Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 12, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'CVSL INC. | ' |
Entity Central Index Key | '0001403085 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 24,398,814 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $3,044,103 | $3,876,708 |
Marketable securities | 5,302,254 | 11,830,252 |
Accounts receivable, net | 657,517 | 780,237 |
Inventory, net | 16,692,726 | 18,734,294 |
Other current assets | 2,605,490 | 2,948,717 |
Total current assets | 28,302,090 | 38,170,208 |
Property, plant and equipment, net | 8,501,243 | 22,847,854 |
Leased property, net | 15,624,444 | ' |
Goodwill | 4,676,397 | 4,422,928 |
Intangibles, net | 3,609,333 | 3,764,063 |
Other assets | 5,248,732 | 617,795 |
Total assets | 65,962,239 | 69,822,848 |
Current liabilities: | ' | ' |
Accounts payable - trade | 6,937,997 | 10,471,121 |
Related party liabilities | 1,279,533 | 181,858 |
Line of credit payable | 1,047,808 | 9,806,002 |
Accrued commissions | 4,762,585 | 3,740,846 |
Deferred revenue | 3,085,186 | 1,661,851 |
Current portion of long-term debt | 698,363 | 1,128,674 |
Other current liabilities | 7,718,637 | 7,881,994 |
Total current liabilities | 25,530,109 | 34,872,346 |
Long-term debt | 25,675,153 | 25,594,722 |
Lease Liability | 15,791,588 | ' |
Other long-term liabilities | 3,674,579 | 499,640 |
Total liabilities | 70,671,429 | 60,966,708 |
Commitments and contingencies | ' | ' |
Stockholders' equity (deficit): | ' | ' |
Preferred stock, par value $0.001 per share, 500,000 authorized-0-issued and outstanding | ' | ' |
Common stock, par value $0.0001 per share, 250,000,000 and 250,000,000 shares authorized; 24,396,195 and 24,356,989 shares issued and outstanding, at September 30, 2014 and December 31, 2013, respectively | 2,440 | 2,436 |
Additional paid-in capital | 15,230,712 | 14,408,770 |
Accumulated other comprehensive loss | -122,004 | -767,569 |
Accumulated deficit | -25,419,083 | -13,085,777 |
Total stockholders' equity (deficit) attributable to common stockholders | -10,307,935 | 557,860 |
Stockholders' equity attributable to noncontrolling interest | 5,598,743 | 8,298,280 |
Total stockholders' equity (deficit) | -4,709,190 | 8,856,140 |
Total liabilities and stockholders' equity | $65,962,239 | $69,822,848 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Stockholders' equity (deficit): | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, authorized shares | 500,000 | 500,000 |
Preferred stock, issued shares | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 24,396,195 | 24,356,989 |
Common stock, shares outstanding | 24,396,195 | 24,356,989 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Consolidated Income Statements | ' | ' | ' | ' |
Revenue | $24,017,441 | $24,292,400 | $75,274,480 | $49,136,204 |
Program costs and discounts | -4,380,221 | -6,817,716 | -14,576,574 | -13,176,698 |
Net revenues | 19,637,220 | 17,474,683 | 60,697,906 | 35,959,506 |
Costs of sales | 6,573,360 | 8,139,015 | 20,452,003 | 17,654,594 |
Gross profit | 13,063,860 | 9,335,668 | 40,245,903 | 18,304,912 |
Commissions and incentives | 5,800,665 | 2,809,926 | 18,778,694 | 6,013,873 |
Gain on sale of assets | -633,133 | ' | -1,040,045 | 15,646 |
Selling, general and administrative | 13,656,012 | 7,795,106 | 35,111,372 | 17,887,482 |
Operating loss | -5,759,684 | -1,269,363 | -12,604,118 | -5,596,443 |
(Loss) gain on marketable securities | 108,131 | ' | -443,954 | ' |
Interest expense, net | 712,997 | 411,718 | 1,192,375 | 1,015,766 |
Loss before income tax provision | -6,364,550 | -1,681,081 | -14,240,447 | -6,612,209 |
Income tax provision | 297,756 | ' | 789,677 | ' |
Net loss | -6,662,306 | -1,681,081 | -15,030,124 | -6,612,209 |
Net loss attributable to noncontrolling interest | -1,039,039 | -163,548 | -2,725,059 | -948,220 |
Net loss attributed to common stockholders | ($5,623,267) | ($1,517,533) | ($12,305,065) | ($5,663,989) |
Basic and diluted loss per share: | ' | ' | ' | ' |
Weighted average common shares outstanding (in shares) | 49,628,683 | 49,626,292 | 49,638,935 | 49,626,292 |
Net loss per common share attributable to common stockholders | ($0.10) | ($0.03) | ($0.23) | ($0.11) |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Consolidated Statements of Comprehensive Loss | ' | ' | ' | ' |
Net loss | ($6,662,306) | ($1,681,081) | ($15,030,124) | ($6,612,209) |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Unrealized gain on marketable securities | -219,096 | 183,124 | 433,665 | 183,124 |
Foreign currency translation adjustment | 156,136 | 40,701 | 190,463 | 40,701 |
Other comprehensive loss | -62,960 | 223,825 | 687,088 | 223,825 |
Comprehensive loss | -6,725,266 | -1,457,256 | -14,405,996 | -6,388,384 |
Comprehensive loss attributable to noncontrolling interest | -1,039,039 | ' | -2,725,059 | ' |
Comprehensive loss attributable to common stockholders | ($5,686,227) | ($1,457,256) | ($11,680,937) | ($6,388,384) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Operating activities: | ' | ' |
Net loss | ($15,030,124) | ($6,612,209) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' |
Depreciation and amortization | 1,997,705 | 1,265,049 |
Loss on marketable securities | 443,954 | ' |
Interest expense | 1,040,045 | 1,015,917 |
Share-based compensation | 941,469 | ' |
Provision for losses on receivables, net | 185,857 | ' |
Provision for obsolete inventory | 153,819 | ' |
Gain on sales of assets and other | 1,040,045 | -15,646 |
Deferred income tax benefit | 223,655 | ' |
Changes in certain assets and liabilities: | ' | ' |
Accounts receivable | -72,404 | -499,367 |
Inventory | 1,995,946 | 2,481,794 |
Prepaid expenses and other | -704,802 | -17,545 |
Accounts payable and accrued expenses | -2,539,771 | 933,301 |
Accounts payable - related party | 93,584 | -428,835 |
Deferred revenue | -1,071,605 | -259,678 |
Other long-term liabilities | 2,167,525 | 388,350 |
Net cash (used in) provided by operating activities | 11,367,525 | -1,717,577 |
Investing activities: | ' | ' |
Capital expenditures | -644,773 | ' |
Proceeds from the sale of property, plant and equipment | 17,263,212 | 622,465 |
Pay off key bank debt | -8,067,573 | ' |
Investment in marketable securities | -3,772,839 | -16,237,359 |
Sale of marketable securities | 10,517,749 | 0 |
Cash acquired in acquisition | 2,000 | 103,222 |
Net cash (used in) provided by investing activities | 18,951,174 | -15,511,672 |
Financing activities: | ' | ' |
Line of credit, net change | -699,023 | 998,992 |
Deposit on leased asset | -4,414,174 | ' |
Proceeds from long-term debt issuance | 1,000,000 | ' |
Repayments on long-term debt | -928,308 | -1,064,004 |
Capital lease sale leaseback | 15,800,000 | ' |
Net cash (used in) provided by financing activities | -8,694,903 | -65,012 |
Effect of exchange rate changes on cash | 278,649 | -1,601 |
Increase (decrease) in cash | -832,605 | -17,295,862 |
Cash and cash equivalents at beginning of year | 3,876,708 | 19,032,392 |
Cash and cash equivalents at end of period | 3,044,103 | 1,736,530 |
Cash paid during the year for: | ' | ' |
Interest | 757,000 | ' |
Income taxes | 654,000 | ' |
Non-cash transactions: | ' | ' |
Convertible note converted to stock | ' | 6,563,555 |
Convertible note issued related to acquisition | ' | 6,500,000 |
Promissory note issued related to acquisition | ' | $4,000,000 |
General
General | 9 Months Ended | |
Sep. 30, 2014 | ||
General | ' | |
General | ' | |
(1) General | ||
Organization | ||
Interim Financial Information | ||
The consolidated financial statements included herein, which have not been audited pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods on a basis consistent with the annual audited statements. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for a full year. Certain information, accounting policies and footnote disclosures normally included in condensed consolidated financial statements prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP") have been omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K/A filed by CVSL Inc. ("the Company," and together with the Company's consolidated subsidiaries, "we", "us" and "our"), for the year ended December 31, 2013, filed with the SEC on October 22, 2014 ("Form 10-K/A"). | ||
Reclassifications | ||
The Company has reclassified certain amounts previously reported in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 ("Form 10-Q") to conform to our consolidated financial statements presented for the year ended December 31, 2013 in our Form 10-K/A and subsequent quarters. These changes had no impact on operating or net loss. The operating losses of $1.3 million and $5.6 million for the three and nine months ended September 30, 2013, respectively, in this Form 10-Q remain unchanged. For the three and nine months ended September 30, 2013 commission and incentives expense of $2.8 million and $6.0 million, respectively, is now shown as a separate expense line item as opposed to being included in program costs and discounts. Program costs and discounts decreased $2.6 million and $5.4 million for the three and nine months ended September 30, 2013. Miscellaneous revenues of $0.5 million and $1.1 million that had previously been classified as an offset to selling, general and administrative costs have been reclassified as revenue for the three and nine months ended September 30, 2013, respectively. Gross profit increased $3.3 million and $6.5 million for the three and nine months ended September 30, 2013 as a result of the reclassification. | ||
The intial presentation relating to commissions and incentives were included in both program costs and discounts and in selling, general and administrative expenses in the consolidated financial statements of operations. Certain personal sales incentives were presented in program costs and discounts as they represent what are referred to as retained commissions in the party plan segment of the direct selling industry. Other commissions related to a consultant's downline (override commissions) were recorded and presented in selling, general and administrative expenses. As we acquired other companies in the direct selling industry, we noticed variations of compensation plans and presentation in the statements of operations. As a result, we decided to standardize our presentation of commissions and incentives. We added the commissions and incentives category for the year-ended December 31, 2013. During the first quarter ended March 31, 2014 and 2013, the second quarter ended June 30, 2014 and 2013 and the third quarter ended September 30, 2014 and 2013, we presented the commissions and incentives based upon the presentation for the year-ended December 31, 2013. | ||
Significant Accounting Policies | ||
The Company has expanded its disclosure of the policies below in response to certain comments from the SEC. Other than the expanded disclosure below there have been no material changes to our significant accounting policies during the three and nine months ended September 30, 2014, as compared to the significant accounting policies disclosed in Note 2 of our consolidated financial statements in the Form 10-K/A for the year ended December 31, 2013. | ||
Revenue Recognition and Deferred Revenue | ||
In the ordinary course of business, the Company receives payments, primarily via credit card, for the sale of products at the time customers place orders. Sales and related fees such as shipping and handling, net of applicable sales discounts, are recorded as revenue when the product is shipped and when title and the risk of ownership passes to the customer. The Company presents revenues net of any taxes collected from customers which are remitted to governmental authorities. Payments received for undelivered products are recorded as deferred revenue and are included in current liabilities on our consolidated balance sheets. Certain incentives offered to our independent sales representatives and their customers, including sales discounts, described in the paragraph below are classified as program costs and discounts. A provision for product returns and allowances is recorded and is founded on historical experience and is classified as a reduction of net revenues. At September 30, 2014 and December 31, 2013, our allowance for sales returns totaled $194,792 and $221,396, respectively. | ||
Program Costs and Discounts | ||
Program costs and discounts represent various methods of promoting our products. The Company offers benefits such as discounts on starter kits for new consultants, promotional pricing for the host of a home show, which may vary depending on the value of the orders placed and general discounts on our products. | ||
Goodwill and Other Intangibles | ||
Our management performs its goodwill and other indefinite-lived intangible impairment tests annually or when changes in circumstances indicate an impairment event may have occurred by estimating the fair value of each reporting unit compared to its carrying value. Our reporting units represent an operating segment or a reporting level below an operating segment. Additionally, the reporting units are aggregated based on similar economic characteristics, nature of products and services, nature of production processes, type of customers and distribution methods. We use a discounted cash flow model and a market approach to calculate the fair value of our reporting units. The model includes a number of significant assumptions and estimates regarding future cash flows and these estimates could be materially impacted by adverse changes in market conditions. | ||
Goodwill is measured for impairment by comparing the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit is less than the carrying value, a second step is performed to determine the implied fair value of goodwill. If the implied fair value of goodwill is lower than its carrying value, an impairment charge equal to the difference is recorded. After the Share Exchange Agreement in 2012, we determined that the goodwill associated with that acquisition was impaired. As a result, we recorded $2,488,708 in goodwill impairment that represented all goodwill associated with the Share Exchange Agreement. The impairment charge is included in the consolidated statements of operations for the year ended December 31, 2012. Indefinite-lived assets are measured for impairment by comparing the fair value of the indefinite-lived intangible asset to its carrying value. If the fair value of the indefinite-lived intangible asset is lower than its carrying value, an impairment charge equal to the difference is recorded. | ||
Leases | ||
Leases are contractual agreements between lessees and lessors in which lessees get the right to use leased assets for a specified period in exchange for regular payments. Capital leases resemble asset purchases because there is an implied transfer of the benefits and risks of ownership from lessor to lessee, and the lessee is responsible for repairs and maintenance. We treat asset leases as capital leases if the life of the lease exceeds 75 percent of the asset's useful life, there is an ownership transfer to the lessee at the end of the lease, the lessee purchases the asset at a "bargain" price relative to fair market value at the end of the lease or the discounted present value of the lease payments exceeds 90 percenf of the fair-market value of the asset at the beginning of the lease term. | ||
Use of Estimates | ||
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Examples include provisions for bad debts, useful lives of property and equipment, impairment of goodwill, other intangibles and property and equipment, deferred taxes, and the provision for and disclosure of litigation and loss contingencies. Actual results may differ materially from those estimates. | ||
Business Overview and Current Plans | ||
We operate a multi-brand direct selling/micro-enterprise company that employs innovative operational, marketing, social networking and e-commerce strategies to drive a high-growth global business. We are engaged in a long-term strategy to develop a large, diverse company in the micro-enterprise sector that combines the entrepreneurship, innovation and relationship-based commerce of micro-enterprises with the infrastructure and operational excellence of a large scale company. We seek to acquire companies primarily in the micro-enterprise (direct-selling) sector and companies potentially engaging in businesses related to micro-enterprise. | ||
In considering appropriate acquisition targets, we anticipate that we will evaluate companies of varying sizes in our targeted space, particularly companies that management believes are accretive or otherwise add value to our businesses. We plan to consider companies that are currently profitable and looking to enhance their growth, as well as companies that have experienced financial and operational difficulties or limitations and can, in our opinion, be strengthened by improved strategic and tactical guidance. All of the acquisitions, large or small, profitable or otherwise, will add additional coordinates of sellers and customers, thereby adding size and continually increasing the scope of our network of networks. Our acquisitions include: | ||
• | 100% ownership of Uppercase Acquisition, Inc. ("UAI") in March 2014, which operates Uppercase Living ("Uppercase Living"), a direct seller of an extensive line of customizable vinyl expressions for display on walls. | |
• | 100.0% ownership of Paperly, Inc. in December 2013, a direct seller that allows its independent sales consultants to work with customers to design and create custom stationery through home parties, events and individual appointments. | |
• | A 90.0% controlling interest in My Secret Kitchen, Ltd ("MSK") in December 2013, an award-winning United Kingdom-based direct seller of a unique line of food products. | |
• | Substantially 100.0% of Agel Enterprises Inc. ("AEI"). Because of foreign ownership regulations in our Argentina, Colombia, Mexico and Panama subsidiaries, AEI is limited to 99.0% ownership in these subsidiaries. An individual owns an approximately 1.0% noncontrolling interest in these subsidiaries of AEI. AEI is a direct-selling business based in Pleasant Grove, Utah that sells nutritional supplements and skin care products through a worldwide network of independent sales representatives. AEI's products are sold in over 40 countries. | |
• | 100.0% ownership of CVSL TBT LLC (which operates Project Home, formerly conducting business under the name Tomboy Tools) in October 2013, a direct seller of a line of tools designed for women, as well as home security monitoring services. | |
• | 100.0% ownership of Your Inspiration At Home Pty Ltd. ("YIAH") in August 2013, an innovative and award-winning direct seller of hand-crafted spices from around the world. YIAH originated in Australia and has expanded its operations to North America. | |
• | A 51.7% controlling interest in The Longaberger Company ("TLC") in March 2013. TLC is a direct-selling business based in Newark, Ohio that sells premium hand-crafted baskets and a line of products for the home, including pottery, cookware, wrought iron and other home décor products, through a nationwide network of independent sales representatives. TLC also has showrooms in various states, which offer merchandise and serve as sales force support centers. | |
• | 100.0% of Happenings Communications Group, Inc. ("HCG") in September 2012. HCG publishes a monthly magazine, Happenings Magazine that references events and attractions, entertainment and recreation, and people and community in Northeast Pennsylvania. HCG also provides marketing and creative services to various companies, and can provide such services to direct-selling businesses. | |
Acquisitions_Dispositions_and_
Acquisitions, Dispositions and Other Transactions | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Acquisitions, Dispositions and Other Transactions | ' | ||||
Acquisitions, Dispositions and Other Transactions | ' | ||||
(2) Acquisitions, Dispositions and Other Transactions | |||||
Uppercase Living | |||||
On March 14, 2014, UAI, a wholly-owned subsidiary of the Company, acquired substantially all the assets of Uppercase Living, LLC, a direct seller of an extensive line of customizable vinyl expressions for display on walls. We assumed $512,195 of seller's liabilities that existed prior to the transaction and agreed to issue 12,725 shares of our common stock, par value $0.0001 ("Common Stock") to the seller at a fair value of $96,706 on the acquisition date. We also delivered 16,195 shares of our common stock at a fair value of $123,081 to escrow accounts for up to 24 months that will be issued to the seller upon remediation of certain closing conditions. We also agreed to pay the seller three subsequent contingent payments equal to 10% of Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") for each of the years ending 2014 to 2016. We have not recorded any contingent earn-out as of September 30, 2014. Goodwill arising from the transaction totaled $469,065. We recognized goodwill in the acquisition as the business had management in place, established distribution methods, an established consultant base and brand recognition. In addition to these factors, goodwill was recognized in this transaction because of the expected synergies that we anticipate and the overall benefits of bringing additional consultants into our network. | |||||
Opening balance sheet for Uppercase Living acquisition on March 14, 2014 | |||||
The following summary represents the fair value of UAI as of the acquisition date and is subject to change following management's final evaluation of the fair value assumptions. | |||||
UAI | |||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 2,000 | |||
Accounts receivable | 1,742 | ||||
Inventory | 96,497 | ||||
Total current assets | 100,239 | ||||
Property, plant and equipment | 23,230 | ||||
Goodwill | 469,065 | ||||
Other assets | 16,366 | ||||
Total assets | $ | 608,900 | |||
Liabilities and stockholders' equity | |||||
Current liabilities: | |||||
Accounts payable—trade | $ | 267,337 | |||
Accrued commissions | 79,003 | ||||
Deferred revenue | 28,399 | ||||
Other current liabilities | 96,706 | ||||
Total current liabilities | 471,445 | ||||
Other long-term liabilities | 137,455 | ||||
Total liabilities | 608,900 | ||||
Stockholders' equity | — | ||||
Total stockholders' equity | — | ||||
Total liabilities and stockholders' equity | $ | 608,900 | |||
Dispositions | |||||
On July 31, 2014, our subsidiary TLC and CFI NNN Raiders, LLC. ("CFI"), entered into a Sale Leaseback Agreement (the "Sale Leaseback Agreement") pursuant to which TLC agreed to sell to CFI certain real estate owned by TLC and used by TLC in its manufacturing, distribution and showroom activities. The real estate described in the Sale Leaseback Agreement was purchased by CFI, for an aggregate purchase price of $15.8 million. As shown in the table below, a gain on sale of approximately $2.5 million was recorded associated with the sale. | |||||
Sales Price (fair value) | $ | 15,800,000 | |||
Transaction Fees | (956,417 | ) | |||
14,843,583 | |||||
Book Value at July 31, 2014 | 12,320,715 | ||||
$ | |||||
Gain on Sale | $ | 2,522,868 | |||
Because the transaction was part of a Sale Leaseback agreement that is being accounted for as a capital lease, the gain has been deferred and will be recognized over the fifteen (15) year life of the Leaseback Agreement. For more details regarding the accounting for this transaction see Note 6 Long term debt and other financing arrangements. | |||||
During the quarter ended September 30, 2014, TLC sold four other properties in Ohio for gross proceeds of $657,360 for a gain on sale of $338,610. The gain on sale is included in the consolidated statement of operations. | |||||
During the quarter ended March 31, 2014, TLC sold an industrial building in Ohio for gross proceeds of $1,333,857 for a gain on sale of $271,970. During the quarter ended June 30, 2014, TLC sold three properties in Ohio for gross proceeds of $497,458 for a gain on sale of $35,309. We also had a net gain on sales of other assets of $99,633 for the six months ended June 30, 2014. The gain on sale is included in consolidated statements of operations. | |||||
The Longaberger Company | |||||
On March 18, 2013, the Company acquired a controlling interest in TLC, a direct-selling business based in Newark, Ohio. The transaction resulted in us acquiring 64.6% of the voting stock and 51.7% of all the stock in TLC in return for a $6.5 million convertible note and a $4.0 million promissory note. The acquisition was accounted for under the purchase method of accounting and TLC is now our consolidated subsidiary . | |||||
Convertible Note Settlement | |||||
On June 14, 2013, in accordance with the mandatory conversion provisions of the Convertible Subordinated Unsecured Promissory Note in the principal amount of $6.5 million (the "Note") that we issued to the Tamala L. Longaberger Trust (the "Trust") as part of the consideration of the acquisition of TLC, we issued the Trust 1,625,000 shares of Common Stock upon conversion of the Note. | |||||
Equity Contribution | |||||
On June 18, 2013, we entered into an Equity Contribution Agreement with Rochon Capital Partners, Ltd. pursuant to which Rochon Capital Partners, Ltd. contributed to us for no consideration 1,625,000 shares of Common Stock to offset the shares issued to the Trust. As a result, our issued and outstanding shares of Common Stock remained at 24,385,617. The returned shares were cancelled and are not being held as treasury shares. | |||||
Possible Issuance of Additional Common Stock under Share Exchange Agreement | |||||
On August 24, 2012 we entered into a Share Exchange Agreement (the "Share Exchange Agreement") with HCG and Rochon Capital Partners, Ltd. ("Rochon Capital"). Under the Share Exchange Agreement, in exchange for all of the capital stock of HCG, we issued 21,904,302 shares of our restricted Common Stock to Rochon Capital (the "Initial Share Exchange"). The shares of our Common Stock received by Rochon Capital totaled approximately 90% of our issued and outstanding stock at the time of issuance. The Initial Share Exchange was completed on September 25, 2012 and resulted in a change in control and HCG becoming our wholly-owned subsidiary. | |||||
Under the Share Exchange Agreement, Rochon Capital also purchased and has the right to an additional 25,240,676 shares of Common Stock (the "Additional Shares"). The second closing of the transactions and the issuance of the Additional Shares contemplated by the Share Exchange Agreement (the "Second Tranche Closing") was to occur on the date that was the later of: (i) the 20th calendar day following the date on which we first mailed an Information Statement to our shareholders; (ii) the date the Financial Industry Regulatory Authority ("FINRA") approved the Amendment; or (iii) the first business day following the satisfaction or waiver of all other conditions and obligations of the parties to consummate the transactions contemplated by the Share Exchange Agreement, or on such other date and at such other time as the parties may mutually determine. | |||||
On April 12, 2013, we filed Articles of Amendment to our Articles of Incorporation with the Florida Secretary of State to effect: (i) an increase in the number of authorized shares of our common stock from 490,000,000 to 5,000,000,000 shares (the "Increase" prior to our 1-for-20 reverse stock split effected on October 16, 2014 as further described in Note 15 Subsequent Events) and (ii) a change in the name of the Corporation to CVSL Inc. (the "Name Change") which was effectuated on May 27, 2013. Shareholders holding a majority of the outstanding shares of common stock approved the Increase and the Name Change and the Articles of Amendment (the "Amendment") effecting such transactions. | |||||
However, at the time of the filing of the Amendment, Rochon Capital and the Company each determined that it was not in the best interests of the Company to consummate the Second Tranche Closing and the issuance of the Additional Shares at that time. As a result, the Share Exchange Agreement was amended on April 10, 2013 to provide that, among other things, the Second Tranche Closing will occur on the date specified in a written notice provided by Rochon Capital, which date shall not be prior to the 20 th calendar day following the date on which we first mailed our Information Statement to our shareholders and the date the FINRA approves the Amendment. | |||||
The amendment to the Share Exchange Agreement also (a) clarifies and redefines the number of shares that are to be issued at the Second Tranche Closing as 25,240,676 shares of our Common Stock, or any portion thereof provided for in the notice from Rochon Capital and (b) modifies the date tied to certain restrictions set forth in Section 7.08 of the Share Exchange Agreement, since the Second Tranche Closing Date cannot be determined at this time. We have the ability to issue the Additional Shares to Rochon Capital, as agreed to in the Share Exchange Agreement, as amended, upon its receipt of written notice from Rochon Capital. | |||||
Please see Note 15, Subsequent Events for a description of actions taken on October 10, 2014 with respect to the shares issuable at Second Tranche Closing. | |||||
Sale Leaseback Agreement | |||||
As mentioned above in Dispositions, on July 31, 2014, our subsidiary TLC and CFI entered into the Sale Leaseback Agreement pursuant to which TLC agreed to sell to CFI certain real estate owned by TLC and used by TLC in its manufacturing, distribution and showroom activities. The real estate described in the Sale Leaseback Agreement was purchased by CFI, for an aggregate purchase price of $15.8 million ($4.4 million of which represents a security deposit shown in other assets which will be released to TLC over time as certain targets are met). | |||||
Concurrently with entering into the Sale Leaseback, the Company entered into a Master Lease Agreement (the "Master Lease Agreement") with CFI. The Master Lease Agreement provides for a 15-year lease term and specifies the base quarterly payment for the real estate. The base quarterly payment in the first year is $551,772 and increases 3% annually each year thereafter. During the lease term, all of the costs, expenses and liabilities associated with the real estate are to be borne by the Company, and the Company is entitled to unlimited use of the real estate. The Master Lease Agreement includes customary events of default, including non-payment by the Company of the quarterly payment or other charges due under any The Master Lease Agreement. The Company utilized the proceeds from the sale of the real estate to pay off outstanding bank debt and for working capital purposes. See Note 6 Long term debt and other financing arrangements for more information regarding the accounting treatment of this transaction. | |||||
Marketable_Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2014 | |
Marketable Securities | ' |
Marketable Securities | ' |
(3) Marketable Securities | |
Our marketable securities as of September 30, 2014 include fixed income and equity investments classified as available for sale. At September 30, 2014, the fair value of the equity securities totaled $0 and the fair value of the fixed income securities totaled $5.3 million. At December 31, 2013, the fair value of the equity securities totaled $1,390,355 and the fair value of the fixed income securities totaled $10,439,897. The gross proceeds from sales of our marketable securities were $4.6 million and $10.5 million for the three and nine months ended September 30, 2014, respectively, and $-0- for three and nine months ended September 30, 2013. Unrealized gain on the investments for the three and nine months ended September 30, 2014 was $(219,000) and $434,000, respectively. These amounts were included in the consolidated statements of comprehensive income. The Company realized gains (losses) from the sale of marketable securities included in the consolidated statements of operations were $108,131 and $(443,954) for the three and nine months ended September 30, 2014, respectively, and realized gains of $348,716 for the three and nine months ended September 30, 2013. | |
Inventory
Inventory | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory | ' | |||||||
Inventory | ' | |||||||
(4) Inventory | ||||||||
Inventories are stated at lower of cost or market. Cost is determined using the first-in, first-out method. Inventory consisted of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Raw material and supplies | $ | 3,202,724 | $ | 2,640,842 | ||||
Work in process | 286,247 | 339,581 | ||||||
Finished goods | 13,203,755 | 15,753,871 | ||||||
$ | 16,692,726 | $ | 18,734,294 | |||||
Our reserve for inventory obsolescence at September 30, 2014 and December 31, 2013 was $104,000 and $124,000, respectively. | ||||||||
Property_plant_and_equipment
Property, plant and equipment | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, plant and equipment | ' | |||||||
Property, plant and equipment | ' | |||||||
(5) Property, plant and equipment | ||||||||
Property, plant and equipment consisted of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Land and improvements | $ | 699,308 | $ | 3,049,765 | ||||
Buildings and improvements | 6,357,967 | 19,788,447 | ||||||
Equipment | 2,920,561 | 1,306,597 | ||||||
Construction in progress | 10,621 | 425,424 | ||||||
9,988,457 | 24,570,233 | |||||||
Less accumulated depreciation | (1,487,214 | ) | 1,722,379 | |||||
$ | 8,501,243 | $ | 22,847,854 | |||||
Depreciation expense was $$646,465 and $1,667,619 for three and nine months ended September 30, 2014, respectively, and was $499,812 and $1,265,049 for three and nine months ended September 30, 2013, respectively. Certain assets disposed of in 2014 reduced accumulated depreciation at September 30, 2014. | ||||||||
Longterm_debt_and_other_financ
Long-term debt and other financing arrangements | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Long-term debt and other financing arrangements | ' | ||||||||||
Long-term debt and other financing arrangements | ' | ||||||||||
> | |||||||||||
(6) Long-term debt and other financing arrangements | |||||||||||
Our long-term borrowing consisted of the following: | |||||||||||
Description | Interest | September 30, | December 31, | ||||||||
rate | 2014 | 2013 | |||||||||
Convertible Subordinated Unsecured Promissory Note—Richmont Capital Partners V L.P. (including accrued interest) | 4.00 | % | $ | 21,489,767 | $ | 20,881,096 | |||||
Promissory Note—payable to former shareholder of TLC | 2.63 | % | 3,464,638 | 3,734,695 | |||||||
Promissory Note—Lega Enterprises, LLC (formerly Agel Enterprises, LLC) | 5.00 | % | 1,419,111 | 1,649,880 | |||||||
Term loan—KeyBank | — | 427,481 | |||||||||
Other, equipment notes | — | — | |||||||||
Total debt | 26,373,516 | 26,723,396 | |||||||||
Less current maturities | 698,363 | 1,128,674 | |||||||||
Long-term debt | $ | 25,675,153 | $ | 25,594,722 | |||||||
Convertible Subordinated Unsecured Promissory Note—Richmont Capital Partners V L.P. | |||||||||||
On December 12, 2012 (the "Issuance Date"), the Company signed, closed, and received, as the maker, $20.0 million in cash proceeds from Richmont Capital Partners V L.P., a Texas limited partnership ("RCP V"), pursuant to a Convertible Subordinated Unsecured Promissory Note, in the original principal amount of $20.0 million (the "RCP V Note"), issued pursuant to a Convertible Subordinated Unsecured Note Purchase Agreement between the Company and RCP V (the "Purchase Agreement"). The RCPV Note is (i) an unsecured obligation of the Company and (ii) subordinated to any bank, financial institution, or other lender providing funded debt to us or any direct or indirect subsidiary of us, including any seller debt financing provided by the owners of any entity(ies) that may be acquired by the Company. Principal payments of $1,333,333 are due and payable on each anniversary of the Issuance Date beginning on the third anniversary of the Issuance Date. A final principal payment, equal to the then unpaid principal balance of the RCP V Note, is due and payable on the 10th anniversary of the Issuance Date. The RCP V Note bears interest at an annual rate of 4%, which interest is payable on each anniversary of the Issuance Date; provided, however, that interest payable through the third anniversary of the Issuance Date may, at our option, be paid in kind ("PIK Interest") and any such PIK Interest will be added to the outstanding principal amount of the RCP V Note. Beginning 380 days from the Issuance Date, the RCP V Note may be prepaid, in whole or in part, at any time without premium or penalty. | |||||||||||
On June 17, 2013, the RCP V Note was amended to extend the date of mandatory conversion of the RCP V Note to provide that the RCP V Note be mandatorily convertible into shares of Common Stock (subject to a maximum of 3,200,000 shares being issued) within ten days of June 17, 2014. The full amount of the RCP V Note (including any and all accrued interest thereon, whether previously converted to principal or otherwise) will be converted (the "Conversion"), into no more than 3,200,000 shares of Common Stock at a price of $6.60 per share of Common Stock. | |||||||||||
On June 12, 2014, the Company entered into a Second Amendment to Convertible Subordinated Unsecured Promissory Note (the "Second Amendment"), with RCP V which amends the RCP V Note. The Second Amendment amends the Note to extend the date of mandatory conversion of the RCP V Note. As amended by the Second Amendment, the original principal amount of, and all accrued interest under, the RCP V Note is convertible mandatorily into shares of our common stock (subject to a maximum of 3,200,000 shares being issued) within ten days after June 12, 2015, or such earlier time as may be mutually agreed upon by the Company and RCP V. All other terms and conditions of the RCP V Note remain unchanged and in effect. | |||||||||||
John Rochon, Jr. is the 100% owner, and is in control, of Richmont Street LLC, the sole general partner of RCP V. Michael Bishop, a director of the Company, is a limited partner of RCP V. John Rochon, Jr. is a director of the Company and the son of John P. Rochon, our Chairman, President, and Chief Executive Officer. | |||||||||||
Note 15, Subsequent Events contains a description of actions taken on October 10, 2014 with respect to the RCP V Note. | |||||||||||
Promissory Note—payable to former shareholder of TLC | |||||||||||
On March 14, 2013, we issued a $4.0 million Promissory Note in connection with the purchase of TLC. The Promissory Note bears interest at 2.63% per annum, has a ten-year maturity, and is payable in equal monthly installments of outstanding principal and interest. | |||||||||||
Promissory Note—Lega Enterprises, LLC | |||||||||||
On October 22, 2013, we issued a $1.7 million Promissory Note to Lega Enterprises, LLC (formerly Agel Enterprises, LLC) in connection with AEI's acquisition of assets from Agel Enterprises LLC. The Promissory Note bears interest at 5% per annum, and is payable in equal monthly installments of outstanding principal and interest and matures on October 22, 2018. | |||||||||||
Term loan | |||||||||||
In conjunction with the Line of Credit described below, on October 23, 2012, TLC obtained a $6.5 million term loan from Key Bank. As of March 1, 2014, TLC had paid in full the outstanding balance of the term loan. | |||||||||||
Lines of Credit | |||||||||||
Key Bank | |||||||||||
Prior to payoff in full on July 31, 2014 using proceeds from the Sale Leaseback transaction described in Note 2, TLC had a line of credit agreement through October 23, 2015. Under the agreement, TLC had available borrowings up to $12.0 million, limited to a formula primarily based on accounts receivable and inventory. The agreement provided for interest based on Key Bank's prime rate plus 1.75% or LIBOR plus 3.50%. Interest during the period ended September 30, 2014 and at December 31, 2013 was 3.94% and 3.94%, respectively. The balance was $0 and $8,067,573 on September 30, 2014 and December 31, 2013, respectively. The line of credit was collateralized by substantially all assets of TLC. TLC was subject to certain financial covenants, including a fixed charge coverage ratio and limitations on capital expenditures, additional indebtedness, and incurrence of liens. TLC obtained a waiver for the fixed charge coverage calculation, as the term loan had been paid in full, and was in compliance with all other financial covenants until the loan was paid in full. The loan had been included in the lines of credit on our consolidated balance sheets. | |||||||||||
UBS Margin Loan | |||||||||||
The Company has a margin loan agreement with UBS that allows us to purchase investments. The maximum loan amount is based on a percentage of marketable securities held by us. The interest rate at September 30, 2014 and December 31, 2013 was 1.65% and 1.67%, respectively. The outstanding balance was $933,060 and $1,663,534 on September 30, 2014 and December 31, 2013, respectively. The loan is included in the lines of credit on our consolidated balance sheets. | |||||||||||
Capital Leases | |||||||||||
As mentioned above in Dispositions, on July 31, 2014, our subsidiary TLC and CFI, entered into the Sale Leaseback Agreement. | |||||||||||
The transaction has been accounted for using normal sales leaseback accounting. The gain arising from the sale of the three buildings and related property has been deferred and recognized using the full accrual method over the term of the lease. The lease has been classified as a capital lease since the condition was met whereby the term of the lease is greater than 75% of the estimated economic life of the property. TLC has recorded the sale and removed the properties sold and related liabilities from the balance sheet. Since the lease is a capital lease, a leased asset will be recorded and depreciated over 15 years using the straight-line method. | |||||||||||
The payments under the lease will be accounted for as interest and payments under capital lease using 15 year amortization. Interest expense of $371,935 associated with the lease payments was recognized in the three months and nine months ended September 30, 2014 to reflect two months of interest. Depreciation expense of $175,556 was recorded in the three months and nine months ended September 30, 2014 to reflect two months of depreciation. The gain on Sales of real estate recorded in the three and nine months ended September 30, 2014 was $28,032, which represents two months of the gain amortized over the life of the lease. | |||||||||||
Outstanding Warrants | |||||||||||
On May 6, 2014, the Company issued warrants to purchase up to 12,500 and 6,250 shares of its Common Stock, respectively, in connection with exclusivity agreements. The warrants will be exercisable commencing 75 days after their date of issuance, in whole or in part, until one year from the date of issuance for cash and/or on a cashless exercise basis at an exercise price of $11.00 per share, representing the average closing price of our common stock for the ten days preceding the issuance. In addition, the warrants provide for piggyback registration rights upon request, in certain cases. The exercise price and number of shares issuable upon exercise of the warrants is subject to adjustment in the event of a stock dividend or our recapitalization, reorganization, merger or consolidation. The fair value of the warrants on the date of issuance approximated $116,000. | |||||||||||
On July 2, 2014, the Company issued a warrant exercisable for 50,000 shares of our common stock at an exercise price of $12.80 per share in consideration of a two-year consulting agreement with an individual with direct selling industry experience. The warrant is exercisable for a ten day period commencing 720 days after issuance, however, the warrant expires without an opportunity to exercise it on July 1, 2015, unless the term is extended for an additional year if on July 1, 2015 the shares of common stock underlying the warrant are subject to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act") or our common stock is listed on the Nasdaq National Market or the NYSE MKT. In addition, the warrant provides for piggyback registration rights upon request, in certain cases. The exercise price and number of shares issuable upon exercise of the warrants is subject to adjustment in the event of a stock dividend or our recapitalization, reorganization, merger or consolidation. Because the conditions necessary to make the warrant exercisable have not been met as of September 30, 2014, the fair value of the warrants has not been determined and no expense was recognized in the periods ended September 30, 2014. | |||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||
(7) Accumulated Other Comprehensive Loss | |||||||||||
Accumulated other comprehensive loss, net of taxes, is comprised of the following: | |||||||||||
Foreign | Unrealized Gain | Total | |||||||||
Currency | (Loss) on | Accumulated | |||||||||
Translation | Available-for- | Other | |||||||||
Sale Securities | Comprehensive | ||||||||||
Income (Loss) | |||||||||||
Balance at December 31, 2013 | $ | (130,791 | ) | $ | (636,778 | ) | $ | (767,569 | ) | ||
Other comprehensive income (loss) before reclassifications | 34,327 | 100,676 | 135,003 | ||||||||
Amount reclassified from AOCI | — | 552,085 | 552,085 | ||||||||
Net other comprehensive income (loss) | 34,327 | 652,761 | 687,088 | ||||||||
Balance at September 30, 2014 | $ | (96,464 | ) | $ | 15,983 | $ | (80,481 | ) | |||
Components of AOCI | Amounts | ||||||||||
reclassified | |||||||||||
from AOCI | |||||||||||
Realized gain/(loss) on sale of marketable securities | $ | (552,085 | ) | ||||||||
Income tax (expense) benefit | — | ||||||||||
Net of income taxes | $ | (552,085 | ) | ||||||||
Fair_Value
Fair Value | 9 Months Ended |
Sep. 30, 2014 | |
Fair value | ' |
Fair value | ' |
(8) Fair Value | |
The Company established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined as follows: | |
Level 1—Unadjusted quoted prices in active markets for identical assets and liabilities; | |
Level 2—Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable, either directly or indirectly; and | |
Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |
The carrying values of cash and cash equivalents, accounts receivable, accounts payable trade and related party and line of credit payable are considered to be representative of their respective fair values. Our available for sale securities (Level 1) was $1,047,807 and (Level 2) $4,371,488 at September 30, 2014. Our available for sale securities (Level 1) were $1,390,355 and (Level 2) $10,439,897 at December 31, 2013. The Company does not have other assets or intangible assets measured at fair value on a non-recurring basis at September 30, 2014 and December 31, 2013. | |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies. | ' |
Commitments and Contingencies | ' |
(9) Commitments and Contingencies | |
The Company is occasionally involved in lawsuits and disputes arising in the normal course of business. In the opinion of management, based upon advice of counsel, the likelihood of an adverse outcome against the Company is remote. As such, management believes that the ultimate outcome of these lawsuits will not have a material impact on our financial position or results of operations. | |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
(10) Income Taxes | |
As of December 31, 2013, the Company lacked a history of earnings that would allow it to record any of its net deferred tax assets without a corresponding valuation allowance. Using the same methodology, and updating the earnings history based on actual earnings for the nine months ended September 30, 2014, the Company is unable to reduce its valuation allowance. Therefore, no net deferred tax asset is reflected as of September 30, 2014. Additionally, due to some of its historical acquisitions which included indefinite lived intangibles, the Company continue to accumulate a deferred tax liability which is recorded outside the net deferred tax asset and valuation allowance. This deferred tax liability increased by $134,000 and $224,000 during the three and nine months ended September 30, 2014, respectively. The Company recorded a similar amount of deferred tax expense. The Company records no current income tax expense related to its domestic activities due to historical or current net operating losses. Current tax expense of $163,563 and $655,484 for the three and nine months ended September 30, 2014 has been recorded based on our activities in certain foreign jurisdictions which are currently profitable and no loss carryover is available to offset the income. | |
Sharebased_compensation_plans
Share-based compensation plans | 9 Months Ended |
Sep. 30, 2014 | |
Share-based compensation plans | ' |
Share-based compensation plans | ' |
(11) Share-based compensation plans | |
The Company has two share-based compensation plans, the 2013 Director Smart Bonus Unit Plan and 2013 Smart Bonus Unit Award Plan. These plans provide for the issuance of a cash bonus for stock appreciation. A Committee comprised of members of the Board of Directors approves all awards that are granted under its incentive-based compensation plan. We classified the awards as a liability as the value of the award will be settled in cash. As of September 30, 2014, we have 280,500 equivalent shares of stock appreciation rights ("SARs") outstanding. During the nine months ended September 30, 2014, we have granted 65,500 SARs and have forfeitures of 53,000. The SARs are remeasured each reporting period and are recognized ratably over the vesting period of the award. The SARs vest over a period of three years and are paid to the recipient in three annual payments of one-third the vested award amount. The liability related to these awards is included in other long-term liabilities on our consolidated balance sheets. SARs expense for the three and nine months ended September 30, 2014 was $ and $ , respectively, as compared to $ for the three and nine months ended September 30, 2013. The SARs are included in selling, general and administrative expenses in our consolidated statement of operations. As of September 30, 2014, total unrecognized compensation cost related to unvested SARs was $ . | |
Loss_per_share_attributable_to
Loss per share attributable to common stockholders | 9 Months Ended |
Sep. 30, 2014 | |
Loss per share attributable to CVSL | ' |
Loss per share attributable to common stockholders | ' |
(12) Loss per share attributable to common stockholders | |
All share amounts and per share calculations in this Quarterly Report on Form 10-Q reflect the reverse stock split of our outstanding shares of common stock at a ratio of 1-for-20 which was effected on October 16, 2014 and further described in Note 15 Subsequent Events. | |
In calculating earnings per share, there were no adjustments to net earnings to arrive at earnings for any periods presented. We included the additional 25,240,676 shares available to Rochon Capital discussed in Note (2) in the calculation of basic and diluted shares as the conditions were met for the shares to be available for issuance. See Note 15 Subsequent Events regarding the shares available to Rochon Capital. The Company did not include the outstanding warrants nor the shares issuable upon the conversion of the Convertible Note issued to RCP V discussed in Note (6) in the calculation of dilutive shares because we recorded losses from continuing operations; therefore, the effect would be anti-dilutive. | |
Related_party_transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related party transactions | ' |
Related party transactions | ' |
(13) Related party transactions | |
During the fourth quarter of 2013, the Company renewed a Reimbursement of Services Agreement for a minimum of one year with Richmont Holdings. We continue to need advice and assistance in areas related to identification, analysis, financing, due diligence, negotiations and other strategic planning, accounting, tax and legal matters associated with such potential acquisitions. Richmont Holdings and its affiliates have experience in the above areas and we wish to draw upon such experience. In addition, Richmont Holdings had already developed a strategy of acquisitions in the direct-selling industry and has assigned and transferred to us the opportunities it has previously analyzed and pursued. The Company has agreed to pay Richmont Holdings a reimbursement fee (the "Reimbursement Fee") each month equal to One Hundred Sixty Thousand dollars ($160,000) and the Company agreed to reimburse or pay the substantial due diligence, financial analysis, legal, travel and other costs Richmont Holdings incurred in identifying, analyzing, performing due diligence, structuring and negotiating potential transactions. We recorded $480,000 and $1.44 million during the three and nine months ended September 30, 2014, respectively, and $480,000 and $1.39 million for the three and nine months ended September 30, 2013 for expense reimbursement. The Expense Reimbursement Fees were included in selling, general and administrative expense. | |
During the three and nine months ended September, 2014, we paid a total of $85,030 and $205,309, respectively, to Actitech, L.P., an entity owned by Michael Bishop, for the use of the entity's production capabilities for the production of products for YIAH that are being sold in the United States. In addition, in 2014 we began initial production runs of certain Agel products in this facility and expect to continue to utilize this facility to meet some of AEI production needs in the future. | |
On June 27, 2014, Tamala L. Longaberger lent TLC $42,000 and in connection therewith TLC issued a promissory note in the principal amount of $42,000 to her. The note bears interest at the rate of 10% per annum and matures on June 27, 2015. Our failure to attain certain milestones, including specified operational cost-savings, are considered a default under the note as is a default under other loan, security or similar agreements of TLC if the default materially affects any of TLC's property, or ability to repay the note or perform its obligations under the note or any related document. The note may be prepaid in whole or in part at any time without premium or penalty. The note also provides for a cure period for any nonpayment default that is curable so long as a notice of breach of the same provision has not been given within the preceding 12 months. Upon default, the note holder may accelerate the time of payment of the note. | |
On July 1, 2014, Tamala L. Longaberger lent AEI $158,000 and in connection therewith AEI issued a promissory note in the principal amount of $158,000 to her. The note bears interest at the rate of 10% per annum and matures on July 1, 2015 and is guaranteed by us. Our failure to comply with the obligations under the Note, insolvency or bankruptcy proceedings or a default under any other loan, security or similar agreements of AEI if the default materially affects any of AEI property or AEI ability to repay the note or perform its obligations under this note, is a default under the note. The note may be prepaid in whole or in part at any time without premium or penalty. The note also provides for a cure period for any nonpayment default that is curable so long as a notice of breach of the same provision has not been given within the preceding 12 months. Upon default, the note holder may accelerate the time of payment of the note. | |
On July 11, 2014, Tamala L. Longaberger lent AEI $800,000 and in connection therewith AEI issued a promissory note in the principal amount of $800,000 to her. The note bears interest at the rate of 10% per annum and matures July 11, 2015 and is guaranteed by us. Our failure to comply with the obligations under the note, insolvency or bankruptcy proceedings or a default under any other loan, security or similar agreements of AEI if the default materially affects any of AEI property or AEI ability to repay the note or perform its obligation under the note, is a default under the note. The note may be prepaid in whole or in part at any time without premium or penalty. The note also provides for a cure period for any nonpayment default that is curable so long as a notice of breach of the same provision has not been given within the preceding 12 months. Upon default, the note holder may accelerate the time of payment of the note. | |
On July 9, 2014, we issued 5,316 shares of common stock to a director as director compensation and an aggregate of 5,264 shares of restricted common stock (for which restrictions lapse on July 8, 2015) to two newly appointed directors for compensation for their service as directors. On September 16, 2014, we issued 2,604 shares of restricted common stock to a director as director compensation for which restrictions lapse on September 16, 2015. | |
Segment_Information
Segment Information | 9 Months Ended |
Sep. 30, 2014 | |
Segment Information | ' |
Segment Information | ' |
(14) Segment Information | |
The Company operates in a single reporting segment as a direct selling company that sells a wide range of products sold primarily by an independent sales force around the world. For the nine months ended September 30, 2014, 45% of our revenues were generated in international markets with 36%, or $27.1 million derived from countries in Europe (primarily Russia and Italy). One hundred percent of our revenues were domestically generated for the nine months ended September 30, 2013. We do not view any product groups as segments but have grouped similar products into the following five categories for disclosure purposes only: gourmet foods, nutritional and wellness, home décor, publishing and printing and other. For the nine months ended September 30, 2014, approximately $5.0 million or 6.6% of our revenues were derived from the sale of gourmet food products, $29.1 million or 38.7% of our revenues were derived from the sale of nutritional and wellness products, $38.2 million or 50.7% of our revenues were derived from the sale of home décor products, $0.9 million or 1.2% of our revenues were derived from the sale of our publishing and printing services and products and $2.1 million or 2.8% of our revenues were derived from the sale of our other products. For the nine months ended September 30, 2013, $48.2 million or 98.2% of our revenues were derived from the sale of home décor products, $0.2 million or less than 1% of our revenues were derived from gourmet food products and $0.7 million or 1.5% of our revenues were derived from the sale of our publishing and printing services and products. Substantially all our long-lived assets are located in the U.S. Our chief operating decision maker is our Chief Executive Officer who reviews financial information presented on a consolidated basis. Accordingly, we have determined that we operate in one reportable business segment. | |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
(15) Subsequent Events | |
On October 10, 2014, the Company entered into a second amendment to that certain Share Exchange Agreement, as amended, with Rochon Capital (as further amended, the "Amended Share Exchange Agreement"), which will become effective upon the consummation of our proposed current public offering, and which limits Rochon Capital's right or the right of a Permitted Transferee (as defined below) to be issued the 25,240,676 shares of our common stock it is currently entitled to receive under the Share Exchange Agreement, as amended (the "Second Tranche Parent Stock") solely upon the public announcement that a person or group of affiliated or associated persons has become an Acquiring Person (as defined below), or upon the commencement or announcement of a tender or exchange offer which would result in any person or group becoming an Acquiring Person. In such event, the Second Tranche Parent Stock will be issued to Rochon Capital, or a Permitted Transferee to whom the right has been transferred, within ten (10) days of its written request, which request shall be in its sole discretion. A person or group of affiliated or associated persons becomes an "Acquiring Person," thus triggering the issuance of the Second Tranche Parent Stock to Rochon Capital, or a Permitted Transferee to whom the right has been transferred, upon acquiring, subsequent to the date of the Amended Share Exchange Agreement, beneficial ownership of 15% or more of the shares of our common stock then outstanding. The term "Acquiring Person" shall not include (1) any person who acquires 15% or more of our shares of common stock in a transaction approved by John P. Rochon, (2) any affiliates of John P. Rochon or (3) any family members of John P. Rochon. | |
In addition, Rochon Capital has agreed to irrevocably waive its right to, and has agreed that it will not (i) sell, pledge, convey or otherwise transfer all or any part of the Second Tranche Parent Stock or the right to received the Second Tranche Parent Stock to any person or entity other than to (x) John P. Rochon or his wife, or both, or William John Philip Rochon (each a "Permitted Transferee") or (y) the Company, as set forth below, and (ii) be entitled to receive any cash dividends or cash distributions of any kind with respect to the Second Tranche Parent Stock, except as specifically provided below. Rochon Capital further agreed that the Second Tranche Parent Stock shall be redeemed by the Company upon receipt of a cash payment by Rochon Capital from the Company of One Million Dollars ($1,000,000) if any of the following events occur: (i) our liquidation or dissolution; (ii) our merger with or into another entity where the holders of its common stock prior to the merger do not own a majority of its common stock immediately after the merger (while specifically excluding the Second Tranche Parent Stock from such calculation); (iii) the sale of all or substantially all of our assets; (iv) the death of John P. Rochon, in which case the redemption shall be limited to Second Tranche Parent Stock that has not been transferred by Rochon Capital; (v) a change of control of Rochon Capital such that a majority of the equity of Rochon Capital is not owned by John P. Rochon or immediate family members of John P. Rochon; and (vi) John P. Rochon having been found guilty or having pled guilty or nolo contendere to any act of embezzlement, fraud, larceny or theft on or from the Company. Rochon Capital has also agreed that the Second Tranche Parent Stock will be automatically redeemed by the Company for nominal consideration if any of the following events should occur: (i) the Company commences a voluntary case under Title 11 of the United States Code or the corresponding provisions of any successor laws; (ii) an involuntary case against the Company is commenced under Title 11 of the United States Code or the corresponding provisions of any successor laws and either (A) the case is not dismissed by midnight at the end of the 90th day after commencement or (B) the court before which the case is pending issues an order for relief or similar order approving the case; or (iii) a court of competent jurisdiction appoints, or the Company makes an assignment of all or substantially all of its assets to, a custodian (as that term is defined in Title 11 of the United States Code or the corresponding provisions of any successor laws) for the Company or all or substantially all of its assets. | |
Rochon Capital has agreed to irrevocably authorize and direct our transfer agent to place a permanent stop order on the Second Tranche Parent Stock and to add a corresponding restrictive legend on the certificate or certificates representing the Second Tranche Parent Stock. | |
On October 10, 2014, pursuant to the Second Amendment entered into on June 12, 2014, the Company and RCP V mutually agreed to convert the RCP V Note in the original principal amount of $20,000,000, into 3,200,000 shares of our common stock which conversion will become effective upon the consummation of our proposed current public offering of common stock. | |
On October 16, 2014, the Company effected a 1-for-20 reverse stock split of its issued and outstanding shares of common stock. The Company filed an amendment to its Articles of Incorporation with the Secretary of State of Florida (the "Amendment") to effectuate the Stock Split and to reduce proportionately the number of its authorized shares of common stock from 5,000,000,000 shares of common stock to 250,000,000 shares of common stock and the number of its authorized shares of preferred stock from 10,000,000 shares of preferred stock to 500,000 shares of preferred stock. As of that date, each 20 shares of issued and outstanding common stock were converted into one share of common stock. No fractional shares will be issued in connection with the Stock Split. Instead, any fractional shares that remain after the Stock Split have been rounded up to the nearest whole number of shares. All options, warrants and convertible securities of the Company outstanding immediately prior to the Stock Split have been appropriately adjusted by dividing the number of shares of common stock into which the options, warrants and convertible securities are exercisable or convertible by 20 and multiplying the exercise or conversion price thereof by 20, as a result of the Stock Split. Accordingly, all share and per share amounts for all periods presented in the consolidated financial statements and notes thereto have been adjusted retrospectively, where applicable to reflect the reverse stock split. | |
General_Policies
General (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
General | ' |
Revenue Recognition and Deferred Revenue | ' |
Revenue Recognition and Deferred Revenue | |
In the ordinary course of business, the Company receives payments, primarily via credit card, for the sale of products at the time customers place orders. Sales and related fees such as shipping and handling, net of applicable sales discounts, are recorded as revenue when the product is shipped and when title and the risk of ownership passes to the customer. The Company presents revenues net of any taxes collected from customers which are remitted to governmental authorities. Payments received for undelivered products are recorded as deferred revenue and are included in current liabilities on our consolidated balance sheets. Certain incentives offered to our independent sales representatives and their customers, including sales discounts, described in the paragraph below are classified as program costs and discounts. A provision for product returns and allowances is recorded and is founded on historical experience and is classified as a reduction of net revenues. At September 30, 2014 and December 31, 2013, our allowance for sales returns totaled $194,792 and $221,396, respectively. | |
Program Costs and Discounts | ' |
Program Costs and Discounts | |
Program costs and discounts represent various methods of promoting our products. The Company offers benefits such as discounts on starter kits for new consultants, promotional pricing for the host of a home show, which may vary depending on the value of the orders placed and general discounts on our products. | |
Goodwill and Other Intangibles | ' |
Goodwill and Other Intangibles | |
Our management performs its goodwill and other indefinite-lived intangible impairment tests annually or when changes in circumstances indicate an impairment event may have occurred by estimating the fair value of each reporting unit compared to its carrying value. Our reporting units represent an operating segment or a reporting level below an operating segment. Additionally, the reporting units are aggregated based on similar economic characteristics, nature of products and services, nature of production processes, type of customers and distribution methods. We use a discounted cash flow model and a market approach to calculate the fair value of our reporting units. The model includes a number of significant assumptions and estimates regarding future cash flows and these estimates could be materially impacted by adverse changes in market conditions. | |
Goodwill is measured for impairment by comparing the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit is less than the carrying value, a second step is performed to determine the implied fair value of goodwill. If the implied fair value of goodwill is lower than its carrying value, an impairment charge equal to the difference is recorded. After the Share Exchange Agreement in 2012, we determined that the goodwill associated with that acquisition was impaired. As a result, we recorded $2,488,708 in goodwill impairment that represented all goodwill associated with the Share Exchange Agreement. The impairment charge is included in the consolidated statements of operations for the year ended December 31, 2012. Indefinite-lived assets are measured for impairment by comparing the fair value of the indefinite-lived intangible asset to its carrying value. If the fair value of the indefinite-lived intangible asset is lower than its carrying value, an impairment charge equal to the difference is recorded. | |
Leases | ' |
Leases | |
Leases are contractual agreements between lessees and lessors in which lessees get the right to use leased assets for a specified period in exchange for regular payments. Capital leases resemble asset purchases because there is an implied transfer of the benefits and risks of ownership from lessor to lessee, and the lessee is responsible for repairs and maintenance. We treat asset leases as capital leases if the life of the lease exceeds 75 percent of the asset's useful life, there is an ownership transfer to the lessee at the end of the lease, the lessee purchases the asset at a "bargain" price relative to fair market value at the end of the lease or the discounted present value of the lease payments exceeds 90 percenf of the fair-market value of the asset at the beginning of the lease term | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Examples include provisions for bad debts, useful lives of property and equipment, impairment of goodwill, other intangibles and property and equipment, deferred taxes, and the provision for and disclosure of litigation and loss contingencies. Actual results may differ materially from those estimates. | |
Acquisitions_Dispositions_and_1
Acquisitions, Dispositions and Other Transactions (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Acquisitions, Dispositions and Other Transactions | ' | ||||
Schedule of Sale Leaseback Transactions | ' | ||||
Sales Price (fair value) | $ | 15,800,000 | |||
Transaction Fees | (956,417 | ) | |||
14,843,583 | |||||
Book Value at July 31, 2014 | 12,320,715 | ||||
$ | |||||
Gain on Sale | $ | 2,522,868 | |||
UAI | ' | ||||
Acquisitions, Dispositions and Other Transactions | ' | ||||
Summary of fair value of TLC, YIAH, TBT, AEI, MSK and Paperly's balance sheets | ' | ||||
UAI | |||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 2,000 | |||
Accounts receivable | 1,742 | ||||
Inventory | 96,497 | ||||
Total current assets | 100,239 | ||||
Property, plant and equipment | 23,230 | ||||
Goodwill | 469,065 | ||||
Other assets | 16,366 | ||||
Total assets | $ | 608,900 | |||
Liabilities and stockholders' equity | |||||
Current liabilities: | |||||
Accounts payable—trade | $ | 267,337 | |||
Accrued commissions | 79,003 | ||||
Deferred revenue | 28,399 | ||||
Other current liabilities | 96,706 | ||||
Total current liabilities | 471,445 | ||||
Other long-term liabilities | 137,455 | ||||
Total liabilities | 608,900 | ||||
Stockholders' equity | — | ||||
Total stockholders' equity | — | ||||
Total liabilities and stockholders' equity | $ | 608,900 | |||
Inventory_Tables
Inventory (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory | ' | |||||||
Schedule of inventory | ' | |||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Raw material and supplies | $ | 3,202,724 | $ | 2,640,842 | ||||
Work in process | 286,247 | 339,581 | ||||||
Finished goods | 13,203,755 | 15,753,871 | ||||||
$ | 16,692,726 | $ | 18,734,294 | |||||
Property_plant_and_equipment_T
Property, plant and equipment (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property, plant and equipment | ' | |||||||
Schedule of property, plant and equipment | ' | |||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Land and improvements | $ | 699,308 | $ | 3,049,765 | ||||
Buildings and improvements | 6,357,967 | 19,788,447 | ||||||
Equipment | 2,920,561 | 1,306,597 | ||||||
Construction in progress | 10,621 | 425,424 | ||||||
9,988,457 | 24,570,233 | |||||||
Less accumulated depreciation | (1,487,214 | ) | 1,722,379 | |||||
$ | 8,501,243 | $ | 22,847,854 | |||||
Longterm_debt_and_other_financ1
Long-term debt and other financing arrangements (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Long-term debt and other financing arrangements | ' | ||||||||||
Schedule of long-term borrowing | ' | ||||||||||
Description | Interest | September 30, | December 31, | ||||||||
rate | 2014 | 2013 | |||||||||
Convertible Subordinated Unsecured Promissory Note—Richmont Capital Partners V L.P. (including accrued interest) | 4.00 | % | $ | 21,489,767 | $ | 20,881,096 | |||||
Promissory Note—payable to former shareholder of TLC | 2.63 | % | 3,464,638 | 3,734,695 | |||||||
Promissory Note—Lega Enterprises, LLC (formerly Agel Enterprises, LLC) | 5.00 | % | 1,419,111 | 1,649,880 | |||||||
Term loan—KeyBank | — | 427,481 | |||||||||
Other, equipment notes | — | — | |||||||||
Total debt | 26,373,516 | 26,723,396 | |||||||||
Less current maturities | 698,363 | 1,128,674 | |||||||||
Long-term debt | $ | 25,675,153 | $ | 25,594,722 | |||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||
Schedule of accumulated other comprehensive loss, net of taxes | ' | ||||||||||
Foreign | Unrealized Gain | Total | |||||||||
Currency | (Loss) on | Accumulated | |||||||||
Translation | Available-for- | Other | |||||||||
Sale Securities | Comprehensive | ||||||||||
Income (Loss) | |||||||||||
Balance at December 31, 2013 | $ | (130,791 | ) | $ | (636,778 | ) | $ | (767,569 | ) | ||
Other comprehensive income (loss) before reclassifications | 34,327 | 100,676 | 135,003 | ||||||||
Amount reclassified from AOCI | — | 552,085 | 552,085 | ||||||||
Net other comprehensive income (loss) | 34,327 | 652,761 | 687,088 | ||||||||
Balance at September 30, 2014 | $ | (96,464 | ) | $ | 15,983 | $ | (80,481 | ) | |||
Components of AOCI | Amounts | ||||||||||
reclassified | |||||||||||
from AOCI | |||||||||||
Realized gain/(loss) on sale of marketable securities | $ | (552,085 | ) | ||||||||
Income tax (expense) benefit | — | ||||||||||
Net of income taxes | $ | (552,085 | ) | ||||||||
General_Details
General (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
General | ' | ' | ' | ' |
Selling, general and administrative | $13,656,012 | $7,795,106 | $35,111,372 | $17,887,482 |
Revenue | 19,637,220 | 17,474,683 | 60,697,906 | 35,959,506 |
Program costs and discounts | 4,380,221 | 6,817,716 | 14,576,574 | 13,176,698 |
Gross profit | 13,063,860 | 9,335,668 | 40,245,903 | 18,304,912 |
Operating loss | 5,759,684 | 1,269,363 | 12,604,118 | 5,596,443 |
Commission and incentives expense | 5,800,665 | 2,809,926 | 18,778,694 | 6,013,873 |
Restatement adjustment | ' | ' | ' | ' |
General | ' | ' | ' | ' |
Revenue | ' | 500,000 | ' | 1,100,000 |
Restatement adjustment | Selling, general and administrative costs | ' | ' | ' | ' |
General | ' | ' | ' | ' |
Selling, general and administrative | ' | -500,000 | ' | -1,100,000 |
Restatement adjustment | Program costs and discounts | ' | ' | ' | ' |
General | ' | ' | ' | ' |
Program costs and discounts | ' | -2,600,000 | ' | -5,400,000 |
Gross profit | ' | $3,300,000 | ' | $6,500,000 |
General_Details_2
General (Details 2) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue Recognition and Deferred Revenue | ' | ' | ' |
Allowance for sales returns | $194,792 | $221,396 | ' |
Goodwill and Other Intangibles | ' | ' | ' |
Goodwill impairment | ' | ' | $2,488,708 |
General_Details_3
General (Details 3) | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Oct. 31, 2013 | Aug. 31, 2013 | Mar. 31, 2013 | Sep. 30, 2012 |
UAI | Paperly | MSK | AEI | TBT | Your Inspiration At Home Acquisition Ltd. | TLC | HCG | |
item | ||||||||
Business overview and current plans | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage including noncontrolling interest in subsidiaries owned by individual | ' | ' | ' | 100.00% | ' | ' | ' | ' |
Ownership percentage by parent | 100.00% | 100.00% | 90.00% | 99.00% | 100.00% | 100.00% | 51.70% | 100.00% |
Noncontrolling interest in subsidiaries owned by individual | ' | ' | ' | 1.00% | ' | ' | ' | ' |
Number of countries in which products are sold | ' | ' | ' | 40 | ' | ' | ' | ' |
Acquisitions_Dispositions_and_2
Acquisitions, Dispositions and Other Transactions (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 18, 2013 | Oct. 16, 2014 | Oct. 16, 2014 | Jul. 09, 2014 | Apr. 10, 2013 | Dec. 31, 2012 | Jun. 18, 2013 | Aug. 24, 2012 | Sep. 30, 2014 | Apr. 10, 2013 | Jun. 14, 2014 | Mar. 14, 2014 | Sep. 30, 2014 | Mar. 14, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 18, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 14, 2013 | Mar. 18, 2013 | Mar. 18, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jul. 31, 2014 | Sep. 30, 2014 | Jul. 31, 2014 | Jul. 31, 2014 |
Subsequent event | Subsequent event | Common Stock | Common Stock | Common Stock | Rochon Capital | Rochon Capital | Rochon Capital | Rochon Capital | Convertible notes one | Uppercase Living | Uppercase Living | UAI | TLC | TLC | TLC | TLC | TLC | TLC | TLC | TLC | Sale Leaseback Agreement Member | Sale Leaseback Agreement Member | Sale Leaseback Agreement Member | Sale Leaseback Agreement Member | Sale Leaseback Agreement Member | Master Lease Agreement Member | ||||
The Tamala L. Longaberger Recoverable Trust | item | ECO Business Park Frazeysburg Ohio | Swim Center | Convertible notes one | Convertible notes one | Promissory Note | TLC | TLC | TLC | |||||||||||||||||||||
item | item | |||||||||||||||||||||||||||||
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payable recorded due to non delivery of shares of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $512,195 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issuable in consideration (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,725 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Par value of common stock issuable in consideration (in dollars per share) | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of common stock issuable in consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 96,706 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares delivered to escrow account | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,195 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of shares delivered to escrow account | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 123,081 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum duration of escrow account | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '24 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of contingent payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration payable in 2014 (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration payable in 2015 (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration payable in 2016 (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,742 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Inventory | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 96,497 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total current assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,239 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,230 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 4,676,397 | 4,422,928 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 469,065 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,366 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 608,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable - trade | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 267,337 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued commissions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 79,003 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28,399 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other current liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 96,706 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total current liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 471,445 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other long-term liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 137,455 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 512,195 | ' | 608,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total liabilities and stockholders' equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 608,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales Price (fair value) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,800,000 | ' | ' | ' |
Transaction Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -956,417 | ' | ' | ' |
Net Proceeds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,843,583 | ' | ' | ' |
Book Value at July 31, 2014 | 15,624,444 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,320,715 | ' |
Gain on Sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 338,610 | ' | ' | 271,970 | 35,309 | ' | ' | ' | 28,032 | 28,032 | 2,522,868 | ' | ' | ' |
Term of agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' |
Proceeds from dispositions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 657,360 | ' | ' | 1,333,857 | 497,458 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | 3 | ' | ' |
Net gain on sales of other assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 99,633 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership interest acquired of the voting stock (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 64.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership interest acquired of all the stock (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,500,000 | 6,500,000 | 4,000,000 | ' | ' | ' | ' | ' | ' |
Common Stock issued upon conversion of the note | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,625,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consideration for repurchase of common stock to offset the shares issued to the Trust | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common stock repurchased to offset the shares issued to the Trust | ' | ' | ' | ' | ' | ' | ' | ' | 1,625,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | 24,396,195 | 24,356,989 | 24,385,617 | ' | ' | 5,316 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted common stock issued (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,904,302 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted common stock issued (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional shares issuable under Share Exchange Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,240,676 | 25,240,676 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized number of shares of common stock | 250,000,000 | 250,000,000 | ' | ' | 250,000,000 | ' | 5,000,000,000 | 490,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split ratio | ' | ' | ' | 0.05 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Security deposit held which will be released over time as certain targets are met | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,400,000 | ' |
Base quarterly rent in first year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $551,772 |
Percentage of annual increase thereafter in base quarterly rent of first year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% |
Marketable_Securities_Details
Marketable Securities (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Marketable Securities | ' | ' | ' | ' | ' |
Equity securities | $0 | ' | $0 | ' | $1,390,355 |
Fixed income securities | 5,300,000 | ' | 5,300,000 | ' | 10,439,897 |
Gross proceeds from sales of marketable securities | 4,600,000 | 0 | 10,517,749 | 0 | ' |
Unrealized losses on the investments | -219,096 | 183,124 | 433,665 | 183,124 | ' |
Realized losses from the sale of marketable securities | $108,131 | $348,716 | ($443,954) | $348,716 | ' |
Inventory_Details
Inventory (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventory | ' | ' |
Raw material and supplies | $3,202,724 | $2,640,842 |
Work in process | 286,247 | 339,581 |
Finished goods | 13,203,755 | 15,753,871 |
Inventory | 16,692,726 | 18,734,294 |
Reserve for inventory obsolescence | $104,000 | $124,000 |
Property_plant_and_equipment_D
Property, plant and equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Property, plant and equipment | ' | ' | ' | ' | ' |
Property, plant and equipment, gross | $9,988,457 | ' | $9,988,457 | ' | $24,570,233 |
Less accumulated depreciation | 1,487,214 | ' | 1,487,214 | ' | 1,722,379 |
Property, plant and equipment, net | 8,501,243 | ' | 8,501,243 | ' | 22,847,854 |
Depreciation expense | 646,465 | 499,812 | 1,667,619 | 1,265,049 | ' |
Land and improvements | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | ' | ' |
Property, plant and equipment, gross | 699,308 | ' | 699,308 | ' | 3,049,765 |
Buildings and improvements | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | ' | ' |
Property, plant and equipment, gross | 6,357,967 | ' | 6,357,967 | ' | 19,788,447 |
Equipment | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | ' | ' |
Property, plant and equipment, gross | 2,920,561 | ' | 2,920,561 | ' | 1,306,597 |
Construction in progress | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | ' | ' |
Property, plant and equipment, gross | $10,621 | ' | $10,621 | ' | $425,424 |
Longterm_debt_and_other_financ2
Long-term debt and other financing arrangements (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||
Jul. 02, 2014 | 6-May-14 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jul. 02, 2014 | 6-May-14 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | 6-May-14 | 6-May-14 | 6-May-14 | 6-May-14 | Sep. 30, 2014 | Sep. 30, 2014 | Jul. 31, 2014 | Sep. 30, 2014 | Jun. 17, 2013 | Dec. 12, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 17, 2013 | Sep. 30, 2014 | Mar. 14, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 27, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 22, 2013 | Jul. 01, 2014 | Jul. 11, 2014 | Dec. 31, 2013 | Oct. 23, 2012 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Sale Leaseback Agreement Member | Sale Leaseback Agreement Member | Maximum | Minimum | Warrant one | Warrant two | Director | TLC | TLC | TLC | Convertible notes three | Convertible notes three | Convertible notes three | Convertible notes three | Convertible notes three | Convertible notes three | Promissory Note | Promissory Note | Promissory Note | Promissory Note | Promissory Note | Promissory Note | Promissory Note | Promissory Note Two | Promissory Note Three | Term loan - Key Bank | Term loan - Key Bank | Other, equipment notes | Lines of Credit - Key Bank | Lines of Credit - Key Bank | Lines of Credit - Key Bank | Lines of Credit - Key Bank | Lines of Credit - Key Bank | Lines of Credit - UBS Margin Loan | Lines of Credit - UBS Margin Loan | ||||||||||
Richmont Street LLC | Sale Leaseback Agreement Member | Sale Leaseback Agreement Member | RCP V | RCP V | RCP V | RCP V | RCP V | RCP V | TLC | TLC | TLC | TLC | AEI | AEI | AEI | AEI | AEI | Maximum | Key Bank's prime rate | LIBOR | ||||||||||||||||||||||||
item | Maximum | Maximum | Tamala L. Longaberger | Tamala L. Longaberger | Tamala L. Longaberger | |||||||||||||||||||||||||||||||||||||||
item | item | |||||||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable and Loans Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total debt | ' | ' | $26,373,516 | ' | $26,373,516 | ' | ' | ' | $26,723,396 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $21,489,767 | $20,881,096 | ' | ' | ' | $3,464,638 | $3,734,695 | ' | $1,419,111 | $1,649,880 | ' | ' | ' | $427,481 | ' | $30,244 | ' | ' | ' | ' | ' | ' | ' |
Less current maturities | ' | ' | 698,363 | ' | 698,363 | ' | ' | ' | 1,128,674 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | ' | ' | 25,675,153 | ' | 25,675,153 | ' | ' | ' | 25,594,722 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate of convertible agreements (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | 4.00% | ' | ' | ' | 2.63% | 2.63% | ' | ' | 5.00% | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes issued by the Company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | 4,000,000 | ' | ' | 42,000 | ' | ' | 1,700,000 | 158,000 | 800,000 | ' | 6,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Annual principal payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,333,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period from the Issuance Date after which debt can be prepaid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 days | '380 days | '10 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common stock issuable on conversion (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,200,000 | 3,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Available borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' |
Basis of interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Key Bank's prime rate | 'LIBOR | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.75% | 3.50% | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.94% | 3.94% | ' | ' | ' | 1.65% | 1.67% |
Line of credit outstanding balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 8,067,573 | ' | ' | ' | 933,060 | 1,663,534 |
Number of properties sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Useful life over which asset depreciated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease payment amortization period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense associated with lease payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | 371,935 | 371,935 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation | ' | ' | 646,465 | 499,812 | 1,667,619 | 1,265,049 | ' | ' | ' | 175,556 | 175,556 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on Sale | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28,032 | 28,032 | ' | ' | ' | ' | ' | 338,610 | 2,522,868 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares into which warrants are exercisable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,500 | 6,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable term of warrants | '10 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '75 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants (in dollars per share) | ' | ' | ' | ' | ' | ' | 12.8 | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of average closing price of common stock preceding the issuance | ' | '10 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants issued | ' | 116,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants granted (in shares) | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of consulting agreement | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period after issuance when warrant is exercisable | '720 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense | ' | ' | $0 | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Accumulated other comprehensive loss, net of taxes | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ($767,569) | ' |
Other comprehensive income (loss) before reclassifications | ' | ' | 135,003 | ' |
Amount reclassified from AOCI | ' | ' | 552,085 | ' |
Net other comprehensive income (loss) | -62,960 | 223,825 | 687,088 | 223,825 |
Balance at the end of the period | -122,004 | ' | -122,004 | ' |
Realized gain/(loss) on sale of marketable securities | 108,131 | ' | -443,954 | ' |
Net loss | -6,662,306 | -1,681,081 | -15,030,124 | -6,612,209 |
Foreign Currency Translation | ' | ' | ' | ' |
Accumulated other comprehensive loss, net of taxes | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | -130,791 | ' |
Other comprehensive income (loss) before reclassifications | ' | ' | 34,327 | ' |
Net other comprehensive income (loss) | ' | ' | 34,327 | ' |
Balance at the end of the period | -96,464 | ' | -96,464 | ' |
Unrealized Gain (Loss) on Available-for-Sale Securities | ' | ' | ' | ' |
Accumulated other comprehensive loss, net of taxes | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | -636,778 | ' |
Other comprehensive income (loss) before reclassifications | ' | ' | 100,676 | ' |
Amount reclassified from AOCI | ' | ' | 552,085 | ' |
Net other comprehensive income (loss) | ' | ' | 652,761 | ' |
Balance at the end of the period | 15,983 | ' | 15,983 | ' |
Unrealized Gain (Loss) on Available-for-Sale Securities | Reclassification from AOCI | ' | ' | ' | ' |
Accumulated other comprehensive loss, net of taxes | ' | ' | ' | ' |
Realized gain/(loss) on sale of marketable securities | ' | ' | -552,085 | ' |
Net loss | ' | ' | ($552,085) | ' |
Fair_Value_Details
Fair Value (Details) (Recurring Basis, USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Level 1 | ' | ' |
Fair Value | ' | ' |
Available for sale securities | $1,047,807 | $1,390,355 |
Level 2 | ' | ' |
Fair Value | ' | ' |
Available for sale securities | $4,371,488 | $10,439,897 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Income Taxes | ' | ' |
Net deferred tax asset | $0 | $0 |
Deferred tax liability | 134,000 | 224,000 |
Current tax expense related to its domestic activities | 0 | 0 |
Current tax expense related to certain foreign jurisdictions | 163,563 | 655,484 |
Amount of loss carryover available for offset | $0 | $0 |
Sharebased_compensation_plans_
Share-based compensation plans (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
item | ||||
Share-based compensation plans | ' | ' | ' | ' |
Number of plans | ' | ' | 2 | ' |
SARs | ' | ' | ' | ' |
Share-based compensation plans | ' | ' | ' | ' |
Number of shares granted | ' | ' | 65,500 | ' |
Number of shares forfeited | ' | ' | 53,000 | ' |
Vesting period | ' | ' | '3 years | ' |
Number of annual payments | ' | ' | 3 | ' |
Vesting percentage | ' | ' | 33.00% | ' |
Share-based compensation expense | $0 | $0 | $0 | $0 |
Unrecognized compensation cost related to unvested share-based compensation | $0 | ' | $0 | ' |
Loss_per_share_attributable_to1
Loss per share attributable to CVSL (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2014 | Apr. 10, 2013 | |
Rochon Capital | Rochon Capital | ||
Adjustments to net earnings | $0 | ' | ' |
Number of additional shares available for issuance included in the calculation of basic and diluted shares | ' | 25,240,676 | 25,240,676 |
Related_party_transactions_Det
Related party transactions (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | Jun. 18, 2013 | Mar. 14, 2013 | Oct. 22, 2013 | Jul. 09, 2014 | Jul. 09, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 16, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 27, 2014 | Jul. 11, 2014 | Jul. 01, 2014 | Jun. 27, 2014 | Jul. 01, 2014 | Jul. 11, 2014 | |
item | Promissory Note | Promissory Note | Common Stock | Common Stock | Richmont Holdings | Richmont Holdings | Richmont Holdings | Richmont Holdings | Richmont Holdings | Richmont Holdings | Director | Actitech, L.P. | Actitech, L.P. | Tamala L. Longaberger | Tamala L. Longaberger | Tamala L. Longaberger | Tamala L. Longaberger | Tamala L. Longaberger | Tamala L. Longaberger | |||
TLC | AEI | Minimum | Common Stock | TLC | AEI | AEI | Promissory Note | Promissory Note Two | Promissory Note Three | |||||||||||||
TLC | AEI | AEI | ||||||||||||||||||||
Related party transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reimbursement fee payable per month | ' | ' | ' | ' | ' | ' | ' | ' | $160,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense Reimbursement Fees | ' | ' | ' | ' | ' | ' | ' | 480,000 | ' | 480,000 | 1,390,000 | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid to the related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 85,030 | 205,309 | ' | ' | ' | ' | ' | ' |
Amount lent by the related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42,000 | 800,000 | 158,000 | ' | ' | ' |
Principal amount | ' | ' | ' | $4,000,000 | $1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notice period of nonpayment default of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '12 months | '12 months | '12 months |
Common stock, shares issued | 24,396,195 | 24,356,989 | 24,385,617 | ' | ' | ' | 5,316 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted common stock issued (in shares) | ' | ' | ' | ' | ' | 5,264 | ' | ' | ' | ' | ' | ' | ' | 2,604 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of newly appointed directors | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
item | ||||
Segment Information | ' | ' | ' | ' |
Number of categories of products | ' | ' | 5 | ' |
Amount of net revenues generated in international markets | $19,637,220 | $17,474,683 | $60,697,906 | $35,959,506 |
Number of reportable business segments in which entity operate | ' | ' | 1 | ' |
Gourmet Food Products | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Amount of net revenues generated in international markets | ' | ' | 5,000,000 | 200,000 |
Home Decor | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Amount of net revenues generated in international markets | ' | ' | 38,200,000 | 48,200,000 |
Nutritionals and Wellness | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Amount of net revenues generated in international markets | ' | ' | 29,100,000 | ' |
Publishing & Printing | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Amount of net revenues generated in international markets | ' | ' | 900,000 | 700,000 |
Other | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Amount of net revenues generated in international markets | ' | ' | 2,100,000 | ' |
Europe including Russia and Ukraine | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Amount of net revenues generated in international markets | ' | ' | $27,100,000 | ' |
Net revenues | Gourmet Food Products | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Percentage of net revenues generated in international markets | ' | ' | 6.60% | ' |
Net revenues | Home Decor | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Percentage of net revenues generated in international markets | ' | ' | 50.70% | 98.20% |
Net revenues | Nutritionals and Wellness | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Percentage of net revenues generated in international markets | ' | ' | 38.70% | ' |
Net revenues | Publishing & Printing | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Percentage of net revenues generated in international markets | ' | ' | 1.20% | 1.50% |
Net revenues | Other | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Percentage of net revenues generated in international markets | ' | ' | 2.80% | ' |
Net revenues | International markets | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Percentage of net revenues generated in international markets | ' | ' | 45.00% | ' |
Net revenues | Domestic markets | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Percentage of net revenues generated in international markets | ' | ' | ' | 100.00% |
Net revenues | Europe including Russia and Ukraine | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' |
Percentage of net revenues generated in international markets | ' | ' | 36.00% | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Mar. 14, 2013 | Oct. 22, 2013 | Dec. 12, 2012 | Oct. 16, 2014 | Oct. 16, 2014 | Oct. 10, 2014 | Oct. 10, 2014 | Oct. 10, 2014 | Oct. 10, 2014 |
Promissory Note | Promissory Note | Convertible notes three | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |||
TLC | AEI | RCP V | item | Rochon Capital | Rochon Capital | Rochon Capital | Convertible notes three | ||||
Minimum | Maximum | RCP V | |||||||||
Subsequent Events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issuable under Share Exchange Agreement | ' | ' | ' | ' | ' | ' | ' | 25,240,676 | ' | ' | ' |
Number of days of written request in which shares would be issuable under share exchange agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 days | ' |
Beneficial ownership as percentage of common stock outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' |
Cash payments to be made for redemption of Second Tranche Parent Stock in case of occurrence of specific events | ' | ' | ' | ' | ' | ' | ' | $1,000,000 | ' | ' | ' |
Term for dismissal of case after commencement | ' | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' |
Principal amount | ' | ' | $4,000,000 | $1,700,000 | $20,000,000 | ' | ' | ' | ' | ' | ' |
Common Stock issued upon conversion of the note | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,200,000 |
Reverse stock split ratio | ' | ' | ' | ' | ' | 0.05 | ' | ' | ' | ' | ' |
Common stock, shares authorized | 250,000,000 | 250,000,000 | ' | ' | ' | ' | 250,000,000 | ' | ' | ' | ' |
Preferred stock, authorized shares | 500,000 | 500,000 | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' |
Divider by which number of shares of common stock into which the options, warrants and convertible securities are exercisable | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' |
Multiple by which exercise or conversion price is multiplied | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' |