Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 15, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | FITLIFE BRANDS, INC. | ||
Entity Central Index Key | 1374328 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $12,128,344 | ||
Entity Common Stock, Shares Outstanding | 8,202,362 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS: | ||
Cash | $4,353,699 | $3,305,179 |
Accounts receivable, net | 1,685,623 | 1,259,887 |
Inventory | 2,284,922 | 2,752,636 |
Deferred taxes | 689,000 | 689,000 |
Prepaid expenses and other current assets | 47,202 | 127,448 |
Total current assets | 9,060,446 | 8,134,150 |
PROPERTY AND EQUIPMENT, net | 3,107 | 5,988 |
Intangibles assets, net | 1,037,369 | 1,037,117 |
Long-term investments | 50,000 | |
Deposits | 3,048 | 3,048 |
TOTAL ASSETS | 10,103,970 | 9,230,303 |
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||
Accounts payable | 813,600 | 1,204,894 |
Accrued expenses and other liabilities | 152,736 | 280,402 |
Income tax payable | 40,000 | 48,000 |
Line of credit | 437,089 | 437,089 |
Current Portion of Term Loan Agreement | 507,031 | 489,129 |
Redemption of preferred stock payable | 15,459 | |
Total current liabilities | 1,950,456 | 2,474,974 |
LONG-TERM DEBT | 1,439,799 | 1,946,733 |
TOTAL LIABILITIES | 3,390,255 | 4,421,707 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $.01 par value, 150,000,000 shares authorized; 8,110,853 and 74,753,482 issued and outstanding as of December 31, 2014 and December 31, 2013, respectively | 81,985 | 81,109 |
Subscribed common stock | 38 | 66 |
Additional paid-in capital | 26,280,388 | 26,049,722 |
Accumulated deficit | -19,648,697 | -21,322,299 |
Total stockholders' equity | 6,713,714 | 4,808,598 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $10,103,970 | $9,230,303 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
STOCKHOLDERS' EQUITY: | ||
Common Stock, Par Value Per Share | $0.01 | $0.01 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 8,198,516 | 8,110,853 |
Common Stock, Shares, Outstanding | 8,198,516 | 8,110,853 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||
Revenue | $19,960,376 | $19,684,030 |
Total | 19,960,376 | 19,684,030 |
Cost of Goods Sold | 12,867,466 | 12,548,637 |
Gross Profit | 7,092,910 | 7,135,393 |
OPERATING EXPENSES: | ||
General and administrative | 2,636,326 | 3,100,320 |
Selling and marketing | 2,378,413 | 2,415,183 |
Depreciation and amortization | 226,046 | 232,338 |
Total operating expenses | 5,240,785 | 5,747,841 |
OPERATING INCOME (LOSS) | 1,852,125 | 1,387,552 |
OTHER (INCOME) AND EXPENSES | ||
Interest expense | 94,667 | 40,906 |
Other expense (income) | -87,500 | -36,279 |
Total other (income) expense | 7,167 | 4,627 |
INCOME TAXES (BENEFIT) | 171,355 | 90,500 |
NET INCOME (LOSS) | $1,673,602 | $1,292,425 |
NET INCOME (LOSS) PER SHARE: | ||
Basic | $0.20 | $0.17 |
Diluted | $0.20 | $0.14 |
Basic | 8,180,428 | 7,830,909 |
Diluted | 8,577,597 | 8,951,051 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Cash Flows [Abstract] | ||
Net Income | $1,673,602 | $1,292,425 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 226,046 | 232,338 |
Common stock issued (cancelled) for services | 116,334 | 354,039 |
Warrants and options issued (cancelled) for services | 32,679 | 40,896 |
Gain on write-up of investment | -137,500 | |
Gain on redemption of preferred stock and warrants | -86,278 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | -425,735 | -290,776 |
Inventory | 467,713 | 932,355 |
Prepaid expenses | 80,246 | -10,389 |
Accounts payable | -391,295 | -4,486 |
Accrued liabilities | -127,666 | 88,615 |
Income tax payable | -8,000 | 16,000 |
Net cash provided by (used in) operating activities | 1,506,426 | 2,564,740 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | -3,417 | |
Long-term investment | 50,000 | -50,000 |
Net cash provided by (used in) investing activities | 46,584 | -50,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of long-term debt | 2,600,000 | |
Payments for redemptiom of preferred stock | -15,459 | -2,582,333 |
Repayments of note payable | -489,032 | -164,139 |
Net cash provided by (used in) financing activities | -504,490 | -146,472 |
INCREASE (DECREASE) IN CASH | 1,048,520 | 2,368,268 |
CASH, BEGINNING OF PERIOD | 3,305,179 | 936,911 |
CASH, END OF PERIOD | 4,353,699 | 3,305,179 |
Supplemental disclosure operating activities | ||
Cash paid for interest | $94,667 | $40,906 |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) | Common Stock | Preferred A | Preferred B | Preferred C | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2012 | $747,534 | $757,063 | $50,756 | $26,864,676 | ($22,614,724) | $5,805,307 | |
Beginning Balance, Shares at Dec. 31, 2012 | 74,753,482 | 103.3 | 125 | ||||
Common Stock issued for services, Shares | 3,005,000 | ||||||
Common Stock issued for services, Amount | 3,050 | 310,990 | 340,950 | ||||
Preferred B shares accumulated dividends, Amount | 137,639 | -137,639 | |||||
Preferred C shares accumulated dividends, Amount | 37,414 | -37,414 | |||||
Options issued for services | 40,896 | 40,896 | |||||
Reverse stock split existing shares, Shares | -699,781,600 | ||||||
Reverse stock split existing shares, Amount | -699,782 | 699,782 | |||||
Reverse stock split recap shares, Shares | -2,974,804 | ||||||
Reverse stock split recap shares, Amount | -29,748 | 29,743 | -5 | ||||
Redemption of Preferred B shares, Shares | -103.3 | ||||||
Redemption of Preferred B shares, Amount | -894,703 | -1,032,999 | -1,927,702 | ||||
Redemption of Preferred C shares, Shares | -62.5 | ||||||
Redemption of Preferred C shares, Amount | -45,085 | -624,999 | -670,084 | ||||
Conversion of Preferred C shares, Shares | 2,680,337 | -62.5 | |||||
Conversion of Preferred C shares, Amount | 26,803 | -45,085 | -142,538 | -160,820 | |||
Exchange of Preferred C warrants, Shares | 624,998 | ||||||
Exchange of Preferred C warrants, Amount | 6,250 | 68,293 | 74,543 | ||||
Subscribed common stock, Shares | 6,621 | ||||||
Subscribed common stock, Amount | 66 | 13,023 | 13,089 | ||||
Net income | 1,292,425 | 1,292,425 | |||||
Ending Balance, Amount at Dec. 31, 2013 | 81,175 | 26,049,772 | -21,322,299 | 4,808,598 | |||
Ending Balance, Shares at Dec. 31, 2013 | 8,117,474 | ||||||
Common Stock issued for services, Shares | 45,482 | 45,482 | |||||
Common Stock issued for services, Amount | 455 | 105,881 | 106,336 | ||||
Common Stock issued for settlement, shares | 35,560 | 35,560 | |||||
Common stock issued for settlement, Amount | 356 | 82,144 | 82,500 | ||||
Options issued for services | 32,679 | 32,679 | |||||
Subscribed common stock, Shares | 3,846 | ||||||
Subscribed common stock, Amount | 38 | 9,961 | 10,000 | ||||
Net income | 1,673,602 | 1,673,602 | |||||
Ending Balance, Amount at Dec. 31, 2014 | $82,024 | $26,280,388 | ($19,648,697) | $6,713,714 | |||
Ending Balance, Shares at Dec. 31, 2014 | 8,202,362 |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | |
Summary | |
FitLife Brands, Inc., formerly Bond Laboratories, Inc. (the “Company”), is a national provider of innovative and proprietary nutritional supplements for health conscious consumers marketed under the brand names NDS Nutrition Products™ (“NDS”) (www.ndsnutrition.com), PMD™ (www.pmdsports.com), SirenLabs™ (www.sirenlabs.com) and CoreActive™ (www.coreactivenutrition.com). The Company manufactures and distributes a full line of nutritional supplements to support athletic performance, weight loss and general health predominantly through franchised General Nutrition Centers, Inc. (“GNC”) stores located both domestically and internationally. | |
The Company was incorporated in the State of Nevada on July 26, 2005. In October 2008, the Company acquired the assets of NDS Nutritional Products, Inc., a Nebraska corporation, and moved those assets into its wholly owned subsidiary NDS Nutrition Products, Inc., a Florida corporation (“NDS”). | |
FitLife Brands is headquartered in Omaha, Nebraska. For more information on the Company, please go to http://www.fitlifebrands.com. The Company’s common stock currently trades under the symbol FTLF on the OTCBB market. | |
Recent Developments | |
Share Repurchase Program | |
On June 30, 2014, the Company’s Board of Directors approved a share repurchase program, pursuant to which the Company is authorized to purchase up to $600,000 of our common stock per annum, subject to maximum repurchases of $50,000 per month (the “Repurchase Program”). Additional purchases under the Repurchase Program may be made from time to time at the discretion of management as market conditions warrant and subject to certain regulatory restrictions and other considerations. In March 2015, the Board of Director’s approved an extension of the Repurchase Program, which enabled the Company to purchase a substantial number of shares in a single transaction on March 6, 2015. The extension did not affect the terms or conditions of the existing Repurchase Program. As of March 12, 2015, the Company had repurchased an aggregate total of 120,354 shares of our common stock, at an average purchase price of $2.15 per share. |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | The accompanying financial statements represent the consolidated financial position and results of operations of the Company and include the accounts and results of operations of the Company and its wholly owned subsidiaries. The accompanying consolidated financial statements include the active entity of FitLife Brands, Inc. and its wholly owned subsidiaries. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies [Abstract] | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows: | ||
Principle of Consolidation | |||
The consolidated financial statements include the accounts of the Company and NDS Nutrition Products, Inc. Intercompany accounts and transactions have been eliminated in the consolidated condensed financial statements. | |||
Use of Estimates and Assumptions | |||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. | |||
These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. | |||
Revenue Recognition | |||
Revenue is derived from product sales. The Company recognizes revenue from product sales in accordance with Accounting Standards Codification (“ASC”) Topic 605 “Revenue Recognition in Financial Statements” which assesses revenue upon: (i) the time customers are invoiced at shipping point provided title and risk of loss has passed to the customer, (ii) evidence of an arrangement exists, (iii) fees are contractually fixed or determinable, (iv) collection is reasonably assured through historical collection results and regular credit evaluations, and (v) there are no uncertainties regarding customer acceptance. | |||
Accounts Receivable | |||
All of the Company’s accounts receivable balance is related to trade receivables which, in the quarter ended September 30, 2014, increased due principally to the transition to GNC’s centralized distribution platform. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts, estimating losses resulting from the inability of its customers to make required payments for products. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the amount of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged off against the allowance when it is probable the receivable will not be recovered. The Company recorded an expense of $2,269 related to bad debt and doubtful accounts during the year ended December 31, 2014, and wrote off $9,051 related to bad debt and doubtful accounts during the year ended December 31, 2013. | |||
Allowance for Doubtful Accounts | |||
The determination of collectability of the Company’s accounts receivable requires management to make frequent judgments and estimates in order to determine the appropriate amount of allowance needed for doubtful accounts. The Company’s allowance for doubtful accounts is estimated to cover the risk of loss related to accounts receivable. This allowance is maintained at a level we consider appropriate based on factors that affect collectability. These factors include historical trends of write-offs, recoveries and credit losses, the careful monitoring of customer credit quality, and projected economic and market conditions. Different assumptions or changes in economic circumstances could result in changes to the allowance. | |||
Cash and Cash Equivalents | |||
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At December 31, 2014, cash and cash equivalents include cash on hand and cash in the bank. | |||
Inventory | |||
The Company’s inventory is carried at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method. The Company evaluates the need to record adjustments for inventory on a regular basis. Company policy is to evaluate all inventories including raw material and finished goods for all of its product offerings across all of the Company’s operating subsidiaries. At December 31, 2014 and December 31, 2013, the value of the Company’s inventory was $2,284,922 and $2,752,636, respectively. | |||
Property and Equipment | |||
Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. | |||
The range of estimated useful lives used to calculate depreciation for principal items of property and equipment are as follows: | |||
Asset Category | Depreciation / Amortization Period | ||
Furniture and Fixture | 3 Years | ||
Office equipment | 3 Years | ||
Leasehold improvements | 5 Years | ||
The Company adopted FASB ASC Topic 350, Goodwill and Other Intangible Assets. In accordance with ASC Topic 350, goodwill, which represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method, acquired in business combinations is assigned to reporting units that are expected to benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events and circumstances indicate impairment may have occurred in accordance with ASC Topic 350. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. ASC Topic 350 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value. | |||
Impairment of Long-Lived Assets | |||
In accordance with ASC Topic 3605, Long-Lived Assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimate undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no events or changes in circumstances that necessitated an impairment of long-lived assets. | |||
Income Taxes | |||
Deferred income taxes are provided based on the provisions of ASC Topic 740, Accounting for Income Taxes, to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||
The Company adopted the provisions of FASB Interpretation No. 48; Accounting For Uncertainty In Income Taxes - An Interpretation of ASC Topic 740 ("FIN 48"). FIN 48 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At December 31, 2014, the Company did not record any liabilities for uncertain tax positions. | |||
Concentration of Credit Risk | |||
The Company maintains its operating cash balances in a bank located in Nebraska. The Federal Depository Insurance Corporation (“FDIC”) insures accounts up to $250,000. | |||
Earnings Per Share | |||
Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. In the event of a loss, diluted loss per share is the same as basic loss per share, because of the effect of the additional securities, a result of the net loss would be anti-dilutive. | |||
Fair Value of Financial Instruments | |||
The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation. | |||
The carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued liabilities, income tax payable and related party payable, if any, approximate fair value. | |||
Recent Accounting Pronouncements | |||
None. |
PREPAID_EXPENSES
PREPAID EXPENSES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Prepaid Expenses | |||||||||
PREPAID EXPENSES | The Company has prepaid expenses as of December 31, 2014 and 2013 as follows: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Prepaid Expenses | 47,202 | 127,448 | |||||||
Total | $ | 47,202 | $ | 127,448 | |||||
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
INVENTORIES | The Company inventories as of December 31, 2014 and 2013 consists as follows: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Finished goods | $ | 1,904,950 | $ | 2,140,185 | |||||
Components | 379,972 | 612,451 | |||||||
Total | $ | 2,284,922 | $ | 2,752,636 |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
PROPERTY AND EQUIPMENT | |||||||||
The Company has fixed assets as of December 31, 2014 and 2013 as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Equipment | $ | 289,169 | $ | 285,753 | |||||
Accumulated depreciation | $ | (286,063 | ) | $ | (279,765 | ) | |||
Total | $ | 3,107 | $ | 5,988 | |||||
Depreciation expense was $6,298 for December 31, 2014 compared to $12,589 for December 31, 2013. | |||||||||
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2014 | |
Acquisition | |
ACQUISITION | |
On October 1, 2008, the Company entered into an Asset Purchase Agreement with Cory Wiedel and Ryan Zink (the “Shareholders”), and NDS Nutritional Products, Inc. (“NDS”), a Nebraska corporation. The Company purchased substantially all of the tangible properties, equipment, tenant improvements, customer accounts, customer lists, goodwill, software, intellectual property, component inventory and all insurance benefits, including rights and proceeds in or related to the retail operations of NDS, in accordance with the provisions of the definitive transaction documents. The estimated purchase price was $2,645,684. In addition to $700,000 in cash, the purchase price consisted of promissory notes and an earn-out based on gross profits of NDS. | |
On September 30, 2009, the Company amended the terms to the above referenced Asset Purchase Agreement originally dated October 1, 2008 by and between the Shareholders, NDS and the Company. Under the terms of the amendment, all remaining obligations payable by the Company in connection with the earn-out and outstanding secured promissory notes were replaced in their entirety by a new promissory note (the “New Note”) with an original principal amount of $621,775.01 payable in monthly installments commencing as of March 1, 2010, accruing at the rate of eight percent (8%) per annum, and due and payable in full on December 31, 2010. | |
On November 15, 2010, the Company entered into an Amended and Restated Secured Promissory Note by and among FitLife Brands, Inc., NDS Nutrition Products, Inc. and NDS Nutritional Products, Inc., as well as other ancillary documents in connection with such transaction in replacement of that certain Secured Promissory Note by and among the parties dated September 30, 2009. The Amended and Restated Secured Promissory Note, which became effective December 1, 2010, calls for an initial payment by the Company of $205,000 on December 1, 2010 and ongoing monthly payments of $17,350 throughout 2011 in full satisfaction of the note. The Secured Promissory Note, which was replaced by the Amended and Restated Secured Promissory Note, had a remaining principal balance of approximately $400,000 and matured in December of 2010. | |
The Company hired a third-party expert to prepare a valuation analysis to assist management of the Company in its allocation of the purchase price, primarily through the determination of the fair value and remaining useful lives of the intangible assets from the acquisition of NDS Nutritional Products, Inc. in 2008. Based on that analysis, the Company determined that there was no impairment for the year ended December 31, 2014 or 2013. | |
The amortization expense for all intangible assets is grouped with the depreciation expense for the related reporting period, and reported in the Statements of Operations and the Statements of Cash Flows as “Depreciation and amortization” expense. The Company calculates the weighted average of the average amortization period, in total and by major define-lived intangible asset on a straight-line basis over the estimated useful lives of the related assets that is ten years in accordance with the agreements with the above intangible assets. | |
The Company had total amortization expense of $219,749 for December 31, 2014 and December 31, 2013. | |
INTELLECTUAL_PROPERTY
INTELLECTUAL PROPERTY | 12 Months Ended |
Dec. 31, 2014 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTELLECTUAL PROPERTY | During the fiscal year ended December 31, 2014 the Company wrote off the remaining balance of its investment in YogaEarth Group LLC (“YogaEarth”) and recorded a $50,000 expense in connection with the write off. Contemporaneously with the write off, the Company, YogaEarth and other third parties (collectively, the “Parties”) entered into a settlement agreement (the “Settlement”) related to prior investment activity and intellectual property development initiatives undertaken by the Parties. Under the terms of the Settlement, YogaEarth agreed to sell its 50% ownership position in the kaniwa protein extraction intellectual property (the “Kaniwa IP”) to the other Parties for the termination of certain equity rights and claims held by such parties in and against YogaEarth. Under the terms of the Settlement, the Company issued shares of its common stock with a fair market value of $84,500 to third parties in exchange for their 37.5% of the Kaniwa IP, resulting in the Company owning 100% of the Kaniwa IP. The Company booked the $220,000 implied value of the Kaniwa IP to intangible assets, net and recorded a gain on the transaction of $137,500. Following the execution of the Settlement, the Company filed a patent application with the USPTO for the Kaniwa IP. On December 22, 2014, the USPTO notified the Company that its claims under the Kaniwa IP were not allowed. The Company intends to file a response with the USPTO on or around March 23, 2015. |
NOTE_PAYABLES
NOTE PAYABLES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
NOTE PAYABLES | |||||||||
Notes payable consist of the following as of December 31, 2014 and December 31, 2013: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Revolving line of credit of $3,000,000 from US Bank, dated April 9, 2009, as amended July 15, 2010, May 25, 2011, August 22, 2012, April 29, 2013, May 22, 2014 and June 25, 2014 at an interest rate of 3.0% plus the one-month LIBOR quoted by US Bank from Reuters Screen LIBOR. The line of credit matures May 15, 2015 and is secured by 80% of the eligible receivables and 50% of the eligible inventory (such inventory amount not to exceed 50% of the borrowing base) of NDS Nutrition Products, Inc. The Company pays interest only on this line of credit. | $ | 437,089 | $ | 437,089 | |||||
Term loan of $2,600,000 from US Bank, dated September 4, 2013, at a fixed interest rate of 3.6%. The term loan amortizes evenly on a monthly basis and matures August 15, 2018. | $ | 1,946,830 | $ | 2,435,862 | |||||
Total of notes payable and advances | $ | 2,383,919 | $ | 2,872,951 | |||||
Less Current Portion: | $ | -944,120 | $ | (926,218 | ) | ||||
Long-Term Portion: | $ | 1,439,799 | $ | 1,946,733 |
EQUITY
EQUITY | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
EQUITY | Common and Preferred Stock | ||||||||||||
The Company is authorized to issue 150,000,000 shares of common stock, $0.01 par value per share, of which 8,198,516 common shares were issued and outstanding as of December 31, 2014. The Company is authorized to issue 10,000,000 shares of preferred stock, $0.01 par value per share. At present, the Company is authorized to issue, subject to the 10,000,000 share limit, 10,000,000 shares of its Series A Convertible Preferred Stock, $0.01 par value, 1,000 shares of its 10% Cumulative Perpetual Series B Preferred Stock, $0.01 par value, and 500 shares of its Series C Convertible Preferred Stock, par value $0.01, none of which were issued and outstanding as of December 31, 2014. | |||||||||||||
As of December 31, 2014, 3,846 shares of common stock were subscribed. | |||||||||||||
Options | |||||||||||||
As of December 31, 2014, 220,000 options to purchase common stock of the Company were issued and outstanding, 120,000 of which had an exercise price equal to $0.90 per share, 60,000 of which had an exercise price equal to $1.00 per share, and 40,000 of which had an exercise price equal to $2.20 per share. During the fiscal year ended December 31, 2014, the Company issued 40,000 options to key employees with an exercise price equal to $2.20 for which it recorded an expense of $32,679. | |||||||||||||
Warrants | |||||||||||||
The Company values all warrants using the Black-Scholes option-pricing model. Critical assumptions for the Black-Scholes option-pricing model include the market value of the stock price at the time of issuance, the risk-free interest rate corresponding to the term of the warrant, the volatility of the Company’s stock price, dividend yield on the common stock, as well as the exercise price and term of the warrant. The Black Scholes option-pricing model was the best determinable value of the warrants that the Company “knew up front” when issuing the warrants in accordance with Topic 505. Other than as expressly noted below, the warrants are not subject to any form of vesting schedule and, therefore, are exercisable by the holders anytime at their discretion during the life of the warrant. No discounts were applied to the valuation determined by the Black-Scholes option-pricing model; provided, however, that in determining volatility the Company utilized the lesser of the 90-day volatility as reported by Bloomberg or other such nationally recognized provider of financial markets data and 40.0%. | |||||||||||||
As of December 31, 2014, 115,139 warrants to purchase common stock of the Company were issued and outstanding, additional information about which is included in the following table: | |||||||||||||
Issued | Exercise Price | Issuance Date | Expiration Date | Vesting | |||||||||
14,259 | $ | 3.6 | 5/14/10 | 5/14/15 | Yes | ||||||||
25,000 | $ | 3 | 11/1/13 | 11/1/16 | No | ||||||||
20,640 | $ | 2 | 6/29/10 | 6/29/15 | No | ||||||||
21,240 | $ | 2 | 7/21/10 | 7/21/15 | No | ||||||||
9,000 | $ | 2 | 9/3/10 | 9/3/15 | No | ||||||||
25,000 | $ | 2 | 11/1/13 | 11/1/16 | No | ||||||||
115,139 | |||||||||||||
Expected Dividend Yield | 0 | % | |||||||||||
Volatility | 40 | % | |||||||||||
Weighted average risk free interest rate | 0.2 | % | |||||||||||
Weighted average expected life (in years) | 1.1 | ||||||||||||
Private Placements, Other Issuances and Cancellations | |||||||||||||
The Company periodically issues shares of its common stock and warrants to purchase shares of common stock to investors in connection with private placement transactions, as well as, to advisors and consultants for the fair value of services rendered. Absent an arm’s length transaction with an independent third-party, the value of any such issued shares is based on the trading value of the stock at the date on which such transactions or agreements are consummated or such shares are issued. The Company expenses the fair value of all such issuances in the period incurred. | |||||||||||||
The Company issued 45,482 shares of its common stock plus an additional 3,846 shares of subscribed common stock for services during the year ended December 31, 2014, for which it recorded an expense of $116,334 as compared to an expense of $354,039 for the year ended December 31, 2013. The Company also issued 35,560 shares of its common stock in connection with a settlement during the year ended December 31, 2014, for which it recorded an expense of $82,500. During the year ended December 31, 2014 the Company also issued 40,000 options to key employees to purchase shares of its common stock, for which it recorded an expense of $32,679 as compared to an expense of $40,896 for the year ended December 31, 2013. | |||||||||||||
2014 | |||||||||||||
During the year ended December 31, 2014, the Company issued 81,042 shares of its common stock, consisting of (i) 33,334 shares were issued to employees for the fair value of services rendered, (ii) 12,148 shares were issued to members of the Board of Directors for the fair value of services rendered consistent with the Company’s Board compensation plan, and (iii) 35,560 shares were issued to certain parties in connection with the Company’s settlement with YogaEarth that resulted in the Company owning 100% of the Kaniwa IP. As of December 31, 2014, there were an additional 3,846 shares of subscribed common stock issuable to members of the Board of Directors for the fair value of services rendered consistent with the Company’s Board compensation plan. In addition to the above, during the year ended December 31, 2014 the Company issued 40,000 options to purchase common stock in the Company under the terms of the Company’s qualified plan. The Company did not cancel any shares of its common stock or issue any shares of its common stock to investors for cash during the year ended December 31, 2014. | |||||||||||||
During the year ended December 31, 2014, the Company valued shares issued for services rendered based on the trading value of the stock at the time of grant. | |||||||||||||
2013 | |||||||||||||
During the year ended December 31, 2013, the Company issued and cancelled 642,126 and 0 shares of its common stock, respectively, for an aggregate net issuance of 642,126 shares. Of those amounts, (i) 5,000 shares were issued to consultants for the fair value of services rendered, (ii) 39,121 shares were issued to members of the Board of Directors for the fair value of services rendered consistent with the Company’s Board compensation plan, (iii) 267,500 shares were issued to employees for the fair value of services rendered in connection with an employee stock award program, and (iv) 330,505 shares were issued in connection with the Series C Recapitalization Transactions. In addition to the above, during the year ended December 31, 2013 the Company issued 60,000 options to purchase common stock in the Company under the terms of the Company’s qualified plan and 50,000 warrants to a consultant for the fair value of services rendered. The Company did not issue any shares of its common stock to investors for cash during the year ended December 31, 2013. | |||||||||||||
During the year ended December 31, 2013, the Company valued shares issued for services rendered based on the trading value of the stock at the time of issuance. | |||||||||||||
Any offer and sale of shares of our common stock are effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act and in Section 4(2) of the Securities Act, based on the following: (a) the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act. | |||||||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
INCOME TAXES | The provision (benefit) for income taxes from continued operations for the years ended December 31, 2014 and 2013 consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Current: | |||||||||
Federal AMT | $ | 24,354 | $ | 26,250 | |||||
State | 147,000 | 64,250 | |||||||
171,354 | 90,500 | ||||||||
Deferred: | |||||||||
Federal | $ | 626,280 | $ | 455,000 | |||||
State | - | 38,000 | |||||||
626,280 | 493,000 | ||||||||
Change in valuation allowance | (626,280 | ) | (493,000 | ) | |||||
Provision (benefit) for income taxes, net | $ | 171,354 | $ | 90,500 | |||||
The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||
State income taxes and other | 7.09 | % | 6.29 | % | |||||
Federal AMT | 1.3 | % | 1.9 | % | |||||
Temporary differences | 0.22% | - | - | ||||||
Permanent differences | 0.60% | - | |||||||
Valuation allowance | -34 | % | (35.65 | % | |||||
Effective tax rate | 9.21 | % | 6.54 | ||||||
Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The components of deferred tax assets consist principally from the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net operating loss carryforwards | 6,602,000 | 7,272,000 | |||||||
Valuation allowance | (5,913,000 | ) | (6,583,000 | ||||||
Deferred income tax asset | $ | 689,000 | $ | 689,000 | |||||
The Company has a net operating loss carryforwards of approximately $19,400,000 for federal purposes available to offset future taxable income through 2032, which expire in various years through 2032, The Company has provided a valuation reserve against the full amount of the net operating loss benefit, because in the opinion of management the benefits from net operating losses carried forward may be impaired or limited on certain circumstances. Events which may cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, limitations imposed under Section 382 of the Internal Revenue Code, as amended, from change of more than 50% over a three-year period. The impact of any limitations that may be imposed for future issuances of equity securities, including issuances with respect to acquisitions have not been determined. | |||||||||
ASC 740 requires the consideration of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Significant management judgment is required in determining any valuation allowance recorded against deferred tax assets. In evaluating the ability to recover deferred tax assets, the Company considered available positive and negative evidence, giving greater weight to its recent cumulative losses and its ability to carry-back losses against prior taxable income and lesser weight to its projected financial results due to the challenges of forecasting future periods. The Company also considered, commensurate with its objective verifiability, the forecast of future taxable income including the reversal of temporary differences. At that time the Company continued to have sufficient positive evidence, including recent cumulative profits, a reduction in operating expenses, the ability to carry-back losses against prior taxable income and an expectation of improving operating results, showing a valuation allowance was not required. At the end of the year ended December 31, 2012, expectations of taxable income necessitated a reduction in the valuation allowance and a restoration of $689,000 of deferred tax assets related to net operating losses expected to be utilized in the next 12 months. At December 31, 2014, the Company continues to maintain the deferred tax asset of $689,000. | |||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
FAIR VALUE MEASUREMENTS | The Company immediately adopted FASB Accounting Standards Codification No. 820 (SFAS 157), Fair Value Measurements. ASC 820 relates to financial assets and financial liabilities. | ||||||||||||||||
Determination of Fair Value | |||||||||||||||||
At December 31, 2014, the Company calculated the fair value of its assets and liabilities for disclosure purposes only. | |||||||||||||||||
Valuation Hierarchy | |||||||||||||||||
ASC 820 establishes a three-level valuation hierarchy for the use of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date: | |||||||||||||||||
Valuation Hierarchy | |||||||||||||||||
• | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||||||||||||||
• | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||||||||||
• | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. These inputs rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs are developed based on the best information available in the circumstances and may include the Company's own data.) | ||||||||||||||||
The following table presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2014. | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash | $ | - | 4,353,699 | - | 4,353,699 | ||||||||||||
Intangible assets | - | - | 1,037,369 | 1,037,369 | |||||||||||||
$ | 4,353,699 | 1,037,369 | 5,391,068 |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | The Company does not have, to the best of its knowledge, any undisclosed commitments or contingent liabilities. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | The Company did not have any related party transactions as of December 31, 2014. |
NET_INCOME_LOSS_PER_SHARE
NET INCOME / (LOSS) PER SHARE | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
NET INCOME (LOSS) PER SHARE: | |||||||||
NET INCOME / (LOSS) PER SHARE | Basic income per share is calculated by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per share is calculated by dividing net income attributable to common stockholders by the weighted average fully diluted number of shares of common stock outstanding during the period. For the years ended December 31, 2014 and 2013, the following potential shares of common stock were included in the number of shares of common stock outstanding for the calculation of diluted income per share. | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Warrants | 188,391 | 569,142 | |||||||
Options | 208,778 | 176,000 | |||||||
Preferred Stock (as converted) | 0 | 375,000 | |||||||
Total | 397,169 | 1,120,142 | |||||||
The following table represents the computation of basic and diluted losses per share at December 31, 2014 and 2013: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Net income (losses) available for common shareholders | 1,673,602 | 1,292,425 | |||||||
Basic weighted average common shares outstanding | 8,180,428 | 7,830,909 | |||||||
Basic income (loss) per share | 0.2 | 0.17 | |||||||
Diluted weighted average common shares outstanding | 8,577,597 | 8,951,051 | |||||||
Diluted income (loss) per share | 0.2 | 0.14 | |||||||
Net loss per share is based upon the weighted average shares of common stock outstanding. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | As disclosed under Note 1 above, in March 2015, the Board of Directors approved an extension of the Repurchase Program, which enabled the Company to purchase a substantial number of shares in a single transaction on March 6, 2015. The extension did not affect the terms or conditions of the existing Repurchase Program. As of March 12, 2015, the Company had repurchased an aggregate total of 120,354 shares of our common stock at an average purchase price of $2.15 per share. |
Management has reviewed and evaluated subsequent events and transactions occurring after the balance sheet date through the filing of this Annual Report on Form 10-K on March 31, 2015 and determined that no other subsequent events occurred. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Options issued | |||
Principle of Consolidation | The consolidated financial statements include the accounts of the Company and NDS Nutrition Products, Inc. Intercompany accounts and transactions have been eliminated in the consolidated condensed financial statements. | ||
Use of Estimates and Assumptions | The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. | ||
These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. | |||
Revenue Recognition | Revenue is derived from product sales. The Company recognizes revenue from product sales in accordance with Accounting Standards Codification (“ASC”) Topic 605 “Revenue Recognition in Financial Statements” which assesses revenue upon: (i) the time customers are invoiced at shipping point provided title and risk of loss has passed to the customer, (ii) evidence of an arrangement exists, (iii) fees are contractually fixed or determinable, (iv) collection is reasonably assured through historical collection results and regular credit evaluations, and (v) there are no uncertainties regarding customer acceptance. | ||
Accounts Receivable and Allowance for Doubtful Accounts | All of the Company’s accounts receivable balance is related to trade receivables which, in the quarter ended September 30, 2014, increased due principally to the transition to GNC’s centralized distribution platform. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts, estimating losses resulting from the inability of its customers to make required payments for products. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the amount of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged off against the allowance when it is probable the receivable will not be recovered. The Company recorded an expense of $2,269 related to bad debt and doubtful accounts during the year ended December 31, 2014, and wrote off $9,051 related to bad debt and doubtful accounts during the year ended December 31, 2013. | ||
The determination of collectability of the Company’s accounts receivable requires management to make frequent judgments and estimates in order to determine the appropriate amount of allowance needed for doubtful accounts. The Company’s allowance for doubtful accounts is estimated to cover the risk of loss related to accounts receivable. This allowance is maintained at a level we consider appropriate based on factors that affect collectability. These factors include historical trends of write-offs, recoveries and credit losses, the careful monitoring of customer credit quality, and projected economic and market conditions. Different assumptions or changes in economic circumstances could result in changes to the allowance. | |||
Cash and Cash Equivalents | The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At December 31, 2014, cash and cash equivalents include cash on hand and cash in the bank. | ||
Inventory | The Company’s inventory is carried at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method. The Company evaluates the need to record adjustments for inventory on a regular basis. Company policy is to evaluate all inventories including raw material and finished goods for all of its product offerings across all of the Company’s operating subsidiaries. At December 31, 2014 and December 31, 2013, the value of the Company’s inventory was $2,284,922 and $2,752,636, respectively. | ||
Property and Equipment | line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. | ||
The range of estimated useful lives used to calculate depreciation for principal items of property and equipment are as follows: | |||
Asset Category | Depreciation / Amortization Period | ||
Furniture and Fixture | 3 Years | ||
Office equipment | 3 Years | ||
Leasehold improvements | 5 Years | ||
The Company adopted FASB ASC Topic 350, Goodwill and Other Intangible Assets. In accordance with ASC Topic 350, goodwill, which represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method, acquired in business combinations is assigned to reporting units that are expected to benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events and circumstances indicate impairment may have occurred in accordance with ASC Topic 350. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. ASC Topic 350 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value. | |||
Impairment of Long-Lived Assets | In accordance with ASC Topic 3605, Long-Lived Assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimate undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no events or changes in circumstances that necessitated an impairment of long-lived assets. | ||
Income Taxes | Deferred income taxes are provided based on the provisions of ASC Topic 740, Accounting for Income Taxes, to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | ||
The Company adopted the provisions of FASB Interpretation No. 48; Accounting For Uncertainty In Income Taxes - An Interpretation of ASC Topic 740 ("FIN 48"). FIN 48 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At December 31, 2014, the Company did not record any liabilities for uncertain tax positions. | |||
Concentration of Credit Risk | The Company maintains its operating cash balances in a bank located in Nebraska. The Federal Depository Insurance Corporation (“FDIC”) insures accounts up to $250,000. | ||
Earnings Per Share | Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. In the event of a loss, diluted loss per share is the same as basic loss per share, because of the effect of the additional securities, a result of the net loss would be anti-dilutive. | ||
Fair Value of Financial Instruments | The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation. | ||
The carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued liabilities, income tax payable and related party payable, if any, approximate fair value. | |||
Recent Accounting Pronouncements | None. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Summary Of Significant Accounting Policies Tables | |||
Property and Equipment | Asset Category | Depreciation / Amortization Period | |
Furniture and Fixture | 3 Years | ||
Office equipment | 3 Years | ||
Leasehold improvements | 5 Years |
PREPAID_EXPENSES_Tables
PREPAID EXPENSES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Prepaid Expenses Tables | |||||||||
Prepaid Expenses | December 31, | ||||||||
2014 | 2013 | ||||||||
Prepaid Expenses | 47,202 | 127,448 | |||||||
Total | $ | 47,202 | $ | 127,448 |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventories Tables | |||||||||
Inventories | December 31, | ||||||||
2014 | 2013 | ||||||||
Finished goods | $ | 1,904,950 | $ | 2,140,185 | |||||
Components | 379,972 | 612,451 | |||||||
Total | $ | 2,284,922 | $ | 2,752,636 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property And Equipment Tables | |||||||||
PROPERTY AND EQUIPMENT | December 31, | ||||||||
2014 | 2013 | ||||||||
Equipment | $ | 289,169 | $ | 285,753 | |||||
Accumulated depreciation | $ | (286,063 | ) | $ | (279,765 | ) | |||
Total | $ | 3,107 | $ | 5,988 |
NOTE_PAYABLES_Tables
NOTE PAYABLES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Note Payables Tables | |||||||||
Notes payable | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Revolving line of credit of $3,000,000 from US Bank, dated April 9, 2009, as amended July 15, 2010, May 25, 2011, August 22, 2012, April 29, 2013, May 22, 2014 and June 25, 2014 at an interest rate of 3.0% plus the one-month LIBOR quoted by US Bank from Reuters Screen LIBOR. The line of credit matures May 15, 2015 and is secured by 80% of the eligible receivables and 50% of the eligible inventory (such inventory amount not to exceed 50% of the borrowing base) of NDS Nutrition Products, Inc. The Company pays interest only on this line of credit. | $ | 437,089 | $ | 437,089 | |||||
Term loan of $2,600,000 from US Bank, dated September 4, 2013, at a fixed interest rate of 3.6%. The term loan amortizes evenly on a monthly basis and matures August 15, 2018. | $ | 1,946,830 | $ | 2,435,862 | |||||
Total of notes payable and advances | $ | 2,383,919 | $ | 2,872,951 | |||||
Less Current Portion: | $ | -944,120 | $ | (926,218 | ) | ||||
Long-Term Portion: | $ | 1,439,799 | $ | 1,946,733 |
EQUITY_Tables
EQUITY (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity Tables | |||||||||||||
Warrants issued and outstanding | Issued | Exercise Price | Issuance Date | Expiration Date | Vesting | ||||||||
14,259 | $ | 3.6 | 5/14/10 | 5/14/15 | Yes | ||||||||
25,000 | $ | 3 | 11/1/13 | 11/1/16 | No | ||||||||
20,640 | $ | 2 | 6/29/10 | 6/29/15 | No | ||||||||
21,240 | $ | 2 | 7/21/10 | 7/21/15 | No | ||||||||
9,000 | $ | 2 | 9/3/10 | 9/3/15 | No | ||||||||
25,000 | $ | 2 | 11/1/13 | 11/1/16 | No | ||||||||
115,139 | |||||||||||||
Expected Dividend Yield | 0 | % | |||||||||||
Volatility | 40 | % | |||||||||||
Weighted average risk free interest rate | 0.2 | % | |||||||||||
Weighted average expected life (in years) | 1.1 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Taxes Tables | |||||||||
Provision (benefit) for income taxes | December 31, | ||||||||
2014 | 2013 | ||||||||
Current: | |||||||||
Federal AMT | $ | 24,354 | $ | 26,250 | |||||
State | 147,000 | 64,250 | |||||||
171,354 | 90,500 | ||||||||
Deferred: | |||||||||
Federal | $ | 626,280 | $ | 455,000 | |||||
State | - | 38,000 | |||||||
626,280 | 493,000 | ||||||||
Change in valuation allowance | (626,280 | ) | (493,000 | ) | |||||
Provision (benefit) for income taxes, net | $ | 171,354 | $ | 90,500 | |||||
Federal statutory tax rate | December 31, | ||||||||
2014 | 2013 | ||||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||
State income taxes and other | 7.09 | % | 6.29 | % | |||||
Federal AMT | 1.3 | % | 1.9 | % | |||||
Temporary differences | 0.22% | - | - | ||||||
Permanent differences | 0.60% | - | |||||||
Valuation allowance | -34 | % | (35.65 | % | |||||
Effective tax rate | 9.21 | % | 6.54 | ||||||
Deferred tax assets | December 31, | ||||||||
2014 | 2013 | ||||||||
Net operating loss carryforwards | 6,602,000 | 7,272,000 | |||||||
Valuation allowance | (5,913,000 | ) | (6,583,000 | ||||||
Deferred income tax asset | $ | 689,000 | $ | 689,000 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Measurements Tables | |||||||||||||||||
Fair value of recurring assets and liabilities | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | |||||||||||||||||
Cash | $ | - | 4,353,699 | - | 4,353,699 | ||||||||||||
Intangible assets | - | - | 1,037,369 | 1,037,369 | |||||||||||||
$ | 4,353,699 | 1,037,369 | 5,391,068 |
NET_INCOME_LOSS_PER_SHARE_Tabl
NET INCOME / (LOSS) PER SHARE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Net Income Loss Per Share Tables | |||||||||
Dilutive shares included in EPS | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Warrants | 188,391 | 569,142 | |||||||
Options | 208,778 | 176,000 | |||||||
Preferred Stock (as converted) | 0 | 375,000 | |||||||
Total | 397,169 | 1,120,142 | |||||||
NET INCOME PER SHARE | December 31, | December 31, | |||||||
2014 | 2013 | ||||||||
Net income (losses) available for common shareholders | 1,673,602 | 1,292,425 | |||||||
Basic weighted average common shares outstanding | 8,180,428 | 7,830,909 | |||||||
Basic income (loss) per share | 0.2 | 0.17 | |||||||
Diluted weighted average common shares outstanding | 8,577,597 | 8,951,051 | |||||||
Diluted income (loss) per share | 0.2 | 0.14 |
DESCRIPTION_OF_BUSINESS_Detail
DESCRIPTION OF BUSINESS (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 15, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
State of incorporation | Nevada | ||
Company incorporation date | 26-Jul-05 | ||
Share repurchase program, authorized for repurchase, value | $60,000 | ||
Repurchase of common stock, shares | 120,354 | 0 | 0 |
Repurchase of common stock, price per share | $2.15 | ||
MaximumMonthly [Member] | |||
Share repurchase program, authorized for repurchase, value | $5,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Furniture and Fixtures | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Depreciation/Amortization Period | 3 years |
Office Equipment | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Depreciation/Amortization Period | 3 years |
Leasehold Improvements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Depreciation/Amortization Period | 5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Series C Preferred shares accumulated dividends, Shares | ||
Recovered bad debt and doubtful accounts | $2,269 | $9,051 |
Inventory | 2,284,922 | 2,752,636 |
FDIC Insurance amount | $250,000 |
PREPAID_EXPENSES_Details
PREPAID EXPENSES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Prepaid Expenses Details | ||
Prepaid Expenses | $47,202 | $127,448 |
Total | $47,202 | $127,448 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Inventories Details | ||
Finished goods | $1,904,950 | $2,140,185 |
Components | 379,972 | 612,451 |
Total | $2,284,922 | $2,752,636 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property And Equipment Details | ||
Equipment | $289,169 | $285,753 |
Accumulated depreciation | -286,063 | -279,765 |
Total | $3,107 | $5,988 |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property And Equipment Details Narrative | ||
Depreciation and amortization expense | $6,298 | $12,589 |
ACQUISITION_Details_Narrative
ACQUISITION (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Acquisition Details Narrative | ||
NDS Asset Purchase Agreement purchase price | $2,645,684 | |
Amount of purchase price consisted of cash | 700,000 | |
New Promissory Note original principal amount | 621,775 | |
Accrual rate | 8.00% | |
Amended and Restated Secured Promissory Note initial payment | 205,000 | |
Monthly payments | 17,350 | |
Amended and Restated Secured Promissory Note remaining principal balance | 400,000 | |
Amortization expense of intangible assets | $219,749 | $219,749 |
INTELLECTUAL_PROPERTY_Details_
INTELLECTUAL PROPERTY (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Balance write off expense | $50,000 | |
Sale of ownership position | 50.00% | |
Shares issued, value | 84,500 | |
Decrease in intangible assets | 0 | |
Gain on sale of Kaniwa assets | 220,000 | |
Kaniwa Asset [Member] | ||
Sale of ownership position | 37.50% | |
Decrease in intangible assets | ($137,500) |
NOTE_PAYABLES_Details
NOTE PAYABLES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Note Payables Details | ||
Revolving Line of Credit | $437,089 | $437,089 |
Term loan | 1,946,830 | 2,435,862 |
Total of notes payable and advances | 2,383,919 | 2,872,951 |
Less current portion | -944,120 | -926,218 |
Long-term portion | $1,439,799 | $1,946,733 |
NET_INCOMELOSS_PER_SHARE_Detai
NET INCOME/(LOSS) PER SHARE (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Potential shares of common stock included in the number of shares outstanding | 397,169 | 1,120,142 |
Income / (Losses) available for common shareholders | $1,673,602 | $1,292,425 |
Basic weighted average common shares outstanding | 8,180,428 | 7,830,909 |
Basic income / (loss) per share | $0.20 | $0.17 |
Diluted weighted average common shares outstanding | 8,577,597 | 8,951,051 |
Diluted income / (loss) per share | $0.20 | $0.14 |
Warrant [Member] | ||
Potential shares of common stock included in the number of shares outstanding | 188,391 | 569,142 |
Option [Member] | ||
Potential shares of common stock included in the number of shares outstanding | 208,778 | 176,000 |
Preferred Stock [Member] | ||
Potential shares of common stock included in the number of shares outstanding | 0 | 375,000 |
EQUITY_Details
EQUITY (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Expected dividend yield | 0.00% |
Volatility | 40.00% |
Weighted average risk free interest rate | 0.20% |
Weighted average expected life (in years) | 1 year 1 month 6 days |
Warrants1 [Member] | |
Warrants Issued | 14,259 |
Exercise price | 3.6 |
Warrants2Member | |
Warrants Issued | 25,000 |
Exercise price | 3 |
Warrants3Member | |
Warrants Issued | 20,640 |
Exercise price | 2 |
Warrants4Member | |
Warrants Issued | 21,240 |
Exercise price | 2 |
Warrants5Member | |
Warrants Issued | 9,000 |
Exercise price | 2 |
Warrants6Member | |
Warrants Issued | 25,000 |
Exercise price | 2 |
Warrant [Member] | |
Warrants Issued | 115,139 |
Exercise price | 2 |
EQUITY_Details_Narrative
EQUITY (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 15, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Authorized to issue shares of common stock | 150,000,000 | ||
Share price, par value | $0.01 | ||
Common shares issued and outstanding | 8,198,516 | 8,110,853 | |
Subscribed shares | 3,846 | ||
SharesB issued of common stock for services | 45,482 | ||
Fair value expense of services rendered | $116,334 | $354,039 | |
New share issuances | 81,042 | 642,126 | |
Shares cancelled | 120,354 | 0 | 0 |
Shares issued business settlement | 35,560 | ||
Expense of share issuance for business settlement | 82,500 | ||
Shares issued in connection with recapitalization transaction | 330,505 | ||
Consultants [Member] | |||
SharesB issued of common stock for services | 33,334 | 5,000 | |
Board [Member] | |||
SharesB issued of common stock for services | 12,148 | 39,121 | |
Employees [Member] | |||
SharesB issued of common stock for services | 267,500 | ||
Option [Member] | |||
Options and warrants issued and outstanding | 220,000 | ||
Exercise price | $2.20 | ||
Option [Member] | Option 2 [Member] | |||
Options and warrants issued and outstanding | 60,000 | ||
Exercise price | $1 | ||
Option [Member] | Option 3 [Member] | |||
Options and warrants issued and outstanding | 40,000 | ||
Exercise price | $2.20 | ||
Option [Member] | Option 1 [Member] | |||
Options and warrants issued and outstanding | 120,000 | ||
Exercise price | $0.90 | ||
Options [Member] | |||
SharesB issued of common stock for services | 40,000 | 60,000 | |
Fair value expense of services rendered | $32,679 | $40,896 | |
Warrant [Member] | |||
Options and warrants issued and outstanding | 115,139 | ||
Exercise price | $2 | ||
Volatility duration | 90 days | ||
SharesB issued of common stock for services | 50,000 | ||
Common And Preferred Stock [Member] | Series A [Member] | |||
Authorized to issue shares of common stock | 10,000,000 | ||
Share price, par value | $0.01 | ||
Common shares issued and outstanding | 0 | ||
Common And Preferred Stock [Member] | Series B [Member] | |||
Authorized to issue shares of common stock | 1,000 | ||
Share price, par value | $0.01 | ||
Common shares issued and outstanding | 0 | ||
Common And Preferred Stock [Member] | Series C [Member] | |||
Authorized to issue shares of common stock | 500 | ||
Share price, par value | $0.01 | ||
Common shares issued and outstanding | 0 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes Details | ||
Current income tax provision (benefit), federal | $24,354 | $26,250 |
Current income tax provision (benefit), state | 147,000 | 64,250 |
Total current income tax provision | 171,354 | 90,500 |
Deferred income tax provision (benefit), federal | 626,280 | 455,000 |
Deferred income tax provision (benefit), state | 38,000 | |
Total deferred income tax provision | 626,280 | 493,000 |
Change in valuation allowance | -626,280 | -493,000 |
Provision (benefit) for income taxes, net | $171,355 | $90,500 |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes Details 1 | ||
Statutory federal income tax rate | 34.00% | 34.00% |
State income taxes and other | 7.09% | 6.29% |
Federal AMT | 1.30% | 1.90% |
Temporary differences | 0.22% | |
Permanent differences | 0.60% | |
Valuation allowance | -34.00% | -35.65% |
Effective tax rate | 9.21% | 6.54% |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Income Taxes Details 1 | ||
Net operating loss carryforwards | $6,602,000 | $7,272,000 |
Valuation allowance | -5,913,000 | -6,583,000 |
Deferred income tax asset | $689,000 | $689,000 |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes | |||
Net operating loss carryforwards, Federal | $19,400,000 | ||
Restored deferred tax assets related to net operating losses | 689,000 | ||
Deferred taxes | $689,000 | $689,000 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Dec. 31, 2014 |
Fair value cash | $4,353,699 |
Fair value intangible assets | 1,037,369 |
Fair value assets | 5,391,068 |
Fair Value Inputs Level 1 [Member] | |
Fair value cash | |
Fair value intangible assets | |
Fair value assets | |
Fair Value Inputs Level 2 [Member] | |
Fair value cash | 4,353,699 |
Fair value intangible assets | |
Fair value assets | 4,353,699 |
Fair Value Inputs Level 3 [Member] | |
Fair value cash | |
Fair value intangible assets | 1,037,369 |
Fair value assets | $1,037,369 |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 15, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Subsequent Events [Abstract] | |||
Repurchase of common stock, shares | 120,354 | 0 | 0 |
Repurchase of common stock, price per share | $2.15 |