Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | OCEAN BIO CHEM INC | ||
Entity Central Index Key | 350,737 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Common Stock, Shares Outstanding | 9,146,937 | ||
Entity Public Float | $ 7,071,550 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash | $ 4,070,445 | $ 2,468,415 |
Trade accounts receivable less allowances of approximately $75,000 and $78,000, respectively | 4,931,792 | 5,092,040 |
Receivables due from affiliated companies | 1,190,103 | 1,051,091 |
Inventories, net | 8,600,689 | 7,914,950 |
Prepaid expenses and other current assets | 1,013,952 | 942,820 |
Total Current Assets | 19,806,981 | 17,469,316 |
Property, plant and equipment, net | 4,895,973 | 5,356,388 |
Intangible assets, Net | 967,688 | 1,037,968 |
Total Assets | 25,670,642 | 23,863,672 |
Current Liabilities: | ||
Current portion of long-term debt | 278,392 | 451,148 |
Accounts payable - trade | 1,512,020 | 1,101,720 |
Income taxes payable | 1,447 | |
Accrued expenses payable | 1,099,919 | 1,098,721 |
Total Current Liabilities | 2,891,778 | 2,651,589 |
Deferred tax liability | 213,367 | 239,677 |
Long-term debt, less current portion | 50,426 | 328,818 |
Total Liabilities | 3,155,571 | 3,220,084 |
Commitments and contingencies | ||
Shareholders' Equity: | ||
Common stock - $.01 par value, 12,000,000 shares authorized; 9,146,937 shares and 8,983,374 shares issued, respectively | 91,469 | 89,834 |
Additional paid in capital | 9,604,634 | 9,287,313 |
Accumulated other comprehensive loss | (286,555) | (284,442) |
Retained earnings | 13,105,523 | 11,550,883 |
Total Shareholders' Equity | 22,515,071 | 20,643,588 |
Total Liabilities and Shareholders' Equity | $ 25,670,642 | $ 23,863,672 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Balance Sheets [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 75,000 | $ 78,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 12,000,000 | 12,000,000 |
Common stock, shares issued | 9,146,937 | 8,983,374 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statements of Operation [Abstract] | ||
Net sales | $ 36,205,444 | $ 33,987,487 |
Cost of goods sold | 22,331,761 | 22,647,516 |
Gross profit | 13,873,683 | 11,339,971 |
Operating Expenses: | ||
Advertising and promotion | 3,117,164 | 3,010,758 |
Selling and administrative | 7,660,377 | 7,579,682 |
Total operating expenses | 10,777,541 | 10,590,440 |
Operating income | 3,096,142 | 749,531 |
Other expense | ||
Interest net, (expense) | (17,820) | (33,639) |
Other (expense) | (12,522) | |
Income before income taxes | 3,078,322 | 703,370 |
Provision for income taxes | 983,151 | 242,676 |
Net income | $ 2,095,171 | $ 460,694 |
Earnings per common share - basic and diluted | $ 0.23 | $ 0.05 |
Dividends declared per common share | $ 0.06 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statements of Comprehensive Income [Abstract] | ||
Net income | $ 2,095,171 | $ 460,694 |
Foreign currency translation adjustment | (2,113) | (5,279) |
Comprehensive income | $ 2,093,058 | $ 455,415 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Total | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive loss | Retained Earnings |
Beginning balance at Dec. 31, 2014 | $ 20,032,120 | $ 89,142 | $ 9,131,952 | $ (279,163) | $ 11,090,189 |
Beginning balance, shares at Dec. 31, 2014 | 8,914,274 | ||||
Net income | 460,694 | 460,694 | |||
Options exercised | $ 79 | (79) | |||
Options exercised, shares | 7,844 | ||||
Common stock issued, net of shares withheld for employee taxes | 156,053 | $ 613 | 155,440 | ||
Common stock issued, net of shares withheld for employee taxes, Shares | 61,256 | ||||
Foreign currency translation adjustment | (5,279) | (5,279) | |||
Ending balance at Dec. 31, 2015 | 20,643,588 | $ 89,834 | 9,287,313 | (284,442) | 11,550,883 |
Ending balance, shares at Dec. 31, 2015 | 8,983,374 | ||||
Net income | 2,095,171 | 2,095,171 | |||
Dividends declared | (540,531) | (540,531) | |||
Options exercised | 21,600 | $ 255 | 21,345 | ||
Options exercised, shares | 25,481 | ||||
Common stock issued, net of shares withheld for employee taxes | 297,356 | $ 1,380 | 295,976 | ||
Common stock issued, net of shares withheld for employee taxes, Shares | 138,082 | ||||
Foreign currency translation adjustment | (2,113) | (2,113) | |||
Ending balance at Dec. 31, 2016 | $ 22,515,071 | $ 91,469 | $ 9,604,634 | $ (286,555) | $ 13,105,523 |
Ending balance, shares at Dec. 31, 2016 | 9,146,937 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 2,095,171 | $ 460,694 |
Adjustment to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 974,587 | 916,317 |
Deferred income taxes | (26,310) | 104,355 |
Loss on sale of property, plant and equipment | 12,522 | |
Stock based compensation | 305,780 | 168,663 |
Other operating noncash items | 10,772 | 1,578 |
Changes in assets and liabilities: | ||
Trade accounts receivable | 163,520 | (244,513) |
Inventories | (700,736) | 191,797 |
Prepaid expenses and other current assets | (71,132) | (91,487) |
Receivables due from affiliated companies | (139,012) | (336,057) |
Accounts payable | 410,300 | (338,148) |
Accrued expenses payable | 2,645 | (33,258) |
Net cash provided by operating activities | 3,025,585 | 812,463 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (443,892) | (997,761) |
Cash paid for patent and trademark registration | (11,902) | |
Sale of property, plant and equipment | 55,000 | |
Net cash used in investing activities | (443,892) | (954,663) |
Cash flows from financing activities: | ||
Payments on long-term debt | (451,148) | (437,988) |
Payments for taxes related to net share settlements of stock awards | (8,424) | (12,610) |
Dividends paid to common shareholders | (540,531) | |
Proceeds from exercise of stock options | 21,600 | |
Net cash used in financing activities | (978,503) | (450,598) |
Effect of exchange rate on cash | (1,160) | (1,516) |
Net increase (decrease) increase in cash | 1,602,030 | (594,314) |
Cash at beginning of the year | 2,468,415 | 3,062,729 |
Cash at end of the year | 4,070,445 | 2,468,415 |
Supplemental disclosure of cash transactions: | ||
Cash paid for interest during the year | 19,096 | 34,871 |
Cash paid for income taxes during the year | $ 993,600 | $ 169,200 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Organization and summary of significant accounting policies | Note 1 Organization Basis of presentation Revenue recognition Collectability of accounts receivable Inventories Shipping and handling costs Advertising and promotion expense Property, plant and equipment Research and development costs Stock based compensation Use of estimates Concentration of cash Fair value of financial instruments ASC 820 also sets forth a valuation hierarchy of the inputs (assumptions that market participants would use in pricing an asset or liability) used to measure fair value. The hierarchy prioritizes the inputs into the following three levels: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data through correlation or other means. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The carrying amounts of the Company’s short-term financial instruments, including cash, accounts receivable, accounts payable, certain accrued expenses and revolving line of credit, approximate their fair value due to the relatively short period to maturity for these instruments. The fair value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities; the carrying amount of the long-term debt approximates fair value. Impairment of long-lived assets Income taxes We record a valuation allowance when necessary to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax positions will be sustained on examination by the taxing authorities based on the technical merits of the positions; otherwise, we establish reserves for uncertain tax positions. We adjust reserves with respect to uncertain tax positions to address developments related to these positions, such as the closing of a tax audit, the expiration of a statute of limitations or the refinement of an estimate. The provision for income taxes includes any reserves with respect to uncertain tax positions that are considered appropriate, as well as the related net interest and penalties. The Company has no uncertain tax positions as of December 31, 2016. The Company is no longer subject to income tax examinations for years before 2013. Intangible assets Foreign currency adjustments Earnings per share |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventories [Abstract] | |
Inventories | Note 2 The composition of inventories at December 31, 2016 and 2015 are as follows: 2016 2015 Raw materials $ 3,633,641 $ 3,749,702 Finished goods 5,235,207 4,445,130 Inventories, gross 8,868,848 8,194,832 Inventory reserves (268,159 ) (279,882 ) Inventories, net $ 8,600,689 $ 7,914,950 The inventory reserves shown in the table above reflect slow moving and obsolete inventory. The Company operates a vendor managed inventory program with one of its customers to improve the promotion of the Company's products. The Company manages the inventory levels at this customer’s warehouses and recognizes revenue as the products are sold by the customer. The inventories managed at the customer’s warehouses, which are included in inventories, net, amounted to approximately $551,000 and $543,000 at December 31, 2016 and 2015, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Note 3 The Company’s property, plant and equipment at December 31, 2016 and 2015 consisted of the following: Estimated Useful Life 2016 2015 Land $ 278,325 $ 278,325 Building and Improvements 30 years 4,652,669 4,652,669 Manufacturing and warehouse equipment 6-20 years 9,239,876 9,072,162 Office equipment and furniture 3-5 years 1,344,732 1,293,609 Construction in process 387,417 215,155 Leasehold improvements 10-15 years 558,666 544,146 Vehicles 3 years 10,020 42,283 Property, plant and equipment, gross 16,471,705 16,098,349 Less accumulated depreciation (11,575,732 ) (10,741,961 ) Property, plant and equipment, net $ 4,895,973 $ 5,356,388 |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Dec. 31, 2016 | |
Revolving Line of Credit and Long-term Debt [Abstract] | |
Revolving line of credit | Note 4 On November 17, 2016, the Company and Regions Bank entered into a Business Loan Agreement (the “Business Loan Agreement”), under which the Company was provided a renewed revolving line of credit. Under the Business Loan Agreement, the Company may borrow up to the lesser of (i) $4 million or (ii) a borrowing base equal to 85% of Eligible Accounts (as defined in the Business Loan Agreement: generally, accounts receivable from unaffiliated entities containing selling terms and conditions acceptable to Regions Bank, subject to specified exceptions) plus 50% of Eligible Inventory (as defined in the Business Loan Agreement). Interest on amounts borrowed under the revolving line of credit is payable monthly at the 30 day LIBOR rate plus 1.50% per annum, computed on a 365/360 basis. The interest rate will be increased an additional 2.0% if an event of default occurs. Outstanding amounts under the revolving line of credit are payable on demand. If no demand is made, the Company may repay and reborrow funds from time to time until expiration of the revolving line of credit on August 31, 2017, at which time all outstanding principal and interest will be due and payable. The Company’s obligations under the revolving line of credit are secured by, among other things, the Company’s accounts receivable and inventory and, as a result of cross-collateralization of the Company’s obligations under the term loan described in Note 6 and the revolving line of credit, real property and equipment at the Montgomery, Alabama facility of the Company’s subsidiary, Kinpak, Inc. ("Kinpak"). The Business Loan Agreement includes financial covenants requiring that the Company maintain a minimum debt service coverage ratio (generally, EBITDAR (net operating profit plus depreciation, amortization and rent/lease expense) divided by the sum of current maturities of long-term debt, interest and lease rent expense) of 1.75 to 1.00, calculated on a trailing twelve month basis, and a maximum debt to capitalization ratio (generally, funded debt divided by the sum of net worth and funded debt) of 0.75 to 1.00, calculated quarterly. For the year ended December 31, 2016, our debt service coverage ratio was approximately 10.60 to 1.00 and at December 31, 2016, our debt to capitalization ratio was approximately 0.02 to 1.00. The revolving line of credit is subject to several events of default, including a decline in the majority shareholder’s ownership below 50% of all outstanding shares. The Business Loan Agreement is a successor to earlier agreements under which Regions Bank provided a revolving line of credit to the Company in the maximum amount of $6 million. At December 31, 2016 and December 31, 2015, the Company had no borrowings under the revolving line of credit then in effect. |
Accrued Expenses Payable
Accrued Expenses Payable | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses Payable [Abstract] | |
Accrued expenses payable | Note 5 Accrued expenses payable at December 31, 2016 and 2015 consisted of the following: 2016 2015 Accrued customer promotions $ 546,127 $ 491,378 Accrued payroll, commissions, and benefits 287,376 269,380 Other 266,416 337,963 Total accrued expenses payable $ 1,099,919 $ 1,098,721 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Revolving Line of Credit and Long-term Debt [Abstract] | |
Long-term debt | Note 6 On July 6, 2011, in connection with a credit agreement among the Company, Kinpak, Regions Bank and Regions Equipment Finance Corporation (“REFCO”), an Equipment Finance Addendum to the credit agreement (the “Addendum”) was entered into by the Company, Kinpak and REFCO. Under the Addendum, REFCO provided to the Company a $2,430,000 term loan with a fixed interest rate of 3.54% per annum. Principal and interest on the term loan are payable in equal monthly installments of $37,511 through July 6, 2017, the date the term loan matures. In the event the Company’s debt service coverage ratio falls to or below 2.00 to 1.00, interest on the term loan will increase to 4.55% per annum. The proceeds of the term loan were used to pay Kinpak’s remaining obligations under a lease agreement relating to industrial revenue bonds used to fund the expansion of Kinpak’s facilities and acquisition of related equipment. At December 31, 2016, approximately $260,000 was outstanding under the term loan. At December 31, 2016 and 2015, the Company was obligated under various capital lease agreements covering equipment utilized in the Company’s operations. The capital leases aggregating approximately $69,000 and $88,000 at December 31, 2016 and December 31, 2015, respectively, mature on July 1, 2020 and carry an interest rate of 2% per annum. The following table provides information regarding the Company’s long-term debt at December 31, 2016 and 2015: Current Portion Long-term Portion 2016 2015 2016 2015 Term loan $ 259,503 $ 432,601 $ --- $ 259,503 Capitalized equipment leases 18,889 18,547 50,426 69,315 Total long-term debt $ 278,392 $ 451,148 $ 50,426 $ 328,818 Required principal payments under the Company’s term loan and capital lease obligations are set forth below: Year ending December 31, 2017 $ 278,392 2018 19,238 2019 19,593 2020 11,595 Total $ 328,818 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 7 The Company’s intangible assets at December 31, 2016 and 2015 consisted of the following: 2016 Intangible Asset Cost Accumulated Amortization Net Patents $ 622,733 $ 335,300 $ 287,433 Trade names and trademarks 1,131,125 549,561 581,564 Royalty rights 160,000 61,309 98,691 Total intangible assets $ 1,913,858 $ 946,170 $ 967,688 2015 Intangible Asset Cost Accumulated Amortization Net Patents $ 622,733 $ 282,964 $ 339,769 Trade names and trademarks 1,131,125 549,561 581,564 Royalty rights 160,000 43,365 116,635 Total intangible assets $ 1,913,858 $ 875,890 $ 1,037,968 At December 31, 2016 and 2015, the tradenames and trademarks are considered indefinite-lived (the Star brite® trade name and trademark initially was deemed to have an estimated useful life of 40 years until, pursuant to Statement of Financial Accounting Standards No. 142 (currently codified in ASC Topic 350, “Intangibles-Goodwill and Other”), the Company determined that, effective January 1, 2002, the assets had indefinite lives). The patents (the most significant of which (the “ClO 2 2 ) 2 2 2 Amortization expense related to intangible assets was $70,280 ($52,336 attributable to the patents and $17,944 attributable to the royalty rights) for the year ended December 31, 2016 and approximately $69,392 ($51,448 attributable to the patents and $17,944 attributable to the royalty rights) for the year ended December 31, 2015. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Income taxes | Note 8 The components of the Company’s consolidated provision for income taxes are as follows: 2016 2015 Federal – current $ 982,298 $ 136,479 Federal – deferred (25,565 ) 101,290 State – current 27,163 1,842 State – deferred (745 ) 3,065 Total provision for income taxes $ 983,151 $ 242,676 The reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes is as follows: 2016 % 2015 % Income Tax computed at statutory rate $ 1,046,629 34.0 % $ 239,146 34.0 % State tax, net of federal benefit 17,916 0.6 % 889 0.1 % Share based compensation (2,013 ) (0.1 )% (2,881 ) (0.4 )% Domestic production activities deduction (97,645 ) (3.2 )% (13,905 ) (1.9 ) Other, permanent adjustments 23,991 0.8 % 19,984 2.8 % Tax credits and prior year tax adj. (5,727 ) (0.2 )% (557 ) (0.1 )% Provision for income taxes $ 983,151 31.9 % $ 242,676 34.5 % The Company’s deferred tax (liability) consisted of the following at December 31, 2016 and 2015: 2016 2015 Deferred tax Asset (liability) Inventory reserves $ 93,829 $ 97,931 Trade accounts receivable allowances 26,259 27,404 Net Operating loss carryforward state 303,784 361,488 Depreciation of property and equipment (333,455 ) (365,012 ) Net deferred tax asset 90,417 121,811 Valuation allowance (303,784 ) (361,488 ) Total net deferred tax (liability) $ (213,367 ) $ (239,677 ) At December 31, 2016 and 2015, the Company has a net operating loss carryforward with the state of Alabama. The net operating losses of $4,676,600 and $5,561,354 expire between 2020 and 2023. The Company does not expect to be able to utilize these losses and has recorded a valuation allowance for the full amount of the net operating losses. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 9 During 2016, as in previous years, the Company sold products to companies affiliated with Peter G. Dornau, who is its Chairman, President and Chief Executive Officer. The affiliated companies distribute the products outside of the United States and Canada. The Company also provides administrative services to these companies. Sales to the affiliated companies aggregated approximately $1,850,000 and $2,075,000 during the years ended December 31, 2016 and 2015, respectively, and administrative fees aggregated approximately $621,000 and $527,000 during the years ended December 31, 2016 and 2015, respectively. The Company had accounts receivable from the affiliated companies in connection with the product sales and administrative services aggregating approximately $1,190,000 and $1,051,000 at December 31, 2016 and 2015, respectively. An entity that is owned by Peter G. Dornau, the Company’s Chairman, President and Chief Executive Officer provides several services to the Company. Under this arrangement, the Company paid the entity $42,000 for research and development services in each of the years ended December 31, 2016 and 2015. The research and development expenses are included in our statement of operations as a selling and administrative expense. In addition, during the year ended December 31, 2016, the Company paid this entity $25,000 for the production of television commercials and $9,000 for providing charter boat services for entertainment of Company customers. These amounts are included in our 2016 statement of operations as an advertising and promotion expense. The Company leases office and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. See Note 10 for a description of the lease terms. A director of the Company is Regional Executive Vice President of an entity from which the Company sources most of its commercial insurance needs. The Company paid an aggregate of approximately $697,000 and $925,000 to the entity during the years ended December 31, 2016 and 2015, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and contingencies | Note 10 The Company leases its executive offices and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. The lease, as extended, expires on December 31, 2023. The lease requires an annual minimum base rent of $94,800 and provides for a maximum annual 2% increase in subsequent years, although the entity has not raised the minimum rent since the Company entered into a previous lease agreement in 1998. Additionally, the leasing entity is entitled to reimbursement of all taxes, assessments, and any other expenses that arise from ownership. Each of the parties to the lease has agreed to review the terms of the lease every three years at the request of the other party. Rent expense under the lease was approximately $97,000 and $98,000 for the years ended December 31, 2016 and 2015, respectively. The rent expense is included in our statement of operations as a selling and administrative expense. The Company also leases a 15,000 square foot warehouse in Montgomery, AL near its Kinpak manufacturing facility for the purpose of fabricating and assembling brushes used for cleaning boats, automobiles, and recreational vehicles. The lease commenced on August 1, 2016 and expires on July 31, 2018. The lease requires monthly rent paid in advance of $4,375. The following is a schedule of minimum future rentals on the Company’s non-cancelable operating leases. 12 month period ending December 31, 2017 $ 148,564 2018 128,610 2019 99,945 2020 101,944 2021 103,983 Thereafter 214,246 Total $ 797,292 |
Stock Options and Awards
Stock Options and Awards | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options and Awards [Abstract] | |
Stock options and awards | Note 11 On May 29, 2015, the Company’s shareholders approved the Ocean Bio-Chem, Inc. 2015 Equity Compensation Plan (the “Plan”). The Plan provides for grants of several types of awards at the discretion of the Equity Grant Committee of the Company’s Board of Directors, including stock options, stock units, stock awards, stock appreciation rights and other stock based awards. The Plan authorizes the issuance of 630,000 shares of Company common stock, subject to anti-dilution adjustments upon the occurrence of certain events affecting the common stock. During the years ended December 31, 2016 and 2015, the Company issued stock awards under the Plan, respectively aggregating 142,000 and 65,500 shares of common stock, to officers, key employees, directors and a consultant Following the withholding of an aggregate of 3,918 and 4,244 shares of common stock, respectively, in connection with a net exercise feature of the Plan, 138,082 and 61,256 shares were delivered to the award recipients, for the years ended December 31, 2016 and 2015, respectively. At December 31, 2016, 422,500 shares remained available for future issuance under the Plan. The shares vested immediately upon issuance and were fully expensed in the period in which they were awarded. Compensation expense related to the stock awards was $305,780 and $168,663 for the years ended December 31, 2016 and 2015, respectively. The company withheld shares, pursuant to net share settlements, with a value of $8,424 and $12,610 respectively for income tax withholding related to the awards. As a result of the adoption of the Plan, no further stock awards will be made under the Company’s equity compensation plans previously approved by its shareholders (the “Prior Plans”). Prior to the May 29, 2015 effective date of the Plan, stock options were granted under the Prior Plans. Only non-qualified options granted under the Prior Plans were outstanding on December 31, 2016. Outstanding non-qualified options were granted to outside directors, have a 10-year term from the date of grant and are immediately exercisable. The last tranche of non-qualified options previously granted terminate on April 25, 2020. There was no compensation expense attributable to stock options recognized during the years ended December 31, 2016 and 2015, and at December 31, 2016 and 2015, there was no unrecognized compensation cost related to share based compensation arrangements During 2016, stock options to purchase an aggregate of 30,000 shares were exercised. The Company received a total of $21,600, withheld 4,519 shares in connection with the net exercise feature of the stock options and delivered an aggregate of 25,481 shares to the option holders who exercised their options. During 2015, a former director exercised stock options to purchase 10,000 shares. Following the withholding of 2,156 shares in connection with the net exercise feature of the stock options, the Company delivered 7,844 shares to the former director. The following tables provide information at December 31, 2016 and 2015 regarding outstanding options under the Company’s stock option plans. As used in the table below, “2002 NQ” refers to the Company’s 2002 Non-Qualified Stock Option Plan and “2008 NQ” refers to the Company’s 2008 Non-Qualified Stock Option Plan. At December 31, 2016: Plan Date Options Outstanding Exercisable Exercise Price Expiration Weighted Average 2002 NQ 12/17/07 40,000 40,000 1.32 12/16/17 1.0 2008 NQ 1/11/09 40,000 40,000 0.69 1/10/19 2.1 2008 NQ 4/26/10 20,000 20,000 2.07 4/25/20 3.4 100,000 100,000 $ 1.22 1.9 At December 31, 2015: Plan Date Options Outstanding Exercisable Exercise Price Expiration Weighted Average 2002 NQ 4/3/06 30,000 30,000 $ 1.08 4/2/16 0.3 2002 NQ 12/17/07 40,000 40,000 1.32 12/16/17 2.0 2008 NQ 1/11/09 40,000 40,000 0.69 1/10/19 3.1 2008 NQ 4/26/10 20,000 20,000 2.07 4/25/20 4.4 130,000 130,000 $ 1.19 2.3 The following table provides information relating to stock option transactions during the years ended December 31, 2016 and 2015: 2016 2015 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding beginning of the year 130,000 $ 1.19 140,000 $ 1.18 Options exercised (30,000 ) 1.08 (10,000 ) 1.08 Total 100,000 $ 1.22 130,000 $ 1.19 |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2016 | |
Major Customers [Abstract] | |
Major customers | Note 12 The Company had net sales to each of two major customers that constituted in excess of 10% of the Company’s consolidated net sales for each of the years ended December 31, 2016 and 2015. Net sales to these customers aggregated approximately 33.0% and 38.2% of consolidated net sales for 2016 and 2015, respectively. |
Litigation Expense
Litigation Expense | 12 Months Ended |
Dec. 31, 2016 | |
Litigation Expense [Abstract] | |
Litigation expense | Note 13 During the years ended December 31, 2015 and 2016, the Company was engaged in litigation with a competitor in which each of the Company and the competitor claimed that the other was engaged in false advertising and related violations of law. Following a trial in which it was determined that neither party was liable to the other, the matter was concluded. The Company incurred professional fees and expenses relating to this matter of $1,146,000 and $1,174,000 during the years ended December 31, 2016 and 2015, respectively. These amounts are included in selling and administrative expenses. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per share | Note 14 Basic earnings per share are calculated by dividing net income by the weighted average number of shares outstanding during the reporting period. Diluted earnings per share reflect additional dilution from potential common stock issuable upon the exercise of outstanding stock options. The following table sets forth the computation of basic and diluted earnings per common share, as well as a reconciliation of the weighted average number of common shares outstanding to the weighted average number of shares outstanding on a diluted basis. Years Ended 2016 2015 Earnings per common share –Basic Net income $ 2,095,171 $ 460,694 Weighted average number of common shares outstanding 9,059,966 8,940,593 Earnings per common share – Basic $ 0.23 $ 0.05 Earnings per common share – Diluted Net income $ 2,095,171 $ 460,694 Weighted average number of common shares outstanding 9,059,966 8,940,593 Dilutive effect of employee stock-based awards 56,550 86,513 Weighted average number of common shares outstanding - assuming dilution 9,116,516 9,027,106 Earnings per common share - Diluted $ 0.23 $ 0.05 The Company had no stock options outstanding at December 31, 2016 and 2015, respectively that were anti-dilutive and therefore not included in the diluted earnings per common share calculation. |
Special Cash Dividend
Special Cash Dividend | 12 Months Ended |
Dec. 31, 2016 | |
Special Cash Dividend [Abstract] | |
Special Cash Dividend | Note 15 On April 26, 2016, the Company paid a special cash dividend of $0.06 per common share to all shareholders of record on April 12, 2016. The dividend aggregated $540,531. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2016 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note -16 Accounting Guidance Adopted by the Company In November 2015, the Financial Accounting Standards Board FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The guidance under ASU 2015-17 is designed to simplify the presentation of deferred tax assets and liabilities within the balance sheet by requiring generally that all deferred tax assets and liabilities be classified as non-current. Under previously applicable guidance, an entity was required to separate deferred tax liabilities and assets into a current amount and a noncurrent amount. The guidance is effective for years beginning after December 15, 2016 with early adoption permitted, and can be applied prospectively or retrospectively. The Company adopted this guidance in the quarter ended September 30, 2016, retrospectively to January 1, 2016. As a result of the adoption, we made the following reclassifications to the 2015 consolidated balance sheet: a $125,335 decrease to current deferred tax asset and a $125,335 decrease to noncurrent deferred tax liability. Accounting Guidance Not Yet Adopted by the Company In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, "Revenue from Contracts with Customers (Topic 606)". ASU 2014-19, which has been modified on several occasions, provides new guidance designed to enhance the comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the new guidance is 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 entity expects to be entitled in exchange for those goods and services. The new guidance also requires disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years; early application is permitted for annual periods beginning after December 15, 2016. We do not expect this new standard to have a material impact on the amount and timing of our revenue recognition. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The principal change under this new accounting guidance is that lessees under leases classified as operating leases generally will recognize a right-of-use asset and a lease liability on the balance sheet. Current lease accounting standards do not require lessees to recognize assets and liabilities arising under operating leases on the balance sheet. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; the guidance provides certain practical expedients. The Company is currently evaluating this guidance to determine its impact on the Company’s financial statements. In July 2015, the FASB issued ASU No. 2015-11, “ Inventory” (Topic 330) |
Organization and Summary of S24
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Organization | Organization |
Basis of presentation | Basis of presentation |
Revenue recognition | Revenue recognition |
Collectability of accounts receivable | Collectability of accounts receivable |
Inventories | Inventories |
Shipping and handling costs | Shipping and handling costs |
Advertising and promotion expense | Advertising and promotion expense |
Property, plant and equipment | Property, plant and equipment |
Research and development costs | Research and development costs |
Stock based compensation | Stock based compensation |
Use of estimates | Use of estimates |
Concentration of cash | Concentration of cash |
Fair value of financial instruments | Fair value of financial instruments ASC 820 also sets forth a valuation hierarchy of the inputs (assumptions that market participants would use in pricing an asset or liability) used to measure fair value. The hierarchy prioritizes the inputs into the following three levels: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data through correlation or other means. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The carrying amounts of the Company’s short-term financial instruments, including cash, accounts receivable, accounts payable, certain accrued expenses and revolving line of credit, approximate their fair value due to the relatively short period to maturity for these instruments. The fair value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities; the carrying amount of the long-term debt approximates fair value. |
Impairment of long-lived assets | Impairment of long-lived assets |
Income taxes | Income taxes We record a valuation allowance when necessary to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax positions will be sustained on examination by the taxing authorities based on the technical merits of the positions; otherwise, we establish reserves for uncertain tax positions. We adjust reserves with respect to uncertain tax positions to address developments related to these positions, such as the closing of a tax audit, the expiration of a statute of limitations or the refinement of an estimate. The provision for income taxes includes any reserves with respect to uncertain tax positions that are considered appropriate, as well as the related net interest and penalties. The Company has no uncertain tax positions as of December 31, 2016. The Company is no longer subject to income tax examinations for years before 2013. |
Intangible assets | Intangible assets |
Foreign currency adjustments | Foreign currency adjustments |
Earnings per share | Earnings per share |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventories [Abstract] | |
Summary of composition of inventories | 2016 2015 Raw materials $ 3,633,641 $ 3,749,702 Finished goods 5,235,207 4,445,130 Inventories, gross 8,868,848 8,194,832 Inventory reserves (268,159 ) (279,882 ) Inventories, net $ 8,600,689 $ 7,914,950 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Summary of property, plant and equipment | Estimated Useful Life 2016 2015 Land $ 278,325 $ 278,325 Building and Improvements 30 years 4,652,669 4,652,669 Manufacturing and warehouse equipment 6-20 years 9,239,876 9,072,162 Office equipment and furniture 3-5 years 1,344,732 1,293,609 Construction in process 387,417 215,155 Leasehold improvements 10-15 years 558,666 544,146 Vehicles 3 years 10,020 42,283 Property, plant and equipment, gross 16,471,705 16,098,349 Less accumulated depreciation (11,575,732 ) (10,741,961 ) Property, plant and equipment, net $ 4,895,973 $ 5,356,388 |
Accrued Expenses Payable (Table
Accrued Expenses Payable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses Payable [Abstract] | |
Summary of accrued expenses payable | 2016 2015 Accrued customer promotions $ 546,127 $ 491,378 Accrued payroll, commissions, and benefits 287,376 269,380 Other 266,416 337,963 Total accrued expenses payable $ 1,099,919 $ 1,098,721 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Revolving Line of Credit and Long-term Debt [Abstract] | |
Summary of company's long term debt | Current Portion Long-term Portion 2016 2015 2016 2015 Term loan $ 259,503 $ 432,601 $ --- $ 259,503 Capitalized equipment leases 18,889 18,547 50,426 69,315 Total long-term debt $ 278,392 $ 451,148 $ 50,426 $ 328,818 |
Summary of principal payments under Company's long term obligations | Year ending December 31, 2017 $ 278,392 2018 19,238 2019 19,593 2020 11,595 Total $ 328,818 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets [Abstract] | |
Schedule of intangible assets | 2016 Intangible Asset Cost Accumulated Amortization Net Patents $ 622,733 $ 335,300 $ 287,433 Trade names and trademarks 1,131,125 549,561 581,564 Royalty rights 160,000 61,309 98,691 Total intangible assets $ 1,913,858 $ 946,170 $ 967,688 2015 Intangible Asset Cost Accumulated Amortization Net Patents $ 622,733 $ 282,964 $ 339,769 Trade names and trademarks 1,131,125 549,561 581,564 Royalty rights 160,000 43,365 116,635 Total intangible assets $ 1,913,858 $ 875,890 $ 1,037,968 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Summary of provision for income taxes | 2016 2015 Federal – current $ 982,298 $ 136,479 Federal – deferred (25,565 ) 101,290 State – current 27,163 1,842 State – deferred (745 ) 3,065 Total provision for income taxes $ 983,151 $ 242,676 |
Summary of reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes | 2016 % 2015 % Income Tax computed at statutory rate $ 1,046,629 34.0 % $ 239,146 34.0 % State tax, net of federal benefit 17,916 0.6 % 889 0.1 % Share based compensation (2,013 ) (0.1 )% (2,881 ) (0.4 )% Domestic production activities deduction (97,645 ) (3.2 )% (13,905 ) (1.9 ) Other, permanent adjustments 23,991 0.8 % 19,984 2.8 % Tax credits and prior year tax adj. (5,727 ) (0.2 )% (557 ) (0.1 )% Provision for income taxes $ 983,151 31.9 % $ 242,676 34.5 % |
Summary of deferred tax asset and liability | 2016 2015 Deferred tax Asset (liability) Inventory reserves $ 93,829 $ 97,931 Trade accounts receivable allowances 26,259 27,404 Net Operating loss carryforward state 303,784 361,488 Depreciation of property and equipment (333,455 ) (365,012 ) Net deferred tax asset 90,417 121,811 Valuation allowance (303,784 ) (361,488 ) Total net deferred tax (liability) $ (213,367 ) $ (239,677 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Schedule of minimum future rentals on the Company's non-cancelable operating leases | 12 month period ending December 31, 2017 $ 148,564 2018 128,610 2019 99,945 2020 101,944 2021 103,983 Thereafter 214,246 Total $ 797,292 |
Stock Options and Awards (Table
Stock Options and Awards (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options and Awards [Abstract] | |
Schedule of options outstanding and granted under stock option plans | At December 31, 2016: Plan Date Options Outstanding Exercisable Exercise Price Expiration Weighted Average 2002 NQ 12/17/07 40,000 40,000 1.32 12/16/17 1.0 2008 NQ 1/11/09 40,000 40,000 0.69 1/10/19 2.1 2008 NQ 4/26/10 20,000 20,000 2.07 4/25/20 3.4 100,000 100,000 $ 1.22 1.9 At December 31, 2015: Plan Date Options Outstanding Exercisable Exercise Price Expiration Weighted Average 2002 NQ 4/3/06 30,000 30,000 $ 1.08 4/2/16 0.3 2002 NQ 12/17/07 40,000 40,000 1.32 12/16/17 2.0 2008 NQ 1/11/09 40,000 40,000 0.69 1/10/19 3.1 2008 NQ 4/26/10 20,000 20,000 2.07 4/25/20 4.4 130,000 130,000 $ 1.19 2.3 |
Schedule of information relating to stock option transactions | 2016 2015 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding beginning of the year 130,000 $ 1.19 140,000 $ 1.18 Options exercised (30,000 ) 1.08 (10,000 ) 1.08 Total 100,000 $ 1.22 130,000 $ 1.19 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Summary of computation of basic and diluted earnings per common share | Years Ended 2016 2015 Earnings per common share –Basic Net income $ 2,095,171 $ 460,694 Weighted average number of common shares outstanding 9,059,966 8,940,593 Earnings per common share – Basic $ 0.23 $ 0.05 Earnings per common share – Diluted Net income $ 2,095,171 $ 460,694 Weighted average number of common shares outstanding 9,059,966 8,940,593 Dilutive effect of employee stock-based awards 56,550 86,513 Weighted average number of common shares outstanding - assuming dilution 9,116,516 9,027,106 Earnings per common share - Diluted $ 0.23 $ 0.05 |
Organization and Summary of S34
Organization and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies (Textual) | ||
Trade accounts receivable, allowance for doubtful accounts | $ 75,000 | $ 78,000 |
Bad debt expense | 3,000 | |
Shipping and handling costs | 1,120,000 | 1,367,000 |
Advertising and promotion expense | 3,117,000 | 3,011,000 |
Research and development costs | 46,000 | 78,000 |
Depreciation expense | 904,307 | $ 846,925 |
Bad debt reserve | $ 3,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of composition of inventories | ||
Raw materials | $ 3,633,641 | $ 3,749,702 |
Finished goods | 5,235,207 | 4,445,130 |
Inventories, gross | 8,868,848 | 8,194,832 |
Inventory reserves | (268,159) | (279,882) |
Inventories, net | $ 8,600,689 | $ 7,914,950 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Inventories (Textual) | ||
Inventories managed at customer's warehouses | $ 551,000 | $ 543,000 |
Property, Plant and Equipment37
Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of property, plant and equipment | ||
Land | $ 278,325 | $ 278,325 |
Building and Improvements | 4,652,669 | 4,652,669 |
Manufacturing and warehouse equipment | 9,239,876 | 9,072,162 |
Office equipment and furniture | 1,344,732 | 1,293,609 |
Construction in process | 387,417 | 215,155 |
Leasehold improvements | 558,666 | 544,146 |
Vehicles | 10,020 | 42,283 |
Property, plant and equipment, gross | 16,471,705 | 16,098,349 |
Less accumulated depreciation | (11,575,732) | (10,741,961) |
Property, plant and equipment, net | $ 4,895,973 | $ 5,356,388 |
Building and Improvements [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 30 years | |
Manufacturing and warehouse equipment [Member] | Minimum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 6 years | |
Manufacturing and warehouse equipment [Member] | Maximum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 20 years | |
Office equipment and furniture [Member] | Minimum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 3 years | |
Office equipment and furniture [Member] | Maximum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 5 years | |
Leasehold improvements [Member] | Minimum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 10 years | |
Leasehold improvements [Member] | Maximum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 15 years | |
Vehicles [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 3 years |
Revolving Line of Credit (Detai
Revolving Line of Credit (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Nov. 17, 2016 | Dec. 31, 2016 | |
Revolving line of credit (Textual) | ||
Term of revolving line of credit | The Company may borrow up to the lesser of (i) $4 million or (ii) a borrowing base equal to 85% of Eligible Accounts (as defined in the Business Loan Agreement; generally covering specified accounts receivable from unaffiliated entities, subject to specified exceptions) plus 50% of Eligible Inventory (as defined in the Business Loan Agreement). | |
Maximum borrowing capacity of the company | $ 4 | |
Percentage of eligible accounts receivables as part of borrowing base | 85.00% | |
Percentage of eligible inventory as part of the borrowing base | 50.00% | |
Description of interest on the revolving line of credit | 30 day LIBOR rate plus 1.50% per annum | |
Due date of outstanding principal and interest borrowed under revolving line of credit | Aug. 31, 2017 | |
Financial covenants under credit agreement | A minimum debt service coverage ratio (generally, EBITDAR (net operating profit plus depreciation, amortization and rent/lease expense) divided by the sum of current maturities of long-term debt, interest and lease rent expense) of 1.75 to 1.00, tested on a trailing twelve month basis, and a maximum debt to capitalization ratio (generally, funded debt divided by the sum of net worth and funded debt) of 0.75 to 1.00, tested quarterly. | |
Debt service coverage ratio | 1.75 to 1.00 | 10.60 to 1 |
Debt capitalization ratio | 0.75 to 1.00 | 0.02 to 1 |
Ownership requirement of majority shareholder to prevent default | The revolving line of credit is subject to several events of default, including a decline in the majority shareholder's ownership below 50% of all outstanding shares. | |
Maximum revolving line of credit provided by Regions Bank in the prior agreement | $ 6 |
Accrued Expenses Payable (Detai
Accrued Expenses Payable (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of accrued expenses payable | ||
Accrued customer promotions | $ 546,127 | $ 491,378 |
Accrued payroll, commissions, and benefits | 287,376 | 269,380 |
Other | 266,416 | 337,963 |
Total accrued expenses payable | $ 1,099,919 | $ 1,098,721 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of long term debt | ||
Total long term debt, Current Portion | $ 278,392 | $ 451,148 |
Total long term debt, Long Term Portion | 50,426 | 328,818 |
Term loan [Member] | ||
Summary of long term debt | ||
Term loan, Current Portion | 259,503 | 432,601 |
Term loan, Long-term Portion | 259,503 | |
Capitalized equipment leases [Member] | ||
Summary of long term debt | ||
Capitalized equipment leases, Current Portion | 18,889 | 18,547 |
Capitalized equipment leases, Long-term Portion | $ 50,426 | $ 69,315 |
Long-Term Debt (Details 1)
Long-Term Debt (Details 1) | Dec. 31, 2016USD ($) |
Summary of principal payments under Company's long term obligations | |
2,017 | $ 278,392 |
2,018 | 19,238 |
2,019 | 19,593 |
2,020 | 11,595 |
Total | $ 328,818 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textual) - USD ($) | Jul. 06, 2011 | Dec. 31, 2016 | Dec. 31, 2015 |
Long-term debt (Textual) | |||
Term loan | $ 260,000 | ||
Aggregate capital lease | $ 69,000 | $ 88,000 | |
Maturity period for capital lease | Mature on July 1, 2020 | ||
Percentage of interest rates | 2.00% | ||
REFCO [Member] | |||
Long-term debt (Textual) | |||
Term loan | $ 2,430,000 | $ 37,511 | |
Interest rate | 3.54% | ||
Term loan maturity date | Jul. 6, 2017 | ||
Term loan, Description | Term loan with a fixed interest rate of 3.54% per annum. Principal and interest on the term loan are payable in equal monthly installments of $37,511 through July 6, 2017, the date the term loan matures. In the event the Company's debt service coverage ratio falls to or below 2.0 to 1.00, interest on the term loan will increase to 4.55% per annum. | ||
Debt service coverage ratio | 2.0 to 1.00 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | $ 1,913,858 | $ 1,913,858 |
Intangible assets, Accumulated Amortization | 946,170 | 875,890 |
Intangible assets, Net | 967,688 | 1,037,968 |
Patents [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 622,733 | 622,733 |
Intangible assets, Accumulated Amortization | 335,300 | 282,964 |
Intangible assets, Net | 287,433 | 339,769 |
Trade names and trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 1,131,125 | 1,131,125 |
Intangible assets, Accumulated Amortization | 549,561 | 549,561 |
Intangible assets, Net | 581,564 | 581,564 |
Royalty rights [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 160,000 | 160,000 |
Intangible assets, Accumulated Amortization | 61,309 | 43,365 |
Intangible assets, Net | $ 98,691 | $ 116,635 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Amortization expense | $ 70,280 | $ 69,392 |
Net of amortization | 287,433 | |
Patents [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Amortization expense | $ 52,336 | $ 51,448 |
Expiry date of intangible assets | 2,022 | |
Net of amortization | $ 282,963 | |
Trademarks and Trade Names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Estimated useful life of intangible assets | 40 years | 40 years |
Royalty Agreements [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Amortization expense | $ 17,944 | $ 17,944 |
Expiry date of intangible assets | 2,021 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of provision for income taxes | ||
Federal - current | $ 982,298 | $ 136,479 |
Federal - deferred | (25,565) | 101,290 |
State - current | 27,163 | 1,842 |
State - deferred | (745) | 3,065 |
Total provision for income taxes | $ 983,151 | $ 242,676 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes | ||
Income Tax computed at statutory rate | $ 1,046,629 | $ 239,146 |
State tax, net of federal benefit | 17,916 | 889 |
Share based compensation | (2,013) | (2,881) |
Effective Income Tax Rate Reconciliation, Deduction, Other, Amount | (97,645) | (13,905) |
Other, permanent adjustments | 23,991 | 19,984 |
Tax credits and prior year tax adj. | (5,727) | (557) |
Provision for income taxes | $ 983,151 | $ 242,676 |
Income Tax computed at statutory rate, percentage | 34.00% | 34.00% |
State tax, net of federal benefit, percentage | 0.60% | 0.10% |
Share based compensation, percentage | (0.10%) | (0.40%) |
Domestic production activities deduction, percentage | (3.20%) | (1.90%) |
Other, permanent adjustments, percentage | 0.80% | 2.80% |
Tax credits and prior year tax adj., percentage | (0.20%) | (0.10%) |
Provision for income taxes, percentage | 31.90% | 34.50% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax Asset (liability) | ||
Inventory reserves | $ 93,829 | $ 97,931 |
Trade accounts receivable allowances | 26,259 | 27,404 |
Net Operating loss carryforward state | 303,784 | 361,488 |
Depreciation of property and equipment | (333,455) | (365,012) |
Net deferred tax asset | 90,417 | 121,811 |
Valuation allowance | (303,784) | (361,488) |
Total net deferred tax (liability) | $ (213,367) | $ (239,677) |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes (Textual) | ||
Net operating losses expired description | Expire between 2020 and 2023. | |
Net operating losses | $ 4,676,600 | $ 5,561,354 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions (Textual) | ||
Sales to the affiliated companies | $ 1,850,000 | $ 2,075,000 |
Administrative fees | 621,000 | 527,000 |
Accounts receivable from the affiliated companies | 1,190,103 | 1,051,091 |
Amount paid to entity for services | 42,000 | 42,000 |
Amount paid for the production of television commercials | 25,000 | |
Marketing expense | 9,000 | |
Insurance premiums paid | $ 697,000 | $ 925,000 |
Commitments and Contingencies50
Commitments and Contingencies (Details) | Dec. 31, 2016USD ($) |
Schedule of minimum future rentals on the Company's non-cancelable operating leases | |
2,017 | $ 148,564 |
2,018 | 128,610 |
2,019 | 99,945 |
2,020 | 101,944 |
2,021 | 103,983 |
Thereafter | 214,246 |
Total | $ 797,292 |
Commitments and Contingencies51
Commitments and Contingencies (Details Textual) | Aug. 01, 2016USD ($) | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) |
Commitments and Contingencies (Textual) | |||
Area of rent leases | ft² | 15,000 | ||
Fort Lauderdale Florida Facility [Member] | |||
Commitments and Contingencies (Textual) | |||
Extended expiration date of lease | Dec. 31, 2023 | ||
Minimum base rent | $ 94,800 | ||
Maximum annual percentage increase in base rent | 2.00% | ||
Period to review term of lease | 3 years | ||
Rent expense under the lease | $ 97,000 | $ 98,000 | |
Kinpak Manufacturing Facility [Member] | |||
Commitments and Contingencies (Textual) | |||
Extended expiration date of lease | Jul. 31, 2018 | ||
Lease rent paid in advance | $ 4,375 |
Stock Options and Awards (Detai
Stock Options and Awards (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of options outstanding and granted under stock option plans | ||
Options Outstanding | 100,000 | 130,000 |
Exercisable Options | 100,000 | 130,000 |
Exercise Price | $ 1.22 | $ 1.19 |
Weighted Average Remaining life | 1 year 10 months 24 days | 2 years 3 months 18 days |
2002 NQ [Member] | ||
Schedule of options outstanding and granted under stock option plans | ||
Date Granted | Dec. 17, 2007 | Apr. 3, 2006 |
Options Outstanding | 40,000 | 30,000 |
Exercisable Options | 40,000 | 30,000 |
Exercise Price | $ 1.32 | $ 1.08 |
Expiration Date | Dec. 16, 2017 | Apr. 2, 2016 |
Weighted Average Remaining life | 1 year | 3 months 18 days |
2002 NQ 1 [Member] | ||
Schedule of options outstanding and granted under stock option plans | ||
Date Granted | Dec. 17, 2007 | |
Options Outstanding | 40,000 | |
Exercisable Options | 40,000 | |
Exercise Price | $ 1.32 | |
Expiration Date | Dec. 16, 2017 | |
Weighted Average Remaining life | 2 years | |
2008 NQ [Member] | ||
Schedule of options outstanding and granted under stock option plans | ||
Date Granted | Jan. 11, 2009 | Jan. 11, 2009 |
Options Outstanding | 40,000 | 40,000 |
Exercisable Options | 40,000 | 40,000 |
Exercise Price | $ 0.69 | $ 0.69 |
Expiration Date | Jan. 10, 2019 | Jan. 10, 2019 |
Weighted Average Remaining life | 2 years 1 month 6 days | 3 years 1 month 6 days |
2008 NQ 1 [Member] | ||
Schedule of options outstanding and granted under stock option plans | ||
Date Granted | Apr. 26, 2010 | Apr. 26, 2010 |
Options Outstanding | 20,000 | 20,000 |
Exercisable Options | 20,000 | 20,000 |
Exercise Price | $ 2.07 | $ 2.07 |
Expiration Date | Apr. 25, 2020 | Apr. 25, 2020 |
Weighted Average Remaining life | 3 years 4 months 24 days | 4 years 4 months 24 days |
Stock Options and Awards (Det53
Stock Options and Awards (Details 1) - Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of information relating to stock option transactions | ||
Options outstanding beginning of the year | 130,000 | 140,000 |
Options exercised | (30,000) | (10,000) |
Options outstanding end of the year | 100,000 | 130,000 |
Options outstanding beginning of the year, Weighted Average Exercise Price | $ 1.19 | $ 1.18 |
Options exercised, Weighted Average Exercise Price | 1.08 | 1.08 |
Options outstanding ending of the year, Weighted Average Exercise Price | $ 1.22 | $ 1.19 |
Stock Options and Awards (Det54
Stock Options and Awards (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 29, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock options and awards (Textual) | |||
Number of shares authorized under equity compensation plan | 630,000 | ||
Stock awards granted | 142,000 | 65,500 | |
Common stock available for future issuance under Equity Compensation Plan | 422,500 | ||
Stock based compensation attributable to stock award | $ 305,780 | $ 168,663 | |
Term of previously non-qualified options granted | 10 years | ||
Termination period of previously non-qualified options | Apr. 25, 2020 | ||
Option exercised | $ 21,600 | ||
Number of shares withhold in connection with net exercise feature of options | 4,519 | 2,156 | |
Shares issued to option holders shares | 25,481 | 7,844 | |
Payments for taxes related to net share settlements of stock awards | $ 8,424 | $ 12,610 | |
Stock Option [Member] | |||
Stock options and awards (Textual) | |||
Stock option exercised | 30,000 | 10,000 | |
Number of shares withhold in connection with net exercise feature of options | 3,918 | 4,244 | |
Shares issued to option holders shares | 138,082 | 61,256 |
Major Customers (Details)
Major Customers (Details) - Customers | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Major Customers (Textual) | ||
Percentage of consolidated net revenues by customers with sales in excess of 10% of consolidated net revenues | 33.00% | 38.20% |
Number of customers with sales in excess of 10% of consolidated net revenues | 2 | 2 |
Litigation Expense (Details)
Litigation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Litigation Expense (Textual) | ||
Professional fees and expenses of litigation expense | $ 1,146,000 | $ 1,174,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings per common share - Basic | ||
Net income | $ 2,095,171 | $ 460,694 |
Weighted average number of common shares outstanding | 9,059,966 | 8,940,593 |
Earnings per common share - Basic | $ 0.23 | $ 0.05 |
Earnings per common share - Diluted | ||
Net income | $ 2,095,171 | $ 460,694 |
Weighted average number of common shares outstanding | 9,059,966 | 8,940,593 |
Dilutive effect of employee stock-based awards | 56,550 | 86,513 |
Weighted average number of common shares outstanding - assuming dilution | 9,116,516 | 9,027,106 |
Earnings per common share - Diluted | $ 0.23 | $ 0.05 |
Special Cash Dividend (Details)
Special Cash Dividend (Details) - USD ($) | Apr. 26, 2016 | Dec. 31, 2016 |
Special Cash Dividend (Textual) | ||
Dividends paid to common shareholders | $ 540,531 | |
Dividends declared per common share | $ 0.06 |
Recent Accounting Pronounceme59
Recent Accounting Pronouncements (Details) | Dec. 31, 2016USD ($) |
Recent Accounting Pronouncements (Textual) | |
Decrease to current deferred tax assets | $ 125,335 |
Decrease to noncurrent deferred tax liability | $ 125,335 |