Leatt (LEAT) 10-Q 8 Nov 13 2013 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 06, 2013
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	30-Sep-13	'
Trading Symbol	'leatpk	'
Entity Registrant Name	'Leatt Corp	'
Entity Central Index Key	'0001456189	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	5,200,623
Entity Current Reporting Status	'Yes	'
Entity Voluntary Filers	'No	'
Entity Well Known Seasoned Issuer	'No	'
Document Fiscal Year Focus	'2013	'
Document Fiscal Period Focus	'Q3	'

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current Assets	'	'
Cash and cash equivalents	$369,947	$667,671
Short-term investments	311,574	311,263
Accounts receivable	1,572,004	3,532,811
Inventory	3,537,828	3,770,932
Payments in advance	152,824	168,710
Deferred tax asset	300,785	47,000
Prepaid expenses and other current assets	135,773	874,113
Total current assets	6,380,735	9,372,500
Property and equipment, net	985,811	1,127,707
Other Assets	'	'
Deposits	22,134	44,495
Intangible assets	93,764	111,358
Total other assets	115,898	155,853
Total Assets	7,482,444	10,656,060
Current Liabilities	'	'
Accounts payable and accrued expenses	1,834,682	2,000,554
Income taxes payable	113,501	115,000
Short term loan, net of finance charges	16,302	837,721
Total current liabilities	1,964,485	2,953,275
Deferred tax liabilities	36,915	38,000
Commitments and contingencies	0	0
Stockholders' Equity	'	'
Preferred stock, $.001 par value, 1,120,000 shares authorized, 120,000 shares issued and outstanding	3,000	3,000
Common stock, $.001 par value, 28,000,000 shares authorized, 5,200,623 shares issued and outstanding	130,008	130,008
Additional paid - in capital	7,302,352	7,302,352
Accumulated other comprehensive income (loss)	-59,570	164,235
Retained earnings (accumulated deficit)	-1,894,746	65,190
Total stockholders' equity	5,481,044	7,664,785
Total Liabilities and Stockholders' Equity	$7,482,444	$10,656,060

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Preferred Stock, Par Value Per Share	$0.00	$0.00
Preferred Stock, Shares Authorized	1,120,000	1,120,000
Preferred Stock, Shares Issued	120,000	120,000
Preferred Stock, Shares Outstanding	120,000	120,000
Common Stock, Par Value Per Share	$0.00	$0.00
Common Stock, Shares Authorized	28,000,000	28,000,000
Common Stock, Shares, Issued	5,200,623	5,200,623
Common Stock, Shares, Outstanding	5,200,623	5,200,623

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenues	$2,243,598	$2,689,157	$9,108,243	$10,481,585
Cost of Revenues	1,071,522	1,317,056	4,555,276	4,715,416
Gross Profit	1,172,076	1,372,101	4,552,967	5,766,169
Product Royalty Income	105,328	82,729	285,014	156,162
Operating Expenses	'	'	'	'
Salaries and wages	508,641	547,144	1,640,282	1,613,684
Commissions and consulting expenses	142,866	122,987	426,035	371,057
Professional fees	197,672	310,696	1,013,783	864,448
Advertising and marketing	339,578	429,421	1,069,903	968,501
Office rent and expenses	62,528	66,015	195,342	206,348
Research and development costs	274,218	255,982	839,823	777,437
Bad debt expense (recovery)	0	-19,242	0	-143,080
General and administrative expenses	518,537	528,407	1,619,221	1,574,650
Depreciation	60,585	102,496	252,040	318,390
Total operating expenses	2,104,625	2,343,906	7,056,429	6,551,435
Loss from Operations	-827,221	-889,076	-2,218,448	-629,104
Other Income	'	'	'	'
Interest and other income, net	4,505	28,492	5,647	77,860
Total other income	4,505	28,492	5,647	77,860
Loss Before Income Taxes	-822,716	-860,584	-2,212,801	-551,244
Income Taxes	-253,785	-105,000	-252,865	960
Net Loss Available to Common Shareholders	-568,931	-755,584	-1,959,936	-552,204
Net Loss per Common Share	'	'	'	'
Basic	($0.11)	($0.15)	($0.38)	($0.11)
Diluted	($0.11)	($0.15)	($0.38)	($0.11)
Weighted Average Number of Common Shares Outstanding	'	'	'	'
Basic	5,200,623	5,200,623	5,200,623	5,200,623
Diluted	5,200,623	5,200,623	5,200,623	5,200,623
Comprehensive Loss	'	'	'	'
Net Loss	-568,931	-755,584	-1,959,936	-552,204
Other comprehensive loss, net of $-0- deferred income taxes	'	'	'	'
Foreign currency translation	-7,271	5,293	-223,805	-3,369
Total Comprehensive Loss	($576,202)	($750,291)	($2,183,741)	($555,573)

CONSOLIDATED_STATEMENTS_OF_CHA

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $)	Preferred Stock A [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings (Accumulated Deficit) [Member]	Total
Beginning Balance at Dec. 31, 2012	$3,000	$130,008	$7,302,352	$164,235	$65,190	$7,664,785
Beginning Balance (Shares) at Dec. 31, 2012	120,000	5,200,623	'	'	'	'
Net loss	'	'	'	'	-1,959,936	-1,959,936
Foreign currency translation adjustment	'	'	'	-223,805	'	-223,805
Ending Balance at Sep. 30, 2013	$3,000	$130,008	$7,302,352	($59,570)	($1,894,746)	$5,481,044
Ending Balance (Shares) at Sep. 30, 2013	120,000	5,200,623	'	'	'	'

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities	'	'
Net loss	($1,959,936)	($552,204)
Adjustments to reconcile net loss to net cash provided by operating activities:	'	'
Depreciation	252,040	318,390
Deferred income taxes	-254,870	-161
Stock-based compensation	0	10,325
Gain on sale of property and equipment	-2,844	-7,851
(Increase) decrease in:	'	'
Accounts receivable	1,960,807	1,158,051
Inventory	233,104	-766,550
Payments in advance	15,886	48,894
Prepaid expenses and other current assets	738,340	782,293
Income tax refunds receivable	0	-1,991
Deposits	22,361	-11,138
Increase (decrease) in:	'	'
Accounts payable and accrued expenses	-165,872	209,960
Income taxes payable	-1,499	-148,000
Customer deposits	0	-265
Net cash provided by operating activities	837,517	1,039,753
Cash flows from investing activities	'	'
Capital expenditures	-236,131	-94,201
Proceeds from sale of property and equipment	2,844	7,851
Increase in short-term investments, net	-311	-622
Net cash used in investing activities	-233,598	-86,972
Cash flows from financing activities	'	'
Repayments of short-term loan, net	-821,419	-617,010
Net cash used in financing activities	-821,419	-617,010
Effect of exchange rates on cash and cash equivalents	-80,224	-80,223
Net (decrease) increase in cash and cash equivalents	-297,724	255,548
Cash and cash equivalents - beginning of period	667,671	1,084,806
Cash and cash equivalents - end of period	369,947	1,340,354
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:	'	'
Cash paid for interest	11,995	122
Cash paid for income taxes	2,419	960
Other noncash investing and financing activities	'	'
Common stock issued for services	$0	$10,325

Basis_of_Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2013
Basis of Presentation [Text Block]	'
	Note 1 - Basis of presentation
	The consolidated balance sheet as of December 31, 2012 was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 28, 2013. The consolidated balance sheet as of September 30, 2013 and the consolidated statements of operations and comprehensive loss for the three months and nine months ended September 30, 2013 and 2012, changes in stockholders’ equity for the nine months ended September 30, 2013, cash flows for the nine months ended September 30, 2013 and 2012, and the related information contained in these notes have been prepared by management without audit. In the opinion of management, all adjustments (which include only normal recurring items) necessary to present fairly the financial position, results of operations and cash flows in conformity with generally accepted accounting principles as of September 30, 2013 and for all periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year.
	Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these condensed consolidated financial statements be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2012 as filed with the Securities and Exchange Commission in the Company’s Form 10-K.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2013
Inventory [Text Block]	'
	Note 2 - Inventory
	Inventory is stated at the lower of cost or market. Cost is determined using the first-in first-out (FIFO) method. Inventory consists primarily of finished goods. Shipping and handling costs are included in the cost of inventory. In assessing the inventory value, the Company must make estimates and judgments regarding reserves required for product obsolescence, aging of inventory and other issues potentially affecting the saleable condition of products. In performing such evaluations, the Company utilizes historical experience as well as current market information. There was no reserve for obsolescence for the nine months ended September 30, 2013.

Intangible_Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2013
Intangible Assets [Text Block]	'
	Note 3 - Intangible Assets
	The Company’s intangible assets consist of acquired patents with an indefinite useful life and are thus not amortized. Intangible assets are carried at cost less impairment. Amortization expense for the nine months ended September 30, 2013 was 0. There was no impairment of intangible assets at September 30, 2013.

Shortterm_Loan

Short-term Loan	9 Months Ended
	Sep. 30, 2013
Short-term Loan [Text Block]	'
	Note 4 - Short-term Loan
	The Company carries product liability insurance policies with a U.S. and South African-based insurance carrier. The Company finances payment of its short-term insurance premiums over the period of coverage, which is generally twelve months. The short-term loan was payable in monthly installments of $94,316 over eleven months with interest at an annual interest rate of 2.647% .

Income_Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2013
Income Taxes [Text Block]	'
	Note 5- Income Taxes
	The Company uses the asset and liability approach to account for income taxes. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The provision for income taxes included taxes currently payable, if any, plus the net change during the period in deferred tax assets and liabilities recorded by the Company.
	The Company applies the provisions of FASB ASC Topic 740-10, Accounting for Uncertainty in Income Taxes (“Standard”), which provides that the tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the position is more likely than not of being sustained upon an examination by tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, the standard provides guidance on derecognition, classification, interest and penalties; accounting in interim periods, disclosure and transition, and any amounts when incurred would be recorded under these provisions.
	The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of September 30, 2013, the Company has no unrecognized tax benefits and the Company currently has no federal or state tax examinations in progress.

Net_Income_Per_Share_of_Common

Net Income Per Share of Common Stock	9 Months Ended
	Sep. 30, 2013
Net Income Per Share of Common Stock [Text Block]	'
	Note 6 - Net Income Per Share of Common Stock
	Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted–average number of common stock shares and dilutive potential common shares outstanding during the period. For the nine months ended September 30, 2013, the Company had 328,000 potential common shares, consisting of 120,000 preferred shares and 208,000 stock options, outstanding that were anti-dilutive and therefore not included in diluted net income per share.

Litigation

Litigation	9 Months Ended
	Sep. 30, 2013
Litigation [Text Block]	'
	Note 7 - Litigation
	In the ordinary course of business, the Company is involved in various legal proceedings involving product liability and personal injury and intellectual property litigation. The Company is insured against loss for certain of these matters. The Company will record contingent liabilities resulting from asserted and unasserted claims against it when it is probable that the liability has been incurred and the amount of the loss is reasonably estimable. The Company will disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. While the outcome of currently pending litigation is not yet determinable, the ultimate exposure with respect to these matters cannot be ascertained. However, based on the information currently available to the Company, the Company does not expect that any liabilities or costs that might be incurred to resolve these matters will have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

Subsequent_Events

Subsequent Events	9 Months Ended
	Sep. 30, 2013
Subsequent Events [Text Block]	'
	Note 8 - Subsequent Events
	The Company has evaluated all subsequent events through the date the financial statements were released.
	Pursuant to a Premium Financing Agreement, dated October 11, 2013, between the Company and AFCO Acceptance Corporation ("AFCO"), the Company is obligated to pay AFCO an aggregate sum of $1,001,151 in eleven payments of $91,014, at a 2.647% annual interest rate, commencing on November 1, 2013 and ending on September 1, 2014.
	On October 6, 2013, the Company entered into a confidential settlement agreement to resolve alleged patent infringement claims and counter claims, under which it will receive a series of payments over time that in the aggregate will not have a significant impact on the Company's financial position.

Intangible_Assets_Narrative_De

Intangible Assets (Narrative) (Details)	9 Months Ended
	Sep. 30, 2013
Intangible Assets 1	0

Shortterm_Loan_Narrative_Detai

Short-term Loan (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Short-term Loan 1	$94,316
Short-term Loan 2	2.65%

Income_Taxes_Narrative_Details

Income Taxes (Narrative) (Details)	9 Months Ended
	Sep. 30, 2013
Income Taxes 1	50.00%

Net_Income_Per_Share_of_Common1

Net Income Per Share of Common Stock (Narrative) (Details)	9 Months Ended
	Sep. 30, 2013
Net Income Per Share Of Common Stock 1	328,000
Net Income Per Share Of Common Stock 2	120,000
Net Income Per Share Of Common Stock 3	208,000

Subsequent_Events_Narrative_De

Subsequent Events (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Subsequent Events 1	$1,001,151
Subsequent Events 2	$91,014
Subsequent Events 3	2.65%