Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | LEATT CORPORATION | |
Entity Central Index Key | 0001456189 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 5,826,892 | |
Entity Current Reporting Status | Yes | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Ex Transition Period | true | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-54693 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 12 Kiepersol Drive | |
Entity Address, Address Line Two | Atlas Gardens | |
Entity Address, Address Line Three | Contermanskloof Road | |
Entity Address, City or Town | Durbanville | |
Entity Address, Postal Zip Code | 7441 | |
Entity Address, Country | ZA | |
City Area Code | 27 | |
Local Phone Number | 21-557-7257 | |
Title of 12(b) Security | Common Stock | |
Entity Tax Identification Number | 20-2819367 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 4,949,771 | $ 5,022,436 |
Short-term investments | 58,263 | 58,262 |
Accounts receivable, net | 13,823,969 | 12,660,936 |
Inventory, net | 21,853,273 | 21,081,481 |
Payments in advance | 1,351,666 | 1,610,640 |
Prepaid expenses and other current assets | 3,449,089 | 4,178,427 |
Total current assets | 45,486,031 | 44,612,182 |
Property and equipment, net | 2,959,009 | 3,128,086 |
Operating lease right-of-use assets, net | 1,239,776 | 1,393,213 |
Other Assets | ||
Deposits | 41,333 | 33,339 |
Total Assets | 49,726,149 | 49,166,820 |
Current Liabilities | ||
Accounts payable and accrued expenses | 7,967,771 | 14,617,671 |
Note payable, current | 88,950 | 83,270 |
Operating lease liabilities, current | 301,640 | 318,621 |
Income taxes payable | 3,442,038 | 2,738,818 |
Short term loan, net of finance charges | 227,180 | 975,025 |
Total current liabilities | 12,027,579 | 18,733,405 |
Deferred Compensation | 360,000 | 320,000 |
Note payable, net of current portion | 147,423 | 189,249 |
Operating lease liabilities, net of current portion | 938,136 | 1,074,592 |
Deferred tax liability, net | 228,600 | 228,600 |
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, 5,826,892 and 5,673,683 shares issued and outstanding | 130,280 | 130,162 |
Additional paid - in capital | 9,809,539 | 9,230,847 |
Accumulated other comprehensive loss | (904,316) | (779,268) |
Retained earnings | 26,985,908 | 20,036,233 |
Total stockholders' equity | 36,024,411 | 28,620,974 |
Total Liabilities and Stockholders' Equity | $ 49,726,149 | $ 49,166,820 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
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 | 5,826,892 | 5,673,683 |
Common Stock, Shares, Outstanding | 5,826,892 | 5,673,683 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Operations [Abstract] | ||||
Revenues | $ 17,938,310 | $ 14,300,559 | $ 42,166,418 | $ 27,197,034 |
Cost of Revenues | 10,294,238 | 8,107,020 | 24,895,256 | 14,951,541 |
Gross Profit | 7,644,072 | 6,193,539 | 17,271,162 | 12,245,493 |
Product Royalty Income | 46,971 | 58,479 | 125,810 | 83,289 |
Operating Expenses | ||||
Salaries and wages | 1,325,177 | 912,811 | 2,623,139 | 1,837,348 |
Commissions and consulting expenses | 150,634 | 215,986 | 313,220 | 436,648 |
Professional fees | 79,653 | 123,501 | 338,768 | 461,256 |
Advertising and marketing | 746,114 | 518,153 | 1,360,004 | 1,035,733 |
Office lease and expenses | 193,878 | 87,200 | 400,899 | 174,573 |
Research and development costs | 480,843 | 445,156 | 1,014,543 | 850,261 |
Bad debt expense (recovery) | (13,969) | (51,732) | 4,355 | 14,093 |
General and administrative expenses | 710,351 | 609,760 | 1,422,103 | 1,138,359 |
Depreciation | 287,943 | 242,401 | 564,867 | 478,936 |
Total operating expenses | 3,960,624 | 3,103,236 | 8,041,898 | 6,427,207 |
Income from Operations | 3,730,419 | 3,148,782 | 9,355,074 | 5,901,575 |
Other Income (Expenses) | ||||
Interest and other expenses, net | (8,349) | 3,948 | (2,192) | (59) |
Total other income (expenses) | (8,349) | 3,948 | (2,192) | (59) |
Income Before Income Taxes | 3,722,070 | 3,152,730 | 9,352,882 | 5,901,516 |
Income Taxes | 995,150 | 744,082 | 2,403,207 | 1,432,030 |
Net Income Available to Common Shareholders | $ 2,726,920 | $ 2,408,648 | $ 6,949,675 | $ 4,469,486 |
Net Income per Common Share | ||||
Basic | $ 0.47 | $ 0.44 | $ 1.2 | $ 0.82 |
Diluted | $ 0.44 | $ 0.39 | $ 1.12 | $ 0.72 |
Weighted Average Number of Common Shares Outstanding | ||||
Basic | 5,815,285 | 5,438,686 | 5,790,510 | 5,434,553 |
Diluted | 6,255,537 | 6,172,686 | 6,230,763 | 6,168,553 |
Comprehensive Income | ||||
Net Income | $ 2,726,920 | $ 2,408,648 | $ 6,949,675 | $ 4,469,486 |
Other comprehensive income, net of $0 deferred income taxes in 2022 and 2021 | ||||
Foreign currency translation | (382,782) | 60,893 | (125,048) | 32,541 |
Total Comprehensive Income | $ 2,344,138 | $ 2,469,541 | $ 6,824,627 | $ 4,502,027 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Operations [Abstract] | ||||
Deferred income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2022 - USD ($) | Preferred Stock A [Member] | Common Stock [Member] | Additional Paid - In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Total |
Beginning Balance at Dec. 31, 2021 | $ 3,000 | $ 130,162 | $ 9,230,847 | $ (779,268) | $ 20,036,233 | $ 28,620,974 |
Beginning Balance (Shares) at Dec. 31, 2021 | 120,000 | 5,673,683 | ||||
Compensation cost recognized in connection with stock options | 82,530 | 82,530 | ||||
Exercise of stock options | $ 118 | 255,682 | 255,800 | |||
Exercise of stock options (Shares) | 118,000 | |||||
Options exercised on a cashless basis | $ 0 | 0 | ||||
Options exercised on a cashless basis (Shares) | 35,209 | |||||
Restricted stock awards | 240,480 | 240,480 | ||||
Net income | 6,949,675 | 6,949,675 | ||||
Foreign currency translation adjustment | (125,048) | (125,048) | ||||
Ending Balance at Jun. 30, 2022 | $ 3,000 | $ 130,280 | $ 9,809,539 | $ (904,316) | $ 26,985,908 | $ 36,024,411 |
Ending Balance (Shares) at Jun. 30, 2022 | 120,000 | 5,826,892 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities | ||
Net income | $ 6,949,675 | $ 4,469,486 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 564,867 | 478,936 |
Stock-based compensation | 323,010 | 55,020 |
Bad debts reserve | (7,871) | 11,763 |
Inventory reserve | 94,269 | 39,995 |
(Gain) Loss on sale of property and equipment | (22,905) | 5,767 |
(Increase) decrease in: | ||
Accounts receivable | (1,155,162) | 2,077,870 |
Inventory | (866,061) | 3,478,553 |
Payments in advance | 258,974 | (397,698) |
Prepaid expenses and other current assets | 729,338 | (3,989,785) |
Income tax refunds receivable | 0 | 2,964 |
Deposits | (7,994) | (233) |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | (6,649,900) | (5,377,741) |
Income taxes payable | 703,220 | 375,379 |
Deferred compensation | 40,000 | 40,000 |
Net cash provided by operating activities | 953,460 | 1,270,276 |
Cash flows from investing activities | ||
Capital expenditures | (435,537) | (191,443) |
Proceeds from sale of property and equipment | 42,773 | 0 |
Increase in short-term investments, net | (1) | (2) |
Net cash used in investing activities | (392,765) | (191,445) |
Cash flows from financing activities | ||
Issuance of common stock | 255,800 | 0 |
Repayment of note payable to bank | (36,146) | 0 |
Repayment of short-term loan, net | (747,845) | (317,720) |
Net cash used in financing activities | (528,191) | (317,720) |
Effect of exchange rates on cash and cash equivalents | (105,169) | 20,427 |
Net increase (decrease) in cash and cash equivalents | (72,665) | 781,538 |
Cash and cash equivalents - beginning of period | 5,022,436 | 2,967,042 |
Cash and cash equivalents - end of period | 4,949,771 | 3,748,580 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 30,178 | 16,379 |
Cash paid for income taxes | 1,699,987 | 1,088,360 |
Other noncash investing and financing activities | ||
Common stock issued for services | $ 323,010 | $ 55,020 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Basis of presentation [Abstract] | |
Basis of presentation [Text Block] | Note 1 - Basis of presentation The consolidated balance sheet as of December 31, 2021 was audited and appears in the Form 10-K filed by the Company with the Securities and Exchange Commission on March 10, 2022. The consolidated balance sheet as of June 30, 2022 and the consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2022 and 2021, changes in stockholders' equity for the six months ended June 30, 2022, cash flows for the six months ended June 30, 2022 and 2021, 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, 2022 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, 2021 as filed with the Securities and Exchange Commission in the Company's Form 10-K. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
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 $210,452 at June 30, 2022 and $116,183 at December 31, 2021. |
Operating Leases - Right-of-Use
Operating Leases - Right-of-Use Assets and Lease Liability Obligations | 6 Months Ended |
Jun. 30, 2022 | |
Lessee Disclosure [Abstract] | |
Operating Leases - Right-of-Use Assets and Lease Liability Obligations [Text Block] | Note 3 - Operating Leases - Right-of-Use Assets and Lease Liability Obligations The Company has four non-cancelable operating leases, for office and warehousing space, one that expired in June 2022, and the other three expiring in June 2023, August 2023 and January 2027, respectively. 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 June 30, 2022 and December 31, 2021: 2022 2021 Assets Operating lease ROU assets $ 1,239,776 $ 1,393,213 Liabilities Operating lease liabilities, current $ 301,640 $ 318,621 Operating lease liabilities, net of current portion 938,136 1,074,592 Total operating lease liabilities $ 1,239,776 $ 1,393,213 During the six months ended June 30, 2022 and 2021 the Company recognized $189,954 and $108,997, respectively, in operating lease expenses, which are included in office lease and expenses in the Company's consolidated statements of operations and comprehensive income. Generally, the Company's lease agreements do not specify an implicit rate. Therefore, the Company estimates the incremental borrowing rate, which is defined as the interest rate the Company 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 June 30, 2022, and December 31, 2021 the following disclosures for the remaining lease terms and incremental borrowing rates were applicable: Supplemental disclosure June 30, 2022 December 31, 2021 Weighted average remaining lease term 5 years 5 years Weighted average discount rate 3.75% 4.08% Maturities of lease liabilities as of June 30, 2022 were as follows: Year ended December 31, Amounts under Operating Leases Remaining 2022 $ 149,366 2023 293,329 2024 281,663 2025 290,098 2026 298,791 2027 25,455 Total minimum lease payments $ 1,338,702 Less: amount representing interest $ (98,926 ) Total operating lease liabilities $ 1,239,776 Supplemental cash flow information for the six months ended June 30, 2022 and 2021 are as follows: Six months ended June 30, 2022 Six months ended June 30, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 191,732 $ 119,300 Right-of-use assets obtained in exchange for lease obligations $ 41,163 $ 15,170 |
Revolving line of Credit facili
Revolving line of Credit facility | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Revolving line of Credit facility [Text Block] | Note 4 - Revolving line of Credit facility On November 19, 2018, the Company entered into a $1,000,000 revolving line of credit agreement with a bank. Advances under the line of credit bear interest at the LIBOR Daily Floating Rate plus 2.5 percentage points commencing January 1, 2019. The line of credit matured on November 19, 2020, at which time the unpaid principal, interest, or other charges outstanding under the agreement were due and payable. On November 5, 2020, the Company executed an amendment to the line of credit agreement to extend the credit facility through November 19, 2021. The amendment took retroactive effect to October 27, 2020 and introduced an index floor so that payments for any future advances will bear interest at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. Obligations under the line of credit are secured by equipment and fixtures in the United States of America, accounts receivable and inventory of Leatt Corporation and Two-Eleven Distribution, LLC. On March 1, 2021, the Company executed an amendment to the line of credit. The amendment took retroactive effect to February 17, 2021 and extended the line of credit facility through February 28, 2022 and increased the revolving line of credit to $1,500,000. Effective January 21, 2022, the Company executed an amendment agreement for the line of credit to extend the line of credit facility through February 28, 2023, and to replace interest determined by LIBOR daily Floating Rate with the Bloomberg short-term Bank Yield Index Rate. As of June 30, 2022, and December 31, 2021, respectively there were no advances of the line of credit leaving $1,500,000 and $1,500,000 available for advances. |
Short-term Loan
Short-term Loan | 6 Months Ended |
Jun. 30, 2022 | |
Short-term Debt [Abstract] | |
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 $102,078 over eleven months including interest at 4.650% and the South African short-term loan is payable in monthly installments of $5,754, over a ten-month period at a flat interest rate of 3.10%. 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 on a sliding scale, in two payments of $37,381, three payments of $1,172 and six payments of $326 at 6.360% annual interest rate. |
Note Payable
Note Payable | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Note Payable [Text Block] | Note 6 - Note payable Two Eleven entered into a Note Payable with a bank effective December 17, 2021 in the principal amount of $272,519, secured by equipment. The Note is payable in 36 consecutive monthly installments of $7,990, including interest at a fixed rate of 3.5370%, commencing February 5, 2022, and continuing to January 5, 2025. As of June 30, 2022 and December 31, 2021, the amount of $236,373 and $272,519 were outstanding, respectively. June 30, December 31, 2022 2021 Liabilities Note payable, current $ 88,950 $ 83,270 Note payable, net off current portion 147,423 189,249 $ 236,373 $ 272,519 Principal maturities of note payable as of June 30, 2022 were as follows: Year ended December 31, Amounts under Notes Payable Remaining 2022 $ 44,082 2023 90,535 2024 93,790 2025 7,966 $ 236,373 |
Revenue and Cost Recognition
Revenue and Cost Recognition | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Revenue and Cost Recognition [Text Block] | Note 7 - Revenue and Cost Recognition 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. The Company's standard 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, however, in limited instances qualified distributors and dealers may be granted extended payment terms during selected order periods. In performing such evaluations, we utilize historical experience, sales performance, and credit risk requirements. 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 material 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, 2022 % of Revenues 2021 % of Revenues Consumer and athlete direct revenues $ 1,385,732 3% $ 1,137,597 4% Dealer direct revenues 8,551,462 20% 10,140,312 37% International distributor revenues 32,229,224 77% 15,919,125 59% $ 42,166,418 100% $ 27,197,034 100% 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 June 30, 2022 and December 31, 2021 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 the expected credit losses determined utilizing historical experience and any specific customer collection issues that have been identified. In determining the amount of the allowance, the Company is required to make certain estimates and assumptions. Accounts receivable balances that are still outstanding after the Company used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within the Company's expectations and the provisions established, the Company cannot guarantee that it will continue to experience the same credit loss rates as in the past. A significant change in the liquidity or financial position of any of the Company's significant customers could have a material adverse effect on the collectability of the Company's accounts receivable and future operating results. The allowance of doubtful accounts was $283,713 at June 30, 2022 and $291,584 at December 31, 2021. 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 expenses 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes [Text Block] | Note 8 - 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, 2022, 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, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share of Common Stock [Text Block] | Note 9 - 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, 2022, the Company had 471,000 potential common shares, consisting of 120,000 preferred shares, and options to purchase 351,000 shares, outstanding that were dilutive. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2022 | |
Compensation Related Costs [Abstract] | |
Common Stock [Text Block] | Note 10 - Common Stock In January 2022, the Company issued 78,000 shares of common stock to an employee who exercised stock options. In March 2022, the Company issued 40,000 shares of common stock to two employees who exercised stock options. In May 2022, the Company issued 35,209 shares of common stock to an employee who exercised stock options in a cashless exercise. Stock-based compensation expense related to vested stock options during the six months ended June 30, 2022 was $82,530. As of June 30, 2022, there was $0 of unrecognized compensation cost related to unvested stock options. Stock-based compensation expense related to vested restricted stock awards during the six months ended June 30, 2022 was $240,480. As of June 30, 2022, there was $240,480 of unrecognized compensation cost related to unvested restricted stock. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements [Text Block | Note 11 - Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements - Accounting Pronouncements Not Yet Adopted - |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2022 | |
Litigation Settlement [Abstract] | |
Litigation [Text Block] | Note 12 - 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. |
Risks and Uncertainties
Risks and Uncertainties | 6 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties [Text Block] | Note 13 - Risks and Uncertainties As the COVID-19 pandemic continues to evolve, the Company believes the extent of the impact to its operations will be primarily driven by the severity and duration of the pandemic, the pandemic's impact on the U.S. and global economies and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic. Due to strong consumer demand for outdoor product categories since the initial stages of the pandemic, we did not see any significant material negative impact of COVID-19 on the Company's results of operations for the six months ended June 30, 2022. The Company remains cautiously optimistic that ongoing efforts to increase the availability of new COVID-19 vaccines worldwide will mitigate the spread of the virus throughout Europe and the U.S. (our largest markets) and bring about an end to global quarantines. The continued mutation and spread of the virus, economic headwinds caused by global quarantines or the occurrence of any other catastrophic events, could have a negative impact on sales revenue for the coming periods and beyond. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 14 - 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) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Adopted Accounting Pronouncements [Policy Text Block] | Recently Adopted Accounting Pronouncements - |
Accounting Pronouncements Not Yet Adopted [Policy Text Block] | Accounting Pronouncements Not Yet Adopted - |
Operating Leases - Right-of-U_2
Operating Leases - Right-of-Use Assets and Lease Liability Obligations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Lessee Disclosure [Abstract] | |
Schedule of operating right-of-use assets and operating lease liabilities [Table Text Block] | 2022 2021 Assets Operating lease ROU assets $ 1,239,776 $ 1,393,213 Liabilities Operating lease liabilities, current $ 301,640 $ 318,621 Operating lease liabilities, net of current portion 938,136 1,074,592 Total operating lease liabilities $ 1,239,776 $ 1,393,213 |
Schedule of remaining lease term and incremental borrowing rates [Table Text Block] | Supplemental disclosure June 30, 2022 December 31, 2021 Weighted average remaining lease term 5 years 5 years Weighted average discount rate 3.75% 4.08% |
Schedule of maturities of lease liabilities [Table Text Block] | Year ended December 31, Amounts under Operating Leases Remaining 2022 $ 149,366 2023 293,329 2024 281,663 2025 290,098 2026 298,791 2027 25,455 Total minimum lease payments $ 1,338,702 Less: amount representing interest $ (98,926 ) Total operating lease liabilities $ 1,239,776 |
Schedule of supplemental cash flow information of operating leases [Table Text Block] | Six months ended June 30, 2022 Six months ended June 30, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 191,732 $ 119,300 Right-of-use assets obtained in exchange for lease obligations $ 41,163 $ 15,170 |
Note Payable (Tables)
Note Payable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of note payable [Table Text Block] | June 30, December 31, 2022 2021 Liabilities Note payable, current $ 88,950 $ 83,270 Note payable, net off current portion 147,423 189,249 $ 236,373 $ 272,519 |
Schedule of principal maturities of note payable [Table Text Block] | Year ended December 31, Amounts under Notes Payable Remaining 2022 $ 44,082 2023 90,535 2024 93,790 2025 7,966 $ 236,373 |
Revenue and Cost Recognition (T
Revenue and Cost Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of revenue by major customers by reporting segments [Table Text Block] | Six months ended June 30, 2022 % of Revenues 2021 % of Revenues Consumer and athlete direct revenues $ 1,385,732 3% $ 1,137,597 4% Dealer direct revenues 8,551,462 20% 10,140,312 37% International distributor revenues 32,229,224 77% 15,919,125 59% $ 42,166,418 100% $ 27,197,034 100% |
Inventory (Narrative) (Details)
Inventory (Narrative) (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Inventory reserve for obsolescence | $ 210,452 | $ 116,183 |
Operating Leases - Right-of-U_3
Operating Leases - Right-of-Use Assets and Lease Liability Obligations (Narrative) (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Lessee Disclosure [Abstract] | ||
Operating lease expense | $ 189,954 | $ 108,997 |
Operating Leases - Right-of-U_4
Operating Leases - Right-of-Use Assets and Lease Liability Obligations - Schedule of Right-of- Use Assets and Lease Liability Obligations (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Operating lease ROU assets | $ 1,239,776 | $ 1,393,213 |
Liabilities | ||
Operating lease liabilities, current | 301,640 | 318,621 |
Operating lease liabilities, net of current portion | 938,136 | 1,074,592 |
Total operating lease liabilities | $ 1,239,776 | $ 1,393,213 |
Operating Leases - Right-of-U_5
Operating Leases - Right-of-Use Assets and Lease Liability Obligations - Schedule of Remaining lease term and incremental borrowing rates of Operating leases (Details) | Jun. 30, 2022 | Dec. 31, 2021 |
Lessee Disclosure [Abstract] | ||
Weighted average remaining lease term | 5 years | 5 years |
Weighted average discount rate | 3.75% | 4.08% |
Operating Leases - Right-of-U_6
Operating Leases - Right-of-Use Assets and Lease Liability Obligations - Schedule of Maturities of lease liabilities (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Lessee Disclosure [Abstract] | ||
Remaining 2022 | $ 149,366 | |
2023 | 293,329 | |
2024 | 281,663 | |
2025 | 290,098 | |
2026 | 298,791 | |
2027 | 25,455 | |
Total minimum lease payments | 1,338,702 | |
Less: amount representing interest | (98,926) | |
Total operating lease liabilities | $ 1,239,776 | $ 1,393,213 |
Operating Leases - Right-of-U_7
Operating Leases - Right-of-Use Assets and Lease Liability Obligations - Schedule of Supplemental cash flow information of Operating Leases (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Lessee Disclosure [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 191,732 | $ 119,300 |
Right-of-use assets obtained in exchange for lease obligations | $ 41,163 | $ 15,170 |
Revolving line of Credit faci_2
Revolving line of Credit facility (Narrative) (Details) - Revolving line of credit [Member] - USD ($) | 1 Months Ended | ||||
Mar. 01, 2021 | Nov. 05, 2020 | Nov. 19, 2018 | Jun. 30, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 1,000,000 | ||||
Line of Credit Facility, Interest Rate Description | at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. | interest at the LIBOR Daily Floating Rate plus 2.5 percentage points | |||
Line bear interest at the LIBOR daily floating rate | 2.50% | 2.50% | |||
Increased in revolving line of credit | $ 1,500,000 | ||||
Line of credit available balance | $ 1,500,000 | $ 1,500,000 |
Short-term Loan (Narrative) (De
Short-term Loan (Narrative) (Details) | Jun. 30, 2022 USD ($) |
Current U.S. short-term loan [Member] | |
Short-term Debt [Line Items] | |
Short-term loan, monthly payment | $ 102,078 |
Debt instrument, interest rate, stated percentage | 4.65% |
Current South African short-term loan [Member] | |
Short-term Debt [Line Items] | |
Short-term loan, monthly payment | $ 5,754 |
Debt instrument, interest rate, stated percentage | 3.10% |
Various short-term insurance policies in the U.S. [Member] | |
Short-term Debt [Line Items] | |
Short-term loan paid in two payments | $ 37,381 |
Short-term loan paid in three payments | 1,172 |
Short-term loan paid in six payments | $ 326 |
Debt instrument, interest rate, stated percentage | 6.36% |
Note Payable (Narrative) (Detai
Note Payable (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Jun. 30, 2022 | Dec. 17, 2021 | |
Debt Disclosure [Abstract] | |||
Note payable | $ 272,519 | $ 236,373 | $ 272,519 |
Note payable term | 36 months | ||
Monthly instalments | $ 7,990 | ||
Fixed interest rate | 3.537% |
Note Payable - Schedule of note
Note Payable - Schedule of note payable (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 17, 2021 |
Debt Disclosure [Abstract] | |||
Note payable, current | $ 88,950 | $ 83,270 | |
Note payable, net of current portion | 147,423 | 189,249 | |
Notes Payable, Total | $ 236,373 | $ 272,519 | $ 272,519 |
Note Payable - Schedule of prin
Note Payable - Schedule of principal maturities of note payable (Details) | Jun. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
Remaining 2022 | $ 44,082 |
2023 | 90,535 |
2024 | 93,790 |
2025 | 7,966 |
Total | $ 236,373 |
Revenue and Cost Recognition (N
Revenue and Cost Recognition (Narrative) (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Revenue Recognition [Abstract] | ||
Product royalty income, revenue percentage | 1% | |
Provision for estimated returns | $ 0 | $ 0 |
Allowance for doubtful accounts | $ 283,713 | $ 291,584 |
Revenue and Cost Recognition -
Revenue and Cost Recognition - Schedule of revenue by major customers by reporting segments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 17,938,310 | $ 14,300,559 | $ 42,166,418 | $ 27,197,034 |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 42,166,418 | $ 27,197,034 | ||
% of Revenues | 100% | 100% | ||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Consumer and athlete direct revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,385,732 | $ 1,137,597 | ||
% of Revenues | 3% | 4% | ||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Dealer direct revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 8,551,462 | $ 10,140,312 | ||
% of Revenues | 20% | 37% | ||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | International distributor revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 32,229,224 | $ 15,919,125 | ||
% of Revenues | 77% | 59% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | Jun. 30, 2022 |
Income Tax Disclosure [Abstract] | |
Maximum likelihood of being sustained | 50% |
Net Income Per Share of Commo_2
Net Income Per Share of Common Stock (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2022 shares | |
Earnings Per Share [Abstract] | |
Weighted average number diluted shares outstanding adjustment | 471,000 |
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 | 351,000 |
Common Stock (Narrative) (Detai
Common Stock (Narrative) (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
May 31, 2022 | Mar. 31, 2022 | Jan. 31, 2022 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock to employee who exercised stock options in cashless exercise | 35,209 | 40,000 | 78,000 | |
Compensation cost recognized in connection with stock options | $ 82,530 | |||
Unrecognized compensation cost related to unvested stock options | 0 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost recognized in connection with stock options | 240,480 | |||
Unrecognized compensation cost related to unvested stock options | $ 240,480 |