NMI Health (NANM) 10-K 23 Jul 15 2013 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2013	Jul. 22, 2015	Jun. 30, 2013
Document And Entity Information
Entity Registrant Name	NMI Health, Inc.
Entity Central Index Key	1,088,213
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 2,431,302
Entity Common Stock, Shares Outstanding		24,294,118
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,013

Balance Sheets

Balance Sheets - USD ($)	Dec. 31, 2013	Dec. 31, 2012
CURRENT ASSETS
Cash	$ 660	$ 9,409
Accounts receivable, net	7,553	0
Prepaid expenses	30,000	0
Inventory, net	0	42,165
Total current assets	38,213	51,574
FIXED ASSETS
Equipment	933	973
Accumulated depreciation	(78)	(519)
Net fixed assets	855	454
OTHER ASSETS
Non-performing assets	4,230	4,230
Total assets	43,298	56,258
CURRENT LIABILITIES
Customer advances	15,047	12,545
Accounts payable	205,517	449,331
Accounts payable - related party	7,707	10,380
Advances from related party	420,200	207,200
Accrued expenses	775,390	687,336
Notes payable	710,058	521,157
Note payable - related party	0	25,000
Total current liabilities	2,133,919	1,912,949
LONG-TERM DEBT
Note payable - related party	30,000	0
Total long term liabilities	30,000	0
Total liabilities	2,163,919	1,912,949
STOCKHOLDERS' DEFICIT
Common stock, $.001 par, 100,000,000 shares authorized; 10,465,619 outstanding in 2013 and 9,869,544 outstanding in 2012	10,466	9,870
Additional paid-in capital	21,874,494	21,713,090
Accumulated deficit	(24,005,581)	(23,579,651)
Total stockholders' deficit	(2,120,621)	(1,856,691)
Total liabilities and stockholders' deficit	$ 43,298	$ 56,258

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2013	Dec. 31, 2012
STOCKHOLDERS' DEFICIT
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, outstanding shares	10,465,619	9,869,544

Statements of Operations

Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
NET SALES	$ 235,291	$ 454,513
COSTS AND EXPENSES
Cost of sales	179,112	328,032
Research and development	16,268	3,379
Selling, general and administrative	618,016	920,298
Provision for inventory obsolescence	41,554	7,609
LOSS FROM OPERATIONS	(619,659)	(804,805)
OTHER INCOME (EXPENSE)
Interest expense	(42,090)	(43,598)
Gain from sale of investment	26,973	0
Gain on settlement of vendor liabilities and other	208,846	17,284
Total other income (expense)	193,729	(26,314)
NET LOSS	$ (425,930)	$ (831,119)
BASIC AND DILUTED LOSS PER SHARE	$ (0.04)	$ (0.09)
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING	10,178,453	8,912,950

Shareholders Equity

Shareholders Equity - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Amount at Dec. 31, 2011	$ 8,025	$ 21,200,026	$ (22,748,532)	$ (1,540,481)
Beginning Balance, Shares at Dec. 31, 2011	8,024,970
Common stock issued for cash, Amount	$ 360	50,640		51,000
Common stock issued for cash, Shares	360,000
Common stock issued for settlement of accounts payable and acrrued liabilities, Amount	$ 509	169,354		169,863
Common stock issued for settlement of accounts payable and accrued liabilities, Shares	508,567
Common stock issued for settlement of relatated party accounts payable, Amount	$ 29	8,674		8,703
Common stock issued for settlement of relatated party accounts payable, Shares	29,010
Common stock issued for advances from related parties, Amount	$ 40	3,960		4,000
Common stock issued for advances from related parties, Shares	40,000
Common stock issued for services, Amount	$ 881	274,017		274,898
Common stock issued for services, Shares	881,218
Common stock issued for reimbursed expenses, Amount	$ 26	6,419		6,445
Common stock issued for reimbursed expenses, Shares	25,779
Net loss			$ (831,119)	(831,119)
Ending Balance, Amount at Dec. 31, 2012	$ 9,870	21,713,090	$ (23,579,651)	(1,856,691)
Ending Balance, Shares at Dec. 31, 2012	9,869,544
Common stock issued for settlement of relatated party accounts payable, Amount	$ 130	38,870		39,000
Common stock issued for settlement of relatated party accounts payable, Shares	130,000
Common stock issued for services, Amount	$ 466	122,534		123,000
Common stock issued for services, Shares	465,909
Additional shares required to permit reverse split	166
Net loss			$ (425,930)	(425,930)
Ending Balance, Amount at Dec. 31, 2013	$ 10,466	$ 21,874,494	$ (24,005,581)	$ (2,120,621)
Ending Balance, Shares at Dec. 31, 2013	10,465,619

Statements of Cash Flows

Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (425,930)	$ (831,119)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	191	498
Provision for bad debt	1,514	0
Provision for inventory obsolescence	41,554	7,609
Loss on disposition of equipment	341	0
Loss on debt settlement	10,604	0
Common stock issued for services rendered	0	274,898
Common stock issued for company expenses incurred	0	6,445
Gain on settlement of vendor liabilities	(219,450)	(17,284)
Changes in operating assets and liabilities:
Accounts receivable, net	(1,514)	422
Other receivable	(7,553)	0
Prepaid expenses and other	(30,000)	14,543
Inventory	611	(35,317)
Customer advances	2,502	(137,972)
Accounts payable	164,536	25,279
Accounts payable - related parties	(2,673)	0
Accrued expenses	214,451	465,746
Net cash used in operating activities	(250,816)	(226,252)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	(933)	0
Cash used in investing activities	(933)	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from advances of related party	213,000	119,700
Proceeds from issuance of related party short term note payable	30,000	0
Proceeds from issuance of short-term note payable	0	5,149
Repayments of short-term note payable	0	(1,692)
Proceeds from issuance of common shares	0	51,000
Net cash provided by financing activities	243,000	174,157
NET INCREASE (DECREASE) IN CASH	(8,749)	(52,095)
CASH AT BEGINNNING OF PERIOD	9,409	61,504
CASH AT END OF PERIOD	660	9,409
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	0	311
Cash paid for income taxes	0	0
NON-CASH INVESTING AND FINANCING ACTIVITIES
Reduction of note payable due to a reduction in prepaid insurance	0	3,457
Increase in notes payable due to reduction in accounts payable and accrued liabilities	264,600	0
Common stock issued for prior year services rendered	123,000	0
Common stock issued for settlement of accounts payable and accrued liabilities	0	169,863
Common stock issued for note payable and accrued liabilities	28,396	0
Common stock issued for settlement of related party advances	0	4,000
Property reclassified to other assets	0	4,230
Common stock issued for settlement of related party accounts payable	0	8,703
Note payable reclassified from long-term note to short-term note	$ 0	$ 23,430

1. Nature of Business and Summa

1. Nature of Business and Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2013
Accounting Policies [Abstract]
1. Basis of Presentation	Nature of business NMI Health, Inc. (“we”, “our” or the “Company”) is a materials-technology development company focused on health and wellness-related markets. The Company is evolving from a specialty filter products company that developed a state-of-the-art air filtration technology for removing infectious bacteria and viruses in air flow systems into a company that plans to provide a proprietary line of antibacterial and antimicrobial products for the health and hospitality industries. Significant accounting policies Estimates Inventory Loss per share Revenue recognition and sales returns. Fair value measurements Fair Value Measurement The three levels of the fair value hierarchy defined by ASC 820 are as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 inputs to value warrants issued and Level 1 inputs to value its common stock transactions. Income taxes Income Taxes Management has conducted an evaluation of the Company's tax positions taken on returns that remain subject to examination and has concluded that there are no uncertain tax positions, as defined in ASC 740, that require recognition or disclosure in the financial statements. Interest and penalties incurred by the Company, if any, related to income tax matters are classified as part of the income tax provision/benefit. Stock-based compensation Reclassifications

2. Notes Payable

2. Notes Payable	12 Months Ended
	Dec. 31, 2013
Debt Disclosure [Abstract]
2. Notes Payable	In August, 2013 a judgment was awarded to Applied Nanoscience, Inc. against the Company in the amount of $601,041, including interest and attorney fees. The Company transferred $188,901 from this vendor’s payable and related accrued interest to accommodate the increase in the judgement amount and, in addition, recognized $75,699 in gains from reversing excess prior year amounts for accrued interest and vendor payables. The Company maintains various unsecured short-term loans and notes payable totaling $710,058 at December 31, 2013 ($521,157 at December 31, 2012), including a $601,041 judgment from Applied Nanoscience, Inc. (Note 6, Litigation). A significant shareholder loaned the Company $25,000 with interest at prime, plus 2%, payable in six months from February 22, 2012. On August 1, 2013, the shareholder converted this note of $25,000, plus interest of $3,396, into 130,000 common shares. A $10,604 loss on settlement of debt was generated, inasmuch as the fair value exceeded the carrying value of such debt. On September 24, 2013 the same shareholder provided an unsecured two year note of $30,000, plus interest at an annual rate of 10%. At December 31, 2013, all notes payable continue to bear interest according to their original terms. Interest expense for 2013 totaled $42,090 for which no interest payments were paid during the year. This compares with $43,598 interest expense incurred during 2012 of which $311 in cash payments were made during the year.

3. Share-Based Transactions

3. Share-Based Transactions	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements
3. Share-Based Transactions	Restricted shares On March 26, 2013 a majority of shareholders approved a 1 for 10 reverse split of its outstanding shares. The number of authorized shares remains at 100,000,000 common shares. In addition, the Company name was changed to NMI Health, Inc. The following table summarizes the restricted share issuances during the years ended December 31, 2013 and 2012: Summary of Stock Issuances during the Years ended December 31, 2013 and 2012 Settlement of Accounts Payable and Accrued Liabilities Settlement of Advances and Note Payables -Related Party Compensation and Expenses Cash from Offerings Year Ended Dec. 31, Common Shares Fair Value Carrying Value of Payables Common Shares Fair Value Carrying Value of Related Advances Common Shares Fair Value Common Shares Fair Value Cash Proceeds 2013 - - - 130,000 $ 39,000 $ 28,396 465,909 $ 123,000 - - - 2012 508,567 $ 169,863 $ 172,228 690,099 $ 12,703 $ 12,703 906,998 $ 281,343 360,000 $ 51,000 $ 51,000 During 2013, a significant shareholder converted his note of $25,000, plus interest of $3,396, into 130,000 common shares. A $10,604 loss on settlement of debt was generated, inasmuch as the fair value exceeded the carrying value of such debt. During 2013, 465,909 shares were issued to an executive officer with a fair value of $123,000 for services and operating expenses incurred during the prior year. During 2012, a total of 906,998 shares were issued with a fair value of $281,343 for services and operating expenses reimbursed during the year. For 2012, the Company issued 508,567 shares with a fair value of $169,863 to settle unrelated party accounts payable and prior period accrued payroll liabilities. An additional gain of $14,919 was generated from the expiration of applicable statutes of limitations. Further, the Company issued 690,099 shares with a fair value of $12,703 to settle advances and payables to related party with the same amount of carrying value. While there were no cash proceeds generated from private placements during 2013, the Company in 2012 issued 360,000 shares of common stock for the $51,000 in cash proceeds received from four individual investors in private placements. Warrants Stock options A summary of the status of our outstanding stock options at December 31, 2013 and December 31, 2012 and the related changes during the periods then ended is presented below: December 31, 2013 December 31, 2012 Shares Weighted-Average Exercise Price Weighted – Average Remaining Life (Years) Aggregate Intrinsic Value Shares Weighted-Average Exercise Price Weighted – Average Remaining Life (Years) Aggregate Intrinsic Value Outstanding beginning of period 25,000 $ 0.76 1.07 - 25,000 $ 0.76 2.07 - Granted - - - - - Expired/Cancelled - - - - - Exercised - - - - - Outstanding end of period 25,000 $ 0.76 .07 - 25,000 $ 0.76 1.07 - Exercisable 25,000 $ 0.76 .07 - 25,000 $ 0.76 1.07 -

4. Income Tax

4. Income Tax	12 Months Ended
	Dec. 31, 2013
Income Tax Disclosure [Abstract]
4. Income Tax	At December 31, 2013, the Company had net operating loss carry-forwards of approximately $13,954,435 that may be used to offset future taxable income. These operating loss carry-forwards expire in the years 2014 through 2033. However, the Company may be limited in its ability to fully utilize its net operating loss carry-forwards and realize any benefits in the event of certain ownership changes described in Internal Revenue Code Section 382. Section 382 limits the use of net operating losses where a change of control has occurred. No tax benefit has been reported in the financial statements because the potential tax benefit of the net operating loss carry-forwards that would result in a deferred tax asset of approximately $4,744,508 is effectively offset by a 100% valuation allowance primarily because there is no certainty that the Company will generate profits to permit use of these net operating loss carry-forwards. Details of the reason there is no income tax benefit such as would ordinarily be computed at federal statutory rates of approximately 34% are as follows: 2013 2012 Income tax benefit at statutory rate $ 144,816 $ 282,580 Timing differences between book and tax depreciation 135 (154 ) Timing differences in inventory obsolescence recognition (14,128 ) (2,587 ) Reversal of prior year inventory obsolescence recognition 29,782 - Loss on disposition of equipment (61 ) - Loss on debt settlement (3,605 ) Expiration of net operating loss carry-backs (75,554 ) (271,209 ) Non-deductible expenses from common stock issued for services rendered (41,820 ) (93,466 ) 39,565 (84,836 ) Change in valuation allowance (39,565 ) 84,836 $ - $ - Deferred tax assets are comprised of the following at December 31, 2013 and 2012: 2013 2012 Operating loss carry forwards $ 4,744,508 $ 4,704,943 Less valuation allowance (4,744,508 ) (4,704,943 ) Net deferred tax assets $ - $ - Such deferred tax assets expire as follows: 2014 - 2018 $ 200,186 2019 - 2023 $ 991,459 2024 - 2028 $ 2,778,343 2029 - 2033 $ 774,520 Total deferred tax assets $ 4,744,508

5. Commitments and Contingencie

5. Commitments and Contingencies	12 Months Ended
	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
5. Commitments and Contingencies	Litigation Notes Payable On March 5 2012, the Company received a complaint from a certain attorney seeking collection of his invoices in the amount of $167,167, plus interest and litigation expenses. The Company does not believe the claim has any merit and is actively pursuing dismissal of the complaint at this time. The Company has already recognized $15,763 as a liability at December 31, 2013. We are currently in the Discovery process before trial in the late fall. On or about May 8, 2012, the Company received a complaint from a certain former employee seeking collection of his charges as a distributor and as an employee in the amount of $409,525, plus interest and litigation expenses. The Company believes the likelihood of loss in this case is remote and intends to offset for certain expenditures made by the Company caused by this employee. The Company has already recognized $37,500 as a liability at this time. We are currently in the Discovery process before trial in the fall. Employment agreements

6. Other Transactions

6. Other Transactions	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements
6. Other Transactions	Related parties Advances from related parties are summarized as follows: Balance, January 1, 2012 $ 91,500 2012 advances 119,700 Non-cash repayments (4,000 ) Balance, December 31, 2012 207,200 2013 advances 213,000 Repayments - Balance, December 31, 2013 $ 420,200 As of December 31, 2013, the Company has a balance of $7,707 owed to one officer for the expenses he incurred on behalf of the Company, which was recorded as related party accounts payable. During 2012, one officer paid $6,445 expense for the Company and was reimbursed with 25,779 shares of common stock at a fair value of the same amount. As of December 31, 2012, the Company has a related party accounts payable balance of $10,380 to two officers for the expenses paid on behalf of the Company. During 2012, the Company issued 290,099 shares with a fair value of $8,703 to pay off the related party accounts payable balance. During 2012, the Company issued 260,000 shares to two officers for cash proceeds of $26,000. Other The Company sold an interest in a mutual insurance company that generated a gain of $26,973. The Company also settled vendor liabilities for a gain of $219,450. These gains were offset, in part, by a loss of $10,604 on a debt settlement.

7. Subsequent Events

7. Subsequent Events	12 Months Ended
	Dec. 31, 2013
Subsequent Events [Abstract]
7. Subsequent Events	Subsequent to December 31, 2013, the Company received cash advances from an affiliate shareholder of $56,400. On April 15, 2014 a note from a significant shareholder for $30,000 including interest of $1,696 was converted into 633,921 common shares. Also, on May 15, 2014 the same shareholder provided $20,000 cash for an unsecured note payable from the Company with an annual interest rate of 10% maturing in twenty-four months. Also on April 15, 2014, Applied Nanoscience, Inc. and the Company agreed to settle the outstanding $601,041 judgment for 500,000 restricted common shares (valued at $0.025 per share on the date of the settlement) and $175,000 payable in three instalments ending on October 15, 2014. The Company has paid $20,000 to date. Finally on April 15, 2014 the Company authorized the issuance of 4,602,810 common shares to Company officers and employees at a value of $0.15 per share in satisfaction of accrued payroll and director fees. And on the same date, 500,000 common shares valued at $12,500 were awarded to two individuals for services performed. During the two months ended June 30, 2014, 75,000 shares of common stock were issued in a private placement to two individual investors for $15,000 in cash. Also, during the three months ended December 31, 2014, an additional 150,000 common shares were issued in a private placement to two individuals for $30,000 in cash. In the six months ended June 30, 2015, another 105,000 common shares were issued in private placements with four individuals for $21,000 in cash. On October 9, 2014 the Company issued 2,222,000 common shares to an affiliate shareholder in settlement of his unsecured loan of $444,400. Also, on the same date officers and employees agreed to receive 874,820 common shares to settle $131,223 in accrued payroll. In the six months ended December 31, 2014, 400,000 restricted shares were issued to three individuals for services performed in the amount of $68,000. In January 2015, 2,395,160 common shares were issued to satisfy payroll and director fees through December 2014. On the same date, $18,000 in unsecured loans made by an affiliate shareholder was converted into 90,000 common shares. Also, a consultant was paid $9,314 for website development costs. This was settled with 54,788 common shares. In addition, two executive officers received 625,000 common shares as an integral part of their employment agreements in January 2015. In April 2015, a consultant received 500,000 shares as consideration for his services performed in the amount of $75,000. In June 2015 a shareholder extended a two year note payable of $5,000, plus interest at an annual rate of 10%, convertible into shares of common stock at a conversion rate of $0.10 per share. Also, in June a consultant received 100,000 common shares as an integral part of his employment agreement. Subsequent to December 31, 2013 the Company generated $40,460 in gains from expiry of certain accounts payable under applicable statutes of limitations. Also, the Company generated gains of $435, 688 from settlement of a note payable.

1. Nature of Business and Sum14

1. Nature of Business and Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2013
Nature Of Business And Summary Of Significant Accounting Policies Policies
Estimates	The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the reported amounts. Actual results could differ from those estimates.
Inventory	The inventory is carried at the lower of cost (determined on a first-in, first-out basis) or market. Obsolete or abandoned inventories (if any) are charged to operations in the period that it is determined that the items are no longer viable sales products. During 2013 and 2012, respectively, the Company provided $41,544 and $7,609 in inventory obsolescence for items no longer saleable.
Loss per share	The computation of basic loss per share of common stock is based on the weighted-average number of shares outstanding during the period of the financial statements.
Revenue recognition and sales returns	The Company recognizes revenue for its products generally when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured. In general, these conditions are satisfied when the product is shipped and title passes to the buyer. The Company provides an allowance for sales returns based upon estimated and known returns.
Fair value measurements	The carrying values of prepaid expenses, accounts payable, accrued expenses and short term notes payable generally approximate the respective fair values of these instruments due to their current nature. The Company values its warrants and non-cash common stock transactions under the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurement The three levels of the fair value hierarchy defined by ASC 820 are as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 inputs to value warrants issued and Level 1 inputs to value its common stock transactions.
Income taxes	We provide for income taxes in accordance with ASC 740, Income Taxes Management has conducted an evaluation of the Company's tax positions taken on returns that remain subject to examination and has concluded that there are no uncertain tax positions, as defined in ASC 740, that require recognition or disclosure in the financial statements. Interest and penalties incurred by the Company, if any, related to income tax matters are classified as part of the income tax provision/benefit.
Stock-based compensation	The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718 which requires companies to measure the cost of employee services received in exchange for an award of an equity instrument based upon the grant-date fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period (Note 4). Stock-based compensation awards to non-employees are accounted for in accordance with ASC 505-50.
Reclassifications	Certain minor reclassifications to prior year amounts have been made to conform to the current year’s presentation.

3. Share-Based Transactions (Ta

3. Share-Based Transactions (Tables)	12 Months Ended
	Dec. 31, 2013
Share-based Transactions Tables
Schedule of restricted shares	Summary of Stock Issuances during the Years ended December 31, 2013 and 2012 Settlement of Accounts Payable and Accrued Liabilities Settlement of Advances and Note Payables -Related Party Compensation and Expenses Cash from Offerings Year Ended Dec. 31, Common Shares Fair Value Carrying Value of Payables Common Shares Fair Value Carrying Value of Related Advances Common Shares Fair Value Common Shares Fair Value Cash Proceeds 2013 - - - 130,000 $ 39,000 $ 28,396 465,909 $ 123,000 - - - 2012 508,567 $ 169,863 $ 172,228 690,099 $ 12,703 $ 12,703 906,998 $ 281,343 360,000 $ 51,000 $ 51,000
Schedule of stock options	December 31, 2013 December 31, 2012 Shares Weighted-Average Exercise Price Weighted – Average Remaining Life (Years) Aggregate Intrinsic Value Shares Weighted-Average Exercise Price Weighted – Average Remaining Life (Years) Aggregate Intrinsic Value Outstanding beginning of period 25,000 $ 0.76 1.07 - 25,000 $ 0.76 2.07 - Granted - - - - - Expired/Cancelled - - - - - Exercised - - - - - Outstanding end of period 25,000 $ 0.76 .07 - 25,000 $ 0.76 1.07 - Exercisable 25,000 $ 0.76 .07 - 25,000 $ 0.76 1.07 -

4. Income Tax (Tables)

4. Income Tax (Tables)	12 Months Ended
	Dec. 31, 2013
Income Tax Tables
Schedule of Effective Income Tax Reconciliation	2013 2012 Income tax benefit at statutory rate $ 144,816 $ 282,580 Timing differences between book and tax depreciation 135 (154 ) Timing differences in inventory obsolescence recognition (14,128 ) (2,587 ) Reversal of prior year inventory obsolescence recognition 29,782 - Loss on disposition of equipment (61 ) - Loss on debt settlement (3,605 ) Expiration of net operating loss carry-backs (75,554 ) (271,209 ) Non-deductible expenses from common stock issued for services rendered (41,820 ) (93,466 ) 39,565 (84,836 ) Change in valuation allowance (39,565 ) 84,836 $ - $ -
Schedule of deferred tax assets	2013 2012 Operating loss carry forwards $ 4,744,508 $ 4,704,943 Less valuation allowance (4,744,508 ) (4,704,943 ) Net deferred tax assets $ - $ -
Expiration of deferred tax assets	2014 - 2018 $ 200,186 2019 - 2023 $ 991,459 2024 - 2028 $ 2,778,343 2029 - 2033 $ 774,520 Total deferred tax assets $ 4,744,508

6. Other Transactions (Tables)

6. Other Transactions (Tables)	12 Months Ended
	Dec. 31, 2013
Other Transactions Tables
Schedule of related party transactions	Balance, January 1, 2012 $ 91,500 2012 advances 119,700 Non-cash repayments (4,000 ) Balance, December 31, 2012 207,200 2013 advances 213,000 Repayments - Balance, December 31, 2013 $ 420,200

1. Nature of Business and Sum18

1. Nature of Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Nature Of Business And Summary Of Significant Accounting Policies Details Narrative
Inventory allowances	$ 41,544	$ 7,609

3. Share-Based Transactions (De

3. Share-Based Transactions (Details) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Settlement Of Accounts Payable And Accrued Liabilities
Common Shares	$ 0	$ 508,567
Fair Value	0	169,863
Carrying Value of Payables	0	172,228
Carrying Value of Related Advances	0	0
Cash Proceeds	0	0
Settlement Of Advances And Payables Related Party
Common Shares	130,000	690,099
Fair Value	39,000	12,703
Carrying Value of Payables	0	0
Carrying Value of Related Advances	28,396	12,703
Cash Proceeds	0	0
Compensation and Expenses
Common Shares	465,909	906,998
Fair Value	123,000	281,343
Carrying Value of Payables	0	0
Carrying Value of Related Advances	0	0
Cash Proceeds	0	0
Cash from Offerings
Common Shares	0	360,000
Fair Value	0	51,000
Carrying Value of Payables	0	0
Carrying Value of Related Advances	0	0
Cash Proceeds	$ 0	$ 51,000

3. Share-Based Transactions (20

3. Share-Based Transactions (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Share-based Transactions Details 1
Number of Options Outstanding, Beginning	25,000	25,000
Number of Options Granted	0	0
Number of Options Exercised	0	0
Number of Options Forfeited	0	0
Number of Options Outstanding, Ending	25,000	25,000
Number of Options Exercisable	25,000	25,000
Weighted Average Exercise Price Outstanding, Beginning	$ 0.76	$ 0.76
Weighted Average Exercise Price Granted	0	0
Weighted Average Exercise Price Exercised	0	0
Weighted Average Exercise Price Forfeited	0	0
Weighted Average Exercise Price Outstanding, Ending	0.76	0.76
Weighted Average Exercise Price Exercisable	$ 0.76	$ 0.76
Weighted Average Remaining Contractual Life (in years) Outstanding	25 days	1 year 25 days
Weighted Average Remaining Contractual Life (in years) Exercisable	25 days	1 year 25 days
Aggregate Intrinsic Value Outstanding, Beginning	$ 0	$ 0
Aggregate Intrinsic Value Granted	$ 0	$ 0
Aggregate Intrinsic Value Exercised	$ 0	$ 0
Aggregate Intrinsic Value Forfeited/canceled	$ 0	$ 0
Aggregate Intrinsic Value Outstanding, Ending	$ 0	$ 0
Aggregate Intrinsic Value Exercisable	$ 0	$ 0

4. Income Tax (Details)

4. Income Tax (Details) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Tax Details
Income tax benefit at statutory rate	$ 144,816	$ 282,580
Timing differences between book and tax depreciation	135	(154)
Timing differences in inventory obsolescence recognition	(14,128)	(2,587)
Reversal of prior year inventory obsolescence recognition	29,782	0
Loss on disposition of equipment	(61)	0
Loss on debt settlement	(3,605)	0
Expiration of net operating loss carry-backs	(75,554)	(271,209)
Non-deductible expenses from common stock issued for services rendered	(41,820)	(93,466)
Subtotal	39,565	(84,836)
Change in valuation allowance	(39,565)	84,836
Total	$ 0	$ 0

4. Income Tax (Details 1)

4. Income Tax (Details 1) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Income Tax Details 1
Operating loss carry forwards	$ 4,744,508	$ 4,704,943
Less valuation allowance	(4,744,508)	(4,704,943)
Net deferred tax assets	$ 0	$ 0

5. Commitments and Contingenc23

5. Commitments and Contingencies (Details Narrative)	Dec. 31, 2013USD ($)
Commitments And Contingencies Details Narrative
Commitments	$ 652,603

6. Other Transactions (Details)

6. Other Transactions (Details) - USD ($)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Beginning Balance	$ 207,200	$ 91,500
Advances	213,000	119,700
Ending Balance	420,200	207,200
Related Party
Beginning Balance	207,200	91,500
Advances	213,000	119,700
Repayments	0	(4,000)
Ending Balance	$ 420,200	$ 207,200