DS Healthcare (DSKX) 10-Q 14 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 14, 2017
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
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	Q2
Document Fiscal Year Focus	2,017
Entity Filer Category	Smaller Reporting Company
Entity Units Outstanding		26,037,330

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current Assets
Cash	$ 273,058	$ 322,319
Accounts receivable, net	1,502,332	2,516,414
Inventories, net	2,134,521	2,251,005
Prepaid expenses and other current assets	192,467	114,612
Total Current Assets	4,102,378	5,204,350
Furniture and Equipment, net	92,453	106,531
Intangible Assets, net	352,431	340,295
Other Assets	85,353	67,108
TOTAL ASSETS	4,632,615	5,718,284
Current Liabilities
Accounts payable	3,255,253	2,413,000
Accrued expenses	1,803,694	1,235,914
Note payable	37,896	75,932
Other current liabilities	725,786	712,232
Total Current Liabilities	5,822,629	4,437,078
Long Term Debt, net of current portion	654,021	47,587
TOTAL LIABILITIES	6,476,650	4,484,665
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity
Preferred stock, $0.001 par value, 30 million shares authorized: 0 shares issued and outstanding at June 30, 2017 and December 31, 2016.
Common stock, $0.001 par value, 300 million shares authorized: 26,037,330 and 23,537,330 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively	26,038	23,538
Additional paid-in-capital	29,308,054	29,060,555
Accumulated deficit	(31,405,369)	(27,918,109)
Accumulated comprehensive income	227,242	67,635
Total Shareholders' Equity	(1,844,035)	1,233,619
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 4,632,615	$ 5,718,284

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
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	26,037,330	23,537,330
Common stock, shares outstanding	26,037,330	23,537,330

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Net Revenue	$ 2,230,214	$ 4,844,917	$ 4,324,607	$ 7,169,952
Cost of Goods Sold	915,244	3,332,052	1,978,481	4,766,118
Gross Profit	1,314,970	1,512,865	2,346,126	2,403,834
Selling and marketing
Commissions and consulting	184,507	387,648	399,414	576,291
Marketing and promotion	362,629	448,247	778,243	927,572
Other selling and marketing expenses	478,969	423,278	865,912	913,369
Total selling and marketing	1,026,105	1,259,173	2,043,569	2,417,232
General and administrative
Salary and personnel costs	855,162	612,944	1,468,483	1,254,758
Professional fees and consulting costs	1,291,561	982,913	1,644,678	2,191,589
Other general and administrative expenses	725,199	284,198	974,213	538,451
Total general and administrative	2,871,922	1,880,055	4,087,374	3,984,798
Total operating costs and expenses	3,898,027	3,139,228	6,130,943	6,402,030
Operating Income (Loss)	(2,583,057)	(1,626,363)	(3,784,817)	(3,998,196)
Other Income (Expense)
Interest expense	(45,726)	(62,530)	(95,784)	(72,761)
Other	291,224	67,981	393,341	(63,514)
Total other income (expense)	245,498	5,451	297,557	(136,275)
Loss Before Income Taxes	(2,337,559)	(1,620,913)	(3,487,260)	(4,134,470)
Income Tax Expense
Net Loss	$ (2,337,559)	$ (1,620,913)	$ (3,487,260)	$ (4,134,470)
Basic and Diluted Earnings per Share:
Weighted average shares outstanding	23,537,330	22,556,765	23,537,330	22,556,765
Loss per share	$ (0.10)	$ (0.07)	$ (0.15)	$ (0.18)
Other Comprehensive Income:
Foreign currency translation adjustment	$ 110,566	$ 54,943	$ 138,202	$ 278,115
Comprehensive (loss) income	$ (2,226,993)	$ (1,565,970)	$ (3,349,058)	$ (3,856,355)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flows from Operating Activities:
Net Loss	$ (3,487,260)	$ (4,134,470)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	58,314	197,572
Stock issued for services		24,000
Changes in operating assets and liabilities:
Accounts receivable	1,014,082	(54,710)
Inventories	116,484	801,253
Prepaid expenses and other current assets	(77,855)	115,966
Accounts payable	842,253	470,502
Accrued expenses	567,780	(342,967)
Other current liabilities	13,554	46,861
Net cash used in operating activities	(952,648)	(2,875,993)
Cash Flows from Investing Activities:
Purchases of property & equipment	(7,155)
Other assets	(18,245)	(64,462)
Net cash used in investing activities	(25,400)	(64,462)
Cash Flows from Financing Activities:
Proceeds of loans and notes	720,582	30,006
Repayment of loans and notes	(152,183)	(68,807)
Proceeds from sale of stock subscription	250,000
Net cash provided (used) by financing activities	818,399	(38,801)
Effect of exchange rate changes on cash	110,388	139,795
Decrease in Cash	(49,261)	(2,839,461)
Cash, Beginning of Period	322,319	4,517,604
Cash, End of Period	273,058	1,678,143
Supplemental Information:
Cash paid for interest

ORGANIZATION AND NATURE OF BUSI

ORGANIZATION AND NATURE OF BUSINESS	6 Months Ended
	Jun. 30, 2017
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 2016-QTR 2016-YTD Three months ended June 30, 2016 Six months ended June 30, 2016 2017-QTR 2017-YTD Three months ended June 30, 2017 Six months ended June 30, 2017 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	6 Months Ended
	Jun. 30, 2017
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 Inc., and Divine Skin Laboratories, S.A. de CV (“DS Mexico”). Also included in the consolidated financial statements are the operating activities of Velocity Storage and Packaging, LLC (“Velocity”), which were accounted for as Variable Interest Entity (“VIE”) through October 31, 2016. As of November 1, 2016, Velocity employees have been hired directly by DS Healthcare and the VIE is no longer used. All significant intercompany balances and transactions have been eliminated in consolidation. 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 March 31, 2017. 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 June 30, 2017 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, 2017. 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 Inc., and Divine Skin Laboratories, S.A. de CV (“Mexico”). Also included in the consolidated financial statements are the operating activities of Velocity Storage and Packaging, LLC (“Velocity”), which were accounted for as Variable Interest Entity (“VIE”) through October 31, 2016. As of November 1, 2016, Velocity employees have been hired directly by DS Healthcare and the VIE is no longer used. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. In the fourth quarter of fiscal 2016, the Company concluded that it was appropriate to classify its related party receivable with DS Espana, a company owned by Mr. Fernando Tamez who is our Chief Operating Officer, as a long-term investment ( see - Footnote 8. Related Party transactions). Previously, such investment had been classified as a trade receivable resulting from shipments of product directly to DS Espana. Management had previously disclosed it had an informal agreement with Mr. Tamez because of the Company’s interest in purchasing his company in Spain with the trade receivable to be considered as part of the purchase price, however no written agreement has ever consummated to date. During the second quarter of 2017, the Company has elected to exclude this trade receivable from any future agreement and purchase price, and has requested the trade receivable be paid by October 1, 2017. Accordingly, the classification to report this under the other assets caption, and the corresponding reclassification has also been made to the consolidated condensed balance sheet for the year ending December 31, 2016, to reflect the sale of product as a receivable rather than as an investment and component of other assets. This change in classification does not materially affect previously reported cash flows from operations or from financing activities in the Consolidated Condensed Statement of Cash Flows, and had no effect on the previously reported Consolidated Condensed Statement of Operations for any period. For the year ended December 31, 2016, $488,054 was previously classified as other assets on the accompanying consolidated balance sheet. Use of Estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the 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 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, · Estimates made in connection with our acquisition loss reserve, 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 June 30, 2017 and December 31, 2016, the allowance for uncollectable accounts was $591,836 and $725,929, respectively, including reserves for product returns and advertising costs. 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. At June 30, 2017 and December 31, 2016, the allowance for obsolescence was $392,745 and $651,641 at June 30, 2017 and December 31, 2016, respectively. Revenue Recognition The Company’s revenue recognition policies are in compliance with ASU No. 2014-09, “Revenue from Contracts with Customers”, which establishes core principle of the revenue recognition that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those good or services. The Company recognizes revenue when all of the following criteria are met: · Identify the contract(s) with a customer, · Identify the separate performance obligations in the contract, · Determine the transaction price, · Allocate the transaction price to the separate performance obligations, and · Recognize revenues when (or as) the Company satisfies a performance obligation. 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, a chemist and a lab technician that identify new technology, test product alternatives and improve existing formulations and technologies. In addition, our Founder, Mr. Daniel Khesin, devotes a 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 $72,493 and $64,051 for the six months ended June 30, 2017 and 2016, respectively. On February 8, 2017, the Company entered into a Joint Venture arrangement with Evercare Prohealth Technologies LTD. (EverCare) for the development of certain new products, whereby the operational costs would be shared between the two companies. Pursuant to that agreement, for the six months ended June 30, 2017 the two companies shared operational costs totaling $55,000. 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 -0- and 444,213 shares as of June 30, 2017 and 2016, respectively.

LIQUIDITY and GOING CONCERN

LIQUIDITY and GOING CONCERN	6 Months Ended
	Jun. 30, 2017
LIQUIDITY and GOING CONCERN [Abstract]
LIQUIDITY and GOING CONCERN	NOTE 3. – LIQUIDITY and GOING CONCERN We have sustained operational losses since our inception. At June 30, 2017, we had an accumulated deficit of approximately $31,405,369. 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 June 30, 2017, we had $273,058 in cash. 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. We are 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 are implementing, and will continue to implement, various measures to address our financial condition.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jun. 30, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 4. – 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 May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under this new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The guidance is effective prospectively for annual periods beginning on or after December 15, 2017. Early adoption is permitted. 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 March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). primarily to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost, ASU 2017-07 was issued to improve the reporting of net benefit cost in the financial statements by adding a standard-setting project to provide additional guidance on the presentation of net benefit cost in the income statement and on the components eligible for capitalization in assets. Public business entities should apply ASU 2017-07 for annual periods beginning after December 15, 2017, including interim periods within those annual periods. 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 February 2017, the FASB issued 2017-05—Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). The FASB is issuing this update to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the update to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. 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 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business. The standard provides guidance to help entities determine whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The standard is required to be applied prospectively. The Company is evaluating the standard, including the impact on its consolidated financial statements and results of operations. 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 February 2016, the (FASB) issued 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 determined that the effect of adopting this standard will not have a material effect on the Company’s consolidated financial position and results of operations. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, 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 has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial position and results of operations.

INVENTORIES

INVENTORIES	6 Months Ended
	Jun. 30, 2017
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 5. – INVENTORIES Significant components of inventory at June 30, 2017 and December 31, 2016 consist primarily of: 2017 2016 Bulk product and raw materials $ 1,734,007 $ 1,739,309 Work in process 367,280 196,451 Merchandise inventory 327,109 815,103 Inventory in transit 98,870 151,783 Less: Allowance (392,745 ) (651,641 ) $ 2,134,521 $ 2,251,005 In March 2016, the Company, under former management, entered in a credit barter 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 six months ended June 30, 2016, the trade credits acquired under the agreement totaled $4,566,717, have no expiration and can be used at any time. The cost of slow moving inventory under the arrangement totaled $505,623. See “Footnote 9. – Barter Credits” for additional information regarding the revenue recognition of the barter credits.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	6 Months Ended
	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	NOTE 6. – INTANGIBLE ASSETS Significant components of intangible assets at June 30, 2017 and December 31, 2016 consist of: 2017 2016 DS Mexico customer list $ 677,213 $ 590,821 Less: Accumulated amortization (351,147 ) (273,528 ) Net customer list 326,066 317,293 Goodwill 26,365 23,002 $ 352,431 $ 340,295 The change in the un-amortized amounts of the customer list and goodwill balances is a result of the fluctuations in foreign exchange rates and the translation of the balance sheets, and not as a result of any acquisitions during the periods covered under this filing. The following table represents the amortized cost of the various assets over the remaining years; the weighted average remaining period is 5.83 years. 2017 2018 2019 2020 Beyond Total Asset: Mexican Customer list $ 72,537 $ 72,537 $ 72,537 $ 72,537 $ 27,145 $ 317,293 $ 72,537 $ 72,537 $ 72,537 $ 72,537 $ 27,145 $ 317,293

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 7. – COMMITMENTS AND CONTINGENCIES Pending and threatened litigation The Company is a party to or otherwise involved in legal proceedings arising in the normal and ordinary course of business. As of the date of this report, except as otherwise disclosed below, we are not aware of any other proceeding, threatened or pending, against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position. The Company leases a facility for its executive office and warehouse in Pompano Beach, FL. On June 15, 2017, the Company was served a tenant eviction notice in connection with this lease which the Company intended to vacate resulting from the need for rent cost reductions. The summons calls for payments of approximately $45,300 for past due rent for the month of May 2017. On July 14, 2017, the company was issued a Writ of Possession and vacated the Pompano Beach, FL facility. In accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations (ASC 420) the Company recorded an estimate of the potential liability associated with abandoning this location of approximately $596,000 as of June 30,2017 which is included in accounts payable of the accompanying consolidated balance sheet. As of the date of this filing the Company has not reached a settlement in the matter. On March 29, 2016, DS Healthcare, Mr. Khesin, and certain former members of the Board of Directors were sued in a class action styled, Prasant Shah v. DS Healthcare Group, Inc., et. al., Case No. 16-60661, which is pending in the United States District Court for the Southern District of Florida. A later-filed class action has been consolidated. The class action arises from the Company’s March 23, 2016 and March 28, 2016 8-K filings, which stated, in pertinent part, that the audit committee had concluded that the unaudited condensed consolidated financial statements of the Company for the two fiscal quarters ended June 30, 2015 and September 30, 2015 (the “June and September 2015 Quarters”), should no longer be relied upon because of certain errors in such financial statements, and that Daniel Khesin had been terminated for cause and removed as Chairman and a member of the Board of Directors. Plaintiffs have until November 2, 2016 to file an Amended Complaint, which DS Healthcare must respond to no later than December 19, 2016. The Company also received the first of three related shareholder derivative demands was on March 29, 2016. A mediation concerning the class action and the derivative demands was scheduled for October 17, 2016, in Miami, Florida. As a result of this mediation hearing and subsequent negotiations, there was an agreement with Plaintiffs in both the securities case and the derivative demands as to amount of the settlement and most of the key terms. The parties have negotiated the precise terms of the Court stipulations that were filed under a Stipulation of Settlement Agreement on May 25, 2017 at the United States District Court, Southern District of Florida. 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 $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 was scheduled for October 13, 2016 however no resolution was reached. A settlement conference occurred on January 31, 2017 and once again no settlement was achieved, however both parties continued to work towards reaching an agreement, and on June 22, 2017 an agreement was finalized and An Order of Dismissal With Prejudice was filed on this date with the United State District Court, Southern District of New York. On December 28, 2015, the Company, our former Chief Executive Officer Daniel Khesin, 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 vigorously defended the action and an Order of Dismissal With Prejudice was achieved on January 5, 2017. 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 not recorded reserves and contingent liabilities 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. It is impossible for us to predict with any certainty the outcome of pending disputes, and unless otherwise stated below, we cannot predict whether any liability arising from pending claims and litigation will be material in relation to our consolidated financial position or results of operations. For additional information regarding these matters, see the Pending Transactions disclosures in the Company’s Form 10-K for the year ending December 31, 2016 filed on March 31, 2017.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 8. – RELATED PARTY TRANSACTIONS For the six months ended June 30, 2017 and 2016, the Company was a party to the following related party transactions: · The Company paid $53,745 and $51,616 during 2017-YTD and 2016-YTD, respectively, as compensation to the father of the former Chief Executive Officer, Daniel Khesin, · The Company paid $0 and $12,500 during 2017-YTD and 2016-YTD, respectively, as compensation to the sister of the former Chief Executive Officer, Daniel Khesin, · The Company paid $30,000 and $30,000 in 2017-YTD and 2016-YTD, respectively, as compensation to Dr. Fernando Tamez, · The Company paid $100,000 and $0 in 2017-YTD and 2016-YTD, respectively, to Dr. Fernando Tamez, who is shareholder of the Company, for compensation as our Chief Operating Officer. · Mr. Tamez, who is a shareholder and our Chief Operating Officer, owns an interest with an entity in Spain with which the Company sold product. During 2017-YTD and 2016-YTD, the Company sold product totaling $171,858 and $208,272, respectively, and the outstanding accounts receivable balance as of June 30, 2017 and December 31, 2016 was $ 659,912 and $488,054, respectively. · The Company recorded a liability due to Dr. Fernando Tamez, who is a shareholder and our Chief Operating Officer, of approximately MXN $2,118,000 Mexican pesos, or $129,200, relating to his profit sharing agreement and is included in other current liabilities in the accompanying balance sheet as of June 30, 2017 and December 31, 2016. · Dr. Fernando Tamez, who is a shareholder and our Chief Operating Officer, owns an interest with an entity in Brazil with which the Company sold product. During 2017-YTD and 2016-YTD, there were no sales to the entity in Brazil, respectively, and there were no outstanding accounts receivable balances as of June 30, 2017 and December 31, 2016, respectively. This entity has since ceased operations during the first quarter of 2017. · Executed and effective on December 29, 2016, the Company entered into an agreement to acquire the distribution rights of its Brazilian distributor, of which our current Acting Chief Operating Officer, Dr. Fernando Tamez, and former Officer Abner Silva, are shareholders and listed as sellers on the agreement, to acquire 100% of the distributers shares in exchange for $47,000 in cash to satisfy certain liabilities, guaranteed employment contract for an employee valued at approximately $28,000, and the option to receive 500 units per month at no cost for 24 months. The agreement includes the Company assuming all current operating cost of the distributor during the period between the execution of the agreement and the alteration of the shareholder’s agreement. The Company determined the agreement’s value to be approximately $250,000. On January 30, 2017, the Company paid $33,000 towards the purchase price. However as of the date of the Company filing its annual 10-K report for the year ended December 31, 2016, the Brazilian distributor was not cooperative with the Company’s attempts to perform the required due diligence and refused to grant access to the records or provide the required information preventing the Company to properly consolidate the entity. Therefore, on March 29, 2017, the Company informed the Brazilian distributor, by way of legal letter, that they are in breach of the agreement and subsequently rescinded the agreement dated December 29, 2016 and has demanded a return of the monies paid to date. Due to the uncertainty of the outcome of this legal action and the uncertainty of the Company’s ability to obtain the net assets of the distributor in 2016, the Company deemed it necessary to expense the full value of the agreement in 2016 totaling $250,000, which was subsequently reversed during the 2017-QTR and is included in Other Income/Expense - Other in the accompanying condensed consolidated statement of operations, resulting from the opinion of our legal counsel having determined that the Brazilian distributor violated warranties under the agreement on the very date it was entered into rendering the contract void. The Brazilian entity has ceased operations during March 2017. · On February 8, 2017, the Company entered into a Stock Purchase & Joint Venture and Financing arrangement with EverCare Prohealth Technologies LTD (“EverCare”), a private Hong Kong company. With respect to the Stock Purchase, EverCare acquired the totality of the share representing DS Laboratories capital stock in exchange for financing and consideration discussed below. With respect to financing, EverCare would provide $2 million in financing to the Company. Included in the agreement is the granting of exclusive distribution rights to EverCare for Asia, Australia and Africa and the appointment by EverCare of two additional members to the Company’s board of directors. Additionally, the Company has pledged via transfer of certain intellectual property, held under its DS Laboratories subsidiary, to EverCare as security for the financing. Such pledge includes buyback provisions exercisable within 5 years of the closing date of the transaction. Under the terms of the Agreement, the Company may buyback the intellectual property held under its DS Laboratories subsidiary from EverCare between March 1, 2022 and May 31, 2022, and would have to pay the equivalent to the purchase price plus 7.5% annualized compounded interest which is to be calculated over each installment as of the date of payment to the Company. A condition of the buyback option is that effective with the financing arrangement, DS Laboratories trademarks are subject to issuance by the Company of shares equaling 5% of its capital stock at no cost at the date of closing the buyback, issuance of the Company of 1.1 million shares representing it capital stock and granting EverCare an option to acquire the total of these share for $2.2 million. Additionally, the Company received as consideration 3 million shares of Evercare, warrants to purchase up to 900,000 shares of EverCare at $0.25 per share as part of the arrangement which can be sold back to EverCare, under certain conditions, to obtain additional financing. As of June 30, 2017, EverCare has provided $0.5 million in financing. Interest under the financing will accrue at 7.5% per annum. The Joint Venture arrangement with EverCare is for the development of certain new products, whereby the operational costs would be shared between the two companies. For the three months and six months ended June 30, 2017, the two companies shared operational costs totaling $19,149 and $55,000, respectively. In accordance with the agreement the Company recorded royalty expense due to EverCare of $100,194, based on qualified sales, which is included in cost of goods sold in the accompanying consolidated condensed statement of operations for the three months and six months ended June 30, 2017. · On July 17, 2017, the Company consummated an offering of an aggregate of 4,400,000 shares of the Company’s common stock, par value $0.001 per share. The price per Share was $0.10, for gross proceeds of $440,000. The Company’s CEO and Director, Yasuhiro Fujiwara, purchased 2,500,000 shares of the Company’s common stock in the Offering, and on June 30, 2017, the Company received Mr. Fujiwara’s proceeds totaling $250,000 in advance of the offering. The Offering was made only to accredited investors, as such term is defined in Regulation D under the Securities Act of 1933, as amended (the “Act”). The Shares issued to the purchasers have not been registered under the Act.

BARTER CREDITS

BARTER CREDITS	6 Months Ended
	Jun. 30, 2017
Barter Credits
BARTER CREDITS	NOTE 9. – BARTER CREDITS In December 2015, the Company, under former management entered an agreement with a barter trading company to sell slow moving, finished goods in exchange for prepaid credits. During the 2016-QTR and 2016-YTD, the Company sold merchandise totaling $2,338,100 and $4,566,717to this barter trading company. However, these credits proved to have no economic value and accordingly revenue did not meet the criteria as defined in ASC 605 . 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 and six months ended June 30, 2016.

DEBT

DEBT	6 Months Ended
	Jun. 30, 2017
Debt Disclosure [Abstract]
DEBT	NOTE 10 – DEBT Bank Loans On March 31, 2017, the Company’s Mexican subsidiary obtained a bank loan for MXN $482,000.00 or $25,764.52, payable in May 2017, and bears annual interest of 16.71%. During May 2017 the bank loan was paid in full. On March 31, 2017, the Company’s Mexican subsidiary obtained a bank loan for MXN $1,353,028.04 or $72,323.89, payable in May 2017 and bears annual interest of 14.64%. During May 2017 the bank loan was paid in full. On June 30, 2017, the Company’s Mexican subsidiary obtained a bank loan for MXN $638,287.93 or $35,405.56, payable in July 2017. As of June 30, 2017, the outstanding amount on this bank loan was MXN $638,287.93 or $35,405.56 and bears annual interest of 16.71%. On April 30, 2017, the Company’s Mexican subsidiary obtained a bank loan for MXN $1,570,000 or $87,087.23, payable in April 2020. As of June 30, 2017, the outstanding amount on this bank loan was MXN $1,525,143 or $84,599,04 and bears annual interest of 8.5%. Evercare Sale & Joint Venture Agreement On February 8, 2017, the Company entered into a Stock Purchase & Joint Venture and Financing arrangement with EverCare Prohealth Technologies LTD (“EverCare”), a private Hong Kong company. With respect to the Stock Purchase, EverCare acquired the totality of the share representing DS Laboratories capital stock in exchange for financing and consideration discussed below. With respect to financing, EverCare would provide $2 million in financing to the Company. Included in the agreement is the granting of exclusive distribution rights to EverCare for Asia, Australia and Africa and the appointment by EverCare of two additional members to the Company’s board of directors. Additionally, the Company has pledged via transfer of certain intellectual property, held under its DS Laboratories subsidiary, to EverCare as security for the financing. Such pledge includes buyback provisions exercisable within 5 years of the closing date of the transaction. Under the terms of the Agreement, the Company may buyback the intellectual property held under its DS Laboratories subsidiary from EverCare between March 1, 2022 and May 31, 2022, and would have to pay the equivalent to the purchase price plus 7.5% annualized compounded interest which is to be calculated over each installment as of the date of payment to the Company. A condition of the buyback option is that effective with the financing arrangement, DS Laboratories trademarks are subject to issuance by the Company of shares equaling 5% of its capital stock at no cost at the date of closing the buyback, issuance of the Company of 1.1 million shares representing it capital stock and granting EverCare an option to acquire the total of these share for $2.2 million. Additionally, the Company received as consideration 3 million shares of Evercare, warrants to purchase up to 900,000 shares of EverCare at $0.25 per share as part of the arrangement which can be sold back to EverCare, under certain conditions, to obtain additional financing. As of June 30, 2017, EverCare has provided $0.5 million in financing. Interest under the financing will accrue at 7.5% per annum. The Joint Venture arrangement with EverCare is for the development of certain new products, whereby the operational costs would be shared between the two companies. For the In accordance with the agreement the Company recorded royalty expense due to EverCare of $100,194, based on qualified sales, and is included in cost of goods sold in the accompanying consolidated condensed statement of operations for the three months and six months ended June 30, 2017.

EQUITY

EQUITY	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
EQUITY	NOTE 11 – EQUITY Common Stock On July 17, 2017, the Company consummated an offering of an aggregate of 4,400,000 shares of the Company’s common stock, par value $0.001 per share. The price per Share was $0.10, for gross proceeds of $440,000. The Company’s current Chief Executive Officer and Director, Yasuhiro 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. As of December 31, 2016 the purchase agreement was partially settled. The Company has offset subscription receivable against the additional paid in capital of $1,196,500. The Board of Directors decided to negotiate a revision to the original Stock Purchase Agreement and an agreement was reached on February 8, 2017.

ACQUISITION

ACQUISITION	6 Months Ended
	Jun. 30, 2017
Business Combinations [Abstract]
ACQUISITION	NOTE 12. – ACQUISITION Executed and effective on December 29, 2016, the Company entered into an agreement to acquire the distribution rights of it Brazilian distributor, of which our current Chief Operating Officer Fernando Tamez, and former Officer Abner Silva, are shareholders and listed as sellers on the agreement, to acquire 100% of the distributers shares in exchange for $47,000 in cash to satisfy certain liabilities, guaranteed employment contract for an employee valued at approximately $28,000, and the option to receive 500 units per month at no cost for 24 months. The agreement includes The Company assuming all current operating cost of the distributor during the period between the execution of the agreement and the alteration of the shareholder’s agreement. The Company determined the agreement’s value to be approximately $250,000. On January 30, 2017, the Company paid $33,000 towards the purchase price. However as of the date of the Company filing its annual 10-K report for the year ended December 31, 2016, the Brazilian distributor was not cooperative with The Company’s attempts to perform the required due diligence and refused to grant access to the records or provide the required information preventing the Company to properly consolidating the entity. Therefore, on March 29, 2017, the Company informed the Brazilian distributor, by way of legal letter, that they are in breach of the agreement and subsequently rescinded the agreement dated December 29, 2016 and has demanded a return of the monies paid to date. Due to the uncertainty of the outcome of this legal action and the uncertainty of the Company’s ability to obtain the net assets of the distributor in 2016, the Company deemed it necessary to expense the full value of the agreement in 2016 totaling $250,000, which was subsequently reversed during the 2017-QTR and is included in Other Income/Expense - Other in the accompanying condensed consolidated statement of operations, resulting from the opinion of our legal counsel having determined that the Brazilian distributor violated warranties under the agreement on the very date it was entered into rendering the contract void. The Brazilian entity has ceased operations during March 2017. In June 2017, the Company formed a new wholly owned subsidiary, Divine Skin Laboratories Canada Inc. Operations for this subsidiary commenced in June 2017, the results of which are not material and is included in the condensed consolidated statement of operations and consolidated balance sheet for the period ending June 30, 2017.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 13. – SUBSEQUENT EVENTS On July 17, 2017, the Company consummated an offering of an aggregate of 4,400,000 shares of the Company’s common stock, par value $0.001 per share. The price per Share was $0.10, for gross proceeds of $440,000. The Company’s CEO and Director, Yasuhiro Fujiwara, and the Company’s Chief Operating Officer, Fernando Tamez, purchased 2,500,000 shares and 1,900,000 shares, respectively, of the Company’s common stock in the Offering, and on June 30, 2017, the Company received Mr. Fujiwara’s proceeds totaling $250,000 in advance of the offering. The Offering was made only to accredited investors, as such term is defined in Regulation D under the Securities Act of 1933, as amended (the “Act”). The Shares issued to the purchasers have not been registered under the Act. On June 15, 2017, the Company was served a tenant eviction notice in connection with a facility it leases for executive offices and warehouse in Pompano Beach, FL. The summons calls for payments of approximately $45,300 for past due rent for the month of May 2017. On July 14, 2017, the company was issued a Writ of Possession and vacated the Pompano Beach, FL facility.In accordance with FASB Accounting Standards Codification Topic 420, Exit or Disposal Cost Obligations (“ASC 420”) the Company recorded an estimate of the potential liability associated with abandoning this location of approximately $596,000 as of June 30,2017 which is included in accounts payable of the accompanying consolidated balance sheet. As of the date of this filing the Company has not reached a settlement in the matter. Currently the Company is operating from an office in Miami, FL and is paying rent on under a month to month lease that was obtained in May 2017. All inventory has been relocated to secured warehouses, also located in Miami, FL. The Company believes that the eviction has not materially affected the Company’s ability to ship merchandise to customers or operate. The Company is actively seeking a new location and as of the date of this filing is still searching within Florida’s Dade and Broward Counties.

SUMMARY OF SIGNIFICANT ACCOUN19

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2017
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 Inc., and Divine Skin Laboratories, S.A. de CV (“DS Mexico”). Also included in the consolidated financial statements are the operating activities of Velocity Storage and Packaging, LLC (“Velocity”), which were accounted for as Variable Interest Entity (“VIE”) through October 31, 2016. As of November 1, 2016, Velocity employees have been hired directly by DS Healthcare and the VIE is no longer used. All significant intercompany balances and transactions have been eliminated in consolidation.
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 March 31, 2017. 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 June 30, 2017 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, 2017. 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 Inc., and Divine Skin Laboratories, S.A. de CV (“Mexico”). Also included in the consolidated financial statements are the operating activities of Velocity Storage and Packaging, LLC (“Velocity”), which were accounted for as Variable Interest Entity (“VIE”) through October 31, 2016. As of November 1, 2016, Velocity employees have been hired directly by DS Healthcare and the VIE is no longer used. All significant intercompany balances and transactions have been eliminated in consolidation.
Reclassification of Prior Year Presentation	Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. In the fourth quarter of fiscal 2016, the Company concluded that it was appropriate to classify its related party receivable with DS Espana, a company owned by Mr. Fernando Tamez who is our Chief Operating Officer, as a long-term investment ( see - Footnote 8. Related Party transactions). Previously, such investment had been classified as a trade receivable resulting from shipments of product directly to DS Espana. Management had previously disclosed it had an informal agreement with Mr. Tamez because of the Company’s interest in purchasing his company in Spain with the trade receivable to be considered as part of the purchase price, however no written agreement has ever consummated to date. During the second quarter of 2017, the Company has elected to exclude this trade receivable from any future agreement and purchase price, and has requested the trade receivable be paid by October 1, 2017. Accordingly, the classification to report this under the other assets caption, and the corresponding reclassification has also been made to the consolidated condensed balance sheet for the year ending December 31, 2016, to reflect the sale of product as a receivable rather than as an investment and component of other assets. This change in classification does not materially affect previously reported cash flows from operations or from financing activities in the Consolidated Condensed Statement of Cash Flows, and had no effect on the previously reported Consolidated Condensed Statement of Operations for any period. For the year ended December 31, 2016, $488,054 was previously classified as other assets on the accompanying consolidated balance sheet.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the 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 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, · Estimates made in connection with our acquisition loss reserve, 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 June 30, 2017 and December 31, 2016, the allowance for uncollectable accounts was $591,836 and $725,929, respectively, including reserves for product returns and advertising costs.
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. At June 30, 2017 and December 31, 2016, the allowance for obsolescence was $392,745 and $651,641 at June 30, 2017 and December 31, 2016, respectively.
Revenue Recognition	Revenue Recognition The Company’s revenue recognition policies are in compliance with ASU No. 2014-09, “Revenue from Contracts with Customers”, which establishes core principle of the revenue recognition that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those good or services. The Company recognizes revenue when all of the following criteria are met: · Identify the contract(s) with a customer, · Identify the separate performance obligations in the contract, · Determine the transaction price, · Allocate the transaction price to the separate performance obligations, and · Recognize revenues when (or as) the Company satisfies a performance obligation. 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, a chemist and a lab technician that identify new technology, test product alternatives and improve existing formulations and technologies. In addition, our Founder, Mr. Daniel Khesin, devotes a 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 $72,493 and $64,051 for the six months ended June 30, 2017 and 2016, respectively. On February 8, 2017, the Company entered into a Joint Venture arrangement with Evercare Prohealth Technologies LTD. (EverCare) for the development of certain new products, whereby the operational costs would be shared between the two companies. Pursuant to that agreement, for the six months ended June 30, 2017 the two companies shared operational costs totaling $55,000.
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 -0- and 444,213 shares as of June 30, 2017 and 2016, respectively.

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Jun. 30, 2017
Inventory Disclosure [Abstract]
Schedule of the Significant Components of Inventory	Significant components of inventory at June 30, 2017 and December 31, 2016 consist primarily of: 2017 2016 Bulk product and raw materials $ 1,734,007 $ 1,739,309 Work in process 367,280 196,451 Merchandise inventory 327,109 815,103 Inventory in transit 98,870 151,783 Less: Allowance (392,745 ) (651,641 ) $ 2,134,521 $ 2,251,005

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	Significant components of intangible assets at June 30, 2017 and December 31, 2016 consist of: 2017 2016 DS Mexico customer list $ 677,213 $ 590,821 Less: Accumulated amortization (351,147 ) (273,528 ) Net customer list 326,066 317,293 Goodwill 26,365 23,002 $ 352,431 $ 340,295
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. 2017 2018 2019 2020 Beyond Total Asset: Mexican Customer list $ 72,537 $ 72,537 $ 72,537 $ 72,537 $ 27,145 $ 317,293 $ 72,537 $ 72,537 $ 72,537 $ 72,537 $ 27,145 $ 317,293

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Summary Of Significant Accounting Policies [Line Items]
Prior period adjustment to other assets		$ 488,054
Provision for doubtful accounts receivable	$ 591,836	591,836		$ 725,929
Allowance for inventory obsolescence	392,745	392,745		$ 651,641
Research and development expense		$ 72,493	$ 64,051
Anti-dilutive shares excluded from the earnings per share calculation		0	444,213
EverCare Prohealth Technologies LTD [Member ]
Summary Of Significant Accounting Policies [Line Items]
Research and development expense	$ 19,149	$ 55,000

LIQUIDITY and GOING CONCERN (De

LIQUIDITY and GOING CONCERN (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
LIQUIDITY and GOING CONCERN [Abstract]
Accumulated deficit	$ 31,405,369	$ 27,918,109
Cash	$ 273,058	$ 322,319	$ 1,678,143	$ 4,517,604

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Bulk product and raw materials		$ 1,734,007	$ 1,739,309
Work in process		367,280	196,451
Merchandise inventory		327,109	815,103
Inventory in transit		98,870	151,783
Less: Allowance		(392,745)	(651,641)
Inventory, net, total		$ 2,134,521	$ 2,251,005
Reserve for slow moving inventory	$ 505,623
Merchandise sold to barter company	$ 4,566,717

INTANGIBLE ASSETS (Schedule of

INTANGIBLE ASSETS (Schedule of Intangible Assets) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 26,365	$ 23,002
Total intangible assets	$ 352,431	340,295
Weighted average remaining amortization period	5 years 9 months 29 days
DS Mexico customer list [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, gross	$ 677,213	590,821
Finite-lived intangible asset, accumulated amortization	(351,147)	(273,528)
Finite-lived intangible assets, net, total	$ 326,066	$ 317,293

INTANGIBLE ASSETS (Schedule o26

INTANGIBLE ASSETS (Schedule of Future Amortization Expense for Intangible Assets) (Details)	Jun. 30, 2017USD ($)
Finite-Lived Intangible Assets [Line Items]
2,017	$ 72,537
2,018	72,537
2,019	72,537
2,020	72,537
Beyond	27,145
Amortized cost of assets	317,293
DS Mexico customer list [Member]
Finite-Lived Intangible Assets [Line Items]
2,017	72,537
2,018	72,537
2,019	72,537
2,020	72,537
Beyond	27,145
Amortized cost of assets	$ 317,293

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	May 27, 2016	Jun. 30, 2017
PhotoMedex Civil Action [Member]
Loss Contingencies [Line Items]
Damages sought in litigation matter	$ 3,000,000
Tenant Eviction Notice [Member]
Loss Contingencies [Line Items]
Damages sought in litigation matter		$ 45,300
Accrual for estimated liabilitiy for abandoning property		$ 596,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details)	Feb. 08, 2017USD ($)shares	Jul. 31, 2017USD ($)$ / sharesshares	Jun. 30, 2017USD ($)$ / sharesshares	Jan. 30, 2017USD ($)	Dec. 29, 2016USD ($)shares	Jan. 31, 2016USD ($)	Jun. 30, 2017USD ($)$ / sharesshares	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)$ / sharesshares	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)$ / shares	Jun. 30, 2017MXNshares	Dec. 31, 2016MXN
Related Party Transaction [Line Items]
Proceeds from issuance of financing									$ 720,582	$ 30,006
Other income expense							$ 291,224	$ 67,981	393,341	(63,514)
Research and development expense									$ 72,493	64,051
Common stock par value | $ / shares			$ 0.001				$ 0.001		$ 0.001		$ 0.001
Subsequent Event [Member]
Related Party Transaction [Line Items]
Aggregate common stock shares consummated through offering | shares		4,400,000
Common stock par value | $ / shares		$ 0.001
Common stock issuance price per share | $ / shares		$ 0.10
Gross proceeds from common stock		$ 440,000
Brazilian distributor [Member]
Related Party Transaction [Line Items]
Acquired percentage of shares					100.00%
Cash payment for acquisition				$ 33,000	$ 47,000
Guaranteed employment contract assumed under agreement					$ 28,000
Option to receive per month | shares					500
Option to receive per month period					24 months
Agreement value					$ 250,000
Other income expense						$ 250,000					$ 250,000
Father of former Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Expense incurred with related party									$ 53,745	51,616
Sister of former Chief Executive Officer [Member ]
Related Party Transaction [Line Items]
Expense incurred with related party									0	12,500
Dr. Fernando Tamez [Member]
Related Party Transaction [Line Items]
Expense incurred with related party									30,000	30,000
Revenue from related party									171,858	208,272
Accounts receivables			$ 659,912				$ 659,912		659,912		488,054
Other current liabilities due to related party			$ 129,200				$ 129,200		129,200		$ 129,200
Dr. Fernando Tamez [Member] | Mexican Pesos [Member]
Related Party Transaction [Line Items]
Other current liabilities due to related party | MXN												MXN 2,118,000	MXN 2,118,000
Chief Operating Officer [Member]
Related Party Transaction [Line Items]
Expense incurred with related party									100,000	$ 0
Chief Operating Officer [Member] | Subsequent Event [Member]
Related Party Transaction [Line Items]
Common stock issued | shares		1,900,000
EverCare Prohealth Technologies LTD [Member ]
Related Party Transaction [Line Items]
Proceeds from issuance of financing	$ 2,000,000								$ 500,000
Buyback provisions exercisable period	5 years
Shares received | shares									3,000,000
Warrants to purchase shares | shares			900,000				900,000		900,000			900,000
Exercise price | $ / shares			$ 0.25				$ 0.25		$ 0.25
Interest rate			7.50%				7.50%		7.50%			7.50%
Percentage of capital stock at no cost at date of closing buyback	5.00%
Shares issued for buyback | shares	1,100,000
Buyback option exericse price	$ 2,200,000
Research and development expense							$ 19,149		$ 55,000
Royalty expense							$ 100,194		$ 100,194
Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Gross proceeds from common stock			$ 250,000
Chief Executive Officer [Member] | Subsequent Event [Member]
Related Party Transaction [Line Items]
Common stock issued | shares		2,500,000

BARTER CREDITS (Details)

BARTER CREDITS (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2016
Barter Credits
Merchandise sold to barter company	$ 2,338,100	$ 4,566,717

DEBT (Bank Loans) (Details)

DEBT (Bank Loans) (Details)	Mar. 31, 2017USD ($)	Feb. 08, 2017USD ($)shares	Jun. 30, 2017USD ($)$ / sharesshares	Jun. 30, 2017USD ($)$ / sharesshares	Jun. 30, 2016USD ($)	Jun. 30, 2017MXNshares	Apr. 30, 2017USD ($)	Apr. 30, 2017MXN	Mar. 31, 2017MXN
Debt Instrument [Line Items]
Proceeds from issuance of financing				$ 720,582	$ 30,006
Research and development expense				$ 72,493	$ 64,051
EverCare Prohealth Technologies LTD [Member ]
Debt Instrument [Line Items]
Interest rate			7.50%	7.50%		7.50%
Proceeds from issuance of financing		$ 2,000,000		$ 500,000
Buyback provisions exercisable period		5 years
Shares received | shares				3,000,000
Warrants to purchase shares | shares			900,000	900,000		900,000
Exercise price | $ / shares			$ 0.25	$ 0.25
Percentage of capital stock at no cost at date of closing buyback		5.00%
Shares issued for buyback | shares		1,100,000
Buyback option exercise price		$ 2,200,000
Research and development expense			$ 19,149	$ 55,000
Royalty expense			100,194	100,194
Mexican Subsidiary Bank Loan [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 25,765		$ 35,406	$ 35,406			$ 87,087
Interest rate	16.71%		16.71%	16.71%		16.71%			16.71%
Maturity date	May 31, 2017			Jul. 31, 2017
Outstanding bank loan balance			$ 35,406	$ 35,406
Mexican Subsidiary Bank Loan [Member] | Mexican Pesos [Member]
Debt Instrument [Line Items]
Debt instrument, face amount | MXN						MXN 638,288		MXN 1,570,000	MXN 482,000
Outstanding bank loan balance | MXN						MXN 638,288
Mexican Subsidiary Bank Loan Two [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 72,324
Interest rate	14.64%		8.50%	8.50%		8.50%			14.64%
Maturity date	May 31, 2017			Apr. 30, 2020
Outstanding bank loan balance			$ 84,599	$ 84,599
Mexican Subsidiary Bank Loan Two [Member] | Mexican Pesos [Member]
Debt Instrument [Line Items]
Debt instrument, face amount | MXN									MXN 1,353,028
Outstanding bank loan balance | MXN						MXN 1,525,143

EQUITY (Details)

EQUITY (Details) - USD ($)	1 Months Ended
	Jul. 31, 2017	Jun. 30, 2017	Dec. 31, 2016	Jan. 31, 2016
Class of Stock [Line Items]
Stock Purchase Agreement, shares				605,000
Stock Purchase Agreement, amount				$ 1,996,500
Subscription receivable				$ 1,196,500
Common stock par value		$ 0.001	$ 0.001
Chief Executive Officer [Member]
Class of Stock [Line Items]
Gross proceeds from common stock		$ 250,000
Subsequent Event [Member]
Class of Stock [Line Items]
Aggregate common stock shares consummated through offering	4,400,000
Common stock par value	$ 0.001
Common stock issuance price per share	$ 0.10
Gross proceeds from common stock	$ 440,000
Subsequent Event [Member] | Chief Executive Officer [Member]
Class of Stock [Line Items]
Common stock issued	2,500,000

ACQUISITION (Details)

ACQUISITION (Details) - USD ($)	1 Months Ended			3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 30, 2017	Dec. 29, 2016	Jan. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Business Acquisition [Line Items]
Other income expense				$ 291,224	$ 67,981	$ 393,341	$ (63,514)
Brazilian distributor [Member]
Business Acquisition [Line Items]
Acquired percentage of shares		100.00%
Cash payment for acquisition	$ 33,000	$ 47,000
Guaranteed employment contract assumed under agreement		$ 28,000
Option to receive per month		500
Option to receive per month period		24 months
Agreement value		$ 250,000
Other income expense			$ 250,000					$ 250,000

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - USD ($)	1 Months Ended
	Jul. 31, 2017	Jun. 30, 2017	Dec. 31, 2016	Jan. 31, 2016
Subsequent Event [Line Items]
Stock Purchase Agreement, shares				605,000
Stock Purchase Agreement, amount				$ 1,996,500
Subscription receivable				$ 1,196,500
Common stock par value		$ 0.001	$ 0.001
Tenant Eviction Notice [Member]
Subsequent Event [Line Items]
Damages sought in litigation matter		$ 45,300
Accrual for estimated liabilitiy for abandoning property		596,000
Chief Executive Officer [Member]
Subsequent Event [Line Items]
Gross proceeds from common stock		$ 250,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Aggregate common stock shares consummated through offering	4,400,000
Common stock par value	$ 0.001
Common stock issuance price per share	$ 0.10
Gross proceeds from common stock	$ 440,000
Subsequent Event [Member] | Chief Executive Officer [Member]
Subsequent Event [Line Items]
Common stock issued	2,500,000
Subsequent Event [Member] | Chief Operating Officer [Member]
Subsequent Event [Line Items]
Common stock issued	1,900,000