Annual report pursuant to Section 13 and 15(d)

Note 10 - Segment Information

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Note 10 - Segment Information
 12 Months Ended
Dec. 31, 2012
Segment Reporting Disclosure [Text Block]
10.  SEGMENT INFORMATION

The Company sells products to a distributor network that operates in a seamless manner from market to market, except for the Chinese market.  The Company believes that each of its operating segments should be aggregated into a single reportable segment as they have similar economic characteristics.  In making this determination, the Company believes that each of the operating segments are similar in the nature of the products sold, the product acquisition process, the types of customers products are sold to, the methods used to distribute the products, and the nature of the regulatory environment.

The Company’s e-commerce retail business launched in China during June 2007 does not require a direct selling license and allows for discounts on volume purchases.  There is no separate segment manager who is held accountable by our chief operating decision-makers, or anyone else, for operations, operating results and planning for the Chinese market on a stand-alone basis.  Accordingly, we consider ourselves to be in a single reporting segment and operating unit structure.

The Company’s net sales by market are as follows (in thousands):

   
Year Ended December 31,
 
   
2011
   
2012
 
Net sales to external customers:
           
North America
  $ 1,487     $ 1,816  
Hong Kong
    21,038       26,235  
China
    1,131       1,081  
Taiwan
    1,931       2,074  
South Korea
    445       285  
Japan
    240       168  
Russia
    4,537       5,540  
Europe
    353       315  
Total net sales
  $ 31,162     $ 37,514  

The Company’s long-lived assets, which consist of property and equipment and intangible assets, including goodwill, by market are as follows (in thousands):

   
December 31,
 
   
2011
   
2012
 
Long-lived assets:
           
North America
  $ 1,768     $ 1,802  
Hong Kong
    9       12  
China
    41       63  
Other foreign countries
    14       8  
Total long-lived assets
  $ 1,832     $ 1,885  

Due to system constraints, it is impracticable for the Company to separately disclose product and enrollment package revenue for the years presented.