Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Apr. 12, 2016 | Jun. 30, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | FITLIFE BRANDS, INC. | ||
Entity Central Index Key | 1,374,328 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
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 | $ 9,363,200 | ||
Entity Common Stock, Shares Outstanding | 10,989,608 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash | $ 1,532,550 | $ 4,353,699 |
Accounts receivable, net | 2,684,567 | 1,685,623 |
Security deposits | 26,077 | 3,048 |
Inventory | 4,790,301 | $ 2,284,922 |
Note receivable, current portion | 16,517 | |
Prepaid income tax | 152,000 | |
Prepaid expenses and other current assets | 334,483 | $ 47,202 |
Total current assets | 9,536,494 | 8,374,493 |
PROPERTY AND EQUIPMENT, net | 226,804 | $ 3,107 |
Note receivable, net of current portion | 52,695 | |
Deferred taxes | 812,879 | $ 689,000 |
Intangibles assets, net | 6,929,505 | 1,037,369 |
TOTAL ASSETS | 17,558,378 | 10,103,970 |
CURRENT LIABILITIES: | ||
Accounts payable | 3,363,906 | 813,600 |
Accrued expenses and other liabilities | 1,003,832 | 152,736 |
Litigation reserve | 95,775 | |
Income tax payable | 0 | 40,000 |
Line of credit | 1,490,305 | 437,089 |
Term Loan Agreement, current portion | 525,589 | 507,031 |
Notes payable | 54,036 | 0 |
Total current liabilities | 6,533,443 | 1,950,456 |
LONG-TERM DEBT | 914,138 | 1,439,799 |
TOTAL LIABILITIES | 7,447,581 | 3,390,255 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $.01 par value, 150,000,000 shares authorized; 10,444,257 and 8,198,516 issued and outstanding as of December 31, 2015 and December 31, 2014, respectively | 104,443 | 81,985 |
Subscribed common stock | 97 | $ 38 |
Treasury Stock | (142,228) | |
Additional paid-in capital | 30,963,122 | $ 26,280,388 |
Accumulated deficit | (20,814,637) | (19,648,697) |
Total stockholders' equity | 10,110,797 | 6,713,714 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 17,558,378 | $ 10,103,970 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
STOCKHOLDERS' EQUITY: | ||
Common Stock, Par Value Per Share | $ .01 | $ 0.01 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 10,444,257 | 8,198,516 |
Common Stock, Shares, Outstanding | 10,444,257 | 8,198,516 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Revenue | $ 17,931,464 | $ 19,960,376 |
Total | 17,931,464 | 19,960,376 |
Cost of Goods Sold | 11,653,057 | 12,867,466 |
Gross Profit | 6,278,407 | 7,092,910 |
OPERATING EXPENSES: | ||
General and administrative | 4,141,937 | 2,636,326 |
Selling and marketing | 2,926,063 | 2,378,413 |
Depreciation and amortization | 300,141 | 226,046 |
Total operating expenses | 7,368,141 | 5,240,785 |
OPERATING INCOME (LOSS) | (1,089,734) | 1,852,125 |
OTHER (INCOME) AND EXPENSES | ||
Interest expense | 90,410 | 94,667 |
Other expense (income) | 13,768 | (87,500) |
Total other (income) expense | 104,178 | 7,167 |
INCOME TAXES (BENEFIT) | (27,972) | 171,355 |
NET INCOME (LOSS) | $ (1,165,940) | $ 1,673,602 |
NET INCOME (LOSS) PER SHARE: | ||
Basic | $ (.13) | $ 0.20 |
Diluted | $ (.13) | $ 0.20 |
Basic | 8,677,433 | 8,180,428 |
Diluted | 8,677,433 | 8,577,597 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Cash Flows [Abstract] | ||
Net Income | $ (1,165,940) | $ 1,673,602 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 300,141 | 226,046 |
Capitalization of select merger costs | (57,507) | 0 |
Common stock issued (cancelled) for services | 453,779 | 116,334 |
Warrants and options issued (cancelled) for services | 0 | 32,679 |
Gain on write-up of investment | 0 | (137,500) |
Intercompany transfer | (746,784) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (116,269) | (425,735) |
Inventory | (1,559,392) | $ 467,713 |
Deferred tax asset | (66,565) | |
Prepaid income tax | (152,000) | |
Prepaid expenses | 195,430 | $ 80,246 |
Note receivable | 4,074 | $ 0 |
Deposits | 1,060 | |
Accounts payable | 522,591 | $ (391,295) |
Accrued liabilities | (123,814) | $ (127,666) |
Litigation reserve | 95,775 | |
Income tax payable | (40,000) | $ (8,000) |
Net cash provided by (used in) operating activities | (2,455,421) | 1,506,426 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (12,833) | (3,417) |
Long-term investment | 0 | 50,000 |
Repurchases of common stock | (398,209) | 0 |
Net cash provided by (used in) investing activities | (411,042) | 46,584 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments for redemptiom of preferred stock | 0 | (15,459) |
Repayments of note payable | (660,201) | (489,032) |
Net cash provided by (used in) financing activities | (660,201) | (504,490) |
INCREASE (DECREASE) IN CASH | (3,526,665) | 1,048,520 |
CASH, BEGINNING OF PERIOD | 4,353,699 | 3,305,179 |
CASH, END OF PERIOD | 1,532,550 | 4,353,699 |
Supplemental disclosure operating activities | ||
Cash paid for interest | $ 90,410 | $ 94,667 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Preferred A | Preferred B | Preferred C | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2013 | 8,117,474 | 0 | 0 | 0 | |||
Beginning Balance, Amount at Dec. 31, 2013 | $ 81,175 | $ 0 | $ 0 | $ 0 | $ 26,049,772 | $ (21,322,299) | $ 4,808,598 |
Common Stock issued for services, Shares | 45,482 | ||||||
Common Stock issued for services, Amount | $ 455 | 105,881 | 106,336 | ||||
Common Stock issued for settlement, shares | 35,560 | ||||||
Common stock issued for settlement, Amount | $ 356 | 82,144 | |||||
Options issued for services | 32,679 | 32,769 | |||||
Subscribed common stock, Shares | 3,846 | ||||||
Subscribed common stock, Amount | $ 38 | 9,961 | $ 10,000 | ||||
Common stock repurchased and cancelled, Shares | 0 | ||||||
Net income | 1,673,602 | $ 1,673,602 | |||||
Ending Balance, Shares at Dec. 31, 2014 | 8,202,362 | 0 | 0 | 0 | |||
Ending Balance, Amount at Dec. 31, 2014 | $ 82,024 | $ 0 | $ 0 | $ 0 | 26,280,388 | (19,648,697) | 6,713,714 |
Common Stock issued for services, Shares | 83,605 | ||||||
Common Stock issued for services, Amount | $ 836 | 163,166 | 164,002 | ||||
Common stock cancelled for services, Shares | (37,000) | ||||||
Common stock cancelled for services, Amount | $ (370) | (73,630) | (74,000) | ||||
Options issued for services | 315,741 | 315,741 | |||||
Options vested during the period | 32,838 | 32,838 | |||||
Subscribed common stock, Shares | 9,688 | ||||||
Subscribed common stock, Amount | $ 97 | 15,104 | 15,201 | ||||
Common stock issued for merger consideration, Shares | 2,315,644 | ||||||
Common stock issued for merger consideration, Amount | $ 23,156 | 23,156 | |||||
Common stock repurchased and cancelled, Shares | (120,354) | ||||||
Common stock repurchased and cancelled, Amount | $ (1,204) | (254,778) | (255,981) | ||||
Treasury Stock | (142,228) | ||||||
Purchase price merger accounting for combination with iSatori, Inc. | 4,484,295 | 4,484,295 | |||||
Options issued for services | 315,741 | 315,741 | |||||
Options vested during the period | 32,838 | 32,838 | |||||
Net income | (1,165,940) | (1,165,940) | |||||
Ending Balance, Shares at Dec. 31, 2015 | 13,453,945 | 0 | 0 | 0 | |||
Ending Balance, Amount at Dec. 31, 2015 | $ 104,540 | $ 0 | $ 0 | $ 0 | $ 30,963,122 | $ (20,814,637) | $ 10,110,797 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | Summary FitLife Brands, Inc. (the “ Company NDS www.ndsnutrition.com www.pmdsports.com www.sirenlabs.com www.coreactivenutrition.com ) (together, “ NDS Products iSatori Merger www.isatori.com iSatori Products GNC 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 Recent Developments iSatori Merger. Merger Agreement Merger Sub Closing Date In connection with the closing of the Merger, each share of iSatori common stock outstanding on the Closing Date became exchangeable for 0.1732 shares of the Company's common stock (the “ Exchange Ratio The Company has issued a total of 2,315,644 shares of common stock and paid a total of $239 for remaining fractional interests to former iSatori shareholders in connection with the Merger. Pursuant to the terms and conditions of the Merger Agreement, the Company increased the size of its Board of Directors (the “ Board In addition to the foregoing, the Company secured an option to purchase, on or before December 31, 2015, almost 600,000 shares of the Company’s common stock, otherwise issuable to the two largest shareholders of iSatori, and secured a right of first refusal to purchase approximately 460,000 shares of the Company’s common stock issuable to a certain iSatori shareholder in the connection with the Merger. After careful consideration of many factors, including available cash resources, the Company’s Board of Directors elected not to exercise the purchase option prior to its expiration. The right of first refusal, however, remains outstanding. On September 11, 2015, the Company loaned iSatori $750,000 pursuant to a Demand Promissory Note (" Note At closing, in connection with adjustment provisions outlined in the Merger Agreement, iSatori established certain reserves and write-offs totaling approximately $1.8 million, which write-offs, together with the issuance of the Note and other variances of certain working capital accounts, resulted in a reduction of the Exchange Ratio under the terms of the Merger Agreement from 0.3000 to 0.1732 shares of common stock of the Company for each share of iSatori common stock issued and outstanding. Share Repurchase Program. Repurchase Program As of April 12, 2016, the Company had repurchased an aggregate total of 206,187 shares of our common stock under the Repurchase Program at an average purchase price of $1.93 per share. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2015 | |
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 ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
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 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 Revenue Recognition in Financial Statements The Company offers discounts on sales to GNC franchises on many of its products. Discounts are updated monthly and made available to all franchisees. Revenue is recorded net of all discounts taken at the time of sale for all direct sales. Indirect sales involve sales through GNC’s centralized distribution platform. Fulfillment to franchisees from GNC’s distribution centers often spans several months and accounting periods after the initial indirect sale. Given that the discount programs change monthly, it is impossible to predict with any certainty what discounts will be taken on which products and at what time. As a result, the Company has historically booked gross revenue through the indirect channel upon shipment to GNC. Discounts taken by franchisees upon fulfillment from GNC’s distribution center are billed back to the Company as a credit to a future invoice. The Company accounted for these deductions (“ Vendor Funded Discounts Nine Months Ended Year Ended September 30, December 31, Revenue 2015 2014 2015 2014 As reported, gross $ 15,139,949 $ 17,812,097 $ 19,406,875 $ 19,960,376 Vendor Funded Discount (1,063,312 ) (263,833 ) (1,475,411 ) (380,571 ) As revised, net 14,076,637 17,548,264 17,931,464 19,579,806 Gross profit As reported, gross profit 6,124,103 6,450,964 7,753,818 7,092,909 As reported, gross margin 40.4 % 36.2 % 40.0 % 35.5 % As revised, gross profit 5,060,791 6,187,131 6,278,407 6,712,338 As revised, gross margin 36.0 % 35.3 % 35.0 % 34.3 % Selling & marketing expense As reported 2,773,293 1,788,521 4,401,474 2,378,413 Vendor Funded Discount (1,063,312 ) (263,833 ) (1,475,411 ) (380,571 ) As revised 1,709,981 1,524,688 2,926,063 1,997,842 Operating income $ 714,806 $ 2,383,595 $ (1,089,734 ) 1,852,124 The above pro forma presentation shows what revenue, gross profit, gross margin and selling and marketing expense would have been if the above stated revised accounting policy for Vendor Funded Discounts had been implemented as of January 1, 2014. Operating income and net income are not impacted by the change. Moreover, the results for the year ended December 31, 2015 will be reported under the new accounting policy. As such, all “as reported” amounts for that period reflect what would have been reported had the new accounting policy not been implemented prior to the Company filing its yearly results for the year ended December 31, 2015. Accounts Receivable All of the Company’s accounts receivable balance is related to trade receivables which, in the quarter ended September 30, 2015, 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. We maintain an insurance policy for iSatori Products for international shipments, which protects the Company in the event the international distributor does not or cannot remit payment. The Company recorded an expense of $32,148 related to bad debt and doubtful accounts during the year ended December 31, 2015, inclusive of a contra-expense of $3,645 for a received payment on a previously written off receivable. 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, 2015, 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 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 Impairment of Long-Lived Assets In accordance with ASC Topic 3605, Long-Lived Assets Income Taxes Deferred income taxes are provided based on the provisions of ASC Topic 740, Accounting for Income Taxes, The Company adopted the provisions of FASB Interpretation No. 48; Accounting For Uncertainty In Income Taxes FIN 48 Concentration of Credit Risk The Company maintains its operating cash balances in a bank located in Nebraska. The Federal Depository Insurance Corporation (“ FDIC” 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, 2015 | |
Prepaid Expenses | |
PREPAID EXPENSES | The Company has prepaid expenses as of December 31, 2015 and 2014 as follows: December 31, 2015 2014 Prepaid Expenses 334,483 47,202 Total $ 334,483 $ 47,202 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | The Company inventories as of December 31, 2015 and 2014 consists as follows: December 31, 2015 2014 Finished goods $ 3,381,973 $ 1,904,950 Components 1,408,328 379,972 Total $ 4,790,301 $ 2,284,922 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | The Company has fixed assets as of December 31, 2015 and 2014 as follows: December 31, 2015 2014 Equipment $ 808,324 $ 289,169 Accumulated depreciation $ (581,520 ) $ (286,063 ) Total $ 226,804 $ 3,107 Depreciation expense was $29,830 for December 31, 2015 compared to $6,298 for December 31, 2014. |
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2015 | |
Acquisition | |
ACQUISITION | iSatori, Inc. In connection with the closing of the Merger, each share of iSatori common stock outstanding on the Closing Date became exchangeable for 0.1732 shares of the Company's common stock. In the event any iSatori shareholder would otherwise be entitled to a fractional share of the Company's common stock, the Company agreed to pay the value of those fractional interests in cash. Pursuant to the terms and conditions of the Merger Agreement, the Company increased the size of the Board from five to seven members, appointed Stephen Adele, Chief Executive Officer of iSatori, to serve on the Board, and appointed two independent directors, Messrs. Seth Yakatan and Todd Ordal, each of whom were designated by iSatori, to the Board. Concurrently with these appointments, Dr. Fadi Aramouni resigned from the Board. In addition to the foregoing, the Company secured an option to purchase, on or before December 31, 2015, almost 600,000 shares of the Company’s common stock, otherwise issuable to the two largest shareholders of iSatori, and secured a right of first refusal to purchase approximately 460,000 shares of the Company’s common stock issuable to a certain iSatori shareholder in the connection with the Merger. After careful consideration of many factors, including available cash resources, the Company’s Board of Directors elected not to exercise the purchase option prior to its expiration. The right of first refusal, however, remains outstanding. On September 11, 2015, the Company loaned iSatori $750,000 pursuant to the Note, due and payable on demand after October 15, 2015 in the event the Merger was not consummated on or before such date. The proceeds from the Note were to be used by iSatori for the payment, in the ordinary course of business, of payroll and accounts payable of iSatori pending consummation of the Merger. The Note was deemed satisfied in full in connection with the Closing Date of the Merger and was included as an element of the total purchase price, which also included the assumption of outstanding debt of approximately $1.1 million and the issuance of approximately 2.3 million shares of Company common stock. In connection with the Merger, the Company also converted all issued and outstanding options and warrants of iSatori into options and warrants of FitLife in an amount equal to the number of iSatori options and warrants issued and outstanding multiplied by the Exchange Ratio, at an exercise equal to the original exercise price divided by the Exchange Ratio. The treasury stock net equivalent of all issued and outstanding options and warrants were factored into the calculation of the final Exchange Ratio, the vast majority of which were and remain significantly out of the money. At closing, in connection with adjustment provisions outlined in the Merger Agreement, iSatori established certain reserves and write-offs totaling approximately $1.8 million, which write-offs, together with the issuance of the Note and other variances of certain working capital accounts, resulted in a reduction of the Exchange Ratio under the terms of the Merger Agreement from 0.3000 to 0.1732 shares of common stock of the Company for each share of iSatori common stock issued and outstanding. The fair value of consideration transferred on the date of acquisition consisted of the following: Pre-closing note issued by iSatori and forgiven by FitLife at closing: $750,000 Fair value of shares issued to iSatori shareholders: $3,566,092 Fair value of replacement options and warrants issued to iSatori employees $191,121 Capitalized S-4 costs $57,507 Cash paid to shareholders of iSatori in lieu of fractional shares $239 Total consideration $4,564,959 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Cash $ 705,516 Other current assets $2,411,943 Property and equipment $237,498 Intangible Assets $2,022,507 Goodwill $4,139,940 Other non-current assets $57,314 Current liabilities $(3,959,760) Line of credit $(1,050,000) Total consideration $4,564,959 The assessment of fair value is based on information available to management at the time the condensed consolidated financial statements were prepared and reflect the as recorded book value as management does not expect any material adjustments. The goodwill reflects future economic benefits expected to arise from the expanded presence in the nutritional supplement industry and notable increase in our distribution footprint both in-store and on-line. We do not expect to deduct goodwill for income tax purposes. The amount of goodwill will be periodically assessed and tested for impairment. In the event fair value of the goodwill is exceeded by its carried value, the company will record an impairment expense. Intangible assets include intellectual property, trade names and customer relationships with an estimated fair value of $868,000, $504,000 and $593,000, respectively, along with $57,507 in capitalized costs related to the preparation of the registration statement on Form S-4 in connection with the acquisition. All such intangibles have an estimated useful life of 10 years after December 31, 2015. 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. The Company had total amortization expense of $270,311 and 219,748 for December 31, 2015 and December 31, 2014. During the year ended December 31, 2015, the Company incurred transaction costs of $745,203 of which $57,507 were related the registration statement on Form S-4 and capitalized as an element of purchase price. The remaining $687,696 was recorded as an operating expense. The Company’s consolidated results of operations for the year ended December 31, 2015 include $1.4 million of revenues and a net loss of $(0.7) million associated with the operating results of iSatori from October 1, 2015 to December 31, 2015. These iSatori operating results include certain accelerated stock-based compensation. The following unaudited pro forma information presents a summary of the Company’s combined results of operations for the year ended December 31, 2015 and 2014 as if the iSatori acquisition had occurred on January 1, 2014. The following pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of the incremental costs incurred in integrating the businesses. Year Ended December 31, (in thousands, except per share data) 2015 2014 Total revenue $24,842 $29,235 Income from continuing operations (4,813) 503 Basic earnings per share from continuing operations $(0.44) $0.05 Diluted earnings per share from continuing operations $(0.44) $0.04 Revenue for the year ended December 31, 2014 excludes approximately $0.4 million from revenue as previously reported in connection with the accounting policy change for vendor funded discounts. |
INTELLECTUAL PROPERTY
INTELLECTUAL PROPERTY | 12 Months Ended |
Dec. 31, 2015 | |
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 Parties Settlement Kaniwa IP |
NOTE PAYABLES
NOTE PAYABLES | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
NOTE PAYABLES | Notes payable consist of the following as of December 31, 2015 and December 31, 2014: December 31, 2015 December 31, 2014 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, June 25, 2014 and May 15, 2015 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, 2016 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. $ 1,490,305 $ 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. 1,439,727 1,946,830 Notes payable for warehouse equipment 54,036 Total of notes payable and advances 2,984,068 2,383,919 Less current portion (2,069,930) (944,120 ) Long-term portion $ 914,138 $ 1,439,799 As of December 31, 2015, NDS, the Company’s wholly owned subsidiary, was not in compliance with certain financial covenants in its existing five-year term loan and revolving line of credit with U.S. Bank (the “Bank”), principally due to certain non-cash and non-recurring Company expenses incurred in connection with the issuance of stock options to certain key employees during the year and the Merger. As disclosed in Note 16 – Subsequent Events |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
EQUITY | Common and Preferred Stock The Company is authorized to issue 150,000,000 shares of common stock, $0.01 par value, of which 10,444,257 common shares were issued and outstanding as of December 31, 2015. The Company is authorized to issue 10,000,000 shares of 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, 2015. As of December 31, 2015, 9,688 shares of common stock were subscribed and 85,833 shares were held in treasury, reserved for cancellation. Options As of December 31, 2015, 902,205 options to purchase common stock of the Company were issued and outstanding, 590,000 of which were issued and outstanding prior to the acquisition of iSatori, 370,000 of which had an exercise price equal to $2.30 per share, 40,000 of which had an exercise price equal to $2.20 per share, 60,000 of which had an exercise price equal to $1.00 per share, and 120,000 of which had an exercise price of $0.90 per share. In connection with the acquisition of iSatori, the Company issued 312,205 options to former option holders in iSatori, of which 90,064 had an exercise price of $0.06 per share, 4,330 had an exercise price of $1.44 per share, 93,503 had an exercise price of $3.31 per share, 29,804 had an exercise price of $4.62 per share, 4,330 had an exercise price of $5.49 per share, 1,732 had an exercise price of $5.81 per share, 33,774 had an exercise price of $5.89 per share, 8,660 had an exercise price of $12.13 per share, 28,688 had an exercise price of $12.99 per share, and 17,320 had an exercise price of $14.43 per share. During the fiscal year ended December 31, 2015, the Company issued 370,000 options to management, key employees and members of the board of directors, for which it recorded an expense of $315,741. As indicated above, during the year ended December 31, 2015, the Company issued 312,205 options in connection with the acquisition of iSatori for which $191,121 was included as an element of the purchase price. 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, As of December 31, 2015, 110,620 warrants to purchase common stock of the Company were issued and outstanding, of which 60,620 were assumed by the Company in connection with the acquisition of iSatori. Additional information about which is included in the following table: Issued Exercise Price Issuance Date Expiration Date Vesting 17,320 $ 12.99 10/01/13 01/01/18 No 43,300 $ 12.99 07/16/13 07/16/18 No 25,000 $ 3.000 11/01/13 11/01/16 No 25,000 $ 2.000 11/01/13 11/01/16 No 110,620 Expected Dividend Yield 0.0% Volatility 40.0% Weighted average risk free interest rate 0.9% Weighted average expected life (in years) 1.7 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 83,605 shares of its common stock plus an additional 9,688 shares of common stock for services during the year ended December 31, 2015, for which it recorded an expense of $179,203 as compared to an expense of $116,334 for the year ended December 31, 2014. During the year ended December 31, 2015 the Company also cancelled 37,000 shares previously issued for services to a consultant, for which it recorded a contra-expense of $74,000. 2015 During the year ended December 31, 2015, the Company issued 2,408,937 shares of its common stock, consisting of (i) 2,315,644 shares issued to iSatori shareholders in connection with the Merger; (ii) 66,667 shares issued to employees for the fair value of services rendered; and (iii) 16,938 shares issued to members of the Board of Directors for the fair value of services rendered consistent with the Company’s Board compensation plan. As of December 31, 2015, there were an additional 9,688 shares of 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, 2015 the Company cancelled 37,000 shares previously issued for services and bought back and subsequently cancelled 206,187 shares pursuant to the terms of its share Repurchase Program. During the fiscal year ended December 31, 2015, the Company issued 370,000 options to management, key employees and members of the board of directors, for which it recorded an expense of $315,741. In connection with the acquisition of iSatori, the Company issued 312,205 options to former option holders of iSatori for which $191,121 was included as an element of the purchase price. The Company did not issue any shares of its common stock to investors for cash during the year ended December 31, 2015. During the year ended December 31, 2015, the Company valued shares issued for services rendered based on the trading value of the stock at the time of grant. 2014 During the year ended December 31, 2014, the Company issued 81,042 shares of its common stock, consisting of (i) 33,334 shares issued to employees for the fair value of services rendered, (ii) 12,148 shares 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 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 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 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11. INCOME TAXES The provision (benefit) for income taxes from continued operations for the years ended December 31, 2015 and 2014 consist of the following: December 31, 2015 2014 Current: Federal AMT $ — $ 24,354 State — 147,000 — 171,354 Deferred: Federal $ 5,074 $ 626,280 State 5,510 — 10,584 626,280 Change in valuation allowance (10,584 ) (626,280 ) Provision (benefit) for income taxes, net $ — $ 171,354 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, 2015 2014 Statutory Federal Income Rate 35.00% 34.00% State Income taxes and other 4.35% 7.09% Federal AMT 0.00% 1.30% Temporary differences 0.00% 0.22% Permanent Items 1.62% 0.60% Valuation Allowance -42.22% -34.00% Return to Provision 1.25% 0.00% Effective Tax Rate 0.00% 9.21% 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, 2015 2014 Inventory UNICAP $ 41,401 $ - Allowance for Doubtful Accounts 162,849 - Foreign tax credits 30,086 - Share Based Compensation 39,485 Other 24,100 - Property and equipment 16,712 - Net operating loss carryforwards 7,666,946 6,602,000 Valuation allowance (7,168,700) (5,913,000) Deferred income tax asset 812,879 689,000 Deferred expenses (71,482) - Other (52,397) - Deferred income tax liability (123,879) - Net deferred tax asset $ 689,000 $ 689,000 The Company has net operating loss carryforwards of approximately $22,400,000 for federal purposes available to offset future taxable income through 2035 and 2.298,000 for State of Colorado purposes which expire in various years through 2035, 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, 2015, the Company continues to maintain the deferred tax asset of $689,000. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
FAIR VALUE MEASUREMENTS | The Company immediately adopted FASB Accounting Standards Codification No. 820 (SFAS 157), Fair Value Measurements Determination of Fair Value At December 31, 2015, 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, 2015. Level 1 Level 2 Level 3 Total Assets Cash $ 1,532,550 1,532,550 Intangible assets 6,929,505 6,929,505 $ 1,532,550 6,929,505 8,462,055 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | For the period ended December 31, 2015 the Company accrued a litigation reserve of $90,000 related to the proposition 65 legal proceeding. The parties had agreed to a Consent Judgement, which remained subject to a court approval. The court approved the Consent Judgement on April 12, 2016 with payment due April 19, 2016. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | The Company did not have any related party transactions as of December 31, 2015. |
NET INCOME _ (LOSS) PER SHARE
NET INCOME / (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
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 year ended December 31, 2015, the following potential shares of common stock were excluded in the number of shares of common stock outstanding for the calculation of diluted income per share. For the year ended December 31, 2014, the following potential shares of common stock were included in the number of the shares of common stock outstanding for the calculation of diluted income per share. December 31, 2015 2014 Warrants 98,742 188,391 Options 614,607 208,778 Preferred Stock (as converted) - - Total 713,349 397,169 The following table represents the computation of basic and diluted losses per share at December 31, 2015 and 2014: December 31, December 31, 2015 2014 Net income (losses) available for common shareholders (1,165,940) 1,673,602 Basic weighted average common shares outstanding 8,677,433 8,180,428 Basic income (loss) per share (0.13) 0.20 Diluted weighted average common shares outstanding 8,677,433 8,577,597 Diluted income (loss) per share (0.13) 0.20 Net loss per share is based upon the weighted average shares of common stock outstanding. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On or around April 12, 2016, the hearing to approve the Consent Judgement was heard before the Superior Court of California, County of Alameda, regarding the proposition 65 legal proceeding. The settlement was approved and provides for a payment of $90,000 by the Company by April 19, 2016. 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 30, 2016 and determined that no additional subsequent events occurred. On April 14, 2016, the Company received a waiver of compliance for certain financial covenants in its existing five-year term loan and revolving line of credit with U.S. Bank for the current period ended December 31, 2016. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 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 Revenue Recognition in Financial Statements The Company offers discounts on sales to GNC franchises on many of its products. Discounts are updated monthly and made available to all franchisees. Revenue is recorded net of all discounts taken at the time of sale for all direct sales. Indirect sales involve sales through GNC’s centralized distribution platform. Fulfillment to franchisees from GNC’s distribution centers often spans several months and accounting periods after the initial indirect sale. Given that the discount programs change monthly, it is impossible to predict with any certainty what discounts will be taken on which products and at what time. As a result, the Company has historically booked gross revenue through the indirect channel upon shipment to GNC. Discounts taken by franchisees upon fulfillment from GNC’s distribution center are billed back to the Company as a credit to a future invoice. The Company accounted for these deductions (“ Vendor Funded Discounts Nine Months Ended Year Ended September 30, December 31, Revenue 2015 2014 2015 2014 As reported, gross $ 15,139,949 $ 17,812,097 $ 19,406,875 $ 19,960,376 Vendor Funded Discount (1,063,312 ) (263,833 ) (1,475,411 ) (380,571 ) As revised, net 14,076,637 17,548,264 17,931,464 19,579,806 Gross profit As reported, gross profit 6,124,103 6,450,964 7,753,818 7,092,909 As reported, gross margin 40.4 % 36.2 % 40.0 % 35.5 % As revised, gross profit 5,060,791 6,187,131 6,278,407 6,712,338 As revised, gross margin 36.0 % 35.3 % 35.0 % 34.3 % Selling & marketing expense As reported 2,773,293 1,788,521 4,401,474 2,378,413 Vendor Funded Discount (1,063,312 ) (263,833 ) (1,475,411 ) (380,571 ) As revised 1,709,981 1,524,688 2,926,063 1,997,842 Operating income $ 714,806 $ 2,383,595 $ (1,089,734 ) 1,852,124 The above pro forma presentation shows what revenue, gross profit, gross margin and selling and marketing expense would have been if the above stated revised accounting policy for Vendor Funded Discounts had been implemented as of January 1, 2014. Operating income and net income are not impacted by the change. Moreover, the results for the year ended December 31, 2015 will be reported under the new accounting policy. As such, all “as reported” amounts for that period reflect what would have been reported had the new accounting policy not been implemented prior to the Company filing its yearly results for the year ended December 31, 2015. |
Accounts Receivable and Allowance for Doubtful Accounts | All of the CompanyÂ’s accounts receivable balance is related to trade receivables which, in the quarter ended September 30, 2015, increased due principally to the transition to GNCÂ’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 CompanyÂ’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. We maintain an insurance policy for iSatori Products for international shipments, which protects the Company in the event the international distributor does not or cannot remit payment. The Company recorded an expense of $32,148 related to bad debt and doubtful accounts during the year ended December 31, 2015, inclusive of a contra-expense of $3,645 for a received payment on a previously written off receivable. |
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, 2015, 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 |
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 |
Impairment of Long-Lived Assets | In accordance with ASC Topic 3605, Long-Lived Assets |
Income Taxes | Deferred income taxes are provided based on the provisions of ASC Topic 740, Accounting for Income Taxes, The Company adopted the provisions of FASB Interpretation No. 48; Accounting For Uncertainty In Income Taxes FIN 48 |
Concentration of Credit Risk | The Company maintains its operating cash balances in a bank located in Nebraska. The Federal Depository Insurance Corporation (“ FDIC” |
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 CompanyÂ’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 ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Tables | |
Revenue Recognition | Nine Months Ended Year Ended September 30, December 31, Revenue 2015 2014 2015 2014 As reported, gross $ 15,139,949 $ 17,812,097 $ 19,406,875 $ 19,960,376 Vendor Funded Discount (1,063,312 ) (263,833 ) (1,475,411 ) (380,571 ) As revised, net 14,076,637 17,548,264 17,931,464 19,579,806 Gross profit As reported, gross profit 6,124,103 6,450,964 7,753,818 7,092,909 As reported, gross margin 40.4 % 36.2 % 40.0 % 35.5 % As revised, gross profit 5,060,791 6,187,131 6,278,407 6,712,338 As revised, gross margin 36.0 % 35.3 % 35.0 % 34.3 % Selling & marketing expense As reported 2,773,293 1,788,521 4,401,474 2,378,413 Vendor Funded Discount (1,063,312 ) (263,833 ) (1,475,411 ) (380,571 ) As revised 1,709,981 1,524,688 2,926,063 1,997,842 Operating income $ 714,806 $ 2,383,595 $ (1,089,734 ) 1,852,124 |
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, 2015 | |
Prepaid Expenses Tables | |
Prepaid Expenses | December 31, 2015 2014 Prepaid Expenses 334,483 47,202 Total $ 334,483 $ 47,202 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventories Tables | |
Inventories | December 31, 2015 2014 Finished goods $ 3,381,973 $ 1,904,950 Components 1,408,328 379,972 Total $ 4,790,301 $ 2,284,922 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property And Equipment Tables | |
PROPERTY AND EQUIPMENT | December 31, 2015 2014 Equipment $ 808,324 $ 289,169 Accumulated depreciation $ (581,520 ) $ (286,063 ) Total $ 226,804 $ 3,107 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Acquisition Tables | |
Proforma information | Year Ended December 31, (in thousands, except per share data) 2015 2014 Total revenue $24,842 $29,235 Income from continuing operations (4,813) 503 Basic earnings per share from continuing operations $(0.44) $0.05 Diluted earnings per share from continuing operations $(0.44) $0.04 |
NOTE PAYABLES (Tables)
NOTE PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Note Payables Tables | |
Notes payable | Notes payable consist of the following as of December 31, 2015 and December 31, 2014: December 31, 2015 December 31, 2014 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, June 25, 2014 and May 15, 2015 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, 2016 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. $ 1,490,305 $ 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. 1,439,727 1,946,830 Notes payable for warehouse equipment 54,036 Total of notes payable and advances 2,984,068 2,383,919 Less current portion (2,069,930) (944,120 ) Long-term portion $ 914,138 $ 1,439,799 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Tables | |
Warrants issued and outstanding | Issued Exercise Price Issuance Date Expiration Date Vesting 17,320 $ 12.99 10/01/13 01/01/18 No 43,300 $ 12.99 07/16/13 07/16/18 No 25,000 $ 3.000 11/01/13 11/01/16 No 25,000 $ 2.000 11/01/13 11/01/16 No 110,620 Expected Dividend Yield 0.0% Volatility 40.0% Weighted average risk free interest rate 0.9% Weighted average expected life (in years) 1.7 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes Tables | |
Provision (benefit) for income taxes | The provision (benefit) for income taxes from continued operations for the years ended December 31, 2015 and 2014 consist of the following: December 31, 2015 2014 Current: Federal AMT $ — $ 24,354 State — 147,000 — 171,354 Deferred: Federal $ 5,074 $ 626,280 State 5,510 — 10,584 626,280 Change in valuation allowance (10,584 ) (626,280 ) Provision (benefit) for income taxes, net $ — $ 171,354 |
Federal statutory tax rate | 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, 2015 2014 Statutory Federal Income Rate 35.00% 34.00% State Income taxes and other 4.35% 7.09% Federal AMT 0.00% 1.30% Temporary differences 0.00% 0.22% Permanent Items 1.62% 0.60% Valuation Allowance -42.22% -34.00% Return to Provision 1.25% 0.00% Effective Tax Rate 0.00% 9.21% 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, 2015 2014 Inventory UNICAP $ 41,401 $ - Allowance for Doubtful Accounts 162,849 - Foreign tax credits 30,086 - Share Based Compensation 39,485 Other 24,100 - Property and equipment 16,712 - Net operating loss carryforwards 7,666,946 6,602,000 Valuation allowance (7,168,700) (5,913,000) Deferred income tax asset 812,879 689,000 Deferred expenses (71,482) - Other (52,397) - Deferred income tax liability (123,879) - Net deferred tax asset $ 689,000 $ 689,000 |
Deferred tax assets | 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, 2015 2014 Inventory UNICAP $ 41,401 $ - Allowance for Doubtful Accounts 162,849 - Foreign tax credits 30,086 - Share Based Compensation 39,485 Other 24,100 - Property and equipment 16,712 - Net operating loss carryforwards 7,666,946 6,602,000 Valuation allowance (7,168,700) (5,913,000) Deferred income tax asset 812,879 689,000 Deferred expenses (71,482) - Other (52,397) - Deferred income tax liability (123,879) - Net deferred tax asset $ 689,000 $ 689,000 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements Tables | |
Fair value of recurring assets and liabilities | Level 1 Level 2 Level 3 Total Assets Cash $ 1,532,550 1,532,550 Intangible assets 6,929,505 6,929,505 $ 1,532,550 6,929,505 8,462,055 |
NET INCOME _ (LOSS) PER SHARE (
NET INCOME / (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Income Loss Per Share Tables | |
Dilutive shares included in EPS | December 31, 2015 2014 Warrants 98,742 188,391 Options 614,607 208,778 Preferred Stock (as converted) - - Total 713,349 397,169 |
NET INCOME PER SHARE | The following table represents the computation of basic and diluted losses per share at December 31, 2015 and 2014: December 31, December 31, 2015 2014 Net income (losses) available for common shareholders (1,165,940) 1,673,602 Basic weighted average common shares outstanding 8,677,433 8,180,428 Basic income (loss) per share (0.13) 0.20 Diluted weighted average common shares outstanding 8,677,433 8,577,597 Diluted income (loss) per share (0.13) 0.20 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) | 2 Months Ended | 12 Months Ended |
Mar. 15, 2016 | Dec. 31, 2015 | |
Description of Business | ||
State of incorporation | Nevada | |
Company incorporation date | Jul. 26, 2005 | |
Share repurchase program, authorized for repurchase, value | $ 600,000 | |
Repurchase of common stock, shares | 206,187 | |
Repurchase of common stock, price per share | $ 1.93 | |
MaximumMonthly [Member] | ||
Description of Business | ||
Share repurchase program, authorized for repurchase, value | $ 50,000 |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue | $ 17,931,464 | $ 19,960,376 | ||
Gross Profit | 6,278,407 | 7,092,910 | ||
Selling and Marketing Expense | 2,926,063 | 2,378,413 | ||
Operating Income | $ 714,806 | $ 2,383,595 | (1,089,734) | 1,852,125 |
As Reported | ||||
Revenue | 15,139,949 | 17,812,097 | 19,406,875 | 19,960,376 |
Gross Profit | $ 6,124,103 | $ 6,450,964 | $ 7,753,818 | $ 7,092,909 |
Gross Margin | 40.40% | 36.20% | 40.00% | 35.50% |
Selling and Marketing Expense | $ 2,773,293 | $ 1,788,521 | $ 4,401,474 | $ 2,378,413 |
Vendor Funded Discount | ||||
Revenue | (1,063,312) | (263,833) | (1,475,411) | (380,571) |
Selling and Marketing Expense | (1,063,312) | (263,833) | (1,475,411) | (380,571) |
As Revised | ||||
Revenue | 14,076,637 | 17,548,264 | 17,931,464 | 19,579,806 |
Gross Profit | $ 5,060,791 | $ 6,187,131 | $ 6,278,407 | $ 6,712,338 |
Gross Margin | 36.00% | 35.30% | 35.00% | 34.30% |
Selling and Marketing Expense | $ 1,709,981 | $ 1,524,688 | $ 2,926,063 | $ 1,997,842 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Dec. 31, 2015 | |
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 ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies | ||
Allowance for doubtful accounts | $ 32,148 | |
Inventory | 4,790,301 | $ 2,284,922 |
FDIC Insurance amount | 250,000 | |
NDS Products | ||
Summary of Significant Accounting Policies | ||
Inventory | 3,943,705 | |
iSatori Products | ||
Summary of Significant Accounting Policies | ||
Inventory | $ 846,596 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Prepaid Expenses Details | ||
Prepaid Expenses | $ 334,483 | $ 47,202 |
Total | $ 334,483 | $ 47,202 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Inventories | ||
Finished goods | $ 3,381,973 | $ 1,904,950 |
Components | 1,408,328 | 379,972 |
Total | $ 4,790,301 | $ 2,284,922 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
PROPERTY AND EQUIPMENT | ||
Equipment | $ 808,324 | $ 289,169 |
Accumulated depreciation | (581,520) | (286,063) |
Total | $ 226,804 | $ 3,107 |
PROPERTY AND EQUIPMENT (Detai41
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property and Equipment | ||
Depreciation and amortization expense | $ 29,830 | $ 6,298 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Acquisition Details | ||
Total revenue | $ 24,842 | $ 29,235 |
Income from continuing operations | $ (4,813) | $ 503 |
Basic earnings per share from continuing operations | $ (.44) | $ .05 |
Diluted earnings per share from continuing operations | $ (.44) | $ .04 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Amortization expense of intangible assets | $ 270,311 | $ 219,748 |
Total consideration | 4,564,959 | |
iSatori Products | ||
Pre-closing note issued by iSatori and forgiven by FitLife at closing | 750,000 | |
Fair value of shares issued to iSatori shareholders | 3,566,092 | |
Fair value of replacement options and warrants issued to iSatori employees | 191,121 | |
Capitalized S-4 costs | 57,507 | |
Cash paid to shareholders of iSatori in lieu of fractional shares | 239 | |
Total consideration | 4,564,959 | |
Fair Value of Assets Acquired | ||
Cash | 705,516 | |
Other current assets | 2,411,943 | |
Property and equipment | 237,498 | |
Intangible assets | 2,022,507 | |
Goodwill | 4,139,940 | |
Other non-current assets | 57,314 | |
Current liabilities | 3,959,760 | |
Line of credit | $ 1,050,000 |
INTELLECTUAL PROPERTY (Details
INTELLECTUAL PROPERTY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
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, 2015 | Dec. 31, 2014 |
Notes payable | ||
Revolving Line of Credit | $ 1,490,305 | $ 437,089 |
Term loan | 1,439,727 | 1,946,830 |
Notes payable for warehouse equipment | 54,036 | |
Total of notes payable and advances | 2,984,068 | 2,383,919 |
Less current portion | (2,069,930) | (944,120) |
Long-term portion | $ 914,138 | $ 1,439,799 |
NET INCOME_(LOSS) PER SHARE (De
NET INCOME/(LOSS) PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
NET INCOME PER SHARE | ||
Potential shares of common stock included in the number of shares outstanding | 713,349 | 397,169 |
Income / (Losses) available for common shareholders | $ (1,165,940) | $ 1,673,602 |
Basic weighted average common shares outstanding | 8,677,433 | 8,180,428 |
Basic income / (loss) per share | $ (.13) | $ 0.20 |
Diluted weighted average common shares outstanding | 8,677,433 | 8,577,597 |
Diluted income / (loss) per share | $ (.13) | $ 0.20 |
Warrant [Member] | ||
NET INCOME PER SHARE | ||
Potential shares of common stock included in the number of shares outstanding | 98,742 | 188,391 |
Option [Member] | ||
NET INCOME PER SHARE | ||
Potential shares of common stock included in the number of shares outstanding | 614,607 | 208,778 |
Preferred Stock [Member] | ||
NET INCOME PER SHARE | ||
Potential shares of common stock included in the number of shares outstanding | 0 | 0 |
EQUITY (Details)
EQUITY (Details) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Expected dividend yield | 0.00% |
Volatility | 40.00% |
Weighted average risk free interest rate | 0.90% |
Weighted average expected life (in years) | 1 year 8 months 12 days |
Warrants1 [Member] | |
Warrants Issued | 17,320 |
Exercise price | $ / shares | $ 12.99 |
Issuance Date | Oct. 1, 2013 |
Expiration Date | Jan. 1, 2018 |
Warrants2Member | |
Warrants Issued | 43,300 |
Exercise price | $ / shares | $ 12.99 |
Issuance Date | Jul. 16, 2013 |
Expiration Date | Jul. 16, 2018 |
Warrants3Member | |
Warrants Issued | 25,000 |
Exercise price | $ / shares | $ 3 |
Issuance Date | Nov. 1, 2013 |
Expiration Date | Nov. 1, 2016 |
Warrants4Member | |
Warrants Issued | 25,000 |
Exercise price | $ / shares | $ 2 |
Issuance Date | Nov. 1, 2013 |
Expiration Date | Nov. 1, 2016 |
Warrant [Member] | |
Warrants Issued | 110,620 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 2 Months Ended | 12 Months Ended | |
Mar. 15, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
EQUITY | |||
Authorized to issue shares of common stock | 150,000,000 | ||
Share price, par value | $ 0.01 | ||
Common shares issued and outstanding | 10,444,257 | 8,198,516 | |
Subscribed shares | 9,688 | ||
Treasury shares | 85,833 | ||
Fair value expense of services rendered | $ 453,779 | $ 116,334 | |
New share issuances | 2,408,937 | 81,042 | |
Shares cancelled | 206,187 | ||
Consultants [Member] | |||
EQUITY | |||
New share issuances | 35,560 | ||
Shares cancelled | 37,000 | ||
Board [Member] | |||
EQUITY | |||
New share issuances | 16,938 | 12,148 | |
Employees [Member] | |||
EQUITY | |||
New share issuances | 66,667 | 33,334 | |
Option [Member] | |||
EQUITY | |||
Options and warrants issued and outstanding | 902,205 | ||
Option [Member] | Option 2 [Member] | |||
EQUITY | |||
Warrants issued and outstanding | 40,000 | ||
Exercise price | $ 2.20 | ||
Option [Member] | Option 3 [Member] | |||
EQUITY | |||
Warrants issued and outstanding | 60,000 | ||
Exercise price | $ 1 | ||
Option [Member] | Option 4 [Member] | |||
EQUITY | |||
Warrants issued and outstanding | 120,000 | ||
Exercise price | $ .90 | ||
Option [Member] | Option 1 [Member] | |||
EQUITY | |||
Warrants issued and outstanding | 370,000 | ||
Exercise price | $ 2.30 | ||
Warrant [Member] | |||
EQUITY | |||
Options and warrants issued and outstanding | 110,620 | ||
Common And Preferred Stock [Member] | Series A [Member] | |||
EQUITY | |||
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] | |||
EQUITY | |||
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] | |||
EQUITY | |||
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, 2015 | Dec. 31, 2014 | |
Income Taxes Details | ||
Current income tax provision (benefit), federal | $ 0 | $ 24,354 |
Current income tax provision (benefit), state | 0 | 147,000 |
Total current income tax provision | 0 | 171,354 |
Deferred income tax provision (benefit), federal | 5,074 | 626,280 |
Deferred income tax provision (benefit), state | 5,510 | 0 |
Total deferred income tax provision | 10,584 | 626,280 |
Change in valuation allowance | (10,584) | (626,280) |
Provision (benefit) for income taxes, net | $ (27,972) | $ 171,355 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes Details 1 | ||
Statutory federal income rate | 35.00% | 34.00% |
State income taxes and other | 4.35% | 7.09% |
Federal AMT | 0.00% | 1.30% |
Temporary differences | 0.00% | 0.22% |
Permanent Items | 1.62% | 0.60% |
Valuation Allowance | (42.22%) | (34.00%) |
Return to Provision | 1.25% | 0.00% |
Effective tax rate | 0.00% | 9.21% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Taxes Details 1 | ||
Inventory UNICAP | $ 41,401 | |
Allowance for Doubtful Accounts | 162,849 | |
Foreign tax credits | 30,086 | |
Share Based Compensation | 39,485 | |
Other | 24,100 | |
Property and equipment | 16,712 | |
Net operating loss carryforwards | 7,666,946 | $ 6,602,000 |
Valuation allowance | (7,168,700) | (5,913,000) |
Deferred income tax asset | 812,879 | $ 689,000 |
Deferred expenses | (71,482) | |
Other | (52,397) | |
Deferred income tax liability | (123,879) | |
Net deferred tax asset | $ 689,000 | $ 689,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2013 | |
Income Taxes | ||
Net operating loss carryforwards, Federal | $ 22,400,000 | |
Net operating loss carryforwards, State | 2,298,000 | |
Restored deferred tax assets related to net operating losses | $ 68,900 | $ 689,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation reserve | $ 95,775 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) | Dec. 31, 2015USD ($) |
Fair value cash | $ 1,532,550 |
Fair value intangible assets | 6,929,505 |
Fair value assets | 8,462,055 |
Fair Value Inputs Level 1 [Member] | |
Fair value cash | 0 |
Fair value intangible assets | 0 |
Fair value assets | 0 |
Fair Value Inputs Level 2 [Member] | |
Fair value cash | 1,532,550 |
Fair value intangible assets | 0 |
Fair value assets | 1,532,550 |
Fair Value Inputs Level 3 [Member] | |
Fair value cash | 0 |
Fair value intangible assets | 6,929,505 |
Fair value assets | $ 6,929,505 |