Note 7 - Investment in Affiliated Company

3 Months Ended

Mar. 31, 2012

Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note 7.  Investment in Affiliated Company

In July 2010, the Company obtained a 30% membership interest in NuGlow Cosmaceuticals, LLC (NuGlow), a direct-response company selling specialty skin care products, in exchange for a capital contribution of $350,000. In connection with NuGlow’s capital raise in September 2011, the Company contributed an additional $42,000 to maintain its 30% interest in NuGlow. In March 2012, the Company entered into a Second Amendment to the Amended and Restated Operating Agreement with NuGlow, pursuant to which the Company consented to certain monthly payments by NuGlow in consideration for which the Company’s option to purchase the remaining interest of NuGlow (the Purchase Option) was extended from July 1, 2015 to July 1, 2017.

The Company’s cumulative investment in NuGlow is accounted for as an equity investment and is adjusted at each reporting period to reflect the Company’s share of NuGlow’s net earnings, losses, contributions and any profit distributions. The Company has elected to account for the Purchase Option at fair value on the balance sheet with changes in value recognized in the statement of operations over the life the of the Purchase Option. Additionally, at each reporting period, the Company assesses its investment in NuGlow to determine whether events or changes in circumstances indicate that the carrying amount may not be recoverable. The primary factors the Company considers in its determination are NuGlow’s financial condition and operating performance. If the decline in value is deemed to be other than temporary, the Company would recognize an impairment loss.

At December 31, 2011, the carrying value of the Company’s investment in NuGlow was $223,255. For the three months ended March 31, 2012, the Company recorded a loss $17,648 to “Equity in loss of affiliated company” which reflected its share of NuGlow’s net loss during the first quarter of 2012, thereby decreasing the value of the Company’s investment in NuGlow to $205,607 as of March 31, 2012.

NuGlow’s condensed balance sheets at March 31, 2012 and December 31, 2011 and statements of operations for the three months ended March 31, 2012 and 2011 are as follows:

	March 31, 2012 (Unaudited)			December 31, 2011 (Unaudited)
NuGlow Condensed Balance Sheets
Assets
Cash	$	19,242		$	200
Accounts receivable, net		6,373			18,276
Inventory		229,147			275,838
Prepaid expenses and other current assets		59,471			9,513
Total assets	$	314,233		$	303,827
Liabilities and members’ equity
Accounts payable and current liabilities	$	350,098		$	280,867
Members’ equity		514,661			514,661
Accumulated deficit		(550,526	)		(491,701	)
Total liabilities and members’ equity	$	314,233		$	303,827

	Three months ended (Unaudited)
	March 31, 2012 (Unaudited)			March 31, 2011 (Unaudited)
NuGlow Condensed Statements of Operations
Revenue	$	233,371		$	180,720
Cost of goods sold		(98,227	)		(87,590	)
Operating expenses		(193,969	)		(66,489	)
Net income	$	(58,825	)	$	26,641