Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 19, 2021 | Jun. 30, 2020 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Leatt Corp | ||
Entity Central Index Key | 0001456189 | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 5,430,374 | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Public Float | $ 7,800,183 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 2,967,042 | $ 2,072,864 |
Short-term investments | 58,257 | 58,239 |
Accounts receivable, net | 7,173,829 | 2,956,012 |
Inventory, net | 9,670,036 | 8,655,176 |
Payments in advance | 805,098 | 447,476 |
Income tax refunds receivable | 2,964 | |
Prepaid expenses and other current assets | 2,109,190 | 1,129,067 |
Total current assets | 22,786,416 | 15,318,834 |
Property and equipment, net | 3,052,276 | 2,431,061 |
Operating lease right-of-use assets, net | 285,932 | 411,956 |
Deferred tax asset, net | 78,700 | |
Other Assets | ||
Deposits | 33,699 | 26,642 |
Total Assets | 26,237,023 | 18,188,493 |
Current Liabilities | ||
Accounts payable and accrued expenses | 8,008,925 | 5,425,681 |
Note payable to bank | 300,000 | |
Operating lease liabilities, current | 207,824 | 190,765 |
Income taxes payable | 1,654,200 | 592,661 |
Short term loan, net of finance charges | 677,601 | 576,474 |
Total current liabilities | 10,548,550 | 7,085,581 |
Deferred Compensation | 240,000 | 160,000 |
Operating lease liabilities, net of current portion | 78,108 | 221,191 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $.001 par value, 1,120,000 shares authorized, 120,000 shares issued and outstanding | 3,000 | 3,000 |
Common stock, $.001 par value, 28,000,000 shares authorized, 5,430,374 and 5,386,723 shares issued and outstanding | 130,111 | 130,068 |
Additional paid - in capital | 8,338,158 | 8,079,774 |
Accumulated other comprehensive loss | (562,700) | (529,045) |
Retained earnings | 7,461,796 | 3,037,924 |
Total stockholders' equity | 15,370,365 | 10,721,721 |
Total Liabilities and Stockholders' Equity | $ 26,237,023 | $ 18,188,493 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 1,120,000 | 1,120,000 |
Preferred Stock, Shares Issued | 120,000 | 120,000 |
Preferred Stock, Shares Outstanding | 120,000 | 120,000 |
Common Stock, Par Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 28,000,000 | 28,000,000 |
Common Stock, Shares, Issued | 5,430,374 | 5,386,723 |
Common Stock, Shares, Outstanding | 5,430,374 | 5,386,723 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Operations [Abstract] | ||
Revenues | $ 38,604,289 | $ 28,317,817 |
Cost of Revenues | 21,215,669 | 15,311,013 |
Gross Profit | 17,388,620 | 13,006,804 |
Product Royalty Income | 88,748 | 46,460 |
Operating Expenses | ||
Salaries and wages | 3,480,181 | 3,271,018 |
Commissions and consulting expenses | 586,509 | 357,460 |
Professional fees | 793,859 | 725,986 |
Advertising and marketing | 2,167,445 | 1,989,959 |
Office lease and expenses | 306,855 | 279,827 |
Research and development costs | 1,522,758 | 1,491,155 |
Bad debt expense | 71,862 | 203,253 |
General and administrative expenses | 1,879,286 | 1,952,121 |
Intangible asset write-off | 41,511 | |
Depreciation | 832,216 | 760,217 |
Total operating expenses | 11,640,971 | 11,072,507 |
Income from Operations | 5,836,397 | 1,980,757 |
Other Income (Expenses) | ||
PPP loan forgiveness income | 210,732 | |
Interest and other income (expenses), net | (4,724) | (38,300) |
Total other income (expenses) | 206,008 | (38,300) |
Income Before Income Taxes | 6,042,405 | 1,942,457 |
Income Taxes | 1,618,533 | 566,729 |
Net Income Available to Common Shareholders | $ 4,423,872 | $ 1,375,728 |
Net Income per Common Share | ||
Basic | $ 0.82 | $ 0.26 |
Diluted | $ 0.74 | $ 0.25 |
Weighted Average Number of Common Shares Outstanding | ||
Basic | 5,390,420 | 5,385,249 |
Diluted | 5,990,798 | 5,546,098 |
Comprehensive Income | ||
Net Income | $ 4,423,872 | $ 1,375,728 |
Other comprehensive income (loss), net of $20,500 and $8,600 deferred income taxes in 2020 and 2019 | ||
Foreign currency translation | (33,655) | 80,258 |
Total Comprehensive Income | $ 4,390,217 | $ 1,455,986 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Operations [Abstract] | ||
Deferred income taxes | $ 20,500 | $ 8,600 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock A [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Total |
Beginning Balance at Dec. 31, 2018 | $ 3,000 | $ 130,053 | $ 7,868,119 | $ (609,303) | $ 1,662,196 | $ 9,054,065 |
Beginning Balance (Shares) at Dec. 31, 2018 | 120,000 | 5,370,028 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Compensation cost recognized in connection with stock options | 196,670 | 196,670 | ||||
Exercise of stock options | $ 15 | 14,985 | 15,000 | |||
Exercise of stock options (Shares) | 15,000 | |||||
Options exercised on a cashless basis (Shares) | 1,695 | |||||
Net income | 1,375,728 | 1,375,728 | ||||
Foreign currency translation adjustment | 80,258 | 80,258 | ||||
Ending Balance at Dec. 31, 2019 | $ 3,000 | $ 130,068 | 8,079,774 | (529,045) | 3,037,924 | 10,721,721 |
Ending Balance (Shares) at Dec. 31, 2019 | 120,000 | 5,386,723 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Compensation cost recognized in connection with stock options | 65,942 | 65,942 | ||||
Restricted stock awards | $ 41 | 176,110 | 176,151 | |||
Restricted stock awards (Shares) | 41,350 | |||||
Restricted stock awards for accrued leave | $ 2 | 16,332 | 16,334 | |||
Restricted stock awards for accrued leave (Shares) | 2,301 | |||||
Net income | 4,423,872 | 4,423,872 | ||||
Foreign currency translation adjustment | (33,655) | (33,655) | ||||
Ending Balance at Dec. 31, 2020 | $ 3,000 | $ 130,111 | $ 8,338,158 | $ (562,700) | $ 7,461,796 | $ 15,370,365 |
Ending Balance (Shares) at Dec. 31, 2020 | 120,000 | 5,430,374 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net income | $ 4,423,872 | $ 1,375,728 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 832,216 | 760,217 |
Deferred income taxes | (78,700) | (170,900) |
Stock-based compensation | 242,093 | 196,670 |
Bad debts reserve | (2,819) | 21,305 |
Inventory reserve | 7,464 | 26,123 |
Gain on sale of property and equipment | (22,189) | (2,592) |
PPP loan forgiveness income | (210,732) | |
Intangible asset write-off | 41,511 | |
(Increase) decrease in: | ||
Accounts receivable | (4,214,998) | (927,986) |
Inventory | (1,022,324) | (3,866,084) |
Payments in advance | (357,622) | 25,810 |
Prepaid expenses and other current assets | (980,123) | 118,166 |
Income tax refunds receivable | (2,964) | |
Deposits | (7,057) | (1,262) |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | 2,599,578 | 2,646,499 |
Income taxes payable | 1,061,539 | 522,403 |
Deferred compensation | 80,000 | 80,000 |
Net cash provided by operating activities | 2,347,234 | 845,608 |
Cash flows from investing activities | ||
Capital expenditures | (1,477,454) | (874,104) |
Proceeds from sale of property and equipment | 25,713 | 11,088 |
Increase in short-term investments, net | (18) | (7) |
Net cash used in investing activities | (1,451,759) | (863,023) |
Cash flows from financing activities | ||
Issuance of common stock | 15,000 | |
Proceeds from note payable to bank, net | (300,000) | 300,000 |
Proceeds from Paycheck Protection Program loan | 210,732 | |
Proceeds from (repayments of ) short-term loan, net | 101,127 | (5,654) |
Net cash provided by financing activities | 11,859 | 309,346 |
Effect of exchange rates on cash and cash equivalents | (13,156) | 71,033 |
Net increase in cash and cash equivalents | 894,178 | 362,964 |
Cash and cash equivalents - beginning of year | 2,072,864 | 1,709,900 |
Cash and cash equivalents - end of year | 2,967,042 | 2,072,864 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 32,015 | 22,814 |
Cash paid for income taxes | 617,282 | 264,381 |
Other noncash investing and financing activities | ||
Common stock issued for services | 242,093 | $ 196,670 |
Common stock issued for accrued leave | $ 16,334 |
DESCRIPTION OF BUSINESS AND NAT
DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Description Of Business And Nature Of Operations [Abstract] | |
DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS [Text Block] | NOTE 1 - DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS Leatt Corporation (the "Company") designs, develops, markets and distributes personal protective equipment for participants in all forms of motor sports and leisure activities, including riders of motorcycles, bicycles, snowmobiles and ATVs. The Company's flagship products are based on the Leatt-Brace® system, a patented injection molded neck protection system owned by Xceed Holdings CC ("Holdings"), designed to prevent potentially devastating injuries to the cervical spine and neck. The Company has the exclusive global manufacturing, distribution, sale and use rights to the Leatt-Brace®, pursuant to a license agreement between the Company and Holdings, a South African incorporated company owned and controlled by the Company's Chairman and founder, Dr. Christopher Leatt. The Company also has the right to use apparatus embodying, employing and containing the Leatt-Brace® technology and has designed, developed, marketed and distributed other personal protective equipment. The Company's products are manufactured predominately in China and sold to customers worldwide through a global network of distributors and dealers. Leatt also acts as the original equipment manufacturer for neck braces and other personal protective equipment sold by other international brands. The Company was incorporated in the State of Nevada on March 11, 2005, under the name Treadzone, Inc. On June 17, 2005, the Company changed its name to Leatt Corporation in connection with the Company's acquisition of rights to use the Leatt neck brace patents and trademarks. The Company conducts business in South Africa as a foreign registered branch, and in the United States through the Company's wholly-owned subsidiary, Two Eleven Distribution, LLC ("Two Eleven") a California limited liability company. Research and development efforts, global sales and global operations are managed out of the Company's foreign registered branch located in Cape Town, South Africa. Two Eleven acts as a distributor of Leatt products in the United States. United States sales and marketing are managed by Two Eleven located in Santa Clarita, California. The Company also has a wholly-owned subsidiary, Three Eleven Distribution (Pty) Ltd ("Three Eleven") which was an inactive South African incorporated company until December 2008, when it acquired South African registered patents relating to products unrelated to the Leatt-Brace ® |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Text Block] | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and Revenue and Cost Recognition The Company’s products are sold worldwide to a global network of distributors and dealers, and directly to consumers when there are no dealers or distributors in their geographic area or where consumers choose to purchase directly via the Company’s e-commerce website (collectively the “customers”). Revenues from product sales are recognized when earned, net of applicable provisions for discounts and returns and allowances in the event of product defect where no exchange of product is possible. Revenues are recognized when performance obligations are satisfied as evidenced by transfer of control of promised goods to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Product royalty income, representing less than 1% of total revenues, is recorded as the underlying product sales occur, in accordance with the related licensing arrangements. The Company's standard distributor payment terms range from pre-payment in full to 60 days after shipment and subsequent sales of product by distributors have no effect on the amount and timing of payments due to the Company, however, in limited instances qualified distributors and dealers may be granted extended payment terms during selected order periods. In performing such evaluations, the Company utilizes historical experience, sales performance, and credit risk requirements. Furthermore, products purchased by distributors may not be returned to the Company in the event that any such distributor relationship is terminated. Since the Company (through its wholly-owned subsidiary) serves as the distributor of Leatt products in the United States, the Company records its revenue and related cost of revenue for its product sales in the United States upon shipment of the merchandise to the dealer or to the ultimate consumer when there is no dealer in the geographic area or the consumer chooses to purchase directly from the Company's e-commerce website and the sales order was received directly from, and paid by, the ultimate consumer. Since the Company (through its South African branch) serves as the distributor of Leatt products in South Africa, the Company records its revenue and related cost of revenue for its product sales in South Africa upon shipment of the merchandise from the branch to the dealer. The Company's standard terms and conditions of sale for non-consumer direct or web-based sales do not allow for product returns other than under warranty. International sales (other than in the United States and South Africa) are generally drop-shipped directly from the third-party manufacturer to the international distributors. Revenue and related cost of revenue is recognized at the time of shipment from the manufacturer's port when the shipping terms are Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and Insurance to named place ("CIP") as legal title and risk of loss to the product pass to the distributor. Sales to all customers (distributors, dealers and consumers) are generally final; however, in limited instances, product may be returned and exchanged due to product quality issues. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted In the following table, revenue is disaggregated by the source of revenue: Year Ended December 31, 2020 % of Revenues 2019 % of Revenues Consumer and athlete direct revenues $ 2,281,444 6% $ 1,370,776 5% Dealer direct revenues 12,637,969 33% 8,851,606 31% International distributor revenues 23,684,876 61% 18,095,435 64% $ 38,604,289 100% $ 28,317,817 100% The Company reviews the reserves for customer returns at each reporting period and adjusts them to reflect data available at that time. To estimate reserves for returns, the Company estimates the expected returns and claims based on historical rates as well as events and circumstances that indicate changes to historical rates of product returns and claims. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. The provision for estimated returns at December 31, 2020 and December 31, 2019 was $-0-, and $-0-, respectively. Sales commissions are expensed when incurred, which is generally at the time of sale, because the amortization period would have been one year or less. These costs are recorded in commissions and consulting expenses within operating expenses in the accompanying consolidated statements of operations and comprehensive income. Shipping and handling activities associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfilment cost and are included in revenues and cost of revenues in the accompanying consolidated statements of operations and comprehensive income. Revenue recognized from contracts with customers is recorded net of sales taxes, value added taxes, or similar taxes that are collected on behalf of local taxing authorities. Operating leases – Short-term investments - Accounts Receivable and Allowance for Doubtful Accounts - Accounts receivable balances that are still outstanding after management has used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within the Company's expectations and the provisions established, management cannot guarantee that the Company will continue to experience the same credit loss rates that the Company has in the past. A significant change in the liquidity or financial position of any of the Company's significant customers Inventory - Property and Equipment - Impairment of Long-Lived Assets - Short-term Loan The previous South African short-term loan that was payable in monthly installments of $4,595 over a ten-month period at a flat interest rate of 4.10% was repaid October 2020. The current short-term loan effective January 1, 2021 is payable in monthly installments of $4,367 over a ten-month period at a flat interest rate of 3.10%. The Company carries various short-term insurance policies in the U.S. The Company finances payment of its short-term insurance premiums over the period of coverage, which is generally twelve months. The previous U.S. short-term loan was payable in monthly installments of $10,540 over eleven months including interest at 5.990% and has been paid in full. The current short-term loan is payable in monthly installments of $11,634 over ten months including interest at 4.950%. Preferred Stock - Shipping and Handling Costs Advertising - Patent-related Costs Research and Development - Foreign Currency Translation and Foreign Currency Transactions - Stock-Based Compensation - Income Taxes - The Company applies the provisions of FASB ASC Topic 740-10, Accounting for Uncertainty in Income Taxes ("Standard"), which provides that the tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the position is more likely than not of being sustained upon an examination by tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, the standard provides guidance on derecognition, classification, interest and penalties; accounting in interim periods, disclosure and transition, and any amounts when incurred would be recorded under these provisions. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2020, and 2019, the Company has no unrecognized tax benefits. Net Income Per Share of Common Stock - Comprehensive Income - Fair Value of Financial Instruments - Concentration of Credit Risk - The Company's trade receivables are derived from sales to distributors and dealers. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. Management believes that credit risks are moderated by the diversity of the Company's end customers and geographic sales areas. The Company performs ongoing credit evaluations of its customers' financial condition and requires collateral as deemed necessary. The Company maintains allowances for potential credit losses as needed. The Company has derived, and believes that it will continue to derive, a significant portion of its revenue from a limited number of customers. For the years ended December 31, 2020 and 2019, the Company's U.S. revenue was concentrated in one customer that accounted for approximately 9% and 11%, respectively, of annual U.S. revenue. As of December 31, 2020, and 2019, $199,808, or 3% and $35,217, or 1% of the Company's accounts receivable, respectively, were due from this customer. For the years ended December 31, 2020 and 2019, the Company's international revenue was concentrated in one customer that accounted for approximately 9% and 8%, respectively, of annual international revenue. As of December 31, 2020, and 2019, $421,976, or 6%, and $0, or 0% of the Company's accounts receivable, respectively, were due from this international customer. The Company generates revenue both in the United States and internationally. For the years ended December 31, 2020 and 2019, annual revenues associated with international customers were $24,670,072 and $18,897,942, or 64% and 67% of total revenue, respectively. Statement of Cash Flows Recently Adopted Accounting Pronouncements - In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", and in November 2018 issued ASU 2018-19, which amended the standard. The ASU including its amendments are effective for companies for fiscal years beginning after December 15, 2019 and modify existing guidance related to the measurement of credit losses on financial instruments, including trade and loan receivables. The new guidance requires credit losses to be measured based on expected losses over the life of the asset rather than incurred losses. The Company adopted the new standard effective January 1, 2020, using a modified retrospective approach, and it did not have a material impact on the consolidated financial statements. Accounting Pronouncements Not Yet Adopted - In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes", which is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and by clarifying and amending existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. Certain amendments within this ASU are required to be applied on a retrospective basis, certain other amendments are required to be applied on a modified retrospective basis and all other amendments on a prospective basis. The Company is currently evaluating the impact the adoption of this standard will have on the consolidated financial statements. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY [Text Block] | NOTE 3 - INVENTORY Inventory consists primarily of finished goods. Shipping and handling costs are included in the cost of inventory. In assessing the inventory value, the Company must make estimates and judgments regarding reserves required for product obsolescence, aging of inventory and other issues potentially affecting the saleable condition of products. In performing such evaluations, the Company utilizes historical experience as well as current market information. The Company's products are manufactured by third parties predominantly in China and shipped to either a warehouse in California, the corporate offices in South Africa or to distributors throughout South America, Africa, Europe, Asia, Australia and New Zealand. The reserve for obsolescence for the years ended December 31, 2020 and 2019 was $116,591and $109,127, respectively. During the years ended December 31, 2020 and 2019 the Company wrote off and destroyed $53,258 and $78,972, respectively, of inventory which was deemed to be obsolete. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT [Text Block] | NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment as of December 31, 2020, and 2019 consisted of the following: 2020 2019 Land $ 331,304 $ 345,241 Moulds and tools 6,649,737 5,471,031 Computer equipment and software 667,232 510,932 Office and other equipment 526,190 505,965 Vehicles 208,022 236,703 Leasehold improvements 164,307 144,182 $ 8,546,792 $ 7,214,054 Accumulated depreciation (5,494,516 ) (4,782,993 ) Property and equipment, net $ 3,052,276 $ 2,431,061 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES [Text Block] | NOTE 5 - LEASES The Company has three non-cancelable operating leases, two for office and warehousing space and one for office machinery, that expire in March 2022, April 2022 and June 2022. Rent expense for these operating leases is recognized over the term of the lease on a straight-line basis. Below is a summary of the Company's Operating Right-of-Use Assets and Operating Lease liabilities as of December 31, 2020 and 2019: 2020 2019 Assets Operating lease ROU assets $ 285,932 $ 411,956 Liabilities Operating lease liabilities, current $ 207,824 $ 190,765 Operating lease liabilities, net of current portion 78,108 221,191 Total operating lease liabilities $ 285,932 $ 411,956 For the years ended December 31, 2020, and December 31, 2019, the Company recognized $220,992 and $206,799, respectively in operating lease expenses, which are included in office lease and expenses in the Company's consolidated statements of operations and comprehensive income. Generally, the Company's lease agreements do not specify an implicit rate. Therefore, the Company estimates the incremental borrowing rate, which is defined as the interest rate the Company would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates. As of December 31, 2020, and 2019, the following disclosures for remaining lease term and incremental borrowing rates were applicable: Supplemental disclosure December 31, December 31, 2020 2019 Weighted average remaining lease term 2 years 3 years Weighted average discount rate 4.87% 5.02% Maturities of lease liabilities as of December 31, 2020 were as follows: Year ended December 31, Amouts under 2021 231,447 2022 86,867 Total minimum lease payments $ 318,314 Less: amount representing interest $ (32,382 ) Total operating lease liabilities $ 285,932 Supplemental cash flow information for the year ended December 31, 2020, and 2019 is as follows: Year Ended Year Ended December 30, December 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 220,992 $ 223,016 Right-of-use assets obtained in exchange for lease obligations $ 97,096 $ 617,285 |
PAYMENTS IN ADVANCE
PAYMENTS IN ADVANCE | 12 Months Ended |
Dec. 31, 2020 | |
Payments In Advance [Abstract] | |
PAYMENTS IN ADVANCE [Text Block] | NOTE 6 - PAYMENTS IN ADVANCE Payments in advance represent upfront payments made to contract manufacturers for the manufacturing of the Company's products. Payments in advance of $805,098 and $447,476 as of December 31, 2020 and 2019 are recorded in current assets on the consolidated balance sheets. |
REVOLVING LINE OF CREDIT FACILI
REVOLVING LINE OF CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2020 | |
Line of Credit Facility [Abstract] | |
REVOLVING LINE OF CREDIT FACILITY [Text Block] | NOTE 7 - REVOLVING LINE OF CREDIT FACILITY On November 19, 2018, the Company entered into a $1,000,000 revolving line of credit agreement with a bank. Advances under the line of credit bear interest at the LIBOR Daily Floating Rate plus 2.5 percentage points commencing January 1, 2019. The line of credit matured on November 19, 2020, at which time the unpaid principal, interest, or other charges outstanding under the agreement were due and payable. On November 5, 2020, the Company executed an amendment to the line of credit agreement to extend the credit facility through November 19, 2021. The amendment was applied retroactively to October 27, 2020 and introduced an index floor so that payments for any future advances will bear interest at the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. Obligations under the line of credit are secured by equipment and fixtures in the United States of America, accounts receivable and inventory of Leatt Corporation and Two-Eleven Distribution, LLC. As of December 31, 2020, there were no advances of the line of credit leaving $1,000,000 of the line of credit available for advance. As of December 31, 2019, $300,000 of the line of credit was advanced leaving $700,000 of the line of credit available for advance at December 31, 2019. |
PAYCHECK PROTECTION PROGRAM LOA
PAYCHECK PROTECTION PROGRAM LOAN | 12 Months Ended |
Dec. 31, 2020 | |
Paycheck Protection Program Loan [Abstract] | |
PAYCHECK PROTECTION PROGRAM LOAN [Text Block] | NOTE 8 - PAYCHECK PROTECTION PROGRAM LOAN On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act or the Act). Pursuant to the Act, Two Eleven applied for and received loan proceeds of $210,732 on May 4, 2020 under the Paycheck Protection Program (PPP). The loan bore interest at 1%. Two Eleven was able to apply for forgiveness of up to 100% of the entire PPP loan balance at the end of the 24-week period from the Company's first receipt of PPP loan funds; so long as Two Eleven used the funds for specific expenses that were outlined in the CARES Act and incurred and paid within the 24-week period. On December 17, 2020, Two Eleven received notification that the PPP loan was forgiven in full. As of December 31, 2020, the Company has recorded PPP loan forgiveness income of $210,732. |
DEFERRED COMPENSATION
DEFERRED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Compensation Arrangements [Abstract] | |
DEFERRED COMPENSATION [Text Block] | NOTE 9 - DEFERRED COMPENSATION Effective January 1, 2018, the Company entered into a Long Service Bonus Agreement with a key employee. Should the employee remain employed pursuant to his performance requirements in his contract for five years, he shall be entitled to a one-time gross bonus payment. For the duration of this Agreement, the Company shall make a provision of $80,000 per year for the five years as deferred compensation expense. As of December 31, 2020, and 2019, the Company has recorded $240,000 and $160,000, respectively as a liability for deferred compensation with respect to this Agreement. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY [Text Block] | NOTE 10 - STOCKHOLDERS’ EQUITY On December 6, 2011, the Board of Directors adopted, and the shareholders subsequently approved, the 2011 Equity Incentive Plan (the "Plan") which provides for, among other incentives, the granting to employees, directors and consultants incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares as the Plan Administrator may determine. In June 2013, the shareholders approved an increase in the maximum shares from 260,000 to 460,000. In December 2015, the shareholders approved an increase in the maximum number of shares from 460,000 to 920,000. In December 2018, the shareholders approved an increase in the maximum shares from 920,000 to 1,120,000. In December 2020, the shareholders approved an increase in the maximum number of shares approved for issuance under the plan from 1,120,000 to 1,320,000. The maximum number of shares of common stock which may be issued under the Plan is 1,320,000. The maximum number of shares of common stock that may be awarded to an individual participant under the Plan in any one fiscal year is 78,000 shares. Options are generally exercisable at the fair market value or higher on the date of grant over a five-year or ten-year period. Shares are generally issued at the fair market value on the date of issuance. In March 2016, options to purchase 323,000 of the Company’s common stock were granted to key employees and to the outside director under the Plan at an exercise price of $2.60 per share, exercisable over 5-year period. On the date of grant, 27% of the shares underlying these options immediately vested with a compensation expense of $154,440 and the remaining 73% of the shares were unvested with unrecognized compensation values of $426,960. The fair value of the stock options granted was estimated at the date of grant using the Black Sholes option-pricing model. Based on the list of assumptions presented below, the fair value of the options granted in March 2016 was $1.80 per share. On March 29, 2017, 30% of the shares underlying these options vested with a compensation expense of $173,880. On March 29, 2018, 26% of the shares underlying these options vested with a compensation expense of $148,680. In February 2019, 6,000 outstanding options were cancelled (3,000 shares due to vest in March 2019 and 3,000 shares in March 2020) due to the resignation of an employee with unvested options. On March 29, 2019, 15% of the shares underlying these options vested with a compensation expense of $88,260. In February 2020, 9,000 vested but outstanding share options were cancelled due to the resignation of an employee in accordance with plan rules. On March 29, 2020, the remaining 2% of the shares underlying these options vested with a compensation expense of $10,840. In November 2016, the options granted in March were amended to increase the exercise period to 10 years from the date of the modification. The fair value of the amended stock options was estimated at the date of the amendment using the Black Sholes option-pricing model. Based on the list of assumptions presented below, the fair value of the amended options was $1.82, a $0.02 increase from the original grant date value. During the years ended December 31, 2019 and 2020, $920 and $80, respectively, was recognized and included in share-based compensation. In August 2017, options to purchase 169,000 of the Company’s common stock were granted to key employees under the Plan at an exercise price of $1.60 per share, exercisable over 10-year period. On December 31, 2017, 40% of the shares underlying these options vested with a compensation expense of $40,560. On December 31, 2018, 30% of the shares underlying these options vested with a compensation expense of $30,420. On December 31, 2019, the remaining 30% of the shares underlying these options vested with a compensation expense of $30,420. The fair value of the stock options granted was estimated at the date of grant using Black Sholes option-pricing model. Based on the list of assumptions presented below, the fair value of the options granted in August 2017, was $0.60 per share. In February 2019, options to purchase 250,000 of the Company's common stock were granted to key employees and the outside director under the Plan at exercise price of $2.30 per share, exercisable over 10-year period. On the date of grant, 30% of the shares underlying these options immediately vested with a compensation expense of $82,530. On February 25, 2020, 20% of the shares underlying these options vested with a compensation expense of $55,020. The remaining 50% of the shares were unvested with unrecognized compensation values of $137,550. The fair value of the stock options granted was estimated at the date of grant using Black Sholes option-pricing model. Based on the list of assumptions presented below, the fair value of the options granted during the year ended December 31, 2019, was $1.10 per share. The fair value of the stock options granted was estimated at the date of grant using the Black Sholes option-pricing model. The values of the options granted was calculated based on the list of assumptions presented below. 2016 Options Granted Modification to 2017 Options Granted 2019 Options Granted Expected terms in years 5 10 10 10 Years Risk-free interest rate 2.20% 2.69% 2.78% 2.84% Expected volatility 0.88% 0.57% 21.73% 32.35% Expected dividend yield 0.00% 0.00% 0.00% 0.00% The expected volatility was determined with reference to the historical volatility of the Company's stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time during which the options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. Total stock-based compensation expense related to vested stock options recognized during the years ended December 31, 2020 and 2019 was $65,942 and $196,670. As of December 31, 2020, there was $137,550 of unrecognized compensation costs related to unvested stock options, which is expected to be recognized over the next 2 years. A summary of information related to stock option activity during the years ended December 31, 2020 and 2019 is as follows: Outstanding Weighted - Aggregate Stock Average Exercise Intrinsic Options Price Value Options outstanding at January 1, 2019 510,000 $ 1.00 to $2.60 $ 137,960 Stock options granted 250,000 $ 2.30 Stock options exercised (18,000 ) $ 1.00 Stock options cancelled (6,000 ) $ 2.60 Options outstanding at December 31, 2019 736,000 $ 1.00 to $2.60 $ 126,680 Stock options cancelled (9,000 ) Options outstanding at December 31, 2020 727,000 $ 1.00 to $2.60 $ 3,733,600 Options vested and exercisable at December 31, 2020 602,000 $ 1.60 to $2.60 $ 3,096,100 The intrinsic value is the difference between the current fair value of the stock and the exercise price of the stock option. The weighted-average remaining contractual life of options outstanding, vested and exercisable as of December 31, 2020 is one to ten years. In addition, on February 14, 2019, the Company issued 15,000 shares of common stock to a director who exercised stock options and 1,695 shares of common stock to an employee who exercised stock options in a cashless exercise. On December 29, 2020, the Company's Board approved the award of 41,350 restricted shares of the Company's common stock to key employees and the outside director, pursuant to a Restricted Stock Award Agreement, under the Company's 2011 Equity Incentive Plan. On the date of grant, 60% of the shares underlying these options immediately vested with a compensation expense of $176,151. The remaining 40% of the shares were unvested with unrecognized compensation values of $117,434. The fair value of the stock granted, calculated in accordance with the plan, was $ 7.10 per share. On December 29, 2020, the Company's Board approved the award of 2,301 restricted shares of the Company's common stock to a key employee in payment of accrued annual leave of $16,334. The fair value of the stock issued, calculated in accordance with the plan, was $ 7.10 per share. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES [Text Block] | NOTE 11 - INCOME TAXES The Company's income tax expense for the years ended December 31, 2020 and 2019 consists of the following components: 2020 2019 Current Federal $ 1,140,900 $ 531,629 State 556,333 143,100 1,697,233 674,729 Deferred Federal (78,700 ) (170,900 ) State — 62,900 (78,700 ) (108,000 ) Income tax expense $ 1,618,533 $ 566,729 The Company's effective income tax expense differs from the federal statutory amount because of the effect of the following items: 2020 2019 Federal tax statutory rate 21.00% 21.00% State tax statutory rate 8.85% 5.75% Effect of prior year (over) under provision —1.43% 2.95% Timing and permanent differences 1.10% 3.00% Valuation Allowance 1.10% —3.50% 30.62% 29.20% Deferred income taxes (benefit) reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and the tax effects of net operating losses that are available to offset future taxable income. Significant components of the Company's deferred tax assets (liabilities) at December 31, 2020 and 2019 consist of the following: 2020 2019 Deferred tax assets: Accounts receivable $ 25,500 $ 26,200 Inventory 29,100 27,300 Payroll differences 95,000 32,100 Net operating loss carryforwards 1,023,000 1,038,300 Less valuation allowance (1,023,000 ) (969,100 ) Deferred tax assets, net $ 149,600 $ 154,800 Deferred tax liabilites: Depreciation (70,900 ) (154,800 ) Deferred tax assets (liabilities), net $ 78,700 $ — In assessing the ultimate realization of deferred tax assets and liabilities, management considers whether it is more likely than not that some or all of them will not be realized. The Company established a valuation allowance for the use of its state tax net operating loss carryforwards due to uncertain state tax profitability in the jurisdictions within which the losses were incurred. Changes in the tax system by certain states has prevented the Company from utilizing any portion of its state tax net operating loss carryforwards in 2020, and for tax years 2021 and 2022. While the future level of profitability is uncertain, due in part to the current global health crisis and its impact on our future levels of profitability, the change in the location of the USA warehouse in 2021 will impact the utilization of the state tax net operating loss carryforwards. As such, the valuation allowance has been increased by $53,900 in 2020. In 2019 both the gross tax benefit and valuation allowance were reduced by $62,900 due to a reduction in the amount of loss carryforwards. As of both December 31, 2020, and 2019, the Company has approximately $12,900,000 of net operating loss carryforwards to offset certain future state taxable income, expiring in 2029. The Company files a consolidated federal and separate company state income tax returns in the United States. As of December 31, 2020, the tax years that remain subject to examination are 2018 to 2020 for federal and state tax purposes. The Company has reviewed its open tax positions and determined that no exposures exist that require an adjustment as of December 31, 2020 or 2019. While the Company believes that it has performed adequate procedures to identify all reasonably identifiable exposures, it is possible that exposures exist and that these exposures will need to be assessed and may potentially have a material impact on the Company's consolidated financial statements |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS [Text Block] | NOTE 12 - RELATED PARTY TRANSACTIONS Royalty fees associated with sales of Leatt-Brace ® Consulting fees in connection with product research, development and marketing are paid to Innovate, a company in which the Company's founder and chairman is an indirect beneficiary. Monthly consulting fees amounting to $41,446 are payable in terms of the agreement effective, May 15, 2015 and totaled $476,629 and $485,220 for the years ended December 31, 2020 and 2019, respectively. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS [Text Block] | NOTE 13 - RETIREMENT PLANS Effective January 1, 2019, the Company implemented a retirement plan under the provisions of Section 401(k) of the Internal Revenue Code for the benefit of the Company's U.S. based employees. Effective June 1, 2019, the Company implemented a provident fund for the benefit of the Company's permanent South African based employees. The Company makes a matching contribution equal to 100% of the first 4% of participants' compensation which is deferred as an elective deferral. For the years ending December 31, 2020, and 2019, the Company contributed $30,135 and $24,370 on behalf of the Company's U.S. based employees to the retirement plan. The Company contributes a minimum of 4.5% on behalf of the Company's S.A. based employees to the provident fund on a salary sacrifice basis. For the years ending December 31, 2020 and 2019, the Company contributed $31,897 and $23,770 on behalf of the Company's South African based employees. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES [Text Block] | NOTE 14 - COMMITMENTS AND CONTINGENCIES Litigation/Potential Litigation In the ordinary course of business, the Company is involved in various legal proceedings involving product liability and personal injury and intellectual property litigation. The Company is insured against loss for certain of these matters. The Company will record contingent liabilities resulting from asserted and unasserted claims against it when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company will disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. While the outcome of the currently pending litigation is not yet determinable, the ultimate exposure with respect to these matters cannot be ascertained. However, based on the information currently available to the Company, the Company does not expect that any liabilities or costs that might be incurred to resolve these matters will have a material adverse effect on the financial condition, results of operations, liquidity or cash flow of the Company. |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
RISKS AND UNCERTAINTIES [Text Block] | NOTE 15 - RISKS AND UNCERTAINTIES As the COVID-19 pandemic continues to evolve, the Company believes the extent of the impact to its operations will be primarily driven by the severity and duration of the COVID-19 pandemic, the pandemic's impact on the U.S. and global economies and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic. The Company experienced conservative international distributor ordering levels during the first quarter of 2020 as a result of the COVID-19 pandemic which resulted in a decrease in category revenues of the Company's more established product categories and particularly our most established product category, neck braces during the third quarter of 2020. Due to strong consumer demand for outdoor product categories, the Company did not see any significant material negative impact of COVID-19 on the Company's results of operations for the year ended December 31, 2020. The continued spread of the virus and its re-emergence during the fourth quarter of 2020 in areas that had previously eased quarantine requirements, or the occurrence of any other catastrophic events, could have a negative impact on the Company's sales revenue in 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS [Text Block] | NOTE 16 - SUBSEQUENT EVENTS On December 31, 2020, the revolving line of credit with a bank was fully repaid and the balance of $1,000,000 was available. On March 1, 2021, the Company executed an amendment to the line of credit, awaiting countersignature by the bank, to extend the line of credit facility through February 28, 2022 and increase the revolving line of credit to $1,500,000. When fully executed, the amendment will be retroactively effective on February 17, 2021. On December 16, 2020, the Company entered into a non-cancelable operating lease for warehousing space in South Africa, commencing on January 1, 2021 and expiring in June 2022. The lease agreement requires the Company to pay a monthly rent of $871. The Company recognized an operating lease right-of-use asset and operating lease liability of $15,170 and $15,170 effective January 1, 2021. The interest rate for this lease agreement as of January 1, 2021 is 3.75 %. On February 23, 2021, the Company entered into a non-cancelable lease agreement for warehousing space store inventory located in Spain from September 1, 2020 and expiring in June 2021. The lease agreement requires the Company to pay a monthly rent of $1,544. On December 14, 2020, Two Eleven has entered into a new Lease Agreement to lease warehouse and office space in Reno, Nevada. The lease will commence upon the date of substantial completion of the landlord's work, as defined in the Lease Agreement, and the term will continue for a period of 66 The Company has evaluated all subsequent events through March 24, 2021, the date the financial statements were released. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation [Policy Text Block] | Principles of Consolidation - |
Use of Estimates [Policy Text Block] | Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and |
Revenue and Cost Recognition [Policy Text Block] | Revenue and Cost Recognition The Company’s products are sold worldwide to a global network of distributors and dealers, and directly to consumers when there are no dealers or distributors in their geographic area or where consumers choose to purchase directly via the Company’s e-commerce website (collectively the “customers”). Revenues from product sales are recognized when earned, net of applicable provisions for discounts and returns and allowances in the event of product defect where no exchange of product is possible. Revenues are recognized when performance obligations are satisfied as evidenced by transfer of control of promised goods to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Product royalty income, representing less than 1% of total revenues, is recorded as the underlying product sales occur, in accordance with the related licensing arrangements. The Company's standard distributor payment terms range from pre-payment in full to 60 days after shipment and subsequent sales of product by distributors have no effect on the amount and timing of payments due to the Company, however, in limited instances qualified distributors and dealers may be granted extended payment terms during selected order periods. In performing such evaluations, the Company utilizes historical experience, sales performance, and credit risk requirements. Furthermore, products purchased by distributors may not be returned to the Company in the event that any such distributor relationship is terminated. Since the Company (through its wholly-owned subsidiary) serves as the distributor of Leatt products in the United States, the Company records its revenue and related cost of revenue for its product sales in the United States upon shipment of the merchandise to the dealer or to the ultimate consumer when there is no dealer in the geographic area or the consumer chooses to purchase directly from the Company's e-commerce website and the sales order was received directly from, and paid by, the ultimate consumer. Since the Company (through its South African branch) serves as the distributor of Leatt products in South Africa, the Company records its revenue and related cost of revenue for its product sales in South Africa upon shipment of the merchandise from the branch to the dealer. The Company's standard terms and conditions of sale for non-consumer direct or web-based sales do not allow for product returns other than under warranty. International sales (other than in the United States and South Africa) are generally drop-shipped directly from the third-party manufacturer to the international distributors. Revenue and related cost of revenue is recognized at the time of shipment from the manufacturer's port when the shipping terms are Free On Board ("FOB") shipping point, Cost and Freight ("CFR") or Cost and Insurance to named place ("CIP") as legal title and risk of loss to the product pass to the distributor. Sales to all customers (distributors, dealers and consumers) are generally final; however, in limited instances, product may be returned and exchanged due to product quality issues. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted In the following table, revenue is disaggregated by the source of revenue: Year Ended December 31, 2020 % of Revenues 2019 % of Revenues Consumer and athlete direct revenues $ 2,281,444 6% $ 1,370,776 5% Dealer direct revenues 12,637,969 33% 8,851,606 31% International distributor revenues 23,684,876 61% 18,095,435 64% $ 38,604,289 100% $ 28,317,817 100% The Company reviews the reserves for customer returns at each reporting period and adjusts them to reflect data available at that time. To estimate reserves for returns, the Company estimates the expected returns and claims based on historical rates as well as events and circumstances that indicate changes to historical rates of product returns and claims. Historically, returns due to product quality issues have not been material and there have been no distributor terminations that resulted in product returns. The provision for estimated returns at December 31, 2020 and December 31, 2019 was $-0-, and $-0-, respectively. Sales commissions are expensed when incurred, which is generally at the time of sale, because the amortization period would have been one year or less. These costs are recorded in commissions and consulting expenses within operating expenses in the accompanying consolidated statements of operations and comprehensive income. Shipping and handling activities associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfilment cost and are included in revenues and cost of revenues in the accompanying consolidated statements of operations and comprehensive income. Revenue recognized from contracts with customers is recorded net of sales taxes, value added taxes, or similar taxes that are collected on behalf of local taxing authorities. |
Operating leases [Policy Text Block] | Operating leases – |
Short-term investments [Policy Text Block] | Short-term investments - |
Accounts Receivable and Allowance for Doubtful Accounts [Policy Text Block] | Accounts Receivable and Allowance for Doubtful Accounts - Accounts receivable balances that are still outstanding after management has used reasonable collection efforts are written off as uncollectible. While such credit losses have historically been minimal, within the Company's expectations and the provisions established, management cannot guarantee that the Company will continue to experience the same credit loss rates that the Company has in the past. A significant change in the liquidity or financial position of any of the Company's significant customers |
Inventory [Policy Text Block] | Inventory - |
Property and Equipment [Policy Text Block] | Property and Equipment - |
Impairment of Long-Lived Assets [Policy Text Block] | Impairment of Long-Lived Assets - |
Short-term Loan [Policy Text Block] | Short-term Loan The previous South African short-term loan that was payable in monthly installments of $4,595 over a ten-month period at a flat interest rate of 4.10% was repaid October 2020. The current short-term loan effective January 1, 2021 is payable in monthly installments of $4,367 over a ten-month period at a flat interest rate of 3.10%. The Company carries various short-term insurance policies in the U.S. The Company finances payment of its short-term insurance premiums over the period of coverage, which is generally twelve months. The previous U.S. short-term loan was payable in monthly installments of $10,540 over eleven months including interest at 5.990% and has been paid in full. The current short-term loan is payable in monthly installments of $11,634 over ten months including interest at 4.950%. |
Preferred Stock [Policy Text Block] | Preferred Stock - |
Shipping and Handling Costs [Policy Text Block] | Shipping and Handling Costs |
Advertising [Policy Text Block] | Advertising - |
Patent-related Costs [Policy Text Block] | Patent-related Costs |
Research and Development [Policy Text Block] | Research and Development - |
Foreign Currency Translation and Foreign Currency Transactions [Policy Text Block] | Foreign Currency Translation and Foreign Currency Transactions - |
Stock-Based Compensation [Policy Text Block] | Stock-Based Compensation - |
Income Taxes [Policy Text Block] | Income Taxes - The Company applies the provisions of FASB ASC Topic 740-10, Accounting for Uncertainty in Income Taxes ("Standard"), which provides that the tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the position is more likely than not of being sustained upon an examination by tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, the standard provides guidance on derecognition, classification, interest and penalties; accounting in interim periods, disclosure and transition, and any amounts when incurred would be recorded under these provisions. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2020, and 2019, the Company has no unrecognized tax benefits. |
Net Income Per Share of Common Stock [Policy Text Block] | Net Income Per Share of Common Stock - |
Comprehensive Income [Policy Text Block] | Comprehensive Income - |
Fair Value of Financial Instruments [Policy Text Block] | Fair Value of Financial Instruments - |
Concentration of Credit Risk [Policy Text Block] | Concentration of Credit Risk - The Company's trade receivables are derived from sales to distributors and dealers. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. Management believes that credit risks are moderated by the diversity of the Company's end customers and geographic sales areas. The Company performs ongoing credit evaluations of its customers' financial condition and requires collateral as deemed necessary. The Company maintains allowances for potential credit losses as needed. The Company has derived, and believes that it will continue to derive, a significant portion of its revenue from a limited number of customers. For the years ended December 31, 2020 and 2019, the Company's U.S. revenue was concentrated in one customer that accounted for approximately 9% and 11%, respectively, of annual U.S. revenue. As of December 31, 2020, and 2019, $199,808, or 3% and $35,217, or 1% of the Company's accounts receivable, respectively, were due from this customer. For the years ended December 31, 2020 and 2019, the Company's international revenue was concentrated in one customer that accounted for approximately 9% and 8%, respectively, of annual international revenue. As of December 31, 2020, and 2019, $421,976, or 6%, and $0, or 0% of the Company's accounts receivable, respectively, were due from this international customer. The Company generates revenue both in the United States and internationally. For the years ended December 31, 2020 and 2019, annual revenues associated with international customers were $24,670,072 and $18,897,942, or 64% and 67% of total revenue, respectively. |
Statement of Cash Flows [Policy Text Block] | Statement of Cash Flows |
Recently Adopted Accounting Pronouncements [Policy Text Block] | Recently Adopted Accounting Pronouncements - In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", and in November 2018 issued ASU 2018-19, which amended the standard. The ASU including its amendments are effective for companies for fiscal years beginning after December 15, 2019 and modify existing guidance related to the measurement of credit losses on financial instruments, including trade and loan receivables. The new guidance requires credit losses to be measured based on expected losses over the life of the asset rather than incurred losses. The Company adopted the new standard effective January 1, 2020, using a modified retrospective approach, and it did not have a material impact on the consolidated financial statements. |
Accounting Pronouncements Not Yet Adopted [Policy Text Block] | Accounting Pronouncements Not Yet Adopted - In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes", which is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and by clarifying and amending existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. Certain amendments within this ASU are required to be applied on a retrospective basis, certain other amendments are required to be applied on a modified retrospective basis and all other amendments on a prospective basis. The Company is currently evaluating the impact the adoption of this standard will have on the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of disaggregation of revenue [Table Text Block] | Year Ended December 31, 2020 % of Revenues 2019 % of Revenues Consumer and athlete direct revenues $ 2,281,444 6% $ 1,370,776 5% Dealer direct revenues 12,637,969 33% 8,851,606 31% International distributor revenues 23,684,876 61% 18,095,435 64% $ 38,604,289 100% $ 28,317,817 100% |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment [Table Text Block] | 2020 2019 Land $ 331,304 $ 345,241 Moulds and tools 6,649,737 5,471,031 Computer equipment and software 667,232 510,932 Office and other equipment 526,190 505,965 Vehicles 208,022 236,703 Leasehold improvements 164,307 144,182 $ 8,546,792 $ 7,214,054 Accumulated depreciation (5,494,516 ) (4,782,993 ) Property and equipment, net $ 3,052,276 $ 2,431,061 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of operating right-of-use assets and lease liabilities [Table Text Block] | 2020 2019 Assets Operating lease ROU assets $ 285,932 $ 411,956 Liabilities Operating lease liabilities, current $ 207,824 $ 190,765 Operating lease liabilities, net of current portion 78,108 221,191 Total operating lease liabilities $ 285,932 $ 411,956 |
Schedule of remaining lease term and incremental borrowing rates [Table Text Block] | Supplemental disclosure December 31, December 31, 2020 2019 Weighted average remaining lease term 2 years 3 years Weighted average discount rate 4.87% 5.02% |
Schedule of maturities of lease liabilities [Table Text Block] | Year ended December 31, Amouts under 2021 231,447 2022 86,867 Total minimum lease payments $ 318,314 Less: amount representing interest $ (32,382 ) Total operating lease liabilities $ 285,932 |
Schedule of supplemental cash flow information [Table Text Block] | Year Ended Year Ended December 30, December 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ 220,992 $ 223,016 Right-of-use assets obtained in exchange for lease obligations $ 97,096 $ 617,285 |
STOCKHOLDERS EQUITY (Tables)
STOCKHOLDERS EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of share-based payment award, stock options, valuation assumptions [Table Text Block] | 2016 Options Granted Modification to 2017 Options Granted 2019 Options Granted Expected terms in years 5 10 10 10 Years Risk-free interest rate 2.20% 2.69% 2.78% 2.84% Expected volatility 0.88% 0.57% 21.73% 32.35% Expected dividend yield 0.00% 0.00% 0.00% 0.00% |
Schedule of share-based payment arrangement, option, activity [Table Text Block] | Outstanding Weighted - Aggregate Stock Average Exercise Intrinsic Options Price Value Options outstanding at January 1, 2019 510,000 $ 1.00 to $2.60 $ 137,960 Stock options granted 250,000 $ 2.30 Stock options exercised (18,000 ) $ 1.00 Stock options cancelled (6,000 ) $ 2.60 Options outstanding at December 31, 2019 736,000 $ 1.00 to $2.60 $ 126,680 Stock options cancelled (9,000 ) Options outstanding at December 31, 2020 727,000 $ 1.00 to $2.60 $ 3,733,600 Options vested and exercisable at December 31, 2020 602,000 $ 1.60 to $2.60 $ 3,096,100 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) [Table Text Block] | 2020 2019 Current Federal $ 1,140,900 $ 531,629 State 556,333 143,100 1,697,233 674,729 Deferred Federal (78,700 ) (170,900 ) State — 62,900 (78,700 ) (108,000 ) Income tax expense $ 1,618,533 $ 566,729 |
Schedule of effective income tax rate reconciliation [Table Text Block] | 2020 2019 Federal tax statutory rate 21.00% 21.00% State tax statutory rate 8.85% 5.75% Effect of prior year (over) under provision —1.43% 2.95% Timing and permanent differences 1.10% 3.00% Valuation Allowance 1.10% —3.50% 30.62% 29.20% |
Schedule of deferred tax assets and liabilities [Table Text Block] | 2020 2019 Deferred tax assets: Accounts receivable $ 25,500 $ 26,200 Inventory 29,100 27,300 Payroll differences 95,000 32,100 Net operating loss carryforwards 1,023,000 1,038,300 Less valuation allowance (1,023,000 ) (969,100 ) Deferred tax assets, net $ 149,600 $ 154,800 Deferred tax liabilites: Depreciation (70,900 ) (154,800 ) Deferred tax assets (liabilities), net $ 78,700 $ — |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Provision for estimated returns | $ 0 | $ 0 |
Allowance for doubtful accounts | 101,885 | 104,704 |
Inventory reserve for obsolescence | $ 116,591 | 109,127 |
Intangible asset write-off | 41,511 | |
Preferred stock converted common stock conversion ratio | 1 | |
Voting rights for each share of preferred stock | 100 | |
Patent-related costs | $ 149,675 | 137,168 |
Foreign currency translation | $ (33,655) | $ 80,258 |
Weighted-average number of potential common shares | 847,000 | 856,000 |
Weighted-average number of preferred shares | 120,000 | 120,000 |
Number of options to purchase that are dilutive | 727,000 | 169,000 |
Number of options to purchase excluded from computation of earnings per share | 567,000 | |
Cash, uninsured amount | $ 2,710,812 | $ 1,776,931 |
Concentration risk, percentage | 100.00% | 100.00% |
Revenues | $ 38,604,289 | $ 28,317,817 |
Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Cash, FDIC insured amount | $ 250,000 | |
Moulds and tools [Member] | Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 2 years | |
Moulds and tools [Member] | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 5 years | |
Computer equipment and software [Member] | Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 2 years | |
Computer equipment and software [Member] | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 5 years | |
Office and other equipment [Member] | Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 3 years | |
Office and other equipment [Member] | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 6 years | |
Vehicles [Member] | Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 3 years | |
Vehicles [Member] | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 5 years | |
Leasehold improvements [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Property and Equipment, estimated useful life | 3 years | |
Previous U.S. short-term loan [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Short-term loan, monthly payment | $ 70,468 | |
Short-term loan, interest rate | 5.74% | |
Current U.S. short-term loan [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Short-term loan, monthly payment | $ 84,192 | |
Short-term loan, interest rate | 4.95% | |
Previous South African short-term loan [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Short-term loan, monthly payment | $ 4,595 | |
Short-term loan, interest rate | 4.10% | |
Current South African short-term loan [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Intangible asset write-off | $ 4,367 | |
Short-term loan, interest rate | 3.10% | |
Previous various short term insurance policies in U.S. [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Short-term loan, monthly payment | $ 10,540 | |
Short-term loan, interest rate | 5.99% | |
Current various short term insurance policies In U.S. [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Short-term loan, monthly payment | $ 11,634 | |
Short-term loan, interest rate | 4.95% | |
One customer - U.S. Revenue [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 9.00% | 11.00% |
One customer - Accounts receivable [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 3.00% | 1.00% |
Accounts receivable, net | $ 199,808 | $ 35,217 |
One customer - International Revenue [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 9.00% | 8.00% |
One customer - International Accounts receivable [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 6.00% | 0.00% |
Accounts receivable, net | $ 421,976 | $ 0 |
International Revenue [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk, percentage | 64.00% | 67.00% |
Revenues | $ 24,670,072 | $ 18,897,942 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of disaggregation of revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Revenues | $ 38,604,289 | $ 28,317,817 |
% of Revenues | 100.00% | 100.00% |
Consumer and athlete direct revenues [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Revenues | $ 2,281,444 | $ 1,370,776 |
% of Revenues | 6.00% | 5.00% |
Dealer direct revenues [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Revenues | $ 12,637,969 | $ 8,851,606 |
% of Revenues | 33.00% | 31.00% |
International distributor revenues [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Revenues | $ 23,684,876 | $ 18,095,435 |
% of Revenues | 61.00% | 64.00% |
INVENTORY (Narrative) (Details)
INVENTORY (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Inventory reserve for obsolescence | $ 116,591 | $ 109,127 |
Inventory wrote off and destroyed | $ 53,258 | $ 78,972 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of property, plant and equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 8,546,792 | $ 7,214,054 |
Accumulated depreciation | (5,494,516) | (4,782,993) |
Property and equipment, net | 3,052,276 | 2,431,061 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 331,304 | 345,241 |
Moulds and tools [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,649,737 | 5,471,031 |
Computer equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 667,232 | 510,932 |
Office and other equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 526,190 | 505,965 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 208,022 | 236,703 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 164,307 | $ 144,182 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 220,992 | $ 206,799 |
LEASES - Schedule of operating
LEASES - Schedule of operating right-of-use assets and lease liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Operating lease ROU assets | $ 285,932 | $ 411,956 |
Liabilities | ||
Operating lease liabilities, current | 207,824 | 190,765 |
Operating lease liabilities, net of current portion | 78,108 | 221,191 |
Total operating lease liabilities | $ 285,932 | $ 411,956 |
LEASES - Schedule of remaining
LEASES - Schedule of remaining lease term and incremental borrowing rates (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted average remaining lease term | 2 years | 3 years |
Weighted average discount rate | 4.87% | 5.02% |
LEASES - Schedule of maturities
LEASES - Schedule of maturities of lease liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Amounts under Operating Leases | ||
2020 | $ 231,447 | |
2021 | 86,867 | |
Total minimum lease payments | 318,314 | |
Less: amount representing interest | (32,382) | |
Total operating lease liabilities | $ 285,932 | $ 411,956 |
LEASES - Schedule of supplement
LEASES - Schedule of supplemental cash flow information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 220,992 | $ 223,016 |
Right-of-use assets obtained in exchange for lease obligations | $ 97,096 | $ 617,285 |
PAYMENTS IN ADVANCE (Narrative)
PAYMENTS IN ADVANCE (Narrative) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Payments In Advance [Abstract] | ||
Payments in advance | $ 805,098 | $ 447,476 |
REVOLVING LINE OF CREDIT FACI_2
REVOLVING LINE OF CREDIT FACILITY (Narrative) (Details) - USD ($) | 1 Months Ended | |||
Oct. 27, 2020 | Nov. 19, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | ||||
Line of credit advanced | $ 300,000 | |||
Revolving line of credit agreement [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 1,000,000 | |||
Description of revolving line of credit agreement | the greater of the LIBOR Daily Floating Rate or an Index Floor of 1.25 percentage points plus 2.5 percentage points. | LIBOR Daily Floating Rate plus 2.5 percentage points | ||
Line of credit available for advance | $ 1,000,000 | 700,000 | ||
Line of credit advanced | $ 300,000 |
PAYCHECK PROTECTION PROGRAM L_2
PAYCHECK PROTECTION PROGRAM LOAN (Narrative) (Details) - USD ($) | May 04, 2020 | Dec. 31, 2020 |
Short-term Debt [Line Items] | ||
Proceeds from Paycheck Protection Program loan | $ 210,732 | |
Paycheck Protection Program, CARES Act [Member] | ||
Short-term Debt [Line Items] | ||
Proceeds from Paycheck Protection Program loan | $ 210,732 | |
Debt instrument, interest rate, stated percentage | 1.00% | |
PPP loan forgiveness | $ 210,732 |
DEFERRED COMPENSATION (Narrativ
DEFERRED COMPENSATION (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Compensation Arrangements [Abstract] | ||
Deferred compensation expense | $ 80,000 | $ 80,000 |
Provision of deferred compensation expense (in years) | 5 years | |
Liability for deferred compensation | $ 240,000 | $ 160,000 |
STOCKHOLDERS EQUITY (Narrative)
STOCKHOLDERS EQUITY (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 29, 2020 | Mar. 29, 2020 | Feb. 29, 2020 | Feb. 25, 2020 | Mar. 29, 2019 | Feb. 28, 2019 | Feb. 14, 2019 | Mar. 29, 2018 | Aug. 31, 2017 | Mar. 29, 2017 | Nov. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | Jun. 30, 2013 | May 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Weighted average exercise price, stock options granted | $ 2.30 | ||||||||||||||||||
Unrecognized compensation expense of options unvested | $ 137,550 | ||||||||||||||||||
Awards vesting period | 2 years | ||||||||||||||||||
Stock-based compensation | $ 242,093 | $ 196,670 | |||||||||||||||||
Stock-based compensation expense related to vested stock options | $ 65,942 | $ 196,670 | |||||||||||||||||
Exercise of stock options (Shares) | 18,000 | ||||||||||||||||||
Options, forfeitures in period | 9,000 | 6,000 | |||||||||||||||||
Restricted stock awards for accrued leave | $ 16,334 | ||||||||||||||||||
2011 Equity Incentive Plan [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 1,320,000 | 1,120,000 | 920,000 | 460,000 | 260,000 | ||||||||||||||
2011 Equity Incentive Plan [Member] | Restricted stock [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Unrecognized compensation expense of options unvested | $ 117,434 | ||||||||||||||||||
2011 Equity Incentive Plan - an individual participant [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 78,000 | ||||||||||||||||||
Options granted March 2016 [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Common stock share granted to key employees, consultants and directors under the plan | 323,000 | ||||||||||||||||||
Weighted average exercise price, stock options granted | $ 2.60 | ||||||||||||||||||
Options, vested, percentage of options | 15.00% | 26.00% | 30.00% | 27.00% | |||||||||||||||
Share-based compensation recognized | $ 10,840 | $ 88,260 | $ 148,680 | $ 173,880 | $ 154,440 | ||||||||||||||
Options, percentage of options unvested | 2.00% | 73.00% | |||||||||||||||||
Unrecognized compensation expense of options unvested | $ 426,960 | ||||||||||||||||||
Estimated fair value of the stock options granted | $ 1.82 | $ 1.80 | |||||||||||||||||
Stock-based compensation | $ 80 | $ 920 | |||||||||||||||||
Options, forfeitures in period | 9,000 | 6,000 | |||||||||||||||||
Outstanding options, weighted average remaining contractual term | 10 years | ||||||||||||||||||
Options, increase in weighted average grant date fair value | $ 0.02 | ||||||||||||||||||
Options granted August 2017 [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Common stock share granted to key employees, consultants and directors under the plan | 169,000 | ||||||||||||||||||
Weighted average exercise price, stock options granted | $ 1.60 | ||||||||||||||||||
Options, grants in period, contractual term | 10 years | ||||||||||||||||||
Options, vested, percentage of options | 30.00% | 30.00% | 40.00% | ||||||||||||||||
Share-based compensation recognized | $ 30,420 | $ 30,420 | $ 40,560 | ||||||||||||||||
Estimated fair value of the stock options granted | $ 0.60 | ||||||||||||||||||
Options granted February 2019 [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Common stock share granted to key employees, consultants and directors under the plan | 250,000 | ||||||||||||||||||
Weighted average exercise price, stock options granted | $ 2.30 | ||||||||||||||||||
Options, grants in period, contractual term | 10 years | ||||||||||||||||||
Options, vested, percentage of options | 20.00% | 30.00% | |||||||||||||||||
Share-based compensation recognized | $ 55,020 | $ 82,530 | |||||||||||||||||
Remaining percentage of options unvested | 50.00% | ||||||||||||||||||
Unrecognized compensation expense of options unvested | $ 137,550 | ||||||||||||||||||
Estimated fair value of the stock options granted | $ 1.10 | ||||||||||||||||||
Shares due to vest in March 2019 [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Options, forfeitures in period | 3,000 | ||||||||||||||||||
Shares due to vest in March 2020 [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Options, forfeitures in period | 3,000 | ||||||||||||||||||
Director [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Exercise of stock options (Shares) | 15,000 | ||||||||||||||||||
Employee [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Exercise of stock options (Shares) | 1,695 | ||||||||||||||||||
Employee [Member] | Restricted stock [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Restricted stock awards for accrued leave (Shares) | 2,301 | ||||||||||||||||||
Restricted shares issued, value per share | $ 7.10 | ||||||||||||||||||
Restricted stock awards for accrued leave | $ 16,334 | ||||||||||||||||||
Key employees and the outside director [Member] | 2011 Equity Incentive Plan [Member] | Restricted stock [Member] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||
Restricted stock awards (Shares) | 41,350 | ||||||||||||||||||
Options, vested, percentage of options | 60.00% | ||||||||||||||||||
Share-based compensation recognized | $ 176,151 | ||||||||||||||||||
Remaining percentage of options unvested | 40.00% | ||||||||||||||||||
Restricted shares issued, value per share | $ 7.10 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of share-based payment award, stock options, valuation assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2016 | |
Option Indexed to Issuer's Equity [Line Items] | |||
Expected term in years | 10 years | 10 years | 5 years |
Years Risk-free interest rate | 2.84% | 2.78% | 2.20% |
Expected volatility | 32.35% | 21.73% | 0.88% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Modification to Options Granted [Member] | |||
Option Indexed to Issuer's Equity [Line Items] | |||
Expected term in years | 10 years | ||
Years Risk-free interest rate | 2.69% | ||
Expected volatility | 0.57% | ||
Expected dividend yield | 0.00% |
STOCKHOLDERS' EQUITY - Schedu_2
STOCKHOLDERS' EQUITY - Schedule of share-based payment arrangement, option, activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding, beginning of period | 736,000 | 510,000 |
Outstanding, Intrinsic Value, beginning of period | $ 126,680 | $ 137,960 |
Stock options granted | 250,000 | |
Weighted average exercise price, stock options granted | $ 2.30 | |
Stock options exercised | (18,000) | |
Weighted Average Exercise Price, Stock options exercised | $ 1 | |
Stock options cancelled | (9,000) | (6,000) |
Weighted Average Exercise Price, Stock options cancelled | $ 2.60 | |
Options outstanding, end of period | 727,000 | 736,000 |
Outstanding, Intrinsic Value, end of period | $ 3,733,600 | $ 126,680 |
Options vested and exercisable | 602,000 | |
Intrinsic Value, Options vested and exercisable | $ 3,096,100 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, beginning of period | $ 1 | $ 1 |
Weighted Average Exercise Price, end of period | 1 | 1 |
Weighted Average Exercise Price, Options vested and exercisable | 1.60 | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, beginning of period | 2.60 | 2.60 |
Weighted Average Exercise Price, end of period | 2.60 | $ 2.60 |
Weighted Average Exercise Price, Options vested and exercisable | $ 2.60 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Increase (decrease) in amount of gross tax benefit and valuation allowance | $ 53,900 | $ (62,900) |
Operating loss carryforwards | $ 12,900,000 | $ 12,900,000 |
INCOME TAXES - Schedule of comp
INCOME TAXES - Schedule of components of income tax expense (benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current | ||
Federal | $ 1,140,900 | $ 531,629 |
State | 556,333 | 143,100 |
Current | 1,697,233 | 674,729 |
Deferred | ||
Federal | (78,700) | (170,900) |
State | 0 | 62,900 |
Deferred | (78,700) | (108,000) |
Income tax expense | $ 1,618,533 | $ 566,729 |
INCOME TAXES - Schedule of effe
INCOME TAXES - Schedule of effective income tax rate reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal tax statutory rate | 21.00% | 21.00% |
State tax statutory rate | 8.85% | 5.75% |
Effect of prior year (over) under provision | (1.43%) | 2.95% |
Timing and permanent differences | 1.10% | 3.00% |
Valuation Allowance | 1.10% | (3.50%) |
Effective income tax rate reconciliation, percent | 30.62% | 29.20% |
INCOME TAXES - Schedule of defe
INCOME TAXES - Schedule of deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Accounts receivable | $ 25,500 | $ 26,200 |
Inventory | 29,100 | 27,300 |
Payroll differences | 95,000 | 32,100 |
Net operating loss carryforwards | 1,023,000 | 1,038,300 |
Less valuation allowance | (1,023,000) | (969,100) |
Deferred tax assets, net | 149,600 | 154,800 |
Deferred tax liabilites: | ||
Depreciation | (70,900) | (154,800) |
Deferred tax assets (liabilities), net | $ 78,700 | $ 0 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Sales of Leatt-Brace products [Member] | ||
Related Party Transaction [Line Items] | ||
Royalty percentage | 5.00% | |
Royalty revenue | $ 245,117 | $ 284,097 |
Accrued royalties | 34,968 | 37,464 |
Innovate [Member] | ||
Related Party Transaction [Line Items] | ||
Related party transactions, monthly consulting fees | 41,446 | |
Related party transaction, amounts of transaction | $ 476,629 | $ 485,220 |
RETIREMENT PLANS (Narrative) (D
RETIREMENT PLANS (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement plan [Member] | U.S. based employees [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Contribution percentage by company | 4.00% | |
Contribution amount of company | $ 30,135 | $ 24,370 |
Provident fund [Member] | South African based employees [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Contribution amount of company | $ 31,897 | $ 23,770 |
Provident fund [Member] | South African based employees [Member] | Minimum [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Contribution percentage by company | 4.50% |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) | 1 Months Ended | 10 Months Ended | 18 Months Ended | ||||
Jul. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Mar. 01, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Subsequent Event [Line Items] | |||||||
Operating lease right-of-use assets, net | $ 285,932 | $ 411,956 | |||||
Operating lease, liability | 285,932 | $ 411,956 | |||||
Revolving credit facility [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Line of credit available balance | $ 1,000,000 | ||||||
Subsequent Event [Member] | Revolving credit facility [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Revolving line of credit | $ 1,500,000 | ||||||
Subsequent Event [Member] | Lease agreement for warehousing space in South Africa [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Operating lease monthly rent | $ 871 | ||||||
Operating lease right-of-use assets, net | $ 15,170 | ||||||
Operating lease, liability | $ 15,170 | ||||||
Interest rate for lease agreement | 3.75% | ||||||
Subsequent Event [Member] | Lease agreement for warehousing space in Spain [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Operating lease monthly rent | $ 1,544 | ||||||
Subsequent Event [Member] | Lease agreement to lease warehouse and office space in Reno, Nevada [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Operating lease monthly rent | $ 21,959 | ||||||
Operating lease right-of-use assets, net | 1,403,549 | ||||||
Operating lease, liability | $ 1,403,549 | ||||||
Interest rate for lease agreement | 3.75% | ||||||
Lease agreement, term | 66 months |