Annual report [Section 13 and 15(d), not S-K Item 405]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


———————

FORM 10-K

———————


þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2014

or


¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____________ to _____________


———————

DS Healthcare Group, Inc.

(Exact name of registrant as specified in its charter)

———————


Florida

001-35763

20-8380461

(State or Other Jurisdiction

(Commission

(I.R.S. Employer

of Incorporation or Organization)

File Number)

Identification No.)


1601 Green Road

Pompano Beach, FL 33064

(Address of Principal Executive Office) (Zip Code)


(888) 404-7770

(Registrant’s telephone number, including area code)


N/A

(Former name or former address, if changed since last report)

———————

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Stock, Par Value $0.001

The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

(Title of Class)

———————

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes þ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232-405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)   Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes þ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter ($1.74 per share).  $16,997,256 on June 30, 2014.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.  As of April 11, 2015 there were 16,788,571 shares outstanding.







TABLE OF CONTENTS

PAGE

PART I

Item 1.

Business.

1

Item 1A.

Risk Factors.

8

Item 1B.

Unresolved Staff Comments.

8

Item 2.

Properties.

8

Item 3.

Legal Proceedings.

8

Item 4.

Mine Safety Disclosures.

8

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

9

Item 6.

Selected Financial Data.

9

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation.

9

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.

23

Item 8.

Financial Statements and Supplementary Data.

23

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

23

Item 9A.

Controls and Procedures.

23

Item 9B.

Other Information.

25

PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

26

Item 11.

Executive Compensation.

29

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

31

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

32

Item 14.

Principal Accounting Fees and Services.

33

PART IV

Item 15.

Exhibits, Financial Statement Schedules.

34

SIGNATURES

35






PART I

Item 1.

Business.

Overview

DS Healthcare Group, Inc. (formerly Divine Skin, Inc.) (d/b/a DS Laboratories) is a Florida corporation organized on January 26, 2007. DS Healthcare Group, Inc. and its subsidiaries (collectively, the “Company” or “DS Healthcare”) develop proprietary technologies and products for hair care and personal care needs.  Management believes the Company is currently a leading innovator of (1) “Liposome Technology”, which acts as a carrier agent, and has been designed to enhance the action of the active ingredients in our products, and (2) “Nanosome Technology”, which acts as a delivery vehicle, and has been designed to infuse active compounds into targeted cells for increased efficiency of our products.  The Company has grown steadily since inception with a network of retailers across North America and distributors throughout Europe, Asia and South America. DS Healthcare currently researches and develops (formulates) its own products. We currently offer the following lines of products:


·

hair care

·

skin care

·

personal care

·

OTC Drugs (For export only)


Our current principal products are discussed below. We formulate, market and sell these products through specialty retailers, spas, salons, pharmacies and other distributors. Our products are compounded through various third party compounders on an order–by-order basis.


Our Company

We are a global personal-care, product development and marketing company. We develop and market proprietary branded personal care products that address thinning hair conditions, skin care and other personal care needs.  We currently research, develop and formulate our own products, consistent with our mission to provide products that make a meaningful difference in the lives of our customers.


We compete in the personal care markets by focusing on developing innovative technologies and products that more adequately meet the personal care needs of consumers. Our current products are primarily sold under our “DS Laboratories” brand. We also sell certain products under our “Polaris Labs” and “Sigma Skin” brands. We market and sell these products through salons, spas, department stores, specialty retailers and distributors.


We have grown steadily since our inception through sales to a variety of specialty retailers, salon chains and distributors in North America and through distributors for international sales. We have a growing base of domestic and international customers with several large salon chains and distributors, which collectively sell to over 10,000 salons throughout the world.  Our current principal products, which are all sold under our DS Laboratories brand, are set forth below.


Thinning Hair

Hair Care

Skin Care

Personal Care

Revita

Dandrene

Hydroviton.CR

Nirena

Revita LT

Nia

Keramene

Spectral.Lash

Spectral

Radia

Oligio.DX

Trioxil




1




Our Key Strategies

We offer a broad range of branded, personal care products that address various personal needs applications in the hair care market, specifically technology for thinning hair.  All of our products and technology are a result of internally researched and developed formulas.  Our product development activities are not limited to any particular product category; rather, we take a broad approach to personal care applications and develop products that serve specific needs. The ingredients within our products implement technologies that utilize encapsulation techniques which we believe improve the effectiveness and spectrum of the active ingredients of our products. Our thinning hair technology, Nanoxidil, a proprietary compound, for example, is designed to stimulate follicles on the entire scalp. We believe Nanoxidil surpasses competing products in terms of efficacy and tolerability due to its higher level of penetration and prolonged therapeutic effect because of its relatively low molecular weight.  Our research into the mechanism of thinning hair has also led us to develop applications to suppress unwanted

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.

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