Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Property and Equipment

Property and equipment consisted of the following at:

	June 30, 2018			December 31, 2017
Computer hardware and software	$	205,530		$	154,061
Furniture and equipment		908,700			907,586
Leasehold improvements		55,840			55,840
		1,170,070			1,117,487
Accumulated depreciation and amortization		(348,004	)		(230,394	)
Property and equipment, net	$	822,066		$	887,093

Schedule of Estimated Deferred Warranty Revenue from Remaining Obligations

We expect to recognize revenue for these remaining performance obligations during the next five years approximately as follows:

	Remaining Six Months 2018		2019		2020		2021		2022		2023
Estimated Deferred Warranty Revenue from remaining	$	92,000	$	121,000	$	66,000	$	42,000	$	19,000	$	1,000

Schedule of Disaggregation of Revenue

The following table shows the Company’s revenues disaggregated by reportable segment:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Direct to Consumer	$	3,915,091	$	5,729,838	$	8,922,145	$	12,381,253
International Third Party Distributors		580,928		1,040,250		1,472,389		1,398,850
Retail		1,757,630		436,714		4,425,575		848,431
Airlines/Hong Kong Retail		758,407		743,274		1,162,753		968,661
	$	7,012,056	$	7,950,076	$	15,982,862	$	15,597,195

Schedule of Contract Assets and Liabilities

The following table provides information about contract assets which includes accounts receivable, and contract liabilities which includes deferred revenue and accrued returns and contract fees payable from contracts with customers:

	June 30, 2018		December 31, 2017
Accounts receivable, net of allowance for returns of $724,278 and $747,269, respectively, and doubtful accounts of $255,735 and $166,034, respectively	$	2,243,253	$	3,576,376
Total contract assets	$	2,243,253	$	3,576,376
Deferred revenue	$	579,623	$	598,378
Accrued returns and contract fees payable		177,912		179,922
Total contract liabilities	$	757,535	$	778,300

Schedule of Stock Options Outstanding, Nonvested

The following is a summary of all stock options outstanding and nonvested for the six months ended June 30, 2018:

										Weighted
										Average
	Employee			Non- Employee			Totals			Exercise Price
Balance, January 1, 2018		476,667			-			476,667		$	0.42
Granted during the period		1,555,000			300,000			1,855,000			0.26
Vested during the period		-			(75,000	)		(75,000	)		0.11
Cancelled during the period		(450,000	)		-			(450,000	)		0.33
Forfeited during the period		(766,667	)		-			(766,667	)		0.36
					-
Balance, June 30, 2018		815,000			225,000			1,040,000		$	0.20

Stock Option Plan [Member]

Summary of Stock Options Outstanding Under Stock Option Plan

The following is a summary of stock options outstanding outside of the Stock Option Plans for the six months ended June 30, 2018 and 2017:

	Number of Shares						Weighted Average
	Employee		Non - Employee		Totals		Exercise Price
Balance, January 1, 2018		333,333		1,476,667		1,810,000	$	0.31
Granted during the year		-		300,000		300,000		0.11
Exercised during the year		-		-		-		-
Expired during the period		-		-		-		-
Balance, June 30, 2018		333,333		1,776,667		2,110,000	$	0.27

	Number of Shares									Weighted Average
	Employee			Non - Employee			Totals			Exercise Price
Balance, January 1, 2017		516,667			1,676,667			2,193,334		$	0.35
Granted during the year		-			-			-			-
Exercised during the year		(183,334	)		-			(183,334	)		0.27
Expired during the period		-			(200,000	)		(200,000	)		0.80
Balance, June 30, 2017		333,333			1,476,667			1,810,000		$	0.31

Schedule of Assumptions Used in Black-Scholes Option Pricing Model

The following weighted average assumptions are used in the Black-Scholes option pricing model for the six months ended June 30, 2018 to value the stock options granted during the period:

2018
Risk-free interest rate		2.77	%
Expected dividend yield		0.00	%
Expected life		3 years
Expected volatility		143.03	%
Weighted average grant date fair value	$	0.11

2011 Stock Option Plan [Member]

Summary of Stock Options Outstanding Under Stock Option Plan

The following is a summary of stock options outstanding under the Plan and 2011 Plan (collectively “Stock Option Plans”) for the six months ended June 30, 2018 and 2017:

	Number of Shares								Weighted Average
	Employee			Non-Employee		Totals			Exercise Price
Balance, January 1, 2018		3,993,335			-		3,993,335		$	0.27
Granted during the year		1,555,000					1,555,000			0.26
Exercised during the year		-			-		-			-
Cancelled during the year		(450,000	)				(450,000	)		0.33
Forfeited during the year		(850,000	)		-		(850,000	)		0.36
Balance, June 30, 2018		4,248,335					4,248,335		$	0.22

	Number of Shares								Weighted  Average
	Employee			Non- Employee		Totals			Exercise Price
Balance, January 1, 2017		3,680,002			-		3,680,002		$	0.24
Granted during the year		-			-		-			-
Exercised during the year		(101,667	)		-		(101,667	)		0.13
Forfeited during the year		(10,000	)		-		(10,000	)		0.22
Balance, June 30, 2017		3,568,335			-		3,568,335		$	0.24

Schedule of Assumptions Used in Black-Scholes Option Pricing Model

The following weighted average assumptions are used in the Black-Scholes option pricing model for the six months ended June 30, 2018 to value the stock options granted during the period:

2018
Risk-free interest rate		2.84	%
Expected dividend yield		0.00	%
Expected life		6 years
Expected volatility		142.79	%
Weighted average grant date fair value	$	0.26