Leatt (LEAT) 10-Q 13 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 06, 2019
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Trading Symbol	leat
Entity Registrant Name	Leatt Corp
Entity Central Index Key	0001456189
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		5,386,723
Entity Current Reporting Status	Yes
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current Assets
Cash and cash equivalents	$ 1,555,676	$ 1,709,900
Short-term investments	58,233	58,232
Accounts receivable	2,569,519	2,049,331
Inventory	6,318,051	4,815,215
Payments in advance	389,328	473,286
Prepaid expenses and other current assets	611,332	1,247,233
Total current assets	11,502,139	10,353,197
Property and equipment, net	2,286,971	2,317,490
Operating lease right-of-use assets, net	458,001
Other Assets
Deposits	25,355	25,380
Intangible assets	40,309	40,466
Total other assets	65,664	65,846
Total Assets	14,312,775	12,736,533
Current Liabilities
Accounts payable and accrued expenses	3,908,605	2,779,182
Operating lease liability, current	171,617
Income tax payable	48,337	70,258
Short term loan, net of finance charges	384,072	582,128
Total current liabilities	4,512,631	3,431,568
Deferred tax liabilities, net	170,900	170,900
Deferred Compensation	100,000	80,000
Operating lease liability, net of current portion	286,384
Commitments and contingencies
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, 5,386,723 and 5,370,028 shares issued and outstanding	130,068	130,053
Additional paid - in capital	8,049,354	7,868,119
Accumulated other comprehensive loss	(610,996)	(609,303)
Retained earnings	1,671,434	1,662,196
Total stockholders' equity	9,242,860	9,054,065
Total Liabilities and Stockholders' Equity	$ 14,312,775	$ 12,736,533

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
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	5,386,723	5,370,028
Common Stock, Shares, Outstanding	5,386,723	5,370,028

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues	$ 6,090,928	$ 5,502,542
Cost of Revenues	3,228,826	2,746,097
Gross Profit	2,862,102	2,756,445
Product Royalty Income	8,701	12,309
Operating Expenses
Salaries and wages	876,904	777,763
Commissions and consulting expenses	78,061	125,339
Professional fees	252,968	168,471
Advertising and marketing	563,994	504,162
Office rent and expenses	69,992	70,438
Research and development costs	340,096	323,280
Bad debt expense	16,521	9,767
General and administrative expenses	467,234	435,560
Depreciation	189,695	162,764
Total operating expenses	2,855,465	2,577,544
Income from Operations	15,338	191,210
Other Income (Expenses)
Interest and other income (expenses), net	(3,021)	(3,452)
Total other income (expenses)	(3,021)	(3,452)
Income Before Income Taxes	12,317	187,758
Income Taxes	3,079	46,939
Net Income Available to Common Shareholders	$ 9,238	$ 140,819
Net Income per Common Share
Basic		$ 0.03
Diluted		$ 0.03
Weighted Average Number of Common Shares Outstanding
Basic	5,380,747	5,366,382
Diluted	5,556,134	5,545,564
Comprehensive Income
Net Income	$ 9,238	$ 140,819
Other comprehensive income, net of $0 and $0 deferred income taxes in 2019 and 2018
Foreign currency translation	(1,693)	58,232
Total Comprehensive Income	$ 7,545	$ 199,051

CONSOLIDATED STATEMENTS OF OP_2

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Deferred Income Taxes	$ 0	$ 0

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2019 - 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, 2018	$ 3,000	$ 130,053	$ 7,868,119	$ (609,303)	$ 1,662,196	$ 9,054,065
Beginning Balance (Shares) at Dec. 31, 2018	120,000	5,370,028
Compensation cost recognized in connection with stock options			166,250			166,250
Exercise of stock options		$ 15	14,985			15,000
Exercise of stock options (Shares)		15,000
Options exercised on a cashless basis (Shares)		1,695
Net income					9,238	9,238
Foreign currency translation adjustment				(1,693)		(1,693)
Ending Balance at Mar. 31, 2019	$ 3,000	$ 130,068	$ 8,049,354	$ (610,996)	$ 1,671,434	$ 9,242,860
Ending Balance (Shares) at Mar. 31, 2019	120,000	5,386,723

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net income	$ 9,238	$ 140,819
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	189,695	162,764
Stock-based compensation	166,250	150,332
Bad debts	14,087	6,503
Inventory reserve	1,000	16,522
(Increase) decrease in:
Accounts receivable	(534,275)	(242,407)
Inventory	(1,503,836)	(16,587)
Payments in advance	83,958	129,921
Prepaid expenses and other current assets	635,901	373,816
Income tax refunds receivable		46,939
Deposits	25	(336)
Increase (decrease) in:
Accounts payable and accrued expenses	1,129,423	(512,306)
Income taxes payable	(21,921)
Deferred compensation	20,000
Net cash provided by operating activities	189,545	255,980
Cash flows from investing activities
Capital expenditures	(160,353)	(201,157)
Increase in short-term investments, net	(1)	(4)
Net cash used in investing activities	(160,354)	(201,161)
Cash flows from financing activities
Issuance of common stock	15,000
Repayments of short-term loan, net	(198,056)	(172,804)
Net cash used in financing activities	(183,056)	(172,804)
Effect of exchange rates on cash and cash equivalents	(359)	45,673
Net decrease in cash and cash equivalents	(154,224)	(72,312)
Cash and cash equivalents - beginning of year	1,709,900	1,518,157
Cash and cash equivalents - end of year	1,555,676	1,445,845
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	5,449	4,085
Cash paid for income taxes	25,000
Other noncash investing and financing activities
Common stock issued for services	$ 166,250	$ 150,332

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2019
Basis of Presentation [Text Block]	Note 1 - Basis of presentation The consolidated balance sheet as of December 31, 2018 was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 27, 2019. The consolidated balance sheet as of March 31, 2019 and the consolidated statements of operations and comprehensive income for the three months ended March 31, 2019 and 2018, changes in stockholders’ equity for the three months ended March 31, 2019, cash flows for the three months ended March 31, 2019 and 2018, and the related information contained in these notes have been prepared by management without audit. In the opinion of management, all adjustments (which include only normal recurring items) necessary to present fairly the financial position, results of operations and cash flows in conformity with generally accepted accounting principles as of March 31, 2019 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, 2018 as filed with the Securities and Exchange Commission in the Company’s Form 10-K. Significant Accounting Policies There have been no significant changes in the Company’s accounting policies from those disclosed in its Annual Report on Form 10-K, except for the policies described below in relation to the adoption of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), discussed in Note 10 “Recent Accounting Pronouncements” The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use assets (“ROU”), and lease liability obligations are included in the Company’s balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Please refer to Note 4 for additional information.

Inventory

Inventory	3 Months Ended
	Mar. 31, 2019
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 was $82,004 at March 31, 2019 and $83,004 at December 31, 2018.

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2019
Intangible Assets [Text Block]	Note 3 - Intangible Assets The Company’s intangible assets consist of acquired patents with an indefinite useful life and are thus not amortized. Intangible assets are carried at cost less impairment. Amortization expense for the three months ended March 31, 2019 was zero. There was no impairment loss recognized for the three months ended March 31, 2019 and 2018, respectively.

Operating Leases - Right-of-Use

Operating Leases - Right-of-Use Assets and Lease Liability Obligations	3 Months Ended
	Mar. 31, 2019
Lessee Disclosure [Abstract]
Operating Leases - Right-of-Use Assets and Lease Liability Obligations	Note 4 – Operating Leases – Right-of-Use Assets and Lease Liability Obligations The Company has three non-cancelable operating leases, two for office space and one for office machinery, that expire in December 2020, March 2022 and April 2022. Rent expense for these operating leases is recognized over the term of the lease on a straight-line basis. Below is a summary of the Company’s Operating Right-of-Use Assets and Operating Lease liabilities as of March 31, 2019: Assets Operating lease ROU assets $ 458,001 Liabilities Operating lease liability, current 171,617 Operating lease liability, net of current portion 286,384 Total operating lease liabilities $ 458,001 During the three months ended March 31, 2019, the Company recognized $43,454 in operating lease expenses, which are included in office rent and expenses in the Company’s consolidated statements of operations and comprehensive income. Supplemental cash flow information for the three months ended March 31, 2019 is as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 42,955 Right-of-use assets obtained in exchange for lease obligations $ 500,956 Generally, our lease agreements do not specify an implicit rate. Therefore, we estimate our incremental borrowing rate, which is defined as the interest rate we would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates. As of March 31, 2019, the following disclosures for remaining lease term and incremental borrowing rates were applicable: Supplemental disclosure March 31, 2019 Weighted average remaining lease term 3 years Weighted average discount rate 5.02% Maturities of lease liabilities as of March 31, 2019 were as follows: Year ended December 31, Amounts under Operating Leases Remaining 2019 $ 138,634 2020 187,068 2021 136,949 2022 46,070 Total lease payments 508,721 Less: Imputed interest (50,720 ) Total $ 458,001

Short-term Loan

Short-term Loan	3 Months Ended
	Mar. 31, 2019
Short-term Loan [Text Block]	Note 5 - 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 installments of $62,225 over eleven months including interest at 4.990% and the South African short-term loan is payable in monthly installments of $1,623 over a ten-month period at a flat interest rate of 4.10% . 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	3 Months Ended
	Mar. 31, 2019
Revenue and Cost Recognition [Text Block]	Note 6 - Revenue and Cost Recognition The Company recognizes revenue in accordance with ASC 606. As such, 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 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: Three monhts eneded March 31, 2019 % of Revenues 2018 % of Revenues Consumer and athlete direct revenues $ 260,803 4% $ 262,896 5% Dealer direct revenues 2,049,821 34% 2,079,521 38% International distributor revenues 3,780,304 62% 3,160,125 57% $ 6,090,928 100% $ 5,502,542 100% 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 at March 31, 2019 and December 31, 2018 was $0, and $0, 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 of doubtful accounts was $97,486 at March 31, 2019 and $83,399 at December 31, 2018. 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 three months ended March 31, 2019, 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 March 31, 2019, contract liabilities, if any, were not material.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2019
Income Taxes [Text Block]	Note 7 - Income Taxes The Company uses the asset and liability approach to account for income taxes. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The provision for income taxes included taxes currently payable, if any, plus the net change during the period in deferred tax assets and liabilities recorded by the Company. The Company applies the provisions of FASB ASC Topic 740-10, Accounting for Uncertainty in Income Taxes (“Standard”), which provides that the tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the position is more likely than not of being sustained upon an examination by tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, the standard provides guidance on derecognition, classification, interest and penalties; accounting in interim periods, disclosure and transition, and any amounts when incurred would be recorded under these provisions. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of March 31, 2019, the Company has no unrecognized tax benefits.

Net Income Per Share of Common

Net Income Per Share of Common Stock	3 Months Ended
	Mar. 31, 2019
Net Income Per Share of Common Stock [Text Block]	Note 8 - Net Income Per Share of Common Stock Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common stock shares and dilutive potential common shares outstanding during the period. For the three months ended March 31, 2019, the Company had 862,000 potential common shares, consisting of 120,000 preferred shares, options to purchase 419,000 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	3 Months Ended
	Mar. 31, 2019
Common Stock [Text Block]	Note 9 – Common Stock In February 2019, options to purchase 250,000 of the Company’s common stock were granted to key employees, consultants and directors under the Plan at an exercise price of $2.30 per share, exercisable over a 10-year period. On February 25, 2019, 30% of the shares underlying these options vested with a compensation expense of $82,530. The remaining 70% of the shares were unvested with unrecognized compensation value of $192,570. The fair value of the stock options granted was estimated to be $1.1004 at the date of the grant using the Black Sholes option-pricing model. The option value was calculated assuming a year’s risk-free interest rate of 2.84%, expected volatility of 32.35% and an expected dividend yield of 0.00% . In addition, in February 2019, the Company issued 1,695 shares of common stock to an employee who exercised stock options in a cashless exercise and a Director exercised stock options for the issuance of 15,000 shares for $15,000. Stock-based compensation expense related to vested stock options during the three months ended March 31, 2019 was $166,250. As of March 31, 2019, there was $239,370 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	3 Months Ended
	Mar. 31, 2019
Recent Accounting Pronouncements [Text Block]	Note 10 – Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases Leases (Topic 842): Targeted Improvements 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 adopted the new standard effective January 1, 2019 and it did not have a material impact on its 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 adopted the new standard effective January 1, 2019 and it did not have a material impact on the consolidated financial statements. Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurements”, which eliminates, adds or modifies certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year, with early adoption permitted to adopt either the entire standard or only the provisions that eliminate or modify the requirements. 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. The Company does not expect this new guidance will have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in November 2018 issued ASU 2018-19, which amended the standard. The standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. This standard is effective for the Company on January 1, 2020. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently assessing the impact, but does not expect it will have a material impact on the consolidated financial statements.

Litigation

Litigation	3 Months Ended
	Mar. 31, 2019
Litigation [Text Block]	Note 11 - Litigation In the ordinary course of business, the Company is involved in various legal proceedings involving product liability and personal injury and intellectual property litigation. The Company is insured against loss for certain of these matters. The Company will record contingent liabilities resulting from asserted and unasserted claims against it when it is probable that the liability has been incurred and the amount of the loss is reasonably estimable. The Company will disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. While the outcome of currently pending litigation is not yet determinable, the ultimate exposure with respect to these matters cannot be ascertained. However, based on the information currently available to the Company, the Company does not expect that any liabilities or costs that might be incurred to resolve these matters will have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Text Block]	Note 12 – Subsequent Events The Company has evaluated all subsequent events through the date the financial statements were released.

Recent Accounting Pronounceme_2

Recent Accounting Pronouncements (Policies)	3 Months Ended
	Mar. 31, 2019
Recently Adopted Accounting Pronouncements [Policy Text Block]	Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases Leases (Topic 842): Targeted Improvements 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 adopted the new standard effective January 1, 2019 and it did not have a material impact on its 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 adopted the new standard effective January 1, 2019 and it 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 August 2018, the FASB issued ASU 2018-13, “Fair Value Measurements”, which eliminates, adds or modifies certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year, with early adoption permitted to adopt either the entire standard or only the provisions that eliminate or modify the requirements. 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. The Company does not expect this new guidance will have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in November 2018 issued ASU 2018-19, which amended the standard. The standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. This standard is effective for the Company on January 1, 2020. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently assessing the impact, but does not expect it will have a material impact on the consolidated financial statements.

Operating Leases Right-of-Use

Operating Leases Right-of-Use Assets and Lease Liability Obligations (Tables)	3 Months Ended
	Mar. 31, 2019
Lessee Disclosure [Abstract]
Schedule of operating right-of-use assets and operating lease liabilities [Table Text Block]	Assets Operating lease ROU assets $ 458,001 Liabilities Operating lease liability, current 171,617 Operating lease liability, net of current portion 286,384 Total operating lease liabilities $ 458,001
Schedule of supplemental cash flow information of operating leases [Table Text Block]	Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 42,955 Right-of-use assets obtained in exchange for lease obligations $ 500,956
Schedule of remaining lease term and incremental borrowing rates [Table Text Block]	Supplemental disclosure March 31, 2019 Weighted average remaining lease term 3 years Weighted average discount rate 5.02%
Schedule of maturities of lease liabilities [Table Text Block]	Year ended December 31, Amounts under Operating Leases Remaining 2019 $ 138,634 2020 187,068 2021 136,949 2022 46,070 Total lease payments 508,721 Less: Imputed interest (50,720 ) Total $ 458,001

Revenue and Cost Recognition (T

Revenue and Cost Recognition (Tables)	3 Months Ended
	Mar. 31, 2019
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]	Three monhts eneded March 31, 2019 % of Revenues 2018 % of Revenues Consumer and athlete direct revenues $ 260,803 4% $ 262,896 5% Dealer direct revenues 2,049,821 34% 2,079,521 38% International distributor revenues 3,780,304 62% 3,160,125 57% $ 6,090,928 100% $ 5,502,542 100%

Inventory (Narrative) (Details)

Inventory (Narrative) (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Inventory reserve for obsolescence	$ 82,004	$ 83,004

Operating Leases Right-of-U_2

Operating Leases Right-of-Use Assets and Lease Liability Obligations (Narrative) (Details)	3 Months Ended
	Mar. 31, 2019USD ($)
Lessee Disclosure [Abstract]
Operating lease expense	$ 43,454

Short-term Loan (Narrative) (De

Short-term Loan (Narrative) (Details)	Mar. 31, 2019USD ($)
Current U.S. short-term loan [Member]
Short-term loan, monthly payment	$ 62,225
Debt Instrument, Interest Rate, Stated Percentage	4.99%
Current South African short-term loan [Member]
Short-term loan, monthly payment	$ 1,623
Debt Instrument, Interest Rate, Stated Percentage	4.10%
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 ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Product royalty income, revenue percentage	1.00%
Provision for estimated returns	$ 0	$ 0
Allowance for doubtful accounts	$ 97,486	$ 83,399

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details)	Mar. 31, 2019
Maximum likelihood of being sustained	50.00%

Net Income Per Share of Commo_2

Net Income Per Share of Common Stock (Narrative) (Details)	3 Months Ended
	Mar. 31, 2019shares
Weighted Average Number Diluted Shares Outstanding Adjustment	862,000
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	419,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	323,000

Common Stock (Narrative) (Detai

Common Stock (Narrative) (Details) - USD ($)	1 Months Ended		3 Months Ended
	Feb. 28, 2019	Feb. 25, 2019	Mar. 31, 2019	Mar. 31, 2018
Common stock granted to key employees, consultants and directors under the plan	250,000
Common stock granted to key employees, consultants and directors, exercise price	$ 2.30
Common stock granted to key employees, consultants and directors, exercisable term	10 years
Percentage of options vested		30.00%
Compensation expense of options vested		$ 82,530
Percentage of options unvested	70.00%
Unrecognized compensation expense of options unvested	$ 192,570
Estimated fair value of the stock options granted	$ 1.1004
Year's risk-free interest rate	2.84%
Expected volatility	32.35%
Expected dividend yield	0.00%
Exercise of stock options (Shares)	1,695
Exercise of stock options			$ 15,000
Stock-based compensation expense related to vested stock options			166,250	$ 150,332
Unrecognized compensation cost related to unvested stock options			$ 239,370
Vesting period of unrecognized compensation cost related to unvested stock options			3 years
Director [Member]
Exercise of stock options (Shares)	15,000
Exercise of stock options	$ 15,000

Schedule of Right-of-Use Assets

Schedule of Right-of-Use Assets and Lease Liability Obligations (Details)	Mar. 31, 2019USD ($)
Assets
Operating lease ROU assets	$ 458,001
Liabilities
Operating lease liability, current	171,617
Operating lease liability, net of current portion	286,384
Total operating lease liabilities	$ 458,001

Schedule of Supplemental cash f

Schedule of Supplemental cash flow information of Operating Leases (Details)	3 Months Ended
	Mar. 31, 2019USD ($)
Lessee Disclosure [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 42,955
Right-of-use assets obtained in exchange for lease obligations	$ 500,956

Schedule of Remaining lease ter

Schedule of Remaining lease term and incremental borrowing rates of Operating leases (Details)	Mar. 31, 2019
Lessee Disclosure [Abstract]
Weighted average remaining lease term	3 years
Weighted average discount rate	5.02%

Schedule of Maturities of lease

Schedule of Maturities of lease liabilities (Details)	Mar. 31, 2019USD ($)
Lessee Disclosure [Abstract]
Remaining 2019	$ 138,634
2020	187,068
2021	136,949
2022	46,070
Total lease payments	508,721
Less: Imputed interest	(50,720)
Total	$ 458,001

Schedule of Revenue by Major Cu

Schedule of Revenue by Major Customers by Reporting Segments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues	$ 6,090,928	$ 5,502,542
% of Revenues	100.00%	100.00%
Consumer and athlete direct revenues [Member]
Revenues	$ 260,803	$ 262,896
% of Revenues	4.00%	5.00%
Dealer direct revenues [Member]
Revenues	$ 2,049,821	$ 2,079,521
% of Revenues	34.00%	38.00%
International distributor revenues [Member]
Revenues	$ 3,780,304	$ 3,160,125
% of Revenues	62.00%	57.00%