Leatt (LEAT) 10-Q 13 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	6-May-14
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	31-Mar-14	'
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	'2014	'
Document Fiscal Period Focus	'Q1	'

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
Current Assets	'	'
Cash and cash equivalents	$699,574	$835,012
Short-term investments	58,136	58,130
Accounts receivable	2,194,855	3,139,273
Inventory	3,622,337	3,259,274
Payments in advance	245,210	144,302
Income tax refunds receivable	299	299
Deferred tax asset	110,000	110,000
Prepaid expenses and other current assets	842,995	1,092,450
Total current assets	7,773,406	8,638,740
Property and equipment, net	897,897	891,728
Other Assets	'	'
Other receivables	300,000	330,000
Deposits	19,423	19,469
Intangible assets	89,270	89,960
Total other assets	408,693	439,429
Total Assets	9,079,996	9,969,897
Current Liabilities	'	'
Accounts payable and accrued expenses	1,802,505	2,076,809
Short-term loan, net of finance charges	551,468	833,735
Total current liabilities	2,353,973	2,910,544
Deferred tax liabilities	40,638	40,680
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	7,309,942	7,307,515
Accumulated other comprehensive loss	-106,693	-111,864
Accumulated deficit	-650,872	-309,986
Total stockholders' equity	6,685,385	7,018,673
Total Liabilities and Stockholders' Equity	$9,079,996	$9,969,897

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
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
	Mar. 31, 2014	Mar. 31, 2013
Revenues	$3,523,475	$3,248,047
Cost of Revenues	1,627,774	1,653,034
Gross Profit	1,895,701	1,595,013
Product Royalty Income	20,815	37,462
Operating Expenses	'	'
Salaries and wages	527,046	579,140
Commissions and consulting expenses	166,017	123,173
Professional fees	334,056	364,595
Advertising and marketing	285,394	326,637
Office rent and expenses	60,118	73,403
Research and development costs	281,292	288,858
Bad debt expense	22,072	0
General and administrative expenses	504,954	541,173
Depreciation	77,519	94,026
Total operating expenses	2,258,468	2,391,005
Loss from Operations	-341,952	-758,530
Other Income	'	'
Interest and other income, net	1,066	3,789
Total other income	1,066	3,789
Net Loss Available to Common Shareholders	-340,886	-754,741
Net Loss per Common Share	'	'
Basic	($0.07)	($0.14)
Diluted	($0.07)	($0.14)
Weighted Average Number of Common Shares Outstanding	'	'
Basic	5,200,623	5,200,623
Diluted	5,200,623	5,200,623
Comprehensive Loss	'	'
Net Loss	-340,886	-754,741
Other comprehensive loss, net of $-0- deferred income taxes in 2014 and 2013	'	'
Foreign currency translation	5,171	-115,425
Total Comprehensive Loss	($335,715)	($870,166)

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, 2013	$3,000	$130,008	$7,307,515	($111,864)	($309,986)	$7,018,673
Beginning Balance (Shares) at Dec. 31, 2013	120,000	5,200,623	'	'	'	'
Compensation cost recognized in connection with stock options	'	'	2,427	'	'	2,427
Net loss	'	'	'	'	-340,886	-340,886
Foreign currency translation adjustment	'	'	'	5,171	'	5,171
Ending Balance at Mar. 31, 2014	$3,000	$130,008	$7,309,942	($106,693)	($650,872)	$6,685,385
Ending Balance (Shares) at Mar. 31, 2014	120,000	5,200,623	'	'	'	'

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities	'	'
Net loss	($340,886)	($754,741)
Adjustments to reconcile net loss to net cash provided by operating activities:	'	'
Depreciation	77,519	94,026
Deferred income taxes	-42	-560
Stock-based compensation	2,427	0
Bad debts	22,072	7,787
Inventory reserve	89,522	0
Gain on sale of property and equipment	-167	-2,844
(Increase) decrease in:	'	'
Accounts receivable	922,346	1,221,521
Inventory	-452,585	721,734
Payments in advance	-100,908	32,550
Prepaid expenses and other current assets	249,455	169,940
Other receivables	30,000	0
Deposits	46	2,418
Increase (decrease) in:	'	'
Accounts payable and accrued expenses	-274,304	-982,143
Income taxes payable	0	-1,499
Net cash provided by operating activities	224,495	508,189
Cash flows from investing activities	'	'
Capital expenditures	-88,691	-30,265
Proceeds from sale of property and equipment	167	2,844
Increase in short-term investments, net	-6	-119
Net cash used in investing activities	-88,530	-27,540
Cash flows from financing activities	'	'
Repayments of short-term loan, net	-282,267	-266,760
Net cash used in financing activities	-282,267	-266,760
Effect of exchange rates on cash and cash equivalents	10,864	-41,021
Net increase (decrease) in cash and cash equivalents	-135,438	172,868
Cash and cash equivalents - beginning	835,012	667,671
Cash and cash equivalents - ending	699,574	840,539
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:	'	'
Cash paid for interest	4,002	4,033
Cash paid for income taxes	0	1,499
Other noncash investing and financing activities	'	'
Common stock issued for services	$2,427	$0

Basis_of_Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2014
Basis of Presentation [Text Block]	'
	Note 1 - Basis of presentation
	The consolidated balance sheet as of December 31, 2013 was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 19, 2014. The consolidated balance sheet as of March 31, 2014 and the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2014 and 2013, changes in stockholders’ equity for the three months ended March 31, 2014, cash flows for the three months ended March 31, 2014 and 2013, 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 March 31, 2014 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, 2013 as filed with the Securities and Exchange Commission in the Company’s Form 10-K.

Inventory

Inventory	3 Months Ended
	Mar. 31, 2014
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. The reserve for obsolescence for the three months ended March 31, 2014 and 2013 was $221,177 and $0, respectively.

Intangible_Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2014
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 three months ended March 31, 2014 was zero. There was no impairment of intangible assets at March 31, 2014.

Shortterm_Loan

Short-term Loan	3 Months Ended
	Mar. 31, 2014
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 is payable in monthly installments of $91,014 over an 11 month period at an APR of 2.647% .

Income_Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2014
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 March 31, 2014, the Company has no unrecognized tax benefits. The Company’s 2011 income tax return is under examination by the Internal Revenue Service.

Net_Income_Per_Share_of_Common

Net Income Per Share of Common Stock	3 Months Ended
	Mar. 31, 2014
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 three months ended March 31, 2014, 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	3 Months Ended
	Mar. 31, 2014
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	3 Months Ended
	Mar. 31, 2014
Subsequent Events [Text Block]	'
	Note 8 – Subsequent Events
	The company has evaluated all subsequent events through the date the financial statements were released.

Inventory_Narrative_Details

Inventory (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Inventory 1	$221,177
Inventory 2	$0

Shortterm_Loan_Narrative_Detai

Short-term Loan (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
	M
Short-term Loan 1	$91,014
Short-term Loan 2	11
Short-term Loan 3	2.65%

Income_Taxes_Narrative_Details

Income Taxes (Narrative) (Details)	3 Months Ended
	Mar. 31, 2014
Income Taxes 1	50.00%

Net_Income_Per_Share_of_Common1

Net Income Per Share of Common Stock (Narrative) (Details)	3 Months Ended
	Mar. 31, 2014
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