ITEM 1. BUSINESS
Business Overview
Leatt 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, as
well as racing car drivers. The Company sells its products to customers
worldwide through a global network of distributors and retailers. Leatt also
acts as the original equipment manufacturer for neck braces sold by other
international brands.
The Companys flagship products are based on the Leatt-Brace®
system, a patented injection molded neck protection system owned by Xceed
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 Xceed Holdings, a company owned and controlled
by the Companys 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 using this technology, as well as its own
developed technology, including the Companys expanding range of body protection
and helmet products which it markets under the Leatt Protection Range brand. In
2015 the Company initially launched the first products in its new helmet range
and continues to establish its offerings within this product range. The Company
believes that the new helmet range redefines head and brain protection with its
groundbreaking 360 degree Turbine technology for concussion and brain rotation
safety. These helmets offer superior head and brain protection in a shell that
is smaller, very lightweight and super ventilated, even at low speeds.
The Companys research and development efforts are conducted at
its research facilities, located at its executive headquarters in Cape Town,
South Africa. The Company employs 4 full-time employees who are dedicated
exclusively to research, development, and testing. The Company also utilizes
consultants, academic institutions and engineering companies as independent
contractors or consultants, from time to time, to assist it with its research
and development efforts. Leatt products have been tested and reviewed internally
and by external bodies. All Leatt products are compliant with applicable
European Union directives, or CE certified, where appropriate. Certain products,
such as the MRX PRO Head and Neck Restraint System, have been certified by SFI
Foundation (USA) and the Moto GPX was tested by BMW Motorrad (Germany) and
reviewed by KTM (Austria). The Company is also in discussions with governing and
racing bodies, such as the Fédération Internationale de l'Automobile (FIA), the
Fédération Internationale de Motocyclisme (FIM) and the National Association for
Stock Car Auto Racing (NASCAR), to have the Leatt-Brace® accredited by these
bodies.
Our products are manufactured in China under outsource
manufacturing arrangements with third-party manufacturers located there. The
Company utilizes outside consultants and its own employees to ensure the quality
of its products through regular on-site product inspections. Products purchased
through international sales are usually shipped directly from our manufacturers
warehouses or points of dispatch to customers or their import agents.
Leatt earns revenues through the sale of its products through
approximately 60 distributors worldwide, who in turn sell its products to
retailers. Leatt distributors are required to follow certain standard business
terms and guidelines for the sale and distribution of Leatt products. Two Eleven
and Leatt SA directly distribute Leatt products to retailers in the United
States and South Africa, respectively.
Our Corporate History and Structure
We were incorporated in the State of Nevada on March 11, 2005
under the name Treadzone, Inc. Until March 2006, we were a shell company with
little or no operations. Effective as of March 1, 2006, we acquired the
exclusive global manufacturing, distribution, sale and use rights to the
Leatt-Brace®, pursuant to a license agreement between the Company and Xceed
Holdings, a company owned and controlled by the Companys Chairman and founder,
Dr. Christopher Leatt. On May 25, 2005, we changed our name to Leatt Corporation
in connection with our anticipated acquisition of the Leatt-Brace® rights.
Leatt South Africa
The Company conducts business in South Africa as a foreign
registered branch known as Leatt Corporation (Incorporated in the State of
Nevada) registered under the laws of South Africa with registration number:
2007/032780/10. Based in Cape Town, South Africa, Leatt SA was formed on November 14, 2007, for conducting the
Companys business and operations in South Africa. Our corporate headquarters
and our research and development efforts are based at Leatt SA.
- 3 -
Establishment of Two Eleven, Three Eleven and Leatt
USA
On August 17, 2007, the Company established Two Eleven
Distribution, a California limited liability company, as its wholly-owned
subsidiary. Located in Santa Clarita, California, Two Eleven was formed to serve
as the Companys executive offices in the United States, as well as the
exclusive distributor of Leatt® products in the United States.
Southern Palace Investments 409 (Proprietary) Limited, a South
African company, was established on October 12, 2007, by the Company, to engage
in the manufacturing and distribution of sporting goods and protective gear. The
company was inactive until March 2009, when it acquired all intellectual
property rights related to an invention entitled the Helmet® from Xceed
Holdings, for an aggregate purchase price of ZAR 943,480 (approximately,
$90,000) pursuant to a patent assignment agreement, effective as of January 1,
2009, between Xceed Holdings and Southern Palace, doing business as Three Eleven
Distribution. On February 10, 2010, Southern Palace formally changed its name to
Three Eleven Distribution to reflect its business purpose.
On June 26, 2010, the Company established Leatt USA, LLC, a
Nevada Limited Liability Company, as our wholly-owned subsidiary and for the
purpose of holding our California subsidiary, Two Eleven Distribution. However,
as of the date of this annual report the Company had not moved forward with its
original plan and Leatt USA remains dormant.
Wind-up of Leatt New Zealand
On March 13, 2009, the Company established Leatt New Zealand
Limited, a New Zealand company, as its wholly-owned subsidiary. Leatt New
Zealand served as the exclusive distributor of Leatt-Brace® products in New
Zealand, until the fourth quarter of 2011 when it ceased operations and became
dormant In December 2016 the Company closed all Leatt New Zealand bank accounts
which effectively wound up the business. The Company has appointed an unrelated
third party distributor to distribute its products in the New Zealand market.
Settlement Agreement
As consideration for their founding of the Companys operations
in South Africa, we agreed to issue 20,000,000 shares of our common stock, and
19,200,000 shares of our preferred stock to Dr. Leatt, 5,000,000 shares of our
common stock and 4,800,000 shares of our preferred stock to Jean-Pierre De
Villiers, and 50,000 shares of our common stock to Ervian Jarrett. We issued the
common stock to Dr. Leatt, Mr. De Villiers and Ms. Jarrett in accordance with
the agreement, but we did not issue any preferred shares to Dr. Leatt or Mr. De
Villiers. On September 25, 2008, in settlement of our obligation to issue Dr.
Leatt and Mr. De Villiers shares of preferred stock, we entered into a
Settlement Agreement with them, pursuant to which they agreed to release us from
any and all liability arising out of or related to our failure to satisfy our
prior obligation to them, and we issued 16,800,000 shares of our common stock
and 2,400,000 shares of our Series A Preferred Stock to Dr. Leatt, and 4,200,000
shares of our common stock and 600,000 shares of our Series A Preferred Stock to
Mr. De Villiers. The Series A Preferred Stock entitles Dr. Leatt and Mr. De
Villiers to one hundred votes for each share of Series A Preferred Stock held
(voting with the common stock as a single class). The Series A Preferred Stock
converts into common stock, on a one-for-one basis, has a liquidation preference
equal to $0.001 par value per share and is redeemable by us at $0.001 par value
per share upon the occurrence of specified events, but it is subject to transfer
limitations and it does not entitle Dr. Leatt and Mr. De Villiers to dividends.
On September 20, 2012, we effected a 1-for-25 reverse stock split which reduces
the foregoing issuances on a 1:25 ratio.
Our Corporate Structure
The following chart reflects our organizational structure as of
the date of this annual report.
- 4 -
Our corporate headquarters are located at 12 Kiepersol Drive,
Atlas Gardens, Contermanskloof Road, Durbanville, Western Cape, South Africa,
7441. Our telephone number is +(27) 21-557-7257. We maintain a website at
www.leatt.com that contains information about our Company, but that information
is not incorporated into, or otherwise considered a part of, this annual report.
Our Industry and Market Trends
Off-Road Motorcycle Market
Our products have their roots in the off-road motorcycle
market. Our revolutionary neck brace was invented by Dr. Leatt to protect from
catastrophic neck injuries after he witnessed the death of a fellow off-road
motorcycle rider the weekend after his sons riding debut. As a result, our
original products target participants in off-road cycling activities such as BMX
racing and downhill racing.
We believe that we have gained our market share, largely due to
the innovation and quality of our products, the growth of the market, our
increased marketing efforts and our steps to secure our international patents
and protect our patents from infringement.
Downhill and Cycling Market
We design and sell neck braces, helmets and protective gear for
the downhill and cycling market. We entered this market focusing on downhill
cycling, which requires a full-face helmet. We have since expanded our
protective gear range to address the needs of mountain biking and BMX riders.
The downhill and cycling market is now our second largest market.
Other Recreational Markets
We also design and sell neck braces for use by participants in
other recreational sports such as ATV, go-kart and snowmobile users, race-car
drivers and participants in other sports where a full-face helmet should be
worn. As a result, our overall performance in the market is also affected by the
performance of these industries, especially in jurisdictions where the use of
helmets are compulsory.
- 5 -
Our Products
The Company designs, develops, distributes and markets
protective gear, parts and accessories. The company's flagship protective
product is the Leatt-Brace®, a patented neck protection system for sports.
The Leatt-Brace®
The Leatt-Brace® is a prophylactic neck bracing system composed
of various combinations of carbon fiber, glass fiber, polycarbonate or Glass
Filled Nylon, which was designed to help prevent potentially devastating sports
injuries to the cervical spine (neck). The first LeattBrace® was designed for
motorcycle, high speed motor vehicle and ATV use, where there is little means of
protecting the neck in the event of an accident, but the Leatt-Brace® has been
designed in such a way as to offer neck protection to all who utilize a crash
helmet as a form of protection, including soldiers, law enforcement officers and
other professionals whose activities could result in cervical spine injury.
The Company currently markets and sells seven models of
Leatt-Brace® products which bring the safety benefits of the Leatt-Brace®
technology to a large group of sports participants: our GPX model for off- road
motorcycle use; our DBX model, for downhill and BMX bicycle use; our SNX model
for snowmobile use; our STX model for adventure riders, street commuters and
Speedway participants; our Kart model for go karting; and our Fusion model which
incorporates the neck brace with body protection.
The GPX models include the GPX 5.5, which is fully adjustable,
the GPX 4.5, which is less adjustable, and the GPX 6.5, which is a full carbon
brace. Our DBX models include the DBX 5.5, which are fully adjustable, the DBX
4.5 which are less adjustable, and the DBX 6.5 which is a full carbon brace.
Both the GPX and DBX ranges feature a 5.5 Junior neck brace designed for young
athletes. The STX models include the STX RR and STX Road, while the SNX model
includes the SNX 5.5, SNX Pilot and SNX Trophy, and the Fusion models include
3.0 version designed for adults and 2.0 version designed for young athletes. The
Company offers various versions and colors of these products to appeal to
different clients and price points.
The following table sets out the type of neck braces currently
sold by the Company:
Product Category
|
Models
|
Description
|
NECK BRACES:
|
GPX
|
These neck braces are designed for
off-road motorcycle riders.
|
|
GPX 6.5 Carbon
|
Totally new carbon chassis design by LEATT. MaxiWeave
Carbon matrix allows for increased rigidity while maintaining a lower
weight of ±620g. Lowered rim striking platform for increased head and
helmet movement. New on-board size adjusting. No parts needed. New folding
thoracic for easy storage. New 3-way adjustability for great comfort and
fit. New design chest strap included to use as optional. CE certified as
Personal Protective Equipment 89/686/EEC. Two adult sizes.
|
|
GPX 5.5
|
Totally new chassis design by LEATT. New helmet rim
striking platform profile. New improved helmet side clearance. New
adjustable over the shoulder height. New on-board size adjusting. No parts
needed. New great fit with sliding front and rear. New folding thoracic.
New on board 4-angle rear thoracic adjustment. - 0, 5, 10 and 15°. New
design clear strap included to use as optional. 4-way adjustable for great
comfort and fit. CE certified as Personal Protective Equipment 89/686/EEC.
Two adult sizes.
|
|
GPX 5.5 Junior
|
Totally new chassis design by LEATT. New helmet rim
striking platform profile. New improved helmet side clearance. New
adjustable over the shoulder height. New on-board size adjusting. No parts
needed. New great fit with sliding front and rear. New folding thoracic.
New on board 4-angle rear thoracic adjustment. - 0, 5, 10 and 15°. New
design clear strap included to use as optional. 4-way adjustable for great
comfort and fit. CE certified as Personal Protective Equipment 89/686/EEC.
One junior size.
|
|
GPX 4.5
|
The 4.5 is the new entry level brace in this category.
Totally new chassis design by LEATT. New helmet rim striking platform
profile. New improved helmet side clearance. New folding thoracic. New on
board 4-angle rear thoracic adjustment. - 0, 5, 10 and 15°. New design
clear strap included to use as optional. 2-way adjustable for great
comfort and fit. CE certified as Personal Protective Equipment 89/686/EEC.
Two adult sizes.
|
- 6 -
DBX
|
These neck braces are for downhill
bicycle and BMX riders.
|
|
DBX 6.5 Carbon
|
Totally new carbon chassis design by LEATT. MaxiWeave
Carbon matrix allows for increased rigidity while maintaining a lower
weight of ±620g. Lowered rim striking platform for increased head and
helmet movement. New on-board size adjusting. No parts needed. New folding
thoracic for easy storage. New 3-way adjustability for great comfort and
fit. New design chest strap included to use as optional. CE certified as
Personal Protective Equipment 89/686/EEC.
|
|
DBX 5.5
|
A totally new chassis design. New helmet rim striking
platform profile. New improved helmet side clearance. New adjustable over
the shoulder height. New on-board size adjusting. No parts needed. New
great fit with sliding front and rear. New folding thoracic. New on board
4-angle rear thoracic adjustment: - 0, 5, 10 and 15°. New design clear
strap included to use as optional. 4-way adjustable for great comfort and
fit. CE certified as Personal Protective Equipment 89/686/EEC. Two adult
sizes.
|
|
DBX 5.5 Junior
|
Totally new chassis design by LEATT. New helmet rim
striking platform profile. New improved helmet side clearance. New
adjustable over the shoulder height. New on-board size adjusting. No parts
needed. New great fit with sliding front and rear. New folding thoracic.
New on board 4-angle rear thoracic adjustment. - 0, 5, 10 and 15°. New
design clear strap included to use as optional. 4-way adjustable for great
comfort and fit. CE certified as Personal Protective Equipment 89/686/EEC.
One junior size.
|
|
DBX 4.5
|
The 4.5 is the new entry level brace in this category.
Totally new chassis design by LEATT. New helmet rim striking platform
profile. New improved helmet side clearance. New folding thoracic. New on
board 4-angle rear thoracic adjustment. - 0, 5, 10 and 15°. New design
clear strap included to use as optional. 2-way adjustable for great
comfort and fit. CE certified as Personal Protective Equipment 89/686/EEC.
Two adult sizes.
|
STX
|
These neck braces are for street
commuters.
|
|
STX Road
|
This product is intended for use by all types of street
riders. It features a quick and easy no- tool adjustable fit, with folding
scapula wings that permit easy storage and adapt to an outside back
protector and hump, and a molded padding solution for an extra low
profile. The neck brace fits over or under a garment. Skin coated padding
for improved durability. CE certified as Personal Protective Equipment
89/686/EEC. Three adult sizes.
|
|
STX RR
|
The New STX RR design is for road racing and sport
riding. The neck brace has a new folding front for full tuck down.
Platform shaped for sport and race riding. Light-weight 620g carbon
construction. Race adopted front construction for tucking behind the
windscreen. Improved side clearance for race cornering. Swiveling rear
scapula's for perfect fit over any hump. CE certified as Personal
Protective Equipment 89/686/EEC. One adult size.
|
- 7 -
SNX
|
These neck braces are for snowmobile
riders.
|
|
SNX 5.5
|
This neck brace features the AFC Artic Fusion Compound
- Three-way adjustability, sliding front and rear SureFit adjusters to
ensure optimum fit. Four-angle rear thoracic strut adjustments to fit most
body shapes. Sculptured, split front for improved comfort and fit.
CoreFlex split rear thoracic strut is more comfortable and designed to
work with the bodys natural movements. CE certified as Personal
Protective Equipment 89/686/EEC. Two adult sizes.
|
|
SNX Pilot
|
This neck brace features the AFC Artic Fusion Compound
- Special low temperature resin material with exclusive clip-on padding
which resists snow sticking. It fits under the riders jacket and armor.
It includes a brace sock which is a waterproof and breathable barrier
against winter elements for improved comfort. It has fully adjustable
front and rear tables. CE certified as Personal Protective Equipment
89/686/EEC. Two adult sizes.
|
|
SNX Trophy
|
This neck brace features the AFC Artic Fusion Compound
- Special low temperature resin material with exclusive clip-on padding
which resists snow sticking. It fits over the riders jacket and armor. It
has molded padding for low profile and adjustable height for optimal
helmet clearance. It has folded scapula wings for easy storage and side
padding recess for improved helmet movement. CE certified as Personal
Protective Equipment 89/686/EEC. Three adult sizes.
|
Kart
|
These neck braces are for go-kart
riders.
|
|
Kart
|
This neck brace features a special Kart angle for
improved function and fit. It features bio foam lycra padding. It also has
fully adjustable front and rear tables. CE certified as Personal
Protective Equipment 89/686/EEC. Two adult sizes.
|
Moto
|
These neck braces are for restrained
torso car drivers
|
|
MRX PRO
|
This head and neck restraint is SFI 38.1 tested and
approved for optimum protection at over 70G. It has an exclusive flexible
chassis and single collar angle design for greater comfort. It fits all
types of 2" and 3" harnesses, has fire retardant Nomex® washable padding
and the chassis is made of an advanced, fire retardant, high tensile PC
composite as well as a quick release fire retardant Kevlar® tether system
for both frontal and side impact protection. It has an Anchor post kit
with wrench included.
|
Fusion
|
These neck braces incorporate upper
body protection
|
|
Fusion vest 3.0
|
This product combines CE certified LEATT neck brace
technology together with LEATT 3DF AirFit CE certified back, shoulder and
chest impact protection. Chest protection: EN1621-3 Level 1; Back
protection: EN1621-2 Level 1 and Shoulder protection EN1621-1. This is a
comfortable, lightweight and vented product. This product incorporates
LEATT 3DF AirFit impact foam for premium body protection. 3 dimensional
designed for perfect fit. Light weight. Great comfort. Well ventilated.
Three adult sizes.
|
|
SNX Fusion vest 3.0
|
This product combines CE certified LEATT neck brace
technology together with LEATT 3DF AirFit CE certified back, shoulder and
chest impact protection. Chest protection: EN1621-3 Level 1; Back
protection: EN1621-2 Level 1 and Shoulder protection EN1621-1. This is a
comfortable, lightweight and vented product. This product incorporates
LEATT 3DF AirFit impact foam for premium body protection. 3 dimensional
designed for perfect fit. Light weight. Great comfort. Well ventilated.
Three adult sizes.
|
- 8 -
|
Fusion vest 2.0 Junior
|
This product combines CE certified LEATT neck brace
technology together with LEATT 3DF AirFit CE certified back, shoulder and
chest impact protection. Chest protection: EN1621-3 Level 1; Back
protection: EN1621-2 Level 1 and Shoulder protection EN1621-1. This is a
comfortable, lightweight and vented product. This product incorporates
LEATT 3DF AirFit impact foam for premium body protection. 3 dimensional
designed for perfect fit. Light weight. Great comfort. Well ventilated.
Three junior sizes.
|
Leatt Helmet Range
In 2015 the Company launched its helmet range and commenced
shipment of its new helmet range. The Company expanded its off-road helmet range
in 2016 to include two junior helmets and its award winning DBX range for
downhill and BMX bicycle use. The Company currently sells two models of helmet
products which the Company believes redefines head and brain protection with its
groundbreaking 360 degree Turbine technology for concussion and brain rotation
safety. These helmets offer superior head and brain protection in a shell that
is smaller, very lightweight and super ventilated, even at low speeds.
The following table sets out the type of helmets currently sold
by the Company:
Product Category
|
Models
|
Description
|
HELMETS:
|
GPX
|
These helmets are designed for
off-road motorcycle riders.
|
|
GPX 6.5 Carbon
|
This race-ready Carbon off-road, light weight and super
ventilated helmet is equipped with 360 Turbine concussion and brain
rotation safety technology. It has reduced outer shell volume, low
friction cheek pads for emergency removal. Visor with breakaway function
for rotational reduction in a crash. Hydration ready (with optional
hands-free kit). Moisture-wicking, breathable, anti- microbial and
washable liner. Certified and tested to ECE2205/DOT, ACU Gold. Six adult
sizes.
|
|
LGPX 6.5 Carbon Junior
|
The Leatt GPX 6.5 Carbon Junior helmet is extremely
lightweight and features the same head and brain protection as our adult
helmets. Integrating 360 °Turbine Technology with Armourgel® cushioning
material, the helmet is lined with turbines made of this 3D molded
Armourgel®.Visor, with breakaway function for rotational reduction in a
crash. The helmet is hydration ready (with optional hands-free kit), has a
moisture-wicking, breathable, anti- microbial and washable liner and is
certified and tested to ECE2205 or DOT. Two junior sizes.
|
|
GPX 5.5 Composite
|
This race-ready composite off-road, light weight and
super ventilated helmet is equipped with 360 Turbine concussion and brain
rotation safety technology. It has reduced outer shell volume, low
friction cheek pads for emergency removal. Visor with breakaway function
for rotational reduction in a crash. Hydration ready (with optional
hands-free kit). Moisture-wicking, breathable, anti-microbial and washable
liner. Certified and tested to ECE2205/DOT. Two junior sizes.
|
|
GPX 5.5 Composite Junior
|
Specifically designed to protect younger riders, the GPX
5.5 Composite Junior helmet boasts the same technology that makes the
adult helmets so effective. The helmet is equipped with 360 Turbine
concussion and brain rotation safety technology. It has reduced outer
shell volume. Visor with breakaway function for rotational reduction in a
crash. Hydration ready (with optional hands-free kit). Moisture-wicking,
breathable, anti-microbial and washable liner. Certified and tested to
ECE2205/DOT.
|
- 9 -
DBX
|
These helmets are for downhill
bicycle and BMX riders.
|
|
DBX 6.0 Carbon
|
The DBX Carbon helmet is the latest, lightest
innovation that has been added to the Leatt bicycle helmet range. It is
extremely lightweight and features innovative 360 °Turbine Technology
integrated with Armourgel® cushioning material. Ten turbines made of 3D
molded Armourgel® are set inside the helmet. Flexible in their natural
state, these turbines stiffen upon impact and deform to absorb both
vertical and rotational impact forces. This means that the faster or
harder you fall, the better it works. Visor with breakaway function for
rotational reduction in a crash and removable chin bar. The helmet has a
Fidlock magnetic closure system. The Helmet has Moisture-wicking,
breathable, anti-odor and washable liner. Certified and tested to EN1078;
US CPSC; AND ASTM F1952-10. Six adult sizes.
|
|
DBX 5.0 Composite
|
The composite bicycle helmets are made
specifically to suit downhill and BMX riders needs, keeping both safety
and comfort in mind. Making use of 360 °Turbine Technology integrated with
Armourgel® cushioning material, they offer premium protection. The helmet
features our innovative 360 °Turbine Technology and Armourgel® cushioning
material. The Quattro Force Control is 3D in-molded impact foam for great
energy absorption. This helmet has maximized ventilation. The Quattro
Force Control is 3D in-molded impact foam for great energy absorption.
Visor with breakaway function for rotational reduction in a crash and
removable chin bar. The helmet has a Fidlock magnetic closure system. The
Helmet has Moisture-wicking, breathable, anti-odor and washable liner.
Certified and tested to EN1078; US CPSC; AND ASTM F1952-10. Six adult
sizes.
|
Leatt Body Armor Range
While we remain committed to the ongoing improvement and
enhancement of the Leatt-Brace®, we are also focusing on the development of
related and complimentary protection products. We now offer additional
protection products, such as chest protectors, that can be worn with or without
the Leatt-Brace®, as well as ancillary products such as clothing. Such products
have a wider range of uses including activities such as rugby, horseback riding,
snowboarding, skiing and any activity where researched technology can be applied
to help prevent injury.
In 2010 we launched the Leatt Body Armor Range with the
introduction of the Leatt Adventure Chest Protector, a hard shell chest
protector. In 2011 we introduced junior protectors, body vests and full body
protectors, since then we have extended our range further to include more body
protectors and vests, back protectors, elbow guards, knee guards and cooling
vest.
All our protectors come standard with the Brace-On integration
system that attaches the protector to the Leatt-Brace® yet permits independent
movement of the brace and protector.
In 2014 we expanded our range of body protection to meet the
consumers need based on market feedback. We have expanded into new markets by
adding a shoulder brace and C-Frame knee brace to this category. We included
more products specifically for the youth and children. We have further added two
new products which combine back protectors with hydration packs. The Body Armor
Range has seen an increase in sales since inception. Revenue derived from Leatt
protection products in 2016 was 47% of total revenue, as compared to 47% of
revenues in 2015.
- 10 -
The following table sets out the types of body armor products
currently sold by the Company:
Product Category
|
Models
|
Description
|
CHEST PROTECTORS:
|
|
Chest Protector 5.5 Pro HD
|
Front, back, shoulder and flank safety multilayer multi
plate articulating design. Great fit and very comfortable by 3D design.
Consists of 53 ventilation slots for maximum airflow. It includes the
BraceOn neck brace fitting system. This product is Heavy Duty maximized
protection. New FlipFit front and rear function allows over and under the
shirt fitting with Leatt neck braces. Available also in XXL. It has a hard
shell outer shield made of High Density Poly Ethylene (HDPE). This product
includes 3DF impact foam. CE certified for impact protection: Shoulder
protection EN1621- 1, Back protection EN1621- 2 level 2, Chest protection
EN1621-3 level 2. Flank protection. Two adult sizes.
|
|
Chest Protector 5.5 Pro
|
Front, back, and shoulder safety. Multilayer multiplate
articulating design. Great fit and very comfortable by 3D design. 45
ventilation slots for maximum airflow. It includes the BraceOn® neck brace
fitting system. New FlipFit front and rear function allows over and under
the shirt fitting with Leatt neck braces. The absolute most protective and
comfortable chest protector ever. Available also in XXL. This products
hard-shell outer protective shield is made from LEATT
®
HDPE High Density Poly Ethylene. This product includes 3DF
impact foam. CE certified for impact protection: Shoulder protection
EN1621-1, Back protection EN1621-2 level 2, Chest protection EN1621-3
level 2. Two adult sizes.
|
|
Chest Protector Lite SHOX
|
The new SHOX design chest protector. HDPE High Density
Poly Ethylene hard shell outer protective shield with our 3D design
ensures a great fit that is very comfortable. Close fitting allows for
over or under the jersey use. This protector is designed to fit with the
Leatt neck brace. Includes BraceOn® brace strap and allows for individual
movement of body, brace and protector. CE certified for roost protection:
Chest EN 14021 approved. One adult size.
|
|
Chest Protector Lite
|
This protector has three-dimensional design for perfect
fit and fit with the Leatt neck brace. It is made of tough HDPE High
Density Poly Ethylene hard shell outer protective shell and also includes
a BraceOn® brace strap to improve fit. CE certified as roost protection:
CE EN 14021. One adult size.
|
|
Chest Protector Adventure
|
This protector has three-dimensional design for perfect
fit and fit with the Leatt neck brace. It is made of tough HDPE High
Density Poly Ethylene hard shell outer protective shell and also includes
a BraceOn® brace strap to improve fit. Upper arm roost protection.
Adjustable waist straps for great fit. CE certified for impact protection:
CE EN 14021. One adult size.
|
|
Chest Protector 4.5 Pro
|
This protector has 3D and multi-layer, multi-plate design
promises a comfortable fit. This hard shell and 3DF AirFit ventilated soft
impact foam. These ventilation slots allow for maximum airflow. The
protector has BraceOn neck brace fitting system. CE certified for impact
protection: Back protection EN1621-2 level 2, Chest protection EN1621-3
level 2, and shoulder protection EN 1621-1. Two adults sizes available.
|
|
Chest Protector 4.5
|
Front, back, and flank safety. Multilayer multi plate
articulating design. Great fit and very comfortable by 3D design.
Ventilation slots for maximum airflow. It includes the BraceOn® neck brace
fitting system. This products hard- shell outer protective shield is made
from LEATT
®
HDPE High Density Poly Ethylene. This
product includes 3DF impact foam. Removable front and rear plate function
allows over and under the shirt fitting with the neck brace. CE certified
for impact protection: Back protection EN1621-2 level 2, Chest protection
EN1621-3 level 2. Two adult sizes.
|
- 11 -
|
Chest Protector 4.5 Hydra
|
This is a Body Protector which incorporates a 10 L back
pack with 3l hydration pack. Integration with or without the neck brace.
Optimal Airline back ventilation. Removable brace plate to wear under or
over riding gear. Left and right hydration tube channeling. Integrated
buckle system. Waterproof removable cell phone pouch. CE certified for
impact protection. CE EN1621-2 level 2 back. CE EN1621-3 level 2 impact
front. One adult size.
|
|
Chest Protector 4.5 Jacki (Ladies)
|
The 4.5 Jacki Chest Protector was designed specifically
with the female body shape in mind. This protector has a hard shell and
3DF AirFit ventilated soft impact foam, with flank protection. This
product has ventilation slots and a new mesh base layer to maximize
airflow. CE tested and certified as impact protection: CE EN1621-3 Level 2
chest and CE EN1621-2 Level 2 back. One adult size.
|
|
Chest Protector 3DF Airfit
|
This is our top-of-the-line soft body protection range
which offers a super lightweight, ventilated and secure strapping system.
This protector is made of perforated, multi-layer, 3DF AirFit impact foam,
the 3DF AirFit Chest Protector offers a soft, flexible fit but transforms
into a harder, energy absorbing protector upon impact. CE tested and
certified as impact protection: prEN1621-3 Level 1 chest and EN1621-2
Level 1 back. Two adult sizes.
|
|
Chest Protector 2.5
|
This light chest protector offers premium hard shell
roost protection. The 3D design and adjustable waist straps offer a close
fit that is also comfortable as well as ventilated. CE tested and
certified as roost protection: EN14021 chest. One adult size.
|
|
Chest Protector 5.5 Pro HD Junior
|
The Pro HD has added Hardshell flank padding. It consists
of 3D design with eight, multilayer, articulating plates, for a great fit.
It has also been designed to integrate perfectly with all Leatt® neck
braces although it works equally well without a neck brace. The BraceOn
strap system attaches the protector to the neck brace yet permits
independent movement of body, brace and chest protector. Fits over or
under the jersey. 47 ventilation slots for maximum cooling. Perforated 3DF
foam helps air flow. Hard shell outer shield made of High Density Poly
Ethylene (HDPE). CE certified for impact protection: Shoulder protection
EN1621-1, Back protection EN1621-2 level 1, and Chest protection EN1621- 3
level 2, Flank protection. One junior size.
|
|
Chest Protector 5.5 Pro Junior
|
This product is specifically designed to meet the highest
CE safety approvals for front and back impact protection. The 3D design
with eight, multi-layer, articulating plates, for a great fit. It has also
been designed to integrate perfectly with all Leatt® neck braces although
it works equally well without a neck brace. BraceOn strap system attaches
the protector to the neck brace yet permits independent movement of body,
brace and chest protector. Fits over or under the jersey. 41 ventilation
slots for maximum cooling. Perforated 3DF foam helps air flow. Hard shell
outer shield made of High Density Poly Ethylene (HDPE). CE certified for
impact protection: Shoulder protection EN1621-1, Back protection EN1621-2
level 1, and Chest protection EN1621- 3 level 2. One junior size.
|
|
Chest Protector Adventure Junior
|
This protector is designed especially for children and is
designed to fit with the Leatt neck brace. It is made of tough HDPE High
Density Poly Ethylene hard shell outer protective shell and also includes
a BraceOn® brace strap to improve fit. CE certified for impact protection.
CE EN 14021. One junior size.
|
- 12 -
|
Chest Protector 4.5 Junior
|
Front, back, and flank safety. Multilayer multi plate
articulating design. Great fit and very comfortable by 3D design.
Ventilation slots for maximum airflow. It includes the BraceOn® neck brace
fitting system. This product has Hard shell and 3DF AirFit ventilated soft
impact foam. CE certified for impact protection: Back protection EN1621-2
level 1, Chest protection EN1621-3 level 2. Two junior sizes.
|
|
Chest Protector 4.5 Pro Junior
|
Front, back, shoulder and flank safety. Multilayer multi
plate articulating design. Great fit and very comfortable by 3D design.
Ventilation slots for maximum airflow. It includes the BraceOn® neck brace
fitting system. This product includes 3DF AirFit ventilated soft impact
foam. CE certified for impact protection: Back protection EN1621-2 level
1, Chest protection EN1621-3 level 2 and Shoulder EN 1621-1. Two junior
sizes.
|
|
Chest Protector 2.5 Junior
|
This protector is a hard shell roost protection designed
for mini riders. Our 3D design ensures a great fit that is very
comfortable. Close fitting allows for over or under the jersey use.
Liberal venting helps keep rider cool. Recess areas in both front and back
integrates with Leatt® neck braces perfectly. Adjustable waist straps for
great fit. Ergonomically designed buckles for kids. CE tested and
certified as roost protection: Chest EN14021. One kids size.
|
|
Chest Protector 2.5 Kids
|
The 2.5 Kids Chest Protector hard shell protector
specifically designed to protect the youngest riders and is equipped with
an ergonomically designed buckle as well as adjustable waist straps to
ensure a secure fit. CE tested and certified as roost protection.
Certified for Chest EN14021. One kids size.
|
BODY PROTECTORS:
|
|
Body Protector 3DF AirFit
|
This Body Protector is soft protection. Great fit with
elastic waist belt. New thin chest impact protection layer for non-brace
riders. Super ventilation with 3DF AirFit impact foam. Three- dimensional
designed for perfect fit. This product includes Moisture Cool wicking
fabric to keep you cooler. Easy to wear zip-up compression sock design for
maximum evaporation. BraceOn® flexible neck brace connection. It has
removable Impact foam for easy washing. CE certified for impact
protection. Elbow and arms protection EN1621-1, Back protection EN1621-2
level 2, Chest protection EN1621- 3 level 2. Three adult sizes.
|
|
Body Protector 3DF Airfit Wintersports
|
The 3DF AirFit Winter Sport Body Protector offers quality
soft body protection that is CE tested and certified as impact protection
for the chest, back, elbows and shoulders. With a lighter weight, better
ventilation and an ultra-secure strapping system. CE tested and certified
as impact protection: Chest prEN1621-3 Level 1; Back EN1621-2 Level 1 and
Elbow and shoulder EN1621-1. Three adult sizes.
|
|
Body Vest 3DF Airfit
|
This Body Vest is Level Two soft protection. Great fit
with elastic waist belt. New thin chest impact protection layer for
non-brace riders. Super ventilation with 3DF AirFit impact foam. Three-
dimensional designed for perfect fit. This product includes Moisture Cool
wicking fabric to keep you cooler. It has removable Impact foam for easy
washing. CE certified for impact protection. Back protection EN1621-2
level 2, Chest protection EN1621- 3 level 2. Shoulder EN1621-1 Level 1.
Three adult sizes.
|
- 13 -
|
Body Protector 3DF
|
Airfit Lite Light and slim body protector with Level One
soft protection. Mulit-layer Level One back protector and chest protector.
Extra chest impact protection layer on upper chest for better protection
for non neck brace users. Great fit with elastic waist belt. Maximum
ventilated and light weight 3DF AirFit impact foam. Three-dimensional
design for perfect fit. This product includes Moisture Cool wicking fabric
to keep you cooler. Easy to wear zip-up compression sock design for
maximum evaporation. BraceOn® flexible neck brace connection. It has
removable Impact foam for easy washing. CE certified for impact
protection. Elbow and arms protection EN1621-1, Back protection EN1621-2
level 1, Chest protection EN1621-3 level 1. Three adult sizes.
|
|
Body Vest 3DF Airfit Lite
|
Light and slim body protector with Level One soft
protection. Mulitlayer Level One back protector and chest protector. Extra
chest impact protection layer on upper chest for better protection for
non-neck brace users. Great fit with elastic waist belt. Maximum
ventilated and light weight 3DF AirFit impact foam. Three-dimensional
design for perfect fit. This product includes Moisture Cool wicking fabric
to keep you cooler. Easy to wear zip-up compression sock design for
maximum evaporation. BraceOn® flexible neck brace connection. It has
removable Impact foam for easy washing. CE certified for impact
protection. Back protection EN1621-2 level 1, Chest protection EN1621-3
level 1. Three adult sizes.
|
|
Body Vest 3DF Airfit Wintersports
|
The soft 3DF AirFit Winter Sport Body Vest offers
lightweight and ventilated CE tested and certified impact protection for
the chest and back. With an ultra-secure elastic chest strap, the vest
will stay in place during riding. It is also designed to fit most body
shapes comfortably with a 3D design. CE tested and certified as impact
protection Chest prEN1621-3 Level 1 and Back EN1621-2 Level 1. Three adult
sizes.
|
|
Body Protector 5.5
|
This product has a multilayer multi plate articulating
design with provides protection for front, bank and flank. Ventilation
slots that maximize airflow and Moisture Cool wicking fabric to keep you
cooler. BraceOn neck brace fitting system. New flipfit front and rear
function allows over and under the shirt fitting with a neck brace.
Protection is provided by 3DF foam for impact absorption and HDPE High
Density Poly Ethylene hard shell outer protective shell. CE certified for
impact protection. CE EN 1621-1 elbow and arms. CE EN1621-2 level 2 back.
CE EN1621-3 level 2 impact front. Three adult sizes
|
|
Body Vest 5.5
|
This product has a multilayer multi plate articulating
design with provides protection for front, bank and flank. Ventilation
slots that maximize airflow and Moisture Cool wicking fabric to keep you
cooler. BraceOn neck brace fitting system. New flipfit front and rear
function allows over and under the shirt fitting with a neck brace.
Protection is provided by 3DF foam for impact absorption and HDPE High
Density Poly Ethylene hard shell outer protective shell. CE certified for
impact protection. CE EN1621-2 level 2 back. CE EN1621-3 level 2 impact
front. Three adult sizes.
|
|
Body Protector 4.5
|
This hard shell reinforced CE certified 3DF body
protector has HDPE High Density Poly Ethylene hard shell outer protective
shield. Perforated 3DF AirFit impact foam. Multi- layer multi- plate
articulating design. Our 3D design ensures a great fit that is very
comfortable. Ventilation slots for maximum airflow. CE tested and
certified as impact protection: Chest prEN1621-3 Level 2, Back EN1621-2
Level 2 and Elbow and Shoulder EN1621-1. Three adult sizes.
|
- 14 -
|
Body Vest 4.5
|
This hard shell reinforced CE certified 3DF body vest has
HDPE High Density Poly Ethylene hard shell outer protective shield.
Perforated 3DF AirFit impact foam. Multi-layer multi- plate articulating
design. Our 3D design ensures a great fit that is very comfortable.
Ventilation slots for maximum airflow. CE tested and certified as impact
protection: Chest prEN1621-3 Level 2, Back EN1621-2 Level 2. Three adult
sizes.
|
|
Body Tee 3DF Airfit Lite
|
This 3DF AirFit Lite Tee offers light and slim CE Level 1
soft protection for your upper body. The flexible foam is light to wear
and very well ventilated, yet absorbs energy up on impact for optimal
safety. CE tested and certified as impact protection: Chest prEN1621-3
Level 1, Back EN1621-2 Level 1 and Shoulder EN1621-1. Three adult sizes.
|
|
LEATT Roost Tee
|
Ultra lightweight roost tee. Vented roost padding over
chest and upper arms. MoistureCool wicking fabric to help keep rider cool.
Fits snug direct on the body. It comes in a cool grey color which will not
shine through the jersey. It has non- aggressive over lock seams. It has a
front, rear and side panel stretch for ultimate fit. Long back cut. Three
adult sizes.
|
|
Body Protector 5.5 Junior
|
This product is maximized junior protection. It has
front, back, shoulder and elbow protection. It is a multilayer and multi
plate articulating design and great fit and comfort. Ventilation slots
that maximize airflow and Moisture Cool wicking fabric to keep you cooler.
BraceOn neck brace fitting system. New flipfit front and rear function
allows over and under the shirt fitting with a neck brace. Protection is
provided by 3DF foam for impact absorption and HDPE High Density Poly
Ethylene hard shell outer protective shell. CE certified for impact
protection. CE EN 1621-1 elbow and arms. CE EN1621-2 level 1 back. CE
EN1621-3 level 2 impact front. Two junior sizes.
|
|
Body Protector 4.5 Junior
|
This hard shell reinforced CE certified 3DF body
protector has HDPE High Density Poly Ethylene hard shell outer protective
shield. Perforated 3DF AirFit impact foam. Multi- layer multi- plate
articulating design. Our 3D design ensures a great fit that is very
comfortable. Ventilation slots for maximum airflow. CE tested and
certified as impact protection: Chest prEN1621-3 Level 2, Back EN1621-2
Level 1 and Elbow and Shoulder EN1621-1. Two junior sizes.
|
|
LEATT Roost Tee Junior
|
Ultra lightweight roost tee made of MoistureCool wicking
fabric to help keep rider cool. Fits snug direct on the body. It comes in
a cool grey color which will not shine through the jersey. It has non-
aggressive over lock seams. It has a front, rear and side panel stretch
for ultimate fit. Long back cut. One junior size.
|
|
Body Protector 3DF Airfit Lite Junior
|
Three-dimensional designed for perfect fit. Lighter
weight. Greater comfort. Moisture Cool wicking fabric to keep you cooler.
Easy to wear zip-up compression sock design should be worn next to the
skin for maximum evaporation. LEATT 3DF Foam for premium protection.
Removable foam for easy washing. CE certified for impact protection. CE EN
1621-1 elbow and arms. CE EN1621-2 level 2 back. CE EN1621-3 level 2
impact front. Two junior sizes.
|
- 15 -
BACK PROTECTOR:
|
|
Back Protector 3DF
|
Three-dimensional designed for perfect fit. Bio
engineered back with 3D contour shape like your spine. Light weight and
greater comfort. Moisture Cool wicking fabric to keep you cooler. Easy to
wear zip-up compression sock design should be worn next to the skin for
maximum evaporation. LEATT 3DF Foam for premium protection. Removable foam
for easy washing. CE certified for impact protection. CE EN1621-2 level 2
back. Three adult sizes.
|
|
Back Protector 3DF Airfit Wintersports
|
The 3DF Winter Sport Back Protector offers CE tested and
certified impact protection for your back. Constructed from a blend of 3DF
AirFit soft impact foam, new MoistureCool fabric that controls odor, and
AirMesh fabric that wicks moisture away from the body, this protector is
comfortable and provides premium protection. The 3DF AirFit ventilated
soft impact foam. CE tested and certified as impact protection: Back
EN1621-2 Level 1. Three adult sizes.
|
|
Hydration Cargo 3.0 DBX
|
This product incorporates back protector and hydration
pack in one. It has a 3l hydration pack with Leatt Flat CleanTech bladder.
The back pack has 10l volume with outer pocket for MTB helmet. Back
protector incorporates 3DF impact protection. Waterproof removable pouch
for cellphone. Inner and outer compartments for the back pack. Water
bottle holders and volume regulating straps on backpack. CE certified for
impact protection. CE EN1621-2 level 2 back. One adult size.
|
|
Hydration Cargo 3.0 GPX
|
This product incorporates back protector and hydration
pack in one. It has a 3l hydration pack with Leatt Flat CleanTech bladder.
The back pack has 10l volume. Back protector incorporates 3DF impact
protection. Waterproof removable pouch for cell phone. Inner and outer
compartments for the back pack. Water bottle holders and volume regulating
straps on backpack. CE certified for impact protection. CE EN1621- 2 level
2 back. One adult size.
|
|
Hydration Pack DBX Enduro Lite WP 2.0
|
Waterproof light bicycle hydration with back protector.
Fully welded waterproof lightweight bicycle hydration system with multi
impact level 1 back protector. The unique chest harness ensures a very
solid fit making the waist strap obsolete. Includes bottom
jacket/protector storage straps, heat resistant encapsulated bladder
pocket and a strap system for full face or/and MTB helmet. CE tested and
certified as impact protection: Back EN1621-2 Level 1. One size fit all.
|
|
Hydration Pack DBX Mountain Lite 2.0
|
Slim and ultra-light bicycle hydration with back
protector with 2.0L Flat CleanTech bladder and 1.0L luggage. Unique light
weight chest harness for a rock solid fit. Mesh storage pocket inside the
bag. Optimal AirLine back ventilation. Heat reflective inner back panel to
keep liquid cool or hot. Lightweight helmet carrier system for full face
or/and MTB helmet. Dual hydration tube exit for 2-way routing. CE tested
and certified as impact protection: Back EN1621-2 Level 1. One size fits
all.
|
SHOULDER BRACE:
|
|
Shoulder Brace
|
This shoulder brace has the correct anatomical pull
forces to help prevent a shoulder dislocation. It fits snug under the
riders jersey with adjustable compression. Three adult sizes.
|
ELBOW GUARDS:
|
|
Elbow Guard Airflex
|
This is the slimmest, lightest elbow guard made by
Leatt®. The new super slim 6mm CE impact certified elbow guard which
weighs only 240 g grams per pair. CE Certified for impact protection:
Elbow EN 1621-1. Five adult sizes: S, M, L, XL and XXL.
|
- 16 -
|
Elbow Guard 3DF 5.0
|
The soft CE certified 3DF elbow guard has premium elbow
protection in a slimmer, softer, more flexible design. This pure soft
shell guard is big on protection yet lightweight and very comfortable.
Pre-curve design for better fit & function. Its made with our
innovative 3DF foam that absorbs energy on impact. CE tested and certified
as impact protection: Elbow EN1621-2 Five adult sizes.
|
|
Elbow Guard 3DF Hybrid
|
This elbow guard combines soft and comfortable 3DF foam
with deflecting hard shell. Moisture Cool wicking fabric to keep you
cooler and silicone laminations keep protectors in place. CE certified for
impact protection. CE EN1621- 1. Three adult sizes.
|
|
Elbow Guard 3.0
|
The hard-shell elbow guard is comfortable and very easy
to slip on and off with the X-straps and offers a full hard shell elbow
protection. Co-molded soft rubber edges for extra comfort, 3D design for
optimal fit with specific left and right sides and vented plates for
maximum airflow. Three adult sizes.
|
|
Elbow Guard Contour
|
The Contour elbow guard offers full hard shell elbow
protection with co-molded soft edges for comfort. They are slim,
lightweight and comfortable with a great fit and silicone cuffed
MoistureCool sock. Silicone printed non slip cuffs. CE certified for
impact protection: Elbow CE EN1621- 1. Three adult sizes.
|
|
Elbow Guard 3DF 5.0 Junior
|
The 3DF 5.0 Junior Elbow Guards have a new pre-curved
design that promises a better fit as well as functionality. Now with a 25%
slimmer CE impact certified profile, these elbow guards are ultra- slim.
The 3DF AirFit ventilated soft impact foam. CE tested and certified as
impact protection: Elbow EN1621-1. One junior size.
|
|
Elbow Guard 3DF 5.0 Kids
|
This is a soft 3DF elbow guard designed for kids. It has
soft & flexible 3DF impact material; abrasion resistant Aramid outer
layer for durability and silicone printed elastic non slip cuffs. It is
constructed with new MoistureCool & AirMesh fabrics. CE tested and
certified as impact protection: Elbow EN1621-2. One kids size.
|
|
Elbow Guard 3DF Hybrid Junior
|
The company has taken the 3DF Elbow Guards and added hard
shell impact area. Combining the best of our soft and hard shell protector
materials, the Hybrid features 3DF AirFit soft impact foam as well as hard
shell deflecting areas. 3DF AirFit ventilated soft impact foam with hard
shell areas. CE tested and certified as impact protection: Elbow EN1621-1.
One junior size.
|
|
Elbow Guard Contour Junior
|
The Junior Contour Elbow Guard is designed to fit junior
riders and is constructed from soft shell 3DF AirFit impact foam yet is
reinforced with hard shell for additional elbow protection. 3DF AirFit
impact foam is special because its soft structure transforms into a hard,
energy absorbing protector when subjected to impact. It also has silicone
printed elbow grip, new anti-odor MoistureCool and AirMesh wicking fabrics
and silicone printed, non-slip cuffs. CE tested and certified as impact
protection: Elbow EN1621-1. One junior size.
|
KNEE BRACE
|
|
Knee Brace C-Frame
|
This knee brace has three-point force distribution with
super stiff C-arm mono hinge construction. The adjustable soft lockout
prevents hyperextension of the knee. It has super low profile inner knee
for superior bike control. X-strap thigh and calf fitment with adjustable
inner knee load pad. Leatt InteliLink hinge with double pivot points and
ferro-ligaments control knee rotation and sheer. CE certifies for knee
impact protection. Certified as medical device: EU CA014741 and USA FDA
10048761. CE tested and certified as impact protection: Knee EN1621-1.
Three adult sizes.
|
- 17 -
|
Knee Brace C-Frame Wintersport
|
This knee brace has three-point force distribution with
super stiff C-arm mono hinge construction. The C-Frame Wintersport Knee
Brace is engineered specifically for ski and board riders looking for
quality knee protection. Super comfortable, low-profile shin bone plate
with load distribution pad that fits inside all boots. InteliLink hinge
with double pivot points and sealed bearings. Certified as medical device:
EU CA014741 and USA FDA 10048761. CE tested and certified as impact
protection: Knee EN1621-1. Three adult sizes.
|
|
Knee Brace C-Frame Pro Carbon
|
This knee brace has three-point force distribution with
super stiff C-arm mono hinge construction. The adjustable soft lockout
prevents hyperextension of the knee. It has super low profile inner knee
for superior bike control. X-strap thigh and calf fitment with adjustable
inner knee load pad. Leatt InteliLink hinge with double pivot points and
ferro-ligaments control knee rotation and sheer. CE certifies for knee
impact protection. CE 1621-1. Three adult sizes.
|
|
Knee Brace Pants
|
Designed to keep the knee brace in its correct position
by not slipping down, our knee brace pants are made of new anti-odor,
wicking material with strategically placed knee brace reinforcement
panels. The pants fit comfortably as they are flatlock stitched and
equipped with a super soft knitted waistband with silicone grip to help
keep them in place. Three adult sizes.
|
|
Knee Brace Sleeve
|
This sleeve is manufactured using Moisture Cool wicking
fabric with flatlock stitching for extra comfort. This extra sleeve folds
over the knee brace and prevents slipping. Three adult sizes.
|
|
Knee Brace Socks
|
The full-length knee brace socks are designed to be worn
under the knee braces. The socks upper areas are made of MoistureCool
material whereas the back areas are made of X-Flow mesh for ventilation.
To keep socks in place, they have silicone printed, non-slip cuffs. Three
adult sizes: S, M and L.
|
KNEE AND LEG GUARDS:
|
|
Knee Guard Dual Axis
|
Three-dimensional designed for perfect fit. Light Weight.
Greater comfort. Large vents help keep rider cool. Slim over or under the
pants design. Leatt HDPE (High Density Poly Ethylene) hard shell outer
protective shield. Anatomically correct dual pivot points. LEATT Foam for
premium protection. CE certified for impact protection. CE EN1621-1. Three
adult sizes.
|
|
Knee Guard Enduro
|
This product consists of a hard-shell sliding surface
with 3DF impact absorption body. Silicone laminated straps keeps protector
in place with maximum ventilation. The co-molded rubber edges increases
comfort. CE certified for impact protection. CE EN1621-1. Two adult sizes.
|
|
Knee Guard Airflex Pro
|
This ultra slim AirFlex knee guard offers great impact
protection and a slim fit. 6mm CE impact certified profile. New side &
upper knee impact protection. New silicon printed cupped knee grip.
Silicone printed non slip cuffs. New single sizing for perfect fit. CE
tested and certified as impact protection: Knee EN1621-2. Five adult
sizes.
|
|
Knee Guard 3DF 5.0
|
This soft CE certified 3DF knee guard has increased side
protection. This pure soft shell guard is big on protection yet
lightweight and comfortable. Abrasion resistant Aramid outer layer for
durability, new wider silicone printed elastic cuffs, new 30mm low profile
elastic Velcro strap with easy pull suede finger tabs with MoistureCool
and AirMesh fabrics. CE tested and certified as impact protection: Knee
EN1621-2. Three adult sizes.
|
- 18 -
|
Knee Guard 3DF 5.0 Junior
|
This soft CE certified 3DF knee guard has increased side
protection. This pure soft shell guard is big on protection yet
lightweight and comfortable. Abrasion resistant Aramid outer layer for
durability, new wider silicone printed elastic cuffs, new 30mm low profile
elastic Velcro strap with easy pull suede finger tabs with MoistureCool
and AirMesh fabrics. CE tested and certified as impact protection: Knee
EN1621-2. One junior size.
|
|
Knee Guard 3DF 5.0 Kids
|
The protector was designed to fit the youngest of riders.
Constructed from a blend of anti-odor MoistureCool and AirMesh wicking
fabric, it is further reinforced with 3DF AirFit impact foam. This soft
and flexible foam is revolutionary because it adapts comfortably to the
bodys shape and motions but converts into a hard, energy absorbing
protector upon impact. CE tested and certified as impact protection: Knee
EN1621-1. One kids size.
|
|
Knee Guard 3DF Hybrid
|
This protector consists of deflecting hard shell with
soft and comfortable 3DF foam. Moisture Cool wicking fabric to keep you
cooler. CE certified for impact protection. CE EN1621-1. Three adult
sizes.
|
|
Knee Guard 3DF Airflex
|
This knee guard is super slim 6mm which weighs only 105
grams. It consists of Armourgels ultra slim impact absorbing gel.
Moisture Cool wicking fabric to keep you cooler. CE certified for impact
protection. CE EN1621-1. Three adult sizes.
|
|
Knee and Shin Guard EXT
|
The EXT Knee and Shin Guards sport an extended length
design and offer premium protection for the knees and shins It consists of
a hard-shell sliding surface with 3DF Airfit ventilated soft impact foam.
Silicone laminated straps keeps protector in place with maximum
ventilation. The co-molded rubber edges increases comfort. CE certified
for impact protection. CE EN1621-1. Two adult size.
|
|
Knee and Shin Guard EXT Junior
|
The EXT Knee and Shin Guards sport an extended length
design and offer premium protection for the knees and shins. It consists
of a hard-shell sliding surface with 3DF Airfit ventilated soft impact
foam. Silicone laminated straps keeps protector in place with maximum
ventilation. CE tested and certified as impact protection: Knee and shin
EN1621-1. One junior size.
|
|
Knee and Shin Guard 3DF Hybrid EXT
|
This protector consists of deflecting hard shell with
soft and comfortable 3DF foam. Moisture Cool wicking fabric to keep you
cooler. CE certified for impact protection. CE EN1621-1. Three adult
sizes.
|
|
Knee and Shin Guard 3DF Hybrid EXT Junior
|
This protector boasts the same technology as the adult
version. The original 3DF AirFit range is made of soft, ventilated impact
foam that is flexible in its natural state but instantly transforms into a
hard, energy absorbing substance upon impact to provide protection. CE
tested and certified as impact protection: Knee and shin EN1621-1. One
junior size.
|
|
Knee and Shin Guard 3.0 EXT
|
This protector is a hard-shell knee & shin guard
combined with 3DF impact absorbing body. It has 3D design for optimal fit
with specific left and right sides. Slim shin plate that also fit inside
boots. CE tested and certified as impact protection: Knee & shin
EN1621-2. Three adult sizes.
|
- 19 -
|
Knee and Shin Guard Dual Axis
|
These are hard shell reinforced CE certified 3DF knee
& shin guards. The pivoting Dual Axis full hard shell knee & shin
protection offers the most protection of all Leatt knee guards. They are
slim under the boot fit, lightweight, comfortable and has great
ventilation. CE tested and certified as impact protection: Knee EN1621-2.
Three adult sizes.
|
KIDNEY BELT:
|
|
Kidney Belt 3DF
|
Kidney belt with CE certified lumbar impact protection.
Dual action elastic closure for maximum support, 3DF foam for impact
protection. Thermo foamed 3D air channels for maximum ventilation. Extra
wide and comfortable waist stretch. CE certified for impact protection.
Lumbar EN1621-2 Level 1. Three adult sizes.
|
IMPACT SHORTS:
|
|
Impact Shorts GPX 5.5 Airflex
|
Our off-road impact shorts feature ultra-slim protection
by making use of Armourgel®. This low profile solution is flexible in its
natural state for a comfortable fit, but hardens immediately when
subjected to impact. Pre-shaped 3D design for better fit and function CE
tested and certified as impact protection: Hip EN1621-1 Level 1. Six adult
sizes.
|
|
Impact Shorts DBX 5.0 Airflex
|
Our bicycle impact shorts might be super slim and offer
premium impact protection. They are ideal for those looking for a dual
density seat padding or chamois. The hip pads are ultra-thin 6mm to be
exact. Made of 3D molded Armourgel®, a low profile solution that is
flexible in its natural state, but stiffens upon impact. CE tested and
certified as impact protection: Hip EN1621- 1 Level 1. Five adult sizes
|
Leatt Apparel Range
In 2015 we introduced a new product category of gloves to the
range and expanded our cooling product range. In 2016 added a full apparel range
for off-road motorcycle riders and bicycle riders. This range includes jackets,
jerseys, pants and shorts. All products in this range come in a various trendy
of colors. We also sell casual clothing and socks that is updated annually.
COOLING WEAR:
|
|
Coolit Evaporative Cooling Vest
|
This product is made from a patented Hyperkewl
TM
cooling fabric that is designed to lower the body temperature. It
fits snugly on the body under a body protector and is light-weight. Seven
adult sizes.
|
|
Coolit Evaporative Cooling Tee
|
This product is also made from a patented
Hyperkewl
TM
cooling fabric that is designed to lower the body
temperature. It is the only product with sleeves in this range. It fits
snugly on the body under a body protector and is light-weight. Seven adult
sizes.
|
|
Pre-Cool Cooling Vest
|
This product is for cooling riders down before, after and
between races. Patented TechKewl cooling inserts. Keeps 14C or 58F
temperature for 3 hours. Lowers body temperature. Increases body
performance. Fits directly on body. Non- aggressive over lock seams.
Front, rear and side panel stretch for ultimate fit. Cool white/grey.
Three adult sizes.
|
GLOVES:
|
|
Glove DBX 2.0 X-Flow
|
The X-Flow gloves are the lightest gloves in the range
with its upper made of fully vented four-way stretch mesh material. It has
brush guard reinforcement over the fingers and knuckles, which is an
ultra-thin and four-way flex film that is feather-light and increases
scratch and abrasion resistance properties of base material. Four adult
sizes.
|
- 20 -
|
Glove GPX 2.5 X-Flow
|
The 2.5 X-Flow gloves are the lightest and most
minimalistic gloves of the off-road racing range. Its upper is made of
X-Flow, a four-way stretch mesh material that offers maximum airflow,
whilst its palm is made of NanoGrip, making it extremely durable and
breathable. Five adult sizes.
|
|
Glove DBX 3.0 Lite
|
The 3.0 Lite bicycle gloves upper are made of light and
vented four-way stretch material. The knuckles are reinforced with 3D
molded Armourgel®, an energy absorbing solution that is flexible in its
natural state, but hardens upon impact. NanoGrip palm for ultra-thin for
maximum bike feel. CE tested as impact protection: Knuckle EN 13594:2015.
Four adult sizes.
|
|
Glove DBX 3.0 X-Flow
|
This product is a super vented X-Flow mesh bicycle glove
with impact protection. The glove has 3D molded self- locating Armourgel
impact protection for knuckles. This glove has Genuine Clarino Japan palm:
Micro fiber technology, 3D intervened fiber layout, soft and flexible,
great dry and wet grip and two silicone finger grips. CE tested as impact
protection: Knuckle prEN 13594:2014. Six adult sizes.
|
|
Glove GPX 3.5 Lite
|
The 3.5 Lite gloves offer a super lightweight fit with
Armourgel®, a low-profile energy absorbing solution, protection panels on
its knuckles. Armourgel® offers superior impact protection as it hardens
upon impact, even though it is flexible in its natural state. NanoGrip
palm for ultra-thin for maximum bike feel. CE tested as impact protection:
Knuckle EN 13594:2015. Five adult sizes.
|
|
Glove GPX 3.5 X-Flow
|
This product is a super vented X-Flow mesh Off-Road glove
with impact protection. The glove has 3D molded self- locating Armourgel
impact protection for knuckles. This glove has Genuine Clarino Japan palm:
Micro fiber technology, 3D intervened fiber layout, soft and flexible,
great dry and wet grip and two silicone finger grips. CE tested as impact
protection: Knuckle prEN 13594:2014. Six adult sizes.
|
|
Glove DBX 4.0 Windblock
|
This product is a slim and protective windproof bicycle
glove. The glove has 3D molded self-locating Armourgel impact protection
for: knuckles, third finger and fourth finger. The glove also features
NanoGrip palm: Ultra-thin for maximum bike feel, Nano fiber technology
7.500 thinner than hair, very stretchy and flexible and has touch screen
function. CE tested as impact protection: Knuckle prEN 13594:2014. Six
adult sizes.
|
|
Glove DBX 4.0 Lite
|
This product is a vented bicycle glove. The glove has 3D
molded self-locating Armourgel impact protection for: knuckles, third
finger and fourth finger. The glove also features NanoGrip palm:
Ultra-thin for maximum bike feel, Nano fiber technology 7.500 thinner than
hair, very stretchy and flexible and has touch screen function. CE tested
as impact protection: Knuckle prEN 13594:2014. Six adult sizes.
|
|
Glove GPX 4.5 Lite
|
This product is a vented Off-Road glove. The glove has 3D
molded self-locating Armourgel impact protection for: knuckles, third
finger and fourth finger. The glove also features NanoGrip palm:
Ultra-thin for maximum bike feel, Nano fiber technology 7.500 thinner than
hair, very stretchy and flexible and has touch screen function. CE tested
as impact protection: Knuckle prEN 13594:2014. Six adult sizes.
|
- 21 -
|
Glove GPX 5.5 Lite
|
This is a vented Off-Road glove with optimum protection.
The glove has 3D molded self-locating Armourgel impact protection for:
knuckles, fingers & thumb and upper hand. The glove also features
NanoGrip palm: Ultra-thin for maximum bike feel, Nano fiber technology
7.500 thinner than hair, very stretchy and flexible and has touch screen
function. CE tested as impact protection: Knuckle prEN 13594:2014. Six
adult sizes.
|
|
Glove GPX 5.5 Windblock
|
This product is a slim and protective windproof off-road
glove. The glove has 3D molded self-locating Armourgel impact protection
for: knuckles, fingers & thumb and upper hand. The glove also features
NanoGrip palm: Ultra-thin for maximum bike feel, Nano fiber technology
7.500 thinner than hair, very stretchy and flexible and has touch screen
function. CE tested as impact protection: Knuckle prEN 13594:2014. Six
adult sizes.
|
RIDING JACKETS
|
|
WEC Jacket
|
The W.E.C. jacket is a water resistant, lightweight off
road riding jacket with some heavy-duty features. The companys main
concern in designing a jacket like this is the ability for it to integrate
with neck braces yet still be comfortable and easy to wear. The
collapsible, waterproof fabric, neck allows the rider to decide if they
would like to cover up the neck brace and seal out the elements or leave
the weather collar off the brace to allow a little more ventilation. Zip
off arms add versatility. Rubber arm guards help protect jacket from abuse
from trees, bushes and rocks. The jacket has five cargo pockets and one
waterproof chest pocket.
|
|
SNX Jacket
|
The SNX jacket is a snow-specific jacket designed by
Leatt® for a perfect fit with the SNX Leatt-Brace®. Wear a jacket designed
around the Leatt-Brace® not modified to accept it.
|
|
Pro Jacket
|
The Pro jacket is a fully waterproof, windproof jacket
with a hidden neck cuff that stretches over a neck brace to help keep out
the elements. Soft, pliable and durable the Cordura outer shell has fully
taped seams and waterproof zippers to keep the water out on even the
longest of rides. It also features removable CE certified shoulder and
elbow protectors and has a rear pocket for optional CE back protector. 3M
reflective material adds safety for road use
|
|
Jacket GPX 5.5 Enduro
|
This off-road jacket sports zip-off arms, large
zip-adjusted ventilation, and has an internal hydration pocket with a
bladder suspension system for up to three liters. Its neck collar was made
specifically to be worn over your neck brace, the collar to go around your
neck brace, the neck brace to be covered by the collar, or to be worn
without a neck brace. It is also tailored to be worn with or without your
body armor. Protection offered by the jacket is enhanced by brush guard,
an ultra-thin flex film that is feather-light and increases scratch and
abrasion resistance properties of the base material, along with
reinforcement over the elbows. It also has a total of nine pockets, which
includes water resistant pockets and touch screen pocket.
|
|
Jacket GPX 4.5 X-Flow
|
The lighter off-road jacket, the GPX 4.5 is made of a
lightweight shell as well as front and rear panels made of X-Flow mesh
material, and a Spandura stretch panel on sides of jacket enables
comfortable movement. Its neck collar was made specifically for your neck
brace to be worn over the collar, to go around your neck brace, the neck
brace to be covered by the collar, or to be worn without a neck brace. It
is also designed to be worn with or without your body armor. It has
pre-curved, zip-off arms and for added protection the elbows are
reinforced with brush guard, an ultra-thin flex film that is feather-light
and increases scratch and abrasion resistance properties of the jackets
base material.
|
- 22 -
|
Jacket DBX 5.0 All-Mountain
|
This brand new top-of-the-line bicycle jacket is
engineered to keep riders shielded and has a sleek design. Made of
three-layer HydraDri material, a lightweight and breathable fabric with a
waterproof
rating of 20,000/20,000mm, which means that it is
water-resistant under high pressure. It repels water while still allowing
moisture to escape. This fabric was designed to be used in all weather
conditions. The DBX 5.0 jacket is reinforced with hidden stitching and has
YKK AquaGuard zippers. For further protection, it is reinforced with brush
guard fabric, an ultra-thin flex film that is feather-light and increases
scratch and abrasion resistance properties of material, on the shoulders
and elbows. It is neck brace compatible, tailored to be worn over slim
protection, and designed to pair perfectly with the DBX 5.0 shorts. The
jackets three-point, fully adjustable hood has reflective printing and
fits over all full-face helmets. This jacket has silk storm cuffs and a
silicone printed tail at the back to prevent jacket rise.
|
|
Jacket DBX 4.0 All-Mountain
|
The DBX 4.0 jacket is made of soft shell, four-way
stretch and water resistant material and has YKK zippers and hidden
reinforced stitching. For extra protection, it has brush guard fabric
protection on the shoulders and elbows, which increases scratch and
abrasion resistance properties of the jackets base material. Although
this jacket is windproof, it is breathable and will keep riders cool with
front and rear ventilation. For added comfort, it has stretch fit cuffs
and hems and has a silicone printed tail at the back to prevent jacket
rise.
|
JERSEYS
|
|
Jersey GPX 5.5 Ultraweld
|
The GPX 5.5 Ultraweld jersey offers an ultra-light layer
of protection for off-road racing. It is made of four-way stretch mesh
fabric that is MoistureCool wicking and has air channels. Its tape- bonded
seams offer a superior level of comfort and its comfortable athletic
stretch fit allows riders to wear the jersey with or without body armor
and neck brace. Its silicone tail easily connects to the Leatt off-road
pants and its bar task stitching offers critical reinforcement whilst the
brush guard fabric over the elbows offers added protection as it is an
ultra-thin flex film that is feather-light and increases scratch and
abrasion resistance properties of the material.
|
|
Jersey GPX 4.5 Windblock
|
Designed to be worn for off-road riding in all weather
conditions, the Windblock jersey offers a comfortable layer of protection.
It has a windproof and dirt/water repellent coated chest, arms and sides
and, to offer rider ventilation whilst riding, the back panel is made of
an anti-odor mesh fabric that has MoistureCool wicking properties. This
jersey was engineered to not only offer protection against all weather
conditions, but to also offer comfort and convenience while riding, and
therefore its stretch fit enables it to be paired with or without body
armor and neck brace. It also has a silicone printed tail that will easily
connect to the Leatt off-road pants.
|
|
Jersey GPX 4.5 Lite
|
For a light layer that offers comfort and protection, the
Lite jersey is made of a MoistureCool wicking fabric with air channels.
Its stretch fit is designed specifically to be worn with or without body
armor and its neck collar is neck brace compatible. For added comfort, the
Lite jersey has overlocked stitched seams and a silicone tail that
connects to the Leatt off-road pants.
|
- 23 -
|
Jersey GPX 4.5 Flow
|
The X-Flow mesh fabric makes this jersey lightweight and
with MoistureCool wicking properties. It is also extremely comfortable
with a stretch fit that will enable the Rider to wear it over body armor.
Its neck collar is also designed to be worn with or without your neck
brace for added convenience. The Leatt off-road jerseys pair well with the
off-road pants as they have a silicone printed tail to connect to it. For
added comfort, the jerseys seams are overlocked stitched
|
|
Jersey DBX 5.0 All-Mountain
|
The long-sleeved DBX 5.0 jersey is breathable yet
windproof and has a dirt/water repellent coated chest, arms and sides. It
was not only designed to fight the effects of the weather, but is tailored
specifically to be worn with or without body armor and to be neck brace
compatible. It has silicone inside that enables it to grip to the Leatt
bicycle pants, as well as a zipper pocket with a microfiber goggle wiper.
The jerseys back panel is made of breathable, super moisture wicking and
quick-drying Miharo material whereas the elbows are reinforced with brush
guard fabric, an ultra-thin flex film that increases scratch and abrasion
resistance properties of material. The jacket has tape bonded seams for
supreme comfort and bar task stitching for critical reinforcement.
|
|
Jersey 4.0 Ultraweld
|
Made to be a lighter layer of protection than the DBX 5.0
jersey, the DBX 4.0 bicycle jersey is made of ultra-light, four-way
stretch mesh fabric that is MoistureCool wicking and has air channels. Its
athletic stretch fit makes it perfect to be worn with or without body
armor, and it is neck brace compatible. The elbows of the jersey are
reinforced with brush guard, an ultra-thin flex film that is feather-light
and increases scratch and abrasion resistance properties. It has tape
bonded seams to make it super comfortable and has bar task stitching for
critical reinforcement. For added comfort, it has silicone print inside so
that it can grip to the Leatt bicycle pants.
|
|
Jersey DBX 3.0
|
The shorter sleeved bicycle jersey that offers a casual
look. The DBX 3.0 jersey has three-quarter length sleeves and is made of a
stretch mesh fabric that is MoistureCool wicking and that has air
channels. It offers a comfortable fit with overlock stitched seams, a
stretch fit that conveniently enables it to be worn with or without body
armor, and its neck collar was designed to be neck brace compatible.
|
|
Jersey DBX 2.0
|
The DBX 2.0 Jersey is made of a casual-looking,
cotton-feel Rayon material. An extremely lightweight, stretchy and
breathable material, its back panel is made of MoistureCool wicking mesh
fabric for added ventilation. For added comfort, it has a stretch fit so
that it can be worn with or without body armor, and its neck collar is
specifically designed to pair with a neck brace.
|
BICYCLE SHORTS
|
|
Shorts DBX 5.0
|
Made specifically to pair with the DBX 5.0 Jacket, the
DBX 5.0 Shorts are also made of three-layer HydraDri material. With an
all-taped shell and a dirt/water repellent coating, it is extremely
waterproof with a rating of 20.000/20.000mm, which means that it
withstands very high pressure. Even though it blocks the weather, it will
keep riders cool with zippered rear ventilation. With a pre- curved 3D
shaped knee area that prevents snagging, the shorts are designed to be
comfortable even when pedalling with protectors. The knee area is also
reinforced with brush guard for protection. To make the fit even more
comfortable, it has a soft touch, seamless and durable seat area and a
soft touch waist lining with back gripper that will prevent seat drop.
|
- 24 -
|
Shorts DBX 4.0
|
Made of four-way stretch material, the 4.0 bicycle shorts
are water resistant and has a dirt/water repellent coating. It is still
breathable and has laser-cut ventilation holes to keep riders cool
regardless of the riding conditions. Made to be worn with other gear, its
knees offer a pre-curved 3D fit that will avoid snagging during pedalling,
even when worn with knee protectors. For added comfort, its seat area is
made of a three-layer, laminated seat area that is both seamless and
durable. It has a soft touch waist lining and a back gripper that will
prevent seat drop during riding.
|
|
Shorts DBX 3.0
|
The soft shell 3.0 bicycle shorts are made of a
lightweight, four- way stretch material that has a dirt/water repellent
coating. Made to be paired with the lighter bicycle jerseys such as the
DBX 3.0 or 2.0 jerseys, it offers a comfortable and convenient fit that
still fights the effects of the weather when riding. The shorts are
designed to be comfortable. It has YKK zippers and hidden reinforced
stitching and a rear area made of a stretch mesh yoke that offers
ventilation during riding. It also has a soft touch waist lining with a
back gripper to avoid seat drop. The shorts can also be worn with knee
protectors as it has a pre-curved fit for improved comfort.
|
OFF ROAD PANTS
|
|
Pants GPX 5.5 I.K.S.
|
The 5.5 off-road pants have a new system called the
Internal Knee Brace System (I.K.S) which consists of four layers of
reinforcement in the critical high wear, inner knee area. Compatible with
the Leatt knee brace and all other leading knee brace brands in the world,
this system protects both your pants and bike. Made of a super lightweight
and ventilated material and with a tailored, pre-curved slim fit, a
durable nylon seat area and 3D fully floating knee cap reinforcement, it
offers comfort as well as protection during off-road riding. The knee area
also has four- point knee ventilation. The inner leg area is made of the
high-tech NanoGrip material that is known for its durability,
breathability and superior wet and dry grip properties. A new, shorter
micro adjuster waist belt with 360 °silicone grip and side belt adjusters
ensure a perfect fit.
|
|
Pants GPX 4.5
|
These pre-curved pants offer a tailored, performance fit.
Made of Nylon shell with diamond stretch panels and X-flow mesh material,
they offer durable, ventilated protection. The seat area is made of a
durable nylon material whilst the inner leg areas are made of Amara. Like
the GPX 5.5 pants, they have 3D molded, fully floating knee cap
reinforcements. They also have two-point knee ventilation and a new,
shorter micro adjuster waist belt with 180 °silicone grip that ensures a
perfect fit with ease. The off-road pants are designed to pair perfectly
with the off-road jackets and jerseys.
|
Other Products, Parts and Accessories
The nature of our product is such that certain components
collapse and fail in a controlled mode to help prevent further bodily injury. In
light of this, we also provide aftermarket support for users of our products
through our global distribution network. Specific parts of the product or the
entire product may need to be replaced after a significant impact. Our
aftermarket support primarily entails the replacement of worn or damaged parts, as well as sale of
accessories, including hats and hydration kits. The following table sets out the
type of hydration products currently sold by the Company:
- 25 -
HYDRATION SYSTEMS:
|
|
Hydration Ultra 750 HF
|
Ultra-light hydration for neck brace fit. Specially
developed liquid pack to fit Leatt neck braces. Easily strapped directly
onto the rear thoracic strut of any Leatt neck brace, giving a
well-balanced fit. This enables the rider to combine neck protection and a
hydration system in a very flexible way.
|
|
Hydration Pack GPX Race HF 2.0
|
Slim, ultra-light, hands-free hydration system for off
road racing. The unique chest harness ensures a very solid fit making the
waist strap obsolete. Includes heat resistant encapsulated bladder pocket
with dual hydration tube exit for 2-way routing. One size fits all.
|
|
Hydration Pack GPX 2.0 Trail WP HF
|
Waterproof light off-road hydration with 2.0L Flat
CleanTech bladder & 5L luggage. Fully welded waterproof lightweight
hydration system. The unique chest harness ensures a very solid fit making
the waist strap obsolete. Removable tool roll and neoprene hydration
pocket.
|
Accolades
Leatt-Brace® products have attracted worldwide interest and we
have corresponded with global motorsports governing bodies such as the FIM,
Motorsport South Africa, NASCAR and the FIA, with motor racing teams such as the
KTM Racing Team, with automotive and motorcycle manufacturers, and with global
retailers and distributors of protective gear for motor and extreme sports. We
are also in discussions with the FIM, NASCAR and the FIA, to have the
Leatt-Brace® accredited.
Our Leatt-Brace® and chest protection products have acquired CE
certification where necessary to distribute and sell products in the EU
countries. The Leatt-Brace® products have won a series of awards and accolades
since 2007, including the following:
|
|
Motocross Action
: Leatt-Brace GPX awarded 5/5 Star
Product Rating (2007) and Decades Most Significant Product (awarded by an
industry magazine based on comfort, fit and safety)
|
|
|
Transworld MX
: Editors ChoiceLeatt Brace
Adventure awarded Best New Product of Year (2009) (selected by editors of
an industry magazine with no published criteria)
|
|
|
ISPO Brandnew Awards
: Leatt-Brace DBX awarded Best
Protection at Bike Expo (2010) (Bike Expo is an annual gathering of
industry participants)
|
|
|
Transworld MX
: Leatt GPX Pro Best Product of the
Year (2011) (selected by editors of an industry magazine, based on comfort
and safety)
|
|
|
Motocrossgear.com
: Perfect Score to New 2012
Leatt-Brace Chest Protector Adventure Pro (selected by an industry
website, based on looks, comfort and safety)
|
|
|
Transworld Motorcross Magazine
: Chest Protector
Leatt Pro Lite was awarded Product of the Year for 2012 (selected by
editors of industry magazine based on testing and looks)
|
|
|
PPS Moto: This Motocross Product review website awarded
the Company the 2014 PPS Moto Protective Gear Company of the Year Award.
|
|
|
Mountainbike Magazine
: The Leatt F4 Hydration
System won the Design and Innovation Award for 2015. The product was
chosen from over 100 brands and vetted by an international jury featuring
top athletes, including Enduro World Series Winner, Nico Lau.
|
|
|
2015 Vital MX Audience Survey
: The Leatt Neck
Brace was voted the number one Neck Brace to buy in the Vital MX Audience
Survey.
|
|
|
Design & Innovation 2016 Awards:
The Leatt DBX
5.0 Composite Helmet won a Design and Innovation Award for 2016. The
Design & Innovation jury of bicycle industry experts seeks to
recognize bicycles and bicycle products.
|
|
|
Design & Innovation 2016 Awards:
The Leatt DBX
Enduro Lite WP 2.0 won a Design and Innovation Award for 2016. The Design
& Innovation jury of bicycle industry experts seeks to recognize
bicycles and bicycle products.
Decline Magazine:
awarded Leatt Knee
Guards a five-star rating based on the products fit, impact testing,
|
|
|
breathability and overall appeal (July 2016).
|
- 26 -
We believe that the quality of Leatt-Brace® products has
resulted in increased sales since inception. We have sold in excess of 690,000
units of Leatt-Brace® products worldwide to date. Approximately 9% of our 2010
unit sales were from our DBX bicycle brace. This number increased to 10% of unit
sales in 2014, 13% of unit sales in 2015, and remains flat at 13% of unit sales
in 2016. Our STX street brace, which was introduced to the market in 2011,
accounted for 1% of unit sales in 2014, 2% of unit sales in 2015, and has
decreased to 1% unit sales in 2016.
Manufacturing
Our products are manufactured in China in accordance with our
manufacturing specifications, pursuant to outsource manufacturing arrangements
with third-party manufacturers located there. Our third-party manufacturers
usually have the capacity to produce more than 120,000 neck braces per year and
have the space to expand such capacity as required. We do not currently have
written agreements with our neck brace third-party manufacturers but will
include any such future written agreement with our periodic filings. We have a
manufacturing agreement with our Helmet manufacturer and will file agreements as
they become material. We generally offer a 2-year warranty on our products in
accordance with EU regulations. Products purchased through international sales
are usually shipped directly from our manufacturers warehouses or points of
dispatch to customers or their import agents.
Upon our determination of order quantities, we issue periodic
purchase orders for products to our third-party manufacturers at negotiated
prices. A security deposit of between 10 30% of the total purchase order value
is made with such manufacturers upon receipt of a manufacturers invoice
reflecting quantities ordered and the negotiated price for the products. The
standard agreed on lead time from purchase order date to ship-ready date is 70
days, and our usually agreed on shipping terms are FOB (Port). Products
purchased through international sales are usually shipped directly from our
manufacturers warehouses or points of dispatch to customers or their import
agents.
During production, we measure the manufacturers on-time
performance to determine whether to continue our outsource relationship. We
utilize outside consultants and our own employees to ensure the quality of our
products through regular on-site product inspections. Such quality inspections
are conducted in conformance with ISO/IEC 17025 specifications at the
manufacturers premises and penalties are levied against a manufacturer if any
delay in shipment to customers or customer rejection or non-acceptance is caused
by quality issues. The balance of the open invoices is paid to the manufacturer
six weeks after successful inspection.
Raw Materials and Suppliers
Our products are manufactured from generally available
engineering materials, such as thermoset carbon fiber, glass fiber reinforced
nylon, high impact polycarbonate resin. The cost of materials used in our
products varies depending on the target market for, and the price of, our
products. The prices of these raw materials are determined based upon prevailing
market conditions and supply and demand and global conditions may impact the
supply of these raw materials and adversely affect the supply of our products.
We have not experienced any interruptions to our production due to shortage of
our raw materials.
Our third-party manufacturers arrange for the purchase of most
of the raw materials that are used to manufacture our products and they pay for
the cost of such materials. We may occasionally directly source and pay for
highly specialized protection materials, such as Armourgel, for use in the
production of our products. These protection materials are freely available. We
may also occasionally acquire raw materials on behalf of a third-party
manufacturer in order to secure and maintain a specified production capacity.
The expenses incurred for such materials for the years ended December 31, 2016
and 2015, were not material and we do not foresee these amounts being material
in the near future.
We have implemented certain protocols to check the quality of
raw materials used in the production process. Our third-party manufacturers are
required to perform prescribed strength testing on critical parts of certain
products. In addition, certain materials are tested by our research and
development staff at Leatt SA and by independent material laboratories for
compliance to manufacturing and material specification.
Our Customers
Leatt earns revenues through the sale of its products to
customers worldwide through a global network of distributors and retailers.
Leatt also acts as the original equipment manufacturer for neck braces sold by
certain international brands. Leatt sells its products directly to distributors
in South Africa (through Leatt SA), in the USA (through Two Eleven), and through
a network of 60 third-party distributors worldwide. Our distributors are
required to follow certain standard business terms and guidelines for the sale
and distribution of our products. Two Eleven also sells our
products directly to consumers through our online store available at
www.leatt.com.
- 27 -
Products purchased through international sales are usually
shipped directly from our manufacturers warehouses or points of dispatch to
customers or their import agents. Revenue and related cost of revenue is
recognized at the time of shipment from the manufacturers port when 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 customer.
We generate revenue both in the United States and
internationally. For the years ended December 31, 2016 and 2015, annual revenues
associated with international customers were $9,685,191 and $11,642,970, or 59%
and 63% of total revenue, respectively
We have derived a significant portion of our revenue from a
limited number of customers, however none of our customers account for more than
10% of our consolidated revenues for the year ended December 31, 2016. For the
year ended December 31, 2015, our U.S. revenue was concentrated in one customer
that accounted for approximately 7% of annual U.S. revenue, with our largest
customer in the U.S. accounting for approximately 13% of our U.S. sales for the
year ended December 31, 2016. As of December 31, 2016 and 2015, $316,976 or 14%
and $95,507 or 3% of our accounts receivable was due from this customer.
For the years ended December 31, 2016 and 2015, our
international revenue derived outside of the U.S was earned from one and two
customers that accounted for approximately 9% and 24% of our annual
international revenue for the respective periods, with our largest international
customer accounting for approximately 9% and 17% of international sales for each
of the respective periods. As of December 31, 2016 and 2015, $24,394 or 1% and
$344,589 or 12% of our accounts receivable, respectively, were due from these
international customers.
Advertising and Marketing
We first gained market recognition through customer
word-of-mouth and later through third-party articles and reviews of the
Leatt-Brace® in motorcycle and racing magazines, and unsolicited and unpaid
endorsements from current and former celebrity motocross (and other) riders, but
we now advertise our products in various motorsport industry magazines and in
related online media. We also enhance our image through the sponsorship of
sporting events, teams and individuals.
We believe that, as a result of our marketing efforts, and
based on our internal marketing estimates, we have approximately 870 active
distributors and dealers who stock Leatt products in the U. S. and approximately
240 active distributors and dealers in South Africa. We expect that the number
of our distributors and dealers will also grow as the market segments that we
sell to and our product offering grows but we cannot guarantee that this will be
the case.
Our advertising and marketing expenses for the years ended
December 31, 2016 and 2015 were $1,588,599 and 1,498,307, respectively,
representing approximately 10% and 8% of our revenues for each period.
Our Growth Strategy
We are committed to growing our business in the coming years.
The key elements of our growth strategy are summarized below:
|
|
Regional Distribution
. Our product range has
attracted the interest of global retailers and distributors of protective
gear for motor and extreme sports, as well as automotive and motorcycle
manufacturers and racing teams like the KTM teams. The resultant interest
and the expected demand for our products have prompted us to change our
production and distribution strategy in order to cater to this demand. In
November 2007, we established Two Eleven, our wholly owned California
subsidiary, to manage and control the distribution of our products,
particularly in the United States. We distribute products to international
consumers through a network of international distributors who are selected
by our management team based on their financial status and
creditworthiness, their location in major geographic locations, their
marketing and media presence, their portfolio of leading motorcycle brands
and accessories, and their reputation among industry players. We are
working on developing our bicycle distribution network throughout the
world by appointing new distributors and dealers with a specific focus on
the bicycle market. We believe that regional distributors will better
promote our products in the designated regions and expand our global
customer base. In the U.S we are expanding and upgrading our dealer
network and sales management team.
|
|
|
|
|
|
Strategic Alliances
. We are actively researching
and evaluating strategic alliances that will enable the Company to grow
into markets outside of its core markets in an efficient
manner. We are also working with our OEM partners to develop more mutually
beneficial, sustainable, long-term relationships in line with the Companys
goals.
|
- 28 -
|
|
Industry Accreditation and Endorsements.
We are
pursuing accreditation and endorsements of our products from global motor
sports governing bodies and industry organizations. We are in discussions
with governing racing bodies, such as the Commission Internationale de
Karting, or CIK, the FIM, the FIA, and NASCAR, to have the Leatt-Brace®
accredited. We believe that these accreditations and endorsements will
increase sales of our products and solidify our position as a leader in
safety products. SFI testing is compulsory for neck protection used in
automotive racing in the United States, therefore should neck protection
be compulsory we believe that such accreditations and endorsements will
additionally increase our sales.
|
|
|
|
|
|
Developing Brand Awareness and Brand Loyalty.
We
are continuing with our efforts to develop brand loyalty by refining our
marketing strategy and by engaging in more targeted communication with
current and potential consumers of our products. We are working to build
loyalty among more consumers in our core bicycle and moto markets by
introducing more price points for our products and addressing more
consumer needs in more segments, while remaining true to our
missionpioneering functional safety gear.
|
|
|
|
|
|
Expanding our Portfolio of Products
. We are always
looking for opportunities to introduce new products to reach a wider
audience and penetrate new markets. This will include extending our
product range to include both innovative protection products as well as
peripheral or accessory products such as clothing. In the 2015 first
quarter our Knee Brace was accepted for registration by both the United
States Food and Drug Administration (FDA) and the UKs Medicine and
Healthcare Regulatory Products Agency (MHRA), and our Shoulder Brace was
accepted by the FDA, as Class 1 Medical Devices. FDA and MHRA registration
will allow us take these products directly to market as medical devices
for patients (not just athletes) recuperating from injuries, surgery,
muscle tears or strains, dislocations, breaks or fractures. In 2016, we
launched two additions to our body armor product range, namely helmets and
gloves. We also added two full apparel lines to our product rangeone line
designed for the off-road motorcycle market and the other designed for the
bicycling market. We expect that our sales of peripheral products and
accessories will increase in line with increased brand awareness.
|
Our Research and Development Efforts
Our Chairman and Founder, Dr. Christopher Leatt, is our primary
research and development consultant and heads the research and development
efforts conducted at our research facility, or Leatt Lab, located at our
executive headquarters in Cape Town, South Africa. The facility houses a team of
biomedical engineers and designers who ensure products are scientifically and
mechanically sound. This facility features state of the art testing and
prototyping equipment and sophisticated simulation models. Leatt also utilizes
other consultants, academic institutions and engineering companies from time to
time to assist us with our research and development efforts.
We believe that the development of new products and new
technology is critical to our success. We are continuously working to improve
the quality, efficiency and cost-effectiveness of our existing products. All our
products have achieved CE certification when necessary. We are working to
develop technology to expand our range of products with further innovation,
comfort, ergonomics and market appeal. We believe that our scientific and
medical approach to product development gives our products a competitive edge.
Our research and development expenses for the fiscal years
ended December 31, 2016 and 2015, amounted to $1,443,451 and $1,180,227,
respectively. These expenses included salaries for research and development
staff as well as other direct product development and research costs.
Competition
We compete with a small number of dominant competitors in the
neck brace and body protection market, some of whom have substantially greater
financial and other resources than we currently have. We believe that our major
competitors in the body protection, helmet and knee brace market are Fox Racing
and EVS Sports, and our major competitors in the neck brace market are Atlas
Brace USA, LLC, Alpinestars S.p.A and EVS Sports.
Competition is based on quality, price reputation, industry endorsements and
certifications, as well as, on product design, brand names, marketing support
and distribution strategies. We believe that our products can be distinguished
from the products offered by our competitors due to the fact that our products
are innovative, safety tested, versatile, aesthetically appealing, priced
competitively and comfortable without compromising quality and performance.
According to a 2017 reader survey by RacerX magazine, an industry publication
(available at http://mediakit.filterpubs.com/survey), we hold an approximately
61.3% market share for neck braces and 14.5% of the market share for chest
protectors in the U.S. off road motorcycle market, which represents
approximately 50% of the worldwide off road motorcycle market. We believe that
we have gained our market share, largely due to the innovation and quality of
our products, the growth of the market, our increased marketing efforts and our
steps to secure our international patents and protect our patents from
infringement.
- 29 -
Our Competitive Strengths
We believe that our competitive strengths include the
following:
|
|
Intellectual Property.
Licensed patented
technology allows us to provide a product that cannot easily be duplicated
by our competitors. We have invested extensive resources to patent our
products worldwide and have taken legal action to protect our intellectual
property rights from infringement.
|
|
|
|
|
|
Diverse Multi-Cultural Skilled Management Team
.
Our management team is knowledgeable and experienced in the personal
protective equipment industry, sports medicine and business development.
Our executive corporate management team consists of Mr. Sean Macdonald,
Dr. Christopher James Leatt, Mr. Erik Olsson and Mr. Todd Repsher. Mr.
Macdonald is our Chief Executive Officer, Chief Financial Officer,
President and Director, and is a Chartered Accountant with 9 years
experience in the financial and operational aspects of running sports
orientated growth companies. Dr. Leatt is our Founder, Chairman and
Research and Development consultant, who developed the Leatt-Brace® from
his study of the benefits and viability of a neck protection system for
helmet clad sport and recreational users. Mr. Olsson is our General
Manager and Head of International Distribution and has served as a Sales
and Product Manager for various companies in the power sports industry for
the past 16 years. Mr. Repsher is our US General Manager, who is an
award-winning sales executive with over fifteen years experience in the
marketing and sales of sports orientated companies in North America.
|
|
|
|
|
|
Outsourced Manufacturing
. We outsource our
manufacturing to third-party manufacturers in order to produce large
volumes of our products. The manufacturing process remains subject to our
strict quality control guidelines safeguarded by our employees and the
third party inspectors who we hire as consultants to ensure that these
guidelines are being implemented at the production point. While such
manufacturing arrangements pose a risk to our ability to safeguard our
property technologies and may lead to increased costs, as discussed under
the Risk Factors heading in this report, we expect that the increase in
expected sales volumes will contribute to a lower production cost per unit
and that this will translate to better margins for our distributors and
retailers.
|
|
|
|
|
|
Research, Development, Certification and Marketing
Capabilities
. We have in-house know how in the areas of product
development, testing and accreditation, particularly in the field of
personal protective equipment. With the experience and capabilities
developed and established in taking our product to market, we believe that
we are well positioned to develop, manufacture and market additional
products. With our medical and mechanical expertise, demonstrated research
and development capabilities, established outsource manufacturing
capacity, established brand and our dedicated, loyal and enthusiastic
distribution network, we believe that we have the components necessary to
bring new successful products to market.
|
|
|
|
|
|
Industry Accreditation, Testing Standards and
Regulations.
We are pursuing accreditation and endorsements of our
products from global motor sports governing bodies and industry
organizations. We have obtained homologations of our products from various
global racing authorities where objective standards have been set and we
are in discussions with governing racing bodies, such as the FIM, FIA,
CIK, and NASCAR, to have the Leatt-Brace® accredited. SFI testing is
compulsory for neck protection used in automotive racing in the U. S.,
therefore any of our competitors will also have to pass the certification
testing. Should industry accreditation become compulsory, we would be
ahead of our competitors in the market place.
|
|
|
|
|
|
Brand Recognition
. We believe that public
recognition of the Leatt® brand drives the sales of our products,
regardless of the action of competitors and competitive products. We
expect that the reputation of our brand in the market place, particularly
our product testing and applicable CE certification, will continue to
ensure market acceptance and facilitate market penetration of our new
products. In order to bolster and grow the Leatt® brand, stringent quality
control and assurance are our highest priority and our ongoing marketing,
advertising and public relations efforts continue to stress the quality,
safety and innovation of our products.
|
- 30 -
Our Intellectual Property
We believe that the continued success of our business is
dependent on our intellectual property portfolio consisting of globally
registered trademarks, design patents and utility patents related to the
Leatt-Brace®. Most of these initial intellectual property rights are held by
Xceed Holdings, a corporation controlled by our Chairman, Dr. Christopher Leatt
and the rest of these rights are held by the Company and Three Eleven
Distribution, our South African subsidiary. We license most of our intellectual
property from Xceed Holdings, pursuant to a patent and royalty license
agreement, or Licensing Agreement, dated March 1, 2006, between the Company and
Xceed Holdings. Under the terms of the Licensing Agreement, we are obligated to
pay Xceed Holdings 4% of all our revenues from the Leatt-Brace®. In addition,
pursuant to a separate license agreement between us and Mr. De Villiers, we are
obligated to pay a royalty fee of 1% of all our billed and received sales
revenue, in quarterly installments, based on sales of the previous quarter, to a
trust that is beneficially owned and controlled by Mr. De Villiers. We also rely
on nondisclosure agreements and other methods to protect our intellectual
property rights. However, the steps we have taken may be inadequate to prevent
the misappropriation of our technology.
The following table lists the patents and designs licensed from
Xceed Holdings:
Country
|
Application
No
|
Patent No
|
Filing Date
|
Invention
Title
|
Status
|
Renewal
Date
|
South Africa
|
2006/05044
|
2006/05044
|
6/20/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
Brazil
|
PI0416971-9
|
|
5/26/2006
|
Neck Brace
|
Pending
|
11/26/2017
|
Canada
|
2,547,855
|
2,547,855
|
5/26/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
China
|
20048003507 2.4
|
|
5/26/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
Indonesia
|
W002006014 67
|
IDP0030269
|
6/19/2006
|
Neck Brace
|
Granted
|
02/11/2017
|
Israel
|
175931
|
175931
|
6/19/2006
|
Neck Brace
|
Granted
|
11/26/2018
|
Japan
|
2006541524
|
4553903
|
5/26/2006
|
Neck Brace
|
Granted
|
7/22/2017
|
South Korea
|
10-2006- 7012173
|
10-0904041
|
6/19/2006
|
Neck Brace
|
Granted
|
6/19/2017
|
Morocco
|
PV29105
|
28229
|
6/15/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
Mexico
|
JL/a/2006/000 026
|
301465
|
5/26/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
Malaysia
|
PI 20062407
|
MY-145683-A
|
5/25/2006
|
Neck Brace
|
Granted
|
3/15/2018
|
Singapore
|
200808773-6
|
148205
|
5/26/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
USA
|
11/440,576
|
7,993,293
|
5/25/2006
|
Neck Brace
|
Granted
|
2/9/2019
|
USA (Broad)
|
11/690,412
|
8,002,723
|
3/23/2007
|
Neck Brace
|
Granted
|
2/23/2019
|
USA (Continuation)
|
13/206,312
|
8,562,551
|
8/9/2011
|
Neck Brace
|
Granted
|
4/22/2017
|
Eurasia
|
200601049
|
10815
|
6/26/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
Australia
|
2004293118
|
2004293118
|
6/23/2003
|
Neck Brace
|
Granted
|
11/26/2017
|
India
|
2315/CHENP/ 2006
|
|
6/26/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
Norway
|
20062971
|
327461
|
6/26/2006
|
Neck Brace
|
Granted
|
11/30/2017
|
New Zealand
|
548068
|
548068
|
6/22/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
Vietnam
|
1-2006-01015
|
|
6/26/2006
|
Neck Brace
|
Granted
|
02/09/2018
|
Germany
|
04816084.0
|
6020040259 75,6
|
6/22/2006
|
Neck Brace
|
Granted
|
11/30/2017
|
France
|
04816084.0
|
1696842
|
6/22/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
UK
|
04816084.0
|
1696842
|
6/22/2006
|
Neck Brace
|
Granted
|
11/30/2017
|
Switzerland
|
04816084.0
|
1696842
|
6/22/2006
|
Neck Brace
|
Granted
|
11/30/2017
|
Spain
|
04816084.0
|
2342402
|
6/22/2006
|
Neck Brace
|
Granted
|
11/26/2017
|
Italy
|
04816084.0
|
1696842
|
6/22/2006
|
Neck Brace
|
Granted
|
11/30/2017
|
Netherlands
|
04816084.0
|
1696842
|
6/22/2006
|
Neck Brace
|
Granted
|
11/30/2017
|
- 31 -
Taiwan
|
97109256
|
I 359009
|
3/17/2008
|
SSS Brace
|
Granted
|
2/28/2018
|
Brazil
|
PI07180047
|
|
4/27/2009
|
SSS Brace
|
Pending
|
10/26/2017
|
China
|
2007 80047024.0
|
ZL200780047024 .0
|
6/19/2009
|
SSS Brace
|
Granted
|
10/26/2017
|
Japan
|
2009-534037
|
|
4/27/2009
|
SSS Brace
|
Granted
|
03/13/2018
|
USA
|
12/447,452
|
8,484,768
|
4/27/2009
|
SSS Brace
|
Granted
|
1/16/2021
|
New Zealand
|
577131
|
577131
|
5/21/2009
|
SSS Brace (clip)
|
Granted
|
10/26/2017
|
New Zealand
|
592116
|
592116
|
5/21/2009
|
SSS Brace (tether)
|
Granted
|
10/26/2017
|
USA
|
12/812,596
|
8,439,042
|
7/12/2010
|
MRX Brace
|
Granted
|
14/11/2020
|
Australia
|
2009321240
|
2009321240
|
6/8/2011
|
MRX Brace
|
Granted
|
11/26/2017
|
China
|
20098014755 8.X
|
ZL200980147558 .X
|
5/26/2011
|
MRX Brace
|
Granted
|
11/26/2017
|
Austria
|
09801554.8
|
EP 2376032
|
5/31/2011
|
MRX Brace
|
Granted
|
11/30/2017
|
France
|
09801554.8
|
EP 2376032
|
11/26/2009
|
MRX Brace
|
Granted
|
11/30/2017
|
Germany
|
09801554.8
|
60 2009 029 841.0
|
11/26/2009
|
MRX Brace
|
Granted
|
11/30/2017
|
Italy
|
09801554.8
|
EP 2376032
|
11/26/2009
|
MRX Brace
|
Granted
|
11/30/2017
|
Spain
|
09801554.8
|
EP 2376032
|
11/26/2009
|
MRX Brace
|
Granted
|
11/30/2017
|
Sweden
|
09801554.8
|
EP 2376032
|
11/26/2009
|
MRX Brace
|
Granted
|
11/30/2017
|
Netherlands
|
09801554.8
|
EP 2376032
|
11/26/2009
|
MRX Brace
|
Granted
|
11/30/2017
|
UK
|
09801554.8
|
EP 2376032
|
11/26/2009
|
MRX Brace
|
Granted
|
11/30/2017
|
Japan
|
2011-537006
|
5643960
|
5/19/2011
|
MRX Brace
|
Granted
|
11/14/2017
|
Switzerland
|
09165346.9
|
2113231
|
7/13/2009
|
Neck Brace
|
Granted
|
11/30/2017
|
Germany
|
09165346.9
|
602004035367.1
|
7/13/2009
|
Neck Brace
|
Granted
|
11/30/2017
|
Spain
|
09165346.9
|
2377592
|
7/13/2009
|
Neck Brace
|
Granted
|
11/30/2017
|
France
|
09165346.9
|
2113231
|
7/13/2009
|
Neck Brace
|
Granted
|
11/30/2017
|
UK
|
09165346.9
|
2113231
|
7/13/2009
|
Neck Brace
|
Granted
|
11/30/2017
|
Italy
|
09165346.9
|
2113231
|
7/13/2009
|
Neck Brace
|
Granted
|
11/30/2017
|
Netherlands
|
09165346.9
|
2113231
|
7/13/2009
|
Neck Brace
|
Granted
|
11/30/2017
|
USA
|
29/224,261
|
D552,742
|
2/28/2005
|
Moto-R Brace
|
Registered
|
|
USA
|
29/225,477
|
D542,919
|
3/17/2005
|
Moto-GPX Brace
|
Registered
|
|
Europe
|
000 312 061- 0001
|
000 312 061- 0001
|
3/17/2005
|
Moto-GPX Brace
|
Registered
|
3/17/2020
|
New Zealand
|
405978
|
405978
|
3/16/2005
|
Moto-GPX Brace
|
Registered
|
|
USA
|
29/279,249
|
D631,167
|
4/24/2007
|
SSS Brace
|
Registered
|
|
Europe
|
000 711 130- 0001
|
000 711 130- 0001
|
4/20/2007
|
SSS Brace
|
Registered
|
4/20/2017
|
USA
|
29/284,258
|
D592,310
|
9/4/2007
|
Moto-GPX Brace 2006
|
Registered
|
|
Europe
|
000 785 373- 0001
|
000 785 373- 0001
|
9/6/2007
|
Moto-GPX Brace 2006
|
Registered
|
9/30/2017
|
USA
|
29/325,870
|
D633,623
|
10/7/2008
|
Damper Brace
|
Registered
|
|
- 32 -
The following table lists our own patents and designs:
Country
|
Application
No
|
Patent No
|
Filing
date
|
Invention
Title
|
Status
|
Renewal
Date
|
Held by Leatt Corporation
|
South Africa
|
2013/01921
|
2013/01921
|
10/1/2010
|
Chest Protector
|
Granted
|
10/01/2017
|
South Africa
|
2015/00206
|
2015/00206
|
01/13/2015
|
Shoulder Brace
|
Granted
|
06/26/2017
|
USA
|
14/894,237
|
|
11/25/2015
|
Knee Brace
|
Pending
|
After Grant
|
Europe
|
14737320.3
|
|
12/3/2015
|
Knee Brace
|
Accepted
|
5/26/2017
|
USA
|
14/976,209
|
|
12/21/2015
|
Glove
|
Pending
|
After Grant
|
Europe
|
15730280.3
|
|
5/21/2015
|
Turbine Helmet
|
Pending
|
05/21/2017
|
USA
|
15/312,271
|
|
12/21/2016
|
Turbine Helmet
|
Pending
|
After Grant
|
China
|
201580025924.X
|
|
11/18/2016
|
Turbine Helmet
|
Pending
|
After Grant
|
Australia
|
2015262893
|
|
11/21/2016
|
Turbine Helmet
|
Pending
|
05/21/2019
|
Brazil
|
BR1120160269829
|
|
11/17/2016
|
Turbine Helmet
|
Pending
|
05/21/2017
|
Canada
|
2,949,756
|
|
11/21/2016
|
Turbine Helmet
|
Pending
|
05/21/2017
|
New Zealand
|
727758
|
|
12/20/2016
|
Turbine Helmet
|
Pending
|
05/21/2019
|
PCT
|
PCT/IB2016/057895
|
|
12/21/2016
|
Boot
|
Pending
|
|
UK
|
1603129.6
|
|
02/23/2016
|
Neck Brace
|
Pending
|
|
USA
|
29/381,768
|
D649,649
|
12/22/2010
|
STX Brace
|
Registered
|
|
Europe
|
001 251 508- 0001
|
001 251 508-
|
12/23/2010
|
STX Brace
|
Registered
|
12/23/2020
|
Australia
|
15733/2010
|
334789
|
12/23/2010
|
STX Brace
|
Registered
|
12/23/2016
|
Japan
|
2010-031383
|
1422456
|
12/28/2010
|
STX Brace
|
Registered
|
8/4/2017
|
USA
|
29/297,349
|
D609,815
|
11/08/2007
|
Leatt Sock Kit
|
Registered
|
|
USA
|
29/510,597
|
|
12/02/2014
|
Visor Screw
|
Accepted
|
|
USA
|
29,509,338
|
D768,940
|
11/17/2014
|
Hydration System
|
Registered
|
|
Europe
|
02588970-0001- 0003
|
02588970-0001- 0003
|
12/2/2014
|
Visor Screw & Hydration System
|
Registered
|
2/12/2019
|
Held by Three Eleven Distribution (Pty)
Ltd.
|
India
|
1863/KOLNP/ 2008
|
|
5/8/2008
|
Helmet
|
Pending
|
|
Germany
|
06809017.4
|
60 2006 010 418.9-08
|
3/31/2008
|
Helmet
|
Granted
|
10/13/2016
|
France
|
06809017.4
|
1933656
|
3/31/2008
|
Helmet
|
Granted
|
10/13/2016
|
UK
|
06809017.4
|
1933656
|
3/31/2008
|
Helmet
|
Granted
|
10/13/2016
|
Italy
|
67618/BE/201 0
|
1933656
|
3/31/2008
|
Helmet
|
Granted
|
10/13/2016
|
Netherlands
|
06809017.4
|
1933656
|
3/31/2008
|
Helmet
|
Granted
|
10/13/2016
|
Austria
|
06809017.4
|
AT-E 0447866
|
3/31/2008
|
Helmet
|
Granted
|
10/13/2016
|
Spain
|
06809017.4
|
1933656
|
3/31/2008
|
Helmet
|
Granted
|
10/13/2016
|
Sweden
|
06809017.4
|
1933656
|
3/31/2008
|
Helmet
|
Granted
|
10/13/2016
|
___________________
* The Patent Cooperation Treaty, or PCT, is an international
agreement for filing patent applications having effect in up to 117 countries.
Under the PCT, an inventor can file a single international patent application in
one language with one patent office in order to simultaneously seek protection
for an invention in up to 117 countries throughout the world.
- 33 -
Patents applicable to specific products extend for varying
periods according to the date of patent application filing or patent grant and
the legal term of patents in the various countries where patent protection is
obtained. The actual protection afforded by a patent, which can vary from
country to country, depends upon the type of patent, the scope of its coverage
and the availability of legal remedies in the country. Issued patents or patents
based on pending patent applications or any future patent applications may not
exclude competitors or may not provide a competitive advantage to us. In
addition, patents issued or licensed to us may not be held valid if subsequently
challenged and others may claim rights in or ownership of such patents. In
addition, the validity and breadth of claims in protective gear technology
patents involve complex legal and factual questions and, therefore, the extent
of their enforceability and protection is highly uncertain.
The following table lists our licensed and/or registered and
pending trademarks:
Country
|
Trademark
|
TM Class
|
Application No
|
Registration No
|
Filing Date
|
Renewal Date
|
Status
|
China
|
Leatt-Brace
|
10
|
6287826
|
6287826
|
21/09/2007
|
02/20/2020
|
Registered
|
China
|
Leatt
|
10
|
6287824
|
6287824
|
21/09/2007
|
02/20/2020
|
Registered
|
China
|
The Helmet for your Neck
|
10
|
6287823
|
6287823
|
21/09/2007
|
02/20/2020
|
Registered
|
|
Device
|
|
|
|
|
|
|
CTM
|
Leatt-Brace
|
9
|
6313993
|
6313993
|
19/09/2007
|
09/19/2017
|
Registered
|
CTM
|
The Helmet for your neck
|
9
|
6314009
|
6314009
|
19/09/2007
|
09/19/2017
|
Registered
|
CTM
|
Leatt
|
9
|
6314017
|
6314017
|
19/09/2007
|
09/19/2017
|
Registered
|
CTM
|
Device (The Helmet for your neck)
|
9
|
6314132
|
6314132
|
19/09/2007
|
09/19/2017
|
Registered
|
USA
|
ALPT
|
9
|
77/742,823
|
3,926,378
|
22/05/2009
|
03/01/2021
|
Registered
|
USA
|
Alternative Load Path Technology
|
9
|
77/742,826
|
3868833
|
22/05/2009
|
10/26/2020
|
Registered
|
CTM
|
Alternative Load Path Technology
|
9
|
8358046
|
8358046
|
11/06/2009
|
06/11/2019
|
Registered
|
CTM
|
Alternative Load Path
|
9
|
8358061
|
8358061
|
11/06/2009
|
06/11/2019
|
Registered
|
CTM
|
ALPT
|
9
|
8358079
|
8358079
|
11/06/2009
|
06/11/2019
|
Registered
|
USA
|
Leatt Device
|
9
|
77/765,739
|
3,861,760
|
23/06/2009
|
10/12/2020
|
Registered
|
CTM
|
Leatt Device
|
9
|
8444168
|
|
23/07/2009
|
07/23/2019
|
Registered
|
Australia
|
Leatt
|
9,10, 28
|
1372902
|
1372902
|
16/07/2010
|
07/16/2020
|
Registered
|
Japan
|
Leatt
|
9, 10, 28
|
2010-056635
|
5432253
|
16/07/2010
|
08/12/2021
|
Registered
|
Japan
|
Leatt
|
25
|
2010-74427
|
5403909
|
22/09/2010
|
04/01/2021
|
Registered
|
CTM
|
Leatt
|
25
|
9395997
|
9395997
|
23/09/2010
|
09/23/2020
|
Registered
|
Brazil
|
Leatt Brace
|
10
|
829468323
|
829468323
|
03/11/2010
|
11/03/2020
|
Registered
|
Brazil
|
Leatt Brace (Special Script)
|
9
|
829994920
|
829994920
|
24/11/2008
|
02/08/2021
|
Registered
|
Brazil
|
Leatt Brace (Special Script)
|
25
|
829994939
|
829994939
|
24/11/2008
|
02/08/2021
|
Registered
|
Brazil
|
Leatt (Special Script)
|
9
|
830409432
|
830.409.432
|
05/11/2009
|
10/09/2022
|
Registered
|
Brazil
|
Leatt and Device
|
9
|
830409440
|
830.409.440
|
05/11/2009
|
10/09/2022
|
Registered
|
Brazil
|
Leatt (Special Script)
|
10
|
902094165
|
902.094.165
|
05/11/2009
|
10/09/2022
|
Registered
|
Brazil
|
Leatt and Device
|
10
|
902094149
|
902094149
|
05/11/2009
|
01/14/2024
|
Published
|
Brazil
|
Leatt (Special Script)
|
25
|
902094238
|
902.094.238
|
05/11/2009
|
10/09/2022
|
Registered
|
Brazil
|
Leatt and Device
|
25
|
902094190
|
902.094.190
|
05/11/2009
|
10/09/2022
|
Registered
|
Canada
|
LEATT
|
25
|
1535498
|
841,643
|
13/07/2011
|
01/29/2028
|
Registered
|
USA
|
BraceOn
|
9
|
85/429,145
|
4,276,706
|
22/09/2011
|
01/15/2023
|
Registered
|
- 34 -
Australia
|
BraceOn
|
28
|
1450772
|
1450772
|
23/09/2011
|
09/23/2021
|
Registered
|
CTM
|
BraceOn
|
9, 28
|
10288405
|
10288405
|
23/09/2011
|
09/23/2021
|
Registered
|
NZ
|
Leatt
|
9
|
829603
|
829603
|
30/08/2010
|
08/30/2020
|
Registered
|
NZ
|
Leatt
|
25
|
831034
|
831034
|
27/09/2010
|
09/27/2020
|
Registered
|
NZ
|
Leatt
|
28
|
831035
|
831035
|
27/09/2010
|
09/27/2020
|
Registered
|
NZ
|
Leatt
|
10
|
831036
|
831036
|
27/09/2010
|
09/27/2020
|
Registered
|
Brazil
|
Device
|
10
|
902.094.084
|
902.094.084
|
05/11/2009
|
10/09/2022
|
Registered
|
Brazil
|
Device
|
25
|
902.094.157
|
902.094.157
|
05/11/2009
|
10/09/2022
|
Registered
|
Brazil
|
Device
|
9
|
830.409.416
|
830.409.416
|
05/11/2009
|
10/09/2022
|
Registered
|
CTM
|
Device
|
9, 25, 28
|
13289822
|
13289822
|
23/09/2014
|
09/23/2024
|
Registered
|
USA
|
THREE L DEVICE
|
9, 25, 28
|
86445638
|
5,124,832
|
5/11/2014
|
01/17/2027
|
Registered
|
USA
|
LEATT
|
9, 18, 25, 28
|
86551815
|
|
3/3/2015
|
|
Pending
|
USA
|
Leatt
|
25
|
85135308
|
4,202,879
|
22/09/2010
|
09/04/2021
|
Registered
|
SA
|
DEVICE (NEW LOGO)
|
9
|
2009/11856
|
2009/11856
|
26/06/2009
|
06/26/2019
|
Registered
|
SA
|
DEVICE (NEW LOGO)
|
10
|
2009/11857
|
2009/11857
|
26/06/2009
|
06/26/2019
|
Registered
|
SA
|
DEVICE (NEW LOGO)
|
28
|
2009/11858
|
2009/11858
|
26/06/2009
|
06/26/2019
|
Registered
|
SA
|
Leatt-Brace (Special Script)
|
10
|
2004/08584
|
2004/08584
|
28/05/2004
|
05/28/2024
|
Registered
|
SA
|
Leatt
|
10
|
2006/22761
|
2006/22761
|
26/09/2006
|
09/26/2026
|
Registered
|
SA
|
The Helmet for your Neck
|
10
|
2006/22760
|
2006/22760
|
26/09/2006
|
09/26/2017
|
Registered
|
SA
|
Helmet for your Neck Device
|
10
|
2007/15892
|
2007/15892
|
19/07/2007
|
07/19/2017
|
Registered
|
SA
|
Helmet for your Neck Device
|
28
|
2007/15893
|
2007/15893
|
19/07/2007
|
07/19/2017
|
Registered
|
SA
|
Adventure Leatt and Device
|
9
|
2008/15403
|
2008/15403
|
04/07/2008
|
07/04/2018
|
Registered
|
SA
|
Adventure Leatt and Device
|
10
|
2008/15404
|
2008/15404
|
04/07/2008
|
07/04/2018
|
Registered
|
SA
|
Adventure Leatt and Device
|
28
|
2008/15405
|
2008/15405
|
04/07/2008
|
07/04/2018
|
Registered
|
SA
|
Adventure Brace
|
9
|
2008/28131
|
2008/28131
|
01/12/2008
|
12/01/2018
|
Registered
|
SA
|
Adventure Brace
|
10
|
2008/28132
|
2008/28132
|
01/12/2008
|
12/01/2018
|
Registered
|
SA
|
Adventure Brace
|
28
|
2008/28133
|
2008/28133
|
01/12/2008
|
12/01/2018
|
Registered
|
USA
|
Leatt-Brace
|
9
|
77227507
|
3483439
|
11/07/2007
|
08/12/2018
|
Registered
|
USA
|
The Helmet For Your Neck Device
|
9
|
77236512
|
3483523
|
23/07/2007
|
08/12/2018
|
Registered
|
USA
|
The Helmet For Your Neck
|
9
|
77264171
|
3483644
|
24/08/2007
|
08/12/2018
|
Registered
|
USA
|
LEATT
|
9
|
77264178
|
3483646
|
24/08/2007
|
08/12/2018
|
Registered
|
CTM
|
Adventure Brace
|
9, 10, 28
|
8224479
|
8224479
|
26/03/2009
|
03/26/2019
|
Registered
|
China
|
Leatt-Brace
|
9
|
7668832
|
7668832
|
09/03/2009
|
03/06/2021
|
Registered
|
China
|
LEATT
|
9
|
7668830
|
7668830
|
03/09/2009
|
03/06/2021
|
Registered
|
China
|
LEATT
|
18
|
21157818
|
|
31/08/2016
|
|
Pending
|
China
|
LEATT
|
25
|
Pending
|
|
31/08/2016
|
|
Pending
|
China
|
LEATT
|
28
|
Pending
|
|
31/08/2016
|
|
Pending
|
China
|
The Helmet For Your Neck Device
|
9
|
7668857
|
7668857
|
03/09/2009
|
03/06/2021
|
Registered
|
China
|
Leatt
|
25
|
8706821
|
870682
|
28/09/2010
|
09/28/2021
|
Registered
|
- 35 -
____________________
* A Community Trade Mark or CTM, is
any trademark which is pending registration or has been registered in the
European Union as a whole (rather than on a national level within the EU). The
CTM system creates a unified trademark registration system in Europe, whereby
one registration provides protection by being enforceable in all member states
of the EU.
____________________
From time to time, we have had to enforce our intellectual
property rights through litigation and we may be required to do so in the
future. Reverse engineering, unauthorized copying or other misappropriation of
our technologies could enable third parties to benefit from our technologies
without paying us. We cannot assure you that our competitors have not developed
or will not develop similar products, will not duplicate our products, or will
not design around any patents issued to or licensed by us. We believe that a
loss of these rights would harm or cause a material disruption to our business
and, our corporate strategy is to aggressively take legal action against any
violators of our intellectual property rights, regardless of where they may be.
Our Employees
As of December 31, 2016, we employed 44 full-time employees, 11
independent contractors and no part-time employees. The following table sets
forth the number of our full-time employees by function as of December 31, 2016.
Employee Function
|
Number
|
Executive
|
3
|
Internet Technology
|
2
|
Product
|
5
|
Marketing
|
6
|
Finance
|
3
|
Operations and Distributions/Logistics
|
5
|
Research and Development / Leatt Lab
|
4
|
Legal and Compliance
|
2
|
Sales/Customer Services
|
11
|
Support Staff (Receptionist/Cleaners/Driver)
|
3
|
Independent Contractors
|
11
|
Total
|
55
|
We are required to pay UIF, or unemployment insurance, for each
of our South African employees. We are also required to withhold income taxes
for our South African and U.S. based employees. We generally provide health care
benefits and other standard benefits to our employees. We do not have any
pension or retirement plans for any of our employees.
We believe that we maintain a satisfactory working relationship
with our employees and we have not experienced any significant labor disputes or
any difficulty in recruiting staff for our operations.
Regulations
The 2012 JOBS Act
We qualify as an emerging growth company, as defined in Title
I of the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). An
emerging growth company is defined as an issuer, including a foreign private
issuer, with less than $1 billion of total annual gross revenues during the most
recently completed fiscal year. The SEC has interpreted total annual gross
revenues to mean total revenues as presented on the income statement
presentation under U.S. GAAP, which for the Company was $16.4 million for the
fiscal year ended December 31, 2016. We will retain our status as an emerging
growth company until the earlier of: (1) the fifth anniversary of the date we first sell securities pursuant to an
IPO registration statement; (2) the last day of the fiscal year in which we
first exceed $1 billion in annual gross revenues; (3) the time we become a large
accelerated filer (an SEC registered company with a public float of at least
$700 million); or (4) the date on which we have issued, within the previous
three years, $1 billion of nonconvertible debt, whether issued in a registered
or unregistered offering and whether or not it is still outstanding at the
determination date.
- 36 -
The JOBS Act provides scaled disclosure provisions for us,
including, among other things: (a) permitting us to include only two years of
audited financial statements in a registration statement filed under the
Securities Act of 1933 for an IPO of common equity securities; (b) allowing us
to comply with the smaller reporting company version of Item 402 of Regulation
S-K (Executive Compensation); and (c) removing the requirement that our
independent registered public accounting firm attest to the effectiveness of our
internal control over financial reporting in accordance with Section 404(b) of
the Sarbanes-Oxley Act of 2002. The JOBS Act also exempts us from the following
additional compensation-related disclosure provisions that were imposed on U.S.
public companies pursuant to the Dodd-Frank Act: the advisory say-on-pay vote
on executive compensation required under Section 14A(a) of the Exchange Act; the
Section 14A(b) requirements relating to shareholder advisory votes on golden
parachute compensation; the Section 14(i) requirements for disclosure relating
to the relationship between executive compensation and financial performance of
the issuer; and the requirement of Dodd-Frank Act Section 953(b)(1), which will
require disclosure as to the relationship between CEO and median employee pay.
Under Section 102(b)(1) of the JOBS Act, "emerging growth
companies" can also delay adopting new or revised accounting standards until
such time as those standards apply to private companies. However, we have
irrevocably elected not to avail ourselves of this extended transition period
for compliance with new or revised accounting standards and, therefore, we will
be subject to the same new or revised accounting standards as other public
companies that are not "emerging growth companies.
European Union Directives
All our products are compliant with applicable European Union
directives, or CE certified, where appropriate. All Leatt Personal Protective
Equipment (PPE) products are CE Certified showing compliance with European
Economic Community (EEC) directive 89/686/EEC that imposes mandatory
accreditation of all Personal Protective Equipment products offered for sale in
the EEC. This includes the Companys Leatt-Brace® and body protection products.
This means that as a minimum these products must comply with:
the basic Health and Safety requirements of the directive; certain chemical
innocuousness tests prescribed in EN 340:2003 - Protective clothing General
Requirements
;
and
the requirements relating to usage, care,
cleaning, sizing and other information to be supplied with the product.
Accordingly, all Leatt-Braces®, chest protectors and body protection products
are CE certified. Only our peripheral products such as jackets, clothing, and
caps are not covered.
In addition to the minimum requirements the Company complies
with the European Standards, or EN (European Norm), specific to certain
categories of PPE. An EN is a standard that has been adopted by one of the three
recognized European Standardization Organizations (ESOs): CEN, CENELEC or ETSI.
It is produced by all interested parties (including manufacturers, users,
consumers and regulators of a particular material, product, process or service)
through a transparent, open and consensus based process. In the Companys case
these are the applicable EN standards: EN 14021 Stone Shields; EN 1621-1 Limb
Protectors; EN 1621-2 Back Protectors; and CE EN1621-3 level 2 impact front
Chest Protectors. These standards are more performance related and, among other
things, measure the performance of PPE at various intensity levels and under
different environmental conditions. They also prescribe product labeling, tests
for user comfort and ease of use. Where no specific standards exist in the EU,
such as with the neck brace, the Notifying Body will be responsible for CE
evaluation and certification.
FDA and MHRA Registration
In the 2015 first quarter our Knee Brace was accepted for
registration by both the FDA and the MHRA, and our Shoulder Brace was accepted
by the FDA, as Class 1 Medical Devices. FDA and MHRA registration will allow us
take these products directly to market as medical devices for patients (not just
athletes) recuperating from injuries, surgery, muscle tears or strains,
dislocations, breaks or fractures. The Companys FDA registration included the
contract manufacturer of the braces, a Good Manufacturing Practices (GMP)
vendor. Our initial registration period expired on December 31, 2016 and we
renewed our registration until December 31, 2017. For the duration of our
registration period, we are required to maintain logs of complaints or problems,
and to provide appropriate labelling for medical uses. The MHRA registration of the knee brace is open-ended,
subject to the Companys continued monitoring of product performance in the
market place and delivery of prompt responses to the MHRA as necessary.
- 37 -
Other Accreditation
We have also obtained certification for certain of our
products, such as the MRX head and neck restraint system, by the SFI Foundation
(USA), or the SFI. To attain SFI certification, a safety device must, every five
years, pass a series of impact sled tests with an instrumented crash test dummy
at a SFI accredited test lab, as well as flammability tests on various parts of
the safety device. These tests are done according to the SFI38.1 specification
that can be found at http://www.sfifoundation.com. SFI 38.1 accreditation is
mandatory for any safety device that is used by participants in SFI sanctioned
events worldwide. We also voluntarily submitted our Moto GPX neck brace to be
tested by the in-house engineers of BMW Motorrad (Germany) and to be reviewed by
KTM (Austria). We believe that such testing, while not mandatory, provides
validation for our products performance.
We are also in discussions with governing and racing bodies,
such as the FIA, the FIM and NASCAR, to have the Leatt-Brace® accredited by
these bodies. To acquire NASCAR accreditation, the safety device must obtain SFI
38.1 accreditation, discussed above, and be recertified every 5 years. In
addition, the safety device must undergo review and a series of NASCAR specific
tests by NASCARs technical panel to ensure that it meets all the NASCAR safety
requirements. NASCAR accreditation is mandatory for any safety device that is
used by participants in NASCAR events. To acquire FIA accreditation, the safety
device must obtain SFI 38.1 accreditation, discussed above, and be recertified
every 5 years. In addition, the device must undergo review by a FIA technical
panel, which assesses the device in accordance with FIA standards for frontal
head restraint (FHR) systems and conduct more product specific testing if
necessary. To achieve FIA standards, the device must pass certain FIA stress
tests for the FHR, the tethers and end fittings, and the attachments included on
the protective helmet. FIA accreditation is mandatory for any safety device that
is used by participants in FIA sanctioned events worldwide. While there is
currently no official accreditation for FIM sanctioned events, we have submitted
test documents for FIM review. We cannot guarantee that we will secure any of
these accreditations.
ITEM 1A. RISK FACTORS
An investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below, together with all
of the other information included in this report, before making an investment
decision. If any of the following risks actually occurs, our business, financial
condition or results of operations could suffer. In that case, the trading price
of our common stock could decline, and you may lose all or part of your
investment. You should read the section entitled Special Note Regarding
Forward-Looking Statements above for a discussion of what types of statements
are forward-looking statements, as well as the significance of such statements
in the context of this report.
RISKS RELATED TO OUR BUSINESS
Our operations may be impaired if our information
technology systems fail to perform adequately or if they are the subject of a
security breach or cyber attack.
We rely on a variety of information technology systems in the
ordinary course of business to manage business data, communications, supply
chain, order entry and fulfillment, and other business processes. Our
information technology systems are potentially vulnerable to malfunctions,
computer viruses, unauthorized access, and cyber-attacks, including individual
or advanced persistent cyber-attacks on our information technology
infrastructure and attempts by others to gain access to our propriety or
sensitive information. While we use procedures and controls designed to properly
maintain and safeguard our information technology systems, including monitoring
of threats to mitigate our exposure, such efforts may not be sufficient to
prevent a failure of our information security systems or cyber security
incidents. The failure of any of our information technology systems to perform
as anticipated could disrupt our business and could result in transaction
errors, processing inefficiencies and the loss of sales and customers, which
could materially adversely affect our financial condition, business and results
of operations. A successful breach of our information technology systems could
result in the theft of the Companys intellectual property, impose liability on
the Company for the loss of customer, supplier or employee confidential
information, increase costs from litigation and reputational damage, any of
which results would have a material adverse impact on the Companys financial
condition, business and results of operations. Any remedial costs or other
liabilities related to information security system failures and cybersecurity
incidents may not be fully insured or indemnified by other means.
The ongoing global economic turmoil could negatively
affect our business, results of operations, and financial condition.
The ongoing turmoil in the global economy, especially in the
U.S., South America and Europe, may have an impact on our business and our
financial condition, and we may face challenges if economic conditions do not
improve. These economic conditions impact levels of consumer spending, which
have deteriorated and may remain depressed for the foreseeable future. If demand
for our products fluctuates as a result of these economic conditions or
otherwise, our revenue and gross margin could be harmed.
- 38 -
In order to grow at the pace expected by management, we
may require additional capital to support our long-term growth strategies. If we
are unable to obtain additional capital in future years, we may be unable to
proceed with our plans and we may be forced to curtail our operations.
We currently meet our working capital requirements with cash
flow provided by our operating activities and we expect to continue doing so for
the foreseeable future. However, in the future we may require additional working
capital to support our long-term growth strategies, including identifying
suitable targets for horizontal or vertical mergers or acquisitions so as to
enhance the overall productivity and benefit from economies of scale. If the
uncertainty arising out of domestic and global economic conditions and the
ongoing tightening of domestic credit markets persist, we may not be able to
generate adequate cash flows or obtain adequate levels of additional financing,
whether through equity financing, debt financing or other sources. Even if we
are able to get additional financing, it might not be on terms that are
favorable to the Company. Furthermore, additional financings could result in
significant dilution to our earnings per share or the issuance of securities
with rights superior to our current outstanding securities, including
registration rights. If we are unable to raise additional financing, we may be
unable to implement our long-term growth strategies, develop or enhance our
products and services, take advantage of future opportunities or respond to
competitive pressures on a timely basis, if at all. In addition, a lack of
additional financing could force us to substantially curtail operations.
A substantial amount of our sales revenue is derived from
sales to a limited number of customers, and our business will suffer if sales to
these customers decline.
We have derived a significant portion of our revenue from a
limited number of customers, however none of our customers account for more than
10% of our consolidated revenues. For the year ended December 31, 2016, our U.S.
revenue was concentrated in one customer that accounted for approximately 13% of
annual U.S. revenue. As of December 31, 2016 and 2015, $316,976 or 14% and
$95,507, or 3% of our accounts receivable, was due from this customer.
For the years ended December 31, 2016 and 2015, our
international revenue derived outside of the U.S. was earned from one and two
customers that accounted for approximately 9% and 24% of our annual
international revenue for the respective periods, with our largest international
customer accounting for approximately 9% and 17% of international sales for each
of the respective periods. As of December 31, 2016 and 2015, $24,394 or 1% and
$344,589 or 12% of our accounts receivable, respectively, were due from these
international customers.
We do not have long term contractual arrangements with most of
these wholesale customers. The loss of one or more of these customers could
damage our business, financial condition and results of operations.
We engage in international sales, which expose us to
trade restrictions that could harm our business and competitive
position.
For the years ended December 31, 2016 and 2015, annual revenues
from product sales to international customers were $9,685,191 and 11,642,970, or
59% or 63% of our total revenue, respectively. As a result, we are subject to
risks associated with shipping products across borders, including shipping
delays, customs duties, export quotas and other trade restrictions that could
have a significant impact on our revenue and profitability. While we have not
encountered significant difficulties in connection with the sales of our
products in international markets, if we cannot deliver our products on a
competitive and timely basis, our relationships with international customers
will be damaged and our financial condition could also be harmed. Furthermore,
the future imposition of, or significant increases in, the level of custom
duties, export quotas or other trade restrictions could have an adverse effect
on us. We cannot assure you that the laws of foreign jurisdictions where we sell
and seek to sell our products afford similar or any protection of our
intellectual property rights as may be available under U.S. laws. We are
directly impacted by the political, economic, military and other conditions in
the countries where we sell or seek to sell our products.
Significant fluctuations in fuel prices could have an
adverse impact on our business and operations.
A significant portion of our revenue is derived from
international sales and so significant fluctuations in fuel prices could
adversely affect our business and operations. While fluctuations in fuel prices
could lead to higher commuter costs which may encourage the increased use of
motorcycles and bicycles as alternative modes of transportation and lead to an
increase in the market for our protection products, significant fluctuations in
world fuel prices could significantly increase the price of shipping or
transporting our products which we may not be able to pass on to our customers.
- 39 -
Expansion of our business may put added pressure on our
management, financial resources and operational infrastructure impeding our
ability to meet any increased demand for our products and possibly hurting our
operating results.
Our business plan is to significantly grow our operations to
meet anticipated growth in demand for existing products, and by the introduction
of new product offerings. Our planned growth includes the construction of
several new production lines to be put into operation over the next five years.
Growth in our business may place a significant strain on our personnel,
management, financial systems and other resources. We may be unable to
successfully and rapidly expand sales to potential customers in response to
potentially increasing demand or control costs associated with our growth.
To accommodate any such growth and compete effectively, we may
need to obtain additional funding to improve information systems, procedures and
controls and expand, train, motivate and manage our employees, and such funding
may not be available in sufficient quantities, if at all. If we are not able to
manage these activities and implement these strategies successfully to expand to
meet any increased demand, our operating results could suffer.
We rely on patent and trade secret laws that are complex
and difficult to enforce and we may not be able to prevent others from
unauthorized use of our intellectual property. If we are not able to adequately
secure and protect our patent, trademark and other proprietary rights our
business may be materially affected.
The continued success of our business is dependent on our
intellectual property portfolio consisting of globally registered trademarks,
design patents and utility patents related to the Leatt-Brace®. We also rely on
nondisclosure agreements and other methods to protect our intellectual property
rights. However, the steps we have taken may be inadequate to prevent the
misappropriation of our technology. In addition, the validity and breadth of
claims in protective gear technology patents involve complex legal and factual
questions and, therefore, the extent of their enforceability and protection is
highly uncertain. Issued patents or patents based on pending patent applications
or any future patent applications may not exclude competitors or may not provide
a competitive advantage to us. In addition, patents issued or licensed to us may
not be held valid if subsequently challenged and others may claim rights in or
ownership of such patents. Reverse engineering, unauthorized copying or other
misappropriation of our technologies could enable third parties to benefit from
our technologies without paying us. We cannot assure you that our competitors
have not developed or will not develop similar products, will not duplicate our
products, or will not design around any patents issued to or licensed by us.
We believe that a loss of these rights would harm or cause a
material disruption to our business and, our corporate strategy is to
aggressively take legal action against any violators of our intellectual
property rights, regardless of where they may be.
We depend on key personnel, and turnover of key employees
and senior management could harm our business.
Our future business and results of operations depend in
significant part upon the continued contributions of our key technical and
senior management personnel, including specifically, Dr. Christopher Leatt, our
Chairman and Research and Development Consultant, Sean Macdonald, our Chief
Executive Officer and President, Erik Olsson, our International General Manager
and Todd Repsher, our U.S. General Manager. They also depend in significant part
upon our ability to attract and retain additional qualified management,
technical, marketing and sales and support personnel for our operations. To
address this risk we have taken out key man insurance on Key Staff members such
as Dr. Leatt. However, if we lose a key employee or if a key employee fails to
perform in his or her current position, or if we are unable to attract and
retain skilled employees as needed, our business could suffer. Significant
turnover in our senior management could significantly deplete our institutional
knowledge held by our existing senior management team. We depend on the skills
and abilities of these key employees, as well as the intellectual property owned
by Dr. Leatt, in managing the development, manufacturing, technical, marketing
and sales aspects of our business, any part of which could be harmed by further
turnover.
We face an inherent business risk of exposure to product
liability claims that could have a material adverse effect on our operating
results.
Because of the nature of our products, we face an inherent
business risk of exposure to product liability claims arising from the claimed
failure of our products to prevent the types of personal injury or death against
which they are designed to protect. Plaintiffs may also advance other legal
theories supporting claims that our products or actions resulted in harm to
them. We maintain product liability insurance policies with a self-insured
retention to attempt to manage this risk worldwide. We are currently defending
against 1 such claim which we have a fair expectation will be resolved in our
favor. But although we maintain product liability insurance coverage, there can
be no absolute assurance that our coverage limits will be sufficient to cover
any successful product liability claims made against us now or in the future.
Furthermore, our insurance coverage does not include damages which may be
assessed against us for willful and/or intentional injury, or for exemplary or
punitive damages. Any claim or aggregation of claims substantially in excess of
our insurance coverage, or any substantial claim not covered by insurance, could
have a material adverse effect on our financial condition and results of
operations. These aforementioned claims also have a negative impact on the
renewal our product liability insurance policy and the premiums.
- 40 -
We may not be able to adequately finance the significant
costs associated with the development of new protective equipment
products.
The products in the protective equipment market can change
dramatically with new technological advancements. We are currently conducting
research and development on new products, which requires a substantial outlay of
capital. To remain competitive, we must continue to incur significant costs in
product development, equipment, facilities and invest in research and
development of new products. These costs may increase, resulting in greater
fixed costs and operating expenses.
In addition to research and development costs, we could be
required to expend substantial funds for and commit significant resources to the
following:
|
|
additional engineering and other technical
personnel;
|
|
|
advanced design, production and test equipment;
|
|
|
manufacturing services that meet changing
customer needs;
|
|
|
technological changes in manufacturing
processes;
|
|
|
working capital and;
|
|
|
manufacturing capacity
|
Our future operating results will depend to a significant
extent on our ability to continue to provide new and competitive products that
compare favorably on the basis of cost and performance with the design and
manufacturing capabilities of competitive third-party technologies. We will need
to sufficiently increase our net sales to offset these increased costs, the
failure of which would negatively affect our operating results.
We may be exposed to potential risks relating to our
internal controls over financial reporting and our ability to have those
controls attested to by our independent auditors.
As directed by Section 404 of the Sarbanes-Oxley Act of 2002,
or SOX 404, the SEC adopted rules requiring public companies to include a report
of management on the companys internal controls over financial reporting in
their annual reports, including Form 10-K. Under current law, we became subject
to the requirements of SOX 404 beginning with our annual report for the fiscal
year ended December 31, 2012 and since becoming a U.S. public company, we have
evaluated our internal control systems in order to allow our management to meet
these requirements, including for this annual report for the fiscal year ended
December 31, 2016. We can provide no assurance that we will comply with all of
the requirements imposed thereby in the coming years. In the event that we ever
identify significant deficiencies or material weaknesses in our internal
controls that we cannot remediate in a timely manner, investors and others may
lose confidence in the reliability of our financial statements.
We are an "emerging growth company," and have availed
ourselves of scaled public company reporting requirements and requirements for
stockholder approval and advice applicable to emerging growth companies, which
could make our common stock less attractive to investors.
We are an "emerging growth company," as defined in the
Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For as long as we
remain an emerging growth company, we may take advantage of certain exemptions
from various reporting requirements that are applicable to public companies that
are not emerging growth companies, including not being required to comply with
the independent auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation
and stockholder approval of any golden parachute payments not previously
approved. We intend to take advantage of these reporting exemptions and
requirements of stockholder advisory votes and approvals until we are no longer
an emerging growth company.
We could be an "emerging growth company" for up to five years
after the first sale of our common equity securities pursuant to an effective
registration statement under the Securities Act, which we expect will be
pursuant to a Registration Statement on Form S-8 or on Form S-1. However, if
certain events occur prior to the end of such five-year period, including if we
become a "large accelerated filer," our annual gross revenues exceed $1 billion or we issue
more than $1 billion of non-convertible debt in any three-year period, we would
cease to be an "emerging growth company" prior to the end of such five year
period. We cannot predict if investors will find our common stock less
attractive if we choose to rely on these exemptions. If some investors find our
common stock less attractive as a result of any choice we make to reduce future
disclosure, there may be a less active trading market for our common stock and
our stock price may be more volatile.
- 41 -
RISKS RELATED TO OUR INDUSTRY
We may not be able to maintain or improve our competitive
position because of strong competition in the personal protective equipment
industry, and we expect this competition to continue to intensify.
We face competition from other global manufacturers and
distributors who provide personal protective equipment to users of motorcycles,
ATVs, snowmobiles, motor racing cars and other helmeted sports. Some of our
international competitors are larger than we and possess greater name
recognition, assets, personnel, sales and financial resources. These entities
may be able to respond more quickly to changing market conditions by developing
new products and services that meet customer requirements or are otherwise
superior to our products and services and may be able to more effectively market
their products than we can because they have significantly greater financial,
technical and marketing resources than we do. They may also be able to devote
greater resources than we can to the development, promotion and sale of their
products. Increased competition could require us to reduce our prices, result in
our receiving fewer customer orders, and result in our loss of market share. We
cannot assure you that we will be able to distinguish ourselves in a competitive
market. To the extent that we are unable to successfully compete against
existing and future competitors, our business, operating results and financial
condition would be materially adversely affected.
If we are unable to develop competitive new products our
future results of operations could be adversely affected.
Our future revenue stream depends to a large degree on our
ability to utilize our technology in a way that will allow us to offer new types
of safety products to a broader client base. We will be required to make
investments in research and development in order to continue to develop new
products, enhance our products and achieve market acceptance. We may incur
problems in the future in innovating and introducing new and innovative products
or, if developed, such products may not achieve significant customer acceptance.
If we are unable to successfully define, develop and introduce competitive new
products or improve on existing ones, our future results of operations would be
adversely affected.
The value of our brand and sales of our products could be
diminished if we, the individuals who use our products or the sport and activity
categories in which or products are used, are associated with negative
publicity.
Our success depends on the value of our brand. Our brand could
be adversely affected if our public image or reputation were to be tarnished by
negative publicity. Many athletes and other public individuals use our products
and actions taken by such persons that harm the reputations of activities they
participate in could also harm our brand image and result in a material decrease
in our revenues and net income, which could have a negative effect on our
financial condition and liquidity. In addition, negative publicity resulting
from severe injuries or death occurring in the sports or activities in which our
products are used and negatively impacts the popularity of such sport or
activity, could have a subsequent negative effect on our net sales of products
used in that sport or activity.
We may not be able to receive certain industry
certifications and accreditation for our products.
We have obtained certification and approvals for certain of our
products, including certification of our MRX head and neck restraint system by
the SFI, and approval of our new knee brace as a Class 1 medical device by both
the U.S. FDA and the UKs Medicine and Healthcare Regulatory Products Agency
(MHRA), and approval of our shoulder brace as a Class 1 medical device by the
U.S. FDA. We also voluntarily submitted our Moto GPX neck brace to be tested by
the in-house engineers of BMW Motorrad (Germany) and to be reviewed by KTM
(Austria). We believe that such testing, while not mandatory, will provide
validation for our products performance. There is no guarantee that our
products will receive SFI certification or meet BMW testing standards.
We are also in discussions with governing and racing bodies,
such as the FIA, FIM and NASCAR, to have the Leatt-Brace® accredited by these
bodies. To acquire NASCAR accreditation, the safety device must obtain SFI 38.1
accreditation, discussed above, and be recertified every 5 years. In addition,
the safety device must undergo review and a series of NASCAR specific tests by
NASCARs technical panel to ensure that it meets all the NASCAR safety
requirements. NASCAR accreditation is mandatory for any safety device that is
used by participants in NASCAR events. To acquire FIA accreditation, the safety
device must obtain SFI 38.1 accreditation, discussed above, and be recertified
every 5 years. In addition, the device must undergo review by a FIA technical
panel, which assesses the device in accordance with FIA standards for
frontal head restraint (FHR) systems and conduct more product specific testing
if necessary. To achieve FIA standards, the device must pass certain FIA stress
tests for the FHR, the tethers and end fittings, and the attachments included on
the protective helmet. FIA accreditation is mandatory for any safety device that
is used by participants in FIA sanctioned events worldwide. While there is
currently no official accreditation for FIM sanctioned events, we have submitted
test documents for FIM review. We cannot guarantee that we will secure any of
these accreditations.
- 42 -
RISKS RELATED TO DOING BUSINESS IN NON-US JURISDICTIONS
We face risks associated with doing business in non-US
jurisdictions.
We have affiliates, and our products are manufactured in and
distributed from facilities, located in foreign countries, including countries
in Asia and South Africa. International operations are subject to certain risks
inherent in doing business abroad, including:
|
|
Exposure to political, social and economic
instability;
|
|
|
Expropriation and nationalization;
|
|
|
Withholding and other taxes on remittances and
other payments by subsidiaries;
|
|
|
Difficulties in enforcement of contract and
intellectual property rights;
|
|
|
Exposure to foreign current exchange rates,
interests rates and inflation;
|
|
|
Investment restrictions or requirements; and
Export and import restrictions.
|
We are highly dependent on our foreign affiliates for their
production capabilities and increasing our foreign operations and business
relationships are important elements of our strategy. As a result, our exposure
to the risks described above may be greater in the future. The likelihood of
such occurrences and their potential impact on us varies from country to country
and are unpredictable.
Our operations and assets in China are subject to
significant political and economic uncertainties.
Our products are manufactured and shipped from production
facilities in China. If our manufacturing in China is disrupted, our overall
capacity could be significantly reduced and sales or profitability could be
negatively impacted. Furthermore, changes in PRC laws and regulations, or their
interpretation, or the imposition of confiscatory taxation, restrictions on
currency conversion, imports and sources of supply, devaluations of currency or
the nationalization or other expropriation of private enterprises could have a
material adverse effect on our business, results of operations and financial
condition. Under its current leadership, the Chinese government has been
pursuing economic reform policies that encourage private economic activity and
greater economic decentralization. There is no assurance, however, that the
Chinese government will continue to pursue these policies, or that it will not
significantly alter these policies from time to time without notice.
We may have limited legal recourse under PRC law if
disputes arise under our outsourcing manufacturing arrangements with third
parties.
The Chinese government has enacted some laws and regulations
dealing with matters such as corporate organization and governance, foreign
investment, commerce, taxation and trade. However, their experience in
implementing, interpreting and enforcing these laws and regulations is limited,
and our ability to enforce commercial claims or to resolve commercial disputes
is unpredictable. If our outsourcing manufacturing arrangements are unsuccessful
or other adverse circumstances arise from these arrangements, we face the risk
that our third-party manufacturers may dishonor our purchase orders or unwritten
arrangements. The resolution of these matters may be subject to the exercise of
considerable discretion by agencies of the Chinese government, and forces
unrelated to the legal-merits of a particular matter or dispute may influence
their determination. Any rights we may have to specific performance, or to seek
an injunction under PRC law, in either of these cases, are severely limited, and
without a means of recourse by virtue of the Chinese legal system, we may be
unable to prevent these situations from occurring. The occurrence of any such
events could have a material adverse effect on our business, financial condition
and results of operations.
Our potential inability to adequately protect our
intellectual property during the outsource manufacturing of our products in
China could negatively impact our performance.
Our products are manufactured primarily in China through
third-party outsource manufacturing arrangements. We rely on our third-party
manufacturers to implement customary manufacturer safeguards onsite, such as the
use of confidentiality agreements with employees, to protect our proprietary
information and technologies during the manufacturing process, however, these
safeguards may not effectively prevent unauthorized use of such information and
technical knowhow, or prevent such manufacturers from retaining them. The legal regime governing intellectual property rights
in China is relatively weak and it is often difficult to create and enforce
intellectual property rights or protect trade secrets there. We face risks that
our proprietary information may not be afforded the same protection in China as
it is in countries with well-developed intellectual property laws, and local
laws may not provide an adequate remedy in the event of unauthorized disclosure
of confidential information. Costly and time-consuming litigation could be
necessary to enforce and determine the scope of our proprietary rights in China,
and failure to obtain or maintain trade secret protection could adversely affect
our competitive business position.
- 43 -
We may be exposed to liabilities under the Foreign
Corrupt Practices Act and Chinese anti-corruption laws, and any determination
that we violated these laws could have a material adverse effect on our
business.
We are subject to the Foreign Corrupt Practice Act, or FCPA,
and other laws that prohibit improper payments or offers of payments to foreign
governments and their officials and political parties by U.S. persons and
issuers as defined by the statute, for the purpose of obtaining or retaining
business. We have operations and agreements with third parties worldwide and
such activities create the risk of unauthorized payments or offers of payments
by the employees, consultants, sales agents or distributors of our Company, even
though they may not always be subject to our control. It is our policy to
implement safeguards to discourage these practices by our employees. However,
our existing safeguards and any future improvements may prove to be less than
effective, and the employees, consultants, sales agents or distributors of our
Company may engage in conduct for which we might be held responsible. Violations
of the FCPA or Chinese anti-corruption laws may result in severe criminal or
civil sanctions, and we may be subject to other liabilities, which could
negatively affect our business, operating results and financial condition. In
addition, the U.S. government may seek to hold our Company liable for successor
liability in connection with FCPA violations committed by companies in which we
invest or that we acquire.
Fluctuations in currency exchange rates could negatively
affect our performance.
We are exposed to foreign exchange risk as our revenues and
consolidated results of operations may be affected by fluctuations in foreign
currency as we translate these currencies into U.S. dollars when we consolidate
our financial results. While our reporting currency is the U.S. Dollar, a
portion of our consolidated revenues are denominated in South African Rand, or
ZAR, certain of our assets are denominated in ZAR, and our research and
marketing operations in South Africa utilize South African labor sources. A
decrease in the value of the U.S. dollar in relation to the ZAR could increase
our cost of doing business in South Africa. If the ZAR depreciates against the
U.S. Dollar, the value of our ZAR revenues, earnings and assets as expressed in
our U.S. Dollar financial statements will decline. We have not entered into any
hedging transactions in an effort to reduce our exposure to foreign exchange
risk. Furthermore since 59% of our sales is derived outside the U.S. where the
U.S. dollar is not the primary currency, significant fluctuations in exchange
rates such as the strengthening of the dollar versus our customers local
currency can adversely affect our ability to remain competitive in those areas.
Your ability to bring an action against us, and those of
our officers and directors who are based in South Africa, or to enforce a
judgment against us or recover assets in our possession may be difficult since
any such action or recovery of assets would be an international matter,
involving South African laws and geographic and temporal
disparities
.
We conduct substantial operations in South Africa through our
foreign registered branch and a substantial portion of our assets are located
outside of the United States. In addition, all but two of our management
personnel reside in South Africa. As a result, it may be difficult or impossible
for you to bring an action against us or these individuals in the United States
in the event that you believe that your rights have been violated under
applicable law or otherwise. Even if an action of this type is successfully
brought, the laws of the United States and of South Africa may render a judgment
unenforceable.
RISKS RELATING TO OUR COMMON STOCK
There is not now, and there may not ever be, an active
market for our common stock and we cannot assure you that the common stock will
become liquid or that it will be listed on a securities exchange.
There currently is no active market for our common stock. We
plan to list our common stock as soon as practicable. However, we cannot assure
you that we will be able to meet the initial listing standards of any stock
exchange, or that we will be able to maintain any such listing. Until our common
stock is listed on an exchange, we expect that it would be eligible to continue
being quoted in the over-the-counter market maintained by the OTC Markets Group
Inc. In this venue, however, an investor may find it difficult to obtain
accurate quotations as to the market value of the common stock and trading of
our common stock may be extremely sporadic. For example, several days may pass
before any shares may be traded. A more active market for the common stock may
never develop. In addition, if we failed to meet the criteria set forth in SEC
regulations, various requirements would be imposed by law on broker-dealers who
sell our securities to persons other than established customers and accredited
investors. Consequently, such regulations may deter broker-dealers from
recommending or selling the common stock, which may further affect its
liquidity. This would also make it more difficult for us to raise additional
capital.
- 44 -
We are subject to penny stock regulations and
restrictions that may affect our ability to sell our securities on the secondary
market.
The SEC has adopted regulations that generally define penny
stock to be an equity security that has a market price of less than $5.00 per
share, subject to specific exemptions. The market price of our common stock is
less than $5.00 per share and therefore is a penny stock. Brokers or dealers
effecting transactions in penny stock must disclose certain information
concerning the transaction, obtain a written agreement from the purchaser and
determine that the purchaser is reasonably suitable to purchase the securities.
These rules may restrict the ability of brokers or dealers to sell our common
stock and may affect your ability to sell shares.
Our holding company structure may limit the payment of
dividends.
We have no direct business operations, other than our ownership
of our subsidiaries. While we have no immediate intention of paying dividends,
should we decide in the future to do so, as a holding company, our ability to
pay dividends and meet other obligations depends upon the receipt of dividends
or other payments from our operating subsidiaries and other holdings and
investments. In addition, our operating subsidiaries, from time to time, may be
subject to restrictions on their ability to make distributions to us, including
as a result of restrictive covenants in loan agreements, restrictions on the
conversion of local currency into U.S. dollars or other hard currency and other
regulatory restrictions as discussed below. If we determine that we will pay
dividends to the holders of our common stock, we cannot assure that such
dividends will be paid on a timely basis. As a result, you will not receive any
return on your investment prior to selling your shares in our company and, for
the other reasons discussed in this Risk Factors section, you may not receive
any return on your investment even when you sell your shares in our company and
your shares may become worthless. If future dividends are paid in ZAR,
fluctuations in the exchange rate for the conversion of ZAR into U.S. dollars
may reduce the amount received by U.S. stockholders upon conversion of the
dividend payment into U.S. dollars.
The management team collectively has the power to make
all major decisions regarding the company without the need to get consent from
any stockholder or other person. This discretion could lead to decisions that
are not necessarily in the best interests of minority shareholders.
Our management team collectively owns 41.53% of our common
stock (including our preferred stock which converts on a one-for-one basis to
common stock). Management, therefore, has the power to make all major decisions
regarding our affairs, including decisions regarding whether or not to issue
stock and for what consideration, whether or not to sell all or substantially
all of our assets and for what consideration and whether or not to authorize
more stock for issuance or otherwise amend our charter or bylaws. The management
team is in a position to elect all of our directors and to dictate all of our
policies.