Leatt (LEAT) 10-Q 10 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 02, 2018
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
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
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 1,512,283	$ 1,518,157
Short-term investments	58,228	58,221
Accounts receivable	1,783,581	2,420,656
Inventory	3,272,914	5,034,310
Payments in advance	701,723	565,124
Income tax refunds receivable	97,766	130,171
Prepaid expenses and other current assets	975,338	847,442
Total current assets	8,401,833	10,574,081
Property and equipment, net	1,937,586	2,113,855
Other Assets
Deposits	25,451	26,081
Intangible assets	68,694	76,364
Total other assets	94,145	102,445
Total Assets	10,433,564	12,790,381
Current Liabilities
Accounts payable and accrued expenses	2,211,559	4,433,665
Short term loan, net of finance charges	258,033	518,130
Total current liabilities	2,469,592	4,951,795
Deferred tax liabilities, net	38,100	38,100
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 shares issued and outstanding	130,053	130,053
Additional paid - in capital	7,837,699	7,687,367
Accumulated other comprehensive loss	(601,596)	(485,286)
Retained earnings	556,716	465,352
Total stockholders' equity	7,925,872	7,800,486
Total Liabilities and Stockholders' Equity	$ 10,433,564	$ 12,790,381

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
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	5,366,382
Common Stock, Shares, Outstanding	5,366,382	5,366,382

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues	$ 4,795,863	$ 3,510,297	$ 10,298,405	$ 9,328,066
Cost of Revenues	2,440,660	1,745,138	5,186,757	4,652,808
Gross Profit	2,355,203	1,765,159	5,111,648	4,675,258
Product Royalty Income	7,802	39,961	20,111	50,917
Operating Expenses
Salaries and wages	617,552	555,514	1,395,315	1,314,757
Commissions and consulting expenses	133,575	126,273	258,914	279,321
Professional fees	128,987	119,981	297,458	430,772
Advertising and marketing	458,450	407,781	962,612	809,335
Office rent and expenses	71,321	66,627	141,759	132,678
Research and development costs	378,912	322,155	702,192	645,398
Bad debt expense	10,705	5,291	20,472	650
General and administrative expenses	454,156	434,077	889,716	835,490
Depreciation	165,011	102,490	327,775	191,455
Total operating expenses	2,418,669	2,140,189	4,996,213	4,639,856
Income (Loss) from Operations	(55,664)	(335,069)	135,546	86,319
Other Expenses
Interest and other expenses, net	(2,475)	(2,567)	(5,927)	(5,555)
Total other expenses	(2,475)	(2,567)	(5,927)	(5,555)
Income (Loss) Before Income Taxes	(58,139)	(337,636)	129,619	80,764
Income Taxes	(8,684)	(116,573)	38,255	29,867
Net Income (Loss) Available to Common Shareholders	$ (49,455)	$ (221,063)	$ 91,364	$ 50,897
Net Income (Loss) per Common Share
Basic	$ (0.01)	$ (0.04)	$ 0.02	$ 0.01
Diluted	$ (0.01)	$ (0.04)	$ 0.02	$ 0.01
Weighted Average Number of Common Shares Outstanding
Basic	5,366,382	5,364,743	5,366,382	5,363,872
Diluted	5,514,452	5,496,278	5,514,452	5,496,278
Comprehensive Income
Net Income (Loss)	$ (49,455)	$ (221,063)	$ 91,364	$ 50,897
Other comprehensive income (loss), net of $0 and $0 deferred income taxes in 2018 and 2017
Foreign currency translation	(174,542)	3,667	(116,310)	56,388
Total Comprehensive Income (Loss)	$ (223,997)	$ (217,396)	$ (24,946)	$ 107,285

CONSOLIDATED STATEMENTS OF OPE5

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Deferred Income Taxes	$ 0	$ 0	$ 0	$ 0

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2018 - 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, 2017	$ 3,000	$ 130,053	$ 7,687,367	$ (485,286)	$ 465,352	$ 7,800,486
Beginning Balance (Shares) at Dec. 31, 2017	120,000	5,366,382
Compensation cost recognized in connection with stock options			150,332			150,332
Net income					91,364	91,364
Foreign currency translation adjustment				(116,310)		(116,310)
Ending Balance at Jun. 30, 2018	$ 3,000	$ 130,053	$ 7,837,699	$ (601,596)	$ 556,716	$ 7,925,872
Ending Balance (Shares) at Jun. 30, 2018	120,000	5,366,382

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Net income	$ 91,364	$ 50,897
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	327,775	191,455
Deferred income taxes	0	(62,000)
Stock-based compensation	150,332	177,113
Bad debts	13,991	(2,024)
Inventory reserve	14,660	126,660
Loss on sale of property and equipment	0	49
(Increase) decrease in:
Accounts receivable	623,084	582,146
Inventory	1,746,736	1,231,456
Payments in advance	(136,599)	(73,957)
Prepaid expenses and other current assets	(127,896)	(172,633)
Income tax refunds receivable	32,405	4,660
Deposits	630	(556)
Decrease in:
Accounts payable and accrued expenses	(2,222,106)	(945,555)
Net cash provided by operating activities	514,376	1,107,711
Cash flows from investing activities
Capital expenditures	(210,680)	(603,180)
Increase in short-term investment, net	(7)	(11)
Net cash used in investing activities	(210,687)	(603,191)
Cash flows from financing activities
Repayments of short-term loan, net	(260,097)	(275,890)
Net cash used in financing activities	(260,097)	(275,890)
Effect of exchange rates on cash and cash equivalents	(49,466)	30,404
Net increase (decrease) in cash and cash equivalents	(5,874)	259,034
Cash and cash equivalents - beginning of period	1,518,157	1,103,003
Cash and cash equivalents - end of period	1,512,283	1,362,037
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	8,070	6,898
Cash paid for income taxes	5,850	87,207
Other non-cash investing and financing activities
Common stock issued for services	$ 150,332	$ 177,113

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2018
Basis of Presentation [Text Block]	Note 1 - Basis of presentation The consolidated balance sheet as of December 31, 2017 was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 19, 2018. The consolidated balance sheet as of June 30, 2018 and the consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2018 and 2017, changes in stockholders’ equity for the six months ended June 30, 2018, cash flows for the six months ended June 30, 2018 and 2017, 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 June 30, 2018 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, 2017 as filed with the Securities and Exchange Commission in the Company’s Form 10-K.

Inventory

Inventory	6 Months Ended
	Jun. 30, 2018
Inventory [Text Block]	Note 2 - Inventory Inventory is stated at the lower of cost or net realizable value. 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 as of June 30, 2018 and December 31, 2017 was $72,468 and $57,808, respectively.

Intangible Assets

Intangible Assets	6 Months Ended
	Jun. 30, 2018
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 six months ended June 30, 2018 was zero. There was no impairment of intangible assets at June 30, 2018.

Short-term Loan

Short-term Loan	6 Months Ended
	Jun. 30, 2018
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 both of its product liability insurance premiums over the period of coverage which is generally twelve months. The U.S. short-term loan is payable in monthly instalments of $55,071 over eleven months including interest at 4.150% and the South African short-term loan is payable in monthly instalments of $1,725 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 $9,181 at 4.990% annual interest rate.

Revenue and Cost Recognition

Revenue and Cost Recognition	6 Months Ended
	Jun. 30, 2018
Revenue and Cost Recognition [Text Block]	Note 5 - Revenue and Cost Recognition On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method, and due to the immaterial difference, there was no adjustment to the opening balance of retained earnings at January 1, 2018. Based upon the Company’s review, and the interpretive guidance that has been issued and examined, the adoption of this standard has not had a material impact on our consolidated financial statements. 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. The Company has and will continue to review its performance obligations in terms of material customer contractual arrangements in order to verify that revenue is recognized when performance obligations are satisfied on a periodic basis. All manufacturing of Leatt-Brace products is performed by third party subcontractors in China. The Company's products are sold worldwide to a global network of distributors and dealers, and directly to consumers when there are no dealers or distributors in their geographic area or where consumers choose to purchase directly via the Company’s e-commerce website (collectively the "customers"). Revenues from product sales are recognized when earned, net of applicable provisions for discounts and returns and allowances in the event of product defect where no exchange of product is possible. Revenues are recognized at the point in time when our performance obligations are satisfied as evidenced by transfer of control of promised goods to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Product royalty income, representing less than 1% of total revenues, is recorded as the underlying product sales occur, in accordance with the related licensing arrangements. Our distributor payment terms range from pre-payment in full to 60 days after shipment and subsequent sales of our products by distributors have no effect on the amount and timing of payments due to us. Furthermore, products purchased by distributors may not be returned to us in the event that any such distributor relationship is terminated. 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 there is no dealer in the geographic area or the consumer chooses to purchase directly from the Company’s e-commerce website and 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. The Company's standard terms and conditions of sale for non-consumer direct or web-based sales do not allow for product returns other than under warranty. International sales (other than in the United States and 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 and exchanged due to product quality issues. 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. In the following table, revenue is disaggregated by the source of revenue: Six months ended June 30, 2018 % of Revenues 2017 % of Revenues Consumer and athlete direct revenues $ 579,202 6% $ 503,671 5% Dealer direct revenues 4,207,110 41% 3,561,242 38% International distributor revenues 5,512,093 53% 5,263,153 57% $ 10,298,405 100% $ 9,328,066 100% The Company reviews the reserves for customer returns at each reporting period and adjusts them to reflect data available at that time. To estimate reserves for returns, the Company estimates the expected returns and claims based on historical rates as well as events and circumstances that indicate changes to historical rates of product returns and claims. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. The provision for estimated returns as of June 30, 2018 and December 31, 2017 was $-and $-respectively. Accounts receivable consist of amounts due to the Company from normal business activities. Credit is granted to substantially all distributors on an unsecured basis. The Company continuously monitors collections and payments from customers and maintains an allowance for doubtful accounts receivable based upon historical experience and any specific customer collection issues that have been identified. The allowance for doubtful accounts was $98,974 at June 30, 2018, and $84,983 at December 31, 2017. Sales commissions are expensed when incurred, which is generally at the time of sale, because the amortization period would have been one year or less. These costs are recorded in commissions and consulting expenses within operating expense in the accompanying consolidated statements of operations and comprehensive income. Shipping and handling activities associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfillment cost and are included in revenues and cost of revenues in the accompanying consolidated statements of operations and comprehensive income. Revenue recognized from contracts with customers is recorded net of sales taxes, value added taxes, or similar taxes that are collected on behalf of local taxing authorities. For the six months ended June 30, 2018, revenue recognized from performance obligations related to prior periods was not material. Revenue expected to be recognized in any future period related to remaining performance obligations is not material. As of June 30, 2018, contract liabilities, if any, were not material.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Taxes [Text Block]	Note 6 - 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 June 30, 2018, the Company has no unrecognized tax benefits.

Net Income Per Share of Common

Net Income Per Share of Common Stock	6 Months Ended
	Jun. 30, 2018
Net Income Per Share of Common Stock [Text Block]	Note 7 - 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 six months ended June 30, 2018, the Company had 636,000 potential common shares, consisting of 120,000 preferred shares, options to purchase 193,000 shares, outstanding that were dilutive, and options to purchase 323,000 shares that were anti-dilutive and therefore, not included in diluted net income per share.

Common Stock

Common Stock	6 Months Ended
	Jun. 30, 2018
Common Stock [Text Block]	Note 8 – Common Stock Stock-based compensation expense related to vested stock options during the six months ended June 30, 2018 was $150,332. As of June 30, 2018, there was $166,400 of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a 3 -year vesting period.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2018
Recent Accounting Pronouncements [Text Block]	Note 9 – Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. The updated guidance, and subsequent clarifications, collectively referred to as ASC 606, require an entity to recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this standard, utilizing the modified retrospective approach, with the cumulative effect of initially applying the new standard recognized in retained earnings. Accordingly, comparative prior period information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company expects the timing of revenue recognition for its significant revenue streams to remain substantially unchanged, with no material effect on net sales. The adoption of this ASU did not have a material impact on its financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting”, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. If an award is not probable of vesting at the time a change is made, the new guidance clarifies that no new measurement date will be required if there is no change to the fair value, vesting conditions, and classification. This ASU will be applied prospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company adopted the new standard on January 1, 2018. The adoption of this ASU did not have a material impact on its financial statements. 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 adopted the new standard on January 1, 2018. The adoption of this ASU did not have a material impact on its 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 adopted the new standard on January 1, 2018. The adoption of this ASU did not have a material impact on its 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 adopted the new standard on January 1, 2018. The adoption of this ASU did not have a material impact on its 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 Company adopted the new standard on January 1, 2018. The adoption of this ASU did not have a material impact on its financial statements. Accounting Pronouncements Not Yet Adopted In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation”, which aligns the measurement and classification guidance for share-based payments to non-employees with the guidance for share-based payments to employees. Under the new guidance, the measurement period for equity-classified non-employee awards will be fixed at the grant date. This update is effective for annual periods beginning after December 15, 2018, and interim periods within those periods and early adoption is permitted. The Company is evaluating the new standard to determine the impact of adoption on the Company’s consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which provides for an election to reclassify stranded tax effects within accumulated other comprehensive income/(loss) to retained earnings due to the U.S. federal corporate income tax rate change in the Tax Cuts and Jobs Act of 2017. This standard is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company does not expect this new guidance will have a material impact on the consolidated financial statements. 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 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.

Litigation

Litigation	6 Months Ended
	Jun. 30, 2018
Litigation [Text Block]	Note 10 - 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	6 Months Ended
	Jun. 30, 2018
Subsequent Events [Text Block]	Note 11 – Subsequent Events The Company has evaluated all subsequent events through the date the financial statements were released.

Revenue and Cost Recognition (T

Revenue and Cost Recognition (Tables)	6 Months Ended
	Jun. 30, 2018
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]	Six months ended June 30, 2018 % of Revenues 2017 % of Revenues Consumer and athlete direct revenues $ 579,202 6% $ 503,671 5% Dealer direct revenues 4,207,110 41% 3,561,242 38% International distributor revenues 5,512,093 53% 5,263,153 57% $ 10,298,405 100% $ 9,328,066 100%

Inventory (Narrative) (Details)

Inventory (Narrative) (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Inventory reserve for obsolescence	$ 72,468	$ 57,808

Short-term Loan (Narrative) (De

Short-term Loan (Narrative) (Details)	Jun. 30, 2018USD ($)
Current U.S. short-term loan [Member]
Short-term loan, monthly payment	$ 55,071
Debt Instrument, Interest Rate, Stated Percentage	4.15%
Current South African short-term loan [Member]
Short-term loan, monthly payment	$ 1,725
Debt Instrument, Interest Rate, Stated Percentage	4.00%
Various short-term insurance policies in the U.S [Member]
Short-term loan, monthly payment	$ 9,181
Debt Instrument, Interest Rate, Stated Percentage	4.99%

Revenue and Cost Recognition (N

Revenue and Cost Recognition (Narrative) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Provision for estimated returns	$ 0	$ 0
Product royalty income, revenue percentage	1.00%
Allowance for doubtful accounts	$ 98,974	$ 84,983

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details)	Jun. 30, 2018
Maximum likelihood of being sustained	50.00%

Net Income Per Share of Commo24

Net Income Per Share of Common Stock (Narrative) (Details)	6 Months Ended
	Jun. 30, 2018shares
Weighted Average Number Diluted Shares Outstanding Adjustment	636,000
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Preferred Stock	120,000
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants	193,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	323,000

Common Stock (Narrative) (Detai

Common Stock (Narrative) (Details)	6 Months Ended
	Jun. 30, 2018USD ($)
Compensation cost recognized in connection with stock options	$ 150,332
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 166,400
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years

Schedule of Revenue by Major Cu

Schedule of Revenue by Major Customers by Reporting Segments (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues	$ 4,795,863	$ 3,510,297	$ 10,298,405	$ 9,328,066
% of Revenues			100.00%	100.00%
Consumer and athlete direct revenues [Member]
Revenues			$ 579,202	$ 503,671
% of Revenues			6.00%	5.00%
Dealer direct revenues [Member]
Revenues			$ 4,207,110	$ 3,561,242
% of Revenues			41.00%	38.00%
International distributor revenues [Member]
Revenues			$ 5,512,093	$ 5,263,153
% of Revenues			53.00%	57.00%