Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 11, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | FITLIFE BRANDS, INC. | |
Entity Central Index Key | 1,374,328 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
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 Common Stock, Shares Outstanding | 10,504,472 | |
Trading Symbol | FTLF | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash | $ 1,430,372 | $ 1,293,041 |
Accounts receivable, net | 3,676,624 | 2,792,649 |
Security deposits | 24,956 | 24,956 |
Inventory | 2,564,682 | 3,756,716 |
Note receivable, current portion | 2,782 | 2,782 |
Prepaid income tax | 120,000 | 120,000 |
Prepaid expenses and other current assets | 121,674 | 136,014 |
Total current assets | 7,941,090 | 8,126,157 |
PROPERTY AND EQUIPMENT, net | 148,805 | 171,004 |
Note receivable, net of current portion | 48,195 | 52,696 |
Deferred Taxes | 689,000 | 689,000 |
Intangibles assets, net | 6,297,943 | 6,507,505 |
TOTAL ASSETS | 15,125,033 | 15,546,362 |
CURRENT LIABILITIES: | ||
Accounts payable | 2,148,313 | 1,596,748 |
Accrued expenses and other liabilities | 669,063 | 539,765 |
Line of credit | 1,950,000 | 1,950,000 |
Term loan agreement, current portion | 554,706 | 544,825 |
Notes payable | 7,004 | 12,700 |
Total current liabilities | 5,329,086 | 4,644,038 |
LONG-TERM DEBT, net of current portion | 89,113 | 369,177 |
TOTAL LIABILITIES | 5,418,199 | 5,013,215 |
CONTINGENCIES AND COMMITMENTS | ||
STOCKHOLDERS' EQUITY: | ||
Common stock, $.01 par value, 150,000,000 shares authorized; 10,504,472 and 10,483,389 issued and outstanding as of June 30, 2017 and December 31, 2016, respectively | 105,045 | 104,495 |
Subscribed common stock | 339 | |
Treasury stock | (44,416) | |
Additional paid-in capital | 30,932,797 | 30,919,289 |
Accumulated deficit | (21,331,008) | (20,446,559) |
Total stockholders' equity | 9,706,834 | 10,533,148 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 15,125,033 | 15,546,363 |
Preferred Class A [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | 0 | 0 |
Preferred Class B [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | 0 | 0 |
Preferred Class C [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
STOCKHOLDERS' EQUITY: | ||
Common Stock, Par Value Per Share | $ .01 | $ .01 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 10,504,472 | 10,483,389 |
Common Stock, Shares, Outstanding | 10,504,472 | 10,483,389 |
Preferred Class A [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred Stock, Par Value Per Share | $ 0.01 | |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares, Issued | 0 | 0 |
Preferred Stock, Shares, Outstanding | 0 | 0 |
Preferred Class B [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred Stock, Par Value Per Share | $ 0.01 | |
Preferred Stock, Shares Authorized | 1,000 | 1,000 |
Preferred Stock, Shares, Issued | 0 | 0 |
Preferred Stock, Shares, Outstanding | 0 | 0 |
Preferred Class C [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred Stock, Par Value Per Share | $ 0.01 | |
Preferred Stock, Shares Authorized | 500 | 500 |
Preferred Stock, Shares, Issued | 0 | 0 |
Preferred Stock, Shares, Outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 5,022,338 | $ 8,662,760 | $ 10,611,693 | $ 16,274,989 |
Cost of Goods Sold | 3,499,120 | 4,851,166 | 7,167,910 | 9,115,857 |
Gross Profit | 1,523,218 | 3,811,594 | 3,443,783 | 7,159,132 |
OPERATING EXPENSES: | ||||
General and administrative | 1,009,934 | 1,356,464 | 2,170,003 | 2,745,671 |
Selling and marketing | 913,371 | 1,111,129 | 1,860,758 | 2,026,687 |
Depreciation and amortization | 117,312 | 125,996 | 236,650 | 250,751 |
Total operating expenses | 2,040,617 | 2,593,589 | 4,267,411 | 5,023,109 |
OPERATING INCOME (LOSS) | (517,399) | 1,218,005 | (823,628) | 2,136,023 |
OTHER (INCOME) AND EXPENSES | ||||
Interest expense | 29,015 | 27,172 | 55,676 | 56,600 |
Other expense (income) | 5,145 | (2,203) | 5,145 | (2,767) |
Total other income, net | 34,160 | 24,969 | 60,821 | 53,833 |
INCOME TAXES | 114,000 | 189,000 | ||
NET INCOME (LOSS) | $ (551,559) | $ 1,079,036 | $ (884,449) | $ 1,893,190 |
NET INCOME (LOSS) PER SHARE: | ||||
Basic | $ (0.05) | $ 0.1 | $ (0.08) | $ 0.18 |
Diluted | $ (0.05) | $ 0.09 | $ (0.08) | $ 0.17 |
Basic weighted average common shares | 10,470,158 | 10,408,264 | 10,455,814 | 10,397,077 |
Diluted weighted average common shares | 10,470,158 | 11,520,541 | 10,455,814 | 11,459,628 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2017 - USD ($) | Common Stock | Subscribed Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, Shares at Dec. 31, 2016 | 10,483,389 | |||||
Beginning balance, Amount at Dec. 31, 2016 | $ 104,834 | $ 339 | $ (44,416) | $ 30,919,289 | $ (20,446,559) | $ 10,533,148 |
Common stock issued for services, Shares | 63,003 | |||||
Common stock issued for services, Amount | $ 630 | 34,370 | 35,000 | |||
Cancellation of treasury stock, Shares | (419,200) | |||||
Cancellation of treasury stock, Amount | $ (419) | $ 44,416 | (43,997) | |||
Issuance of subscribed common stock, Amount | $ 339 | $ (339) | ||||
Fair value of options issued for services | 23,135 | 23,135 | ||||
Net loss | (884,449) | (884,449) | ||||
Ending balance, Shares at Jun. 30, 2017 | 10,504,472 | |||||
Ending balance, Amount at Jun. 30, 2017 | $ 105,045 | $ 30,932,797 | $ (21,331,008) | $ 9,706,834 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||
Net income (loss) | $ (884,449) | $ 1,893,190 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 236,650 | 250,751 |
Common stock issued for services | 35,000 | 51,331 |
Warrants and options issued for services | 23,135 | 27,537 |
Loss on disposal of assets | 5,144 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (883,975) | (3,697,593) |
Inventory | 1,192,034 | 1,141,061 |
Deferred tax asset | 123,879 | |
Prepaid income tax | 151,000 | |
Prepaid expenses | 14,340 | 137,081 |
Note receivable | 4,501 | 5,485 |
Accounts payable | 551,565 | 336,360 |
Accrued expenses and other liabilities | 129,298 | (185,697) |
Litigation reserve | (95,775) | |
Income tax payable | 38,000 | |
Net cash provided by operating activities | 423,243 | 176,610 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (10,033) | (21,619) |
Long-term investment | 2,027 | |
Net cash provided by (used in) investing activities | (10,033) | (19,592) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from draw down on credit line | 520,000 | |
Repayments of term loan and note payable | (275,879) | (269,452) |
Net cash provided by (used in) financing activities | (275,879) | 250,548 |
INCREASE IN CASH | 137,331 | 407,566 |
CASH, BEGINNING OF PERIOD | 1,293,041 | 1,532,550 |
CASH, END OF PERIOD | 1,430,372 | 1,940,116 |
Supplemental disclosure operating activities | ||
Cash paid for interest | 55,676 | 56,601 |
Non-cash investing and financing activities | ||
Cancellation of Treasury Stock | $ 44,416 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2017 | |
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 NDS Products iSatori 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 The Company is headquartered in Omaha, Nebraska and maintains an office in Golden, Colorado. For more information on the Company, please go to http://www.fitlifebrands.com |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | The accompanying interim condensed unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation are included. Operating results for the three and six month period ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. While management of the Company believes the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited condensed consolidated financial statements and the footnotes thereto for the fiscal year ended December 31, 2016 as filed with the Securities and Exchange Commission as an exhibit to our Annual Report on Form 10-K. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
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: Principles 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 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. Impairment of Long-Lived Assets The Company had goodwill and intangible assets with a carrying value of $4,422,448 and $1,875,495, respectively, as of the quarter ended June 30, 2017. In accordance with ASC Topic 350 Goodwill and Other Intangible Assets, the Company assesses the carrying value of such intangible assets for impairment on a periodic basis and records an impairment charge if the carrying value of such intangible assets exceeds the estimated fair value of the reporting unit, which in this case is the Company. The Company performed its annual goodwill impairment test as of December 31, 2016, which did not indicate the existence of an impairment at that time. While the fiscal year-to-date financial performance have not met our expectations, and the enterprise value of the Company based on current price of the stock the Company may fluctuate at or near the recorded levels of goodwill and indefinite-lived intangible assets, Management does not consider these results to be a triggering event requiring the performance of an interim goodwill impairment test. The Company will continue to monitor its operating results for indicators of impairment and perform additional tests as necessary. The Company's fiscal 2017 annual impairment test will be performed as of December 31, 2017, which could result in an impairment charge to goodwill depending on the Companys finalized forecast for fiscal 2018 and other market conditions Customer Concentration Gross sales prior to reduction for vendor funded discounts and coupons to GNC during the period ended June 30, 2017 and 2016 were approximately $11,235,892 and $14,844,691, respectively representing 81.9% and 82.8% of total revenue respectively. Accounts receivable attributable to GNC as of June 30, 2017 and June 30, 2016 were approximately $3,115,274 and $5,489,253, respectively representing 84.7% and 86.0% of the Company's total accounts receivable balance, respectively. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ( "FASB "ASU" Revenue from Contracts with Customers In February 2016, the FASB issued ASU No. 2016-02, Leases Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | The Companys inventories as of June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Finished goods $ 1,945,103 $ 3,069,531 Components 619,580 687,185 Total $ 2,564,683 $ 3,756,716 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | The Companys fixed assets as of June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Equipment $ 796,790 792,930 Accumulated depreciation (647,985 ) (621,926 ) Total $ 148,805 171,004 Depreciation and amortization expense for the six months ended June 30, 2017 was $27,088 as compared to $38,667 for the six-month period ended June 30, 2016. During the period ended June 30, 2017, the Company also disposed various equipment with a cost of $6,173 and accumulated depreciation of $1,029 which resulted in a loss on disposal of $5,144 |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | Notes payable consist of the following as of June 30, 2017 and December 31, 2016: June 30, 2017 December 31, 2016 Revolving line of credit of $3,000,000 from U.S. 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, May 15, 2015 and August 15, 2016 at an interest rate of 3.0% plus the one-month LIBOR quoted by U.S. Bank from Reuters Screen LIBOR. The line of credit matured on June 15, 2017; however, U.S. Bank has agreed to extend the maturity date of the line of credit for an additional 60 days to August 15, 2017. The line of credit is secured by substantially all the assets of the Company. During the 60-day period in which U.S. Bank has extended the maturity date of the line of credit, U.S. Bank is conducting an audit of the Companys assets securing the line of credit. Advances to the Company under the line of credit are based on 80% of the eligible receivables and 50% of the eligible inventory (such inventory amount not to exceed 50% of the borrowing base) of the Company. The Company pays interest only on this line of credit. $ 1,950,000 $ 1,950,000 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. 643,819 914,002 Notes payable for warehouse equipment 7,004 12,700 Total of notes payable and advances 2,600,823 2,876,703 Less current portion 2,511,710 (2,507,526 ) Long-term portion $ 89,113 $ 369,177 The notes are subject to certain financial covenants for which the Company was not in compliance at June 30, 2017, but has requested a waiver of for balance thereon |
NET INCOME _ (LOSS) PER SHARE
NET INCOME / (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME / (LOSS) PER SHARE | Basic net income per share is calculated by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share also includes the weighted average number of outstanding warrants and options in the denominator. In the event of a loss, the diluted loss per share is the same as basic loss per share. Because of the net loss, the weighted average number of diluted shares of common stock outstanding for the three and six months ended June 30, 2017 did not include 60,620 shares of common stock issuable upon the exercise of outstanding common stock purchase warrants, and 899,375 shares of common stock issuable upon the exercise of outstanding options to purchase common stock due to its anti-dilutive effect. The following table represents the computation of basic and diluted income and (losses) per share for the three months and six ended June 30, 2017 and 2016. June 30, 2017 June 30, 2016 Income / (Losses) available for common shareholders $ (551,559 ) $ 1,079,036 Basic weighted average common shares outstanding 10,470,158 10,408,264 Basic income / (loss) per share $ (0.05 ) $ 0.10 Diluted weighted average common shares outstanding 10,470,158 11,520,541 Diluted income / (loss) per share $ (0.05 ) $ 0.09 |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
EQUITY | Common and Preferred Stock The Company is authorized to issue 150.0 million shares of common stock, $0.01 par value, of which 10,504,472 common shares were issued and outstanding as of June 30, 2017. 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 June 30, 2017. As of June 30, 2017, 34,314 shares of common stock were subscribed for and not yet issued, however, all such subscribed shares were issued prior to filing of this report on Form 10Q for the three and six month periods ended June 30, 2017 and reflected on the balance sheet as issued. Options As of June 30, 2017, 899,375 options to purchase common stock of the Company were issued and outstanding, additional information about which is included in the following table. Outstanding Exercise Price Issuance Date Expiration Date Vesting 50,000 $ 0.90 01/16/13 01/16/18 No 10,000 $ 1.00 03/04/13 03/04/18 No 217,614 $ 1.39 05/09/16 05/09/21 Yes 4,330 $ 1.44 09/29/15 09/29/25 No 40,000 $ 2.20 04/11/14 04/11/19 No 370,000 $ 2.30 02/23/15 02/23/20 No 93,503 $ 3.31 02/16/12 02/16/22 No 19,424 $ 4.62 05/13/15 05/13/25 Yes 4,330 $ 5.49 04/08/15 04/08/25 No 1,732 $ 5.81 03/05/15 03/05/25 No 33,774 $ 5.89 03/23/15 03/23/25 Yes 8,660 $ 12.13 09/17/13 09/17/23 Yes 21,650 $ 12.99 09/06/12 09/05/17 No 7,038 $ 12.99 11/14/12 09/27/22 No 17,320 $ 14.43 01/16/13 11/30/22 No 899,375 During the six month period ended June 30, 2017 and 2016, the Company recognized compensation expense of $23,135 and $3,983, respectively, to account the fair value of stock options that vested. There was no intrinsic value for all the outstanding options at June 30, 2017 since the exercise price of these options were greater than the June 30, 2017 closing stock price of $0.51 per share. Warrants As of June 30, 2017, 60,620 warrants to purchase common stock of the Company were issued and outstanding, additional information about which is included in the following table: Outstanding 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 60,620 There was no intrinsic value for all the outstanding warrants at June 30, 2017 since the exercise price of these warrants was greater than the June 30, 2017 closing stock price of $0.51 per share. Private Placements, Other Issuances and Cancellations The Company periodically issues shares of its common stock, as well as options and warrants to purchase shares of common stock to investors in connection with private placement transactions, and to advisors, consultants and employees for the fair value of services rendered. Absent an arms 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. The Company expenses the fair value of all such issuances in the period incurred, with the exception of options that are subject to vesting which are expensed ratably on a monthly basis over the life of the vesting period. During the quarter ended June 30, 2017, the Company issued 63,003 shares of common stock subscribed for services rendered by directors that elected to take their board fees in shares of common stock in lieu of cash payment and recorded an expense of $35,000 for the fair value of services rendered. The common shares were valued at the date of issuances. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | No federal tax provision has been provided for the period ended June 30, 2017 due to the loss incurred during such periods. A provision for $114,000 was provided for the period ended June 30, 2016 based on the Companys net income for the period and projected annual effective tax rate. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | The Company’s revolving line of credit from U.S. 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, May 15, 2015 and August 15, 2016, matured on June 15, 2017. However, U.S. Bank agreed to extend the maturity date of the line of credit for an additional 60 days to August 15, 2017. As of August 21, 2017, a condition of default exists under the line of credit. Although no assurances can be given, management is currently negotiating with U.S. Bank to extend the line of credit through December 15, 2017, and avoid an event of default. The line of credit is secured by substantially all the assets of the Company. In accordance with the Subsequent Events Topic of the FASB ASC 855, we have evaluated subsequent events through the filing date and noted that no additional subsequent events exist that are reasonably likely to impact the financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Summary Of Significant Accounting Policies Policies | |
Principles 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 | 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. |
Impairment of Long-Lived Assets | The Company had goodwill and intangible assets with a carrying value of $4,422,448 and $1,875,495, respectively, as of the quarter ended June 30, 2017. In accordance with ASC Topic 350 Goodwill and Other Intangible Assets, the Company assesses the carrying value of such intangible assets for impairment on a periodic basis and records an impairment charge if the carrying value of such intangible assets exceeds the estimated fair value of the reporting unit, which in this case is the Company. The Company performed its annual goodwill impairment test as of December 31, 2016, which did not indicate the existence of an impairment at that time. While the fiscal year-to-date financial performance have not met our expectations, and the enterprise value of the Company based on current price of the stock the Company may fluctuate at or near the recorded levels of goodwill and indefinite-lived intangible assets, Management does not consider these results to be a triggering event requiring the performance of an interim goodwill impairment test. The Company will continue to monitor its operating results for indicators of impairment and perform additional tests as necessary. The Company's fiscal 2017 annual impairment test will be performed as of December 31, 2017, which could result in an impairment charge to goodwill depending on the Companys finalized forecast for fiscal 2018 and other market conditions |
Customer Concentration | Gross sales prior to reduction for vendor funded discounts and coupons to GNC during the period ended June 30, 2017 and 2016 were approximately $11,235,892 and $14,844,691, respectively representing 81.9% and 82.8% of total revenue respectively. Accounts receivable attributable to GNC as of June 30, 2017 and June 30, 2016 were approximately $3,115,274 and $5,489,253, respectively representing 84.7% and 86.0% of the Company's total accounts receivable balance, respectively. |
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board ( "FASB "ASU" Revenue from Contracts with Customers In February 2016, the FASB issued ASU No. 2016-02, Leases Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventories Tables | |
Inventories | June 30, 2017 December 31, 2016 Finished goods $ 1,945,103 $ 3,069,531 Components 619,580 687,185 Total $ 2,564,683 $ 3,756,716 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property And Equipment Tables | |
PROPERTY AND EQUIPMENT | June 30, 2017 December 31, 2016 Equipment $ 796,790 792,930 Accumulated depreciation (647,985 ) (621,926 ) Total $ 148,805 171,004 |
NOTE PAYABLES (Tables)
NOTE PAYABLES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Note Payables Tables | |
Notes payable | June 30, 2017 December 31, 2016 Revolving line of credit of $3,000,000 from U.S. 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, May 15, 2015 and August 15, 2016 at an interest rate of 3.0% plus the one-month LIBOR quoted by U.S. Bank from Reuters Screen LIBOR. The line of credit matured on June 15, 2017; however, U.S. Bank has agreed to extend the maturity date of the line of credit for an additional 60 days to August 15, 2017. The line of credit is secured by substantially all the assets of the Company. During the 60-day period in which U.S. Bank has extended the maturity date of the line of credit, U.S. Bank is conducting an audit of the Companys assets securing the line of credit. Advances to the Company under the line of credit are based on 80% of the eligible receivables and 50% of the eligible inventory (such inventory amount not to exceed 50% of the borrowing base) of the Company. The Company pays interest only on this line of credit. $ 1,950,000 $ 1,950,000 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. 643,819 914,002 Notes payable for warehouse equipment 7,004 12,700 Total of notes payable and advances 2,600,823 2,876,703 Less current portion 2,511,710 (2,507,526 ) Long-term portion $ 89,113 $ 369,177 |
NET INCOME _ (LOSS) PER SHARE (
NET INCOME / (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Net Income Loss Per Share Tables | |
NET INCOME / (LOSS) PER SHARE | June 30, 2017 June 30, 2016 Income / (Losses) available for common shareholders $ (551,559 ) $ 1,079,036 Basic weighted average common shares outstanding 10,470,158 10,408,264 Basic income / (loss) per share $ (0.05 ) $ 0.10 Diluted weighted average common shares outstanding 10,470,158 11,520,541 Diluted income / (loss) per share $ (0.05 ) $ 0.09 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity Tables | |
Options issued and outstanding | Outstanding Exercise Price Issuance Date Expiration Date Vesting 50,000 $ 0.90 01/16/13 01/16/18 No 10,000 $ 1.00 03/04/13 03/04/18 No 217,614 $ 1.39 05/09/16 05/09/21 Yes 4,330 $ 1.44 09/29/15 09/29/25 No 40,000 $ 2.20 04/11/14 04/11/19 No 370,000 $ 2.30 02/23/15 02/23/20 No 93,503 $ 3.31 02/16/12 02/16/22 No 19,424 $ 4.62 05/13/15 05/13/25 Yes 4,330 $ 5.49 04/08/15 04/08/25 No 1,732 $ 5.81 03/05/15 03/05/25 No 33,774 $ 5.89 03/23/15 03/23/25 Yes 8,660 $ 12.13 09/17/13 09/17/23 Yes 21,650 $ 12.99 09/06/12 09/05/17 No 7,038 $ 12.99 11/14/12 09/27/22 No 17,320 $ 14.43 01/16/13 11/30/22 No 899,375 |
Warrants issued and outstanding | Outstanding 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 60,620 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2017 | Jun. 30, 2017 | |
Description of Business | ||
State of incorporation | Nevada | |
Date of incorporation | Jul. 26, 2005 | |
iSatori [Member] | ||
Description of Business | ||
Acquisition date | Sep. 1, 2015 |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |||
Recovered bad debt and doubtful accounts | $ 3,384,308 | $ 2,328,000 | |
Total sales revenue | 10,611,693 | $ 16,274,989 | |
Goodwill | 4,422,448 | ||
Indefinite lived intangible assets | $ 1,875,495 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Inventories | ||
Finished goods | $ 1,945,103 | $ 3,069,531 |
Components | 619,580 | 687,185 |
Total | $ 2,564,683 | $ 3,756,716 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
PROPERTY AND EQUIPMENT | ||
Equipment | $ 796,789 | $ 792,930 |
Accumulated depreciation | (647,984) | (621,926) |
Total | $ 148,805 | $ 171,004 |
PROPERTY AND EQUIPMENT (Detai27
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property and Equipment | |||
Depreciation and amortization expense | $ 27,088 | $ 38,667 | |
Disposal of equipment | $ 6,173 | ||
Accumulated depreciation on disposal | 1,029 | ||
Loss on disposal of equipment | $ 5,144 |
NOTE PAYABLES (Details)
NOTE PAYABLES (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Notes payable | ||
Revolving Line of Credit | $ 1,950,000 | $ 1,950,000 |
Term loan | 643,819 | 914,002 |
Notes payable | 7,004 | 12,700 |
Total of notes payable and advances | 2,600,823 | 2,876,703 |
Less current portion | (2,511,710) | (2,507,526) |
Long-term portion | $ 89,113 | $ 369,177 |
NOTE PAYABLES (Details Narrativ
NOTE PAYABLES (Details Narrative) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Note Payables Details | |
Revolving LOC maximum | $ 3,000,000 |
Revolving LOC begin date | Apr. 9, 2009 |
Revolving LOC interest rate | 3.00% |
Revolving LOC maturity date | Jun. 15, 2017 |
Term loan face amount | $ 2,600,000 |
Term loan interest rate | 3.60% |
Term loan maturity date | Sep. 4, 2013 |
NET INCOME _ (LOSS) PER SHARE30
NET INCOME / (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
NET INCOME / (LOSS) PER SHARE | ||||
Income / (Losses) available for common shareholders | $ (551,559) | $ 1,079,036 | ||
Basic weighted average common shares outstanding | 10,470,158 | 10,408,264 | 10,455,814 | 10,397,077 |
Basic income / (loss) per share | $ (0.05) | $ 0.1 | $ (0.08) | $ 0.18 |
Diluted weighted average common shares outstanding | 10,470,158 | 11,520,541 | 10,455,814 | 11,459,628 |
Diluted income / (loss) per share | $ (0.05) | $ 0.09 | $ (0.08) | $ 0.17 |
EQUITY (Details)
EQUITY (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Options Issued | 899,375 |
Equity Option [Member] | |
Options Issued | 50,000 |
Exercise price | $ / shares | $ 0.90 |
Issuance Date | Jan. 16, 2013 |
Expiration Date | Jan. 16, 2018 |
Vesting | No |
StockOption2Member | |
Options Issued | 10,000 |
Exercise price | $ / shares | $ 1 |
Issuance Date | Mar. 4, 2013 |
Expiration Date | Mar. 4, 2018 |
Vesting | No |
StockOption3Member | |
Options Issued | 217,614 |
Exercise price | $ / shares | $ 1.39 |
Issuance Date | May 9, 2016 |
Expiration Date | May 9, 2021 |
Vesting | Yes |
StockOption4Member | |
Options Issued | 4,330 |
Exercise price | $ / shares | $ 1.44 |
Issuance Date | Sep. 29, 2015 |
Expiration Date | Sep. 29, 2025 |
Vesting | No |
StockOption5Member | |
Options Issued | 40,000 |
Exercise price | $ / shares | $ 2.20 |
Issuance Date | Apr. 11, 2014 |
Expiration Date | Apr. 11, 2019 |
Vesting | No |
StockOption6Member | |
Options Issued | 370,000 |
Exercise price | $ / shares | $ 2.30 |
Issuance Date | Feb. 23, 2015 |
Expiration Date | Feb. 23, 2020 |
Vesting | No |
StockOption7Member | |
Options Issued | 93,503 |
Exercise price | $ / shares | $ 3.31 |
Issuance Date | Feb. 16, 2012 |
Expiration Date | Feb. 16, 2022 |
Vesting | No |
StockOption8Member | |
Options Issued | 19,424 |
Exercise price | $ / shares | $ 4.62 |
Issuance Date | May 13, 2015 |
Expiration Date | May 13, 2025 |
Vesting | Yes |
StockOption9Member | |
Options Issued | 4,330 |
Exercise price | $ / shares | $ 5.49 |
Issuance Date | Apr. 8, 2015 |
Expiration Date | Apr. 8, 2025 |
Vesting | No |
StockOption10Member | |
Options Issued | 1,732 |
Exercise price | $ / shares | $ 5.81 |
Issuance Date | Mar. 5, 2015 |
Expiration Date | Mar. 5, 2025 |
Vesting | No |
StockOption11Member | |
Options Issued | 33,774 |
Exercise price | $ / shares | $ 5.89 |
Issuance Date | Mar. 23, 2015 |
Expiration Date | Mar. 23, 2025 |
Vesting | Yes |
StockOption12Member | |
Options Issued | 8,660 |
Exercise price | $ / shares | $ 12.13 |
Issuance Date | Sep. 17, 2013 |
Expiration Date | Sep. 17, 2023 |
Vesting | Yes |
StockOption13Member | |
Options Issued | 21,650 |
Exercise price | $ / shares | $ 12.99 |
Issuance Date | Sep. 6, 2012 |
Expiration Date | Sep. 5, 2017 |
Vesting | No |
StockOption14Member | |
Options Issued | 7,038 |
Exercise price | $ / shares | $ 12.99 |
Issuance Date | Nov. 14, 2012 |
Expiration Date | Sep. 27, 2022 |
Vesting | No |
StockOption15Member | |
Options Issued | 17,320 |
Exercise price | $ / shares | $ 14.43 |
Issuance Date | Jan. 16, 2013 |
Expiration Date | Nov. 30, 2022 |
Vesting | No |
EQUITY (Details 1)
EQUITY (Details 1) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Warrants Issued | 60,620 |
Warrants1member | |
Warrants Issued | 17,320 |
Exercise price | $ / shares | $ 12.99 |
Issuance Date | Oct. 1, 2013 |
Expiration Date | Jan. 1, 2018 |
Vesting | No |
Warrants2Member | |
Warrants Issued | 43,300 |
Exercise price | $ / shares | $ 12.99 |
Issuance Date | Jul. 16, 2013 |
Expiration Date | Jul. 16, 2018 |
Vesting | No |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 | |
Common Stock, Shares, Issued | 10,504,472 | 10,483,389 | |
Common Stock, Shares, Outstanding | 10,504,472 | 10,483,389 | |
Common Stock, Par Value Per Share | $ .01 | $ .01 | |
Compensation expense | $ 23,136 | $ 3,983 | |
Warrants Issued | 60,620 | ||
Preferred Class A [Member] | |||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | |
Preferred Stock, Par Value Per Share | $ 0.01 | ||
Preferred Class B [Member] | |||
Preferred Stock, Shares Authorized | 1,000 | 1,000 | |
Preferred Stock, Par Value Per Share | $ 0.01 | ||
Preferred Class C [Member] | |||
Preferred Stock, Shares Authorized | 500 | 500 | |
Preferred Stock, Par Value Per Share | $ 0.01 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Income Taxes | |
Net operating loss carryforwards, Federal | $ 0 |
Net operating loss carryforwards, State | 0 |
Restored deferred tax assets related to net operating losses | 0 |
Valuation reserve | 0 |
Deferred tax asset | $ 689,000 |