DS Healthcare (DSKX) 10-Q 7 Oct 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Oct. 07, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Entity Registrant Name	DS HEALTHCARE GROUP, INC.
Entity Central Index Key	1,463,959
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016
Entity Filer Category	Smaller Reporting Company
Entity Units Outstanding		22,569,738

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current Assets
Cash	$ 2,632,761	$ 4,517,604
Accounts receivable, net	1,158,221	1,557,560
Inventories, net	3,462,465	3,733,213
Prepaid expenses and other current assets	202,708	255,980
Total Current Assets	7,456,155	10,064,357
Furniture and Equipment, net	96,581	99,539
Intangible Assets, net	460,383	483,765
Other Assets	67,297	67,765
TOTAL ASSETS	8,080,416	10,715,426
Current Liabilities
Accounts payable	1,420,015	1,235,152
Accrued expenses	973,134	1,400,552
Notes payable, current portion	75,719	97,042
Other current liabilities	365,279	574,475
Total Current Liabilities	2,834,147	3,307,221
Long Term Debt, net of current portion	219,499	115,050
TOTAL LIABILITIES	3,053,646	3,422,271
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity
Preferred stock, $0.001 par value, 30,000,000 shares authorized: 0 shares issued and outstanding at March 31, 2016 and December 31, 2015
Common stock, $0.001 par value, 300,000,000 shares authorized: 22,556,765 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively	22,557	22,557
Additional paid-in-capital	28,332,784	28,308,784
Accumulated deficit	(23,492,308)	(20,978,751)
Accumulated comprehensive income	163,737	(59,435)
Total Shareholders' Equity	5,026,770	7,293,155
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 8,080,416	$ 10,715,426

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, shares authorized	30,000,000	30,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	22,556,765	22,556,765
Common stock, shares outstanding	22,556,765	22,556,765

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Net Revenue	$ 2,325,035	$ 2,698,010
Cost of Goods Sold	1,434,066	1,214,215
Gross Profit	890,969	1,483,795
Selling and marketing
Commissions and consulting	188,643	169,372
Other selling and marketing expenses	969,416	620,906
Total selling and marketing	1,158,059	790,278
General and administrative
Salary and personnel costs	641,814	512,451
Professional fees and consulting costs	1,208,676	377,399
Other general and administrative expenses	254,252	440,333
Total general and administrative	2,104,742	1,330,183
Total operating costs and expenses	3,262,801	2,120,461
Operating Loss	(2,371,832)	(636,666)
Other Income (Expense)
Interest expense	(10,231)	(15,855)
Impairment of intangible asset		(337,500)
Other	(131,494)	120,475
Total other income (expense)	(141,725)	(232,880)
Net Loss	(2,513,557)	(869,546)
Net Loss Attributable to Non-Controlling Interest
Net Loss Attributable to Common Shareholders	$ (2,513,557)	$ (869,546)
Basic and Diluted Earnings per Share:
Weighted average shares outstanding	22,556,765	16,256,461
Net Loss per share	$ (0.11)	$ (0.05)
Other Comprehensive Loss:
Foreign currency translation adjustment	$ 223,171	$ (14,893)
Comprehensive loss	$ (2,290,386)	$ (884,439)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities:
Net loss	$ (2,513,557)	$ (869,546)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	141,361	32,307
Impairment of intangible assets		337,500
Recovery of bad debts	(65,241)	(16,119)
Recovery of obsolete inventory		1,087
Stock issued for services	24,000	100,500
Changes in operating assets and liabilities:
Accounts receivable, net	464,580	139,088
Inventories, net	270,748	(83,561)
Prepaid expenses and other current assets	53,272	830
Accounts payable	184,863	(233,781)
Accrued expenses	(427,418)	(48,129)
Other current liabilities	(209,196)	(261,312)
Net cash used in operating activities	(2,076,588)	(901,136)
Cash Flows from Investing Activities:
Purchase of furniture and equipment		526
Purchase of injection molds		(14,250)
Other assets	468
Net cash used in investing activities	468	(13,724)
Cash Flows from Financing Activities:
Proceeds from loans and notes	97,966
Repayment of loans and notes	(100,719)	(2,965)
Proceeds from sale of stock subscriptions		220,000
Net cash provided by financing activities	(2,753)	217,035
Effect of exchange rate changes on cash	194,030	221,362
Increase (Decrease) in cash	(1,884,843)	(476,463)
Cash, Beginning of Period	4,517,604	1,128,556
Cash, End of Period	2,632,761	652,093
Supplemental Information:
Cash paid for interest
Cash paid for taxes

ORGANIZATION AND NATURE OF BUSI

ORGANIZATION AND NATURE OF BUSINESS	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND NATURE OF BUSINESS	NOTE 1. – ORGANIZATION AND NATURE OF BUSINESS Terms and Definitions ASC Accounting Standards Codification ASU Accounting Standards Update FASB Financial Accounting Standards Board FIFO First-in, First-out US GAAP Accounting principles generally accepted in the United States of America SEC Securities and Exchange Commission 2015-QTR Three months ended March 31, 2015 2015-YTD Year ended December 31, 2015 2016-QTR Three months ended March 31, 2016 VIE Variable Interest Entity Organization and Nature of Business DS Healthcare Group, Inc. (d/b/a DS Laboratories) (the “Company”, “DS Laboratories”, ”DSKX”, “we”, “us” or “our”) was organized under the laws of the State of Florida in January 2007. Through its predecessors, the Company has been developing and marketing hair care, skin care and personal care products for over fifteen years. The Company has grown steadily over the last few years with a network of top specialty retailers and distributors throughout North America, Europe, Asia and South America. The Company researches and develops its own products, which management believes keeps the Company at the forefront of innovation. The Company utilizes two innovative technologies in its products, (1) “Liposome Technology”, which acts as a carrier agent, and has been designed to enhance the action of the active ingredients in our products, and (2) “Nanosome Technology”, which acts as a delivery vehicle, and has been designed to infuse active compounds into targeted cells for increased efficiency of our products. We currently offer products within the following broad product categories: Hair Care, Skin Care and Personal Care.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2. – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Presentation The condensed consolidated financial statements are prepared using the accrual basis of accounting where revenues and expenses are recognized in the period in which they were incurred. The basis of accounting conforms to US GAAP. The condensed consolidated financial statements include the accounts of the Company and its operating subsidiaries DS Laboratories, Inc., Sigma Development and Holding Co., Inc., Polaris Labs, Inc., Polymer Research, Inc., and Divine Skin Laboratories, S.A. de CV (“DS Mexico”). Also included in the condensed consolidated financial statements are the operating activities of Velocity Storage and Packaging, LLC, which are accounted for as VIEs. All significant intercompany balances and transactions have been eliminated in consolidation. On March 30, 2016, During the preparation of the Company’s 10-K, the company identified that certain transactions recorded in the company’s 10-K report for it consolidated financial statements for the years ended December 31, 2014 and the results of each quarterly 10-Q filings for the period ending September 30, 2015 became subject to an internal investigation. The internal investigation resulted in the company’s inability to timely file it’s for 10-Q as required. The Company continued its review these transactions with its newly appointed independent accountants, the results of which have now been corrected and reflected in the consolidated financial statements for the three months period ending March 31, 2015. The corrective actions identified errors related to sales and customer returns and allowances amounts with respect to the recognition of revenues and customer accounts receivables, and the recording of certain stock transactions. The Audit Committee of the Board of Directors consulted with management and analyzed the adjustments. The company needs to correct the 2014 and 2015 10-Q filings to reflect these errors. However, because of the above mentioned errors, the Audit Committee has directed the Company to conduct a thorough review of the financial records for fiscal years 2014 and 2015 along with its independent accountants and believes the financial statements for the three months ended March 31, 2016 and 2015 to be fairly presented. Interim Condensed Consolidated Financial Statements The interim condensed consolidated financial statements presented herein have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. The interim condensed consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements and related disclosures included in the Company’s Annual Report on Form 10-K, filed with the SEC on October 7, 2016. In the opinion of management, all adjustments (consisting only of those of a normal recurring nature) which are necessary to provide a fair presentation of financial position as of March 31, 2016 and the related operating results and cash flows for the interim periods presented have been made. The results of operations for the periods presented are not necessarily indicative of the results to be expected for future periods or for the year ending December 31, 2016. The condensed consolidated financial statements include the accounts of the Company and its operating subsidiaries DS Laboratories, Inc., Sigma Development and Holding Co., Inc., Polaris Labs, Inc., Polymer Research, Inc., and Divine Skin Laboratories, S.A. de CV (“DS Mexico”). Also included in the condensed consolidated financial statements are the operating activities of Velocity Storage and Packaging, LLC, which are accounted for as VIEs. All significant intercompany balances and transactions have been eliminated in consolidation. On March 30, 2016, During the preparation of the Company’s 10-K, the company identified that certain transactions recorded in the company’s 10-K report for it consolidated financial statements for the years ended December 31, 2014 and the results of each quarterly 10-Q filings for the period ending September 30, 2015, became subject to an internal investigation. The internal investigation resulted in the company’s inability to timely file it’s for 10-Q as required. The Company continued its review these transactions with its newly appointed independent accountants, the results of which have now been corrected and reflected in the consolidated financial statements for the three months ending March 31, 2015. The corrective actions identified errors related to sales and customer returns and allowances amounts with respect to the recognition of revenues and customer accounts receivables, and the recording of certain stock transactions. The Audit Committee of the Board of Directors consulted with management and analyzed the adjustments. The company intends to correct the 2014 and 2015 10-Q filings to reflect these errors. However, because of the above mentioned errors, the Audit Committee has directed the Company to conduct a thorough review of the financial records for fiscal years 2014 and 2015 along with its independent accountants and believes the financial statements for the three months ended March 31, 2016 and 2015 to be fairly presented. Use of Estimates The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. We believe our estimates and assumptions are reasonable; however, such estimates and assumptions are subject to a number of risks and uncertainties that may cause actual results to differ materially from such estimates. Significant estimates and assumptions underlying these condensed consolidated financial statements include: · Estimates of allowances for uncollectable accounts receivable, · Estimates of inventory obsolescence and overhead and labor cost allocations, · Estimates assuming future earning capacity of our intangible assets, · Estimates of value of equity transactions for services rendered, · Estimates of returned or damaged product, and · Estimates made in our deferred income tax calculations, for which there is a full valuation allowance. Accounts Receivable Accounts receivable are reported at their net realizable value. The Company establishes an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible. The Company also provides for allowances against accounts receivables for product returns and cooperative advertising allowances. At March 31, 2016 and December 31, 2015, the allowance for uncollectable accounts was $662,284 and $663,161, respectively, $210,000 at both dates for defectives and product returns and $40,000 at both dates for advertising credits. Inventories Inventory is reported at the lower of cost or market on the FIFO method. Our inventory is subject to expiration and obsolescence. Accordingly, quantities purchased and sell through rates are periodically monitored for potential overstocking or pending expiration as a basis for establishing the appropriate reserve for any estimated expiration or obsolescence. Revenue Recognition The Company’s revenue recognition policies are in compliance with ASC Topic 605, “Revenue Recognition”, which establishes criteria that must be satisfied before revenue is realized or realizable and earned. The Company recognizes revenue when all of the following four criteria are met: · persuasive evidence of a sales arrangement exists, · shipping terms are FOB shipping point · delivery has occurred, · the sales price is fixed or determinable and · collectability is probable. Shipping and handling charges related to sales transactions are recorded as sales revenues when billed to customers or included in the sales price. Shipping and handling costs are included in cost of goods sold. Research and Development The Company currently maintains a functional laboratory employing a new product development director, Dr. Patel, and a chemist and a lab technician that identify new technology, test product alternatives and improve existing formulations and technologies. In addition, our founder and Chief Executive Officer devotes a substantial portion of his time in identifying new technologies and formulations to develop new products and improve existing products with the newest technology available. Such activities are expensed in the year incurred. Such costs include laboratory supplies, salaries, materials and consultant fees. These costs are classified as product development, salaries, selling, general and administrative expenses in the condensed consolidated statements of operations, and amounted to $34,736 and $47,326 for 2016-QTR and 2015-QTR, respectively. Earnings Per Share Potentially dilutive securities are excluded from the computation of diluted net loss per share for all of the periods presented in the accompanying condensed consolidated statements of operations because the reported net loss in each of these periods results in their inclusion being antidilutive. Antidilutive securities, which consist of stock options and warrants that are not included in the diluted net loss per share calculation, consisted of an aggregate of 444,213 and 316,526 shares as of March 31, 2016 and 2015, respectively.

LIQUIDITY and GOING CONCERN

LIQUIDITY and GOING CONCERN	3 Months Ended
	Mar. 31, 2016
LIQUIDITY and GOING CONCERN [Abstract]
LIQUIDITY and GOING CONCERN	NOTE 3. – LIQUIDITY and GOING CONCERN We have sustained operational losses since our inception. At March 31, 2016, we had an accumulated deficit of approximately $20,492 million. The Company cannot predict how long it will continue to incur further losses or whether it will ever become profitable as this is dependent upon the reduction of certain operating expenses, success of new and existing products and increase in overall revenue among other things. These conditions raise substantial doubt about the entity’s ability to continue as a going concern. As of March 31, 2016, we had $2,632,761 in cash. While we have historically financed our operations and growth primarily through the issuance and sale of shares of our common stock, a line of credit and the issuance of promissory notes, the Company has started several new revenue initiatives creating additional revenue streams. Some of these initiatives include: establishing an online store Shop.DSLaboratories.com ) which became operational in the third quarter of 2014, generating $85,636 2015-YTD and $125,041 2016-QTR in net revenue, respectively. In the second quarter 2015, we began selling through http://www.costco.com , which generated net revenue of $315,404 2016-YTD. Although we cannot predict our success with these products or projects, all are currently under development and production and in various stages of completion. We have commenced implementing, and will continue to implement, various measures to address our financial condition, including but not limited to Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with US GAAP, which contemplates continuation of the Company as a going concern. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and carrying amount or classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. We have commenced implementing, and will continue to implement, various measures to address our financial condition.

RESTATEMENT OF FINANCIAL STATEM

RESTATEMENT OF FINANCIAL STATEMENTS	3 Months Ended
	Mar. 31, 2016
Restatement
RESTATEMENT OF FINANCIAL STATEMENTS	NOTE 4. – RESTATEMENT OF FINANCIAL STATEMENTS On March 30, 2016, during the preparation of the Company’s 10-K for the year ended December 31, 2015, the company identified certain transactions recorded in the company’s 10-K report for it consolidated financial statements for the years ended December 31, 2014 and the results of each quarterly 10-Q filings for the period ending September 30, 2015, and determined these transactions did not reflect the proper matching of revenues and costs. The impact of these transactions on the Company’s financial statements for the year ended December 31, 2014, have been considered and have been disclosed and reported in the notes to the Company’s financial statements as reported in the annual 10-K report for the year ending December 31, 2014. The results of each quarterly 10-Q filings during the nine months ending September 30, 2015, as previously filed, also did not reflect the proper matching of revenues and costs. The impact of this restatement on the Company’s financial statements for the three months ended March 31, 2015, are reflected in the tables below: Condensed Consolidated Statements of Operations and Comprehensive Loss: Previously Adjustment Restated 2015 Net Revenue $ 2,803,920 $ (105,910 ) $ 2,698,010 Cost of Goods sold 1,138,760 75,455 1,214,215 Gross Profit 1,665,160 (181,365 ) 1,483,795 Operating Costs and Expenses: Selling and marketing Commissions and consulting 169,372 - 169,372 Other selling and marketing expenses 607,406 13,500 620,906 776,778 13,500 790,278 General and administrative Salary and personnel costs 512,451 - 512,451 Professional fees and consulting costs 376,411 988 377,399 Other general and administrative expenses 189,278 251,055 440,333 1,078,140 252,043 1,330,183 Total operating costs and expenses 1,854,918 265,543 2,120,461 Operating Loss (189,758 ) (446,908 ) (636,666 ) Other Income (Expense) Interest expense (15,855 ) - (15,855 ) Impairment of intangible asset - (337,500 ) (337,500 ) Other 120,475 - 120,475 Total other income (expense) 104,620 (337,500 ) (232,880 ) Net Loss (85,138 ) (784,408 ) (869,546 ) Net Loss Attributable to Non-Controlling Interest - - - Net Loss Attributable to Common Shareholders $ (85,138 ) $ (784,408 ) $ (869,546 ) Basic and Diluted Earnings per Share: Weighted average shares outstanding 16,256,461 - 16,256,461 Net Loss per share $ (0.01 ) $ (0.04 ) $ (0.05 ) Other Comprehensive Loss: Foreign currency translation adjustment $ (14,893 ) $ - $ (14,893 ) Comprehensive loss $ (100,031 ) $ (784,408 ) $ (884,439 ) Previously Adjustment Restated 2014 Cash Flows from Operating Activities: Net loss (85,138 ) (784,408 ) (869,546 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 32,307 - 32,307 Impairment of intangible assets - 337,500 337,500 Provision (recovery) of bad debts (16,504 ) 385 (16,119 ) (Reocvery) Provision for obsolete inventory 1,087 - 1,087 Stock issued for services 100,500 - 100,500 Changes in operating assets and liabilities: Accounts receivable, net (217,494 ) 356,582 139,088 Inventories, net (159,016 ) 75,455 (83,561 ) Prepaid expenses and other current assets 830 - 830 Accounts payable (233,780 ) (1 ) (233,781 ) Accrued expenses (62,617 ) 14,488 (48,129 ) Other current liabilities (261,311 ) (1 ) (261,312 ) Net cash used in operating activities (901,136 ) - (901,136 ) Cash Flows from Operating Activities: Purchase of furniture and equipment 526 - 526 Purchase of injection molds (14,250 ) - (14,250 ) Net cash used in investing activities (13,724 ) - (13,724 ) Cash Flows from Financing Activities: Repayment of loans and notes (2,965 ) 2,965 - Proceeds from stock subscriptions 220,000 - 220,000 Net cash provided by financing activities 217,035 - 220,000 Effect of exchange rate changes on cash 221,362 - (221,362 ) Decrease in cash (476,463 ) - (476,463 ) Cash, Beginning of Period 1,128,556 - 1,128,556 Cash, End of Period $ 652,093 $ - $ 652,093

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 5. – RECENT ACCOUNTING PRONOUNCEMENTS Management continually evaluates the potential impact, if any, of all recent accounting pronouncements on our condensed consolidated financial statements or related disclosures and, if significant, makes the appropriate disclosures required by such new accounting pronouncements. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The Company has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial position and results of operations. In January 2016, the FASB issued Accounting Standards Update 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation and disclosure of financial statements. This guidance will be effective in the first quarter of fiscal year 2019 and early adoption is not permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement – Period Adjustments. This ASU simplifies the accounting for adjustments made to provisional amounts recognized in a business combination; the amendments eliminate the requirement to retrospectively account for those adjustments. This ASU will require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. It also requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts calculated as if the accounting had been completed at the acquisition date. This ASU is effective for the annual and interim reporting periods beginning after December 15, 2016. We are currently evaluating whether the adoption of this new guidance will have a significant impact on our consolidated financial statements and disclosures. In July 2015, the FASB issued ASU No. 2015-11, Inventory: Simplifying the Measurement of Inventory. This ASU simplifies the guidance on the subsequent measurement of inventory by requiring inventory within the scope of this update to be measured at the lower of cost or net realizable value rather than the lower of cost or market. This ASU is effective for the annual and interim reporting periods beginning after December 15, 2016. We are currently evaluating whether the adoption of this new guidance will have a significant impact on our consolidated financial statements and disclosures. The FASB has issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern substantial doubt substantial doubt The FASB has issued ASU No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period The FASB has issued ASU No. 2014-09, Revenue from Contracts with Customers . This ASU supersedes the revenue recognition requirements in Accounting Standards Codification 605 - Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective on January 1, 2017 and should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application. For all other entities (nonpublic entities), the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. A nonpublic entity may elect to apply this guidance earlier, however, only as prescribed in this ASU.

INVENTORIES

INVENTORIES	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 6. – INVENTORIES Significant components of inventory at March 31, 2016 and December 31, 2015 consist primarily of: 2016 2015 Bulk product and raw materials $ 2,225,381 $ 2,502,402 Work in process 234,201 213,832 Merchandise inventory 1,227,842 1,172,614 Inventory in transit 154,656 231,623 Total 3,842,080 4,120,471 Less: Allowance (379,615 ) (387,258 ) $ 3,462,465 $ 3,733,213 In March 2016, the Company, under former management, entered in a barter credit agreement with a third party to sell slow moving, finished goods inventory in exchange for trade credits the company may use to purchase goods and/or services in the future. For the three months ended March 31, 2016 the trade credits acquired under the agreement totaled $ have no expiration and can be used at any time. The cost of slow moving inventory under the arrangement totaled $249,319. See “Footnote 10. – Barter Credits” for additional information regarding the revenue recognition of the barter credits.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	NOTE 7. – INTANGIBLE ASSETS Significant components of intangible assets at March 31, 2016 and December 31, 2015 consist of: 2016 2015 Distribution rights in Brazil $ 750,000 $ 750,000 Less: Accumulated amortization (750,000 ) (750,000 ) Net distribution rights --- --- Pure Guild brand rights $ 159,086 $ 159,086 Less: Accumulated amortization (159,086 ) (159,086 ) Net brand rights --- --- DS Mexico customer list 707,716 704,087 Less: Accumulated amortization (274,886 ) (247,734 ) Net customer list 432,830 456,353 Goodwill 27,553 27,412 $ 460,383 $ 483,765 The following table represents the amortized cost of the various assets over the remaining years; the weighted average remaining period is 5.83 years. 2016 2017 2018 2019 Beyond Total Asset: Mexican Customer list 78,232 78232 78,232 78,232 143,425 456,353 $ 78,232 $ 78,232 $ 78,232 $ 78,232 $ 143,425 $ 456,353

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 8. – COMMITMENTS AND CONTINGENCIES Pending and threatened litigation From time to time, the Company may be involved in various claims and legal actions arising from the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s condensed consolidated financial position or results of operations. On March 29, 2016, DS Healthcare, Mr. Khesin, and certain former members of the Board of Directors Prasant Shah v. DS Healthcare Group, Inc. On May 27, 2016, PhotoMedex, Inc., Radiancy, Inc., and PhotoMedex Technology, Inc. (collectively, “PhotoMedex”) filed a civil action for damages and declaratory relief against DS Healthcare in the United States District Court for the Southern District of New York. The lawsuit is styled PhotoMedex, Inc. v. DS Healthcare Group, Inc., Case No. 1:16-cv-03981. The lawsuit arises from two merger agreements: (i) an Agreement and Plan of Merger and Reorganization among DS Healthcare Group, Inc., PHMD P Acquisition Corp., PhotoMedex, Inc. and Radiancy, Inc. dated February 19, 2016; and (ii) an Agreement and Plan of Merger and Reorganization by and among DS Healthcare Group, Inc., PHMD Professional Acquisition Corp., PhotoMedex Technology, Inc. and PhotoMedex, Inc. dated February 19, 2016. PhotoMedex alleges that DS Healthcare breached both agreements by failing to meet its pre-closing obligations and not completing the transactions contemplated by the agreements. PhotoMedex seeks a declaratory judgment that their terminations of the two agreements were proper, and requests an award of damages specified by the agreements, including a “break-up fee” of USD $3 million. DS Healthcare disputes the claims asserted by PhotoMedex, including that PhotoMedex is entitled to the “break-up fee” under the agreements. DS Healthcare has also asserted a counterclaims for damages against PhotoMedex for their breaches of the two agreements. An initial case management conference is scheduled for October 13, 2016. On December 28, 2015, the Company, our chief executive officer, Daniel Khesin individually, and Abner Silva, a former consultant and employee was named in a lawsuit brought in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida by a former investor relations contractor claiming monetary damages and allegations of using material or false misrepresentations. The Plaintiff’s complaint alleges owed compensation in stock and cash. Management intends to vigorously defend the action and contends the suit is primarily without merit as the contractor was dismissed in writing. Accordingly, management has provided a contingency reserve this matter. The Company accounts for its facility leases using the straight-line method and incurred $535,012 and $489,643 in total rent expense for 2015 and 2014, respectively. In 2015, the Company was served a suit in connection to its Asheville, NC (“Asheville”) abandoned office lease. The suit calls for payments of $73,000. On September 21, 2016, the Company was notified it has received default judgement in the amount of $73,000. The Company plans of appealing the default judgment. As of December 31, 2015, the Company had sufficiently accrued for the Asheville suit. The Company has received several pre-litigation demand letters from various former employees, including but not limited to a demand for alleged past wages, shares and commissions on various sales which do not qualify as revenue under GAAP guidance from former Chief Executive Officer, Renee Barch- Niles. While we cannot determine the outcome of these disputes, the Company intends to vehemently defend its position to the fullest extent possible. Accordingly, the Company has not reserved for these disputes. At this time, the amount of any loss, or range of loss, cannot be reasonably estimated as the case has only been initiated and no discovery has been conducted to determine the validity of any claim or claims made by plaintiffs. Therefore, the Company has recorded any reserve or contingent liability related to these particular legal matters. However, in the future, as the cases progress, the Company may be required to increase its contingent liability or reserve for these matters. For additional information regarding these matters, see the Pending Transactions disclosures in the Company’s Form 10-K for the year ending December 31, 2015 filed on October 7, 2016.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2016
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 9. – RELATED PARTY TRANSACTIONS For the three months ended March 31, 2016 and 2015, the Company was a party to the following related party transactions not disclosed elsewhere in these financial statements: · the Company paid $25,808 (2016) and $25,808 (2015) as compensation to the father of our Chief Executive Officer, · the Company paid $6,250 (2016) and $0 (2015) as compensation to the sister of our Chief Executive Officer, · the Company paid $15,000 (2016) and $15,000 (2015) as compensation to Dr. Fernando Tamez. Dr. Tamez who is President of Divine Skin Laboratories, S.A. D.E. C.V. (“DS Mexico”) since 2009, our Mexican subsidiary. Dr. Tamez oversees the day-to-day operations of DS Mexico.

BARTER CREDITS

BARTER CREDITS	3 Months Ended
	Mar. 31, 2016
Barter Credits
BARTER CREDITS	NOTE 10. – BARTER CREDITS In December 2015, the Company, under former management entered into an agreement with a barter trading company to sell slow moving, finished goods in exchange for prepaid credits. During the three months ended March 31,2016, the Company sold merchandise worth $2,228,617 to this barter trading company. However, these credits proved to have no economic value and accordingly revenue did not meet the criteria as defined in Accounting Standards Codification 605 (“ASC”). The Company has reversed the sales to this barter trading company since it failed to meet the revenue standards and has expensed the barter credits, the results of which are reflected in net revenue of the company’s consolidated condensed statement of operations and comprehensive loss for the three months ending March 31, 2016.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 11. – SUBSEQUENT EVENTS Management has evaluated subsequent events or transactions occurring through the date the financial statements were issued. The following items are a summary of events or transactions occurring subsequent to the balance-sheet date, but prior to the issuance of these financial statements, that have a material effect on the financial statements and therefore require adjustment or disclosure in these statements. On October 7 th th Throughout the year ended 2014 and 2015, Daniel Khesin, the Company's former chief executive officer and former chief financial officer, received in addition to base compensation, reimbursement and payroll advances of expenses of approximately $76,000 and $40,000 respectively, which were for non-business related goods and services. Pursuant to his executive employment agreement $50,000 in shares were to be payable in shares of the Company's common stock at fiscal year-end. While Mr. Khesin believed that these payments were received as satisfaction of certain bonus or other perquisites earned by him on a monthly basis under his employment agreement, such payments, if any, required approval of our compensation committee, which approval was not received until subsequent to 2014 and 2015. Section 402 of the Sarbanes Oxley Act of 2002 prohibits advances or loans to a director or executive officer of a public company. While our audit committee has concluded that the payments made to Mr. Khesin prior to board approval may be in violation of Section 402 of the Sarbanes Oxley Act of 2002, in the event it is determined any such payments were a violation of the Sarbanes Oxley Act, such violation could have a material adverse effect on our Company, including, but not limited to criminal, civil or administrative sanctions, penalties, or investigations, in addition to potential securities litigation. As a consequence of these activities, the company received notice from its independent auditor of potential illegal acts concerning payments of personal expenses by the Company. The Company’s Audit Committee has agreed with the findings. On September 29 th th During 2013, in addition to base compensation paid to Abner Silva, a consultant deemed to be an officer by our independent auditor for accounting purposes, our company advanced approximately $11,500, to Mr. Silva. While Mr. Silva, believed that these payments were received as satisfaction of certain moneys owed to him or his affiliate companies, such payments, if any, required prior approval of our compensation committee, which approval was not received. As a consequence of these activities, the company received notice from its independent auditor of potential illegal acts concerning payments of personal expenses by the company on September 29 th th In December 2015, the Company, under former management entered into an agreement with a barter trading company to sell slow moving, finished goods in exchange for prepaid credits. During 2015 and through April 2016, the Company sold merchandise worth $956,176 and $4,566,717 to this barter trading company. However, these credits proved to have no economic value and accordingly revenue did not meet the criteria as defined in Accounting Standards Codification 605 (“ASC”). The Company has reversed the sales to this barter trading company that did not meet the revenue standards. In January 2016, the company entered into a Stock Purchase Agreement with a private party in the amount of $1,996,500 for 605,000 shares of the company’s stock. To date, the purchase agreement has only partially settled. The Company’s has offset subscription receivable against the additional paid in capital of $1,196,500. The Board of Directors has decided to negotiate a revision to the original Stock Purchase Agreement to reach an appropriate resolution to the matter. The company has no way of knowing what the financial impact will be. On May 2 nd On September 27, 2016, pursuant to the Company’s By-Laws, the current Board of Directors approved and ratified all shares to the former management through date of termination. It is the Company’s position that due to circumstances surrounding the terminations, no further shares or compensation are owned and will vehemently defend its position. On April 20 th On June 7 th th On September 26 th th th th th On March 29, 2016, DS Healthcare, Mr. Khesin, and certain former members of the Board of Directors Prasant Shah v. DS Healthcare Group, Inc. On May 27, 2016, PhotoMedex, Inc., Radiancy, Inc., and PhotoMedex Technology, Inc. (collectively, “PhotoMedex”) filed a civil action for damages and declaratory relief against DS Healthcare in the United States District Court for the Southern District of New York. The lawsuit is styled PhotoMedex, Inc. v. DS Healthcare Group, Inc., Case No. 1:16-cv-03981. The lawsuit arises from two merger agreements: (i) an Agreement and Plan of Merger and Reorganization among DS Healthcare Group, Inc., PHMD P Acquisition Corp., PhotoMedex, Inc. and Radiancy, Inc. dated February 19, 2016; and (ii) an Agreement and Plan of Merger and Reorganization by and among DS Healthcare Group, Inc., PHMD Professional Acquisition Corp., PhotoMedex Technology, Inc. and PhotoMedex, Inc. dated February 19, 2016. PhotoMedex alleges that DS Healthcare breached both agreements by failing to meet its pre-closing obligations and not completing the transactions contemplated by the agreements. PhotoMedex seeks a declaratory judgment that their terminations of the two agreements were proper, and requests an award of damages specified by the agreements, including a “break-up fee” of USD $3 million. DS Healthcare disputes the claims asserted by PhotoMedex, including that PhotoMedex is entitled to the “break-up fee” under the agreements. DS Healthcare has also asserted a counterclaims for damages against PhotoMedex for their breaches of the two agreements. An initial case management conference is scheduled for October 13, 2016. On December 28, 2015, Microcap Headlines, Inc. (“Microcap”), an investor awareness business located in North Babylon, New York, filed a civil action against DS Healthcare, Daniel Khesin and former DS Healthcare employee Abner Silva in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida. The lawsuit is styled Microcap Headlines Inc. v. DS Healthcare Group, Inc. et al., Case No. 2015-030046-CA-01. Plaintiff Microcap asserts claims for breach of contract, negligent misrepresentation, fraud (solely against defendant Silva), violation of the Florida Securities and Investor Protection Act, and quantum meruit, all of which arise from an October 15, 2014 contract between Microcap and DS Healthcare pursuant to which Microcap promised to provide certain investor awareness services in exchange for compensation in the form of cash and warrants to purchase DS Healthcare stock. Microcap seeks damages in an unspecified amount. DS Healthcare disputes the claims asserted by Microcap in the lawsuit. Court-ordered mediation is scheduled for November 22, 2016, and the case is scheduled for trial to commence sometime during the three-week trial period beginning on January 17, 2017. On April 12, 2016, the SEC issued a “Formal Order” directing a private non-public formal investigation to determine whether violations of the federal securities law may have been committed, directly or indirectly, by the Company, its officers, directors, employees, partners, subsidiaries and/or affiliates, and/or other persons or entities. The possible violations set forth in the Formal Order include Section 17(a) of the Securities Act of 1933 (“Securities Act”), Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), 13(b)(5), 13(k), 14(a), and 14(f) of the Securities Exchange Act of 1934 (“Exchange Act”), and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13a-14, 13b2-1, 13b2-2(a), 14a3, 14a-9, and 14f-1. The relevant time period specified in the Formal Order is between January 1, 2010 and the present date. On April 15, 2016, the SEC issued a subpoena duces tecum to Mr. Khesin. On May 4, 2016, the SEC issued a subpoena duces tecum to the Company. The company is complying with all requests to the SEC and the review and production process is ongoing in nature. On or about July 27, 2016, the SEC issued a second subpoena duces tecum to the Company seeking a current copy of its QuickBooks file with a user name and password. The Company has complied with the second subpoena duces tecum. The company has no way of determining what the outcome of this investigation will be and cannot predict any financial impact. Significant Changes to the Board of Directors and Executive Management: On April 2 nd Mr. Myron Lewis joined the Board of Directors on April 22, 2016.His role includes chairing the Compensation Committee. Subsequently, on September 12 th Mr. Yasuhiro Fujiwara joined the Board of Directors on April 22, 2016. Subsequently, on September 12 th Ms. Elina Yuabov joined the Board of Directors on April 22, 2016. Ms. Estella Ng joined the Board of Directors on May 6, 2016. Her role includes chairing the Audit Committee. Mr. John Power joined the company on September 12 th

SUMMARY OF SIGNIFICANT ACCOUN17

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Principles of Consolidation and Presentation	Principles of Consolidation and Presentation The condensed consolidated financial statements are prepared using the accrual basis of accounting where revenues and expenses are recognized in the period in which they were incurred. The basis of accounting conforms to US GAAP. The condensed consolidated financial statements include the accounts of the Company and its operating subsidiaries DS Laboratories, Inc., Sigma Development and Holding Co., Inc., Polaris Labs, Inc., Polymer Research, Inc., and Divine Skin Laboratories, S.A. de CV (“DS Mexico”). Also included in the condensed consolidated financial statements are the operating activities of Velocity Storage and Packaging, LLC, which are accounted for as VIEs. All significant intercompany balances and transactions have been eliminated in consolidation. On March 30, 2016, During the preparation of the Company’s 10-K, the company identified that certain transactions recorded in the company’s 10-K report for it consolidated financial statements for the years ended December 31, 2014 and the results of each quarterly 10-Q filings for the period ending September 30, 2015 became subject to an internal investigation. The internal investigation resulted in the company’s inability to timely file it’s for 10-Q as required. The Company continued its review these transactions with its newly appointed independent accountants, the results of which have now been corrected and reflected in the consolidated financial statements for the three months period ending March 31, 2015. The corrective actions identified errors related to sales and customer returns and allowances amounts with respect to the recognition of revenues and customer accounts receivables, and the recording of certain stock transactions. The Audit Committee of the Board of Directors consulted with management and analyzed the adjustments. The company needs to correct the 2014 and 2015 10-Q filings to reflect these errors. However, because of the above mentioned errors, the Audit Committee has directed the Company to conduct a thorough review of the financial records for fiscal years 2014 and 2015 along with its independent accountants and believes the financial statements for the three months ended March 31, 2016 and 2015 to be fairly presented.
Interim Condensed Consolidated Financial Statements	Interim Condensed Consolidated Financial Statements The interim condensed consolidated financial statements presented herein have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. The interim condensed consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements and related disclosures included in the Company’s Annual Report on Form 10-K, filed with the SEC on October 7, 2016. In the opinion of management, all adjustments (consisting only of those of a normal recurring nature) which are necessary to provide a fair presentation of financial position as of March 31, 2016 and the related operating results and cash flows for the interim periods presented have been made. The results of operations for the periods presented are not necessarily indicative of the results to be expected for future periods or for the year ending December 31, 2016. The condensed consolidated financial statements include the accounts of the Company and its operating subsidiaries DS Laboratories, Inc., Sigma Development and Holding Co., Inc., Polaris Labs, Inc., Polymer Research, Inc., and Divine Skin Laboratories, S.A. de CV (“DS Mexico”). Also included in the condensed consolidated financial statements are the operating activities of Velocity Storage and Packaging, LLC, which are accounted for as VIEs. All significant intercompany balances and transactions have been eliminated in consolidation. On March 30, 2016, During the preparation of the Company’s 10-K, the company identified that certain transactions recorded in the company’s 10-K report for it consolidated financial statements for the years ended December 31, 2014 and the results of each quarterly 10-Q filings for the period ending September 30, 2015, became subject to an internal investigation. The internal investigation resulted in the company’s inability to timely file it’s for 10-Q as required. The Company continued its review these transactions with its newly appointed independent accountants, the results of which have now been corrected and reflected in the consolidated financial statements for the three months ending March 31, 2015. The corrective actions identified errors related to sales and customer returns and allowances amounts with respect to the recognition of revenues and customer accounts receivables, and the recording of certain stock transactions. The Audit Committee of the Board of Directors consulted with management and analyzed the adjustments. The company intends to correct the 2014 and 2015 10-Q filings to reflect these errors. However, because of the above mentioned errors, the Audit Committee has directed the Company to conduct a thorough review of the financial records for fiscal years 2014 and 2015 along with its independent accountants and believes the financial statements for the three months ended March 31, 2016 and 2015 to be fairly presented.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. We believe our estimates and assumptions are reasonable; however, such estimates and assumptions are subject to a number of risks and uncertainties that may cause actual results to differ materially from such estimates. Significant estimates and assumptions underlying these condensed consolidated financial statements include: · Estimates of allowances for uncollectable accounts receivable, · Estimates of inventory obsolescence and overhead and labor cost allocations, · Estimates assuming future earning capacity of our intangible assets, · Estimates of value of equity transactions for services rendered, · Estimates of returned or damaged product, and · Estimates made in our deferred income tax calculations, for which there is a full valuation allowance.
Accounts Receivable	Accounts Receivable Accounts receivable are reported at their net realizable value. The Company establishes an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible. The Company also provides for allowances against accounts receivables for product returns and cooperative advertising allowances. At March 31, 2016 and December 31, 2015, the allowance for uncollectable accounts was $662,284 and $663,161, respectively, $210,000 at both dates for defectives and product returns and $40,000 at both dates for advertising credits.
Inventories	Inventories Inventory is reported at the lower of cost or market on the FIFO method. Our inventory is subject to expiration and obsolescence. Accordingly, quantities purchased and sell through rates are periodically monitored for potential overstocking or pending expiration as a basis for establishing the appropriate reserve for any estimated expiration or obsolescence.
Revenue Recognition	Revenue Recognition The Company’s revenue recognition policies are in compliance with ASC Topic 605, “Revenue Recognition”, which establishes criteria that must be satisfied before revenue is realized or realizable and earned. The Company recognizes revenue when all of the following four criteria are met: · persuasive evidence of a sales arrangement exists, · shipping terms are FOB shipping point · delivery has occurred, · the sales price is fixed or determinable and · collectability is probable. Shipping and handling charges related to sales transactions are recorded as sales revenues when billed to customers or included in the sales price. Shipping and handling costs are included in cost of goods sold.
Research and Development	Research and Development The Company currently maintains a functional laboratory employing a new product development director, Dr. Patel, and a chemist and a lab technician that identify new technology, test product alternatives and improve existing formulations and technologies. In addition, our founder and Chief Executive Officer devotes a substantial portion of his time in identifying new technologies and formulations to develop new products and improve existing products with the newest technology available. Such activities are expensed in the year incurred. Such costs include laboratory supplies, salaries, materials and consultant fees. These costs are classified as product development, salaries, selling, general and administrative expenses in the condensed consolidated statements of operations, and amounted to $34,736 and $47,326 for 2016-QTR and 2015-QTR, respectively.
Earnings Per Share	Earnings Per Share Potentially dilutive securities are excluded from the computation of diluted net loss per share for all of the periods presented in the accompanying condensed consolidated statements of operations because the reported net loss in each of these periods results in their inclusion being antidilutive. Antidilutive securities, which consist of stock options and warrants that are not included in the diluted net loss per share calculation, consisted of an aggregate of 444,213 and 316,526 shares as of March 31, 2016 and 2015, respectively.

RESTATEMENT OF FINANCIAL STAT18

RESTATEMENT OF FINANCIAL STATEMENTS (Tables)	3 Months Ended
	Mar. 31, 2016
Restatement Tables
Schedule of Effects of Restatement on Previously Issued Financial Statements	The results of each quarterly 10-Q filings during the nine months ending September 30, 2015, as previously filed, also did not reflect the proper matching of revenues and costs. The impact of this restatement on the Company’s financial statements for the three months ended March 31, 2015, are reflected in the tables below: Condensed Consolidated Statements of Operations and Comprehensive Loss: Previously Adjustment Restated 2015 Net Revenue $ 2,803,920 $ (105,910 ) $ 2,698,010 Cost of Goods sold 1,138,760 75,455 1,214,215 Gross Profit 1,665,160 (181,365 ) 1,483,795 Operating Costs and Expenses: Selling and marketing Commissions and consulting 169,372 - 169,372 Other selling and marketing expenses 607,406 13,500 620,906 776,778 13,500 790,278 General and administrative Salary and personnel costs 512,451 - 512,451 Professional fees and consulting costs 376,411 988 377,399 Other general and administrative expenses 189,278 251,055 440,333 1,078,140 252,043 1,330,183 Total operating costs and expenses 1,854,918 265,543 2,120,461 Operating Loss (189,758 ) (446,908 ) (636,666 ) Other Income (Expense) Interest expense (15,855 ) - (15,855 ) Impairment of intangible asset - (337,500 ) (337,500 ) Other 120,475 - 120,475 Total other income (expense) 104,620 (337,500 ) (232,880 ) Net Loss (85,138 ) (784,408 ) (869,546 ) Net Loss Attributable to Non-Controlling Interest - - - Net Loss Attributable to Common Shareholders $ (85,138 ) $ (784,408 ) $ (869,546 ) Basic and Diluted Earnings per Share: Weighted average shares outstanding 16,256,461 - 16,256,461 Net Loss per share $ (0.01 ) $ (0.04 ) $ (0.05 ) Other Comprehensive Loss: Foreign currency translation adjustment $ (14,893 ) $ - $ (14,893 ) Comprehensive loss $ (100,031 ) $ (784,408 ) $ (884,439 ) Previously Adjustment Restated 2014 Cash Flows from Operating Activities: Net loss (85,138 ) (784,408 ) (869,546 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 32,307 - 32,307 Impairment of intangible assets - 337,500 337,500 Provision (recovery) of bad debts (16,504 ) 385 (16,119 ) (Reocvery) Provision for obsolete inventory 1,087 - 1,087 Stock issued for services 100,500 - 100,500 Changes in operating assets and liabilities: Accounts receivable, net (217,494 ) 356,582 139,088 Inventories, net (159,016 ) 75,455 (83,561 ) Prepaid expenses and other current assets 830 - 830 Accounts payable (233,780 ) (1 ) (233,781 ) Accrued expenses (62,617 ) 14,488 (48,129 ) Other current liabilities (261,311 ) (1 ) (261,312 ) Net cash used in operating activities (901,136 ) - (901,136 ) Cash Flows from Operating Activities: Purchase of furniture and equipment 526 - 526 Purchase of injection molds (14,250 ) - (14,250 ) Net cash used in investing activities (13,724 ) - (13,724 ) Cash Flows from Financing Activities: Repayment of loans and notes (2,965 ) 2,965 - Proceeds from stock subscriptions 220,000 - 220,000 Net cash provided by financing activities 217,035 - 220,000 Effect of exchange rate changes on cash 221,362 - (221,362 ) Decrease in cash (476,463 ) - (476,463 ) Cash, Beginning of Period 1,128,556 - 1,128,556 Cash, End of Period $ 652,093 $ - $ 652,093

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Schedule of the Significant Components of Inventory	2016 2015 Bulk product and raw materials $ 2,225,381 $ 2,502,402 Work in process 234,201 213,832 Merchandise inventory 1,227,842 1,172,614 Inventory in transit 154,656 231,623 Total 3,842,080 4,120,471 Less: Allowance (379,615 ) (387,258 ) $ 3,462,465 $ 3,733,213

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	Significant components of intangible assets at March 31, 2016 and December 31, 2015 consist of: 2016 2015 Distribution rights in Brazil $ 750,000 $ 750,000 Less: Accumulated amortization (750,000 ) (750,000 ) Net distribution rights --- --- Pure Guild brand rights $ 159,086 $ 159,086 Less: Accumulated amortization (159,086 ) (159,086 ) Net brand rights --- --- DS Mexico customer list 707,716 704,087 Less: Accumulated amortization (274,886 ) (247,734 ) Net customer list 432,830 456,353 Goodwill 27,553 27,412 $ 460,383 $ 483,765
Schedule of Future Amortization Expense for Intangible Assets	The following table represents the amortized cost of the various assets over the remaining years; the weighted average remaining period is 5.83 years. 2016 2017 2018 2019 Beyond Total Asset: Mexican Customer list 78,232 78232 78,232 78,232 143,425 456,353 $ 78,232 $ 78,232 $ 78,232 $ 78,232 $ 143,425 $ 456,353

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Accounting Policies [Abstract]
Provision for doubtful accounts receivable	$ 662,284		$ 663,161
Product return and advertising reserve	210,000		210,000
Advertising credits	40,000		$ 40,000
Contracted research and development expense	$ 34,736	$ 47,326
Anti-dilutive shares excluded from the earnings per share calculation	444,213	316,526

LIQUIDITY and GOING CONCERN (De

LIQUIDITY and GOING CONCERN (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Accumulated deficit	$ 23,492,308	$ 20,978,751
Cash	2,632,761	4,517,604	$ 652,093	$ 1,128,556
Shop.DSLaboratories.com [Member]
Online sale revenue	125,041	$ 85,636
Costco.com [Member]
Online sale revenue	$ 315,404

RESTATEMENT OF FINANCIAL STAT23

RESTATEMENT OF FINANCIAL STATEMENTS (Schedule of Consolidated Statements of Operations and Comprehensive Loss) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2015
Net Revenue	$ 2,325,035	$ 2,698,010
Cost of Goods Sold	1,434,066	1,214,215
Gross Profit	890,969	1,483,795
Selling and marketing
Commissions and consulting	188,643	169,372
Other selling and marketing expenses	969,416	620,906
Total selling and marketing	1,158,059	790,278
General and administrative
Salary and personnel costs	641,814	512,451
Professional fees and consulting costs	1,208,676	377,399
Other general and administrative expenses	254,252	440,333
Total general and administrative	2,104,742	1,330,183
Total operating costs and expenses	3,262,801	2,120,461
Operating Loss	(2,371,832)	(636,666)
Other Income (Expense)
Interest expense	(10,231)	(15,855)
Impairment of intangible asset		(337,500)
Other	(131,494)	120,475
Total other income (expense)	(141,725)	(232,880)
Net Loss	(2,513,557)	(869,546)
Net Loss Attributable to Non-Controlling Interest
Net Loss Attributable to Common Shareholders	$ (2,513,557)	$ (869,546)
Basic and Diluted Earnings per Share:
Weighted average shares outstanding	22,556,765	16,256,461
Net Loss per share	$ (0.11)	$ (0.05)
Other Comprehensive Loss:
Foreign currency translation adjustment	$ 223,171	$ (14,893)
Comprehensive loss	$ (2,290,386)	(884,439)
Previously Reported [Member]
Net Revenue		2,803,920
Cost of Goods Sold		1,138,760
Gross Profit		1,665,160
Selling and marketing
Commissions and consulting		169,372
Other selling and marketing expenses		607,406
Total selling and marketing		776,778
General and administrative
Salary and personnel costs		512,451
Professional fees and consulting costs		376,411
Other general and administrative expenses		189,278
Total general and administrative		1,078,140
Total operating costs and expenses		1,854,918
Operating Loss		(189,758)
Other Income (Expense)
Interest expense		(15,855)
Impairment of intangible asset
Other		120,475
Total other income (expense)		104,620
Net Loss		(85,138)
Net Loss Attributable to Non-Controlling Interest
Net Loss Attributable to Common Shareholders		$ (85,138)
Basic and Diluted Earnings per Share:
Weighted average shares outstanding		16,256,461
Net Loss per share		$ (0.01)
Other Comprehensive Loss:
Foreign currency translation adjustment		$ (14,893)
Comprehensive loss		(100,031)
Adjustment [Member]
Net Revenue		(105,910)
Cost of Goods Sold		75,455
Gross Profit		(181,365)
Selling and marketing
Commissions and consulting
Other selling and marketing expenses		13,500
Total selling and marketing		13,500
General and administrative
Salary and personnel costs
Professional fees and consulting costs		988
Other general and administrative expenses		251,055
Total general and administrative		252,043
Total operating costs and expenses		265,543
Operating Loss		(446,908)
Other Income (Expense)
Interest expense
Impairment of intangible asset		(337,500)
Other
Total other income (expense)		(337,500)
Net Loss		(784,408)	$ (1,125,792)
Net Loss Attributable to Non-Controlling Interest
Net Loss Attributable to Common Shareholders		$ (784,408)
Basic and Diluted Earnings per Share:
Weighted average shares outstanding
Net Loss per share		$ (0.04)
Other Comprehensive Loss:
Foreign currency translation adjustment
Comprehensive loss		$ (784,408)

RESTATEMENT OF FINANCIAL STAT24

RESTATEMENT OF FINANCIAL STATEMENTS (Schedule of Consolidated Statements of Cash Flows) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2015
Cash Flows from Operating Activities:
Net loss	$ (2,513,557)	$ (869,546)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	141,361	32,307
Impairment of intangible assets		337,500
Provision (recovery) of bad debts	(65,241)	(16,119)
(Recovery) Provision for obsolete inventory		1,087
Stock issued for services	24,000	100,500
Changes in operating assets and liabilities:
Accounts receivable, net	464,580	139,088
Inventories, net	270,748	(83,561)
Prepaid expenses and other current assets	53,272	830
Accounts payable	184,863	(233,781)
Accrued expenses	(427,418)	(48,129)
Other current liabilities	(209,196)	(261,312)
Net cash used in operating activities	(2,076,588)	(901,136)
Cash Flows from Investing Activities:
Purchase of furniture and equipment		526
Purchase of injection molds		(14,250)
Net cash used in investing activities	468	(13,724)
Cash Flows from Financing Activities:
Repayment of loans and notes	(100,719)	(2,965)
Proceeds from loans and notes	97,966
Proceeds from stock subscriptions		220,000
Net cash provided by financing activities	(2,753)	217,035
Effect of exchange rate changes on cash	194,030	221,362
Decrease in cash	(1,884,843)	(476,463)
Cash, Beginning of Period	4,517,604	1,128,556	$ 1,128,556
Cash, End of Period	$ 2,632,761	652,093
Previously Reported [Member]
Cash Flows from Operating Activities:
Net loss		(85,138)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		32,307
Impairment of intangible assets
Provision (recovery) of bad debts		(16,504)
(Recovery) Provision for obsolete inventory		1,087
Stock issued for services		100,500
Changes in operating assets and liabilities:
Accounts receivable, net		(217,494)
Inventories, net		(159,016)
Prepaid expenses and other current assets		830
Accounts payable		(233,780)
Accrued expenses		(62,617)
Other current liabilities		(261,311)
Net cash used in operating activities		(901,136)
Cash Flows from Investing Activities:
Purchase of furniture and equipment		526
Purchase of injection molds		(14,250)
Net cash used in investing activities		(13,724)
Cash Flows from Financing Activities:
Repayment of loans and notes		(2,965)
Proceeds from stock subscriptions		220,000
Net cash provided by financing activities		217,035
Effect of exchange rate changes on cash		221,362
Decrease in cash		(476,463)
Cash, Beginning of Period		1,128,556	1,128,556
Cash, End of Period		652,093
Adjustment [Member]
Cash Flows from Operating Activities:
Net loss		(784,408)	(1,125,792)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
Impairment of intangible assets		337,500
Provision (recovery) of bad debts		385
(Recovery) Provision for obsolete inventory
Stock issued for services
Changes in operating assets and liabilities:
Accounts receivable, net		356,582
Inventories, net		75,455
Prepaid expenses and other current assets
Accounts payable		(1)
Accrued expenses		14,488
Other current liabilities		(1)
Net cash used in operating activities
Cash Flows from Investing Activities:
Purchase of furniture and equipment
Purchase of injection molds
Net cash used in investing activities
Cash Flows from Financing Activities:
Repayment of loans and notes		2,965
Proceeds from stock subscriptions
Net cash provided by financing activities
Effect of exchange rate changes on cash
Decrease in cash
Cash, Beginning of Period
Cash, End of Period

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Bulk product and raw materials	$ 2,225,381	$ 2,502,402
Work in process	234,201	213,832
Merchandise inventory	1,227,842	1,172,614
Inventory in transit	154,656	231,623
Total	3,842,080	4,120,471
Less: Allowance	(379,615)	(387,258)
Inventory, net, total	3,462,465	3,733,213
Reserve for slow moving inventory	249,319
Merchandise sold to barter company	$ 2,228,617	$ 956,176

INTANGIBLE ASSETS (Schedule of

INTANGIBLE ASSETS (Schedule of Intangible Assets) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 27,553	$ 27,412
Total intangible assets	$ 460,383	483,765
Weighted average remaining amortization period	5 years 9 months 29 days
Distribution rights in Brazil [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, gross	$ 750,000	750,000
Finite-lived intangible asset, accumulated amortization	(750,000)	(750,000)
Finite-lived intangible assets, net, total
Pure Guild brand rights [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, gross	159,086	159,086
Finite-lived intangible asset, accumulated amortization	(159,086)	(159,086)
Finite-lived intangible assets, net, total
DS Mexico customer list [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, gross	707,716	704,087
Finite-lived intangible asset, accumulated amortization	(274,886)	(247,734)
Finite-lived intangible assets, net, total	$ 432,830	$ 456,353

INTANGIBLE ASSETS (Schedule o27

INTANGIBLE ASSETS (Schedule of Future Amortization Expense for Intangible Assets) (Details)	Mar. 31, 2016USD ($)
Finite-Lived Intangible Assets [Line Items]
2,016	$ 78,232
2,017	78,232
2,018	78,232
2,019	78,232
Beyond	143,425
Amortized cost of assets	456,353
DS Mexico customer list [Member]
Finite-Lived Intangible Assets [Line Items]
2,016	78,232
2,017	78,232
2,018	78,232
2,019	78,232
Beyond	143,425
Amortized cost of assets	$ 456,353

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	May 27, 2016	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Loss Contingencies [Line Items]
Rent expenses			$ 535,012	$ 489,643
PhotoMedex Civil Action [Member] | Subsequent Event [Member]
Loss Contingencies [Line Items]
Damages sought in litigation matter	$ 3,000,000
Settled Litigation - Asheville, NC Office Lease [Member]
Loss Contingencies [Line Items]
Damages sought in litigation matter			$ 73,000
Damages awarded in litigation matter		$ 73,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Father of Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Payment made to related party	$ 25,808	$ 25,808
Sister of Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Payment made to related party	6,250
Dr. Fernando Tamez [Member]
Related Party Transaction [Line Items]
Payment made to related party	$ 15,000	$ 15,000

BARTER CREDITS (Details)

BARTER CREDITS (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Barter Credits
Merchandise sold to barter company	$ 2,228,617	$ 956,176

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - USD ($)	May 27, 2016	May 02, 2016	Dec. 16, 2013	Apr. 30, 2016	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014	Jan. 31, 2016	Dec. 31, 2013
Subsequent Event [Line Items]
Increased net loss due to adjustment					$ 2,513,557	$ 869,546
Personal expenses paid for Daniel Khesin								$ 40,000	$ 76,000
Merchandise sold to barter company					$ 2,228,617			$ 956,176
Stock purchase agreement amount										$ 1,996,500
Shares in stock purchase agreement										605,000
Offset of subscription receivable against additional paid in capital										$ 1,196,500
Adjustment [Member]
Subsequent Event [Line Items]
Increased net loss due to adjustment						$ 784,408	$ 1,125,792
Abner Silva [Member]
Subsequent Event [Line Items]
Advance to related party											$ 11,500
Chief Executive Officer [Member]
Subsequent Event [Line Items]
Value of common stock payment included in base salary			$ 50,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Merchandise sold to barter company				$ 4,566,717
Subsequent Event [Member] | PhotoMedex Civil Action [Member]
Subsequent Event [Line Items]
Damages sought	$ 3,000,000
Subsequent Event [Member] | Renee Barch-Niles Claim [Member] | Potential Litigation [Member]
Subsequent Event [Line Items]
Claim amount sought - shares of stock		$ 2,500,000
Claim amount sought - commissions		123,000
Claim amount sought - severance payments		$ 300,000