Axion Power International (AXPWQ) 10-Q 15 May 14 2014 Q1 Quarterly report Financial data

Document_And_Entity_Informatio

Document And Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 28, 2014
Document Information [Line Items]	'	'
Entity Registrant Name	'Axion Power International, Inc.	'
Entity Central Index Key	'0001028153	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Smaller Reporting Company	'
Trading Symbol	'AXPW	'
Entity Common Stock, Shares Outstanding	'	221,511,725
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	31-Mar-14	'
Document Fiscal Period Focus	'Q1	'
Document Fiscal Year Focus	'2014	'

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
ASSETS	'	'
Cash and cash equivalents	$1,609,466	$1,169,093
Restricted cash	1,566,678	3,780,341
Accounts receivable	258,141	562,583
Other current assets	160,039	281,055
Inventory, net	2,542,371	2,250,637
Total current assets	6,136,695	8,043,709
Property & equipment, net	6,356,959	6,698,536
Other receivables	26,000	29,000
Total Assets	12,519,654	14,771,245
LIABILITIES AND STOCKHOLDERS’ EQUITY	'	'
Accounts payable	487,146	420,337
Other liabilities	179,265	352,857
Note payable	104,777	104,777
Accrued interest	72,000	52,001
Subordinated convertible notes, net of discount	647,926	583,574
Senior convertible notes, net of discount	390,000	2,046,948
Total current liabilities	1,881,114	3,560,494
Deferred revenue	822,200	922,362
Note payable	191,314	219,722
Derivative liability senior warrants	2,937,788	518,433
Total liabilities	5,832,416	5,221,011
Stockholders’ Equity	'	'
Common stock-350,000,000 shares authorized $0.0001 par value 216,045,389 shares issued & outstanding (180,401,405 in 2013)	21,576	18,039
Additional paid in capital	109,947,789	106,302,018
Retained earnings (deficit)	-103,030,515	-96,518,212
Cumulative foreign currency translation adjustment	-251,612	-251,611
Total stockholders' equity	6,687,238	9,550,234
Total Liabilities & Stockholders' Equity	12,519,654	14,771,245
Series Preferred Stock [Member]	'	'
Stockholders’ Equity	'	'
Convertible preferred stock - 12,500,000 shares designated 0 shares issued and outstanding	$0	$0

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Mar. 31, 2014	Dec. 31, 2013
Convertible preferred stock, shares authorized	12,500,000	12,500,000
Common stock, shares authorized	350,000,000	350,000,000
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares issued	216,045,389	180,401,405
Common stock, shares outstanding	216,045,389	180,401,405
Series A Preferred Stock [Member]	'	'
Preferred Stock Shares Designated	0	0
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0

CONSOLIDATED_STATEMENTS_OF_INC

CONSOLIDATED STATEMENTS OF INCOME and COMPREHENSIVE INCOME (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Net sales	$2,314,300	$2,237,647
Cost of tangible goods sold	2,352,636	2,260,479
Cost of goods sold - idle capacity	437,257	501,441
Gross loss	-475,593	-524,273
Research and development expense	443,926	517,801
Selling, general and administrative expense	1,113,597	1,021,664
Other (income) expense	-43,791	0
Operating loss	-1,989,325	-2,063,738
Change in value of senior warrants, loss	2,419,355	0
Change in value conversion feature senior notes, (gain)	-32	0
Debt discount amortization expense	809,334	0
Interest expense, note payable	5,359	4,580
Extinguishment loss on senior notes conversion	834,000	0
Derivative revaluations expense (income)	0	-1,063
Interest on convertible notes	454,963	0
Loss before income taxes	-6,512,304	-2,067,255
Income taxes	0	0
Net loss	-6,512,304	-2,067,255
Foreign translation adjustment	-1	64
Comprehensive income (loss)	($6,512,305)	($2,067,191)
Loss per share	'	'
Basic and diluted net loss per share (in dollars per share)	($0.03)	($0.02)
Weighted average common shares outstanding (in shares)	201,274,198	113,285,979

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Activities	'	'
Net loss	($6,512,304)	($2,067,255)
Adjustments to reconcile net loss to net cash used by operating activities for non cash items	'	'
Depreciation	371,870	360,332
Derivative revaluations (gain)	0	-1,063
Change in value senior warrants, loss	2,419,355	0
Change in value conversion feature senior notes, (gain)	-32	0
Debt discount amortization expense	742,404	0
Interest accrued, senior convertible notes paid in common stock	434,963	0
Extinguishment loss	834,000	0
Amortization deferred finance costs	66,930	0
Share based compensation expense	37,905	92,685
Changes in operating assets & liabilities	'	'
Accounts receivable	304,442	484,434
Other current assets	54,087	-1,731
Inventory, net	-291,734	85,426
Accounts payable	66,809	44,117
Other current liabilities	-166,123	-32,958
Accrued interest	20,000	0
Deferred revenue	-100,162	-84,983
Cash (used) by operating activities	-1,717,590	-1,120,996
Investing Activities	'	'
Other receivables	3,000	3,000
Purchase of property & equipment	-30,294	-90,820
Cash (used) by investing activities	-27,294	-87,820
Financing Activities	'	'
Repayment of note payable	-28,407	-36,713
Change in restricted cash account	2,213,663	0
Cash provided (used) by financing activities	2,185,256	-36,713
Net change in cash and cash equivalents	440,372	-1,245,529
Effect of exchange rate on cash	-1	64
Cash and cash equivalents - beginning	1,169,093	2,004,391
Cash and cash equivalents - ending	1,609,466	758,926
Supplemental schedule of Non Cash Investing and Financing Activities:	'	'
Common stock issued for principal payments on senior notes:	$2,335,000	'

Financial_Statements

Financial Statements	3 Months Ended
	Mar. 31, 2014
Organization, Consolidation and Presentation Of Financial Statements [Abstract]	'
Basis Of Presentation And Recent Accounting Pronouncements [Text Block]	'
	1	Financial Statements
	In the opinion of management the accompanying unaudited consolidated financial statements contain all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of income and comprehensive income and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). These consolidated financial statements should be read in conjunction with the audited financial statements and footnotes thereto in the Axion Power International, Inc. (“the Company”) Annual Report on Form 10-K for the year ended December 31, 2013. The results of income for the three month period ended March 31, 2014 are not necessarily indicative of results of income and comprehensive income for the Company’s 2014 calendar year.
	Certain amounts for the results of income for the three month period ending March 31, 2013 have been revised to conform to the current year’s presentation.

New_Accounting_Pronouncements

New Accounting Pronouncements	3 Months Ended
	Mar. 31, 2014
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]	'
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	'
	2	New Accounting Pronouncements
	During the first quarter of 2014, there were no new accounting standards, that if adopted, that would have significant impact on the Company’s consolidated financial position, results of operations and cash flows.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2014
Inventory Disclosure [Abstract]	'
Inventory Disclosure [Text Block]	'
		3	Inventories
	Inventories consist of the following:
			March 31,		December 31,
			2014		2013
	Raw materials and components		$	1,082,706	$	1,073,034
	Work in process			1,345,638		1,235,029
	Finished goods			334,622		163,228
	Inventory reserves			-220,595		-220,654
			$	2,542,371	$	2,250,637

Warrants

Warrants	3 Months Ended
	Mar. 31, 2014
Warrants and Rights Note Disclosure [Abstract]	'
Warrants Disclosure [Text Block]	'
	4	Warrants
	Warrants consist of the following:
			Shares		Weighted		Weighted average
					average		remaining contract
					exercise price		term (years)
	Warrants outstanding at January 1, 2014			20,826,436	$	0.31		4.3
	Granted			151,515		0.3		5
	Exercised			-		-		-
	Forfeited or lapsed			-		-		-
	Warrants outstanding at March 31, 2014			20,997,951	$	0.31		4.1

Equity_Compensation

Equity Compensation	3 Months Ended
	Mar. 31, 2014
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]	'
Shareholders Equity and Share-based Payments [Text Block]	'
	5	Equity Compensation
	The Company adopted ASC 718 “Compensation – Stock Compensation” whereby employee-compensation expense related to stock based payments is recorded over the requisite service period based on the grant date fair value of the awards. The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505-50 “Equity-Based Payments to Non-Employees”.  The measurement date for fair value of the equity instruments is determined by the earlier of (i) the date at which commitment for performance by the vendor or consultant is reached, or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.
	The compensation expense for options was $ 37,905 of which $ 26,504 was for Director’s compensation in lieu of cash, for the three months ended March 31, 2014 and had no impact on the diluted loss per share calculation.
	Outstanding compensatory options consist of the following based on grant date as of March 31, 2014:
					Weighted Average
	All Compensatory Options		Number of		Exercise		Fair		Remaining		Aggregate
			Options				Value		Life		Intrinsic
									(years)		Value
	Options outstanding at December 31, 2013			5,192,140	$	1.22	$	0.46		3.7	$	-
	Granted			700,000		0.15		0.06		5		-
	Exercised			-		-		-		-		-
	Forfeited or lapsed			-48,750		3.01		0.85		-		-
	Options outstanding at March 31, 2014			5,843,390	$	1.07	$	0.37		3.8	$	56,925
	Options exercisable at March 31, 2014			4,146,523	$	1.4	$	0.48		2.8	$	18,708
	All non-vested compensatory stock options consist of the following as of March 31, 2014:
			All Options
			Shares		Fair Value
	Options subject to future vesting at December 31, 2013			1,760,411	$	0.27
	Options granted			700,000		0.06
	Options forfeited or lapsed			-48,750		0.85
	Options vested			-714,794		0.16
	Options subject to future vesting at March 31, 2014			1,696,867	$	0.09
	As of March 31, 2014, there was $179,218 of unrecognized compensation related to non-vested options granted under the plans. The Company expects to recognize this expense over a weighted average period of 3.8 years.

Earnings_Loss_Per_Share

Earnings (Loss) Per Share	3 Months Ended
	Mar. 31, 2014
Earnings Per Share [Abstract]	'
Earnings Per Share [Text Block]	'
	6	Earnings (Loss) Per Share
	Basic earnings per share is computed by dividing income available to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. Diluted earnings per share are computed by assuming that any dilutive convertible securities outstanding were converted, with related preferred stock dividend requirements and outstanding common shares adjusted accordingly. It also assumes that outstanding common shares were increased by shares issuable upon exercise of those stock options for which the market price exceeds the exercise price, less shares which could have been purchased by us with the related proceeds. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive.
	If the Company had generated earnings during the three months ended March 31, 2014 and 2013, the Company would have added 8,608,375 and 89,924 respectively, of common equivalent shares to the weighted average shares outstanding to compute the diluted weighted average shares outstanding.

Senior_Convertible_Notes_and_W

Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants	3 Months Ended
	Mar. 31, 2014
Debt Disclosure [Abstract]	'
Debt Disclosure [Text Block]	'
	7	Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants
	On May 8, 2013, the Company consummated the sale of $9 million in aggregate principal amount of senior convertible notes (the “Senior Notes”) due on February 8, 2015 and warrants (the “Senior Warrants”) to various institutional investors (“Investors”). At closing, the Company received $2.76 million in net proceeds, after deducting placement agent fees of $240,000. Total offering expenses were $494,500 and were recorded as deferred financing fees. The $6,000,000 balance of the gross proceeds from the sale of Senior Notes was deposited into a series of control accounts in the Company’s name. Withdrawals from the control accounts are permitted (i) in connection with certain conversions of the Senior Notes or (ii) otherwise, as follows: $500,000 on each 30 day anniversary of the closing date (May 8, 2013) commencing on the 60th day after the closing date until there are no more funds in the control accounts.  The Senior Notes and Senior Warrants and the Subordinated Notes and Subordinated Warrants described below were issued in transactions exempt from registration under Section 4(2) of the Securities Act of 1933, as amended. As of March 31, 2014 we have received $ 5,062,500 funds release and an additional $547,500 due to accelerated note conversions by the investors.
	The following is intended to provide a summary of the terms of the agreements and securities described above. This summary is qualified in its entirety by reference to the full text of the agreements, each of which is attached as an exhibit to our Current Report on Form 8-K filed with the SEC on May 8, 2013. Readers should review those agreements for a complete understanding of the terms and conditions associated with these transactions.
	Securities Purchase Agreement
	The Senior Convertible Notes and Senior Warrants were issued pursuant to the terms of a Securities Purchase Agreement (“Purchase Agreement”) entered into among us and the Investors. The Purchase Agreement provided for the sale of the Senior Convertible Notes and Senior Warrants for gross proceeds of $9 million to us.
	Ranking - The Senior Notes are senior unsecured obligations of the Company, subject only to certain secured obligations of the Company for up to a maximum of $1 million of government issued indebtedness for purchase of plant and machinery and other purchase money financing for property, plant and equipment.
	Maturity Date - Unless earlier converted or redeemed, the Senior Notes mature 21 months from the closing date subject to the right of the investors to extend the date (i) if an event of a default under the Senior Notes has occurred and (ii) for a period of 20 business days after the consummation of a fundamental transaction if certain events occur.
	Interest - The Senior Notes bear interest at the rate of 8% per year, compounded monthly on the first calendar day of each calendar month. The interest rate will increase to 18% per year upon the occurrence and continuance of an event of default (as described below).
	Conversion - The Senior Notes are convertible at any time at the option of the holders, into shares of the Company’s common stock at an initial conversion price of $0.264 per share (subsequent conversions are based on the company’s volume weighted average price per share).  The conversion price is subject to adjustment for stock splits, combinations or similar events. In addition, the conversion price is also subject to a “full ratchet” anti-dilution adjustment if the company issues or is deemed to have issued securities at a price lower than the then applicable conversion price. In the event certain equity conditions are not met, the company may be prevented from issuing shares to satisfy the installments due on the note.
	The Senior Notes may not be converted with respect to any note holder if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the Company’s outstanding shares of common stock. At each holder’s option, the limit on percentage ownership may be raised or lowered to any other percentage not in excess of 9.99%, except that any raise will only be effective upon 61-days’ prior notice to the Company.
	Interest - The Senior Notes bear interest at the rate of 8% per year, compounded monthly on the first calendar day of each calendar month. The interest rate will increase to 18% per year upon the occurrence and continuance of an event of default (as described below).
	Conversion - The Senior Notes are convertible at any time at the option of the holders, into shares of the Company’s common stock at an initial conversion price of $0.264 per share (subsequent conversions are based on the company’s volume weighted average price per share).  The conversion price is subject to adjustment for stock splits, combinations or similar events. In addition, the conversion price is also subject to a “full ratchet” anti-dilution adjustment if the company issues or is deemed to have issued securities at a price lower than the then applicable conversion price. In the event certain equity conditions are not met, the company may be prevented from issuing shares to satisfy the installments due on the note.
	The Senior Notes may not be converted with respect to any note holder if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the Company’s outstanding shares of common stock. At each holder’s option, the limit on percentage ownership may be raised or lowered to any other percentage not in excess of 9.99%, except that any raise will only be effective upon 61-days’ prior notice to the Company.
	Events of Default
	The Senior Notes contain standard and customary events of default including but not limited to: (i) failure to register our Common Stock within certain time periods; (ii) failure to make payments when due under the Senior Notes; and (iii) bankruptcy or insolvency of the Company.
	If an event of default occurs, the Senior Note holders may require the Company to redeem all or any portion of the Senior Notes (including all accrued and unpaid interest thereon), in cash, at a price equal to the greater of (i) up to 125% of the amount being redeemed, depending on the nature of the default, and (ii) the intrinsic value of the shares of Common Stock then issuable upon conversion of the Convertible Note.
	Fundamental Transactions
	The Senior Notes prohibit the Company from entering into specified transactions involving a change of control, unless the successor entity assumes in writing all obligations under the Senior Notes under a written agreement.
	In the event of transactions involving a change of control, the Senior Notes will be redeemable whole or in part (including all accrued and unpaid thereon) at a price equal to the greater 125% of the amount of the face value of the Senior Note being redeemed and the intrinsic value of the shares of Common Stock then issuable upon conversion of the Senior Note being redeemed.
	Warrants
	The Warrants entitle the holders to purchase, in the aggregate, 17,281,107 shares of common stock. The Warrants were exercisable beginning November 8, 2013 and will expire 5 years from the Closing Date. The Warrants are initially exercisable at an exercise price equal to $0.302, subject to certain adjustments. The Warrants may be exercised for cash, provided that, if there is no effective registration statement available registering the exercise of the Warrants, the Warrants may be exercised on a cashless basis.
	The exercise price of the Warrants is subject to adjustment for stock splits, combinations or similar events. In addition, the exercise price is also subject to a “full ratchet” anti-dilution adjustment if we issue or are deemed to have issued securities at a price lower than the then applicable exercise price.
	The Warrants may not be exercised with respect to any warrant holder if, after giving effect to the exercise, the warrant holder together with its affiliates would beneficially own in excess of 4.99% of our outstanding shares of common stock. At each Warrant holder’s option, the limit on percentage ownership may be raised or lowered to any other percentage not in excess of 9.99%, except that any increase will only be effective upon 61-days’ prior notice to the Company.
	The Senior Warrants prohibit the Company from entering into specified transactions involving a change of control, unless the successor entity assumes all obligations under the Senior Warrants under a written agreement before the transaction is completed. When there is a transaction involving a permitted change of control, a Senior Warrant holder will have the right to require us to repurchase their Senior Warrant for a purchase price in cash equal to the Black-Scholes value of the then unexercised portion of the Senior Warrant.
	Accounting for the Conversion Option and Warrants
	The Company first considered whether the notes met the criteria under ASC 480-10-25-14 to be recorded as a liability and determined that, due to the note’s differing potential settlement features, it did not meet the criteria. The Company next considered whether the conversion option met the definition of a derivative, requiring it to be bifurcated and recorded as a liability. Pursuant to ASC 815-40, due to full-ratchet down-round price protection on the conversion price of the Senior Notes and the exercise price of the Warrants, the Company determined that the conversion features of the Senior Notes and the exercise price of the Senior Warrants, the Company determined that the conversion features of the Senior Notes and the exercise features of the Senior Warrants are not indexed to the Company’s owned stock and must be recognized separately as a derivative liability in the consolidated balance sheet, measured at fair value and marked to market each reporting period until the Senior Notes have been fully paid or converted and the Senior Warrants fully exercised.
	The conversion feature of the Senior Notes was valued using the Monte Carlo simulation model under the following assumptions at issuance; (i) expected life of 0.9 years, (ii) volatility of 60%, (iii) risk-free interest rate of 0.10%, and (iv) dividend rate of 0.  The Senior Warrants were also valued using the Monte Carlo simulation model, under the following assumptions: (i) expected life of 5 years, (ii) volatility of 0.80%, (iii) risk-free interest rate of 0.75%, and (iv) dividend rate of zero.   The initial fair values of the conversion feature and the warrants were estimated to be $2.9 million and $1.5 million, respectively, totaling $4.4 million.  This amount was recorded as debt discount on May 8, 2013 and is being amortized over the term of the note using the effective interest method. In addition, debt issuance costs totaling $494,500 are being amortized over the term of the note using the effective interest method. The amortization of the $494,500 was completed as of March 31, 2014.
	As of March 31, 2014, the conversion feature was valued at zero and the Senior Warrants were valued at $2,937,788. The change in fair value of $ 2,414,523 million was recorded as a non-cash loss in change in value of these derivatives for the quarter ended March 31, 2014.  The Senior Warrants and the conversion feature of the Senior Notes are classified as a liability in the consolidated condensed balance sheet as follows:
			Warrants		Conversion			Total
					Feature
	31-Dec-13		$	518,433	$	32		$	518,465
	Adjustment to fair value			2,419,355		-32			2,419,323
	Ending Balance –March 31, 2014		$	2,937,788	$	-		$	2,937,788
	Pursuant to the terms of the Senior Notes, the Company opted to pay the installment payments due prior to March 31, 2014 with shares of the Company’s common stock.  As of March 31 2014, the Company issued 96,828,241 million shares of common stock at a weighted average conversion price of $0.0973 for the first $7,750,000 million in principal and $ 1,615,833 of interest. In addition shares were issued for accelerated conversions netted a release of $860,000 thousand. A loss on extinguishment was recognized in the amount of $2,791,689, for the difference between the installment amount and the fair value of the shares at the issuance date. As of March 31, 2014, the principal balance of the Senior Notes (net of discount) was as follows:
			Convertible Note		Debt			Net Total
					Discount
	31-Dec-13		$	2,725,000	$	-678,052		$	2,046,948
	Installment Payments in Shares			-2,335,000					-2,335,000
	Amortization of debt discount					678,052			678,052
	Ending Balance – March 31, 2014		$	390,000	$	-		$	390,000
	Placement Agent Warrants
	Upon the closing of the issuance of the Senior Notes and Senior Warrants, the Company issued 909,090 warrants to its placement agent and is obligated to issue additional warrants when and if the Company receives further proceeds from the sale of the Senior Notes and Senior Warrants which are currently being held in the control accounts described above. The initial placement agent warrants have been recognized as additional financing fees and are being amortized over the life of the Senior Notes. These warrants were determined not to be derivative instruments, and as such they have been recorded as equity. The fair value of the initial issuance of 909,090 placement agent warrants was estimated to be $144,000 using the Black-Scholes model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 80%, (iii) risk free interest rate of 0.75% and (iv) dividend yield of zero. The total number of warrants issued as of March 31, 2014, is 1,731,060.
	Subordinated Convertible Notes and Subordinated Warrants
	Simultaneously with the closing of the $9 million principal amount Senior Note transaction, the Company sold $1 million principal amount of its Subordinated Convertible Notes (the “Subordinated Notes”) to investors consisting of management and directors of the Company and one individual investor. The sale of the Subordinated Notes did not carry any additional fees and expenses, so the Company received the entire $1 million in proceeds from the Subordinated Notes at closing. The Subordinated Notes are subordinated in right of repayment to the Senior Notes and mature 91 days subsequent to the maturity date of the Senior Notes. The Subordinated Notes bear interest at the rate of 8% per year. Once 2/3 of the Senior Notes have been repaid, then the Subordinated Notes may be converted and/or prepaid in cash so long as there is no Event of Default with respect to the Senior Notes and all Equity Conditions (as defined in the securities purchase agreement for the Senior Notes) are met. The conversion price for the Subordinated Notes is $0.264 per share. The holders of the Subordinated Convertible Notes were issued five year warrants to purchase 1,920,123 shares of Company common stock (“Subordinated Warrants”). Each Subordinated Warrant has an exercise price of $0.302 per share.
	As the conversion feature of the Subordinated Notes and the related warrants were determined not to be derivative instruments, in accordance with the guidance in ASC Topic 470-20 Debt with Conversion and Other Options (“ASC 470”), the Company first calculated the fair value of the warrants issued and then calculated the relative value of the note and determined that there was a beneficial conversion feature in the amount of $246,000. Conversion of the Subordinated Notes is conditioned upon 2/3 of the Senior Notes being repaid, and therefore the beneficial conversion feature was determined to be contingent and therefore was not booked at the date of issuance. During the fourth quarter of 2013, the contingency was met and therefore the beneficial conversion feature was recorded to additional paid in capital with the offset to debt discount. The debt discount is being amortized over the remaining term of the subordinated convertible notes using the effective interest method.
	The fair value of the warrants, issued in connection with the Subordinated Notes is $304,000 in the aggregate and was calculated using the Black-Scholes option pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 80%, (iii) risk free interest rate of 0.75% and (iv) dividend yield of zero.
	The relative value of the warrants to the note was $263,000, which was the amount recorded as original debt discount.
	The balance at March 31, 2014, related to the Subordinated Notes was comprised of:
	Convertible notes payable, related and unrelated parties at December 31, 2013		$	1,000,000
	Unamortized debt discount			352,074
	Ending balance at March 31, 2014		$	647,926
	Fair Value Disclosure
	The Company has two Level 3 financial instruments, Senior Warrants and the conversion feature associated with the Senior Notes, which are both recorded at fair value on a periodic basis.  The Senior Warrants and the conversion feature are evaluated under the hierarchy of FASB ASC Subtopic 480-10, FASB ASC Paragraph 815-25-1 and FASB ASC Subparagraph 815-10-15-74 addressing embedded derivatives. The fair value of the warrants and the conversion feature are estimated using the Monte Carlo simulation model. As of March 31, 2014, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:
			Fair
			Value		Level 1		Level 2		Level 3
	Embedded note conversion feature		$	-					$	-
	Warrant liability		$	2,937,788					$	2,937,788

Going_Concern

Going Concern	3 Months Ended
	Mar. 31, 2014
Going Concern [Abstract]	'
Going Concern [Text Block]	'
		8	Going concern
	The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. At March 31, 2014 the Company’s working capital was $4.3 million.  The financial resources of the Company will not provide sufficient funds for the Company’s operations beyond October 1, 2014, as those operations currently exist. Subsequent funding will be required to fund the Company’s ongoing operations, working capital, and capital expenditures beyond October 1, 2014. No assurances can be given that the Company will be successful in arranging the further funds needed to continue the execution of its business plan, which includes the development and commercialization of new products, or even if further funding is available, upon what terms. Failure to obtain such funds on terms acceptable to the Company’s management will require management to substantially curtail, if not cease, operations, which will result in a material adverse effect on the financial position and results of operations of the Company. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might occur if the Company is unable to continue as a going concern

Inventories_Tables

Inventories (Tables)	3 Months Ended
	Mar. 31, 2014
Inventory Disclosure [Abstract]	'
Schedule of Inventory, Current [Table Text Block]	'
	Inventories consist of the following:
		March 31,		December 31,
		2014		2013
	Raw materials and components	$	1,082,706	$	1,073,034
	Work in process		1,345,638		1,235,029
	Finished goods		334,622		163,228
	Inventory reserves		-220,595		-220,654
		$	2,542,371	$	2,250,637

Warrants_Tables

Warrants (Tables)	3 Months Ended
	Mar. 31, 2014
Warrants and Rights Note Disclosure [Abstract]	'
Schedule of Stockholders Equity Note, Warrants or Rights [Table Text Block]	'
	Warrants consist of the following:
		Shares		Weighted		Weighted average
				average		remaining contract
				exercise price		term (years)
	Warrants outstanding at January 1, 2014		20,826,436	$	0.31		4.3
	Granted		151,515		0.3		5
	Exercised		-		-		-
	Forfeited or lapsed		-		-		-
	Warrants outstanding at March 31, 2014		20,997,951	$	0.31		4.1

Equity_Compensation_Tables

Equity Compensation (Tables)	3 Months Ended
	Mar. 31, 2014
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]	'
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	'
	Outstanding compensatory options consist of the following based on grant date as of March 31, 2014:
				Weighted Average
	All Compensatory Options	Number of		Exercise		Fair		Remaining		Aggregate
		Options				Value		Life		Intrinsic
								(years)		Value
	Options outstanding at December 31, 2013		5,192,140	$	1.22	$	0.46		3.7	$	-
	Granted		700,000		0.15		0.06		5		-
	Exercised		-		-		-		-		-
	Forfeited or lapsed		-48,750		3.01		0.85		-		-
	Options outstanding at March 31, 2014		5,843,390	$	1.07	$	0.37		3.8	$	56,925
	Options exercisable at March 31, 2014		4,146,523	$	1.4	$	0.48		2.8	$	18,708
Schedule of Nonvested Share Activity [Table Text Block]	'
	All non-vested compensatory stock options consist of the following as of March 31, 2014:
		All Options
		Shares		Fair Value
	Options subject to future vesting at December 31, 2013		1,760,411	$	0.27
	Options granted		700,000		0.06
	Options forfeited or lapsed		-48,750		0.85
	Options vested		-714,794		0.16
	Options subject to future vesting at March 31, 2014		1,696,867	$	0.09

Senior_Convertible_Notes_and_W1

Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants (Tables)	3 Months Ended
	Mar. 31, 2014
Debt Disclosure [Abstract]	'
Schedule of Debt Conversions [Table Text Block]	'
	The Senior Warrants and the conversion feature of the Senior Notes are classified as a liability in the consolidated condensed balance sheet as follows:
		Warrants		Conversion			Total
				Feature
	31-Dec-13	$	518,433	$	32		$	518,465
	Adjustment to fair value		2,419,355		-32			2,419,323
	Ending Balance –March 31, 2014	$	2,937,788	$	-		$	2,937,788
Schedule of Debt [Table Text Block]	'
	As of March 31, 2014, the principal balance of the Senior Notes (net of discount) was as follows:
		Convertible Note		Debt			Net Total
				Discount
	31-Dec-13	$	2,725,000	$	-678,052		$	2,046,948
	Installment Payments in Shares		-2,335,000					-2,335,000
	Amortization of debt discount				678,052			678,052
	Ending Balance – March 31, 2014	$	390,000	$	-		$	390,000
Schedule of Subordinated Borrowing [Table Text Block]	'
	The balance at March 31, 2014, related to the Subordinated Notes was comprised of:
	Convertible notes payable, related and unrelated parties at December 31, 2013	$	1,000,000
	Unamortized debt discount		352,074
	Ending balance at March 31, 2014	$	647,926
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]	'
	As of March 31, 2014, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:
		Fair
		Value		Level 1		Level 2		Level 3
	Embedded note conversion feature	$	-					$	-
	Warrant liability	$	2,937,788					$	2,937,788

Inventories_Details

Inventories (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Raw materials and components	$1,082,706	$1,073,034
Work in process	1,345,638	1,235,029
Finished goods	334,622	163,228
Inventory reserves	-220,595	-220,654
Inventory, Net	$2,542,371	$2,250,637

Warrants_Details

Warrants (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Warrants Shares -outstanding, Beginning Balance	20,826,436	'
Warrants Shares - Granted	151,515	'
Warrants Shares - Exercised	0	'
Warrants Shares - Forfeited or lapsed	0	'
Warrants Shares - outstanding, Ending Balance	20,997,951	20,826,436
Weighted Average Exercise Price - Warrants outstanding, Beginning Balance	$0.31	'
Weighted Average Exercise Price - Warrants Shares - Granted	$0.30	'
Weighted Average Exercise Price - Warrants Shares - Exercised	$0	'
Weighted Average Exercise Price - Warrants Shares - Forfeited or lapsed	$0	'
Weighted Average Exercise Price - Warrants outstanding, Ending Balance	$0.31	$0.31
Weighted Average Remaining Contract Term - Warrants outstanding	'4 years 1 month 6 days	'4 years 3 months 18 days
Weighted Average Remaining Contract Term - Warrants Shares - Granted	'5 years	'
Weighted Average Remaining Contract Term - Warrants Shares - Exercised	'0 years	'
Weighted Average Remaining Contract Term - Warrants Shares - Forfeited or lapsed	'0 years	'

Equity_Compensation_Details

Equity Compensation (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Options - Outstanding - Beginning balance	5,192,140	'
Options - Granted	700,000	'
Options - Exercised	0	'
Options - Forfeited or lapsed	-48,750	'
Options - Outstanding - Ending balance	5,843,390	5,192,140
Options - Exercisable	4,146,523	'
Weighted Average Exercise - Outstanding - Beginning balance	$1.22	'
Weighted Average Exercise - Granted	$0.15	'
Weighted Average Exercise - Exercised	$0	'
Weighted Average Exercise - Forfeited or lapsed	$3.01	'
Weighted Average Exercise - Outstanding - Ending balance	$1.07	$1.22
Weighted Average Exercise - Exercisable	$1.40	'
Weighted Average, Fair Value - Outstanding - Beginning balance	$0.46	'
Weighted Average, Fair Value - Granted	$0.06	'
Weighted Average, Fair Value - Exercised	$0	'
Weighted Average, Fair Value - Forfeited or lapsed	$0.85	'
Weighted Average, Fair Value - Outstanding - Ending balance	$0.37	$0.46
Weighted Average, Fair Value - Exercisable	$0.48	'
Weighted Average, Remaining Life (years) - Outstanding	'3 years 9 months 18 days	'3 years 8 months 12 days
Weighted Average, Remaining Life (years) - Granted	'5 years	'
Weighted Average, Remaining Life (years) - Exercisable	'2 years 9 months 18 days	'
Aggregate Intrinsic Value - Outstanding	$0	'
Aggregate Intrinsic Value - Outstanding	56,925	0
Aggregate Intrinsic Value - Exercisable	$18,708	'

Equity_Compensation_Details_1

Equity Compensation (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'
Options subject to future vesting - Shares	1,760,411
Options granted - Shares	700,000
Options forfeited or lapsed - Shares	-48,750
Options vested - Shares	-714,794
Options subject to future vesting - Shares	1,696,867
Options subject to future vesting - Fair Value	$0.27
Options granted - Fair Value	$0.06
Options forfeited or lapsed - Fair Value	$0.85
Options vested - Fair Value	$0.16
Options subject to future vesting - Fair Value	$0.09

Equity_Compensation_Details_Te

Equity Compensation (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'
Allocated Share-based Compensation Expense	$37,905
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	179,218
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	'3 years 9 months 18 days
Director [Member]	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'
Allocated Share-based Compensation Expense	$26,504

EarningsLoss_Per_Share_Details

Earnings/Loss Per Share (Details Textual)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Schedule of Earnings Per Share [Line Items]	'	'
Weighted Average Number of Shares Outstanding, Diluted	8,608,375	89,924

Senior_Convertible_Notes_and_W2

Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'
Warrants, Beginning Balance	$518,465
Adjustment to fair value	2,419,323
Warrants, Ending Balance	2,937,788
Warrant [Member]	'
Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'
Warrants, Beginning Balance	518,433
Adjustment to fair value	2,419,355
Warrants, Ending Balance	2,937,788
Conversion Feature [Member]	'
Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'
Warrants, Beginning Balance	32
Adjustment to fair value	-32
Warrants, Ending Balance	$0

Senior_Convertible_Notes_and_W3

Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2014
Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'
Convertible Note	$2,725,000
Installment Payment in Shares, Convertible Note	-2,335,000
Amortization of debt discount, Convertible Note	0
Ending Balance, Convertible Debt	390,000
Debt Discount	-678,052
Installment Payment in Shares, Debt Discount	0
Amortization of Debt Discount, Debt Discount	678,052
Ending Balance, Debt discount	0
Net Total	2,046,948
Installment Payment in Shares, Net	-2,335,000
Amortization of debt discount, Net	678,052
Ending balance -Net	$390,000

Senior_Convertible_Notes_and_W4

Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Subordinated Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'	'
Unamortized debt discount	$0	$678,052
Subordinated Debt [Member]	'	'
Subordinated Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'	'
Convertible notes payable, related and unrelated parties at December 31, 2013	'	1,000,000
Unamortized debt discount	352,074	'
Ending balance at March 31, 2014	$647,926	'

Senior_Convertible_Notes_and_W5

Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants (Details 3) (USD $)	Mar. 31, 2014
Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'
Embedded note conversion feature	$0
Warrant liability	2,937,788
Fair Value, Inputs, Level 3 [Member]	'
Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'
Embedded note conversion feature	0
Warrant liability	$2,937,788

Senior_Convertible_Notes_and_W6

Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants (Details Textual) (USD $)	3 Months Ended			3 Months Ended		12 Months Ended		3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2014	Dec. 31, 2013	8-May-13	Mar. 31, 2014	Mar. 31, 2014
			Warrant [Member]	Placement Agent Warrants [Member]	Senior Notes [Member]	Senior Notes [Member]	Senior Notes [Member]	Subordinated Notes [Member]	Senior Warrants [Member]
Senior Convertible Notes and Warrants, and Subordinated Notes and Warrants [Line Items]	'	'	'	'	'	'	'	'	'
Senior Notes	'	'	'	'	'	'	$9,000,000	'	'
Net Proceeds From Issuance Of Senior Note	'	'	'	'	2,760,000	'	'	'	'
Placement Agent Fee	'	'	'	'	240,000	'	'	'	'
Deferred Financing Fee	'	'	'	'	494,500	'	'	'	'
Proceeds From Issuance Of Senior Note - Control Account	'	'	'	'	6,000,000	'	'	'	'
Monthly Withdrawal From Control Accounts	'	'	'	'	500,000	'	'	'	'
Total Withdrawals From Control Accounts	'	'	'	'	5,062,500	'	'	'	'
Subordinated Convertible Note	'	'	'	'	'	'	'	1,000,000	'
Debt Instrument, Interest Rate, Stated Percentage	'	'	'	'	8.00%	'	'	'	'
Default Interest Rate Increase Per Year	'	'	'	'	18.00%	'	'	'	'
Debt Instrument, Convertible, Conversion Price	$0.10	'	'	'	'	'	'	$0.26	'
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	17,281,107	'	'	'	'	'	'	1,920,123	'
Class Of Warrant Or Right Expiry Period	'	'	'	'	'5 years	'	'	'5 years	'
Class of Warrant or Right, Exercise Price of Warrants or Rights	'	'	'	'	'	'	'	0.302	'
Fair Value Assumptions, Expected Term	'	'	'	'	'	'	'	'10 months 24 days	'
Fair Value Assumptions, Expected Volatility Rate	'	'	'	60.00%	80.00%	'	'	80.00%	'
Fair Value Assumptions, Risk Free Interest Rate	'	'	'	0.75%	0.10%	'	'	0.75%	'
Fair Value Assumptions, Expected Dividend Rate	'	'	'	'	0.00%	'	'	0.00%	'
Gains (Losses) on Extinguishment of Debt, Total	-834,000	0	'	'	2,791,689	'	'	'	'
Warrants Issued	1,731,060	'	'	'	909,090	'	'	304,000	'
Fair Value Of Warrants	'	'	'	'	144,000	'	'	'	'
Proceeds from Issuance of Subordinated Notes	'	'	'	'	'	'	'	1,000,000	'
Debt Instrument, Convertible, Beneficial Conversion Feature	32	0	'	'	'	246,000	'	'	'
Debt Discount	'	'	'	'	'	'	'	263,000	'
Decrease In Convertible Debt Liability	'	'	'	'	860,000,000	'	'	'	'
Debt Instrument Default Redemption Price, Percentage	'	'	'	'	125.00%	'	'	'	'
Accelerated Note Conversions	'	'	'	'	547,500	'	'	'	'
Debt Instrument, Periodic Payment, Principal	'	'	'	'	7,750,000,000,000	'	'	'	'
Debt Instrument, Periodic Payment, Interest	'	'	'	'	1,615,833	'	'	'	'
Debt Instrument, Non-cash loss in value	'	'	'	'	2,414,523,000,000	'	'	'	'
Percentage Of Holdings	'	'	4.99%	'	4.99%	'	'	'	'
Percentage Of Holdings Adjustment	'	'	9.99%	'	9.99%	'	'	'	'
Debt Conversion, Converted Instrument, Shares Issued	'	'	'	'	96,828,241,000,000	'	'	'	'
Debt Instrument, Fair Value Disclosure	$4,400,000	'	'	'	$2,900,000	'	'	'	$1,500,000

Going_Concern_Details_Textual

Going Concern (Details Textual) (USD $)	Mar. 31, 2014
In Millions, unless otherwise specified
Going Concern [Line Items]	'
Working Capital	$4.30