Leatt (LEAT) 10-K 27 Mar 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 19, 2018	Jun. 30, 2017
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Trading Symbol	leatpk
Entity Registrant Name	Leatt Corp
Entity Central Index Key	1,456,189
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		5,366,382
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Entity Public Float			$ 6,178,346
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 1,518,157	$ 1,103,003
Short-term investments	58,221	58,196
Accounts receivable	2,420,656	2,217,840
Inventory	5,034,310	4,578,125
Payments in advance	565,124	569,498
Income tax refunds receivable	130,171	83,567
Prepaid expenses and other current assets	847,442	847,032
Total current assets	10,574,081	9,457,261
Property and equipment, net	2,113,855	1,190,688
Deferred tax asset, net	0	42,900
Other Assets
Deposits	26,081	24,892
Intangible assets	76,364	69,133
Total other assets	102,445	94,025
Total Assets	12,790,381	10,784,874
Current Liabilities
Accounts payable and accrued expenses	4,433,665	3,021,618
Short term loan, net of finance charges	518,130	542,532
Total current liabilities	4,951,795	3,564,150
Deferred tax liabilities, net	38,100	0
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, 5,366,382 and 5,362,992 shares issued and outstanding	130,053	130,053
Additional paid - in capital	7,687,367	7,469,694
Accumulated other comprehensive loss	(485,286)	(610,083)
Retained earnings	465,352	228,060
Total stockholders' equity	7,800,486	7,220,724
Total Liabilities and Stockholders' Equity	$ 12,790,381	$ 10,784,874

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Preferred Stock, Par Value Per Share	$ 0.001	$ 0.001
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	$ 0.001	$ 0.001
Common Stock, Shares Authorized	28,000,000	28,000,000
Common Stock, Shares, Issued	5,366,382	5,362,992
Common Stock, Shares, Outstanding	5,366,382	5,362,992

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenues	$ 20,139,785	$ 16,416,465
Cost of Revenues	10,674,447	8,178,017
Gross Profit	9,465,338	8,238,448
Product Royalty Income	98,038	103,366
Operating Expenses
Salaries and wages	2,603,707	2,332,167
Commissions and consulting expenses	523,629	566,105
Professional fees	694,345	538,076
Advertising and marketing	1,690,408	1,588,599
Office rent and expenses	266,933	258,950
Research and development costs	1,358,512	1,443,451
Bad debt expense	64,213	62,667
General and administrative expenses	1,659,565	1,873,981
Depreciation	476,552	409,534
Total operating expenses	9,337,864	9,073,530
Income (Loss) from Operations	225,512	(731,716)
Other Income (Expenses)
Interest and other income (expenses), net	(9,457)	97,521
Total other income (expenses)	(9,457)	97,521
Income (Loss) Before Income Taxes	216,055	(634,195)
Income Taxes	(21,237)	(178,958)
Net Income (Loss) Available to Common Shareholders	$ 237,292	$ (455,237)
Net Income (Loss) per Common Share
Basic	$ 0.04	$ (0.09)
Diluted	$ 0.04	$ (0.08)
Weighted Average Number of Common Shares Outstanding
Basic	5,365,137	5,310,966
Diluted	5,544,925	5,448,942
Comprehensive Income (Loss)
Net Income (Loss)	$ 237,292	$ (455,237)
Other comprehensive income (loss), net of $10,300 and $17,100 deferred income taxes in 2017 and 2016
Foreign currency translation	124,797	99,949
Total Comprehensive Income (Loss)	$ 362,089	$ (355,288)

CONSOLIDATED STATEMENTS OF OPE5

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Deferred Income Taxes	$ 10,300	$ 17,100

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Preferred Stock A [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings [Member]	Total
Beginning Balance at Dec. 31, 2015	$ 3,000	$ 130,040	$ 7,346,782	$ (710,032)	$ 683,297	$ 7,453,087
Beginning Balance (Shares) at Dec. 31, 2015	120,000	5,231,823
Compensation cost recognized in connection with stock options			157,458			157,458
Exercise of stock options		$ 39	38,961			39,000
Exercise of stock options (Shares)		39,000
Options exercised on a cashless basis (Shares)		118,620
Cancellation of shares		$ (26)	(73,507)			(73,533)
Cancellation of shares (Shares)		(26,451)
Net income (loss)					(455,237)	(455,237)
Foreign currency translation adjustment				99,949		99,949
Ending Balance at Dec. 31, 2016	$ 3,000	$ 130,053	7,469,694	(610,083)	228,060	7,220,724
Ending Balance (Shares) at Dec. 31, 2016	120,000	5,362,992
Compensation cost recognized in connection with stock options			217,673			217,673
Options exercised on a cashless basis (Shares)		3,390
Net income (loss)					237,292	237,292
Foreign currency translation adjustment				124,797		124,797
Ending Balance at Dec. 31, 2017	$ 3,000	$ 130,053	$ 7,687,367	$ (485,286)	$ 465,352	$ 7,800,486
Ending Balance (Shares) at Dec. 31, 2017	120,000	5,366,382

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities
Net income (loss)	$ 237,292	$ (455,237)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	476,552	409,534
Deferred income taxes	81,000	(900)
Stock-based compensation	217,673	157,458
Other Income	0	(73,533)
Bad debts	(15,895)	(30,446)
Inventory reserve	(108,299)	5,592
Gain on sale of property and equipment	(3,125)	0
Increase (decrease) in:
Accounts receivable	(186,921)	714,305
Inventory	(347,886)	(342,577)
Payments in advance	4,374	(361,468)
Prepaid expenses and other current assets	(410)	223,742
Income tax refunds receivable	(46,604)	(83,567)
Other receivables	0	90,000
Deposits	(1,189)	(8,399)
(Increase) decrease in:
Accounts payable and accrued expenses	1,412,047	460,638
Income taxes payable	0	(384,950)
Net cash provided by operating activities	1,718,609	320,192
Cash flows from investing activities
Capital expenditures	(1,361,453)	(239,336)
Proceeds from sale of property and equipment	3,125	0
Increase in short-term investments, net	(25)	(24)
Net cash used in investing activities	(1,358,353)	(239,360)
Cash flows from financing activities
Issuance of common stock	0	39,000
Proceeds from (repayments of ) short-term loan, net	(24,402)	(116,107)
Net cash used in financing activities	(24,402)	(77,107)
Effect of exchange rates on cash and cash equivalents	79,300	44,528
Net increase in cash and cash equivalents	415,154	48,253
Cash and cash equivalents - beginning of year	1,103,003	1,054,750
Cash and cash equivalents - end of year	1,518,157	1,103,003
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	13,397	12,779
Cash paid for income taxes	87,207	273,359
Other noncash investing and financing activities
Common stock issued for services	217,673	157,458
Cancellation of shares as settlment of debt	$ 0	$ (73,533)

DESCRIPTION OF BUSINESS AND NAT

DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS	12 Months Ended
	Dec. 31, 2017
DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS [Text Block]	NOTE 1 - DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS Leatt Corporation (the “Company”) designs, develops, markets and distributes personal protective equipment for participants in all forms of motor sports and leisure activities, including riders of motorcycles, bicycles, snowmobiles and ATVs. The Company’s flagship products are based on the Leatt-Brace® system, a patented injection molded neck protection system owned by Xceed Holdings CC (“Holdings”), designed to prevent potentially devastating injuries to the cervical spine and neck. The Company has the exclusive global manufacturing, distribution, sale and use rights to the Leatt-Brace®, pursuant to a license agreement between the Company and Holdings, a South African incorporated company owned and controlled by the Company’s Chairman and founder, Dr. Christopher Leatt. The Company also has the right to use apparatus embodying, employing and containing the Leatt-Brace® technology and has designed, developed, marketed and distributed other personal protective equipment. The Company’s products are manufactured in China and sold to customers worldwide through a global network of distributors and dealers. Leatt also acts as the original equipment manufacturer for neck braces and other personal protective equipment sold by other international brands. The Company was incorporated in the State of Nevada on March 11, 2005, under the name Treadzone, Inc. On June 17, 2005, the Company changed its name to Leatt Corporation in connection with the Company’s acquisition of rights to use the Leatt neck brace patents and trademarks. The Company conducts business in South Africa as a foreign registered branch, and in the United States through the Company’s wholly-owned subsidiary, Two Eleven Distribution, LLC (“Two Eleven”) a California limited liability company. Research and development efforts, global sales and global operations are managed out of the Company’s foreign registered branch located in Cape Town, South Africa. Two Eleven acts as a distributor of Leatt-Brace® products in the United States. United States sales and marketing are managed by Two Eleven located in Santa Clarita, California. The Company also has a wholly-owned subsidiary, Three Eleven Distribution (“Three Eleven”) which was an inactive South African incorporated company until December 2008, when it acquired South African registered patents relating to products unrelated to the Leatt-Brace® from Holdings. The Company established a wholly-owned subsidiary, Leatt New Zealand Limited (“New Zealand Limited”) during the first quarter of 2009. This Company acted as the distributor of Leatt-Brace® products in New Zealand, until the 4th quarter of 2011 when operations of New Zealand Limited ceased. As of December 31, 2016, all remaining assets had been distributed to Leatt Corporation and on December 10, 2017, New Zealand Limited was removed from the New Zealand Companies Register and ceased to exist as an entity.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Text Block]	NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - Use of Estimates - Revenue and Cost Recognition Revenue is considered to be realized or realizable and earned when all of the following criteria are met: title and risk of loss have passed to the customer, persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed and determinable and collectability is reasonably assured. Since the Company (through its wholly-owned subsidiary) serves as the distributor of Leatt products in the United States, the Company records its revenue and related cost of revenue for its product sales in the United States upon shipment of the merchandise to the dealer or to the ultimate consumer when the sales order was received directly from, and paid by, the ultimate consumer. Since the Company (through its South African branch) serves as the distributor of Leatt products in South Africa, the Company records its revenue and related cost of revenue for its product sales in South Africa upon shipment of the merchandise from the branch to the dealer. International sales (other than in South Africa) are generally drop-shipped directly from the third-party manufacturer to the international distributors. Revenue and related cost of revenue is recognized at the time of shipment from the manufacturer's port when the shipping terms are Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and Insurance to named place ("CIP") as legal title and risk of loss to the product pass to the distributor. Sales to all customers (distributors, dealers and consumers) are generally final; however, in limited instances, product may be returned due to product quality issues. If a distributor relationship were to be terminated by Leatt, then product return may occur. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. Cost of revenues also includes royalty fees associated with sales of Leatt-Brace products. Product royalty income is recorded as the underlying product sales occur, in accordance with the related licensing arrangements. Short-term investments - Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable balances that are still outstanding after management has used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within our expectations and the provisions established, we cannot guarantee that we will continue to experience the same credit loss rates that we have in the past. A significant change in the liquidity or financial position of any of our significant customers could have a material adverse effect on the collectability of our accounts receivable and our future operating results. The allowance for doubtful accounts for the years ended December 31, 2017 and 2016 was $84,983 and $100,878, respectively. Inventory - Property and Equipment - Impairment of Long-Lived Assets - Intangible Assets - Short-term Loan The previous South African short-term loan that was payable in monthly installments of $1,813 over a ten-month period at a flat interest rate of 4.10% was repaid October 2017. The current short-term loan effective January 1, 2018, is payable in monthly instalments of $1,918 over a ten-month period at a flat interest rate of 4.00% . The Company carries various short-term insurance policies in the U.S. 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 eleven payments of $8,315 at 3.900% annual interest rate. Preferred Stock - Shipping and Handling Costs Advertising - Patent-related Costs Research and Development - Foreign Currency Translation and Foreign Currency Transactions - Stock-Based Compensation - Income Taxes - The U.S. corporate income tax rate reduction effective with the Company’s 2018 tax year has resulted in a large tax benefit as more fully described in Note 7. 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 December 31, 2017, and 2016, the Company has no unrecognized tax benefits. Net Income (Loss) Per Share of Common Stock - Comprehensive Income (Loss) - Fair Value of Financial Instruments - Concentration of Credit Risk - The Company’s trade receivables are derived from sales to distributors and dealers. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. Management believes that credit risks are moderated by the diversity of the Company’s end customers and geographic sales areas. The Company performs ongoing credit evaluations of its customers’ financial condition and requires collateral as deemed necessary. The Company maintains allowances for potential credit losses as needed. The Company has derived, and believes that it will continue to derive, a significant portion of its revenue from a limited number of customers. For the years ended December 31, 2017 and 2016, the Company's U.S. revenue was concentrated in one customer that accounted for approximately 10% and 13%, respectively, of annual U.S. revenue. As of December 31, 2017 and 2016, $147,711, or 6%, and $316,976, or 14% of the Company's accounts receivable, respectively, were due from this customer. For the years ended December 31, 2017 and 2016, the Company's international revenue was concentrated in one customer that accounted for approximately 8% and 9%, respectively, of annual international revenue. As of December 31, 2017, and 2016, $0, or 0%, and $24,394, or 1%, of the Company's accounts receivable, respectively, were due from this international customer. The Company generates revenue both in the United States and internationally. For the years ended December 31, 2017 and 2016, annual revenues associated with international customers were $12,827,572 and $9,685,191, or 64% and 59% of total revenue, respectively. Statement of Cash Flows - Recently Adopted Accounting Pronouncements - In March 2016, the FASB issued ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09").” ASU 2016-09 amends the guidance on several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted the new standard on January 1, 2017. The Company elected to apply the amendments related to the classification of excess tax benefits on the statement of cash flows on a prospective basis, and prior periods were not adjusted. The adoption of this ASU did not have a material impact on the consolidated financial statements. Accounting Pronouncements Not Yet Adopted - In January 2017, the FASB issued ASU 2017-01, “Clarifying the Definition of a Business,” which further clarifies the definition of a business in an effort to assist entities in evaluating whether a set of transferred assets constitutes a business. Under this new guidance, if substantially all of the fair value of gross assets acquired is concentrated in a single asset or similar asset group, the set of transferred assets would not meet the definition of a business and no further evaluation is necessary. If this threshold is not met, the entity would then evaluate whether the set of transferred assets and activities meets the requirement that a business include, at a minimum, an input and a process that together have the ability to create an output. This guidance is effective for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt the ASU beginning January 1, 2018. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating the requirement to calculate the implied fair value of goodwill. Rather, the goodwill impairment is calculated by comparing the fair value of a reporting unit to its carrying value, and an impairment loss is recognized for the amount by which the carrying amount exceeds the fair value, limited to the total goodwill allocated to the reporting unit. All reporting units apply the same impairment test under the new standard. The Company is required to adopt this ASU for its annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect this new guidance will have a material impact on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” (“ASU 2014-09”). ASU 2014-09, as amended, outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. On August 12, 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date". The amendments in this update defers the effective date of Update 2014-09 for all entities by one year. The ASU, as amended, is effective for the first interim period within an annual period beginning after December 15, 2017, and early adoption is not permitted. The new guidance allows for two methods of adoption: (a) “full retrospective” adoption, meaning that the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning that the cumulative effect of applying the new guidance is recognized as an adjustment to the opening retained earnings balance for the year of implementation. The Company plans to adopt the new revenue standard effective January 1, 2018, on a modified retrospective method with the cumulative effect of the change reflected in retained earnings as of January 1, 2018, and not restate prior periods. The Company continues to monitor FASB activity to assess certain interpretative issues and the associated implementation of new standards. In particular, the Company has performed a detailed review of its revenue arrangements, which includes product sales and royalty payments in compliance with FASB ASC topic 606. On a periodic basis, the Company will review its performance obligations in terms of material customer contractual arrangements in order to verify that revenue is recognized when performance obligations are satisfied. Based upon the Company’s review, and the interpretive guidance that has been issued and examined, the adoption of this standard is not expected to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This ASU is a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases. The core principle of this ASU will require lessees to present the assets and liabilities that arise from leases on their balance sheets. The ASU is effective for public companies for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the new standard to determine the impact on the Company’s consolidated financial statements. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, “Statement of Cash Flows” ("ASU 2016-15"). ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for the Company in the first quarter of 2018, with early adoption permitted, and is to be applied using a retrospective approach. The Company is evaluating the new standard to determine the impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory” ("ASU 2016-16"). The ASU clarifies the accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. The ASU is effective for the Company in the first quarter of 2018, with early adoption permitted, and is to be applied using a modified retrospective approach. The Company is evaluating the new standard to determine the impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” The ASU requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statement of cash flows. The ASU is effective for the Company for annual reporting periods beginning after December 15, 2017 and is required to be adopted using a retrospective approach, if applicable, with early adoption permitted. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

INVENTORY

INVENTORY	12 Months Ended
	Dec. 31, 2017
INVENTORY [Text Block]	NOTE 3 - INVENTORY 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. Our products are manufactured by third parties in China and shipped to either a warehouse in California, the corporate offices in South Africa or to distributors throughout South America, Africa, Europe, Asia, Australia and New Zealand. The reserve for obsolescence for the years ended December 31, 2017 and 2016 was $57,808 and $166,107, respectively. During the years ended December 31, 2017 and 2016 the Company wrote off and destroyed $220,093, and $119,785, respectively, of product which was deemed to be obsolete.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	12 Months Ended
	Dec. 31, 2017
PROPERTY AND EQUIPMENT [Text Block]	NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment as of December 31, 2017, and 2016 consisted of the following: 2017 2016 Land $ 392,571 $ 355,397 Moulds and tools 3,893,849 2,676,000 Computer equipment and software 559,289 493,261 Office and other equipment 402,170 389,246 Vehicles 209,950 208,831 Leasehold improvements 140,454 95,590 $ 5,598,283 $ 4,218,325 Accumulated depreciation (3,484,428 ) (3,027,637 ) Property and equipment, net $ 2,113,855 $ 1,190,688

PAYMENTS IN ADVANCE

PAYMENTS IN ADVANCE	12 Months Ended
	Dec. 31, 2017
PAYMENTS IN ADVANCE [Text Block]	NOTE 5 - PAYMENTS IN ADVANCE Payments in advance represent upfront payments made to contract manufacturers for the manufacturing of the Company’s products. Payments in advance of $565,124 and $569,498 as of December 31, 2017 and 2016 are recorded in current assets on the consolidated balance sheets.

STOCKHOLDERS EQUITY

STOCKHOLDERS EQUITY	12 Months Ended
	Dec. 31, 2017
STOCKHOLDERS EQUITY [Text Block]	NOTE 6 - STOCKHOLDERS’ EQUITY On December 6, 2011, the Board of Directors adopted, and the shareholders subsequently approved, the 2011 Equity Incentive Plan (the "Plan") which provides for, among other incentives, the granting to employees, directors and consultants incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares as the Plan Administrator may determine. In June 2013, the shareholders approved an increase in the maximum shares from 260,000 to 460,000. In December 2015, the shareholders approved an increase in the maximum shares from 460,000 to 920,000. The maximum number of shares of common stock which may be issued under the Plan is 920,000. The maximum number of shares of common stock that may be awarded to an individual participant under the Plan in any one fiscal year is 78,000 shares. Options are generally exercisable at the fair market value or higher on the date of grant over a five-year or ten-year period. Shares are generally issued at the fair market value on the date of issuance. In August 2017, options to purchase 169,000 of the Company’s common stock were granted to key employees and director under the Plan at an exercise price of $1.60 per share, exercisable over a 10 -year period. On December 31, 2017, 40% of the shares underlying these options vested with a compensation expense of $40,560 and the remaining 60% of the shares were unvested with an unrecognized compensation value of $60,840. The fair value of the stock options granted was estimated at the date of grant using the Black Sholes option-pricing model. Based on the list of assumptions presented below, the fair value of the options granted during the year ended December 31, 2017 was $0.60 per share. In March 2016, options to purchase 323,000 of the Company’s common stock were granted to key employees and to the outside director under the Plan at exercise price of $2.60 per share, exercisable over 5 -year period. On the date of grant 27% of the shares underlying these options immediately vested with a compensation expense of $154,440 and the remaining 73% of the shares were unvested with unrecognized compensation values of $426,960. The fair value of the stock options granted was estimated at the date of grant using Black Sholes option-pricing model. Based on the list of assumptions presented below, the fair value of the options granted during the year ended December 31, 2016, was $1.80 per share. In November 2016, the options granted in March were amended to increase the exercise period to 10 years from the date of the modification. The fair value of the amended stock options was estimated at the date of the amendment using the Black Sholes option-pricing model. Based on the list of assumptions presented below, the fair value of the amended options was $1.82, a $0.02 increase from the original grant date value. Additional compensation expense for the 27% already vested shares of $1,716 has been recognized and included in share-based compensation, with the additional 73% unvested shares having additional unrecognized compensation value of $4,744. During the year ended December 31, 2014, options to purchase 90,000 shares of the Company’s common stock were granted under the Plan, to key employees and to the outside director at the exercise price of $1.00 per share, exercisable over a 5 -year period. On the grant date 40% of the shares underlying these options immediately vested with a compensation expense of $2,426 and the remaining 60% of the shares were unvested with unrecognized compensation values of $3,640. During the year ended December 31, 2015 an additional 20% of the underlying shares vested with a compensation expense of $1,478 and during the year ended December 31, 2016 an additional 20% of the underlying shares vested with a compensation expense of $1,302. The balance of the compensation cost of $1,302 was recognized in 2017. The fair value of the stock options granted was estimated at the date of grant using the Black Sholes option-pricing model. The values of the options granted was calculated based on the list of assumptions presented below. 2014 Options Granted 2016 Options Granted Modification to 2016 Options Granted 2017 Options Granted Expected terms in years 5 5 10 10 Years Risk-free interest rate 3.38% 2.20% 2.69% 2.78% Expected volatility 22.85% 0.88% 0.57% 21.73% Expected dividend yield 0.00% 0.00% 0.00% 0.00% The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time during which the options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. Total stock-based compensation expense related to vested stock options recognized during the years ended December 31, 2017 and 2016 was $217,673 and $157,458. As of December 31, 2017, there was $316,732 of unrecognized compensation costs related to unvested stock options, which is expected to be recognized over the next 3 years. A summary of information related to stock option activity during the years ended December 31, 2017 and 2016 is as follows: Outstanding Weighted - Average Aggregate Stock Exercise Intrinsic Options Price Value Options outstanding at January 1, 2016 259,000 $ 1.00 898,730 Stock options granted 323,000 $ 2.60 Stock options exercised (229,000 ) $ 1.00 Options outstanding at December 31, 2016 353,000 $ 1.00 to $2.60 45,000 Stock options granted 169,000 $ 1.60 Stock options exercised (6,000 ) $ 1.00 Options outstanding at December 31, 2017 516,000 $ 1.00 to $2.60 168,800 Options vested and exercisable at December 31, 2017 274,000 $ 1.00 to $2.60 87,680 The intrinsic value is the difference between the current fair value of the stock and the exercise price of the stock option. The weighted-average remaining contractual life of options outstanding, vested and exercisable as of December 31, 2017 is one to ten years. In addition, on May 22, 2017, the Company issued 3,390 shares of common stock to employees who exercised employee stock options in a cashless exercise; on April 7, 2016, the Company issued 26,220 shares of common stock to employees who exercised employee stock options in a cashless exercise; and on March 29, 2016 an employee exercised stock options for the issuance 39,000 shares for $39,000. On May 24, 2016, the Company also cancelled and returned 26,451 shares of common stock, granted to a former employee, to authorized and unissued status in settlement of a legal matter. The fair value of the shares as of the date of cancellation was $73,533 and is included in other income for the year ended December 31, 2016. On September 1, 2016, the Company issued an additional 92,400 shares of common stock to employees who exercised employee stock options in a cashless exercise.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2017
INCOME TAXES [Text Block]	NOTE 7 - INCOME TAXES On December 22, 2017 the Tax Cuts and Jobs Act of 2017 was signed into law. Effective for the tax years beginning after December 31, 2017, the U.S. federal corporate income tax rate has been lowered from 34% to 21%. This significant reduction in the corporate rate has a major impact on the amount of deferred tax assets and liabilities included in the balance sheet of the Company as of December 31, 2017. The impact of this change is included in the tax provision and reflected in the statutory rate reconciliation table below. The Company’s income tax expense (benefit) for the years ended December 31, 2017 and 2016 consists of the following components: 2017 2016 Current Federal $ (114,137 ) $ (196,758 ) State 1,600 1,600 (112,537 ) (195,158 ) Deferred Federal 91,300 16,200 91,300 16,200 Income tax expense $ (21,237 ) $ (178,958 ) The Company’s effective income tax expense (benefit) differs from the federal statutory amount because of the effect of the following items: 2017 2016 Federal tax statutory rate 34.00% 34.00% Effect of prior year (over) under provision - 3.00% - 4.00% Impact of reduced staturory rate effective 2018 on timing difference - 42.00% Timing and permanent differences 1.00% - 2.00% - 10.00% 28.00% Deferred income taxes (benefit) reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and the tax effects of net operating losses that are available to offset future taxable income. Significant components of the Company’s deferred tax assets (liabilities) at December 31, 2017 and 2016 consist of the following: 2017 2016 Deferred tax assets: Accounts receivable $ 21,500 $ 34,300 Inventory 14,500 56,500 Vacation accrual 15,600 17,500 Net operating loss carryforwards 1,301,700 1,307,300 Less valuation allowance (1,301,700 ) (1,307,300 ) Deferred tax assets, net $ 51,600 $ 108,300 Deferred tax liabilities: Depreciation (89,700 ) (65,400 ) Deferred tax assets (liabilities), net $ (38,100 ) $ 42,900 In assessing the ultimate realization of deferred tax assets and liabilities, management considers whether it is more likely than not that some or all of them will not be realized. Based on the Company’s anticipation of fluctuations in the Company’s net earnings for state tax purposes, the Company has established a valuation allowance due to the uncertainty as to the realization of the net operating loss carryforwards. As of December 31, 2017, and 2016, the Company has approximately $14,725,000 and $14,785,300 of net operating loss carryforwards to offset certain future state taxable income, expiring in 2029. The Company files a consolidated federal and separate company state income tax returns in the United States. As of December 31, 2017, the tax years that remain subject to examination are 2014 to 2017 for federal and 2014 to 2017 for state tax purposes. The Company has reviewed its open tax positions and determined that no exposures exist that require an adjustment as of December 31, 2017 or 2016. While the Company believes that it has performed adequate procedures to identify all reasonably identifiable exposures, it is possible that exposures exist and that these exposures will need to be assessed and may potentially have a material impact on the Company’s consolidated financial statements.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2017
RELATED PARTY TRANSACTIONS [Text Block]	NOTE 8 - RELATED PARTY TRANSACTIONS Royalty fees associated with sales of Leatt-Brace® products are paid to Holdings, a company owned by a director, and a related individual who is a shareholder. Royalties are based on 5% of the cash received from net sales of the neck braces worldwide and totaled $257,754 and $291,781 for the years ended December 31, 2017 and 2016. The term of the royalty agreement is for the life of the intellectual property. As of December 31, 2017, and 2016, accrued royalties totaled $15,774 and $26,455. Consulting fees in connection with product research, development and marketing are paid to Innovate, a company in which the Company’s founder and chairman is an indirect beneficiary. Monthly consulting fees amounting to $35,639 are payable in terms of the agreement effective, May 15, 2015 and totaled $427,668 and $427,668 for the years ended December 31, 2017 and 2016, respectively.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2017
COMMITMENTS AND CONTINGENCIES [Text Block]	NOTE 9 - COMMITMENTS AND CONTINGENCIES Office / Warehouse Lease The Company’s California entity is leasing office and warehouse space in Santa Clarita, California. The lease was renewed on March 10, 2017 and continues through April 30, 2022. The lease agreement calls for monthly base rent in the amount of $10,216. In addition, the Company’s South African branch leases space in South Africa. The lease was renewed on December 5, 2016 and continues through December 15, 2018. The lease agreement calls for an initial monthly rent of $5,094. Minimum lease payments under non-cancellable operating lease agreements in each of the years subsequent to December 31, 2017 are as follows: 2018 $ 183,620 2019 $ 128,795 2020 $ 132,659 2021 $ 136,639 2022 $ 45,993 Rent expense totaled $218,199 and $211,601, respectively, for the years ended December 31, 2017 and 2016. Litigation/Potential 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 a 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 the 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 flow of the Company.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2017
SUBSEQUENT EVENTS [Text Block]	NOTE 10 – SUBSEQUENT EVENTS The Company has evaluated all subsequent events through March 27, 2018, the date the financial statements were released.

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2017
Principles of Consolidation [Policy Text Block]	Principles of Consolidation -
Use of Estimates [Policy Text Block]	Use of Estimates -
Revenue and Cost Recognition [Policy Text Block]	Revenue and Cost Recognition Revenue is considered to be realized or realizable and earned when all of the following criteria are met: title and risk of loss have passed to the customer, persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed and determinable and collectability is reasonably assured. Since the Company (through its wholly-owned subsidiary) serves as the distributor of Leatt products in the United States, the Company records its revenue and related cost of revenue for its product sales in the United States upon shipment of the merchandise to the dealer or to the ultimate consumer when the sales order was received directly from, and paid by, the ultimate consumer. Since the Company (through its South African branch) serves as the distributor of Leatt products in South Africa, the Company records its revenue and related cost of revenue for its product sales in South Africa upon shipment of the merchandise from the branch to the dealer. International sales (other than in South Africa) are generally drop-shipped directly from the third-party manufacturer to the international distributors. Revenue and related cost of revenue is recognized at the time of shipment from the manufacturer's port when the shipping terms are Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and Insurance to named place ("CIP") as legal title and risk of loss to the product pass to the distributor. Sales to all customers (distributors, dealers and consumers) are generally final; however, in limited instances, product may be returned due to product quality issues. If a distributor relationship were to be terminated by Leatt, then product return may occur. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. Cost of revenues also includes royalty fees associated with sales of Leatt-Brace products. Product royalty income is recorded as the underlying product sales occur, in accordance with the related licensing arrangements.
Short-term investments [Policy Text Block]	Short-term investments -
Accounts Receivable and Allowance for Doubtful Accounts [Policy Text Block]	Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable balances that are still outstanding after management has used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within our expectations and the provisions established, we cannot guarantee that we will continue to experience the same credit loss rates that we have in the past. A significant change in the liquidity or financial position of any of our significant customers could have a material adverse effect on the collectability of our accounts receivable and our future operating results. The allowance for doubtful accounts for the years ended December 31, 2017 and 2016 was $84,983 and $100,878, respectively.
Inventory [Policy Text Block]	Inventory -
Property and Equipment [Policy Text Block]	Property and Equipment -
Impairment of Long-Lived Assets [Policy Text Block]	Impairment of Long-Lived Assets -
Intangible Assets [Policy Text Block]	Intangible Assets -
Short-term Loan [Policy Text Block]	Short-term Loan The previous South African short-term loan that was payable in monthly installments of $1,813 over a ten-month period at a flat interest rate of 4.10% was repaid October 2017. The current short-term loan effective January 1, 2018, is payable in monthly instalments of $1,918 over a ten-month period at a flat interest rate of 4.00% . The Company carries various short-term insurance policies in the U.S. 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 eleven payments of $8,315 at 3.900% annual interest rate.
Preferred Stock [Policy Text Block]	Preferred Stock -
Shipping and Handling Costs [Policy Text Block]	Shipping and Handling Costs
Advertising [Policy Text Block]	Advertising -
Patent-related Costs [Policy Text Block]	Patent-related Costs
Research and Development [Policy Text Block]	Research and Development -
Foreign Currency Translation and Foreign Currency Transactions [Policy Text Block]	Foreign Currency Translation and Foreign Currency Transactions -
Stock-Based Compensation [Policy Text Block]	Stock-Based Compensation -
Income Taxes [Policy Text Block]	Income Taxes - The U.S. corporate income tax rate reduction effective with the Company’s 2018 tax year has resulted in a large tax benefit as more fully described in Note 7. 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 December 31, 2017, and 2016, the Company has no unrecognized tax benefits.
Net Income (Loss) Per Share of Common Stock [Policy Text Block]	Net Income (Loss) Per Share of Common Stock -
Comprehensive Income (Loss) [Policy Text Block]	Comprehensive Income (Loss) -
Fair Value of Financial Instruments [Policy Text Block]	Fair Value of Financial Instruments -
Concentration of Credit Risk [Policy Text Block]	Concentration of Credit Risk - The Company’s trade receivables are derived from sales to distributors and dealers. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. Management believes that credit risks are moderated by the diversity of the Company’s end customers and geographic sales areas. The Company performs ongoing credit evaluations of its customers’ financial condition and requires collateral as deemed necessary. The Company maintains allowances for potential credit losses as needed. The Company has derived, and believes that it will continue to derive, a significant portion of its revenue from a limited number of customers. For the years ended December 31, 2017 and 2016, the Company's U.S. revenue was concentrated in one customer that accounted for approximately 10% and 13%, respectively, of annual U.S. revenue. As of December 31, 2017 and 2016, $147,711, or 6%, and $316,976, or 14% of the Company's accounts receivable, respectively, were due from this customer. For the years ended December 31, 2017 and 2016, the Company's international revenue was concentrated in one customer that accounted for approximately 8% and 9%, respectively, of annual international revenue. As of December 31, 2017, and 2016, $0, or 0%, and $24,394, or 1%, of the Company's accounts receivable, respectively, were due from this international customer. The Company generates revenue both in the United States and internationally. For the years ended December 31, 2017 and 2016, annual revenues associated with international customers were $12,827,572 and $9,685,191, or 64% and 59% of total revenue, respectively.
Statement of Cash Flows [Policy Text Block]	Statement of Cash Flows -
Recently Adopted Accounting Pronouncements [Policy Text Block]	Recently Adopted Accounting Pronouncements - In March 2016, the FASB issued ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09").” ASU 2016-09 amends the guidance on several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted the new standard on January 1, 2017. The Company elected to apply the amendments related to the classification of excess tax benefits on the statement of cash flows on a prospective basis, and prior periods were not adjusted. The adoption of this ASU did not have a material impact on the consolidated financial statements.
Accounting Pronouncements Not Yet Adopted [Policy Text Block]	Accounting Pronouncements Not Yet Adopted - In January 2017, the FASB issued ASU 2017-01, “Clarifying the Definition of a Business,” which further clarifies the definition of a business in an effort to assist entities in evaluating whether a set of transferred assets constitutes a business. Under this new guidance, if substantially all of the fair value of gross assets acquired is concentrated in a single asset or similar asset group, the set of transferred assets would not meet the definition of a business and no further evaluation is necessary. If this threshold is not met, the entity would then evaluate whether the set of transferred assets and activities meets the requirement that a business include, at a minimum, an input and a process that together have the ability to create an output. This guidance is effective for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt the ASU beginning January 1, 2018. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating the requirement to calculate the implied fair value of goodwill. Rather, the goodwill impairment is calculated by comparing the fair value of a reporting unit to its carrying value, and an impairment loss is recognized for the amount by which the carrying amount exceeds the fair value, limited to the total goodwill allocated to the reporting unit. All reporting units apply the same impairment test under the new standard. The Company is required to adopt this ASU for its annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect this new guidance will have a material impact on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” (“ASU 2014-09”). ASU 2014-09, as amended, outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. On August 12, 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date". The amendments in this update defers the effective date of Update 2014-09 for all entities by one year. The ASU, as amended, is effective for the first interim period within an annual period beginning after December 15, 2017, and early adoption is not permitted. The new guidance allows for two methods of adoption: (a) “full retrospective” adoption, meaning that the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning that the cumulative effect of applying the new guidance is recognized as an adjustment to the opening retained earnings balance for the year of implementation. The Company plans to adopt the new revenue standard effective January 1, 2018, on a modified retrospective method with the cumulative effect of the change reflected in retained earnings as of January 1, 2018, and not restate prior periods. The Company continues to monitor FASB activity to assess certain interpretative issues and the associated implementation of new standards. In particular, the Company has performed a detailed review of its revenue arrangements, which includes product sales and royalty payments in compliance with FASB ASC topic 606. On a periodic basis, the Company will review its performance obligations in terms of material customer contractual arrangements in order to verify that revenue is recognized when performance obligations are satisfied. Based upon the Company’s review, and the interpretive guidance that has been issued and examined, the adoption of this standard is not expected to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This ASU is a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases. The core principle of this ASU will require lessees to present the assets and liabilities that arise from leases on their balance sheets. The ASU is effective for public companies for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the new standard to determine the impact on the Company’s consolidated financial statements. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, “Statement of Cash Flows” ("ASU 2016-15"). ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for the Company in the first quarter of 2018, with early adoption permitted, and is to be applied using a retrospective approach. The Company is evaluating the new standard to determine the impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory” ("ASU 2016-16"). The ASU clarifies the accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. The ASU is effective for the Company in the first quarter of 2018, with early adoption permitted, and is to be applied using a modified retrospective approach. The Company is evaluating the new standard to determine the impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” The ASU requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statement of cash flows. The ASU is effective for the Company for annual reporting periods beginning after December 15, 2017 and is required to be adopted using a retrospective approach, if applicable, with early adoption permitted. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2017
Schedule of Property, Plant and Equipment [Table Text Block]	2017 2016 Land $ 392,571 $ 355,397 Moulds and tools 3,893,849 2,676,000 Computer equipment and software 559,289 493,261 Office and other equipment 402,170 389,246 Vehicles 209,950 208,831 Leasehold improvements 140,454 95,590 $ 5,598,283 $ 4,218,325 Accumulated depreciation (3,484,428 ) (3,027,637 ) Property and equipment, net $ 2,113,855 $ 1,190,688

STOCKHOLDERS EQUITY (Tables)

STOCKHOLDERS EQUITY (Tables)	12 Months Ended
	Dec. 31, 2017
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	2014 Options Granted 2016 Options Granted Modification to 2016 Options Granted 2017 Options Granted Expected terms in years 5 5 10 10 Years Risk-free interest rate 3.38% 2.20% 2.69% 2.78% Expected volatility 22.85% 0.88% 0.57% 21.73% Expected dividend yield 0.00% 0.00% 0.00% 0.00%
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Outstanding Weighted - Average Aggregate Stock Exercise Intrinsic Options Price Value Options outstanding at January 1, 2016 259,000 $ 1.00 898,730 Stock options granted 323,000 $ 2.60 Stock options exercised (229,000 ) $ 1.00 Options outstanding at December 31, 2016 353,000 $ 1.00 to $2.60 45,000 Stock options granted 169,000 $ 1.60 Stock options exercised (6,000 ) $ 1.00 Options outstanding at December 31, 2017 516,000 $ 1.00 to $2.60 168,800 Options vested and exercisable at December 31, 2017 274,000 $ 1.00 to $2.60 87,680

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2017
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]	2017 2016 Current Federal $ (114,137 ) $ (196,758 ) State 1,600 1,600 (112,537 ) (195,158 ) Deferred Federal 91,300 16,200 91,300 16,200 Income tax expense $ (21,237 ) $ (178,958 )
Schedule of the difference between the Companys effective income tax expense (benefit) and the federal statutory [Table Text Block]	2017 2016 Federal tax statutory rate 34.00% 34.00% Effect of prior year (over) under provision - 3.00% - 4.00% Impact of reduced staturory rate effective 2018 on timing difference - 42.00% Timing and permanent differences 1.00% - 2.00% - 10.00% 28.00%
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]	2017 2016 Deferred tax assets: Accounts receivable $ 21,500 $ 34,300 Inventory 14,500 56,500 Vacation accrual 15,600 17,500 Net operating loss carryforwards 1,301,700 1,307,300 Less valuation allowance (1,301,700 ) (1,307,300 ) Deferred tax assets, net $ 51,600 $ 108,300 Deferred tax liabilities: Depreciation (89,700 ) (65,400 ) Deferred tax assets (liabilities), net $ (38,100 ) $ 42,900

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2017
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]	2018 $ 183,620 2019 $ 128,795 2020 $ 132,659 2021 $ 136,639 2022 $ 45,993

SUMMARY OF SIGNIFICANT ACCOUN23

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details)	12 Months Ended
	Dec. 31, 2017USD ($)yrshares
Summary Of Significant Accounting Policies 1	$ 84,983
Summary Of Significant Accounting Policies 2	100,878
Summary Of Significant Accounting Policies 3	57,808
Summary Of Significant Accounting Policies 4	$ 166,107
Summary Of Significant Accounting Policies 5	2
Summary Of Significant Accounting Policies 6 | yr	5
Summary Of Significant Accounting Policies 7	2
Summary Of Significant Accounting Policies 8 | yr	5
Summary Of Significant Accounting Policies 9	3
Summary Of Significant Accounting Policies 10 | yr	6
Summary Of Significant Accounting Policies 11	3
Summary Of Significant Accounting Policies 12 | yr	5
Summary Of Significant Accounting Policies 13 | yr	3
Summary Of Significant Accounting Policies 14	$ 1,813
Summary Of Significant Accounting Policies 15	4.10%
Summary Of Significant Accounting Policies 16	$ 1,918
Summary Of Significant Accounting Policies 17	4.00%
Summary Of Significant Accounting Policies 18	$ 8,315
Summary Of Significant Accounting Policies 19	3.90%
Summary Of Significant Accounting Policies 20	100
Summary Of Significant Accounting Policies 21	$ 116,192
Summary Of Significant Accounting Policies 22	107,738
Summary Of Significant Accounting Policies 23	124,797
Summary Of Significant Accounting Policies 24	$ 99,949
Summary Of Significant Accounting Policies 25	50.00%
Summary Of Significant Accounting Policies 26	636,000
Summary Of Significant Accounting Policies 27 | shares	120,000
Summary Of Significant Accounting Policies 28 | shares	193,000
Summary Of Significant Accounting Policies 29 | shares	323,000
Summary Of Significant Accounting Policies 30	473,000
Summary Of Significant Accounting Policies 31 | shares	120,000
Summary Of Significant Accounting Policies 32 | shares	30,000
Summary Of Significant Accounting Policies 33 | shares	323,000
Summary Of Significant Accounting Policies 34	$ 250,000
Summary Of Significant Accounting Policies 35	1,285,362
Summary Of Significant Accounting Policies 36	$ 874,024
Summary Of Significant Accounting Policies 37	10.00%
Summary Of Significant Accounting Policies 38	13.00%
Summary Of Significant Accounting Policies 39	$ 147,711
Summary Of Significant Accounting Policies 40	6.00%
Summary Of Significant Accounting Policies 41	$ 316,976
Summary Of Significant Accounting Policies 42	14.00%
Summary Of Significant Accounting Policies 43	8.00%
Summary Of Significant Accounting Policies 44	9.00%
Summary Of Significant Accounting Policies 45	$ 0
Summary Of Significant Accounting Policies 46	0.00%
Summary Of Significant Accounting Policies 47	$ 24,394
Summary Of Significant Accounting Policies 48	1.00%
Summary Of Significant Accounting Policies 49	$ 12,827,572
Summary Of Significant Accounting Policies 50	$ 9,685,191
Summary Of Significant Accounting Policies 51	64.00%
Summary Of Significant Accounting Policies 52	59.00%

INVENTORY (Narrative) (Details)

INVENTORY (Narrative) (Details)	12 Months Ended
	Dec. 31, 2017USD ($)
Inventory 1	$ 57,808
Inventory 2	166,107
Inventory 3	220,093
Inventory 4	$ 119,785

PAYMENTS IN ADVANCE (Narrative)

PAYMENTS IN ADVANCE (Narrative) (Details)	12 Months Ended
	Dec. 31, 2017USD ($)
Payments In Advance 1	$ 565,124
Payments In Advance 2	$ 569,498

STOCKHOLDERS EQUITY (Narrative)

STOCKHOLDERS EQUITY (Narrative) (Details)	12 Months Ended
	Dec. 31, 2017USD ($)yr$ / sharesshares
Stockholders Equity 1	260,000
Stockholders Equity 2	460,000
Stockholders Equity 3	460,000
Stockholders Equity 4	920,000
Stockholders Equity 5	920,000
Stockholders Equity 6 | shares	78,000
Stockholders Equity 7	169,000
Stockholders Equity 8 | $ / shares	$ 1.60
Stockholders Equity 9	10
Stockholders Equity 10	40.00%
Stockholders Equity 11	$ 40,560
Stockholders Equity 12	60.00%
Stockholders Equity 13	$ 60,840
Stockholders Equity 14 | $ / shares	$ 0.60
Stockholders Equity 15	323,000
Stockholders Equity 16 | $ / shares	$ 2.60
Stockholders Equity 17	5
Stockholders Equity 18	27.00%
Stockholders Equity 19	$ 154,440
Stockholders Equity 20	73.00%
Stockholders Equity 21	$ 426,960
Stockholders Equity 22 | $ / shares	$ 1.80
Stockholders Equity 23 | yr	10
Stockholders Equity 24	$ 1.82
Stockholders Equity 25	$ 0.02
Stockholders Equity 26	27.00%
Stockholders Equity 27	$ 1,716
Stockholders Equity 28	73.00%
Stockholders Equity 29	$ 4,744
Stockholders Equity 30 | shares	90,000
Stockholders Equity 31 | $ / shares	$ 1
Stockholders Equity 32	5
Stockholders Equity 33	40.00%
Stockholders Equity 34	$ 2,426
Stockholders Equity 35	60.00%
Stockholders Equity 36	$ 3,640
Stockholders Equity 37	20.00%
Stockholders Equity 38	$ 1,478
Stockholders Equity 39	20.00%
Stockholders Equity 40	$ 1,302
Stockholders Equity 41	1,302
Stockholders Equity 42	217,673
Stockholders Equity 43	157,458
Stockholders Equity 44	$ 316,732
Stockholders Equity 45 | yr	3
Stockholders Equity 46 | shares	3,390
Stockholders Equity 47 | shares	26,220
Stockholders Equity 48 | shares	39,000
Stockholders Equity 49	$ 39,000
Stockholders Equity 50 | shares	26,451
Stockholders Equity 51	$ 73,533
Stockholders Equity 52 | shares	92,400

INCOME TAXES (Narrative) (Detai

INCOME TAXES (Narrative) (Details)	12 Months Ended
	Dec. 31, 2017USD ($)
Income Taxes 1	34.00%
Income Taxes 2	21.00%
Income Taxes 3	$ 14,725,000
Income Taxes 4	$ 14,785,300

RELATED PARTY TRANSACTIONS (Nar

RELATED PARTY TRANSACTIONS (Narrative) (Details)	12 Months Ended
	Dec. 31, 2017USD ($)
Related Party Transactions 1	5.00%
Related Party Transactions 2	$ 257,754
Related Party Transactions 3	291,781
Related Party Transactions 4	15,774
Related Party Transactions 5	26,455
Related Party Transactions 6	35,639
Related Party Transactions 7	427,668
Related Party Transactions 8	$ 427,668

COMMITMENTS AND CONTINGENCIES29

COMMITMENTS AND CONTINGENCIES (Narrative) (Details)	12 Months Ended
	Dec. 31, 2017USD ($)
Commitments And Contingencies 1	$ 10,216
Commitments And Contingencies 2	5,094
Commitments And Contingencies 3	218,199
Commitments And Contingencies 4	$ 211,601

Schedule of Property, Plant and

Schedule of Property, Plant and Equipment (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Property and equipment, gross	$ 5,598,283	$ 4,218,325
Accumulated depreciation	(3,484,428)	(3,027,637)
Property and equipment, net	2,113,855	1,190,688
Land [Member]
Property and equipment, gross	392,571	355,397
Moulds and tools [Member]
Property and equipment, gross	3,893,849	2,676,000
Computer equipment and software [Member]
Property and equipment, gross	559,289	493,261
Office and other equipment [Member]
Property and equipment, gross	402,170	389,246
Vehicles [Member]
Property and equipment, gross	209,950	208,831
Leasehold improvements [Member]
Property and equipment, gross	$ 140,454	$ 95,590

Schedule of Share-based Payment

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2014
Expected term in years	10 years	5 years	5 years
Years Risk-free interest rate	2.78%	2.20%	3.38%
Expected volatility	21.73%	0.88%	22.85%
Expected dividend yield	0.00%	0.00%	0.00%
Modification to Options Granted [Member]
Expected term in years		10 years
Years Risk-free interest rate		2.69%
Expected volatility		0.57%
Expected dividend yield		0.00%

Schedule of Share-based Compens

Schedule of Share-based Compensation, Stock Options, Activity (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning of Period	353,000	259,000
Stockholders Equity Schedule Of Share-based Compensation, Stock Options, Activity 6	$ (229,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning of Period		$ 1
Stockholders Equity Schedule Of Share-based Compensation, Stock Options, Activity 14	(6,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value, Beginning of Period	$ 45,000	$ 898,730
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	169,000	323,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 1.60	$ 2.60
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 1	$ 1
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, End of Period	516,000	353,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value, End of Period	$ 168,800	$ 45,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	274,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	$ 87,680
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning of Period	$ 1
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, End of Period	1	$ 1
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	1
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning of Period	2.60
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, End of Period	2.60	$ 2.60
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 2.60

Schedule of Components of Incom

Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Current Federal Tax Expense (Benefit)	$ (114,137)	$ (196,758)
Current State and Local Tax Expense (Benefit)	1,600	1,600
Current Income Tax Expense (Benefit)	(112,537)	(195,158)
Deferred Federal Income Tax Expense (Benefit)	91,300	16,200
Income tax expense	$ (21,237)	$ (178,958)

Schedule of the difference betw

Schedule of the difference between the Companys effective income tax expense (benefit) and the federal statutory (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Federal tax statutory rate	34.00%	34.00%
Effect of prior year (over) under provision	3.00%	4.00%
Impact of reduced staturory rate effective 2018 on timing difference	42.00%
Timing and permanent differences	1.00%	2.00%
Effective Income Tax Rate Reconciliation, Percent	10.00%	28.00%

Schedule of Deferred Tax Assets

Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Accounts receivable	$ 21,500	$ 34,300
Inventory	14,500	56,500
Vacation accrual	15,600	17,500
Net operating loss carryforwards	1,301,700	1,307,300
Less valuation allowance	(1,301,700)	(1,307,300)
Deferred tax assets, net	51,600	108,300
Depreciation	(89,700)	(65,400)
Deferred tax assets (liabilities), net	$ (38,100)	$ 42,900

Schedule of Future Minimum Rent

Schedule of Future Minimum Rental Payments for Operating Leases (Details)	Dec. 31, 2017USD ($)
2,018	$ 183,620
2,019	128,795
2,020	132,659
2,021	136,639
2,022	$ 45,993