x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
NEVADA
|
23-2577138
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification
No.)
|
KELLS BUILDING, 621
SHADY RETREAT ROAD, P.O. BOX 1349, DOYLESTOWN, PA
|
18901
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Title
of each class
|
Name
of each exchange on which registered
|
|
COMMON
STOCK, $.0005 PAR VALUE PER SHARE
|
NASDAQ
GLOBAL MARKET
|
|
COMMON
SHARE PURCHASE RIGHTS
|
NASDAQ
GLOBAL MARKET
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Part
I
|
||||
Page
|
||||
Item
|
1.
|
2
–13
|
||
1A.
|
13–
20
|
|||
1B.
|
20
|
|||
2.
|
20
|
|||
3.
|
21
– 23
|
|||
4.
|
23
|
|||
Part
II
|
5.
|
23
– 25
|
||
6.
|
25
|
|||
7.
|
26
– 32
|
|||
7A.
|
32
|
|||
8.
|
33
|
|||
9.
|
34
|
|||
9A
(T).
|
34
|
|||
9B.
|
35
|
|||
Part
III
|
10.
|
35
|
||
11.
|
35
|
|||
12.
|
35
|
|||
13.
|
35
|
|||
14.
|
35
|
|||
Part
IV
|
15.
|
36
|
||
Signatures
|
37
|
·
|
A
Patent (No. 6,555,573 B2) entitled “Method and Composition for the Topical
Treatment of Diabetic Neuropathy.” The patent extends through March 27,
2021.
|
·
|
A
Patent (No. 6,592,896 B2) entitled “Medicinal Composition and Method of
Using It” (for Treatment of Sialorrhea and other Disorders) for a product
to relieve sialorrhea (drooling) in patients suffering from Amyotrophic
Lateral Sclerosis (ALS), otherwise known as Lou Gehrig’s
Disease. The patent extends through August 5,
2021.
|
·
|
A
Patent (No. 6,596,313 B2) entitled “Nutritional Supplement and Method of
Using It” for a product to relieve sialorrhea (drooling) in patients
suffering from Amyotrophic Lateral Sclerosis (ALS), otherwise known as Lou
Gehrig’s Disease. The patent extends through April 14,
2022.
|
·
|
A
Patent (No. 6,753,325 B2) entitled “Composition and Method for Prevention,
Reduction and Treatment of Radiation Dermatitis,” a composition for
preventing, reducing or treating radiation dermatitis. The
patent extends through November 5,
2021.
|
·
|
A
Patent (No. 6,827,945 B2) entitled “Nutritional Supplements and Method of
Using Same” for a method for treating at least one symptom of
arthritis. The patent extends through April 22,
2023.
|
·
|
A
Patent (No. 7,083,813 B2) entitled “Methods for The Treatment of
Peripheral Neural and Vascular Ailments.” The patent extends
through August 4, 2023.
|
·
|
A
Patent (No. 7,166,435 B2) entitled “Compositions and Methods for Reducing
the Tranmissivity of Illnesses.” This patent will provide
additional protection to an existing composition patent (number
6,592,896), which the Company received in July 2003 and will support
on-going investigations and potential commercialization opportunities. The
Company will be continuing its studies to test the effects of the
referenced compound against avian flu and human influenza. The patent
extends through November 5, 2021.
|
·
|
A
Patent (No. 7,175,987 B2) entitled “Compositions and Methods for The
Treatment of Herpes.” The patent extends through November 5,
2021.
|
·
|
A
Patent (No. 7,396,546 B2) entitled “Anti-Microbial Compositions and
Methods of Using Same” The patent extends through August 6,
2021.
|
·
|
A
Patent (No. 7,399,783 B2) entitled “Methods for the Treatment of Scar
Tissue.” The patent extends through September 4,
2026.
|
·
|
A
Patent (No. 7,405,046 B2) entitled “Compositions and Methods for Treatment
of Rhinovirus.” The patent extends through August 6,
2021.
|
·
|
A
Patent (No. 7,410,659 B2) entitled “Methods for the Treatment of
Peripheral Neural and Vascular Ailments.” The patent extends
through November 6, 2022.
|
·
|
A
Patent (No. 7,435,725 B2) entitled “Oral Compositions and Methods for
Prevention, Reduction and Treatment of Radiation Injury.” The
patent extends through January 14,
2022.
|
·
|
A
Mexican Patent (No. 236311) entitled “Method and Composition for the
Treatment of Diabetic Neuropathy.” The patent extends through
December 18, 2020.
|
·
|
A
Mexican Patent (No. 259329) entitled “Nutritional Supplements and Methods
for Prevention, Reduction and Treatment of Radiation Injury” the patent
extends through April 30, 2022.
|
·
|
A
New Zealand Patent (No. 533439) entitled “Methods for The Treatment of
Peripheral Neural and Vascular Ailments.” The patent extends
through November 6, 2022.
|
·
|
A
New Zealand Patent (No. 526041) entitled “Method and Composition for the
Treatment of Diabetic Neuropathy.” The patent extends through December 18,
2021.
|
·
|
A
New Zealand Patent (No. 530187) entitled “Nutritional Supplements and
Methods of Using Same.” The patent extends through August 6,
2022.
|
·
|
A
New Zealand Patent (No. 537821) entitled “Anti-Microbial Compositions and
Methods of Using Same.” The patent extends through July 23,
2023.
|
·
|
A
New Zealand Patent (No. 532775) entitled “Topical Compositions and Methods
for Treatment of Adverse Effects of Ionizing Radiation,” The patent
extends through November 6, 2022.
|
·
|
An
Australian Patent (No. 2002231095) entitled “Method and Composition for
the Treatment of Diabetic Neuropathy.” The patent
extends through December 18, 2021.
|
·
|
An
Australian Patent (No. 2002352501) entitled “Method for The Treatment of
Peripheral Neural and Vascular Ailments.” The
patent extends through November 5,
2022.
|
·
|
An
Australian Patent (No. 2002232464) entitled “Nutritional Supplements and
Methods of Using Same.” The patent extends through
August 5, 2022.
|
·
|
An
Australian Patent (No. 2002365155) “Topical Compositions and Methods for
Treatment of Adverse Effects of Ionizing Radiation,” the patent extends
through November 5, 2022.
|
·
|
An
Australian Patent (No. 2002309615) “Nutritional Supplements and Methods
for Prevention, Reduction and Treatment of Radiation Injury” the patent
extends through April 30, 2022.
|
·
|
A
South African Patent (No. 2003/4247) entitled “Methods and Composition for
the Treatment of Diabetic Neuropathy.” The patent
extends through December 18, 2021.
|
·
|
A
South African Patent (No. 2004/3364) “Nutritional Supplements and Methods
for Prevention, Reduction and Treatment of Radiation Injury” the patent
extends through May 1, 2022.
|
·
|
A
South African Patent (No. 2003/9802) entitled “Nutritional Supplements and
Methods of Using Same” for a method for treating at least one symptom of
arthritis. The patent extends through August 5,
2022.
|
·
|
A
South African Patent (No. 2004/4614) entitled “Methods for The Treatment
of Peripheral Neural and Vascular Ailments.” The patent extends
through November 5, 2022.
|
·
|
A
South African Patent (No. 2005/0517) entitled “Anti-Microbial Compositions
& Methods for Using Same,” the patent extends through July 23,
2023.
|
·
|
A
South African Patent (No. 2004/3365) “Topical Compositions and Methods for
Treatment of Adverse Effects of Ionizing Radiation,” the patent extends
through November 5, 2022.
|
·
|
An
Israeli Patent (No. 159357) entitled “Nutritional Supplements and Methods
of Using Same,” the patent extends through August 6,
2022.
|
·
|
An
Indian Patent (No. 00004/MUMP/2004) entitled “A Nutritional
Supplement.” The patent extends through August 6,
2022.
|
United
States:
|
No.
4 684 528 (August 4, 1987, expired August 2004)
|
No.
4 758 439 (July 19, 1988, expired August 2004)
|
|
Canada:
|
No.
1 243 952 (November 1, 1988, expired June 2005)
|
Great
Britain:
|
No.
2 179 536 (December 21, 1988, expired June 2005)
|
Germany:
|
No.
3,587,766 (March 2, 1994, expired June 2005)
|
Sweden:
|
No. 0 183 840 (March 2, 1994,
expired June 2005)
|
France
& Italy:
|
No.
EP 0 183 840 B1 (March 2, 1994, expired June
2005)
Japan:
Pending
|
United
States:
|
No.
6 555 573 B2 (April 29, 2003)
|
No.
6 592 896 B2 (July 15, 2003)
|
||
No.
6 596 313 B2 (July 22, 2003)
|
No.
6 753 325 B2 (June 22, 2004)
|
|||
No.
6 827 945 B2 (December 7, 2004)
|
No.
7,083,813 B2 (August 1, 2006)
|
|||
No.
7,166,435 B2 (January 23, 2007)
|
No.
7,175,987 B2 (February 13, 2007)
|
|||
No.
7,396,546 B2 (July 8, 2008)
|
No.
7,399,783 B2 (July 15, 2008)
|
|||
No.
7,405,046 B2 (July 29, 2008)
|
No.
7,410,659 B2 (August 12, 2008)
|
|||
No.
7,435,725 B2 (October 14, 2008)
|
||||
Mexico
|
No.
236311 (April 28, 2006)
|
South
Africa
|
No.
2003/4247 (July 28, 2004)
|
|
Mexico
|
No.
259329 (August 4, 2006)
|
South
Africa
|
No.
2003/9802 (July 28, 2004)
|
|
South
Africa
|
No.
2004/4614 (October 28, 2005)
|
|||
New
Zealand
|
No.
533439 (October 12, 2006)
|
South
Africa
|
No.
2005/0517 (December 28, 2005)
|
|
New
Zealand
|
No.
526041 (May 12, 2005)
|
South
Africa
|
No.
2004/3365 (May 31, 2006)
|
|
New
Zealand
|
No.
530187 (June 7, 2007)
|
South
Africa
|
No.
2004/3364 (October 25, 2006)
|
|
New
Zealand
|
No.
537821 (September 13, 2007)
|
|||
New
Zealand
|
No.
532775 (February 8, 2007)
|
Israel
|
No.
159357 (November 21, 2006)
|
|
Australia
|
No.
2002231095 (November 24, 2005)
|
Australia
|
No.
2002232464 (February 22, 2007)
|
|
Australia
|
No.
2002352501 (July 5, 2007)
|
Australia
|
No.
2002365155 (January 31, 2008)
|
|
Australia
|
No.
2002309615 (January 31, 2008)
|
|||
India
|
No.
00004/MUMP/2004 (December 27, 2007)
|
·
|
A
Patent (No. 6,555,573 B2) entitled “Method and Composition for the Topical
Treatment of Diabetic Neuropathy.” The patent extends through March 27,
2021.
|
·
|
A
Patent (No. 6,592,896 B2) entitled “Medicinal Composition and Method of
Using It” (for Treatment of Sialorrhea and other Disorders) for a product
to relieve sialorrhea (drooling) in patients suffering from Amyotrophic
Lateral Sclerosis (ALS), otherwise known as Lou Gehrig’s
Disease. The patent extends through August 5,
2021.
|
·
|
A
Patent (No. 6,596,313 B2) entitled “Nutritional Supplement and Method of
Using It” for a product to relieve sialorrhea (drooling) in patients
suffering from Amyotrophic Lateral Sclerosis (ALS), otherwise known as Lou
Gehrig’s Disease. The patent extends through April 14,
2022.
|
·
|
A
Patent (No. 6,753,325 B2) entitled “Composition and Method for Prevention,
Reduction and Treatment of Radiation Dermatitis,” a composition for
preventing, reducing or treating radiation dermatitis. The
patent extends through November 5,
2021.
|
·
|
A
Patent (No. 6,827,945 B2) entitled “Nutritional Supplements and Method of
Using Same” for a method for treating at least one symptom of
arthritis. The patent extends through April 22,
2023.
|
·
|
A
Patent (No. 7,083,813 B2) entitled “Methods for The Treatment of
Peripheral Neural and Vascular Ailments.” The patent extends
through August 4, 2023.
|
·
|
A
Patent (No. 7,166,435 B2) entitled “Compositions and Methods for Reducing
the Tranmissivity of Illnesses.” This patent will provide
additional protection to an existing composition patent (number
6,592,896), which the Company received in July 2003 and will support
on-going investigations and potential commercialization opportunities. The
Company will be continuing its studies to test the effects of the
referenced compound against avian flu and human influenza. The patent
extends through November 5, 2021.
|
·
|
A
Patent (No. 7,175,987 B2) entitled “Compositions and Methods for The
Treatment of Herpes.” The patent extends through November 5,
2021.
|
·
|
A
Patent (No. 7,396,546 B2) entitled “Anti-Microbial Compositions and
Methods of Using Same” The patent extends through August 6,
2021.
|
·
|
A
Patent (No. 7,399,783 B2) entitled “Methods for the Treatment of Scar
Tissue.” The patent extends through September 4,
2026.
|
·
|
A
Patent (No. 7,405,046 B2) entitled “Compositions and Methods for Treatment
of Rhinovirus.” The patent extends through August 6,
2021.
|
·
|
A
Patent (No. 7,410,659 B2) entitled “Methods for the Treatment of
Peripheral Neural and Vascular Ailments.” The patent extends
through November 6, 2022.
|
·
|
A
Patent (No. 7,435,725 B2) entitled “Oral Compositions and Methods for
Prevention, Reduction and Treatment of Radiation Injury.” The
patent extends through January 14,
2022.
|
·
|
A
Mexican Patent (No. 236311) entitled “Method and Composition for the
Treatment of Diabetic Neuropathy.” The patent extends through
December 18, 2020.
|
·
|
A
Mexican Patent (No. 259329) entitled “Nutritional Supplements and Methods
for Prevention, Reduction and Treatment of Radiation Injury” the patent
extends through April 30, 2022.
|
·
|
A
New Zealand Patent (No. 533439) entitled “Methods for The Treatment of
Peripheral Neural and Vascular Ailments.” The patent extends
through November 6, 2022.
|
·
|
A
New Zealand Patent (No. 526041) entitled “Method and Composition for the
Treatment of Diabetic Neuropathy.” The patent extends through December 18,
2021.
|
·
|
A
New Zealand Patent (No. 530187) entitled “Nutritional Supplements and
Methods of Using Same.” The patent extends through August 6,
2022.
|
·
|
A
New Zealand Patent (No. 537821) entitled “Anti-Microbial Compositions and
Methods of Using Same.” The patent extends through July 23,
2023.
|
·
|
A
New Zealand Patent (No. 532775) entitled “Topical Compositions and Methods
for Treatment of Adverse Effects of Ionizing Radiation,” The patent
extends through November 6, 2022.
|
·
|
An
Australian Patent (No. 2002231095) entitled “Method and Composition for
the Treatment of Diabetic Neuropathy.” The patent
extends through December 18, 2021.
|
·
|
An
Australian Patent (No. 2002352501) entitled “Method for The Treatment of
Peripheral Neural and Vascular Ailments.” The
patent extends through November 5,
2022.
|
·
|
An
Australian Patent (No. 2002232464) entitled “Nutritional Supplements and
Methods of Using Same.” The patent extends through
August 5, 2022.
|
·
|
An
Australian Patent (No. 2002365155) “Topical Compositions and Methods for
Treatment of Adverse Effects of Ionizing Radiation,” the patent extends
through November 5, 2022.
|
·
|
An
Australian Patent (No. 2002309615) “Nutritional Supplements and Methods
for Prevention, Reduction and Treatment of Radiation Injury” the patent
extends through April 30, 2022.
|
·
|
A
South African Patent (No. 2003/4247) entitled “Methods and Composition for
the Treatment of Diabetic Neuropathy.” The patent
extends through December 18, 2021.
|
·
|
A
South African Patent (No. 2004/3364) “Nutritional Supplements and Methods
for Prevention, Reduction and Treatment of Radiation Injury” the patent
extends through May 1, 2022.
|
·
|
A
South African Patent (No. 2003/9802) entitled “Nutritional Supplements and
Methods of Using Same” for a method for treating at least one symptom of
arthritis. The patent extends through August 5,
2022.
|
·
|
A
South African Patent (No. 2004/4614) entitled “Methods for The Treatment
of Peripheral Neural and Vascular Ailments.” The patent extends
through November 5, 2022.
|
·
|
A
South African Patent (No. 2005/0517) entitled “Anti-Microbial Compositions
& Methods for Using Same,” the patent extends through July 23,
2023.
|
·
|
A
South African Patent (No. 2004/3365) “Topical Compositions and Methods for
Treatment of Adverse Effects of Ionizing Radiation,” the patent extends
through November 5, 2022.
|
·
|
An
Israeli Patent (No. 159357) entitled “Nutritional Supplements and Methods
of Using Same,” the patent extends through August 6,
2022.
|
·
|
An
Indian Patent (No. 00004/MUMP/2004) entitled “A Nutritional
Supplement.” The patent extends through August 6,
2022.
|
|
·
|
the
cost involved in applying for and obtaining FDA and international
regulatory approvals;
|
|
·
|
whether
the Company elects to establish partnering arrangements for development,
sales, manufacturing and marketing of such
products;
|
|
·
|
the
level of future sales of Cold-Eeze® products, and expense levels for
international sales and marketing
efforts;
|
|
·
|
whether
the Company can establish and maintain strategic arrangements for
development, sales, manufacturing and marketing of its products;
and
|
|
·
|
whether
any or all of the outstanding options are exercised and the timing and
amount of these exercises.
|
Common Stock | ||||||||||||||||
2008
|
2007
|
|||||||||||||||
Quarter
Ended
|
High
|
Low
|
High
|
Low
|
||||||||||||
March
31
|
$ | 5.74 | $ | 4.17 | $ | 7.99 | $ | 5.09 | ||||||||
June
30
|
$ | 5.85 | $ | 4.54 | $ | 7.49 | $ | 4.55 | ||||||||
September
30
|
$ | 5.65 | $ | 4.58 | $ | 5.24 | $ | 2.92 | ||||||||
December
31
|
$ | 5.39 | $ | 2.85 | $ | 6.13 | $ | 3.75 |
Description
|
Number
|
Exercise
Price
|
Expiration
Date
|
||||||
Option
Plan
|
331,000 | $ | 5.1250 |
April
6, 2009
|
|||||
Option
Plan
|
160,500 | $ | 0.8125 |
December
20, 2010
|
|||||
Option
Plan
|
153,500 | $ | 1.2600 |
December
10, 2011
|
|||||
Option
Plan
|
291,250 | $ | 5.1900 |
July
30, 2012
|
|||||
Option
Plan
|
42,500 | $ | 5.4900 |
December
17, 2012
|
|||||
Option
Plan
|
370,500 | $ | 8.1100 |
October
29, 2013
|
|||||
Option
Plan
|
435,500 | $ | 9.5000 |
October
26, 2014
|
|||||
Option
Plan
|
483,500 | $ | 13.8000 |
December
11,
2015
|
Plan
Category
|
Number
of Securities to be Issued Upon Exercise of Outstanding Options &
Warrants
(A)
|
Weighted
Average Exercise Price of Outstanding Options & Warrants
(B)
|
Number
of Securities Remaining Available for Future Issuance Under Equity
Compensation Plans (Excluding Securities Reflected in Column
A)
( C
)
|
||||
Equity
Plans Approved by Security Holders (1)
|
2,268,250
|
$7.76
|
1,753,750
|
(1)
|
An
incentive stock option plan was instituted in 1997, (the “1997 Stock
Option Plan”) and approved by the stockholders in 1998. Options pursuant
to the 1997 Stock Option Plan have been granted to directors, executive
officers, and employees.
|
(Amounts
in thousands, except per
share data)
|
Year Ended
December
31,
2008
|
Year Ended
December
31,
2007
|
Year Ended
December
31,
2006
|
Year Ended
December
31,
2005
|
Year Ended
December
31,
2004
|
|||||||||||||||
Statement
of Income Data:
|
||||||||||||||||||||
Net
sales
|
$ | 20,507 | $ | 28,242 | $ | 26,850 | $ | 33,185 | $ | 23,587 | ||||||||||
Gross
profit
|
$ | 11,413 | $ | 18,556 | $ | 17,545 | $ | 21,301 | $ | 13,546 | ||||||||||
(Loss)
income - continuing operations
|
$ | (6,410 | ) | $ | (1,856 | ) | $ | (547 | ) | $ | 2,339 | $ | (1,060 | ) | ||||||
Income
(loss) - discontinued operations (1)
|
$ | 876 | $ | (602 | ) | $ | (1,201 | ) | $ | 878 | $ | 1,513 | ||||||||
Net
(loss) income
|
$ | (5,534 | ) | $ | (2,458 | ) | $ | (1,748 | ) | $ | 3,217 | $ | 453 | |||||||
Basic
(loss) earnings per share:
Continuing
operations
|
$ | (0.50 | ) | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.20 | $ | (0.09 | ) | ||||||
Discontinued
operations
|
$ | 0.07 | $ | (0.05 | ) | $ | (0.10 | ) | $ | 0.08 | $ | 0.13 | ||||||||
Net
(loss) income
|
$ | (0.43 | ) | $ | (0.19 | ) | $ | (0.14 | ) | $ | 0.28 | $ | 0.04 | |||||||
Diluted
(loss) earnings per share:
Continuing
operations
|
$ | (0.50 | ) | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.17 | $ | (0.07 | ) | ||||||
Discontinued
operations
|
$ | 0.07 | $ | (0.05 | ) | $ | (0.10 | ) | $ | 0.07 | $ | 0.10 | ||||||||
Net
income (loss)
|
$ | (0.43 | ) | $ | (0.19 | ) | $ | (0.14 | ) | $ | 0.24 | $ | 0.03 | |||||||
Weighted
average shares outstanding:
|
||||||||||||||||||||
Basic
|
12,878 | 12,729 | 12,245 | 11,661 | 11,541 | |||||||||||||||
Diluted
|
12,878 | 12,729 | 12,245 | 13,299 | 14,449 | |||||||||||||||
As
of
December
31,
2008
|
As
of
December
31,
2007
|
As
of
December
31,
2006
|
As
of
December
31,
2005
|
As
of
December
31,
2004
|
||||||||||||||||
Balance
Sheet Data:
|
||||||||||||||||||||
Working
capital
|
$ | 14,072 | $ | 18,578 | $ | 20,541 | $ | 20,682 | $ | 17,853 | ||||||||||
Total
assets
|
$ | 24,369 | $ | 33,502 | $ | 34,845 | $ | 35,976 | $ | 31,530 | ||||||||||
Debt
|
$ | - | $ | - | $ | - | $ | 1,464 | $ | 2,893 | ||||||||||
Stockholders’
equity
|
$ | 17,774 | $ | 23,244 | $ | 25,529 | $ | 25,320 | $ | 21,902 |
|
ITEM 7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Account
– Sales Returns & Allowances
|
2008
|
2007
|
||||||
Beginning
balance
|
$ | 295,606 | $ | 473,176 | ||||
Provision
made for future charges relative to sales for each period
presented
|
2,354,346 | 1,104,161 | ||||||
Current
provision related to discontinuation of Cold-EezeÒ nasal
spray
|
- | - | ||||||
Actual
returns & allowances recorded in the current period
presented
|
(1,222,907 | ) | (1,281,731 | ) | ||||
Ending
balance
|
$ | 1,427,045 | $ | 295,606 |
Payment Due by
Period
|
||||||||||||||||||||
Contractual
Obligations
|
Total
|
Less
than
1
year
|
1-3
years
|
4-5
years
|
More
than
5
years
|
|||||||||||||||
Operating
Lease Obligations
|
$ | 19,406 | $ | 19,406 | $ | - | $ | - | $ | - | ||||||||||
Purchase
Obligations
|
3,347,000 | 1,355,000 | 1,992,000 | - | - | |||||||||||||||
Research
and Development
|
442,000 | 442,000 | - | - | - | |||||||||||||||
Advertising
|
1,920,173 | 1,920,173 | - | - | - | |||||||||||||||
Total
Contractual Obligations
|
$ | 5,728,579 | $ | 3,736,579 | $ | 1,992,000 | $ | - | $ | - |
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
||
Page
|
||
Balance
Sheets as of December 31, 2008 and 2007
|
F-1
|
|
Statements
of Operations for the years ended December 31, 2008, 2007, and
2006
|
F-2
|
|
Statements
of Stockholders’ Equity for the years ended December 31, 2008, 2007, and
2006
|
F-3
|
|
Statements
of Cash Flows for the years ended December 31, 2008, 2007, and
2006
|
F-4
|
|
Notes
to Financial Statements
|
F-5
to F-21
|
|
Responsibility
for Financial Statements
|
F-22
|
|
Report
of Independent Registered Public Accounting Firm
Amper, Politziner
& Mattia, LLP
|
F-23
|
December
31, 2008
|
December
31, 2007
|
|||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ | 11,956,796 | $ | 15,133,546 | ||||
Accounts
receivable (net of doubtful
accounts of $131,162 and $178,144)
|
4,523,519 | 6,648,538 | ||||||
Inventory
|
3,001,001 | 4,135,511 | ||||||
Prepaid
expenses and other current assets
|
1,185,113 | 810,106 | ||||||
Assets
of discontinued operations
|
- | 2,107,589 | ||||||
TOTAL CURRENT
ASSETS
|
20,666,429 | 28,835,290 | ||||||
PROPERTY, PLANT AND
EQUIPMENT –
net
|
3,666,748 | 4,337,540 | ||||||
OTHER
ASSETS:
|
||||||||
Other
assets
|
35,454 | 280,654 | ||||||
Assets
of discontinued operations
|
- | 48,437 | ||||||
TOTAL OTHER
ASSETS
|
35,454 | 329,091 | ||||||
TOTAL
ASSETS
|
$ | 24,368,631 | $ | 33,501,921 |
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable
|
$ | 693,839 | $ | 454,963 | ||||
Accrued
royalties and sales commissions
|
3,791,519 | 3,859,287 | ||||||
Accrued
advertising
|
1,306,341 | 1,369,759 | ||||||
Other
current liabilities
|
803,054 | 2,542,128 | ||||||
Liabilities
of discontinued operations
|
- | 2,031,529 | ||||||
TOTAL CURRENT
LIABILITIES
|
6,594,753 | 10,257,666 | ||||||
COMMITMENTS
AND CONTINGENCIES (Note 9)
|
||||||||
STOCKHOLDERS’
EQUITY:
|
||||||||
Common
stock, $.0005 par value;
authorized 50,000,000; Issued: 17,554,436
and 17,499,186 shares
|
8,777 | 8,750 | ||||||
Additional
paid-in-capital
|
37,599,405 | 37,535,523 | ||||||
Retained
earnings
|
5,353,855 | 10,888,141 | ||||||
Less:
Treasury stock, 4,646,053
and 4,646,053 shares, at cost
|
(25,188,159 | ) | (25,188,159 | ) | ||||
TOTAL STOCKHOLDERS’
EQUITY
|
17,773,878 | 23,244,255 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 24,368,631 | $ | 33,501,921 |
Year
Ended
|
Year
Ended
|
Year
Ended
|
||||||||||
December
31, 2008
|
December
31, 2007
|
December
31, 2006
|
||||||||||
NET
SALES
|
$ | 20,506,612 | $ | 28,241,502 | $ | 26,850,030 | ||||||
COST
OF SALES
|
9,093,593 | 9,685,361 | 9,305,132 | |||||||||
GROSS
PROFIT
|
11,413,019 | 18,556,141 | 17,544,898 | |||||||||
OPERATING
EXPENSES:
|
||||||||||||
Sales
and marketing
|
5,958,031 | 4,994,947 | 6,812,630 | |||||||||
Administration
|
7,943,128 | 9,626,665 | 8,108,807 | |||||||||
Research
and development
|
4,241,724 | 6,482,485 | 3,787,498 | |||||||||
TOTAL
OPERATING EXPENSES
|
18,142,883 | 21,104,097 | 18,708,935 | |||||||||
LOSS
FROM OPERATIONS
|
(6,729,864 | ) | (2,547,956 | ) | (1,164,037 | ) | ||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||
Interest
income
|
320,062 | 691,684 | 726,627 | |||||||||
Interest
expense
|
- | - | (21,644 | ) | ||||||||
TOTAL
OTHER INCOME, NET
|
320,062 | 691,684 | 704,983 | |||||||||
LOSS
FROM CONTINUING OPERATIONS BEFORE TAXES
|
(6,409,802 | ) | (1,856,272 | ) | (459,054 | ) | ||||||
INCOME
TAXES
|
- | - | 88,599 | |||||||||
LOSS
FROM CONTINUING OPERATIONS
|
(6,409,802 | ) | (1,856,272 | ) | (547,653 | ) | ||||||
DISCONTINUED
OPERATIONS:
|
||||||||||||
Gain
on disposal of health and wellness operations
|
736,252 | - | - | |||||||||
Income
(Loss) from discontinued operations
|
139,264 | (602,065 | ) | (1,200,692 | ) | |||||||
NET
LOSS
|
$ | (5,534,286 | ) | $ | (2,458,337 | ) | $ | (1,748,345 | ) | |||
(Loss)
Earnings per common share:
|
||||||||||||
Loss
from continuing operations
|
$ | (0.50 | ) | $ | (0.14 | ) | $ | (0.04 | ) | |||
Income
(Loss) from discontinued operations
|
$ | 0.07 | $ | (0.05 | ) | $ | (0.10 | ) | ||||
Net
Loss
|
$ | (0.43 | ) | $ | (0.19 | ) | $ | (0.14 | ) | |||
Diluted
earnings per common share:
|
||||||||||||
Loss
from continuing operations
|
$ | (0.50 | ) | $ | (0.14 | ) | $ | (0.04 | ) | |||
Income
(Loss) from discontinued operations
|
$ | 0.07 | $ | (0.05 | ) | $ | (0.10 | ) | ||||
Net
Loss
|
$ | (0.43 | ) | $ | (0.19 | ) | $ | (0.14 | ) | |||
Weighted
average common shares outstanding:
|
||||||||||||
Basic
|
12,877,983 | 12,728,706 | 12,245,073 | |||||||||
Diluted
|
12,877,983 | 12,728,706 | 12,245,073 |
Common
Stock
Shares
|
Issued
Amount
|
Additional
Paid-in-
Capital
|
Treasury
Stock
|
Retained
Earnings
|
Total
|
||||||||||||||||||||
Balance
December 31, 2005
|
11,714,471 | $ | 8,180 | $ | 35,404,803 | $ | (25,188,159 | ) | $ | 15,094,823 | $ | 25,319,647 | |||||||||||||
Tax
benefits from options, warrants
& common stock
|
2,484,330 | 2,484,330 | |||||||||||||||||||||||
Tax
benefit allowance
|
(2,484,330 | ) | (2,484,330 | ) | |||||||||||||||||||||
Proceeds
from options and warrants
exercised
|
1,011,155 | 505 | 1,957,630 | 1,958,135 | |||||||||||||||||||||
Stock
Cancellation
|
(40,993 | ) | (20 | ) | 20 | - | |||||||||||||||||||
Net
Loss
|
(1,748,345 | ) | (1,748,345 | ) | |||||||||||||||||||||
Balance
December 31, 2006
|
12,684,633 | 8,665 | 37,362,453 | (25,188,159 | ) | 13,346,478 | 25,529,437 |
Tax
benefits from options, warrants
& common stock
|
153,631 | 153,631 | ||||||||||||||||||||||
Tax
benefit allowance
|
(153,631 | ) | (153,631 | ) | ||||||||||||||||||||
Proceeds
from options and warrants
exercised
|
168,500 | 85 | 173,070 | 173,155 | ||||||||||||||||||||
Net
Loss
|
(2,458,337 | ) | (2,458,337 | ) | ||||||||||||||||||||
Balance
December 31, 2007
|
12,853,133 | 8,750 | 37,535,523 | (25,188,159 | ) | 10,888,141 | 23,244,255 | |||||||||||||||||
Tax
benefits from options, warrants
& common stock
|
67,717 | 67,717 | ||||||||||||||||||||||
Tax
benefit allowance
|
(67,717 | ) | (67,717 | ) | ||||||||||||||||||||
Proceeds
from options exercised
|
55,250 | 27 | 63,882 | 63,909 | ||||||||||||||||||||
Net
Loss
|
(5,534,286 | ) | (5,534,286 | ) | ||||||||||||||||||||
Balance
December 31, 2008
|
12,908,383 | $ | 8,777 | $ | 37,599,405 | $ | (25,188,159 | ) | $ | 5,353,855 | $ | 17,773,878 |
Year
Ended
December
31, 2008
|
Year
Ended
December
31, 2007
|
Year
Ended
December
31, 2006
|
||||||||||
OPERATING
ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (5,534,286 | ) | $ | (2,458,337 | ) | $ | (1,748,345 | ) | |||
Adjustments
to reconcile net loss to net cash provided
by continuing operations:
|
||||||||||||
Loss
on asset impairment
|
100,000 | - | - | |||||||||
Depreciation
and amortization
|
743,670 | 937,852 | 1,145,792 | |||||||||
Loss
on the sales of fixed assets
|
10,188 | - | - | |||||||||
Bad
debts provision
|
(403 | ) | 8,647 | (14,901 | ) | |||||||
(Increase)
decrease in assets:
|
||||||||||||
Accounts
receivable
|
2,125,436 | (139,741 | ) | 1,282,751 | ||||||||
Inventory
|
1,134,510 | (781,098 | ) | (88,188 | ) | |||||||
Prepaid
expenses and other current assets
|
(375,007 | ) | 7,504 | 333,268 | ||||||||
Other
assets
|
245,200 | (97,766 | ) | (72,031 | ) | |||||||
Increase
(decrease) in liabilities:
|
||||||||||||
Accounts
payable
|
238,876 | (206,992 | ) | 120,415 | ||||||||
Accrued
royalties and sales commissions
|
(67,768 | ) | 342,788 | 494,548 |