Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 28, 2014 | Jun. 28, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'NATURAL HEALTH TRENDS CORP | ' | ' |
Document Type | '10-K | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 11,448,571 | ' |
Entity Public Float | ' | ' | $6,903,264 |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0000912061 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $14,550 | $4,207 |
Accounts receivable | 134 | 122 |
Inventories, net | 1,828 | 867 |
Other current assets | 658 | 641 |
Total current assets | 17,170 | 5,837 |
Property and equipment, net | 265 | 121 |
Goodwill | 1,764 | 1,764 |
Restricted cash | 328 | 239 |
Other assets | 300 | 258 |
Total assets | 19,827 | 8,219 |
Current liabilities: | ' | ' |
Accounts payable | 3,058 | 1,385 |
Income taxes payable | 25 | 10 |
Accrued distributor commissions | 3,962 | 1,308 |
Other accrued expenses | 3,146 | 1,688 |
Deferred revenue | 2,569 | 836 |
Deferred tax liability | 108 | 92 |
Other current liabilities | 882 | 991 |
Total current liabilities | 13,750 | 6,310 |
Commitments and contingencies | 0 | 0 |
Stockholders’ equity: | ' | ' |
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 1,761,900 shares designated Series A convertible preferred stock, 138,400 and 123,693 shares issued and outstanding at December 31, 2012 and 2013, respectively; aggregate liquidation value of $308 | 111 | 124 |
Common stock, $0.001 par value; 50,000,000 shares authorized; 11,324,048 and 11,332,771 shares issued and outstanding at December 31, 2012 and 2013, respectively | 11 | 11 |
Additional paid-in capital | 80,655 | 80,584 |
Accumulated deficit | -74,619 | -78,708 |
Accumulated other comprehensive loss: | ' | ' |
Foreign currency translation adjustments | -81 | -102 |
Total stockholders’ equity | 6,077 | 1,909 |
Total liabilities and stockholders’ equity | $19,827 | $8,219 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, aggregate liquidation value (in Dollars) | $308 | $308 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 11,332,771 | 11,324,048 |
Common stock, shares outstanding | 11,332,771 | 11,324,048 |
Series A Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, shares authorized | 1,761,900 | 1,761,900 |
Preferred stock, shares issued | 123,693 | 138,400 |
Preferred stock, shares outstanding | 123,693 | 138,400 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales | $52,527 | $37,514 |
Cost of sales | 12,551 | 9,685 |
Gross profit | 39,976 | 27,829 |
Operating expenses: | ' | ' |
Distributor commissions | 24,053 | 15,724 |
Selling, general and administrative expenses (including stock-based compensation expense of $94 and $110 during 2012 and 2013, respectively) | 11,634 | 9,415 |
Depreciation and amortization | 66 | 45 |
Total operating expenses | 35,753 | 25,184 |
Income from operations | 4,223 | 2,645 |
Other expense, net | -32 | -39 |
Income before income taxes | 4,191 | 2,606 |
Income tax provision (benefit) | 102 | -24 |
Net income | 4,089 | 2,630 |
Preferred stock dividends | -15 | -17 |
Net income available to common stockholders | $4,074 | $2,613 |
Income per share of Natural Health Trends – basic (in Dollars per share) | $0.36 | $0.24 |
Income per share of Natural Health Trends – diluted (in Dollars per share) | $0.36 | $0.23 |
Weighted-average number of shares outstanding – basic (in Shares) | 11,154 | 10,944 |
Weighted-average number of shares outstanding – diluted (in Shares) | 11,331 | 11,234 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parentheticals) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Stock-based compensation expense included in selling, general, and administrative expense | $110 | $94 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Net income | $4,089 | $2,630 |
Other comprehensive income (loss), net of tax: | ' | ' |
Foreign currency translation adjustments | 21 | -3 |
Comprehensive income | $4,110 | $2,627 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
In Thousands | ||||||
Balance at Dec. 31, 2011 | $124 | $11 | $80,493 | ($81,338) | ($99) | ($809) |
Balance (in Shares) at Dec. 31, 2011 | 138,400 | 11,326,323 | ' | ' | ' | ' |
Net income (loss) | ' | ' | ' | 2,630 | ' | 2,630 |
Repurchase of common stock | ' | ' | -3 | ' | ' | -3 |
Repurchase of common stock (in Shares) | ' | -2,275 | ' | ' | ' | ' |
Foreign currency translation adjustments | ' | ' | ' | ' | -3 | -3 |
Stock-based compensation | ' | ' | 94 | ' | ' | 94 |
Balance at Dec. 31, 2012 | 124 | 11 | 80,584 | -78,708 | -102 | 1,909 |
Balance (in Shares) at Dec. 31, 2012 | 138,400 | 11,324,048 | ' | ' | ' | ' |
Net income (loss) | ' | ' | ' | 4,089 | ' | 4,089 |
Conversion of Series A preferred stock | -13 | ' | 13 | ' | ' | ' |
Conversion of Series A preferred stock (in Shares) | -14,707 | 14,707 | ' | ' | ' | ' |
Repurchase of common stock | ' | ' | -52 | ' | ' | -52 |
Repurchase of common stock (in Shares) | ' | -32,660 | ' | ' | ' | ' |
Issuance of common stock (in Shares) | ' | 26,676 | ' | ' | ' | ' |
Foreign currency translation adjustments | ' | ' | ' | ' | 21 | 21 |
Stock-based compensation | ' | ' | 110 | ' | ' | 110 |
Balance at Dec. 31, 2013 | $111 | $11 | $80,655 | ($74,619) | ($81) | $6,077 |
Balance (in Shares) at Dec. 31, 2013 | 123,693 | 11,332,771 | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $4,089 | $2,630 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 66 | 45 |
Stock-based compensation | 110 | 94 |
Deferred income taxes | 16 | -56 |
Changes in assets and liabilities: | ' | ' |
Accounts receivable | -17 | -24 |
Inventories, net | -974 | 236 |
Other current assets | -35 | -95 |
Other assets | -38 | -5 |
Accounts payable | 1,673 | -826 |
Income taxes payable | 16 | -1 |
Accrued distributor commissions | 2,679 | 117 |
Other accrued expenses | 1,467 | 203 |
Deferred revenue | 1,738 | -140 |
Other current liabilities | -104 | 36 |
Net cash provided by operating activities | 10,686 | 2,214 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -210 | -96 |
Decrease (increase) in restricted cash | -82 | 493 |
Net cash provided by (used in) investing activities | -292 | 397 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Repurchase of common stock | -52 | -3 |
Net cash used in financing activities | -52 | -3 |
Effect of exchange rates on cash and cash equivalents | 1 | -18 |
Net increase in cash and cash equivalents | 10,343 | 2,590 |
CASH AND CASH EQUIVALENTS, beginning of period | 4,207 | 1,617 |
CASH AND CASH EQUIVALENTS, end of period | $14,550 | $4,207 |
Note_1_Nature_of_Operations_an
Note 1 - Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies [Text Block] | ' | ||||||||||||||||||||||||
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||
Nature of Operations | |||||||||||||||||||||||||
Natural Health Trends Corp. (the “Company”), a Delaware corporation, is an international direct-selling and e-commerce company headquartered in Dallas, Texas. Subsidiaries controlled by the Company sell personal care, wellness, and “quality of life” products under the “NHT Global” brand. In most markets, we sell our products to an independent member network that either uses the products themselves or resells them to consumers. | |||||||||||||||||||||||||
Our wholly-owned subsidiaries have an active physical presence in the following markets: North America; Greater China, which consists of Hong Kong, Taiwan and China; Russia; South Korea; Japan; and Europe, which consists of Italy and Slovenia. In June 2013, we opened a marketing center in Almaty, Kazakhstan through our engagement with our Russian service provider. The center also opened for sales and distribution purposes in September 2013. A similar fully-operational facility opened in Odessa, Ukraine in February 2014. | |||||||||||||||||||||||||
Principles of Consolidation | |||||||||||||||||||||||||
The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||||||
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. | |||||||||||||||||||||||||
The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates associated with obsolete inventory and the fair value of acquired intangible assets, including goodwill, revenue recognition, as well as those used in the determination of liabilities related to sales returns, distributor commissions and income taxes. Various assumptions and other factors prompt the determination of these significant estimates. The process of determining significant estimates is fact specific and takes into account historical experience and current and expected economic conditions. The actual results may differ materially and adversely from the Company’s estimates. To the extent that there are material differences between the estimates and actual results, future results of operations will be affected. | |||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||
The Company considers all highly liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company includes in its cash and cash equivalents credit card receivables due from its major credit card processor, which serves the Hong Kong, North America, Europe, and Japan markets, as the cash proceeds from credit card receivables are received within two to five days. | |||||||||||||||||||||||||
The Company maintains certain cash balances at several institutions located in the United States which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. | |||||||||||||||||||||||||
Restricted Cash | |||||||||||||||||||||||||
The Company periodically maintains a cash reserve with certain credit card processing companies to provide for potential uncollectible amounts and chargebacks. Those cash reserves held by credit card companies located in South Korea are reflected in noncurrent assets since those cards require the Company to provide 100% collateral before processing transactions, which must be maintained indefinitely. | |||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||
Inventories consist primarily of finished goods and are stated at the lower of cost or market, using the first-in, first-out method. The Company reviews its inventory for obsolescence and any inventory identified as obsolete is reserved or written off. The Company’s determination of obsolescence is based on assumptions about the demand for its products, product expiration dates, estimated future sales, and management’s future plans. At December 31, 2012, the reserve for obsolescence totaled $72,000. No such reserve existed at December 31, 2013. | |||||||||||||||||||||||||
Property and Equipment | |||||||||||||||||||||||||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three to five years for office equipment and office software and five to seven years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets. Expenditures for maintenance and repairs are charged to expense as incurred. | |||||||||||||||||||||||||
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of its carrying amounts to future undiscounted cash flows the assets are expected to generate. If property and equipment are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. | |||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||
In accordance with accounting principles generally accepted in the United States of America, the Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, a two-step impairment test is performed. The Company’s policy is to test for impairment annually during the fourth quarter. Considerable management judgment is necessary to measure fair value. We did not recognize any impairment charges for goodwill during the periods presented. | |||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||
The Company recognizes income taxes under the liability method of accounting for income taxes. Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. Deferred taxes are not provided on the portion of undistributed earnings of subsidiaries outside of the United States when these earnings are considered permanently reinvested. | |||||||||||||||||||||||||
The Company and its subsidiaries file income tax returns in the United States, various states, and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2010, and is no longer subject to state income tax examinations for years prior to 2009. No jurisdictions are currently examining any income tax returns of the Company or its subsidiaries. | |||||||||||||||||||||||||
Foreign Currency | |||||||||||||||||||||||||
The functional currency of the Company’s international subsidiaries is generally their local currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Equity accounts are translated at historical rates. The resulting translation adjustments are recorded directly into a separate component of stockholders’ equity and represents the only component of accumulated other comprehensive income. | |||||||||||||||||||||||||
Aggregate transaction gains or losses, including gains or losses related to foreign-denominated cash and cash equivalents and the re-measurement of certain inter-company balances, are included in the statement of operations as other income and expense. Loss on foreign exchange totaling $125,000 and $32,000 was recognized during 2012 and 2013, respectively. | |||||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||||
Product sales are recorded when the products are shipped and title passes to independent distributors. Product sales to distributors are made pursuant to a distributor agreement that provides for transfer of both title and risk of loss upon our delivery to the carrier that completes delivery to the distributors, which is commonly referred to as “F.O.B. Shipping Point.” The Company primarily receives payment by credit card at the time distributors place orders. Amounts received for unshipped product are recorded as deferred revenue. The Company’s sales arrangements do not contain right of inspection or customer acceptance provisions other than general rights of return. | |||||||||||||||||||||||||
Actual product returns are recorded as a reduction to net sales. The Company estimates and accrues a reserve for product returns based on its return policies and historical experience. | |||||||||||||||||||||||||
Enrollment package revenue, including any nonrefundable set-up fees, is deferred and recognized over the term of the arrangement, generally twelve months. Enrollment packages provide distributors access to both a personalized marketing website and a business management system. No upfront costs are deferred as the amount is nominal. | |||||||||||||||||||||||||
Shipping charges billed to distributors are included in net sales. Costs associated with shipments are included in cost of sales. | |||||||||||||||||||||||||
Various taxes on the sale of products and enrollment packages to distributors are collected by the Company as an agent and remitted to the respective taxing authority. These taxes are presented on a net basis and recorded as a liability until remitted to the respective taxing authority. | |||||||||||||||||||||||||
Distributor Commissions | |||||||||||||||||||||||||
Independent distributors earn commissions based on total personal and group bonus volume points per weekly sales period. Each of our products are designated a specified number of bonus volume points, which is essentially a percentage of the product’s wholesale price. The Company accrues commissions when earned and pays commissions on product sales generally two weeks following the end of the weekly sales period. | |||||||||||||||||||||||||
In some markets, we also pay certain bonuses on purchases by up to three generations of personally sponsored distributors, as well as bonuses on commissions earned by up to three generations of personally sponsored distributors. Independent distributors may also earn incentives based on meeting certain qualifications during a designated incentive period, which may range from several weeks to up to a year. These incentives may be both monetary and non-monetary in nature. The Company estimates and accrues all costs associated with the incentives as the distributors meet the qualification requirements. | |||||||||||||||||||||||||
From time to time we make modifications and enhancements to our compensation plan to help motivate distributors, which can have an impact on distributor commissions. From time to time we also enter into agreements for business or market development, which may result in additional compensation to specific distributors. | |||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||
Stock-based compensation expense is determined based on the grant date fair value of each award, net of estimated forfeitures which are derived from historical experience, and is recognized on a straight-line basis over the requisite service period for the award. | |||||||||||||||||||||||||
Income Per Share | |||||||||||||||||||||||||
Basic income per share is computed via the “two-class” method by dividing net income allocated to common stockholders by the weighted-average number of common shares outstanding during the period. Net income available to common stockholders is allocated to both common stock and participating securities as if all of the income for the period had been distributed. The Company’s Series A convertible preferred stock is a participating security due to its participation rights related to dividends declared by the Company. If dividends are distributed to common stockholders, the Company is also required to pay dividends to the holders of the preferred stock in an amount equal to the greater of (1) the amount of dividends then accrued and not previously paid on such shares of preferred stock or (2) the amount payable if dividends were distributed to the common stockholders on an as-converted basis. | |||||||||||||||||||||||||
Diluted income per share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. The dilutive effect of non-vested restricted stock and warrants is reflected by application of the treasury stock method. Under the treasury stock method, the amount of compensation cost for future service that the Company has not yet recognized and the amount of tax benefit that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares. The dilutive effect of the Company’s Series A convertible preferred stock is calculated using the more dilutive of the “two-class” method and the “if-converted” method, which assumes that the preferred stock was converted into common stock at the beginning of each period presented. | |||||||||||||||||||||||||
The following table illustrates the computation of basic and diluted income per share for the periods indicated (in thousands, except per share data): | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | ||||||||||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||||||||||
Basic EPS: | |||||||||||||||||||||||||
Net income available to common stockholders | $ | 2,613 | $ | 4,074 | |||||||||||||||||||||
Less: undistributed earnings to participating securities | (16 | ) | (31 | ) | |||||||||||||||||||||
Net income allocated to common stockholders | $ | 2,597 | 10,944 | $ | 0.24 | $ | 4,043 | 11,154 | $ | 0.36 | |||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||||
Non-vested restricted stock | – | 290 | – | 177 | |||||||||||||||||||||
Diluted EPS: | |||||||||||||||||||||||||
Net income allocated to common stockholders plus assumed conversions | $ | 2,597 | 11,234 | $ | 0.23 | $ | 4,043 | 11,331 | $ | 0.36 | |||||||||||||||
Certain non-vested restricted stock is anti-dilutive upon applying the treasury stock method since the amount of compensation cost for future service results in the hypothetical repurchase of shares exceeding the actual number of shares to be vested. Other common stock equivalents are also anti-dilutive since the applicable exercise price exceeds the average market price of the related common stock for the period. | |||||||||||||||||||||||||
The following securities were not included for the time periods indicated as their effect would have been anti-dilutive: | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Warrants to purchase common stock | 3,704,854 | 2,234,994 | |||||||||||||||||||||||
Non-vested restricted stock | 100,000 | – | |||||||||||||||||||||||
Warrants to purchase 1,495,952 shares of common stock were still outstanding at December 31, 2013. Such warrants expire April 21, 2015. | |||||||||||||||||||||||||
Certain Risks and Concentrations | |||||||||||||||||||||||||
A substantial portion of the Company’s sales are generated in Hong Kong (see Note 10). Most of the Company’s Hong Kong revenues are derived from the sale of products that are delivered to members in China. In contrast to the Company’s operations in other parts of the world, the Company has not implemented a direct sales model in China. The Chinese government permits direct selling only by organizations that have a license that the Company does not have, and has adopted anti-multilevel marketing legislation. The Company operates an e-commerce direct selling model in Hong Kong and recognizes the revenue derived from sales to both Hong Kong and Chinese members as being generated in Hong Kong. Products purchased by members in China are delivered by the Company to one or more third parties that act as the importers of record under agreements to pay applicable duties. In addition, through a Chinese entity, the Company sells products in China using an e-commerce retail model. The Chinese entity operates separately from the Hong Kong entity, although a Chinese member may elect to participate separately in both. | |||||||||||||||||||||||||
The Company believes that the laws and regulations in China regarding direct selling and multi-level marketing are not specifically applicable to the Company’s Hong Kong based e-commerce activity, and that the Company’s Chinese entity is operating in compliance with applicable Chinese laws. However, there can be no assurance that the Chinese authorities will agree with the Company’s interpretations of applicable laws and regulations or that China will not adopt new laws or regulations. Should the Chinese government determine that the Company’s e-commerce activity violates China’s direct selling or anti-multilevel marketing legislation, or should new laws or regulations be adopted, there could be a material adverse effect on the Company’s business, financial condition and results of operations. | |||||||||||||||||||||||||
Although the Company attempts to work closely with both national and local Chinese governmental agencies in conducting the Company’s business, the Company’s efforts to comply with national and local laws may be harmed by a rapidly evolving regulatory climate, concerns about activities resembling violations of direct selling or anti-multi-level marketing legislation, subjective interpretations of laws and regulations, and activities by individual distributors that may violate laws notwithstanding the Company’s strict policies prohibiting such activities. Any determination that the Company’s operations or activities, or the activities of the Company’s individual distributors or employee sales representatives, or importers of record are not in compliance with applicable laws and regulations could result in the imposition of substantial fines, extended interruptions of business, restrictions on the Company’s future ability to obtain business licenses or expand into new locations, changes to the Company’s business model, the termination of required licenses to conduct business, or other actions, any of which could materially harm the Company’s business, financial condition and results of operations. | |||||||||||||||||||||||||
The Company’s Premium Noni Juice™ and Alura™ products each account for a significant portion of the Company’s total revenue and, together, account for a majority of our total revenue. The Company currently sources each from single suppliers. If demand for these products decreases significantly, government regulation restricts the sale of these products, the Company is unable to adequately source or deliver these products, or the Company ceases offering any of these products for any reason without a suitable replacement, the Company’s business, financial condition and results of operations could be materially and adversely affected. | |||||||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||||||
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value because of their short maturities. The carrying amount of the noncurrent restricted cash approximates fair value since, absent the restrictions, the underlying assets would be included in cash and cash equivalents. | |||||||||||||||||||||||||
Accounting standards permit companies, at their option, to choose to measure many financial instruments and certain other items at fair value. The Company has elected to not fair value existing eligible items. | |||||||||||||||||||||||||
Recently Issued and Adopted Accounting Pronouncements | |||||||||||||||||||||||||
In February 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-02, Comprehensive Income (Topic 220) —Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items in net income but only if the amount reclassified is required under U.S. generally accepted accounting principles ("GAAP") to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 is effective prospectively for reporting periods, including interim periods, beginning after December 15, 2012. The Company’s adoption of the standard on January 1, 2013 did not result in any additional disclosures in its consolidated financial statements for the year ended December 31, 2013. | |||||||||||||||||||||||||
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830) —Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity, to clarify the guidance for entities that cease to hold a controlling financial interest in a subsidiary or group of assets within a foreign entity when (1) the subsidiary or group of assets is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) and (2) there is a cumulative translation adjustment balance associated with that foreign entity. ASU 2013-05 is effective prospectively for reporting periods, including interim periods, beginning after December 15, 2013. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2013-05. | |||||||||||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740) — Presentation of an Unrecognized Tax Benefit When A Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, to provide explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 and should be applied prospectively to all tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently evaluating the impact of adopting ASU 2013-11. | |||||||||||||||||||||||||
Other recently issued accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Note_2_Balance_Sheet_Component
Note 2 - Balance Sheet Components | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Supplemental Balance Sheet Disclosures [Text Block] | ' | ||||||||
2. BALANCE SHEET COMPONENTS | |||||||||
The components of certain balance sheet amounts are as follows (in thousands): | |||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Property and equipment: | |||||||||
Office equipment | $ | 544 | $ | 354 | |||||
Office software | 523 | 533 | |||||||
Furniture and fixtures | 49 | 62 | |||||||
Leasehold improvements | 294 | 256 | |||||||
Construction in progress | – | 102 | |||||||
Property and equipment, at cost | 1,410 | 1,307 | |||||||
Accumulated depreciation and amortization | (1,289 | ) | (1,042 | ) | |||||
$ | 121 | $ | 265 | ||||||
Other accrued expenses: | |||||||||
Sales returns | $ | 181 | $ | 504 | |||||
Employee-related expense | 1,034 | 1,860 | |||||||
Warehousing and inventory-related expense | 301 | 595 | |||||||
Other | 172 | 187 | |||||||
$ | 1,688 | $ | 3,146 | ||||||
Deferred revenue: | |||||||||
Unshipped product | $ | 384 | $ | 1,938 | |||||
Auto ship advances | 263 | 449 | |||||||
Enrollment package revenue | 189 | 182 | |||||||
$ | 836 | $ | 2,569 | ||||||
Other current liabilities: | |||||||||
Unclaimed checks | $ | 761 | $ | 674 | |||||
Other | 230 | 208 | |||||||
$ | 991 | $ | 882 | ||||||
Note_3_Commitments_And_Conting
Note 3 - Commitments And Contingencies | 12 Months Ended | ||
Dec. 31, 2013 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
Commitments and Contingencies Disclosure [Text Block] | ' | ||
3. COMMITMENTS AND CONTINGENCIES | |||
Operating Leases | |||
The Company has entered into non-cancelable operating lease agreements for locations within the United States and for its international subsidiaries, with expirations through March 2018. Rent expense in connection with operating leases was $740,000 and $787,000 during 2012 and 2013, respectively. | |||
Future minimum lease obligations as of December 31, 2013, are as follows (in thousands): | |||
2014 | $ | 617 | |
2015 | 253 | ||
2016 | 40 | ||
2017 | 40 | ||
2018 | 10 | ||
Total minimum lease obligations | $ | 960 | |
Purchase Commitment | |||
In May 2013, the Company entered into an exclusive distribution agreement with one of its suppliers to purchase its product through July 2016. To maintain exclusivity, the Company is required to purchase a minimum of $40,000 of product per month until the termination date. As of December 31, 2013, the Company was in compliance with the exclusivity provision. | |||
Employment Agreements | |||
The Company has employment agreements with certain members of its management team that can be terminated by either the employee or the Company upon four weeks’ notice. The employment agreements entered into with the management team contain provisions that guarantee the payments of specified amounts in the event of a change in control, as defined, or if the employee is terminated without cause, as defined, or terminates employment for good reason, as defined. In addition, the Company has an employment agreement with another employee that can be terminated at will by either the employee or the Company, provided that the Company must pay a specified amount if it terminates the agreement without cause, as defined, or the employee terminates the agreement with good reason, as defined. Accrued severance obligations totaling $296,000 as of December 31, 2013 are expected to be paid during 2014. | |||
Consumer Indemnity | |||
As required by the Door-to-Door Sales Act in South Korea, the Company maintains insurance for consumer indemnity claims with a mutual aid cooperative by possessing a mutual aid contract with Mutual Aid Cooperative & Consumer (the “Cooperative”). The contract secures payment to distributors in the event that the Company is unable to provide refunds to distributors. Typically, requests for refunds are paid directly by the Company according to the Company’s normal Korean refund policy, which requires that refund requests be submitted within three months. Accordingly, the Company estimates and accrues a reserve for product returns based on this policy and its historical experience. Depending on the sales volume, the Company may be required to increase or decrease the amount of the contract. The maximum potential amount of future payments the Company could be required to make to address actual distributor claims under the contract is equivalent to three months of rolling sales. At December 31, 2013, non-current other assets include KRW 144 million (USD $137,000) underlying the contract, which can be utilized by the Cooperative to fund any outstanding distributor claims. The Company believes that the likelihood of utilizing these funds to provide for distributors claims is remote. | |||
Registration Payment Arrangements | |||
Pursuant to a Registration Rights Agreement with the investors in the Company’s October 2007 financing of variable rate convertible debentures having an aggregate face amount of $4,250,000, seven-year warrants to purchase 1,495,952 shares of the Company’s common stock, and one-year warrants to purchase 1,495,952 shares of the Company’s common stock, the Company was obligated to (i) file a registration statement covering the resale of the maximum number of Registrable Securities (as defined) that is permitted by SEC Guidance (as defined) prior to November 18, 2007, (ii) cause the registration statement to be declared effective within certain specified periods of time and (iii) maintain the effectiveness of the registration statement until all Registrable Securities have been sold, or may be sold without volume restrictions pursuant to Rule 144(k) under the Securities Act. The Company timely filed that registration statement covering the shares of common stock underlying the debentures, which have been redeemed, and the one-year warrants, which have expired. At the time, the 1,495,952 shares of common stock underlying the seven-year warrants were not deemed Registrable Securities and were not included in the Registration Statement. If they are subsequently deemed Registrable Securities at a time when a registration statement covering them is required to be effective under the Registration Rights Agreement, and such registration statement is not then effective, then the warrants may be exercised by means of a cashless exercise. The maximum number of shares that could be required to be issued upon exercise of the warrants (whether on a cashless basis or otherwise) is limited to the number of shares indicated on the face of the warrants. The Company filed a registration statement on November 22, 2013 covering the maximum number of shares that could be required to be issued upon exercise of the warrants, and such registration statement was declared effective on December 5, 2013. As of December 31, 2013, no contingent obligations have been recognized under registration payment arrangements. |
Note_4_Stockholders_Equity
Note 4 - Stockholders' Equity | 12 Months Ended | ||
Dec. 31, 2013 | |||
Stockholders' Equity Note [Abstract] | ' | ||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||
4. STOCKHOLDERS’ EQUITY | |||
Authorized Shares | |||
The Company is authorized to issue two classes of capital stock consisting of up to 5,000,000 shares of preferred stock, $0.001 par value, and 50,000,000 shares of common stock, $0.001 par value. On May 4, 2007, the Board of Directors designated up to 1,761,900 shares of preferred stock as Series A preferred stock with the following rights and preferences: | |||
● | Priority – the Series A preferred stock shall rank, in all respects, including the payment of dividends and upon liquidation, senior and prior to the common stock and other equity of the Company not expressly made senior or pari passu with the Series A preferred stock (collectively, “Junior Securities”). | ||
● | Dividends –dividends at the rate per annum of $0.119 per share shall accrue from the date of issuance of any shares of Series A preferred stock, payable upon declaration by the Board of Directors. Accruing dividends shall be cumulative; provided, however, that except as set forth below for the liquidation preference, the Company shall be under no obligation to pay such dividends. No dividends shall be declared on Junior Securities (other than dividends on shares of common stock payable in shares of common stock) unless the holders of the Series A preferred stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A preferred stock in an amount at least equal to the greater of (i) the amount of the aggregate accrued dividends on such share of Series A preferred stock and not previously paid and (ii) in the case of a dividend on common stock or any class or series of Junior Securities that is convertible into common stock, that dividend per share of Series A preferred stock as would equal the product of (1) the dividend payable on each share as if all shares of such class or series had been converted into common stock and (2) the number of shares of common stock issuable upon conversion of a share of Series A preferred stock. | ||
● | Liquidation preference – in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, then, before any distribution or payment shall be made to the holders of any Junior Securities, the holders of the Series A preferred stock then outstanding shall be entitled to be paid in cash out of the assets of the Company available for distribution to its stockholders (on a pari passu basis with the holders of any series of preferred stock ranking on liquidation on a parity with the Series A preferred stock) an amount per share equal to the sum of the Series A Original Issue Price plus any dividends accrued but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon. If the assets of the Company are insufficient to pay the aggregate liquidation preference and the liquidation preference of any series of preferred stock ranking on liquidation on a parity with the Series A preferred stock, the holders of the Series A preferred stock and the holders of any series of preferred stock ranking on liquidation on a parity with the Series A preferred stock shall share ratably with one another in any such distribution or payment in proportion to the full amounts to which they would otherwise be respectively entitled before any distribution shall be made to the holders of the Junior Securities. The “Series A Original Issue Price” shall mean $1.70 per share, subject to adjustment. | ||
● | Voting rights – the holders of shares of Series A preferred stock shall be entitled to vote with the holders of the common stock, and with the holders of any other series of preferred stock, voting together as a single class, upon all matters submitted to a vote of stockholders of the Company. Each holder of shares of Series A preferred stock shall be entitled to the number of votes equal to the product (rounded down to the nearest number of whole shares) of 0.729 times the largest number of shares of common stock into which all shares of Series A preferred stock held of record by such holder could then be converted. | ||
● | Conversion – each share of Series A preferred stock shall be convertible, subject to adjustment only in the event of stock splits, stock dividends, recapitalizations and similar events that would affect all of stockholders, at the option of the holder thereof, at any time and from time to time, into such number of fully paid and nonassessable shares of common stock as determined by dividing the Series A Original Issue Price by the Series A Conversion Price (as defined) in effect at the time of conversion. The “Series A Conversion Price” shall initially be equal to $1.70. Each share of Series A preferred stock shall automatically be converted into shares of common stock at the then effective conversion price immediately upon such date as the average closing price of the common stock over a consecutive, trailing 6-month period equals or exceeds $10.00 per share. | ||
As of December 31, 2013, 123,693 shares of Series A preferred stock were outstanding. Cumulative unpaid dividends and the liquidation preference relating to the outstanding Series A preferred stock at December 31, 2013 was $98,000 and $308,000, respectively. | |||
Common Stock Purchase Warrants | |||
On May 4, 2007, the Company issued warrants to purchase 2,059,307 shares of common stock as a component of a private equity placement. The warrants were exercisable at any time during the period beginning November 4, 2007 (six months after their issuance) and ending May 4, 2013 (six years after their issuance). The exercise price of the warrants was $5.00 per share. Such warrants expired unexercised on May 4, 2013. | |||
On October 19, 2007, the Company issued warrants to purchase 3,141,499 shares of common stock in connection with a convertible debentures financing. The warrants consisted of seven-year warrants to purchase 1,495,952 shares of common stock, one-year warrants to purchase 1,495,952 shares of common stock, and five-year warrants to purchase 149,595 shares of common stock. The term for each of the warrants began six months and one day after their respective issuance and each have an exercise price of $3.52 per share. The exercise price and the number of shares underlying the warrants are subject to adjustment for stock dividends and splits, combinations, and reclassifications, certain rights offerings and distributions to common stockholders, and mergers, consolidations, sales of all or substantially all assets, tender offers, exchange offers, reclassifications or compulsory share exchanges. In addition, subject to certain exceptions, the exercise price and number of shares underlying the warrants are subject to anti-dilution adjustments from time to time if the Company issues its common stock or equivalent securities at below the exercise price for the warrants. If, at any time after the earlier of October 19, 2008 and the completion of the then applicable holding period under Rule 144, there is no effective registration statement for the underlying shares of common stock that are then required to be registered, the warrants may be exercised by means of a cashless exercise. Such one-year warrants expired unexercised on April 21, 2009 and such five-year warrants expired unexercised on April 21, 2013. The remaining warrants to purchase 1,495,952 shares of common stock expire April 21, 2015 if not previously exercised. |
Note_5_StockBased_Compensation
Note 5 - Stock-Based Compensation | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||
5. STOCK-BASED COMPENSATION | |||||||||
On August 18, 2006, the Compensation Committee of Company’s Board of Directors approved, subject to stockholder approval, the Natural Health Trends Corp. 2007 Equity Incentive Plan (the “2007 Plan”). Under the 2007 Plan, the Company may grant (i) incentive stock options, (ii) nonqualified stock options, (iii) restricted stock, (iv) restricted stock units, (v) stock appreciation rights either in tandem with an option or alone and unrelated to an option, or SARs, (vi) performance shares, (vii) award shares, or (viii) stock awards. The 2007 Plan was approved by the Company’s stockholders on November 17, 2006. | |||||||||
The purpose of the 2007 Plan is to enable the Company to attract and retain employees, officers, directors, consultants and advisors; to provide an incentive for them to assist in achieving long-range performance goals; and to enable them to participate in the long-term growth of the Company. The terms of any particular grant are determined by the Board of Directors or a committee appointed by the Board of Directors. Generally, the grants of restricted stock vest quarterly on a pro rata basis over a three-year period. The maximum number of shares available for issuance under the 2007 Plan was 1,550,000 shares. At the Company’s Annual Meeting of Stockholders held on December 30, 2008, the Company’s stockholders approved an increase in the maximum number of shares available for issuance under the 2007 Plan by 500,000 shares. As such, the maximum aggregate number of shares available for issuance under the 2007 Plan totals 2,050,000 shares. As of December 31, 2013, 1,083 shares remain available to be granted under the 2007 Plan. | |||||||||
Valuation and Expense Information under FASB ASC Topic 718 | |||||||||
Stock-based compensation expense totaled approximately $94,000 and $110,000 for 2012 and 2013, respectively. No tax benefits were attributed to the stock-based compensation because a valuation allowance was maintained for substantially all net deferred tax assets. | |||||||||
A following table summarizes the Company’s restricted stock activity under the 2007 Plan: | |||||||||
Shares | Wtd. Avg. | ||||||||
Price at | |||||||||
Date of | |||||||||
Issuance | |||||||||
Nonvested at December 31, 2011 | 473,688 | $ | 0.37 | ||||||
Vested | (212,030 | ) | 0.36 | ||||||
Nonvested at December 31, 2012 | 261,658 | 0.37 | |||||||
Vested | (206,672 | ) | 0.37 | ||||||
Nonvested at December 31, 2013 | 54,986 | 0.37 | |||||||
The restricted stock vests quarterly on a pro rata basis over a three-year period. As of December 31, 2013, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $18,000, which is expected to be recognized over a weighted-average period of 0.3 years. | |||||||||
On August 13, 2012, the Company’s Board of Directors authorized the Company, acting as trustee for certain of its non-officer, overseas employees, to execute a Rule 10b5-1 plan to purchase 100,000 shares of its common stock in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934 and the Company's policies regarding stock transactions. Pursuant to this authority, the Company, as Trustee, entered into a 10b5-1 plan and began purchasing in December 2012. The current 10b5-1 plan for the purchase of up to 2,100 shares per month will expire on November 11, 2014, unless terminated earlier, and the Company, as Trustee, intends at or after that time to enter into a new 10b5-1 plan or plans to complete the purchases authorized. The Company may terminate the plan at any time. The employees will receive the stock as incentive compensation in quarterly increments over three years beginning March 15, 2013, provided that they are employees of the Company on the date of the distribution. Any common stock that is forfeited by an employee whose employment terminates will be delivered to the Company and held as treasury stock. | |||||||||
Shares | Wtd. Avg. | ||||||||
Grant-Date | |||||||||
Fair Value | |||||||||
Nonvested at December 31, 2011 | - | $ | - | ||||||
Granted | 100,000 | 1.37 | |||||||
Nonvested at December 31, 2012 | 100,000 | 1.37 | |||||||
Vested | (26,676 | ) | 1.37 | ||||||
Forfeited | (20,000 | ) | 1.37 | ||||||
Nonvested at December 31, 2013 | 53,324 | 1.37 | |||||||
As of December 31, 2013, total unrecognized stock-based compensation expense related to these stock awards was $64,000, which is expected to be recognized over a weighted-average period of 2.0 years. |
Note_6_Income_Taxes
Note 6 - Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||
6. INCOME TAXES | |||||||||
The components of income before income taxes consist of the following (in thousands): | |||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
Domestic | $ | (2,824 | ) | $ | 194 | ||||
Foreign | 5,430 | 3,997 | |||||||
Income before income taxes | $ | 2,606 | $ | 4,191 | |||||
The components of the income tax provision (benefit) consist of the following (in thousands): | |||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
Current: | |||||||||
Federal | $ | – | $ | 10 | |||||
Foreign | 32 | 76 | |||||||
Total current taxes | 32 | 86 | |||||||
Deferred foreign taxes | (56 | ) | 16 | ||||||
Income tax provision (benefit) | $ | (24 | ) | $ | 102 | ||||
A reconciliation of the reported income tax provision (benefit) to the provision that would result from applying the domestic federal statutory tax rate to pretax income is as follows (in thousands): | |||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
Income tax at federal statutory rate | $ | 886 | $ | 1,425 | |||||
Effect of permanent differences | 8 | 7 | |||||||
Increase in valuation allowance | 672 | 430 | |||||||
Foreign rate differential | (1,576 | ) | (1,218 | ) | |||||
True up of foreign tax balances | 1 | (597 | ) | ||||||
Other reconciling items | (15 | ) | 55 | ||||||
Income tax provision (benefit) | $ | (24 | ) | $ | 102 | ||||
Deferred income taxes consist of the following (in thousands): | |||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating losses | $ | 15,081 | $ | 13,115 | |||||
Stock-based compensation | 352 | – | |||||||
Accrued expenses | 104 | 268 | |||||||
Tax credits | 501 | 512 | |||||||
Impairment of long-lived assets | 76 | 88 | |||||||
Other | 75 | 1 | |||||||
Total deferred tax assets | 16,189 | 13,984 | |||||||
Valuation allowance | (16,141 | ) | (13,927 | ) | |||||
48 | 57 | ||||||||
Deferred tax liabilities: | |||||||||
Intangible assets | (43 | ) | (43 | ) | |||||
Accrued expenses | (91 | ) | (107 | ) | |||||
Prepaids | – | (11 | ) | ||||||
Other | (6 | ) | (4 | ) | |||||
Total deferred tax liabilities | (140 | ) | (165 | ) | |||||
Net deferred tax liability | $ | (92 | ) | $ | (108 | ) | |||
The Company has recorded a valuation allowance to equal its net deferred tax assets due to the uncertainty of future operating results. The valuation allowance will be reduced at such time as management believes it is more likely than not that the deferred tax assets will be realized. Any reductions in the valuation allowance will reduce future income tax provisions. | |||||||||
At December 31, 2013, the Company has U.S. federal net operating loss carryforwards of $33.0 million that begin to expire in 2021, if not utilized. The Company also has foreign net operating loss carryforwards totaling $7.3 million in various jurisdictions with various expirations, including $4.2 million in China with expirations from 2014 to 2017. The Company has not provided for U.S. federal and foreign withholding taxes on the undistributed earnings of its foreign subsidiaries as of December 31, 2013. Such earnings are intended to be reinvested indefinitely. Generally, such earnings become subject to U.S. income tax upon the remittance of dividends and under certain other circumstances. At December 31, 2013, it is not practicable to estimate the amount of deferred tax liability on such undistributed earnings. |
Note_7_Supplemental_Cash_Flow_
Note 7 - Supplemental Cash Flow Information | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Cash Flow, Supplemental Disclosures [Text Block] | ' | ||||||||
7. SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
(In Thousands) | |||||||||
Cash paid during the year for: | |||||||||
Income taxes, net of refunds | $ | 34 | $ | 71 | |||||
Interest | – | – | |||||||
Non-cash financing activity: | |||||||||
Conversion of preferred stock | – | 13 | |||||||
Note_8_Related_Party_Transacti
Note 8 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
8. RELATED PARTY TRANSACTIONS | |
In February 2013, the Company entered into a Royalty Agreement and License with Broady Health Sciences, L.L.C., a Texas limited liability company, (“BHS”) regarding the manufacture and sale of a new product called ReStor™. Under this agreement, the Company has agreed to pay BHS a royalty of 2.5% of sales revenue for this product for 2011 and subsequent years in return for the right to manufacture (or have manufactured), market, import, export and sell this product worldwide, with certain rights being exclusive outside the United States. George Broady, a director of the Company and owner of more than 5% of its outstanding common stock, is owner of BHS. During 2011 and 2012, BHS permitted the Company to manufacture (or have manufactured), market and sell the ReStor™ product. In April 2012, the Company reimbursed BHS $42,000 in expenses incurred in 2011 to promote the ReStor™ product on the Company’s behalf. To permit the Company to continue selling ReStor™ and obtain certain exclusive rights outside of the United States, BHS requested that the Company enter into the Royalty Agreement and License. This agreement was reviewed, considered, authorized and approved by the sole disinterested, non-employee member of the Board of Directors under appointment by the full Board of Directors as an ad hoc committee for this purpose. Upon signing this agreement, the Company paid BHS $12,000 and $25,000 as royalties for 2011 and 2012, respectively. Royalties accrued for 2013 were $48,000. The Company is not required to purchase any product under the agreement, and the agreement may be terminated at any time on 120 days’ notice or, under certain circumstances, with no notice. | |
The Company is considering entering into another royalty agreement and license with BHS regarding the manufacture and sale of a new product called Soothe™, which the Company began selling in the fourth quarter of 2012 with the permission of BHS. To continue selling this product, BHS has requested that the Company pay a royalty of 2.5% of sales revenue for this product for 2012 and subsequent years. The Company is considering that proposal and discussing the terms of a definitive agreement. At a royalty of 2.5% of net sales, the Company calculates that royalties for 2012 and 2013 would total $5,000. |
Note_9_Employee_Benefit_Plan
Note 9 - Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Pension and Other Postretirement Benefits Disclosure [Text Block] | ' |
9. EMPLOYEE BENEFIT PLANS | |
The Company has a 401(k) defined contribution plan which permits participating employees in the United States to defer up to a maximum of 90% of their compensation, subject to limitations established by the Internal Revenue Service. Employees age 21 and older are eligible to contribute to the plan starting the first day of the following month of employment. Participating employees are eligible to receive discretionary matching contributions and profit sharing, subject to certain conditions, from the Company. In 2012 and 2013, the Company matched employee deferral contributions up to 4.5% of salary, which vested 100% immediately. No profit sharing has been paid under the plan. The Company recorded compensation expense of $61,000 and $62,000 for 2012 and 2013, respectively, related to its matching contributions to the plan. Certain of the Company’s employees located outside the United States participate in employee benefit plans that are statutory in nature. |
Note_10_Segment_Information
Note 10 - Segment Information | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||
10. SEGMENT INFORMATION | |||||||||
The Company sells products to a distributor network that operates in a seamless manner from market to market, except for the Chinese market. The Company believes that each of its operating segments should be aggregated into a single reportable segment as they have similar economic characteristics. In making this determination, the Company believes that each of the operating segments are similar in the nature of the products sold, the product acquisition process, the types of customers products are sold to, the methods used to distribute the products, and the nature of the regulatory environment. | |||||||||
The Company’s e-commerce retail business launched in China during June 2007 does not require a direct selling license and allows for discounts on volume purchases. There is no separate segment manager who is held accountable by our chief operating decision-makers, or anyone else, for operations, operating results and planning for the Chinese market on a stand-alone basis. Accordingly, we consider ourselves to be in a single reporting segment and operating unit structure. | |||||||||
The Company’s net sales by geographic area are as follows (in thousands): | |||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
Net sales from external customers: | |||||||||
United States | $ | 1,737 | $ | 2,289 | |||||
Hong Kong | 26,235 | 40,585 | |||||||
China | 1,081 | 791 | |||||||
Taiwan | 2,074 | 3,387 | |||||||
South Korea | 285 | 702 | |||||||
Russia and Kazakhstan | 5,540 | 4,354 | |||||||
Other foreign countries | 562 | 419 | |||||||
Total net sales | $ | 37,514 | $ | 52,527 | |||||
The Company’s net sales by product and service are as follows (in thousands): | |||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Net sales by product and service: | |||||||||
Product sales | $ | 36,174 | $ | 50,385 | |||||
Enrollment package revenue, freight and other | 2,225 | 2,955 | |||||||
Less: sales returns | (885 | ) | (813 | ) | |||||
Total net sales | $ | 37,514 | $ | 52,527 | |||||
The Company’s long-lived assets by geographic area are as follows (in thousands): | |||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Long-lived assets: | |||||||||
United States | $ | 38 | $ | 35 | |||||
China | 63 | 137 | |||||||
Other foreign countries | 20 | 93 | |||||||
Total long-lived assets | $ | 121 | $ | 265 | |||||
Note_11_Subsequent_Events
Note 11 - Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
11. SUBSEQUENT EVENTS | |
In February 2014, warrants to purchase 120,000 shares of common stock were exercised at $3.52 per share for total proceeds of $422,000. | |
On March 7, 2014, the Board of Directors declared a dividend on each share of outstanding Series A preferred stock in the amount of $0.81507 per share representing the accrued and cumulative dividends from May 4, 2007 through March 7, 2014. Simultaneously, the Board of Directors also declared a dividend of $0.005 on each share of common stock outstanding. All such dividends are payable in cash on April 8, 2014 to stockholders of record on March 28, 2014. |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||||||
Consolidation, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Principles of Consolidation | |||||||||||||||||||||||||
The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||||||
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. | |||||||||||||||||||||||||
The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates associated with obsolete inventory and the fair value of acquired intangible assets, including goodwill, revenue recognition, as well as those used in the determination of liabilities related to sales returns, distributor commissions and income taxes. Various assumptions and other factors prompt the determination of these significant estimates. The process of determining significant estimates is fact specific and takes into account historical experience and current and expected economic conditions. The actual results may differ materially and adversely from the Company’s estimates. To the extent that there are material differences between the estimates and actual results, future results of operations will be affected. | |||||||||||||||||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||
The Company considers all highly liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. The Company includes in its cash and cash equivalents credit card receivables due from its major credit card processor, which serves the Hong Kong, North America, Europe, and Japan markets, as the cash proceeds from credit card receivables are received within two to five days. | |||||||||||||||||||||||||
The Company maintains certain cash balances at several institutions located in the United States which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. | |||||||||||||||||||||||||
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Restricted Cash | |||||||||||||||||||||||||
The Company periodically maintains a cash reserve with certain credit card processing companies to provide for potential uncollectible amounts and chargebacks. Those cash reserves held by credit card companies located in South Korea are reflected in noncurrent assets since those cards require the Company to provide 100% collateral before processing transactions, which must be maintained indefinitely. | |||||||||||||||||||||||||
Inventory, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||
Inventories consist primarily of finished goods and are stated at the lower of cost or market, using the first-in, first-out method. The Company reviews its inventory for obsolescence and any inventory identified as obsolete is reserved or written off. The Company’s determination of obsolescence is based on assumptions about the demand for its products, product expiration dates, estimated future sales, and management’s future plans. At December 31, 2012, the reserve for obsolescence totaled $72,000. No such reserve existed at December 31, 2013. | |||||||||||||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Property and Equipment | |||||||||||||||||||||||||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three to five years for office equipment and office software and five to seven years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets. Expenditures for maintenance and repairs are charged to expense as incurred. | |||||||||||||||||||||||||
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of its carrying amounts to future undiscounted cash flows the assets are expected to generate. If property and equipment are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. | |||||||||||||||||||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||
In accordance with accounting principles generally accepted in the United States of America, the Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, a two-step impairment test is performed. The Company’s policy is to test for impairment annually during the fourth quarter. Considerable management judgment is necessary to measure fair value. We did not recognize any impairment charges for goodwill during the periods presented. | |||||||||||||||||||||||||
Income Tax, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||
The Company recognizes income taxes under the liability method of accounting for income taxes. Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. Deferred taxes are not provided on the portion of undistributed earnings of subsidiaries outside of the United States when these earnings are considered permanently reinvested. | |||||||||||||||||||||||||
The Company and its subsidiaries file income tax returns in the United States, various states, and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2010, and is no longer subject to state income tax examinations for years prior to 2009. No jurisdictions are currently examining any income tax returns of the Company or its subsidiaries. | |||||||||||||||||||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Foreign Currency | |||||||||||||||||||||||||
The functional currency of the Company’s international subsidiaries is generally their local currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Equity accounts are translated at historical rates. The resulting translation adjustments are recorded directly into a separate component of stockholders’ equity and represents the only component of accumulated other comprehensive income. | |||||||||||||||||||||||||
Aggregate transaction gains or losses, including gains or losses related to foreign-denominated cash and cash equivalents and the re-measurement of certain inter-company balances, are included in the statement of operations as other income and expense. Loss on foreign exchange totaling $125,000 and $32,000 was recognized during 2012 and 2013, respectively. | |||||||||||||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||||
Product sales are recorded when the products are shipped and title passes to independent distributors. Product sales to distributors are made pursuant to a distributor agreement that provides for transfer of both title and risk of loss upon our delivery to the carrier that completes delivery to the distributors, which is commonly referred to as “F.O.B. Shipping Point.” The Company primarily receives payment by credit card at the time distributors place orders. Amounts received for unshipped product are recorded as deferred revenue. The Company’s sales arrangements do not contain right of inspection or customer acceptance provisions other than general rights of return. | |||||||||||||||||||||||||
Actual product returns are recorded as a reduction to net sales. The Company estimates and accrues a reserve for product returns based on its return policies and historical experience. | |||||||||||||||||||||||||
Enrollment package revenue, including any nonrefundable set-up fees, is deferred and recognized over the term of the arrangement, generally twelve months. Enrollment packages provide distributors access to both a personalized marketing website and a business management system. No upfront costs are deferred as the amount is nominal. | |||||||||||||||||||||||||
Shipping charges billed to distributors are included in net sales. Costs associated with shipments are included in cost of sales. | |||||||||||||||||||||||||
Various taxes on the sale of products and enrollment packages to distributors are collected by the Company as an agent and remitted to the respective taxing authority. These taxes are presented on a net basis and recorded as a liability until remitted to the respective taxing authority. | |||||||||||||||||||||||||
Incentive Distribution Policy, Managing Member or General Partner, Description [Policy Text Block] | ' | ||||||||||||||||||||||||
Distributor Commissions | |||||||||||||||||||||||||
Independent distributors earn commissions based on total personal and group bonus volume points per weekly sales period. Each of our products are designated a specified number of bonus volume points, which is essentially a percentage of the product’s wholesale price. The Company accrues commissions when earned and pays commissions on product sales generally two weeks following the end of the weekly sales period. | |||||||||||||||||||||||||
In some markets, we also pay certain bonuses on purchases by up to three generations of personally sponsored distributors, as well as bonuses on commissions earned by up to three generations of personally sponsored distributors. Independent distributors may also earn incentives based on meeting certain qualifications during a designated incentive period, which may range from several weeks to up to a year. These incentives may be both monetary and non-monetary in nature. The Company estimates and accrues all costs associated with the incentives as the distributors meet the qualification requirements. | |||||||||||||||||||||||||
From time to time we make modifications and enhancements to our compensation plan to help motivate distributors, which can have an impact on distributor commissions. From time to time we also enter into agreements for business or market development, which may result in additional compensation to specific distributors | |||||||||||||||||||||||||
Compensation Related Costs, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||
Stock-based compensation expense is determined based on the grant date fair value of each award, net of estimated forfeitures which are derived from historical experience, and is recognized on a straight-line basis over the requisite service period for the award | |||||||||||||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Income Per Share | |||||||||||||||||||||||||
Basic income per share is computed via the “two-class” method by dividing net income allocated to common stockholders by the weighted-average number of common shares outstanding during the period. Net income available to common stockholders is allocated to both common stock and participating securities as if all of the income for the period had been distributed. The Company’s Series A convertible preferred stock is a participating security due to its participation rights related to dividends declared by the Company. If dividends are distributed to common stockholders, the Company is also required to pay dividends to the holders of the preferred stock in an amount equal to the greater of (1) the amount of dividends then accrued and not previously paid on such shares of preferred stock or (2) the amount payable if dividends were distributed to the common stockholders on an as-converted basis. | |||||||||||||||||||||||||
Diluted income per share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. The dilutive effect of non-vested restricted stock and warrants is reflected by application of the treasury stock method. Under the treasury stock method, the amount of compensation cost for future service that the Company has not yet recognized and the amount of tax benefit that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares. The dilutive effect of the Company’s Series A convertible preferred stock is calculated using the more dilutive of the “two-class” method and the “if-converted” method, which assumes that the preferred stock was converted into common stock at the beginning of each period presented. | |||||||||||||||||||||||||
The following table illustrates the computation of basic and diluted income per share for the periods indicated (in thousands, except per share data): | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | ||||||||||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||||||||||
Basic EPS: | |||||||||||||||||||||||||
Net income available to common stockholders | $ | 2,613 | $ | 4,074 | |||||||||||||||||||||
Less: undistributed earnings to participating securities | (16 | ) | (31 | ) | |||||||||||||||||||||
Net income allocated to common stockholders | $ | 2,597 | 10,944 | $ | 0.24 | $ | 4,043 | 11,154 | $ | 0.36 | |||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||||
Non-vested restricted stock | – | 290 | – | 177 | |||||||||||||||||||||
Diluted EPS: | |||||||||||||||||||||||||
Net income allocated to common stockholders plus assumed conversions | $ | 2,597 | 11,234 | $ | 0.23 | $ | 4,043 | 11,331 | $ | 0.36 | |||||||||||||||
Certain non-vested restricted stock is anti-dilutive upon applying the treasury stock method since the amount of compensation cost for future service results in the hypothetical repurchase of shares exceeding the actual number of shares to be vested. Other common stock equivalents are also anti-dilutive since the applicable exercise price exceeds the average market price of the related common stock for the period. | |||||||||||||||||||||||||
The following securities were not included for the time periods indicated as their effect would have been anti-dilutive: | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Warrants to purchase common stock | 3,704,854 | 2,234,994 | |||||||||||||||||||||||
Non-vested restricted stock | 100,000 | – | |||||||||||||||||||||||
Warrants to purchase 1,495,952 shares of common stock were still outstanding at December 31, 2013. Such warrants expire April 21, 2015. | |||||||||||||||||||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Certain Risks and Concentrations | |||||||||||||||||||||||||
A substantial portion of the Company’s sales are generated in Hong Kong (see Note 10). Most of the Company’s Hong Kong revenues are derived from the sale of products that are delivered to members in China. In contrast to the Company’s operations in other parts of the world, the Company has not implemented a direct sales model in China. The Chinese government permits direct selling only by organizations that have a license that the Company does not have, and has adopted anti-multilevel marketing legislation. The Company operates an e-commerce direct selling model in Hong Kong and recognizes the revenue derived from sales to both Hong Kong and Chinese members as being generated in Hong Kong. Products purchased by members in China are delivered by the Company to one or more third parties that act as the importers of record under agreements to pay applicable duties. In addition, through a Chinese entity, the Company sells products in China using an e-commerce retail model. The Chinese entity operates separately from the Hong Kong entity, although a Chinese member may elect to participate separately in both. | |||||||||||||||||||||||||
The Company believes that the laws and regulations in China regarding direct selling and multi-level marketing are not specifically applicable to the Company’s Hong Kong based e-commerce activity, and that the Company’s Chinese entity is operating in compliance with applicable Chinese laws. However, there can be no assurance that the Chinese authorities will agree with the Company’s interpretations of applicable laws and regulations or that China will not adopt new laws or regulations. Should the Chinese government determine that the Company’s e-commerce activity violates China’s direct selling or anti-multilevel marketing legislation, or should new laws or regulations be adopted, there could be a material adverse effect on the Company’s business, financial condition and results of operations. | |||||||||||||||||||||||||
Although the Company attempts to work closely with both national and local Chinese governmental agencies in conducting the Company’s business, the Company’s efforts to comply with national and local laws may be harmed by a rapidly evolving regulatory climate, concerns about activities resembling violations of direct selling or anti-multi-level marketing legislation, subjective interpretations of laws and regulations, and activities by individual distributors that may violate laws notwithstanding the Company’s strict policies prohibiting such activities. Any determination that the Company’s operations or activities, or the activities of the Company’s individual distributors or employee sales representatives, or importers of record are not in compliance with applicable laws and regulations could result in the imposition of substantial fines, extended interruptions of business, restrictions on the Company’s future ability to obtain business licenses or expand into new locations, changes to the Company’s business model, the termination of required licenses to conduct business, or other actions, any of which could materially harm the Company’s business, financial condition and results of operations. | |||||||||||||||||||||||||
The Company’s Premium Noni Juice™ and Alura™ products each account for a significant portion of the Company’s total revenue and, together, account for a majority of our total revenue. The Company currently sources each from single suppliers. If demand for these products decreases significantly, government regulation restricts the sale of these products, the Company is unable to adequately source or deliver these products, or the Company ceases offering any of these products for any reason without a suitable replacement, the Company’s business, financial condition and results of operations could be materially and adversely affected. | |||||||||||||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||||||
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value because of their short maturities. The carrying amount of the noncurrent restricted cash approximates fair value since, absent the restrictions, the underlying assets would be included in cash and cash equivalents. | |||||||||||||||||||||||||
Accounting standards permit companies, at their option, to choose to measure many financial instruments and certain other items at fair value. The Company has elected to not fair value existing eligible items. | |||||||||||||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||||||||||||||||||||||||
Recently Issued and Adopted Accounting Pronouncements | |||||||||||||||||||||||||
In February 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-02, Comprehensive Income (Topic 220) —Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items in net income but only if the amount reclassified is required under U.S. generally accepted accounting principles ("GAAP") to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 is effective prospectively for reporting periods, including interim periods, beginning after December 15, 2012. The Company’s adoption of the standard on January 1, 2013 did not result in any additional disclosures in its consolidated financial statements for the year ended December 31, 2013. | |||||||||||||||||||||||||
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830) —Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity, to clarify the guidance for entities that cease to hold a controlling financial interest in a subsidiary or group of assets within a foreign entity when (1) the subsidiary or group of assets is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) and (2) there is a cumulative translation adjustment balance associated with that foreign entity. ASU 2013-05 is effective prospectively for reporting periods, including interim periods, beginning after December 15, 2013. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2013-05. | |||||||||||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740) — Presentation of an Unrecognized Tax Benefit When A Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, to provide explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 and should be applied prospectively to all tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently evaluating the impact of adopting ASU 2013-11. | |||||||||||||||||||||||||
Other recently issued accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Note_1_Nature_of_Operations_an1
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | ||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | ||||||||||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||||||||||
Basic EPS: | |||||||||||||||||||||||||
Net income available to common stockholders | $ | 2,613 | $ | 4,074 | |||||||||||||||||||||
Less: undistributed earnings to participating securities | (16 | ) | (31 | ) | |||||||||||||||||||||
Net income allocated to common stockholders | $ | 2,597 | 10,944 | $ | 0.24 | $ | 4,043 | 11,154 | $ | 0.36 | |||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||||
Non-vested restricted stock | – | 290 | – | 177 | |||||||||||||||||||||
Diluted EPS: | |||||||||||||||||||||||||
Net income allocated to common stockholders plus assumed conversions | $ | 2,597 | 11,234 | $ | 0.23 | $ | 4,043 | 11,331 | $ | 0.36 | |||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | ||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||
Warrants to purchase common stock | 3,704,854 | 2,234,994 | |||||||||||||||||||||||
Non-vested restricted stock | 100,000 | – |
Note_2_Balance_Sheet_Component1
Note 2 - Balance Sheet Components (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Property and equipment: | |||||||||
Office equipment | $ | 544 | $ | 354 | |||||
Office software | 523 | 533 | |||||||
Furniture and fixtures | 49 | 62 | |||||||
Leasehold improvements | 294 | 256 | |||||||
Construction in progress | – | 102 | |||||||
Property and equipment, at cost | 1,410 | 1,307 | |||||||
Accumulated depreciation and amortization | (1,289 | ) | (1,042 | ) | |||||
$ | 121 | $ | 265 | ||||||
Other accrued expenses: | |||||||||
Sales returns | $ | 181 | $ | 504 | |||||
Employee-related expense | 1,034 | 1,860 | |||||||
Warehousing and inventory-related expense | 301 | 595 | |||||||
Other | 172 | 187 | |||||||
$ | 1,688 | $ | 3,146 | ||||||
Deferred revenue: | |||||||||
Unshipped product | $ | 384 | $ | 1,938 | |||||
Auto ship advances | 263 | 449 | |||||||
Enrollment package revenue | 189 | 182 | |||||||
$ | 836 | $ | 2,569 | ||||||
Other current liabilities: | |||||||||
Unclaimed checks | $ | 761 | $ | 674 | |||||
Other | 230 | 208 | |||||||
$ | 991 | $ | 882 |
Note_3_Commitments_And_Conting1
Note 3 - Commitments And Contingencies (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||
2014 | $ | 617 | |
2015 | 253 | ||
2016 | 40 | ||
2017 | 40 | ||
2018 | 10 | ||
Total minimum lease obligations | $ | 960 |
Note_5_StockBased_Compensation1
Note 5 - Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||
Nonvested Restricted Stock Shares Activity [Table Text Block] | ' | ||||||||
Shares | Wtd. Avg. | ||||||||
Price at | |||||||||
Date of | |||||||||
Issuance | |||||||||
Nonvested at December 31, 2011 | 473,688 | $ | 0.37 | ||||||
Vested | (212,030 | ) | 0.36 | ||||||
Nonvested at December 31, 2012 | 261,658 | 0.37 | |||||||
Vested | (206,672 | ) | 0.37 | ||||||
Nonvested at December 31, 2013 | 54,986 | 0.37 | |||||||
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | ' | ||||||||
Shares | Wtd. Avg. | ||||||||
Grant-Date | |||||||||
Fair Value | |||||||||
Nonvested at December 31, 2011 | - | $ | - | ||||||
Granted | 100,000 | 1.37 | |||||||
Nonvested at December 31, 2012 | 100,000 | 1.37 | |||||||
Vested | (26,676 | ) | 1.37 | ||||||
Forfeited | (20,000 | ) | 1.37 | ||||||
Nonvested at December 31, 2013 | 53,324 | 1.37 |
Note_6_Income_Taxes_Tables
Note 6 - Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | ' | ||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
Domestic | $ | (2,824 | ) | $ | 194 | ||||
Foreign | 5,430 | 3,997 | |||||||
Income before income taxes | $ | 2,606 | $ | 4,191 | |||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | ' | ||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
Current: | |||||||||
Federal | $ | – | $ | 10 | |||||
Foreign | 32 | 76 | |||||||
Total current taxes | 32 | 86 | |||||||
Deferred foreign taxes | (56 | ) | 16 | ||||||
Income tax provision (benefit) | $ | (24 | ) | $ | 102 | ||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | ||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
Income tax at federal statutory rate | $ | 886 | $ | 1,425 | |||||
Effect of permanent differences | 8 | 7 | |||||||
Increase in valuation allowance | 672 | 430 | |||||||
Foreign rate differential | (1,576 | ) | (1,218 | ) | |||||
True up of foreign tax balances | 1 | (597 | ) | ||||||
Other reconciling items | (15 | ) | 55 | ||||||
Income tax provision (benefit) | $ | (24 | ) | $ | 102 | ||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating losses | $ | 15,081 | $ | 13,115 | |||||
Stock-based compensation | 352 | – | |||||||
Accrued expenses | 104 | 268 | |||||||
Tax credits | 501 | 512 | |||||||
Impairment of long-lived assets | 76 | 88 | |||||||
Other | 75 | 1 | |||||||
Total deferred tax assets | 16,189 | 13,984 | |||||||
Valuation allowance | (16,141 | ) | (13,927 | ) | |||||
48 | 57 | ||||||||
Deferred tax liabilities: | |||||||||
Intangible assets | (43 | ) | (43 | ) | |||||
Accrued expenses | (91 | ) | (107 | ) | |||||
Prepaids | – | (11 | ) | ||||||
Other | (6 | ) | (4 | ) | |||||
Total deferred tax liabilities | (140 | ) | (165 | ) | |||||
Net deferred tax liability | $ | (92 | ) | $ | (108 | ) |
Note_7_Supplemental_Cash_Flow_1
Note 7 - Supplemental Cash Flow Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Condensed Cash Flow Statement [Table Text Block] | ' | ||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
(In Thousands) | |||||||||
Cash paid during the year for: | |||||||||
Income taxes, net of refunds | $ | 34 | $ | 71 | |||||
Interest | – | – | |||||||
Non-cash financing activity: | |||||||||
Conversion of preferred stock | – | 13 |
Note_10_Segment_Information_Ta
Note 10 - Segment Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | ' | ||||||||
Year Ended December 31, | |||||||||
2012 | 2013 | ||||||||
Net sales from external customers: | |||||||||
United States | $ | 1,737 | $ | 2,289 | |||||
Hong Kong | 26,235 | 40,585 | |||||||
China | 1,081 | 791 | |||||||
Taiwan | 2,074 | 3,387 | |||||||
South Korea | 285 | 702 | |||||||
Russia and Kazakhstan | 5,540 | 4,354 | |||||||
Other foreign countries | 562 | 419 | |||||||
Total net sales | $ | 37,514 | $ | 52,527 | |||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Net sales by product and service: | |||||||||
Product sales | $ | 36,174 | $ | 50,385 | |||||
Enrollment package revenue, freight and other | 2,225 | 2,955 | |||||||
Less: sales returns | (885 | ) | (813 | ) | |||||
Total net sales | $ | 37,514 | $ | 52,527 | |||||
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Long-lived assets: | |||||||||
United States | $ | 38 | $ | 35 | |||||
China | 63 | 137 | |||||||
Other foreign countries | 20 | 93 | |||||||
Total long-lived assets | $ | 121 | $ | 265 |
Note_1_Nature_of_Operations_an2
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Oct. 19, 2007 | 4-May-07 | |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' |
Valuation Allowances and Reserves, Charged to Other Accounts (in Dollars) | $0 | $72,000 | ' | ' |
Foreign Currency Transaction Gain (Loss), Unrealized (in Dollars) | ($32,000) | ($125,000) | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 1,495,952 | ' | 3,141,499 | 2,059,307 |
Office Equipment [Member] | Minimum [Member] | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '3 years | ' | ' | ' |
Office Equipment [Member] | Maximum [Member] | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '5 years | ' | ' | ' |
Furniture and Fixtures [Member] | Minimum [Member] | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '5 years | ' | ' | ' |
Furniture and Fixtures [Member] | Maximum [Member] | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '7 years | ' | ' | ' |
Note_1_Nature_of_Operations_an3
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Basic and Diluted Income Per Share (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Basic and Diluted Income Per Share [Line Items] | ' | ' |
Income, (Numerator) | $4,074 | $2,613 |
Shares, (Denominator) (in Shares) | 11,332,771 | 11,324,048 |
Net income allocated to common stockholders plus assumed conversions | 4,043 | 2,597 |
Net income allocated to common stockholders plus assumed conversions (in Shares) | 11,331,000 | 11,234,000 |
Net income allocated to common stockholders plus assumed conversions (in Dollars per share) | $0.36 | $0.23 |
Less: undistributed earnings to participating securities | -31 | -16 |
Distributed [Member] | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Basic and Diluted Income Per Share [Line Items] | ' | ' |
Income, (Numerator) | $4,043 | $2,597 |
Shares, (Denominator) (in Shares) | 11,154,000 | 10,944,000 |
Per Share, Amount (in Dollars per share) | $0.36 | $0.24 |
Restricted Stock [Member] | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Basic and Diluted Income Per Share [Line Items] | ' | ' |
Non-vested restricted stock (in Shares) | 177,000 | 290,000 |
Note_1_Nature_of_Operations_an4
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Antidilutive Securities Excluded From the Dilutive Calculations | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Warrant [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive Securities | 2,234,994 | 3,704,854 |
Restricted Stock [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive Securities | ' | 100,000 |
Note_2_Balance_Sheet_Component2
Note 2 - Balance Sheet Components (Details) - Components of Balance Sheet Accounts (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property and equipment: | ' | ' |
Property and equipment | $1,307 | $1,410 |
Accumulated depreciation and amortization | -1,042 | -1,289 |
265 | 121 | |
Office software | 533 | 523 |
Furniture and fixtures | 62 | 49 |
Leasehold improvements | 256 | 294 |
Construction in progress | 102 | ' |
Other accrued expenses: | ' | ' |
Other accrued expense | 3,146 | 1,688 |
Warehousing and inventory-related expense | 3,146 | 1,688 |
Deferred revenue: | ' | ' |
Deferred revenue | 2,569 | 836 |
Other current liabilities: | ' | ' |
Other current liabilities | 882 | 991 |
Unshipped Product [Member] | ' | ' |
Deferred revenue: | ' | ' |
Deferred revenue | 1,938 | 384 |
Auto Ship Advances [Member] | ' | ' |
Deferred revenue: | ' | ' |
Deferred revenue | 449 | 263 |
Enrollment Package Revenue [Member] | ' | ' |
Deferred revenue: | ' | ' |
Deferred revenue | 182 | 189 |
Office Equipment [Member] | ' | ' |
Property and equipment: | ' | ' |
Property and equipment | 354 | 544 |
Sales Returns [Member] | ' | ' |
Other accrued expenses: | ' | ' |
Other accrued expense | 504 | 181 |
Employee-Related Expense [Member] | ' | ' |
Other accrued expenses: | ' | ' |
Other accrued expense | 1,860 | 1,034 |
Warehousing and Inventory Related Expense [Member] | ' | ' |
Other accrued expenses: | ' | ' |
Warehousing and inventory-related expense | 595 | 301 |
Other [Member] | ' | ' |
Other accrued expenses: | ' | ' |
Other accrued expense | 187 | 172 |
Other current liabilities: | ' | ' |
Other current liabilities | 208 | 230 |
Unclaimed Checks [Member] | ' | ' |
Other current liabilities: | ' | ' |
Other current liabilities | $674 | $761 |
Note_3_Commitments_And_Conting2
Note 3 - Commitments And Contingencies (Details) | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||
Apr. 21, 2013 | Apr. 21, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2007 | Oct. 19, 2007 | 4-May-07 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 19, 2007 | Oct. 31, 2007 | Oct. 19, 2007 | Oct. 31, 2007 | Nov. 18, 2007 | Oct. 19, 2007 | |
USD ($) | USD ($) | USD ($) | Korean Business Segment [Member] | Korean Business Segment [Member] | Seven Year Warrants [Member] | Seven Year Warrants [Member] | One Year Warrants [Member] | One Year Warrants [Member] | Five Year Warrants [Member] | Five Year Warrants [Member] | |||||
USD ($) | KRW | ||||||||||||||
Note 3 - Commitments And Contingencies (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense | ' | ' | $787,000 | $740,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase Obligation, Due in Next Twelve Months | ' | ' | 40,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Supplemental Unemployment Benefits, Severance Benefits | ' | ' | 296,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other Assets, Noncurrent (in Won) | ' | ' | 300,000 | 258,000 | ' | ' | ' | 137,000 | 144,000,000 | ' | ' | ' | ' | ' | ' |
Other Assets, Noncurrent | ' | ' | 300,000 | 258,000 | ' | ' | ' | 137,000 | 144,000,000 | ' | ' | ' | ' | ' | ' |
Convertible Debt | ' | ' | ' | ' | 4,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of Warrant | '5 years | '1 year | ' | ' | ' | ' | ' | ' | ' | '7 years | '7 years | '1 year | '1 year | '7 years | '5 years |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | ' | ' | 1,495,952 | ' | ' | 3,141,499 | 2,059,307 | ' | ' | 1,495,952 | 1,495,952 | 1,495,952 | 1,495,952 | 1,495,952 | 149,595 |
Registration Payment Arrangement, Accrual Carrying Value | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note_3_Commitments_And_Conting3
Note 3 - Commitments And Contingencies (Details) - Future Minimum Lease Obligations (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Future Minimum Lease Obligations [Abstract] | ' |
2014 | $617 |
2015 | 253 |
2016 | 40 |
2017 | 40 |
2018 | 10 |
Total minimum lease obligations | $960 |
Note_4_Stockholders_Equity_Det
Note 4 - Stockholders' Equity (Details) (USD $) | 1 Months Ended | 0 Months Ended | 1 Months Ended | |||||||||||||
Apr. 21, 2013 | Apr. 21, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 19, 2007 | 4-May-07 | 4-May-07 | Dec. 31, 2013 | 4-May-07 | 4-May-07 | Oct. 19, 2007 | Oct. 31, 2007 | Oct. 19, 2007 | Oct. 31, 2007 | Nov. 18, 2007 | Oct. 19, 2007 | |
Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Seven Year Warrants [Member] | Seven Year Warrants [Member] | One Year Warrants [Member] | One Year Warrants [Member] | Five Year Warrants [Member] | Five Year Warrants [Member] | |||||||
Initially Be Equal To [Member] | Minimum [Member] | |||||||||||||||
Note 4 - Stockholders' Equity (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Shares Authorized | ' | ' | 5,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized | ' | ' | 50,000,000 | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Par or Stated Value Per Share (in Dollars per share) | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Shares Outstanding | ' | ' | ' | ' | ' | ' | 1,761,900 | 123,693 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Dividends Per Share, Declared (in Dollars per share) | ' | ' | ' | ' | ' | ' | $0.12 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Price (in Dollars per share) | ' | ' | ' | ' | ' | ' | $1.70 | ' | $1.70 | $10 | ' | ' | ' | ' | ' | ' |
Preferred Stock, Voting Rights | ' | ' | ' | ' | ' | ' | '0.729 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends Payable (in Dollars) | ' | ' | ' | ' | ' | ' | ' | $98,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Liquidation Preference, Value (in Dollars) | ' | ' | ' | ' | ' | ' | ' | $308,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | 1,495,952 | ' | 3,141,499 | 2,059,307 | ' | ' | ' | ' | 1,495,952 | 1,495,952 | 1,495,952 | 1,495,952 | 1,495,952 | 149,595 |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.52 |
Term of Warrant | '5 years | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | '7 years | '1 year | '1 year | '7 years | '5 years |
Note_5_StockBased_Compensation2
Note 5 - Stock-Based Compensation (Details) (USD $) | 10 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | ||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 13, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 30, 2008 | Dec. 31, 2013 | Dec. 30, 2008 | |
Restricted Stock [Member] | Restricted Stock [Member] | Restricted Stock [Member] | 2007 Plan [Member] | 2007 Plan [Member] | Maximum [Member] | |||||
2007 Plan [Member] | Maximum [Member] | |||||||||
Note 5 - Stock-Based Compensation (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | ' | '2 years | ' | ' | '3 years | '109 days | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,083 | 1,083 | ' | ' | ' | ' | ' | ' | 1,550,000 | 2,050,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' |
Allocated Share-based Compensation Expense (in Dollars) | ' | $94,000 | $110,000 | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | $64,000 | $64,000 | ' | ' | ' | ' | $18,000 | ' | ' | ' |
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | ' | ' | 2,100 | 100,000 | ' | ' | ' | ' | ' | ' |
Share-Based Compensation Incentive Compensation Period | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note_5_StockBased_Compensation3
Note 5 - Stock-Based Compensation (Details) - Restricted Stock Activity (Restricted Stock [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock [Member] | ' | ' |
Note 5 - Stock-Based Compensation (Details) - Restricted Stock Activity [Line Items] | ' | ' |
Shares | 261,658 | 473,688 |
Weighted Average Price at Date of Issuance (in Dollars per share) | $0.37 | $0.37 |
Shares | -206,672 | -212,030 |
Weighted Average Price at Date of Issuance (in Dollars per share) | $0.37 | $0.36 |
Shares | 54,986 | 261,658 |
Weighted Average Price at Date of Issuance (in Dollars per share) | $0.37 | $0.37 |
Note_5_StockBased_Compensation4
Note 5 - Stock-Based Compensation (Details) - Restricted Stock Unit Activity (Restricted Stock Units (RSUs) [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock Units (RSUs) [Member] | ' | ' |
Note 5 - Stock-Based Compensation (Details) - Restricted Stock Unit Activity [Line Items] | ' | ' |
Shares | 100,000 | ' |
Weighted Average Grant Date Fair Value (in Dollars per share) | $1.37 | ' |
Vested | -26,676 | ' |
Vested (in Dollars per share) | $1.37 | ' |
Forfeited | -20,000 | ' |
Forfeited (in Dollars per share) | $1.37 | ' |
Granted | ' | 100,000 |
Granted (in Dollars per share) | ' | $1.37 |
Shares | 53,324 | 100,000 |
Weighted Average Grant Date Fair Value (in Dollars per share) | $1.37 | $1.37 |
Note_6_Income_Taxes_Details
Note 6 - Income Taxes (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Note 6 - Income Taxes (Details) [Line Items] | ' |
Operating Loss Carryforwards | $33 |
Other Foreign Countries [Member] | ' |
Note 6 - Income Taxes (Details) [Line Items] | ' |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | 7.3 |
CHINA | ' |
Note 6 - Income Taxes (Details) [Line Items] | ' |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | $4.20 |
Note_6_Income_Taxes_Details_Co
Note 6 - Income Taxes (Details) - Components of Income Before Income Taxes (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Components of Income Before Income Taxes [Abstract] | ' | ' |
Domestic | $194 | ($2,824) |
Foreign | 3,997 | 5,430 |
Income before income taxes | $4,191 | $2,606 |
Note_6_Income_Taxes_Details_Co1
Note 6 - Income Taxes (Details) - Components of Benefit From Income Taxes (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | ' | ' |
Federal | $10 | ' |
Foreign | 76 | 32 |
Total current taxes | 86 | 32 |
Deferred foreign taxes | 16 | -56 |
Income tax provision (benefit) | $102 | ($24) |
Note_6_Income_Taxes_Details_In
Note 6 - Income Taxes (Details) - Income Tax Reconciliation (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Reconciliation [Abstract] | ' | ' |
Income tax at federal statutory rate | $1,425 | $886 |
Effect of permanent differences | 7 | 8 |
Increase in valuation allowance | 430 | 672 |
Foreign rate differential | -1,218 | -1,576 |
True up of foreign tax balances | -597 | 1 |
Other reconciling items | 55 | -15 |
Income tax provision (benefit) | $102 | ($24) |
Note_6_Income_Taxes_Details_De
Note 6 - Income Taxes (Details) - Deferred Income Taxes (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Net operating losses | $13,115 | $15,081 |
Stock-based compensation | ' | 352 |
Accrued expenses | 268 | 104 |
Tax credits | 512 | 501 |
Impairment of long-lived assets | 88 | 76 |
Other | 1 | 75 |
Total deferred tax assets | 13,984 | 16,189 |
Valuation allowance | -13,927 | -16,141 |
57 | 48 | |
Deferred tax liabilities: | ' | ' |
Intangible assets | -43 | -43 |
Accrued expenses | -107 | -91 |
Prepaids | -11 | ' |
Other | -4 | -6 |
Total deferred tax liabilities | -165 | -140 |
Net deferred tax liability | ($108) | ($92) |
Note_7_Supplemental_Cash_Flow_2
Note 7 - Supplemental Cash Flow Information (Details) - Cash Flow Information, Supplemental (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Cash Flow Statements, Captions [Line Items] | ' | ' |
Income taxes, net of refunds | $71 | $34 |
Convertible Preferred Stock [Member] | ' | ' |
Condensed Cash Flow Statements, Captions [Line Items] | ' | ' |
Conversion of preferred stock | $13 | ' |
Note_8_Related_Party_Transacti1
Note 8 - Related Party Transactions (Details) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2013 | Apr. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Feb. 28, 2013 | |
Soothe [Member] | Soothe [Member] | Royalty Income [Member] | Royalty Income [Member] | Broady Health Sciences [Member] | Broady Health Sciences [Member] | Broady Health Sciences [Member] | Broady Health Sciences [Member] | George Broady [Member] | |
Broady Health Sciences [Member] | Broady Health Sciences [Member] | Broady Health Sciences [Member] | Broady Health Sciences [Member] | ||||||
Note 8 - Related Party Transactions (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty Rate | 2.50% | ' | ' | ' | 2.50% | ' | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Related Party Transaction, Expenses from Transactions with Related Party | ' | ' | ' | ' | ' | $42,000 | ' | ' | ' |
Related Party Transaction, Amounts of Transaction | ' | ' | 25,000 | 12,000 | ' | ' | ' | ' | ' |
Accrued Royalties | $5,000 | $5,000 | ' | ' | ' | ' | ' | $48,000 | ' |
Number of Days Termination Notice | ' | ' | ' | ' | ' | ' | '120 days | ' | ' |
Note_9_Employee_Benefit_Plan_D
Note 9 - Employee Benefit Plan (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Compensation and Retirement Disclosure [Abstract] | ' | ' |
Deferred Compensation Arrangement with Individual, Cash Awards Granted, Percentage | 90.00% | ' |
Age Requirement for 401K Contributions | 21 | ' |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.50% | 4.50% |
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage | 100.00% | 100.00% |
Defined Contribution Plan, Cost Recognized (in Dollars) | $62,000 | $61,000 |
Note_10_Segment_Information_De
Note 10 - Segment Information (Details) - Net Sales by Market (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales from external customers: | ' | ' |
Net sales from external customers | $52,527 | $37,514 |
UNITED STATES | ' | ' |
Net sales from external customers: | ' | ' |
Net sales from external customers | 2,289 | 1,737 |
HONG KONG | ' | ' |
Net sales from external customers: | ' | ' |
Net sales from external customers | 40,585 | 26,235 |
CHINA | ' | ' |
Net sales from external customers: | ' | ' |
Net sales from external customers | 791 | 1,081 |
TAIWAN, PROVINCE OF CHINA | ' | ' |
Net sales from external customers: | ' | ' |
Net sales from external customers | 3,387 | 2,074 |
Korea (South), Won | ' | ' |
Net sales from external customers: | ' | ' |
Net sales from external customers | 702 | 285 |
Russia and Kazakhstan [Member] | ' | ' |
Net sales from external customers: | ' | ' |
Net sales from external customers | 4,354 | 5,540 |
Other Foreign Countries [Member] | ' | ' |
Net sales from external customers: | ' | ' |
Net sales from external customers | $419 | $562 |
Note_10_Segment_Information_De1
Note 10 - Segment Information (Details) - The Company’s Net Sales by Product and Service (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Net sales by product and service: | ' | ' |
Product sales | $50,385 | $36,174 |
Enrollment package revenue, freight and other | 2,955 | 2,225 |
Less: sales returns | -813 | -885 |
Total net sales | $52,527 | $37,514 |
Note_10_Segment_Information_De2
Note 10 - Segment Information (Details) - Long Lived Assets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Long-lived assets: | ' | ' |
Long-lived assets | $265 | $121 |
UNITED STATES | ' | ' |
Long-lived assets: | ' | ' |
Long-lived assets | 35 | 38 |
CHINA | ' | ' |
Long-lived assets: | ' | ' |
Long-lived assets | 137 | 63 |
Other Foreign Countries [Member] | ' | ' |
Long-lived assets: | ' | ' |
Long-lived assets | $93 | $20 |
Note_11_Subsequent_Events_Deta
Note 11 - Subsequent Events (Details) (USD $) | Dec. 31, 2013 | Oct. 19, 2007 | 4-May-07 | Feb. 28, 2014 | Mar. 07, 2014 | Feb. 28, 2014 |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
Common Stock [Member] | ||||||
Note 11 - Subsequent Events (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 1,495,952 | 3,141,499 | 2,059,307 | ' | ' | 120,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | ' | ' | 5 | ' | ' | 3.52 |
Proceeds from Issuance or Sale of Equity (in Dollars) | ' | ' | ' | $422,000 | ' | ' |
Preferred Stock, Dividends Per Share, Declared | ' | ' | ' | ' | $0.82 | ' |
Common Stock, Dividends, Per Share, Declared | ' | ' | ' | ' | $0.01 | ' |