RBC Life Sciences (RBCL) 10-Q 14 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 01, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	RBC LIFE SCIENCES, INC.
Entity Central Index Key	830,052
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		2,212,350

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 915,047	$ 1,921,349
Accounts receivable, net of allowance for doubtful accounts of $37,000 and $35,000, respectively	1,096,800	1,285,843
Inventories	5,106,377	4,799,083
Deferred income taxes	383,279	376,925
Prepaid expenses and other current assets	581,825	464,020
Total current assets	8,083,328	8,847,220
Property and equipment, net	4,456,894	4,683,496
Goodwill, net	2,192,931	2,221,347
Intangible assets, net	29,043	39,975
Other assets, net	97,825	203,906
Total assets	14,860,021	15,995,944
Current liabilities:
Accounts payable, trade	2,264,817	2,310,192
Accrued liabilities	1,317,122	1,420,050
Current maturities of long-term obligations	238,578	229,538
Deferred revenue	2,448,188	2,147,290
Total current liabilities	6,268,705	6,107,070
Long-term obligations, less current maturities	785,336	906,809
Deferred income taxes	$ 243,851	$ 556,440
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 2,212,350 shares issued and outstanding at June 30, 2015 and December 31, 2014	$ 2,212	$ 2,212
Additional paid-in capital	13,713,630	13,713,630
Accumulated deficit	(6,212,710)	(5,417,092)
Accumulated other comprehensive income	58,997	126,875
Total shareholders' equity	7,562,129	8,425,625
Total liabilities and shareholders' equity	$ 14,860,021	$ 15,995,944

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Allowance for doubtful accounts	$ 37	$ 35
Shareholders’ equity:
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock shares authorized (shares)	50,000,000	50,000,000
Common stock shares issued (shares)	2,212,350	2,212,350
Common stock shares outstanding (shares)	2,212,350	2,212,350

Condensed Consolidated Statemen

Condensed Consolidated Statements of Comprehensive Income - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
Net sales	$ 6,192,404	$ 7,885,090	$ 11,552,214	$ 13,598,210
Cost of sales	2,692,626	3,762,809	5,003,272	6,293,844
Gross profit	3,499,778	4,122,281	6,548,942	7,304,366
Operating expenses:
General and administrative	2,632,296	2,679,105	5,248,935	5,399,711
Distributor commissions	1,041,888	1,278,347	2,156,830	2,112,810
Depreciation and amortization	130,955	131,639	225,112	250,849
Total operating expenses	3,805,139	4,089,091	7,630,877	7,763,370
Operating income (loss)	(305,361)	33,190	(1,081,935)	(459,004)
Interest expense	20,205	24,456	41,503	49,924
Earnings (loss) before income taxes	(325,566)	8,734	(1,123,438)	(508,928)
Provision (benefit) for income taxes	(79,938)	15,378	(327,820)	(124,396)
Net loss	(245,628)	(6,644)	(795,618)	(384,532)
Other comprehensive income (loss):
Foreign currency translation adjustment	17,853	8,627	(67,878)	(5,725)
Comprehensive income (loss)	$ (227,775)	$ 1,983	$ (863,496)	$ (390,257)
Net loss per share:
Basic (usd per share)	$ (0.11)	$ 0	$ (0.36)	$ (0.17)
Diluted (usd per share)	$ (0.11)	$ 0	$ (0.36)	$ (0.17)
Weighted average common shares outstanding:
Basic (shares)	2,212,350	2,212,350	2,212,350	2,212,350
Diluted (shares)	2,212,350	2,212,350	2,212,350	2,212,350

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net loss	$ (795,618)	$ (384,532)
Adjustment for non-cash items:
Depreciation and amortization	262,238	290,300
Stock-based compensation	0	2,107
Deferred income taxes and other	(329,441)	(137,621)
Change in operating assets and liabilities:
Accounts receivable	188,808	67,300
Inventories	(324,306)	(411,417)
Prepaid expenses and other current assets	(40,247)	(56,962)
Other assets	104,268	(56,092)
Accounts payable and accrued liabilities	(207,666)	1,027,201
Deferred revenue	305,200	(1,203,766)
Net cash used in operating activities	(836,764)	(863,482)
Cash flows from investing activities:
Purchase of property and equipment	(37,649)	(636,170)
Net cash used in investing activities	(37,649)	(636,170)
Cash flows from financing activities:
Payments of long-term obligations	(112,433)	(104,186)
Net cash used in financing activities	(112,433)	(104,186)
Effect of exchange rate changes on cash flows	(19,456)	(28,675)
Net decrease in cash and cash equivalents	(1,006,302)	(1,632,513)
Cash and cash equivalents, beginning of period	1,921,349	3,745,684
Cash and cash equivalents, end of period	$ 915,047	$ 2,113,171

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Financial Statements	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Unaudited Condensed Consolidated Financial Statements	Unaudited Condensed Consolidated Financial Statements: The accompanying unaudited condensed consolidated financial statements, including the notes thereto, of RBC Life Sciences, Inc. (sometimes hereinafter referred to collectively as “we”, “our”, "us", “RBC” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the U.S. (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and disclosures that are normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to these rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 (the “ 2014 Form 10-K”), previously filed with the Securities and Exchange Commission. All references to dollars shall mean U.S. dollars. In the opinion of management, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation of the Company's results for the interim periods have been included. The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. Subsequent events were evaluated through the issuance date of the condensed consolidated financial statements. New Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides guidance related to revenue from contracts with customers. This guidance is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This guidance is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. The Company does not believe ASU No. 2014-09 will have a material effect on its financial position and results of operations. In August 2014, FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern . ASU No. 2014-15 provides guidance regarding management’s responsibility to evaluate whether there exists substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU No. 2014-15 is effective for annual reporting periods beginning after December 15, 2016, and interim periods thereafter. The Company does not believe ASU No. 2014-15 will have a material effect on its financial position and results of operations.

Nature of Operations and Organi

Nature of Operations and Organization Nature of Operations and Organization	6 Months Ended
	Jun. 30, 2015
Nature of Operations and Organization [Abstract]
Nature of Operations and Organization	Nature of Operations and Organization: The Company is principally engaged in the marketing of nutritional supplements and personal care products (collectively “Nutritional Products”) through subsidiaries in North America and Southeast Asia. This product line is marketed under the “RBC Life ® ” brand name. In most of these markets, the Company markets its products through a network of distributors that are referred to as “Associates.” The Associates are independent contractors who purchase products for personal use, purchase products for resale to retail customers and sponsor other individuals as Associates. Accordingly, Associates may be product consumers only or they may also seek to derive compensation both from the direct sales of products and from sales generated by sponsored Associates. In certain other markets in Southeast Asia and Australia, the Company sells its products through a not-for-resale ("NFR") program. Individuals who participate in the NFR program function similarly to Associates in that they can sponsor others and derive compensation from sales generated by individuals they sponsor. However, they may only order products for personal use and may not resell products to retail customers. RBC also markets its Nutritional Products in certain international markets through license arrangements. The licensees are third parties who are granted exclusive rights to distribute RBC products in their respective territories and, for the most part, distribute these products through an independent Associate network in the licensed territory. Under these arrangements, the independent Associate network in a licensed territory is compensated by the licensee. In addition to its Nutritional Products, RBC markets a line of wound care products (“Medical Products”) under the "MPM Medical TM " brand name through a U.S. subsidiary. Medical Products are distributed primarily in the U.S. to hospitals, nursing homes, clinics and pharmacies through traditional medical/surgical supply dealers, pharmaceutical distributors and our own sales representatives. Medical Products are used to treat and manage pain associated with wounds in the acute care, long-term care and oncology markets.

Inventories

Inventories	6 Months Ended
	Jun. 30, 2015
Inventory Disclosure [Abstract]
Inventories	Inventories: Inventories consist of the following: June 30, 2015 December 31, 2014 Raw materials and bulk products $ 417,779 $ 370,333 Packaging materials 256,319 253,700 Finished goods 4,432,279 4,175,050 $ 5,106,377 $ 4,799,083

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	6 Months Ended
	Jun. 30, 2015
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid Expenses and Other Current Assets	Prepaid Expenses and Other Current Assets: Prepaid expenses and other current assets consist of the following: June 30, 2015 December 31, 2014 Advance payment to suppliers $ 109,125 $ 151,365 Prepaid insurance and other 403,909 239,385 Certificates of deposit - restricted 68,791 73,270 $ 581,825 $ 464,020 At June 30, 2015 and December 31, 2014 , the Company held certificates of deposit in the amounts of approximately $68,800 and $73,300 , respectively, which were pledged to secure surety bonds.

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2015
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and Equipment: Property and equipment consists of the following: June 30, 2015 December 31, 2014 Building and improvements $ 4,032,944 $ 4,042,897 Computer software and office equipment 2,467,924 3,536,399 Warehouse equipment 254,034 254,034 Automotive equipment 14,717 14,717 6,769,619 7,848,047 Less – accumulated depreciation (3,453,898 ) (4,305,724 ) 3,315,721 3,542,323 Land 1,141,173 1,141,173 $ 4,456,894 $ 4,683,496 Depreciation expense totaled approximately $146,000 and $ 149,400 for the quarters ended June 30, 2015 and 2014 , respectively, and $ 251,600 and $ 287,300 for the six months ended June 30, 2015 and 2014 , respectively. On July 15, 2015 , the Company completed the previously announced sale of its headquarters building and related parcel of land in Irving, Texas for approximately $ 5.18 million . After repayment of outstanding mortgage debt of approximately $ 1.13 million secured by this facility and payment of other closing costs and adjustments, the Company received net cash proceeds of approximately $ 3.75 million . Effective upon closing of this sale, the Company entered into an agreement to lease back the facility from the purchaser under a lease that provides, among other things, a lease term ending April 30, 2016 and rent of approximately $35,000 per month.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	6 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	Goodwill and Other Intangible Assets: The Company measures its goodwill for impairment at the end of each year or in the event of an impairment indicator. No impairment losses have been recognized as a result of this testing. Goodwill balances are summarized as follows: Gross Carrying Value Accumulated Amortization Balance, December 31, 2014 $ 3,285,689 $ (1,064,343 ) Currency translation adjustment (55,448 ) 27,033 Balance, June 30, 2015 $ 3,230,241 $ (1,037,310 ) Other intangible assets consist of the following: June 30, 2015 December 31, 2014 Average Life (years) Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Copyrights, trademarks and other registrations 19 $ 99,100 $ (73,333 ) $ 99,100 $ (70,690 ) Business license 1 34,398 (34,398 ) 37,193 (29,240 ) Other 19 12,600 (9,324 ) 12,600 (8,988 ) $ 146,098 $ (117,055 ) $ 148,893 $ (108,918 ) Amortization expense related to other intangible assets totaled approximately $3,300 and $ 11,100 for the quarters ended June 30, 2015 and 2014 , respectively, and $ 10,600 and $ 15,700 for the six months ended June 30, 2015 and 2014 , respectively. The aggregate estimated amortization expense for intangible assets remaining as of June 30, 2015 is as follows: Remainder of 2015 $ 2,978 2016 5,957 2017 5,957 2018 5,957 2019 5,957 Thereafter 2,237 $ 29,043

Accrued Liabilities

Accrued Liabilities	6 Months Ended
	Jun. 30, 2015
Accrued Liabilities [Abstract]
Accrued Liabilities	Accrued Liabilities: Accrued liabilities consist of the following: June 30, 2015 December 31, 2014 Distributor commissions and awards $ 785,263 $ 867,336 Salaries and wages 432,956 468,192 Sales and property taxes 79,034 73,954 Interest 6,612 7,339 Other 13,257 3,229 $ 1,317,122 $ 1,420,050

Long-Term Obligations

Long-Term Obligations	6 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Long-Term Obligations	Long-Term Obligations: Long-term obligations consist of the following: June 30, 2015 December 31, 2014 Mortgage note payable bearing interest at 7.75%, payable in monthly installments of $25,797 through April 2019, collateralized by land and building, and personally guaranteed by the Company’s Chairman of the Board of Directors $ 1,023,914 $ 1,136,347 Less – current maturities (238,578 ) (229,538 ) $ 785,336 $ 906,809 The fair value of long-term debt is estimated based on interest rates for the same or similar instruments offered having the same or similar maturities and collateral requirements. At June 30, 2015 , the fair value of fixed-rate long-term debt was approximately $1,095,000 , which was $71,000 above the carrying value of approximately $1,024,000 . At December 31, 2014 , the fair value of fixed-rate long-term debt was approximately $ 1,226,000 , which was $ 90,000 above the carrying value of approximately $ 1,136,000 . As more fully described in Note E, this mortgage note was fully paid in July 2015 in connection with the sale of the land and building that secured the note.

Share-Based Compensation

Share-Based Compensation	6 Months Ended
	Jun. 30, 2015
Share-based Compensation [Abstract]
Share-Based Compensation	Share-Based Compensation: The Company records compensation expense for all share-based payments based on the estimated grant date fair value. There was no share-based compensation expense recognized for the quarters ended June 30, 2015 or 2014 , or the six months ended June 30, 2015 . Share-based compensation was $ 2,100 for the six months ended June 30, 2014 . There were no material tax benefits related to share-based compensation expense because virtually all share-based compensation resulted from grants of incentive stock options. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model. There were no option grants during the quarter s or six months ended June 30, 2015 or 2014 . A summary of stock option activity for the six months ended June 30, 2015 is as follows: Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding on December 31, 2014 50,896 $ 4.35 Granted — — Exercised — — Forfeited/canceled (5,080 ) 3.83 Outstanding on June 30, 2015 45,816 $ 4.41 2.2 $ 900 Exercisable on June 30, 2015 45,816 $ 4.41 2.2 $ 900 There were no non-vested stock options as of June 30, 2015 or changes to non-vested stock options during the six months then ended. As of June 30, 2015 , there was no unrecognized compensation cost related to stock option grants.

Segments and Geographic Area

Segments and Geographic Area	6 Months Ended
	Jun. 30, 2015
Segment Reporting [Abstract]
Segments and Geographic Area	Segments and Geographic Area: The Company's segments are based on the organizational structure that is used by management for making operating and investment decisions and for assessing performance. Based on this structure, the Company has two operating segments: Nutritional Products and Medical Products. The Nutritional Products segment manufactures and distributes a line of approximately 100 nutritional supplements and personal care products, including herbs, vitamins and minerals, as well as natural skin, hair and body care products. Nutritional Products are marketed under the "RBC Life" brand name through subsidiaries in North America and Southeast Asia. These products are distributed by a network comprised of independent Associates and NFR program participants in certain markets, primarily North America and Southeast Asia, and by licensees in other international markets. For the most part, licensees also market the Nutritional Products in their respective territories through a network of independent Associates. The Medical Products segment markets a line of over 35 wound care products under the "MPM Medical" brand name through a subsidiary operating primarily in the U.S. These wound care products are distributed to hospitals, nursing homes, home health care agencies, clinics and pharmacies through a network of medical/surgical supply dealers, pharmaceutical distributors and our own sales representatives. Medical Products are used to treat and manage pain associated with wounds, in the acute care, long-term care and oncology markets. The Company evaluates the performance of its segments primarily based on operating income (loss). All intercompany transactions have been eliminated, and intersegment revenues are not significant. In calculating operating income (loss) for these two segments, administrative expenses incurred that are common to the two segments are allocated on a usage basis. Segment information is as follows (U.S. dollars in 000s): Nutritional Products Medical Products Consolidated Quarter Ended June 30, 2015 Net sales $ 4,560 $ 1,632 $ 6,192 Depreciation and amortization 134 15 149 Operating income (loss) (387 ) 82 (305 ) Capital expenditures — — — Total assets 12,171 2,689 14,860 Quarter Ended June 30, 2014 Net sales $ 6,392 $ 1,493 $ 7,885 Depreciation and amortization 135 16 151 Operating income (loss) 48 (15 ) 33 Capital expenditures 333 — 333 Total assets 13,655 3,089 16,744 Six Months Ended June 30, 2015 Net sales $ 8,409 $ 3,143 $ 11,552 Depreciation and amortization 232 30 262 Operating income (loss) (1,158 ) 76 (1,082 ) Capital expenditures 38 — 38 Total assets 12,171 2,689 14,860 Six Months Ended June 30, 2014 Net sales $ 10,514 $ 3,084 $ 13,598 Depreciation and amortization 259 31 290 Operating income (loss) (496 ) 37 (459 ) Capital expenditures 636 — 636 Total assets 13,655 3,089 16,744 Financial information summarized geographically is as follows (U.S. dollars in 000s): Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Net sales Long-Lived assets Net sales Long-Lived assets Domestic $ 2,311 $ 6,043 $ 2,219 $ 6,087 Russia/Eastern Europe 1,865 — 3,342 — Canada 202 437 328 505 Southeast Asia 1,735 297 1,937 456 All others 79 — 59 — Totals $ 6,192 $ 6,777 $ 7,885 $ 7,048 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Net sales Long-Lived assets Net sales Long-Lived assets Domestic $ 4,368 $ 6,043 $ 4,533 $ 6,087 Russia/Eastern Europe 2,929 — 5,352 — Canada 412 437 661 505 Southeast Asia 3,702 297 2,928 456 All others 141 — 124 — Totals $ 11,552 $ 6,777 $ 13,598 $ 7,048 Significant Customers The Company recorded sales of Nutritional Products to Coral Club International, Inc. ("CCI"), a licensee of the Company, in the amounts of $1,865,000 and $3,342,000 during the quarters ended June 30, 2015 and 2014 , respectively, and $ 2,929,000 and $ 5,352,000 during the six months ended June 30, 2015 and 2014 , respectively. The President of CCI is a former member of our Board of Directors and beneficially owns approximately 18% of our common stock. The Company also recorded sales of Medical Products to a medical/surgical dealer (see Note L for additional information related to this dealer) in the amounts of $574,000 and $711,000 during the quarters ended June 30, 2015 and 2014 , respectively, and $ 1,081,000 and $ 1,391,000 during the six months ended June 30, 2015 and 2014 , respectively. In no other case did a customer of the Company account for more than 10% of net sales during the quarter s or six months ended June 30, 2015 and 2014 . Foreign Currency Translation The local currency is the functional currency for the Company’s foreign operations. Related assets and liabilities are translated into United States dollars at exchange rates existing at the balance sheet date, and revenues and expenses are translated at weighted-average exchange rates. The foreign currency translation adjustment is recorded as a separate component of shareholders’ equity and is included in accumulated other comprehensive income (loss).

Loss Per Share

Loss Per Share	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Loss Per Share	Loss Per Share: Summarized basic and diluted loss per common share was calculated as follows: Net Loss Weighted Average Shares Per Share Quarter Ended June 30, 2015 Basic loss per common share $ (245,628 ) 2,212,350 $ (0.11 ) Effect of dilutive stock options — — Diluted loss per common share $ (245,628 ) 2,212,350 $ (0.11 ) Quarter Ended June 30, 2014 Basic loss per common share $ (6,644 ) 2,212,350 $ (0.00 ) Effect of dilutive stock options — — Diluted loss per common share $ (6,644 ) 2,212,350 $ (0.00 ) Six Months Ended June 30, 2015 Basic loss per common share $ (795,618 ) 2,212,350 $ (0.36 ) Effect of dilutive stock options — — Diluted loss per common share $ (795,618 ) 2,212,350 $ (0.36 ) Six Months Ended June 30, 2014 Basic loss per common share $ (384,532 ) 2,212,350 $ (0.17 ) Effect of dilutive stock options — — Diluted loss per common share $ (384,532 ) 2,212,350 $ (0.17 ) The average number of stock options that were outstanding, but not included in the computation of diluted loss per common share because their exercise price was greater than the average market price of the common stock, or were otherwise anti-dilutive, was approximately 46,000 and 61,400 for the quarter s and six months ended June 30, 2015 and 2014 , respectively.

Legal Proceedings

Legal Proceedings	6 Months Ended
	Jun. 30, 2015
Legal Proceedings [Abstract]
Legal Proceedings	Legal Proceedings: Medical/Surgical Dealer - One medical/surgical dealer accounts for a significant portion of our Medical Products sales. This dealer distributes our Medical Products and provides services primarily to nursing homes and obtains reimbursement for the price of our products from Medicare. This dealer accounted for approximately $ 1,081,000 and $ 1,391,000 , or 9% and 10% , of the Company's net sales during the six months ended June 30, 2015 and 2014 , respectively. On February 27, 2012, we were notified that this dealer filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Central District of California in Santa Ana, California on February 24, 2012. According to its bankruptcy petition, this dealer filed its petition as the most effective means of stabilizing its finances as it resolved a reimbursement guidelines dispute with Medicare, which the dealer believed was improperly withholding payments. In July 2014, pursuant to an arrangement approved by the Bankruptcy Court, this dealer's pre-petition accounts receivable balance was paid in full. In May 2015, this dealer emerged from bankruptcy following the Bankruptcy Court's confirmation of its plan of reorganization. Environmental Research Center - On April 4, 2014, the Company received a notice from Environmental Research Center ("ERC"), a California non-profit corporation, alleging that the Company failed to include a warning notice related to lead content on labels of certain nutritional products sold in California as required under California's Safe Drinking Water and Toxic Enforcement Act of 1986 (commonly known as Proposition 65). During the first quarter of 2015, the Company and ERC entered into a settlement agreement, which was approved by the Court having jurisdiction over this matter, pursuant to which the Company agreed to modify its labeling of the affected products and pay certain settlement costs. These settlement costs have been recognized in the accompanying condensed consolidated financial statements. Mannatech - On April 28, 2015, Mannatech, Incorporated, a distributor of nutritional supplement products, filed suit against the Company alleging patent infringement with respect to sales of two of the Company's products. In July 2015, the parties entered into a settlement agreement and the suit was dismissed. From time to time, we are a party to claims, litigation or other legal or administrative proceedings that we consider to arise in the ordinary course of our business. No assurances can be given regarding the outcome of these or any other pending proceedings, or the ultimate effect such outcomes may have. However, other than as stated above, we do not believe we are a party to any legal or administrative proceedings which, if determined adversely to us, individually or in the aggregate, would have a material effect on our financial position, results of operations or cash flows.

Unaudited Condensed Consolida18

Unaudited Condensed Consolidated Financial Statements (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements:

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2015
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consist of the following: June 30, 2015 December 31, 2014 Raw materials and bulk products $ 417,779 $ 370,333 Packaging materials 256,319 253,700 Finished goods 4,432,279 4,175,050 $ 5,106,377 $ 4,799,083

Prepaid Expenses and Other Cu20

Prepaid Expenses and Other Current Assets (Tables)	6 Months Ended
	Jun. 30, 2015
Prepaid Expense and Other Assets, Current [Abstract]
Schedule of Prepaid Expenses and Other Current Assets	Prepaid expenses and other current assets consist of the following: June 30, 2015 December 31, 2014 Advance payment to suppliers $ 109,125 $ 151,365 Prepaid insurance and other 403,909 239,385 Certificates of deposit - restricted 68,791 73,270 $ 581,825 $ 464,020

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2015
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	Property and equipment consists of the following: June 30, 2015 December 31, 2014 Building and improvements $ 4,032,944 $ 4,042,897 Computer software and office equipment 2,467,924 3,536,399 Warehouse equipment 254,034 254,034 Automotive equipment 14,717 14,717 6,769,619 7,848,047 Less – accumulated depreciation (3,453,898 ) (4,305,724 ) 3,315,721 3,542,323 Land 1,141,173 1,141,173 $ 4,456,894 $ 4,683,496

Goodwill and Other Intangible22

Goodwill and Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Summary of Goodwill Balances	Goodwill balances are summarized as follows: Gross Carrying Value Accumulated Amortization Balance, December 31, 2014 $ 3,285,689 $ (1,064,343 ) Currency translation adjustment (55,448 ) 27,033 Balance, June 30, 2015 $ 3,230,241 $ (1,037,310 )
Schedule of Other Intangible Assets	Other intangible assets consist of the following: June 30, 2015 December 31, 2014 Average Life (years) Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Copyrights, trademarks and other registrations 19 $ 99,100 $ (73,333 ) $ 99,100 $ (70,690 ) Business license 1 34,398 (34,398 ) 37,193 (29,240 ) Other 19 12,600 (9,324 ) 12,600 (8,988 ) $ 146,098 $ (117,055 ) $ 148,893 $ (108,918 )
Schedule of Aggregate Estimated Amortization Expense	The aggregate estimated amortization expense for intangible assets remaining as of June 30, 2015 is as follows: Remainder of 2015 $ 2,978 2016 5,957 2017 5,957 2018 5,957 2019 5,957 Thereafter 2,237 $ 29,043

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2015
Accrued Liabilities [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities consist of the following: June 30, 2015 December 31, 2014 Distributor commissions and awards $ 785,263 $ 867,336 Salaries and wages 432,956 468,192 Sales and property taxes 79,034 73,954 Interest 6,612 7,339 Other 13,257 3,229 $ 1,317,122 $ 1,420,050

Long-Term Obligations (Tables)

Long-Term Obligations (Tables)	6 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Schedule of Long-term Obligations	Long-term obligations consist of the following: June 30, 2015 December 31, 2014 Mortgage note payable bearing interest at 7.75%, payable in monthly installments of $25,797 through April 2019, collateralized by land and building, and personally guaranteed by the Company’s Chairman of the Board of Directors $ 1,023,914 $ 1,136,347 Less – current maturities (238,578 ) (229,538 ) $ 785,336 $ 906,809

Share-Based Compensation (Table

Share-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2015
Share-based Compensation [Abstract]
Schedule of Stock Option Activity	summary of stock option activity for the six months ended June 30, 2015 is as follows: Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding on December 31, 2014 50,896 $ 4.35 Granted — — Exercised — — Forfeited/canceled (5,080 ) 3.83 Outstanding on June 30, 2015 45,816 $ 4.41 2.2 $ 900 Exercisable on June 30, 2015 45,816 $ 4.41 2.2 $ 900

Segments and Geographic Area (T

Segments and Geographic Area (Tables)	6 Months Ended
	Jun. 30, 2015
Segment Reporting [Abstract]
Schedule of Segment Information	Segment information is as follows (U.S. dollars in 000s): Nutritional Products Medical Products Consolidated Quarter Ended June 30, 2015 Net sales $ 4,560 $ 1,632 $ 6,192 Depreciation and amortization 134 15 149 Operating income (loss) (387 ) 82 (305 ) Capital expenditures — — — Total assets 12,171 2,689 14,860 Quarter Ended June 30, 2014 Net sales $ 6,392 $ 1,493 $ 7,885 Depreciation and amortization 135 16 151 Operating income (loss) 48 (15 ) 33 Capital expenditures 333 — 333 Total assets 13,655 3,089 16,744 Six Months Ended June 30, 2015 Net sales $ 8,409 $ 3,143 $ 11,552 Depreciation and amortization 232 30 262 Operating income (loss) (1,158 ) 76 (1,082 ) Capital expenditures 38 — 38 Total assets 12,171 2,689 14,860 Six Months Ended June 30, 2014 Net sales $ 10,514 $ 3,084 $ 13,598 Depreciation and amortization 259 31 290 Operating income (loss) (496 ) 37 (459 ) Capital expenditures 636 — 636 Total assets 13,655 3,089 16,744
Summary of Financial Information by Geographic Segment	Financial information summarized geographically is as follows (U.S. dollars in 000s): Quarter Ended June 30, 2015 Quarter Ended June 30, 2014 Net sales Long-Lived assets Net sales Long-Lived assets Domestic $ 2,311 $ 6,043 $ 2,219 $ 6,087 Russia/Eastern Europe 1,865 — 3,342 — Canada 202 437 328 505 Southeast Asia 1,735 297 1,937 456 All others 79 — 59 — Totals $ 6,192 $ 6,777 $ 7,885 $ 7,048 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Net sales Long-Lived assets Net sales Long-Lived assets Domestic $ 4,368 $ 6,043 $ 4,533 $ 6,087 Russia/Eastern Europe 2,929 — 5,352 — Canada 412 437 661 505 Southeast Asia 3,702 297 2,928 456 All others 141 — 124 — Totals $ 11,552 $ 6,777 $ 13,598 $ 7,048

Loss Per Share (Tables)

Loss Per Share (Tables)	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Loss Per Common Share	Summarized basic and diluted loss per common share was calculated as follows: Net Loss Weighted Average Shares Per Share Quarter Ended June 30, 2015 Basic loss per common share $ (245,628 ) 2,212,350 $ (0.11 ) Effect of dilutive stock options — — Diluted loss per common share $ (245,628 ) 2,212,350 $ (0.11 ) Quarter Ended June 30, 2014 Basic loss per common share $ (6,644 ) 2,212,350 $ (0.00 ) Effect of dilutive stock options — — Diluted loss per common share $ (6,644 ) 2,212,350 $ (0.00 ) Six Months Ended June 30, 2015 Basic loss per common share $ (795,618 ) 2,212,350 $ (0.36 ) Effect of dilutive stock options — — Diluted loss per common share $ (795,618 ) 2,212,350 $ (0.36 ) Six Months Ended June 30, 2014 Basic loss per common share $ (384,532 ) 2,212,350 $ (0.17 ) Effect of dilutive stock options — — Diluted loss per common share $ (384,532 ) 2,212,350 $ (0.17 )

Inventories (Details)

Inventories (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials and bulk products	$ 417,779	$ 370,333
Packaging materials	256,319	253,700
Finished goods	4,432,279	4,175,050
Inventories	$ 5,106,377	$ 4,799,083

Prepaid Expenses and Other Cu29

Prepaid Expenses and Other Current Assets (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Prepaid Expenses and Other Current Assets [Line Items]
Advance payment to suppliers	$ 109,125		$ 151,365
Prepaid insurance and other	403,909		239,385
Certificates of deposit - restricted	68,791	$ 73,270	73,270
Prepaid expenses and other current assets	$ 581,825		$ 464,020

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Jul. 15, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property and equipment, net		$ 4,456,894		$ 4,456,894		$ 4,683,496
Depreciation expense		146,000	$ 149,400	251,600	$ 287,300
Building and improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross		4,032,944		4,032,944		4,042,897
Computer software and office equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross		2,467,924		2,467,924		3,536,399
Warehouse equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross		254,034		254,034		254,034
Automotive equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross		14,717		14,717		14,717
Depreciable assets
Property, Plant and Equipment [Line Items]
Property and equipment, gross		6,769,619		6,769,619		7,848,047
Less: accumulated depreciation		(3,453,898)		(3,453,898)		(4,305,724)
Property and equipment, net		3,315,721		3,315,721		3,542,323
Land
Property, Plant and Equipment [Line Items]
Property and equipment, net		$ 1,141,173		$ 1,141,173		$ 1,141,173
Subsequent Event [Member]
Property, Plant and Equipment [Line Items]
Operating Leases, Rent Expense, Monthly	$ 35,000
Subsequent Event [Member] | Land and Building
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Disposals	5,180,000
Repayments of Debt	1,130,000
Proceeds from Sale of Property, Plant, and Equipment	$ 3,750,000

Goodwill and Other Intangible31

Goodwill and Other Intangible Assets (Summary of Goodwill Balances) (Details)	6 Months Ended
	Jun. 30, 2015USD ($)
Goodwill [Roll Forward]
Gross Carrying Value, Beginning Balance	$ 3,285,689
Gross Carrying Value, Currency translation adjustment	(55,448)
Gross Carrying Value, Ending Balance	3,230,241
Accumulated Amortization, Beginning Balance	(1,064,343)
Accumulated Amortization, Currency translation adjustment	27,033
Accumulated Amortization, Ending Balance	$ (1,037,310)

Goodwill and Other Intangible32

Goodwill and Other Intangible Assets (Summary of Other Intangible Assets) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 146,098		$ 146,098		$ 148,893
Accumulated Amortization	(117,055)		(117,055)		(108,918)
Amortization expense	3,300	$ 11,100	$ 10,600	$ 15,700
Copyrights, trademarks and other registrations
Acquired Finite-Lived Intangible Assets [Line Items]
Average Life (years)			19 years
Gross Carrying Value	99,100		$ 99,100		99,100
Accumulated Amortization	(73,333)		$ (73,333)		(70,690)
Business license
Acquired Finite-Lived Intangible Assets [Line Items]
Average Life (years)			1 year
Gross Carrying Value	34,398		$ 34,398		37,193
Accumulated Amortization	(34,398)		$ (34,398)		(29,240)
Other
Acquired Finite-Lived Intangible Assets [Line Items]
Average Life (years)			19 years
Gross Carrying Value	12,600		$ 12,600		12,600
Accumulated Amortization	$ (9,324)		$ (9,324)		$ (8,988)

Goodwill and Other Intangible33

Goodwill and Other Intangible Assets (Aggregate Estimated Amortization) (Details)	Jun. 30, 2015USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2015	$ 2,978
2,015	5,957
2,016	5,957
2,017	5,957
2,018	5,957
Thereafter	2,237
Aggregate estimated amortization expense	$ 29,043

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Accrued Liabilities [Abstract]
Distributor commissions and awards	$ 785,263	$ 867,336
Salaries and wages	432,956	468,192
Sales and property taxes	79,034	73,954
Interest	6,612	7,339
Other	13,257	3,229
Accrued liabilities	$ 1,317,122	$ 1,420,050

Long-Term Obligations (Details)

Long-Term Obligations (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Long-term Debt	$ 1,023,914	$ 1,136,347
Less – current maturities	(238,578)	(229,538)
Long-term obligations, less current maturities	785,336	906,809
Fair value in excess of carrying value	$ 71,000	$ 90,000
Mortgage Notes Payable
Debt Instrument [Line Items]
Interest rate (as a percentage)	7.75%	7.75%
Monthly installment payments	$ 25,797	$ 25,797
Carrying value
Debt Instrument [Line Items]
Fair value of fixed-rate long-term debt	1,024,000	1,136,000
Fair Value
Debt Instrument [Line Items]
Fair value of fixed-rate long-term debt	$ 1,095,000	$ 1,226,000

Share-Based Compensation (Summa

Share-Based Compensation (Summary of Stock Option Activity) (Details) - Jun. 30, 2015 - USD ($)	Total
Options, Outstanding [Roll Forward]
Options, Beginning Balance Outstanding	50,896
Options, Granted	0
Options, Exercised	0
Options, Forfeited/canceled	(5,080)
Options, Ending Balance Outstanding	45,816
Options, Exercisable	45,816
Outstanding, Weighted-Average Exercise Price per Share [Roll Forward]
Weighted-Average Exercise Price per Share, Beginning Balance Outstanding	$ 4.35
Weighted-Average Exercise Price per Share, Granted	0
Weighted-Average Exercise Price per Share, Exercised	0
Weighted-Average Exercise Price per Share, Forfeited/canceled	3.83
Weighted-Average Exercise Price per Share, Ending Balance Outstanding	4.41
Weighted-Average Exercise Price per Share, Exercisable	$ 4.41
Weighted-Average Remaining Contractual Term, Outstanding	2 years 2 months 12 days
Weighted-Average Remaining Contractual Term, Exercisable	2 years 2 months 12 days
Aggregate Intrinsic Value, Outstanding	$ 900
Aggregate Intrinsic Value, Exercisable	$ 900

Share-Based Compensation (Addit

Share-Based Compensation (Additional Information) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based compensation expense	$ 2,100
Non-vested stock options		0

Segments and Geographic Area (S

Segments and Geographic Area (Summary of Segment Information) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)productsegment	Jun. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Segment Reporting Information [Line Items]
Number of operating segments (segment) | segment			2
Net sales	$ 6,192,404	$ 7,885,090	$ 11,552,214	$ 13,598,210
Depreciation and amortization	149,000	151,000	262,238	290,300
Operating income (loss)	(305,361)	33,190	(1,081,935)	(459,004)
Capital expenditures	0	332,505	37,649	636,170
Total assets	14,860,021	16,744,000	14,860,021	16,744,000	$ 15,995,944
Nutritional Products
Segment Reporting Information [Line Items]
Net sales	4,560,000	6,392,000	8,409,000	10,514,000
Depreciation and amortization	134,000	135,000	232,000	259,000
Operating income (loss)	(387,000)	48,000	(1,158,000)	(496,000)
Capital expenditures	0	333,000	38,000	636,000
Total assets	12,171,000	13,655,000	12,171,000	13,655,000
Medical Products
Segment Reporting Information [Line Items]
Net sales	1,632,000	1,493,000	3,143,000	3,084,000
Depreciation and amortization	15,000	16,000	30,000	31,000
Operating income (loss)	82,000	(15,000)	76,000	37,000
Capital expenditures	0	0	0	0
Total assets	$ 2,689,000	$ 3,089,000	$ 2,689,000	$ 3,089,000
Minimum | Nutritional Products
Segment Reporting Information [Line Items]
Number of products (products) | product			100
Wound Care Products | Medical Products
Segment Reporting Information [Line Items]
Number of products (products) | product			35

Segments and Geographic Area 39

Segments and Geographic Area (Summary of Financial Information by Geographic Location) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Segment Reporting Information [Line Items]
Net sales	$ 6,192,404	$ 7,885,090	$ 11,552,214	$ 13,598,210
Long-Lived assets	6,777,000	7,048,000	6,777,000	7,048,000
Domestic
Segment Reporting Information [Line Items]
Net sales	2,311,000	2,219,000	4,368,000	4,533,000
Long-Lived assets	6,043,000	6,087,000	6,043,000	6,087,000
Russia/Eastern Europe
Segment Reporting Information [Line Items]
Net sales	1,865,000	3,342,000	2,929,000	5,352,000
Long-Lived assets	0	0	0	0
Canada
Segment Reporting Information [Line Items]
Net sales	202,000	328,000	412,000	661,000
Long-Lived assets	437,000	505,000	437,000	505,000
Southeast Asia
Segment Reporting Information [Line Items]
Net sales	1,735,000	1,937,000	3,702,000	2,928,000
Long-Lived assets	297,000	456,000	297,000	456,000
All others
Segment Reporting Information [Line Items]
Net sales	79,000	59,000	141,000	124,000
Long-Lived assets	$ 0	$ 0	$ 0	$ 0

Segments and Geographic Area 40

Segments and Geographic Area (Summary Significant Customers) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Segment Reporting Information [Line Items]
Net sales	$ 6,192,404	$ 7,885,090	$ 11,552,214	$ 13,598,210
Nutritional Products
Segment Reporting Information [Line Items]
Net sales	4,560,000	6,392,000	8,409,000	10,514,000
Medical Products
Segment Reporting Information [Line Items]
Net sales	1,632,000	1,493,000	3,143,000	3,084,000
Coral Club International, Inc. | Nutritional Products
Segment Reporting Information [Line Items]
Net sales	1,865,000	3,342,000	2,929,000	5,352,000
Medical/Surgical Dealer | Medical Products
Segment Reporting Information [Line Items]
Net sales	$ 574,000	$ 711,000	$ 1,081,000	$ 1,391,000
President of Related Entity and Former Director
Segment Reporting Information [Line Items]
Ownership percentage (percent)	18.00%		18.00%

Loss Per Share (Details)

Loss Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share [Abstract]
Net Earnings (Loss), Basic	$ (245,628)	$ (6,644)	$ (795,618)	$ (384,532)
Net Earnings (Loss), Diluted	$ (245,628)	$ (6,644)	$ (795,618)	$ (384,532)
Weighted average shares, basic (shares)	2,212,350	2,212,350	2,212,350	2,212,350
Weighted average shares, effect of dilutive stock options (shares)			0	0
Weighted average shares, diluted (shares)	2,212,350	2,212,350	2,212,350	2,212,350
Earnings per share, basic (usd per share)	$ (0.11)	$ 0	$ (0.36)	$ (0.17)
Earnings per share, diluted (usd per share)	$ (0.11)	$ 0	$ (0.36)	$ (0.17)
Antidilutive stock options excluded from earnings per share calculation	46,000	61,400

Legal Proceedings (Details)

Legal Proceedings (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Loss Contingencies [Line Items]
Net sales	$ 6,192,404	$ 7,885,090	$ 11,552,214	$ 13,598,210
Medical Products
Loss Contingencies [Line Items]
Net sales	1,632,000	1,493,000	3,143,000	3,084,000
Medical/Surgical Dealer | Medical Products
Loss Contingencies [Line Items]
Net sales	$ 574,000	$ 711,000	$ 1,081,000	$ 1,391,000
Concentration risk (percent)			9.00%	10.00%