Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Mar. 28, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'LASERLOCK TECHNOLOGIES INC | ' |
Entity Central Index Key | '0001104038 | ' |
Trading Symbol | 'llti | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Common Stock, Shares Outstanding | ' | 293,066,139 |
Entity Public Float | ' | $1,843,020 |
Document Type | '10-K | ' |
Document Period End Date | 31-Dec-13 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'FY | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $1,285,973 | $2,994,350 |
Accounts receivable, net of allowance of $0 at December 31, 2013 and December 31, 2012 | 3,573 | 3,473 |
Inventory | 34,271 | 19,980 |
Prepaid expenses | 189,474 | 750,000 |
TOTAL CURRENT ASSETS | 1,513,291 | 3,767,803 |
PROPERTY AND EQUIPMENT | ' | ' |
Capital equipment, net of accumulated depreciation of $91,952 and $32,624 as of December 31, 2013 and December 31, 2012 | 144,074 | 2,340 |
OTHER ASSETS | ' | ' |
Deposits | 37,197 | ' |
Patents and trademarks, net of accumulated amortization of $105,393 and $92,302 as of December 31, 2013 and December 31, 2012 | 120,695 | 311,832 |
TOTAL ASSETS | 1,815,257 | 4,081,975 |
CURRENT LIABILITIES | ' | ' |
Accounts payable and accrued expenses | 316,785 | 660,493 |
Accrued interest | 16,667 | 97,563 |
Embedded derivative liability | 800,000 | ' |
Notes payable | 50,000 | 200,000 |
TOTAL CURRENT LIABILITIES | 1,183,452 | 958,056 |
LONG-TERM LIABILITIES | ' | ' |
Warrant liability | 6,000,000 | 2,400,000 |
Accrued interest - related parties | 300,677 | 975,559 |
Senior secured convertible notes payable - related parties | 330,249 | 775,249 |
Convertible notes payable | ' | 140,000 |
Notes payable, net of discount of $13,632 as of December 31, 2012 | ' | 697,368 |
TOTAL LONG-TERM LIABILITIES | 6,630,926 | 4,988,176 |
STOCKHOLDERS' DEFICIT | ' | ' |
Convertible Preferred Stock, $ .001 par value; 75,000,000 shares authorized; 21,111,111 shares issued and outstanding as of December 31, 2013 and no shares issued and outstanding at December 31, 2012 | 633,333 | ' |
Common stock, $ .001 par value; 675,000,000 shares authorized; 319,862,042 shares issued and 290,066,139 outstanding at December 31, 2013 and 248,244,012 shares issued and 218,448,109 outstanding at December 31, 2012 | 319,862 | 248,244 |
Additional paid in capital | 22,938,983 | 11,387,929 |
Treasury stock, at cost (29,795,903 shares at December 31, 2013 and December 31, 2012) | -113,389 | -113,389 |
Deficit accumulated during the development stage | -29,777,910 | -13,387,041 |
STOCKHOLDERS' DEFICIT | -5,999,121 | -1,864,257 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $1,815,257 | $4,081,975 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | ' | ' |
Allowance for accounts receivable (in dollars) | $0 | $0 |
Accumulated depreciation on capital equipment (in dollars) | 91,952 | 32,624 |
Accumulated amortization, patent and trademark costs (in dollars) | 105,393 | 92,302 |
Discount, notes payable (in dollars) | ' | $13,632 |
Convertible preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 75,000,000 | 75,000,000 |
Convertible preferred stock, shares issued | 21,111,111 | ' |
Convertible preferred stock, shares outstanding | 21,111,111 | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 675,000,000 | 675,000,000 |
Common stock, shares issued | 319,862,042 | 248,244,012 |
Common stock, shares outstanding | 290,066,139 | 218,448,109 |
Treasury stock, shares | 29,795,903 | 29,795,903 |
Consolidated_Statement_of_Oper
Consolidated Statement of Operations (USD $) | 12 Months Ended | 170 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | ||||
NET REVENUES | ' | ' | ' | |||
Sales | $3,140 | $7,029 | $464,295 | |||
Royalties | ' | 10,000 | 645,180 | |||
TOTAL NET REVENUE | 3,140 | 17,029 | 1,109,475 | |||
COST OF SALES | 2,710 | 4,083 | 431,741 | |||
GROSS PROFIT | 430 | 12,946 | 677,734 | |||
OPERATING EXPENSES | ' | ' | ' | |||
General and administrative | 762,668 | 129,329 | 2,306,027 | |||
Legal and accounting | 475,948 | 276,774 | 2,014,734 | |||
Patent costs | ' | ' | 65,000 | |||
Payroll expenses | 9,485,339 | [1] | 612,721 | [1] | 12,898,321 | [1] |
Research and development | 655,840 | 5,420 | 1,523,632 | |||
Sales and marketing | 261,804 | 66,499 | 5,281,536 | |||
Total operating expenses | 11,641,599 | 1,090,743 | 24,089,250 | |||
LOSS BEFORE OTHER INCOME (EXPENSE) | -11,641,169 | -1,077,797 | -23,411,516 | |||
OTHER INCOME (EXPENSE) | ' | ' | ' | |||
Interest income | ' | 1 | 63,664 | |||
Interest expense | -127,825 | -277,371 | -2,318,257 | |||
Loss on extinguishment of debt | -1,221,875 | 156,110 | -1,221,875 | |||
Change in fair value of warrants | -604,209 | ' | -604,209 | |||
Change in fair value of embedded derivative liability | 200,000 | ' | 200,000 | |||
Fair value of warrants in excess of consideration for convertible preferred stock | -2,995,791 | ' | -2,995,791 | |||
Gain on debt forgiveness | ' | ' | 340,352 | |||
Gain on disposition of assets | ' | ' | 4,722 | |||
TOTAL OTHER INCOME (EXPENSE) | -4,749,700 | -121,260 | -6,531,394 | |||
INCOME (LOSS) BEFORE INCOME TAX BENEFIT | -16,390,869 | -1,199,057 | -29,942,910 | |||
INCOME TAX BENEFIT | ' | ' | -165,000 | |||
NET INCOME (LOSS) | -16,390,869 | -1,199,057 | -29,777,910 | |||
Less: Deemed dividend distribution | -1,000,000 | ' | -1,000,000 | |||
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS | ($17,390,869) | ($1,199,057) | ($30,777,910) | |||
NET INCOME (LOSS) PER COMMON SHARE | ' | ' | ' | |||
BASIC (in dollars per share) | ($0.07) | ($0.01) | ' | |||
DILUTED (in dollars per share) | ($0.07) | ($0.01) | ' | |||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ' | ' | ' | |||
BASIC (in shares) | 250,043,403 | 150,559,287 | ' | |||
DILUTED (in shares) | 250,043,403 | 150,559,287 | ' | |||
[1] | includes share based compensation of $8,619,137 for the year ended December 31, 2013 and $0 for the year ended December 31, 2012 |
Consolidated_Statement_of_Oper1
Consolidated Statement of Operations (Parentheticals) (Payroll expenses, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Payroll expenses | ' | ' |
Share based compensation | $8,619,137 | $0 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (USD $) | Convertible Preferred Stock | Common Stock | Deferred Consulting Fees | Additional Paid-In Capital | Treasury Stock | Deficit Accumulated During the Development Stage | Total |
Balance (in shares) at Nov. 10, 1999 | ' | ' | ' | ' | ' | ' | 4,278,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of initial 4,278,000 shares on November 10, 1999 | ' | $4,278 | ' | $16,595 | ' | ' | $20,873 |
Issuance of initial 4,278,000 shares on November 10, 1999 (in shares) | ' | 4,278,000 | ' | ' | ' | ' | ' |
Issuance of shares of common stock in exchange for services | ' | 1,232 | ' | 35,728 | ' | ' | 36,960 |
Issuance of shares of common stock in exchange for services (in shares) | ' | 1,232,000 | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 2,090 | ' | 60,610 | ' | ' | 62,700 |
Issuance of shares of common stock (in shares) | ' | 2,090,000 | ' | ' | ' | ' | ' |
Stock issuance costs | ' | ' | ' | -13,690 | ' | ' | -13,690 |
Net loss | ' | ' | ' | ' | ' | -54,113 | -54,113 |
Balance at Dec. 31, 1999 | ' | 7,600 | ' | 99,243 | ' | -54,113 | 52,730 |
Balance (in shares) at Dec. 31, 1999 | ' | 7,600,000 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock in exchange for services | ' | 240 | -40,800 | 40,560 | ' | ' | ' |
Issuance of shares of common stock in exchange for services (in shares) | ' | 240,000 | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 5,450 | ' | 921,050 | ' | ' | 926,500 |
Issuance of shares of common stock (in shares) | ' | 5,449,999 | ' | ' | ' | ' | ' |
Stock issuance costs | ' | ' | ' | -16,335 | ' | ' | -16,335 |
Fair value of non-employee stock options | ' | ' | ' | 50,350 | ' | ' | 50,350 |
Amortization of deferred consulting fees | ' | ' | 20,117 | ' | ' | ' | 20,117 |
Net loss | ' | ' | ' | ' | ' | -367,829 | -367,829 |
Balance at Dec. 31, 2000 | ' | 13,290 | -20,683 | 1,094,868 | ' | -421,942 | 665,533 |
Balance (in shares) at Dec. 31, 2000 | ' | 13,289,999 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 218 | ' | 77,723 | ' | ' | 77,941 |
Issuance of shares of common stock (in shares) | ' | 217,500 | ' | ' | ' | ' | ' |
Issuance of shares of common stock and stock options for acquisition of subsidiary | ' | 2,000 | ' | 736,000 | ' | ' | 738,000 |
Issuance of shares of common stock and stock options for acquisition of subsidiary (in shares) | ' | 2,000,000 | ' | ' | ' | ' | ' |
Exercise of options | ' | 1,450 | ' | 230,609 | ' | ' | 232,059 |
Exercise of options (in shares) | ' | 1,450,368 | ' | ' | ' | ' | ' |
Fair value of non-employee stock options | ' | ' | ' | 323,250 | ' | ' | 323,250 |
Issuance of stock options | ' | ' | ' | 15,000 | ' | ' | 15,000 |
Amortization of deferred consulting fees | ' | ' | 20,683 | ' | ' | ' | 20,683 |
Net loss | ' | ' | ' | ' | ' | -1,052,299 | -1,052,299 |
Balance at Dec. 31, 2001 | ' | 16,958 | ' | 2,477,450 | ' | -1,474,241 | 1,020,167 |
Balance (in shares) at Dec. 31, 2001 | ' | 16,957,867 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 3,377 | ' | 687,223 | ' | ' | 690,600 |
Issuance of shares of common stock (in shares) | ' | 3,376,875 | ' | ' | ' | ' | ' |
Fair value of non-employee stock options | ' | ' | ' | 94,000 | ' | ' | 94,000 |
Salary due to shareholder contributed capital | ' | ' | ' | 15,000 | ' | ' | 15,000 |
Return of shares of common stock related to purchase price adjustment | ' | -1,000 | ' | -353,000 | ' | ' | -354,000 |
Return of shares of common stock related to purchase price adjustment (in shares) | ' | -1,000,000 | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | ' | -1,195,753 | -1,195,753 |
Balance at Dec. 31, 2002 | ' | 19,335 | ' | 2,920,673 | ' | -2,669,994 | 270,014 |
Balance (in shares) at Dec. 31, 2002 | ' | 19,334,742 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock in exchange for services | ' | 143 | ' | 23,857 | ' | ' | 24,000 |
Issuance of shares of common stock in exchange for services (in shares) | ' | 143,000 | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 22,512 | ' | 1,387,109 | ' | ' | 1,409,621 |
Issuance of shares of common stock (in shares) | ' | 22,512,764 | ' | ' | ' | ' | ' |
Stock issuance costs | ' | ' | ' | -49,735 | ' | ' | -49,735 |
Fair value of non-employee stock options | ' | ' | ' | 213,300 | ' | ' | 213,300 |
Net loss | ' | ' | ' | ' | ' | -1,107,120 | -1,107,120 |
Balance at Dec. 31, 2003 | ' | 41,990 | ' | 4,495,204 | ' | -3,777,114 | 760,080 |
Balance (in shares) at Dec. 31, 2003 | ' | 41,990,506 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 18,600 | ' | 939,881 | ' | ' | 958,481 |
Issuance of shares of common stock (in shares) | ' | 18,600,000 | ' | ' | ' | ' | ' |
Stock issuance costs | ' | ' | ' | -25,000 | ' | ' | -25,000 |
Fair value of non-employee stock options | ' | ' | ' | 493,600 | ' | ' | 493,600 |
Net loss | ' | ' | ' | ' | ' | -1,406,506 | -1,406,506 |
Balance at Dec. 31, 2004 | ' | 60,590 | ' | 5,903,685 | ' | -5,183,620 | 780,655 |
Balance (in shares) at Dec. 31, 2004 | ' | 60,590,506 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 3,000 | ' | 102,000 | ' | ' | 105,000 |
Issuance of shares of common stock (in shares) | ' | 3,000,000 | ' | ' | ' | ' | ' |
Fair value of non-employee stock options | ' | ' | ' | 286,762 | ' | ' | 286,762 |
Net loss | ' | ' | ' | ' | ' | -1,266,811 | -1,266,811 |
Balance at Dec. 31, 2005 | ' | 63,590 | ' | 6,292,447 | ' | -6,450,431 | -94,394 |
Balance (in shares) at Dec. 31, 2005 | ' | 63,590,506 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock in exchange for services | ' | 1,200 | ' | 53,800 | ' | ' | 55,000 |
Issuance of shares of common stock in exchange for services (in shares) | ' | 1,200,000 | ' | ' | ' | ' | ' |
Exercise of options | ' | 4,300 | ' | -3,870 | ' | ' | 430 |
Exercise of options (in shares) | ' | 4,300,000 | ' | ' | ' | ' | ' |
Shares retired upon cancellation of consulting agreements | ' | -1,200 | ' | 1,080 | ' | ' | -120 |
Shares retired upon cancellation of consulting agreements (in shares) | ' | -1,200,000 | ' | ' | ' | ' | ' |
Exercise of warrants | ' | 5,550 | ' | 49,950 | ' | ' | 55,500 |
Exercise of warrants (in shares) | ' | 5,550,000 | ' | ' | ' | ' | ' |
Fair value of employee stock options | ' | ' | ' | 135,098 | ' | ' | 135,098 |
Fair value of non-employee stock options | ' | ' | ' | 215,463 | ' | ' | 215,463 |
Fair value of warrants issued for deferred finance charges | ' | ' | ' | 392,376 | ' | ' | 392,376 |
Net loss | ' | ' | ' | ' | ' | -1,607,017 | -1,607,017 |
Balance at Dec. 31, 2006 | ' | 73,440 | ' | 7,136,344 | ' | -8,057,448 | -847,664 |
Balance (in shares) at Dec. 31, 2006 | ' | 73,440,506 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Fair value of employee stock options | ' | ' | ' | 67,651 | ' | ' | 67,651 |
Fair value of non-employee stock options | ' | ' | ' | 47,692 | ' | ' | 47,692 |
Recognition of beneficial conversion feature | ' | ' | ' | 375,000 | ' | ' | 375,000 |
Net loss | ' | ' | ' | ' | ' | -1,117,334 | -1,117,334 |
Balance at Dec. 31, 2007 | ' | 73,440 | ' | 7,626,687 | ' | -9,174,782 | -1,474,655 |
Balance (in shares) at Dec. 31, 2007 | ' | 73,440,506 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants issued in conjunction with debt financing | ' | ' | ' | 25,000 | ' | ' | 25,000 |
Fair value of employee stock options | ' | ' | ' | 19,720 | ' | ' | 19,720 |
Fair value of non-employee stock options | ' | ' | ' | 28,752 | ' | ' | 28,752 |
Net loss | ' | ' | ' | ' | ' | -931,338 | -931,338 |
Balance at Dec. 31, 2008 | ' | 73,440 | ' | 7,700,159 | ' | -10,106,120 | -2,332,521 |
Balance (in shares) at Dec. 31, 2008 | ' | 73,440,506 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock in exchange for services | ' | 7,200 | ' | 40,500 | ' | ' | 47,700 |
Issuance of shares of common stock in exchange for services (in shares) | ' | 7,200,000 | ' | ' | ' | ' | ' |
Shares issued for conversion of notes payable and accrued interest | ' | 48,750 | ' | 263,291 | ' | ' | 312,041 |
Shares issued for conversion of notes payable and accrued interest (in shares) | ' | 48,750,000 | ' | ' | ' | ' | ' |
Fair value of warrants issued in conjunction with debt financing | ' | ' | ' | 15,450 | ' | ' | 15,450 |
Fair value of non-employee stock options | ' | ' | ' | 1,524 | ' | ' | 1,524 |
Net loss | ' | ' | ' | ' | ' | -694,910 | -694,910 |
Balance at Dec. 31, 2009 | ' | 129,390 | ' | 8,020,924 | ' | -10,801,030 | -2,650,716 |
Balance (in shares) at Dec. 31, 2009 | ' | 129,390,506 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock in exchange for services | ' | 25,950 | ' | 182,650 | ' | ' | 208,600 |
Issuance of shares of common stock in exchange for services (in shares) | ' | 25,950,000 | ' | ' | ' | ' | ' |
Fair value of warrants issued in conjunction with debt financing | ' | ' | ' | 20,143 | ' | ' | 20,143 |
Fair value of non-employee stock options | ' | ' | ' | 364 | ' | ' | 364 |
Net loss | ' | ' | ' | ' | ' | -721,841 | -721,841 |
Balance at Dec. 31, 2010 | ' | 155,340 | ' | 8,224,081 | ' | -11,522,871 | -3,143,450 |
Balance (in shares) at Dec. 31, 2010 | ' | 155,340,506 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock in exchange for services | ' | 1,000 | ' | 29,000 | ' | ' | 30,000 |
Issuance of shares of common stock in exchange for services (in shares) | ' | 1,000,000 | ' | ' | ' | ' | ' |
Contribution of common stock from related parties | ' | ' | ' | 95,594 | -95,594 | ' | ' |
Contribution of common stock from related parties (in shares) | ' | -12,000,000 | ' | ' | ' | ' | ' |
Purchase of common stock for treasury | ' | ' | ' | ' | -17,795 | ' | -17,795 |
Purchase of common stock for treasury (in shares) | ' | -17,795,903 | ' | ' | ' | ' | ' |
Sale of common stock | ' | 15,500 | ' | 384,500 | ' | ' | 400,000 |
Sale of common stock (in shares) | ' | 15,500,000 | ' | ' | ' | ' | ' |
Issuance of shares for stock issuance costs | ' | 2,100 | ' | -2,100 | ' | ' | ' |
Issuance of shares for stock issuance costs (in shares) | ' | 2,100,000 | ' | ' | ' | ' | ' |
Stock issuance costs | ' | ' | ' | -40,000 | ' | ' | -40,000 |
Exercise of options | ' | 1,000 | ' | 9,000 | ' | ' | 10,000 |
Exercise of options (in shares) | ' | 1,000,000 | ' | ' | ' | ' | ' |
Fair value of warrants issued in conjunction with debt financing | ' | ' | ' | 21,275 | ' | ' | 21,275 |
Fair value of employee stock options | ' | ' | ' | 47,658 | ' | ' | 47,658 |
Fair value of non-employee stock options | ' | ' | ' | 48,374 | ' | ' | 48,374 |
Net loss | ' | ' | ' | ' | ' | -665,113 | -665,113 |
Balance at Dec. 31, 2011 | ' | 174,940 | ' | 8,817,382 | -113,389 | -12,187,984 | -3,309,051 |
Balance (in shares) at Dec. 31, 2011 | ' | 145,144,603 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of common stock in exchange for services | ' | 1,000 | ' | 45,500 | ' | ' | 46,500 |
Issuance of shares of common stock in exchange for services (in shares) | ' | 1,000,000 | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 44,111 | ' | 1,015,889 | ' | ' | 1,060,000 |
Issuance of shares of common stock (in shares) | ' | 44,111,111 | ' | ' | ' | ' | ' |
Issuance of stock for licensing | ' | 2,222 | ' | 97,778 | ' | ' | 100,000 |
Issuance of stock for licensing (in shares) | ' | 2,222,222 | ' | ' | ' | ' | ' |
Issuance of stock for trademarks, etc. | ' | 2,222 | ' | 97,778 | ' | ' | 100,000 |
Issuance of stock for trademarks, etc. (in shares) | ' | 2,222,222 | ' | ' | ' | ' | ' |
Shares issued for conversion of notes payable and accrued interest | ' | 12,925 | ' | 568,639 | ' | ' | 581,564 |
Shares issued for conversion of notes payable and accrued interest (in shares) | ' | 12,923,622 | ' | ' | ' | ' | ' |
Exercise of options | ' | 10,491 | ' | 2,622 | ' | ' | 13,113 |
Exercise of options (in shares) | ' | 10,490,996 | ' | ' | ' | ' | ' |
Exercise of warrants | ' | 333 | ' | 49,667 | ' | ' | 50,000 |
Exercise of warrants (in shares) | ' | 333,333 | ' | ' | ' | ' | ' |
Fair value of employee stock options | ' | ' | ' | 332,036 | ' | ' | 332,036 |
Fair value of non-employee stock options | ' | ' | ' | 11,638 | ' | ' | 11,638 |
Forgiveness of debt-related party | ' | ' | ' | 349,000 | ' | ' | 349,000 |
Net loss | ' | ' | ' | ' | ' | -1,199,057 | -1,199,057 |
Balance at Dec. 31, 2012 | ' | 248,244 | ' | 11,387,929 | -113,389 | -13,387,041 | -1,864,257 |
Balance (in shares) at Dec. 31, 2012 | ' | 218,448,109 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares of preferred stock | 1,000,000 | ' | ' | ' | ' | ' | 1,000,000 |
Issuance of shares of preferred stock (in shares) | 33,333,333 | ' | ' | ' | ' | ' | ' |
Conversion of shares of preferred stock to common stock | -366,667 | 12,222 | ' | 354,445 | ' | ' | ' |
Conversion of shares of preferred stock to common stock (in shares) | -12,222,222 | 12,222,222 | ' | ' | ' | ' | ' |
Issuance of shares of common stock | ' | 4,811 | ' | 230,189 | ' | ' | 235,000 |
Issuance of shares of common stock (in shares) | ' | 4,811,111 | ' | ' | ' | ' | ' |
Shares issued for conversion of notes payable and accrued interest | ' | 18,275 | ' | 1,871,725 | ' | ' | 1,890,000 |
Shares issued for conversion of notes payable and accrued interest (in shares) | ' | 18,275,000 | ' | ' | ' | ' | ' |
Exercise of options | ' | 3,335 | ' | 14,584 | ' | ' | 17,919 |
Exercise of options (in shares) | ' | 3,335,000 | ' | ' | ' | ' | ' |
Exercise of warrants | ' | 1,000 | ' | 9,000 | ' | ' | 10,000 |
Exercise of warrants (in shares) | ' | 1,000,000 | ' | ' | ' | ' | ' |
Fair value of employee stock options | ' | ' | ' | 8,619,136 | ' | ' | 8,619,136 |
Deemed dividend distribution | ' | ' | ' | -1,000,000 | ' | ' | -1,000,000 |
Exercise of warrants | ' | 6,000 | ' | 53,999 | ' | ' | 59,999 |
Exercise of warrants (in shares) | ' | 6,000,000 | ' | ' | ' | ' | ' |
Conversion of Notes payable | ' | 25,975 | ' | 1,397,976 | ' | ' | 1,423,951 |
Conversion of Notes payable (in shares) | ' | 25,974,697 | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | ' | -16,390,869 | -16,390,869 |
Balance at Dec. 31, 2013 | $633,333 | $319,862 | ' | $22,938,983 | ($113,389) | ($29,777,910) | ($5,999,121) |
Balance (in shares) at Dec. 31, 2013 | 21,111,111 | 290,066,139 | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Parentheticals) | Nov. 10, 1999 |
Statement Of Stockholders' Equity [Abstract] | ' |
Issuance of shares | 4,278,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | 170 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' | ' |
Net loss | ($16,390,869) | ($1,199,057) | ($29,777,910) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' | ' |
Fair value of options issued in exchange for services | 8,619,137 | 343,674 | 11,036,369 |
Accretion of interest on deferred finance charges | ' | 13,625 | 453,625 |
Accretion of discount on notes payable | 3,718 | 4,957 | 446,954 |
Change in fair value warrant liability | 604,209 | ' | 604,209 |
Change in fair value embedded derivative liability | -200,000 | ' | -200,000 |
Change in fair value of deemed distribution | ' | ' | ' |
Fair value of warrants in excess of consideration for convertible preferred stock | 2,995,791 | ' | 2,995,791 |
Fair value of stock in excess of converted notes payable and accrued interest | 1,221,875 | ' | 1,221,875 |
Salary due to stockholder contributed to capital | ' | ' | 15,000 |
Amortization and depreciation | 81,929 | 13,471 | 611,984 |
Loss on extinguishment of debt | 1,221,875 | -156,110 | 1,221,875 |
Gain on disposition of assets | ' | ' | -4,722 |
Gain on debt forgiveness | ' | ' | -340,352 |
Stock issued in exchange for services | ' | 46,500 | 553,760 |
Financing expenses paid directly from stock proceeds | ' | ' | 5,270 |
Amortization of deferred consulting fees | ' | ' | 40,800 |
(Increase) decrease in assets | ' | ' | ' |
Accounts receivable | -100 | -3,473 | -3,573 |
Inventory | -14,291 | 15,157 | 5,689 |
Prepaid expenses | 560,526 | -232,240 | 210,526 |
Deposit | -37,197 | ' | -37,197 |
Increase in liabilities | ' | ' | ' |
Accounts payable and accrued expenses | -233,497 | 786,436 | 2,333,865 |
Net cash used in operating activities | -2,788,769 | -367,060 | -9,828,037 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' | ' |
Purchase of property and equipment | -10,573 | -2,360 | -48,682 |
Purchase of patents and trademarks | -21,954 | -6,665 | -246,088 |
Proceeds from sale of assets | ' | ' | 6,738 |
Net cash used in investing activities | -32,527 | -9,025 | -288,032 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' | ' |
Proceeds from issuance of preferred stock | 1,000,000 | ' | 1,000,000 |
Proceeds from issuance of common stock | 235,000 | 1,060,000 | 5,786,447 |
Proceeds from exercise of stock options | 17,919 | 13,113 | 273,401 |
Proceeds issuance of stock options | ' | ' | 15,000 |
Proceeds from exercise of warrants | 10,000 | 50,000 | 115,500 |
Proceeds from issuance of warrants | ' | 2,000,000 | 2,000,000 |
Proceeds from issuance of notes payable | ' | 200,000 | 2,789,000 |
Repayments of notes payable | -150,000 | -6,251 | -352,751 |
Payment for treasury stock | ' | ' | -17,795 |
Debt issuance costs | ' | ' | -62,000 |
Stock issuance costs | ' | ' | -144,760 |
Net cash provided by financing activities | 1,112,919 | 3,316,862 | 11,402,042 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -1,708,377 | 2,940,777 | 1,285,973 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 2,994,350 | 53,573 | ' |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 1,285,973 | 2,994,350 | 1,285,973 |
Cash paid during the year for: | ' | ' | ' |
Interest | 13,895 | ' | 53,336 |
Income taxes | ' | ' | ' |
Return of shares of common stock related to purchase price adjustment | ' | ' | ' |
Common stock | ' | ' | -1,000 |
Additional paid-in capital | ' | ' | -353,000 |
Intangible assets | ' | ' | -354,000 |
Issuance of common stock and stock options for acquisition of subsidiary | ' | ' | 738,000 |
Proceeds from common stock sales applied directly to debt and financing expenses repayment | ' | ' | 55,270 |
Fair value of warrants issued for deferred finance charges | ' | ' | 392,376 |
Fair value of stock issued for conversion of notes payable and accrued interest | 2,092,075 | 581,564 | 2,985,680 |
Fair value of stock issued for conversion of preferred stock to common stock | 366,667 | ' | 366,667 |
Fair value of stock issued for purchase of assets | ' | 100,000 | 100,000 |
Fair value of warrants issued for purchase of assets | ' | 100,000 | 100,000 |
Fair value of stock issued for licensing costs | ' | 100,000 | 100,000 |
Fair value of warrants issued for licensing costs | ' | 300,000 | 300,000 |
Accretion of discount on preferred stock as deemed dividend distribution | 1,000,000 | ' | 1,000,000 |
Fair value of beneficial conversion feature | 1,500,000 | ' | 1,500,000 |
Fair value of warrants issued as debt discount | ' | ' | 78,043 |
Issuance of common stock for stock issuance costs | ' | ' | 2,100 |
Issuance of options as stock cost for treasury stock | ' | ' | 5,594 |
Forgiveness of debt-related party treated as additional paid in capital | ' | 349,000 | 349,000 |
Conversion of warrant in lieu of cash repayment of notes payable | $60,000 | ' | $60,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of the Business | |
LaserLock Technologies, Inc. and Subsidiary (the “Company”) is a development stage enterprise incorporated in the state of Nevada on November 10, 1999. LaserLock Technologies, Inc., seeks to provide state-of-the-art authentication solutions to governments, health care providers, high-end retailers and the gaming industry. LaserLock Technologies, Inc. is based in Washington, D.C. and is publically traded on the OTC Market under the ticker symbol “LLTI”. The Company markets security technology to protect governments, health care providers, high-end retail goods, the gaming industry and branded products from counterfeiting. | |
Principle of Consolidation | |
The accompanying consolidated financial statements include the accounts of LaserLock Technologies, Inc. and its wholly-owned subsidiary, LL Security Products, Inc. All inter-company transactions have been eliminated in consolidation. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. | |
Comprehensive Income | |
The Company follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 220 in reporting comprehensive income. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Since the Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net income (loss). | |
Fair Value of Financial Instruments | |
The Company’s financial instruments consist of cash, accounts receivable, accounts payable and accrued expenses and notes payable. The carrying value of cash, accounts receivable, accounts payable and accrued expenses approximate their fair value because of their short maturities. The Company believes the carrying amount of its notes payable and convertible debt approximates its fair value based on rates and other terms currently available to the Company for similar debt instruments. | |
Cash and Cash Equivalents | |
For purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and certificates of deposit and commercial paper with original maturities of 90 days or less to be cash or cash equivalents. | |
Concentration of Credit Risk Involving Cash and Cash Equivalents | |
The Company’s cash and cash equivalents are held at two financial institutions. At times, the Company’s deposits may exceed Federal Deposit Insurance Corporation (FDIC) coverage limits. The Company has not experienced any losses from maintaining cash accounts in excess of federally insured limits. | |
Inventory | |
Inventory principally consists of penlights and pigments and is stated at the lower of cost (determined by the first-in, first-out method) or market. | |
Property and Equipment | |
Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, principally five to seven years. Maintenance and repairs of property are charged to operations, and major improvements are capitalized. Upon retirement, sale, or other disposition of property and equipment, the costs and accumulated depreciation are eliminated from the accounts, and any resulting gain or loss is included in operations. | |
Patents and Trademark | |
The Company has five issued patents for anti-counterfeiting technology and purchased a trademark. Costs associated with the registration and legal defense of the patents have been capitalized and are amortized on a straight-line basis over the estimated lives of the patents which were determined to be 17 years. | |
Long-Lived Assets | |
The Company evaluates the recoverability of its long-lived assets in accordance with ASC 360 “Property, Plant, and Equipment.” The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets are measured by a comparison of the carrying amount of an asset to future cash flows expected to be generated by the asset, undiscounted and without interest or independent appraisals. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the assets. | |
Deferred Financing Costs | |
Costs incurred in securing long-term debt are deferred and amortized, as a charge to interest expense, over the term of the related debt. In the case of long-term debt modifications, the Company follows the guidance provided by ASC 470-50 “Debt – Modification and Extinguishments.” | |
Convertible Notes Payable | |
Convertible notes payable, for which the embedded conversion feature does not qualify for derivative treatment, are evaluated to determine if the effective or actual rate of conversion per the terms of the convertible note agreement is below market value. In these instances, the Company accounts for the value of the beneficial conversion feature (BCF) as a debt discount, which is then accreted to interest expense over the life of the related debt using the straight-line method which approximates the effective interest method. | |
Revenue Recognition | |
In accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition (Codified in FASB ASC 605), the Company recognizes revenue when (i) persuasive evidence of a customer or distributor arrangement exists, (ii) a retailer, distributor or wholesaler receives the goods and acceptance occurs, (iii) the price is fixed or determinable, and (iv) collectability of the revenue is reasonably assured. Subject to these criteria, the Company recognizes revenue from product sales, consisting mainly of pigments and penlights, upon shipment to the customer. Royalty revenue is recognized upon receipt of notification from a customer that the Company’s product has been used in the customer’s production process. | |
Income Taxes | |
The Company follows FASB ASC 740 when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Tax years from 2009 through 2012 remain subject to examination by major tax jurisdictions. | |
Stock-based Payments | |
The Company accounts for stock-based compensation under the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. | |
The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. | |
All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Any stock options issued to non-employees are recorded as an expense and additional paid-in capital in stockholders’ equity over the applicable service periods. | |
Advertising Costs | |
Advertising costs are expensed as incurred. Advertising costs were approximately $53,979 and $0 for the years ended December 31, 2013 and 2012, and are included in sales and marketing expenses. | |
Research and Development Costs | |
In accordance with FASB ASC 730, research and development costs are expensed when incurred. | |
Loss Per Share | |
The Company follows FASB ASC 260 when reporting Earnings Per Share resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss for the years ended December 31, 2013 and 2012, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same. | |
Segment Information | |
The Company is organized and operates as one operating segment wherein the Company’s patented technologies are utilized to address counterfeiting issues. In accordance with ASC 280, Segment Reporting, the chief operating decision-maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Since the Company operates in one segment and provides one group of similar products, all financial segment and product line information required by ASC 280 can be found in the consolidated financial statements. | |
Recently Adopted Accounting Pronouncements | |
As of December 31, 2013 and for the period then ended there were no recently adopted accounting pronouncements that had a material effect on the Company’s financial statements. | |
Recently Issued Accounting Pronouncements Not Yet Adopted | |
In July 2013, the FASB issued Accounting Standards Update (“ASU”) ASU 2013-11, Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in this update provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists, in order to eliminate the diversity in practice in the presentation of unrecognized tax benefits in such instances. This guidance generally requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. | |
However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. ASU 2013-11 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Retrospective application is permitted. | |
The Company is currently evaluating ASU 2013-11 and plans to comply with all applicable provisions of this ASU no later than the first quarter of 2014. |
MANAGEMENT_PLANS
MANAGEMENT PLANS | 12 Months Ended |
Dec. 31, 2013 | |
Management Plans [Abstract] | ' |
MANAGEMENT PLANS | ' |
NOTE 2 – MANAGEMENT PLANS | |
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant losses and experienced negative cash flow from operations during the development stage. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
The Company believes that its existing cash resources will not be sufficient to sustain operations during the next twelve months. The Company currently needs to generate revenue in order to sustain its operations. In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to reduce expenses or obtain financing through the sale of debt and/or equity securities. The issuance of additional equity would result in dilution to existing shareholders. If the Company is unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company may be unable to execute upon the business plan or pay costs and expenses as they are incurred, which could have a material, adverse effect on the business, financial condition and results of operations. | |
If sufficient revenues are not generated to sustain operations or additional funding cannot be obtained in the short term, the Company will need to reduce monthly expenditures to a level that will enable the Company to continue until such funds can be obtained. | |
The Company is in the development stage at December 31, 2013. Successful completion of the Company’s development program, and the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company’s cost structure. However, there can be no assurances that the Company will be able to secure additional equity investment or achieve an adequate sales level. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
NOTE 3 – PROPERTY AND EQUIPMENT | |||||||||
Equipment consists of the following: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Furniture and Fixtures | $ | 219,871 | $ | --- | |||||
Equipment | 16,155 | 34,964 | |||||||
236,026 | 34,964 | ||||||||
Less: Accumulated depreciation | 91,952 | 32,624 | |||||||
$ | 144,074 | $ | 2,340 | ||||||
Depreciation of property and equipment was $68,839 and $20, respectively, for the years ended December 31, 2013 and 2012. |
PATENTS_AND_TRADEMARK
PATENTS AND TRADEMARK | 12 Months Ended |
Dec. 31, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
PATENTS AND TRADEMARK | ' |
NOTE 4 – PATENTS AND TRADEMARK | |
The Company has five issued patents for anti-counterfeiting technology. Accordingly, costs associated with the registration of these patents and legal defense have been capitalized and are amortized on a straight-line basis over the estimated lives of the patents (17 years). During the years ended December 31, 2013 and 2012, the Company capitalized patent costs of $21,954 and $6,665, respectively. Amortization expense for patents was $13,091 and $13,451 for the years ended December 31, 2013 and 2012, respectively. Future estimated annual amortization over the next five years is approximately $13,000 per year for the years ended December 31, 2014 through 2018. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
NOTE 5 – INCOME TAXES | |||||||||||||||||
The Company follows FASB ASC 740-10-10 whereby an entity recognizes deferred tax assets and liabilities for future tax consequences or events that have been previously recognized in the Company’s financial statements or tax returns. The measurement of deferred tax assets and liabilities is based on provisions of enacted tax law. The effects of future changes in tax laws or rates are not anticipated. | |||||||||||||||||
At December 31, 2013 the Company has a net operating loss (“NOL”) that approximates $12.5 million. Consequently, the Company may have NOL carryforwards available for federal income tax purposes, which would begin to expire in 2019. Due to changes in ownership, a portion of the NOL carryforward may be subject to certain annual limitations imposed under Section 382 of the Internal Revenue Code. Deferred tax assets would arise from the recognition of anticipated utilization of these net operating losses to offset future taxable income. | |||||||||||||||||
The income tax benefit (provision) consists of the following: | |||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current | $ | 1,837,000 | $ | 490,000 | |||||||||||||
Deferred | 3,284,000 | 263,000 | |||||||||||||||
Change in valuation allowance | (5,121,000 | ) | (753,000 | ) | |||||||||||||
- | - | ||||||||||||||||
The following is a reconciliation of the tax derived by applying the U.S. Federal Statutory Rate of 35% to the earnings before income taxes and comparing that to the recorded tax provisions: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Amount | % | Amount | % | ||||||||||||||
U.S. Federal income tax benefit at Federal Statutory Rate | $ | (5,718,000 | ) | (35 | ) | $ | (298,000 | ) | (35 | ) | |||||||
State tax, net of federal effect | (956,000 | ) | (6 | ) | (50,000 | ) | (6 | ) | |||||||||
Non deductible accrued expense | - | - | (238,000 | ) | (28 | ) | |||||||||||
Deductible share based compensation | (318,000 | ) | (2 | ) | (167,000 | ) | (20 | ) | |||||||||
Non-deductible changes in derivative liability and share based transactions | 1,895,000 | 12 | - | - | |||||||||||||
Other | (24,000 | ) | - | - | - | ||||||||||||
Change in valuation allowance | 5,121,000 | 31 | 753,000 | 89 | |||||||||||||
$ | - | - | - | - | |||||||||||||
The primary components of the Company’s December 31, 2013 and 2012 deferred tax assets, liabilities and related valuation allowance are as follows: | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred tax asset for NOL carryforwards | $ | 5,144,000 | $ | 3,308,000 | |||||||||||||
Deferred tax liability for intangibles | (165,000 | ) | (165,000 | ) | |||||||||||||
Share based compensation | 3,683,000 | 162,000 | |||||||||||||||
Non deductible accrued expenses | 150,000 | 386,000 | |||||||||||||||
Valuation allowance | (8,812,000 | ) | (3,691,000 | ) | |||||||||||||
$ | - | $ | - | ||||||||||||||
Management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such benefits. | |||||||||||||||||
The Company follows FASB ASC 740-10, which provides guidance for the recognition and measurement of certain tax positions in an enterprise’s financial statements. Recognition involves a determination whether it is more likely than not that a tax position will be sustained upon examination with the presumption that the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information. | |||||||||||||||||
The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the consolidated statement of operations. As of December 31, 2013 and 2012, the Company had no unrecognized tax benefits. There were no changes in the Company’s unrecognized tax benefits during the years ended December 31, 2013 and 2012. The Company did not recognize any interest or penalties during 2013 and 2012 related to unrecognized tax benefits. |
SENIOR_SECURED_CONVERTIBLE_NOT
SENIOR SECURED CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2013 | |
Senior Secured Convertible Notes Payable [Abstract] | ' |
SENIOR SECURED CONVERTIBLE NOTES PAYABLE | ' |
NOTE 6 - SENIOR SECURED CONVERTIBLE NOTES PAYABLE | |
In February 2006, the Company commenced a private placement of up to $800,000 principal amount of 10% senior secured convertible promissory notes due twelve months from the date of issue to certain Company shareholders and other accredited investors. As of December 31, 2006, the Company completed this private placement by selling all notes payable totaling $800,000. The notes are secured by a first priority lien on all of the tangible and intangible personal property of the Company. In May 2007, the due date of these notes was extended to August 2008 and the interest rate increased to 12% per annum during the extension period. In June 2011, the interest rate on all of the notes was reset to 10% and $596,500 of the notes and accrued interest was extended until September 15, 2015. During the fourth quarter of 2012 the remaining $178,749 of unextended notes and the associated accrued interest were extended to September 30, 2015. In June 2013, $225,000 of these notes payable plus accrued interest of $181,125 were converted into 7.4 million shares of the Company’s common stock, which was valued at $1,628,000. The excess of the fair value of the Company’s common stock over the value of the notes payable and accrued interest was recorded as loss on extinguishment of debt in accordance with FASB ASC 470-50. | |
During the fourth quarter of 2013, $220,000 of senior convertible notes plus accrued interest of $395,000, were converted into 7,900,000 shares of common stock. Since this transaction was with related parties, the conversion was treated as a capital transaction in accordance with FASB ASC 470-50-40-3. | |
As of December 31, 2013 and December 31, 2012, the outstanding principal balance on these notes was $330,249 and $775,249, respectively. Accrued interest at December 30, 2013 and December 31, 2012 amounted to $300,677 and $600,091, respectively. | |
Purchasers of the notes were issued 8,000,000 10-year warrants exercisable into the Company’s shares at an exercise price of $0.01 per share. The warrants were valued at $392,376 and recorded as a debt discount on the notes payable. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 169% and 284%, risk-free interest rate between 3.6% and 4.5% and expected warrant life of ten years. The deferred finance charges were amortized over one year, which was the original term of the notes. As of June 30, 2012, the Company had received $80,000 for the exercise of all 8,000,000 of the warrants. | |
In addition, if an equity financing with total proceeds of more than $5,000,000 occurs while any notes are outstanding, holders of notes will have the right, at their option, to convert the outstanding principal and interest of the notes into shares at a discount of 30% of the price per share in the qualified financing. Since the embedded conversion feature is contingent upon the occurrence of the qualified financing, the value of the contingent conversion feature, if beneficial, will be recognized if the triggering event occurs and the contingency is resolved. |
CONVERTIBLE_NOTES_PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2013 | |
Convertible Notes Payable [Abstract] | ' |
CONVERTIBLE NOTES PAYABLE | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE | |
During 2007, the Company commenced a private placement of up to $400,000 principal amount of 10% Convertible Promissory Notes originally due in August 2008 (the “Notes”). The Company raised $375,000 under this private placement in 2007 and the remaining $25,000 was raised in 2008. Previously $260,000 of the Notes were converted into shares of the Company’s common stock. Holders of Notes will have the right, at their option, to convert the outstanding principal and interest of the Notes into shares of the Company’s Series A Preferred Stock at any time and from time to time at the option of the holder at the initial conversion price of $0.005333 per share. It is the intention, however, that the option holder will convert the Notes into shares of the Company’s common stock. The Notes are unsecured. | |
In accordance with ASC 470, a beneficial conversion feature of $375,000 and $25,000 was required to be recorded in 2007 and 2008, respectively, since the fair value of the Company’s common stock at the date of issuance ($0.016 per share) was greater than the conversion price of $0.005333 per share. The value of the beneficial conversion feature was recorded to additional paid-in capital with the offset to discount on notes payable. The debt discount was accreted to interest expense over the one-year original term of the notes. | |
In August 2009, noteholders exercised their option to convert $260,000 of the notes payable plus accrued interest into 48,750,000 shares of common stock. The noteholder of the remaining $140,000 under this convertible note issue agreed to extend the maturity date of these notes to September 30, 2015 at an interest rate of 10% per annum. Additionally, the noteholder agreed in writing to suspend its right to convert its note until such as the Company’s authorized shares have been increased. Remaining shares to be potentially issued under this convertible note issue is 26,250,000. | |
On March 19, 2013, the investor holding $140,000 of convertible notes transferred $14,000 of the $140,000 convertible notes to the Vice Chairman of the Company. Also on March 19, 2013, the investor agreed to convert $28,000 of the investor’s remaining $126,000 of convertible notes into 5,250,000 shares of the Company’s common stock. | |
On March 19, 2013, the Vice Chairman of the Company agreed to convert $14,000 of convertible notes into 2,625,000 of the Company’s common stock. | |
During the fourth quarter of 2013, the remaining $98,000 of convertible notes plus accrued interest of $87,150 were converted into 12,375,000 shares of common stock. Since this conversion was with a related party it was treated as a capital transaction in accordance with FASB ASC 470-50-40-3. |
NOTES_PAYABLE
NOTES PAYABLE | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
NOTES PAYABLE | ' | ||||||||
NOTE 8 - NOTES PAYABLE | |||||||||
During the fourth quarter of 2013, all of the $561,000 of unsecured notes payable, less $9,914 of unamortized discount, plus accrued interest of $83,715 was converted into 4,473,333 shares of common stock plus a cash repayment of $150,000. Since this conversion was with a related party it was treated as a capital transaction in accordance with FASB ASC 470-50-40-3. | |||||||||
Unsecured Notes Payable | |||||||||
During the second quarter of 2012, the Company received $200,000 for a 10% unsecured note payable, due April 27, 2013. In December 2012, this note payable and accrued interest of $9,167 was converted into 4,703,711 shares of the Company’s common stock. | |||||||||
Private Placement of 8% Series A Notes Payable | |||||||||
In August 2009, the Company commenced a private placement of up to $300,000 consisting of up to 6 units. Each unit consists of a $50,000, 8% Series A Note Payable, due September 30, 2011, and a non-detachable warrant to purchase 2,000,000 shares of the Company’s common stock. During 2009, the Company sold 4 units, issued $200,000 of 8% Series A Notes Payable, issued 8,000,000 warrants, and raised $180,000, net of commission of $20,000. In January 2010, the Company sold 0.5 units, issued $25,000 of 8% Series A Notes Payable, issued 1,000,000 warrants, and raised $17,500 net of commissions of $7,500. The commissions were treated as deferred finance charges and fully expensed over the term of notes payable. | |||||||||
The 8,000,000 warrants in 2009 were valued at $15,450, fair value, using the Black-Scholes option pricing model to calculate the fair-value of the warrants, with the following assumptions: no dividend yield, expected volatility of between 30.9% and 34.5%, risk free interest rate between .95% and 1.06% and warrant life of approximately 2 years. The 1,000,000 warrants in 2010 were valued at $20,143, fair value, using the Black-Scholes option pricing model to calculate the fair-value of the warrants, with the following assumptions: no dividend yield, expected volatility of 28.6 %, risk free interest rate of .84% and warrant life of approximately 2 years. | |||||||||
In June 2011, the maturity date on the $150,000 of the 8% Series A Notes Payable and the term on the associated 6,000,000 warrants were extended to September 30, 2015. As a result, the warrants were revalued using the Black-Scholes option pricing model to calculate the incremental fair-value of the warrants of $21,275, with the following assumptions: no dividend yield, expected volatility of 60%, risk free interest rate of 1.52% and warrant life of approximately 1.25 years. As part of the debt extension, the lender holding the 6,000,000 warrants agreed in writing to suspend its right to exercise these warrants until such time that the Company’s authorized shares have been increased. The authorized shares of the Company’s common stock were increased on May 23, 2013 from 425,000,000 to 675,000,000. | |||||||||
The relative fair value of the warrants issued in conjunction with the 8% Series A Notes Payable have been treated as a debt discount with an offsetting credit to additional paid-in capital. The debt discount related to the warrant issuances is being accreted to interest expense over the term of the notes. When the warrants were revalued the incremental amount of $21,275 was also treated as additional debt discount and is being accreted over the new term of the 8% Series A Notes Payable. As of December 31, 2012 the unaccreted debt discount related to warrants issued in conjunction with the 8% Series A Notes payable was $13,632. | |||||||||
During the third quarter of 2011, $25,000 plus accrued interest of the 8% Series A Notes Payable were repaid and 3,000,000 of the associated warrants expired unexercised. | |||||||||
During the fourth quarter of 2013, the remaining series A notes payable of $150,000 was reduced by $60,000 for the exercise of 6,000,000 warrants into 6,000,000 shares of common stock. The balance of $90,000 plus accrued interest of $49,000 was converted into 1,226,363 shares of common stock. Since this conversion was with a related party it was treated as a capital transaction in accordance with FASB ASC 470-50-40-3. | |||||||||
Private Placement of 25% Notes Payable | |||||||||
In 2010, the Company issued $400,000 in notes payable in order to finance a patent infringement lawsuit (see Note 16 - Contingencies to these consolidated financial statements). The notes payable accrue interest at 25% per annum and mature upon the earlier of September 1, 2013 or the date on which the Company receives net proceeds from the patent infringement claim. In addition to the base interest of 25% per annum, the lenders are entitled to Bonus Interest equal to the following: | |||||||||
a. | First monies realized by the Company from its share of the net proceeds of the lawsuit shall be allocated and paid to the Lender until the principal and base interest accruing has been fully paid. | ||||||||
b. | The next monies from the net proceeds of the litigation settlement will be paid to the Company to reimburse for out-of-pocket legal costs related to the lawsuit. | ||||||||
c. | The next $825,000 of proceeds will be split 50%/50% between the Company and the Lenders. | ||||||||
d. | The next $1,000,000 realized by the Company shall be allocated 90% to the Company and 10% to the Lenders. | ||||||||
e. | The next $1,000,000 realized by Company shall be allocated 85% to Company and 15% to Lenders. | ||||||||
f. | All remaining proceeds realized by Company shall be allocated 80% to Company and 20% to Lenders. | ||||||||
The Lenders have a security interest in the Company’s patent infringement claim in which the Lender has the right to the net proceeds of this lawsuit to satisfy outstanding principal and interest under the notes. | |||||||||
As part of the private placement of the 25% notes payable, the Company incurred debt placement fees of $34,500 in 2010. These debt placement fees have been treated as deferred finance charges and were being amortized to interest expense over two years. The remainder of amortization $13,625 was recorded the years ended December 31, 2012. | |||||||||
In December 2012, 250,000 of these notes payable and accrued interest of $122,397 were converted into 8,219,911 shares of the Company’s common stock. In March 2013, the remaining $150,000 of the notes payable and accrued interest of $70,000 were converted into 3,000,000 shares of the Company’s common stock. Accrued interest of $13,895 was paid in cash. | |||||||||
Notes payable consists of the following as of December 31: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Unsecured notes payable due to related parties; interest at 10% per annum; principal and accrued interest due at maturity in September 2015 | $ | 330,000 | $ | 561,000 | |||||
Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | --- | 150,000 | |||||||
Series A notes payable; interest at 8% per annum; principal and accrued interest due at maturity in October 2011 (past due) | 50,000 | 50,000 | |||||||
Notes payable, interest at 25% per annum; principal and interest due September 2013 | --- | 150,000 | |||||||
Less: Debt discount | ---- | (13,632 | ) | ||||||
380,000 | 897,368 | ||||||||
Less: Current portion | 50,000 | 200,000 | |||||||
Long-term portion | $ | 330,000 | $ | 697,368 | |||||
At December 31, 2013 and 2012 accrued interest on notes payable was $317,344 and $394,281, respectively. | |||||||||
Aggregate Maturities of Long-term Debt | |||||||||
Aggregate maturities of the senior secured convertible notes, convertible notes and notes payable over the next five years are as follows: | |||||||||
2014 $ 50,000 | |||||||||
2015 330,249 | |||||||||
2016 - | |||||||||
2017 - | |||||||||
2018 - |
WARRANT_LIABILITY
WARRANT LIABILITY | 12 Months Ended |
Dec. 31, 2013 | |
Warrants Liability [Abstract] | ' |
WARRANT LIABILITY | ' |
NOTE 9 – WARRANT LIABILITY | |
On December 31, 2012, the Company entered into an Investment Agreement, a Technology and Services Agreement, a Technology and Services Agreement with Zaah Technologies, Inc. (“Zaah”)., a Patent and Technology License Agreement, and an Asset Purchase Agreement (collectively the “Agreements”). Included in these Agreements were Warrants to purchase shares of the Company’s common stock. | |
The warrants associated with these Agreements are subject to anti-dilution adjustments outlined in the Agreements. In accordance with FASB ASC 815, the warrants were classified as a liability in the total amount of $2.4 million at December 31, 2012. In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. As of December 31, 2013, the fair value of the warrant liability was $3.7 million. |
CONVERTIBLE_PREFERRED_STOCK
CONVERTIBLE PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2013 | |
Features of Convertible Preferred Stock [Abstract] | ' |
CONVERTIBLE PREFERRED STOCK | ' |
NOTE 10 – CONVERTIBLE PREFERRED STOCK | |
Subscription Agreement | |
The Company entered into a Subscription Agreement with VerifyMe, Inc. (“VerifyMe”) on January 31, 2013 (the “Subscription Agreement”). Under the terms of the Subscription Agreement VerifyMe subscribed to purchase 33,333,333 shares of the Company’s preferred stock and a warrant to purchase 33,333,333 shares of the Company’s common stock for $1 million at an exercise price of $0.12. | |
At any time within two years after January 31, 2013, the subscriber has the right, but not the obligation to require the Company to repurchase all, but not less than all, of the capital stock of the Company and warrants exercisable for capital stock of the Company held by subscriber in exchange for the price originally paid by the subscriber therefore upon the occurrence of any of the following events:(i) the consummation of any bona fide business acquisition, (ii) the incurring of any indebtedness by the Company in an amount in excess of $2 million, (iii) the issuance or sale of any security having a preference on liquidation senior to common stock, or (iv) the sale by the Company of capital stock or warrants exercisable for its capital stock at a price below $0.03 per share. | |
In accordance with FASB ASC 480 and 815, the Preferred Stock has been classified as permanent equity and was valued at $1 million at January 31, 2013. | |
The conversion feature of the Preferred Stock is an embedded derivative, which is classified as a liability in accordance with FASB ASC 815 and was valued in accordance with FASB ASC 470 as a beneficial conversion feature at a fair value of $1 million at January 31, 2013 and $800,000 at December 31, 2013. This was classified as an embedded derivative liability and a discount to Preferred Stock. Because the Preferred Stock can be converted at any time, the full amount of the original fair value was accreted and classified as a reduction to the discount on Preferred Stock and a deemed dividend distribution in the full amount of $1 million. | |
Because the Preferred Stock can be converted at any time, the embedded derivative is classified as a current liability at December 31, 2013. | |
The warrants associated with the Preferred Stock were also classified as a liability since they are subject to anti-dilutive adjustments outlined in the warrant agreement and valued at a fair market of $2,995,791 at January 31, 2013. Because this amount was entirely in excess of the transaction price, this amount was recorded as a charge to expenses of $2,995,791. In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. As of December 31, 2013, the fair value of the warrants was $2,300,000. | |
The Convertible Preferred Stock has a preference in liquidation that the holders of the Convertible Preferred Stock are to be paid out of assets available for distribution prior to holders of common stock. The Convertible Preferred Stockholders may cast the number of votes equal to the number of whole shares of common stock into which the shares of Convertible Preferred Stock can be converted. In addition, the Convertible Preferred Stockholders are to be paid dividends, based on the number of Convertible Preferred shares as if the shares had been converted to common shares, prior to the common stockholders receiving a dividend. | |
The conversion price of the Preferred A shares is currently $0.03 per share. There are no arrearages on cumulative dividends. | |
In August 2013, VerifyMe elected to convert in a cashless transaction an equal number of Preferred A stock valued at $366,667 to 12,222,222 shares of common stock. |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | ||||||||||||||||
NOTE 11 – FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
Derivative Liabilities | |||||||||||||||||
For purposes of determining whether certain instruments are derivatives for accounting treatment, the Company follows the accounting standard that provides guidance for determining whether an equity-linked financial instrument, or embedded feature, is indexed to an entity’s own stock. The standard applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially settled in an entity’s own common stock. | |||||||||||||||||
Liabilities measured at fair value on a recurring basis are summarized as follows: | |||||||||||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Derivative liability related to fair value of beneficial conversion feature | $ | - | $ | 800,000 | $ | --- | $ | 800,000 | |||||||||
Derivative liability related to fair value of warrants | - | - | 6,000,000 | 6,000,000 | |||||||||||||
Total | $ | - | $ | 800,000 | $ | 6,000,000 | $ | 6,800,000 | |||||||||
31-Dec-12 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Derivative liability related to fair value of beneficial conversion feature | $ | - | $ | - | $ | - | $ | - | |||||||||
Derivative liability related to fair value of warrants | - | - | 2,400,000 | 2,400,000 | |||||||||||||
Total | $ | - | $ | - | $ | 2,400,000 | $ | 2,400,000 | |||||||||
The following table details the approximate fair value measurements within the fair value hierarchy of the Company’s derivative liabilities using Level 3 inputs: | |||||||||||||||||
Total | |||||||||||||||||
Balance at January 1, 2013 | $ | 2,400,000 | |||||||||||||||
Derivative liabilities resulting from Subscription Agreement | 2,998,027 | ||||||||||||||||
Change in fair value of derivative liabilities | 601,973 | ||||||||||||||||
Balance at December 31, 2013 | $ | 6,000,000 | |||||||||||||||
As of December 31, 2013, the beneficial conversion feature of the preferred stock is treated as an embedded derivative liability and changes in the fair value were recognized in earnings. The preferred stock shares are convertible into shares of the Company’s common stock, which did trade in an active securities market, therefore the embedded derivative liability was valued using the following market based inputs: | |||||||||||||||||
Closing trade price of Common Stock | $0.07 | ||||||||||||||||
Series A Preferred Stock Conversion Price | $0.03 | ||||||||||||||||
Intrinsic value of conversion option per share | $0.04 | ||||||||||||||||
The Company has no assets that are measured at fair value on a recurring basis. There were no assets or liabilities measured at fair value on a non-recurring basis during the year ended December 31, 2013. | |||||||||||||||||
As of December 31, 2013 and December 31, 2012, the Company’s outstanding warrants are treated as derivative liabilities and changes in the fair value were recognized in earnings. These common stock purchase warrants did not trade in an active securities market, and as such, the Company estimated the fair value of these warrants using Black-Scholes and the following assumptions: | |||||||||||||||||
31-Dec-13 | |||||||||||||||||
Annual Dividend Yield | 0.00% | ||||||||||||||||
Expected Life (Years) | 4.00 – 4.08 | ||||||||||||||||
Risk-Free Interest Rate | 1.39% | ||||||||||||||||
Expected Volatility | 267.30% | ||||||||||||||||
Expected volatility was based primarily on historical volatility. Historical volatility was computed using daily pricing observations for recent periods. The Company believed this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected term of these warrants. The Company had no reason to believe future volatility over the expected remaining life of these warrants was likely to differ materially from historical volatility. The expected life was based on the remaining contractual term of the warrants. The risk-free rate was based on the U.S. Treasury rate that corresponded to the expected term of the warrants. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
STOCKHOLDERS' EQUITY | ' |
NOTE 12 – STOCKHOLDERS’ EQUITY | |
In October 2012, the Company commenced private placements consisting of shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock at an exercise price of $0.10 per share. The shares and warrants were sold in units with each unit comprised of one share and one warrant at a purchase price of $.045 per unit. As of December 31, 2012, the Company sold 6,888,889 units that raised $310,000 for the Company. | |
In October 2012, the Company commenced private placements consisting of shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock at an exercise price of $0.10 per share. The shares and warrants were sold in units with each unit comprised of one share and one warrant at a purchase price of $.05 per unit. As of December 31, 2012, the Company sold 15,000,000 units that raised $750,000 for the Company. | |
On November 13, 2012, an employee and consultant exercised options to purchase in the aggregate 10,490,996 shares of the Company’s common stock at an exercise price of $.00125 per share that raised $13,114 for the Company. | |
On November 21, 2012, the Company issued 1,000,000 shares of the Company’s common stock, valued at $46,500 to a board member for services to the Company. | |
On December 5, 2012, the Company issued 12,923,622 shares of the Company’s common stock, valued at $581,564, for the retirement of two notes payable totaling $450,000 and accrued interest of $131,564. | |
On December 20, 2012, an investor exercised warrants to purchase 333,333 shares of the Company’s common stock at $0.15 per share that raised $50,000 for the Company. | |
In January and February 2013, the Company received $185,000 from the sale of 3,700,000 units from private placements consisting of shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock at an exercise price of $0.10 per share. The shares and warrants were sold in units with each unit comprised of one share and one warrant at a purchase price of $.05 per unit. | |
In January 2013, the Company commenced private placements consisting of shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock at an exercise price of $0.12 per share. The shares and warrants were sold in units with each unit comprised of one share and one warrant at a purchase price of $.045 per unit. The company sold 1,111,111 units and raised $50,000. | |
On February 1, 2013, an investor exercised a warrant to purchase 1,000,000 shares of the Company’s common stock that raised $10,000 for the Company. | |
In February and March 2013, four investors exercised options to purchase 3,335,000 shares of the Company’s common stock that raised $17,919 for the Company. |
STOCK_OPTIONS_AND_WARRANTS
STOCK OPTIONS AND WARRANTS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
STOCK OPTIONS AND WARRANTS | ' | ||||||||||||
NOTE 13 – STOCK OPTIONS AND WARRANTS | |||||||||||||
During 1999, the Board of Directors (“Board”) of the Company adopted, with the approval of the stockholders, a Stock Option Plan. In 2000, the Board superseded that plan and created a new Stock Option Plan, pursuant to which it is authorized to grant options to purchase up to 1.5 million shares of common stock. On December 17, 2003, the Board, with approval of the stockholders, superseded this plan and created the 2003 Stock Option Plan (the “Plan”). Under the Plan the Company is authorized to grant options to purchase up to 18,000,000 shares of common stock to the Company’s employees, officers, directors, consultants, and other agents and advisors. The Plan is intended to permit stock options granted to employees under the Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the Plan, which are not intended to qualify as Incentive Stock Options, are deemed to be non-qualified options (“Non-Statutory Stock Options”). | |||||||||||||
During 2013, Our Board of Directors adopted a new comprehensive incentive compensation plan which will serve as the successor incentive compensation plan to the earlier plan, and provide the Company with an omnibus plan to design and structure grants of stock options, stock units, stock awards, stock appreciation rights and other stock-based awards for selected individuals in our employ or service. Our Board of Directors believes that the availability of (i) 20,000,000 new shares of our common stock, plus (ii) the number of shares of our common stock subject to outstanding grants under the 2003 Plan as of the date of the Annual Meeting, plus (iii) the number of shares of our common stock remaining available for issuance under the 2003 Plan but not subject to previously exercised, vested or paid grants, for issuance under the 2013 Plan. | |||||||||||||
As of December 31, 2013, there are 18,425,996 options that have been issued, and 19,574,004 options that are available to be issued under the Plan. | |||||||||||||
The Plan is administered by a committee of the Board of Directors (“Stock Option Committee”) which determines the persons to whom awards will be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan. | |||||||||||||
In connection with Incentive Stock Options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company). The aggregate fair market value (determined at the time of the grant) of stock for which an employee may exercise Incentive Stock Options under all plans of the company shall not exceed $1,000,000 per calendar year. If any employee shall have the right to exercise any options in excess of $100,000 during any calendar year, the options in excess of $100,000 shall be deemed to be Non-Statutory Stock Options, including prices, duration, transferability and limitations on exercise. | |||||||||||||
The Company issued non-statutory stock options pursuant to contractual agreements to non-employees. Options granted under the agreements are expensed when the related service or product is provided. | |||||||||||||
On July 16, 2012, the Company issued an option to purchase 200,000 shares of the Company’s common stock at an exercise price of $.05, with a term of ten years, to a consultant. The fair value of options issued was $11,638. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 133%, risk-free interest rate of 1.5% and expected option life of ten years. These options granted were fully vested as of the date of the agreement. As a result, the Company recorded $11,638 of consulting expense for the year ended December 31, 2012. | |||||||||||||
On November 21, 2012, the Company issued options to purchase an aggregate of 2,000,000 shares of the Company’s common stock at an exercise price of $.05, with a term of ten years, to the Chief Executive Officer and the Chief Operating Officer. The fair value of options issued was $89,538 and was expensed immediately. | |||||||||||||
On November 21, 2012, the Company issued options to purchase an aggregate of 10,000,000 shares of the Company’s common stock at an exercise price of $.05, with a term of ten years, to the five members of the Board of Directors. The fair value of options issued was $447,689 of which $223,844 was expensed immediately and the remainder will be expensed over one year with one month expense of $18,564 being expensed in 2012. The remaining balance of $199,313 was expensed during 2013. | |||||||||||||
All of the options issued on November 21, 2012 were valued using the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 131%, risk-free interest rate of 1.7% and expected option life of ten years. | |||||||||||||
Effective October 8, 2012, the Company entered into a three year agreement with the Vice Chairman of the Board of Company with an annual compensation of $200,000 per year. In addition, upon execution of the agreement the Company has agreed to issue options to the Vice Chairman to purchase 5% of the shares of the Company’s fully diluted common stock at an exercise price of $.05 per share, subsequent to the Company receiving funding of $2.5 million and on June 25, 2013, the Company issued the Vice Chairman 19,000,000 options in satisfaction of the 5% of the shares of the Company’s fully diluted common stock clause. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 146.1%, risk-free interest rate of 2.6% and expected option life of ten years. The fair value of options issued was $3,767,700 that was expensed immediately. | |||||||||||||
Effective October 16, 2012, the Company entered into a three year agreement with the President and Chief Executive Officer of the Company with an annual compensation of $200,000 per year. In addition, upon execution of the agreement the Company has agreed to issue options to the President to purchase 5% of the shares of the Company’s fully diluted common stock at an exercise price of $.05 per share, subsequent to the Company receiving funding of $2.5 million and on June 25, 2013, the Company issued the President and Chief Executive Officer 19,000,000 options in satisfaction of the 5% of the shares of the Company’s fully diluted common stock clause. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 146.1%, risk-free interest rate of 2.6% and expected option life of ten years. The fair value of options issued was $3,767,700 that was expensed immediately. | |||||||||||||
On January 22, 2013, the Company issued options to an employee to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $.05, with a term of ten years. The options vest as follows: 250,000 immediately, 250,000 in one year and 500,000 in two years The Company used the Black- Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 222%, risk-free interest rate of 1.9% and expected option life of ten years. The fair value of options issued was $99,972 of which $25,000 was expensed immediately and the remainder is being expensed over the vesting terms. The total expense for the year ended December 31, 2013 was $71,967. | |||||||||||||
On February 25, 2013, the Company issued options to an employee to purchase 500,000 shares of the Company’s common stock at an exercise price of $.05, with a term of ten years. The options vest as follows: 200,000 in one year, 200,000 in two years and 100,000 in three years. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 259%, risk-free interest rate of 1.9% and expected option life of ten years. The fair value of options issued was $89,998. The options were cancelled during the three months ended June 30, 2013. The total expense recognized of $5,000 was reversed upon cancellation of the options. | |||||||||||||
On March 13, 2013, the Company issued an option to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $.05, with a term of ten years, to a member of the Board of Directors. The options vest 50% immediately and 50% on March 13, 2014. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 235%, risk-free interest rate of 2.0% and expected option life of ten years. The fair value of the option issued was $439,963 of which $219,982 was expensed immediately and the remainder will be expensed over one year. The total expense for the year ended December 31, 2013 was $396,569. | |||||||||||||
On May 4, 2013, the Company issued an option to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $.05, with a term of ten years, to the a member of the Board of Directors. The options vest 50% immediately and 50% on May 4, 2014. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 235%, risk-free interest rate of 1.78% and expected option life of ten years. The fair value of the option issued was $460,000 of which $230,000 was expensed immediately and the remainder will be expensed over one year. The total expense for the year ended December 31, 2013 was $381,864. | |||||||||||||
On September 30, 2013, the Company issued an option to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $.15, with a term of ten years, to the Company’s Chief Operating Officer. The options vest 50% after the first year and 50% at the end of 24 months. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of ranging from 268.4% to 272.8%, risk-free interest rate of 1.39% and expected option life ranging from 10 years. The fair value of the option issued was $99,840. The total expense for the year ended December 31, 2013 was $18,903. | |||||||||||||
On December 2, 2013, the Company issued an option to purchase 1 million shares of the Company’s common stock at an exercise price of $.15, with a term of ten years, to the Company’s Chief Financial Officer. The options vest 50% after the first year and 50% at the end of 24 months. The Company used the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of ranging from 266.1%, risk-free interest rate of 2.64% and expected option life of 10 years. The fair value of the option issued was $79,994, which will be expensed over the vesting term. The total expense for the year ended December 31, 2013 was $15,123. | |||||||||||||
The following tables summarize non-employee stock option/warrant activity of the Company since December 31, 2011: | |||||||||||||
Weighted Average | |||||||||||||
Option/Warrant | Exercise | Exercise | |||||||||||
Shares | Price | Price | |||||||||||
Outstanding, December 31, 2011 | 15,585,996 | $0.00125 to $0.20 | $ | 0.01 | |||||||||
Granted | 72,422,221 | 0.05 to 0.10 | 0.08 | ||||||||||
Transferred to employee options | (200,000 | ) | (0.05 | ) | - | ||||||||
Exercised | (5,000,996 | ) | 0.00125 | - | |||||||||
Expired | - | - | - | ||||||||||
Outstanding, December 31, 2012 | 82,807,221 | 0.00125 to 0.20 | 0 | ||||||||||
Granted | 38,144,444 | 0.10 to 0.15 | 0.03 | ||||||||||
Exercised | (9,435,000 | ) | 0.00125 - 0.07 | - | |||||||||
Expired | - | - | - | ||||||||||
Outstanding, December 31, 2013 | 111,516,665 | $0.01 to $.20 | $ | 0.1 | |||||||||
Exercisable, December 2013 | 111,516,665 | $0.01 to $.20 | $ | 0.1 | |||||||||
Weighted Average Remaining Life, | |||||||||||||
Exercisable, December 31, 2013 (years) | 7 | ||||||||||||
A summary of incentive stock option transactions for employees since December 31, 2011 is as follows: | |||||||||||||
Weighted Average | |||||||||||||
Option/Warrant | Exercise | Exercise | |||||||||||
Shares | Price | Price | |||||||||||
Outstanding, December 31, 2011 | 6,390,000 | $0.00 | $ | 0.00125 | |||||||||
Granted | 15,000,000 | 0.05 - 0.15 | 0.06 | ||||||||||
Transferred from non-employee options | 200,000 | 0.05 | - | ||||||||||
Exercised | (5,823,333 | ) | 0.00125 - 0.15 | - | |||||||||
Expired/Returned | - | - | - | ||||||||||
Outstanding, December 31, 2012 | 15,766,667 | 0.00125 to 0.10 | 0.06 | ||||||||||
Granted | 45,500,000 | 0.05 - 0.15 | 0.04 | ||||||||||
Exercised | (900,000 | ) | 0.00125 | - | |||||||||
Expired/Returned | (500,000 | ) | 0.05 | - | |||||||||
Outstanding, December 31, 2013 | 59,866,667 | $0.05 to $0.15 | $ | 0.05 | |||||||||
Exercisable, December 31, 2013 | 50,116,667 | $0.05 to $0.15 | $ | 0.06 | |||||||||
Weighted Average Remaining Life, | |||||||||||||
Exercisable, December 31, 2013 (years) | 9.6 | ||||||||||||
OPERATING_LEASES
OPERATING LEASES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Leases, Operating [Abstract] | ' | ||||
OPERATING LEASES | ' | ||||
NOTE 14 - OPERATING LEASES | |||||
For the year ended December 31, 2013 and 2012, total rent expense under leases amounted to $59,272 and $0, respectively, and is included in general and administrative expense. At December 31, 2013, the Company was obligated under various non-cancelable operating lease arrangements for property as follows: | |||||
2014 | $ | 71,766 | |||
2015 | 74,637 | ||||
2016 | 31,605 | ||||
$ | 178,008 |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 15 – RELATED PARTY TRANSACTIONS | |
During the fourth quarter of 2013, the company converted outstanding debt owed to shareholders into 25,974,697 shares of common stock (See Notes 6,7,8). | |
At December 31, 2013 and 2012, five shareholders of the Company held $330,249 and $512,249 of the senior secured convertible notes payable. | |
One shareholder held $140,000 of convertible notes payable as of December 31, 2012, that was satisfied by December 31, 2013. | |
At December 31, 2012 two shareholders of the Company held $561,000 of unsecured notes payable that was satisfied by December 31, 2013. | |
At December 31, 2013, five shareholders of the Company were owed accrued interest of $300,676 related to the senior secured convertible notes payable. | |
The Company maintained its office at the home of its Chief Executive Officer in 2012. No formal lease agreement existed and no direct rent expense has been incurred. However, related occupancy costs of $32,414 were incurred during the year ended December 31, 2012. | |
At December 31, 2011, accrued and unpaid salary for the Chief Executive Officer was $208,514. As of December 31, 2012, the Chief Executive Officer has forgiven any unpaid accrued and unpaid salary. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
CONTINGENCIES | ' |
NOTE 16 – CONTINGENCIES | |
In October 2010, the Company filed suit in the Western District of Pennsylvania against WS Packaging Group, Inc. (“WS”) alleging that WS infringed on one of the Company’s patents in the manufacture of MONOPOLY game pieces on behalf of McDonald’s Corp. On June 4, 2012, both WS and the Company filed a stipulation to dismiss the action without prejudice and enter into settlement negotiations. Settlement negotiations are ongoing. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
Principle of Consolidation | ' |
Principle of Consolidation | |
The accompanying consolidated financial statements include the accounts of LaserLock Technologies, Inc. and its wholly-owned subsidiary, LL Security Products, Inc. All inter-company transactions have been eliminated in consolidation. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. | |
Comprehensive Income | ' |
Comprehensive Income | |
The Company follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 220 in reporting comprehensive income. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Since the Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net income (loss). | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The Company’s financial instruments consist of cash, accounts receivable, accounts payable and accrued expenses and notes payable. The carrying value of cash, accounts receivable, accounts payable and accrued expenses approximate their fair value because of their short maturities. The Company believes the carrying amount of its notes payable and convertible debt approximates its fair value based on rates and other terms currently available to the Company for similar debt instruments. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
For purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and certificates of deposit and commercial paper with original maturities of 90 days or less to be cash or cash equivalents. | |
Concentration of Credit Risk Involving Cash and Cash Equivalents | ' |
Concentration of Credit Risk Involving Cash and Cash Equivalents | |
The Company’s cash and cash equivalents are held at two financial institutions. At times, the Company’s deposits may exceed Federal Deposit Insurance Corporation (FDIC) coverage limits. The Company has not experienced any losses from maintaining cash accounts in excess of federally insured limits. | |
Inventory | ' |
Inventory | |
Inventory principally consists of penlights and pigments and is stated at the lower of cost (determined by the first-in, first-out method) or market. | |
Property and Equipment | ' |
Property and Equipment | |
Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, principally five to seven years. Maintenance and repairs of property are charged to operations, and major improvements are capitalized. Upon retirement, sale, or other disposition of property and equipment, the costs and accumulated depreciation are eliminated from the accounts, and any resulting gain or loss is included in operations. | |
Patents and Trademark | ' |
Patents and Trademark | |
The Company has five issued patents for anti-counterfeiting technology and purchased a trademark. Costs associated with the registration and legal defense of the patents have been capitalized and are amortized on a straight-line basis over the estimated lives of the patents which were determined to be 17 years. | |
Long-Lived Assets | ' |
Long-Lived Assets | |
The Company evaluates the recoverability of its long-lived assets in accordance with ASC 360 “Property, Plant, and Equipment.” The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets are measured by a comparison of the carrying amount of an asset to future cash flows expected to be generated by the asset, undiscounted and without interest or independent appraisals. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the assets. | |
Deferred Financing Costs | ' |
Deferred Financing Costs | |
Costs incurred in securing long-term debt are deferred and amortized, as a charge to interest expense, over the term of the related debt. In the case of long-term debt modifications, the Company follows the guidance provided by ASC 470-50 “Debt – Modification and Extinguishments.” | |
Convertible Notes Payable | ' |
Convertible Notes Payable | |
Convertible notes payable, for which the embedded conversion feature does not qualify for derivative treatment, are evaluated to determine if the effective or actual rate of conversion per the terms of the convertible note agreement is below market value. In these instances, the Company accounts for the value of the beneficial conversion feature (BCF) as a debt discount, which is then accreted to interest expense over the life of the related debt using the straight-line method which approximates the effective interest method. | |
Revenue Recognition | ' |
Revenue Recognition | |
In accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition (Codified in FASB ASC 605), the Company recognizes revenue when (i) persuasive evidence of a customer or distributor arrangement exists, (ii) a retailer, distributor or wholesaler receives the goods and acceptance occurs, (iii) the price is fixed or determinable, and (iv) collectability of the revenue is reasonably assured. Subject to these criteria, the Company recognizes revenue from product sales, consisting mainly of pigments and penlights, upon shipment to the customer. Royalty revenue is recognized upon receipt of notification from a customer that the Company’s product has been used in the customer’s production process. | |
Income Taxes | ' |
Income Taxes | |
The Company follows FASB ASC 740 when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Tax years from 2009 through 2012 remain subject to examination by major tax jurisdictions. | |
Stock-based Payments | ' |
Stock-based Payments | |
The Company accounts for stock-based compensation under the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. | |
The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. | |
All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Any stock options issued to non-employees are recorded as an expense and additional paid-in capital in stockholders’ equity over the applicable service periods. | |
Advertising Costs | ' |
Advertising Costs | |
Advertising costs are expensed as incurred. Advertising costs were approximately $53,979 and $0 for the years ended December 31, 2013 and 2012, and are included in sales and marketing expenses. | |
Research and Development Costs | ' |
Research and Development Costs | |
In accordance with FASB ASC 730, research and development costs are expensed when incurred. | |
Loss Per Share | ' |
Loss Per Share | |
The Company follows FASB ASC 260 when reporting Earnings Per Share resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss for the years ended December 31, 2013 and 2012, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same. | |
Segment Information | ' |
Segment Information | |
The Company is organized and operates as one operating segment wherein the Company’s patented technologies are utilized to address counterfeiting issues. In accordance with ASC 280, Segment Reporting, the chief operating decision-maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Since the Company operates in one segment and provides one group of similar products, all financial segment and product line information required by ASC 280 can be found in the consolidated financial statements. | |
Recently Adopted Accounting Pronouncements | ' |
Recently Adopted Accounting Pronouncements | |
As of December 31, 2013 and for the period then ended there were no recently adopted accounting pronouncements that had a material effect on the Company’s financial statements. | |
Recently Issued Accounting Pronouncements Not Yet Adopted | ' |
Recently Issued Accounting Pronouncements Not Yet Adopted | |
In July 2013, the FASB issued Accounting Standards Update (“ASU”) ASU 2013-11, Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in this update provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists, in order to eliminate the diversity in practice in the presentation of unrecognized tax benefits in such instances. This guidance generally requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. | |
However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. ASU 2013-11 is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Retrospective application is permitted. | |
The Company is currently evaluating ASU 2013-11 and plans to comply with all applicable provisions of this ASU no later than the first quarter of 2014. |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of components equipment | ' | ||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Furniture and Fixtures | $ | 219,871 | $ | --- | |||||
Equipment | 16,155 | 34,964 | |||||||
236,026 | 34,964 | ||||||||
Less: Accumulated depreciation | 91,952 | 32,624 | |||||||
$ | 144,074 | $ | 2,340 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of income tax benefit (provision) | ' | ||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current | $ | 1,837,000 | $ | 490,000 | |||||||||||||
Deferred | 3,284,000 | 263,000 | |||||||||||||||
Change in valuation allowance | (5,121,000 | ) | (753,000 | ) | |||||||||||||
- | - | ||||||||||||||||
Schedule of reconciliation of the tax | ' | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Amount | % | Amount | % | ||||||||||||||
U.S. Federal income tax benefit at Federal Statutory Rate | $ | (5,718,000 | ) | (35 | ) | $ | (298,000 | ) | (35 | ) | |||||||
State tax, net of federal effect | (956,000 | ) | (6 | ) | (50,000 | ) | (6 | ) | |||||||||
Non deductible accrued expense | - | - | (238,000 | ) | (28 | ) | |||||||||||
Deductible share based compensation | (318,000 | ) | (2 | ) | (167,000 | ) | (20 | ) | |||||||||
Non-deductible changes in derivative liability and share based transactions | 1,895,000 | 12 | - | - | |||||||||||||
Other | (24,000 | ) | - | - | - | ||||||||||||
Change in valuation allowance | 5,121,000 | 31 | 753,000 | 89 | |||||||||||||
$ | - | - | - | - | |||||||||||||
Schedule of deferred tax assets, liabilities and related valuation | ' | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred tax asset for NOL carryforwards | $ | 5,144,000 | $ | 3,308,000 | |||||||||||||
Deferred tax liability for intangibles | (165,000 | ) | (165,000 | ) | |||||||||||||
Share based compensation | 3,683,000 | 162,000 | |||||||||||||||
Non deductible accrued expenses | 150,000 | 386,000 | |||||||||||||||
Valuation allowance | (8,812,000 | ) | (3,691,000 | ) | |||||||||||||
$ | - | $ | - |
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of notes payable | ' | ||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Unsecured notes payable due to related parties; interest at 10% per annum; principal and accrued interest due at maturity in September 2015 | $ | 330,000 | $ | 561,000 | |||||
Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | --- | 150,000 | |||||||
Series A notes payable; interest at 8% per annum; principal and accrued interest due at maturity in October 2011 (past due) | 50,000 | 50,000 | |||||||
Notes payable, interest at 25% per annum; principal and interest due September 2013 | --- | 150,000 | |||||||
Less: Debt discount | ---- | (13,632 | ) | ||||||
380,000 | 897,368 | ||||||||
Less: Current portion | 50,000 | 200,000 | |||||||
Long-term portion | $ | 330,000 | $ | 697,368 | |||||
Schedule of aggregate maturities of senior secured convertible notes | ' | ||||||||
2014 $ 50,000 | |||||||||
2015 330,249 | |||||||||
2016 - | |||||||||
2017 - | |||||||||
2018 - |
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Schedule of liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||
31-Dec-13 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Derivative liability related to fair value of beneficial conversion feature | $ | - | $ | 800,000 | $ | --- | $ | 800,000 | |||||||||
Derivative liability related to fair value of warrants | - | - | 6,000,000 | 6,000,000 | |||||||||||||
Total | $ | - | $ | 800,000 | $ | 6,000,000 | $ | 6,800,000 | |||||||||
31-Dec-12 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Derivative liability related to fair value of beneficial conversion feature | $ | - | $ | - | $ | - | $ | - | |||||||||
Derivative liability related to fair value of warrants | - | - | 2,400,000 | 2,400,000 | |||||||||||||
Total | $ | - | $ | - | $ | 2,400,000 | $ | 2,400,000 | |||||||||
Schedule of fair value measurements within the fair value hierarchy of derivative liabilities using Level 3 inputs | ' | ||||||||||||||||
Total | |||||||||||||||||
Balance at January 1, 2013 | $ | 2,400,000 | |||||||||||||||
Derivative liabilities resulting from Subscription Agreement | 2,998,027 | ||||||||||||||||
Change in fair value of derivative liabilities | 601,973 | ||||||||||||||||
Balance at December 31, 2013 | $ | 6,000,000 | |||||||||||||||
Schedule of embedded derivative liability valuation assumptions | ' | ||||||||||||||||
Closing trade price of Common Stock | $0.07 | ||||||||||||||||
Series A Preferred Stock Conversion Price | $0.03 | ||||||||||||||||
Intrinsic value of conversion option per share | $0.04 | ||||||||||||||||
Schedule of common stock purchase warrants valuation assumptions | ' | ||||||||||||||||
31-Dec-13 | |||||||||||||||||
Annual Dividend Yield | 0.00% | ||||||||||||||||
Expected Life (Years) | 4.00 – 4.08 | ||||||||||||||||
Risk-Free Interest Rate | 1.39% | ||||||||||||||||
Expected Volatility | 267.30% |
STOCK_OPTIONS_AND_WARRANTS_Tab
STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ' | ||||||||||||
Schedule of non-employee stock option/warrant activity | ' | ||||||||||||
Weighted Average | |||||||||||||
Option/Warrant | Exercise | Exercise | |||||||||||
Shares | Price | Price | |||||||||||
Outstanding, December 31, 2011 | 15,585,996 | $0.00125 to $0.20 | $ | 0.01 | |||||||||
Granted | 72,422,221 | 0.05 to 0.10 | 0.08 | ||||||||||
Transferred to employee options | (200,000 | ) | (0.05 | ) | - | ||||||||
Exercised | (5,000,996 | ) | 0.00125 | - | |||||||||
Expired | - | - | - | ||||||||||
Outstanding, December 31, 2012 | 82,807,221 | 0.00125 to 0.20 | 0 | ||||||||||
Granted | 38,144,444 | 0.10 to 0.15 | 0.03 | ||||||||||
Exercised | (9,435,000 | ) | 0.00125 - 0.07 | - | |||||||||
Expired | - | - | - | ||||||||||
Outstanding, December 31, 2013 | 111,516,665 | $0.01 to $.20 | $ | 0.1 | |||||||||
Exercisable, December 2013 | 111,516,665 | $0.01 to $.20 | $ | 0.1 | |||||||||
Weighted Average Remaining Life, | |||||||||||||
Exercisable, December 31, 2013 (years) | 7 | ||||||||||||
Schedule of incentive stock option transactions for employees | ' | ||||||||||||
Weighted Average | |||||||||||||
Option/Warrant | Exercise | Exercise | |||||||||||
Shares | Price | Price | |||||||||||
Outstanding, December 31, 2011 | 6,390,000 | $0.00 | $ | 0.00125 | |||||||||
Granted | 15,000,000 | 0.05 - 0.15 | 0.06 | ||||||||||
Transferred from non-employee options | 200,000 | 0.05 | - | ||||||||||
Exercised | (5,823,333 | ) | 0.00125 - 0.15 | - | |||||||||
Expired/Returned | - | - | - | ||||||||||
Outstanding, December 31, 2012 | 15,766,667 | 0.00125 to 0.10 | 0.06 | ||||||||||
Granted | 45,500,000 | 0.05 - 0.15 | 0.04 | ||||||||||
Exercised | (900,000 | ) | 0.00125 | - | |||||||||
Expired/Returned | (500,000 | ) | 0.05 | - | |||||||||
Outstanding, December 31, 2013 | 59,866,667 | $0.05 to $0.15 | $ | 0.05 | |||||||||
Exercisable, December 31, 2013 | 50,116,667 | $0.05 to $0.15 | $ | 0.06 | |||||||||
Weighted Average Remaining Life, | |||||||||||||
Exercisable, December 31, 2013 (years) | 9.6 |
OPERATING_LEASES_Tables
OPERATING LEASES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Leases, Operating [Abstract] | ' | ||||
Schedule of non-cancelable operating lease arrangements for property | ' | ||||
2014 | $ | 71,766 | |||
2015 | 74,637 | ||||
2016 | 31,605 | ||||
$ | 178,008 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Number of financial institutions at which company's cash and cash equivalents are held | 2 | ' |
Property and equipment depreciation method | 'straight-line method | ' |
Property and equipment estimated useful lives | 'five to seven years | ' |
Number of operating segment | 1 | ' |
Sales and marketing expenses | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Advertising costs | $53,979 | $0 |
Patents and Trademark | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Number of patents issued | 5 | ' |
Amortization method of patents | 'straight-line basis | ' |
Estimated lives of patents | '17 years | ' |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $236,026 | $34,964 |
Less: Accumulated depreciation | 91,952 | 32,624 |
Total property and equipment | 144,074 | 2,340 |
Furniture and Fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 219,871 | ' |
Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $16,155 | $34,964 |
PROPERTY_AND_EQUIPMENT_Detail_
PROPERTY AND EQUIPMENT (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation of property and equipment | $68,839 | $20 |
PATENTS_AND_TRADEMARK_Detail_T
PATENTS AND TRADEMARK (Detail Textuals) (Patents and Trademark, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Patent | ||
Patents and Trademark | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Number of patents issued | 5 | ' |
Amortization method of patents | 'straight-line basis | ' |
Estimated lives of patents | '17 years | ' |
Capitalized patent costs | $21,954 | $6,665 |
Amortization expense | 13,091 | 13,451 |
Future estimated annual amortization in December 31, 2014 | 13,000 | ' |
Future estimated annual amortization in December 31, 2015 | 13,000 | ' |
Future estimated annual amortization in December 31, 2016 | 13,000 | ' |
Future estimated annual amortization in December 31, 2017 | 13,000 | ' |
Future estimated annual amortization in December 31, 2018 | $13,000 | ' |
INCOME_TAXES_Summary_of_income
INCOME TAXES -Summary of income tax benefit (provision) (Details) (USD $) | 12 Months Ended | 170 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Current | $1,837,000 | $490,000 | ' |
Deferred | 3,284,000 | 263,000 | ' |
Change in valuation allowance | -5,121,000 | -753,000 | ' |
Income tax benefit (provision), total | ' | ' | ($165,000) |
INCOME_TAXES_Reconciliation_of
INCOME TAXES - Reconciliation of tax (Details 1) (USD $) | 12 Months Ended | 170 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
U.S federal income tax benefit at Federal statutory rate, amount | ($5,718,000) | ($298,000) | ' |
State tax, net of federal tax effect, amount | -956,000 | -50,000 | ' |
Non deductible accrued expense, amount | ' | -238,000 | ' |
Deductible share based compensation, amount | -318,000 | -167,000 | ' |
Non-deductible changes in derivative liability and share based transactions, amount | 1,895,000 | ' | ' |
Other, amount | -24,000 | ' | ' |
Change in valuation allowance, amount | 5,121,000 | 753,000 | ' |
Income tax benefit (provision), total | ' | ' | ($165,000) |
U.S federal income tax benefit at Federal statutory rate, percent | -35.00% | -35.00% | ' |
State tax, net of federal tax effect, percent | -6.00% | -6.00% | ' |
Non deductible accrued expense, percent | ' | -28.00% | ' |
Deductible share based compensation, percent | -2.00% | -20.00% | ' |
Non-deductible changes in derivative liability and share based transactions, percent | 12.00% | ' | ' |
Other, percent | ' | ' | ' |
Change in valuation allowance, percent | 31.00% | 89.00% | ' |
Effective income tax rate, total | ' | ' | ' |
INCOME_TAXES_Primary_component
INCOME TAXES - Primary components of deferred tax assets, liabilities and related valuation allowances (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Deferred tax asset for NOL carryforwards | $5,144,000 | $3,308,000 |
Deferred tax liability for intangibles | -165,000 | -165,000 |
Share based compensation | 3,683,000 | 162,000 |
Non deductible accrued expenses | 150,000 | 386,000 |
Valuation allowance | -8,812,000 | -3,691,000 |
Deferred tax assets, net | ' | ' |
INCOME_TAXES_Detail_Textuals
INCOME TAXES (Detail Textuals) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Net operating loss carryforward | $12.50 | ' |
U.S federal income tax benefit at Federal statutory rate | 35.00% | 35.00% |
SENIOR_SECURED_CONVERTIBLE_NOT1
SENIOR SECURED CONVERTIBLE NOTES PAYABLE (Detail Textuals) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2006 | Jun. 30, 2011 | 31-May-07 | Feb. 28, 2006 | |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Accrued interest | ' | $300,677 | $600,091 | ' | ' | ' | ' |
Outstanding principal balance on notes | ' | 330,249 | 775,249 | ' | ' | ' | ' |
10% Senior Secured Convertible Promissory Notes | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Debt instrument principal amount | 225,000 | 220,000 | ' | ' | 596,500 | ' | 800,000 |
Interest rate | ' | ' | ' | ' | 10.00% | 12.00% | 10.00% |
Sale price of notes payable | ' | ' | ' | 800,000 | ' | ' | ' |
Remaining debt and accrued interest was extended until September 15, 2015 | ' | ' | 178,749 | ' | ' | ' | ' |
Accrued interest | 181,125 | 395,000 | ' | ' | ' | ' | ' |
Common stock shares issued on conversion of debt (in shares) | 7,400,000 | 7,900,000 | ' | ' | ' | ' | ' |
Amount of notes converted in to common stock shares | $1,628,000 | ' | ' | ' | ' | ' | ' |
SENIOR_SECURED_CONVERTIBLE_NOT2
SENIOR SECURED CONVERTIBLE NOTES PAYABLE (Detail Textuals 1) (USD $) | 170 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | |
10% Senior Secured Convertible Promissory Notes | 10% Senior Secured Convertible Promissory Notes | 10% Senior Secured Convertible Promissory Notes | 10% Senior Secured Convertible Promissory Notes | 10% Senior Secured Convertible Promissory Notes | 10% Senior Secured Convertible Promissory Notes | ||
Warrant | Warrant | Warrant | Warrant | ||||
Minimum | Maximum | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Repurchase of notes issued exercise by warrants | ' | ' | ' | 8,000,000 | ' | ' | ' |
Term of warrants | ' | ' | ' | '10 years | ' | ' | ' |
Warrants exercise price (in dollars per share) | ' | ' | 0.01 | 0.01 | ' | ' | ' |
Fair value of warrants recorded as a debt discount on the notes payable | $392,376 | ' | ' | $392,376 | ' | ' | ' |
Method used to calculate fair value of warrants | ' | ' | ' | 'Black-Scholes option pricing model | ' | ' | ' |
Dividend yield | ' | ' | ' | 0.00% | ' | ' | ' |
Expected volatility | ' | ' | ' | ' | ' | 169.00% | 284.00% |
Risk-free interest rate | ' | ' | ' | ' | ' | 3.60% | 4.50% |
Expected warrant term | ' | ' | ' | '10 years | ' | ' | ' |
Amortization period | ' | '1 year | ' | ' | ' | ' | ' |
Amount received for exercised of warrants | ' | ' | ' | ' | $80,000 | ' | ' |
Number of warrants | ' | ' | ' | ' | 8,000,000 | ' | ' |
Debt instrument conditional covenants amount | ' | ' | ' | ' | ' | ' | ' |
if an equity financing with total proceeds of more than $5,000,000 occurs while any notes are outstanding, holders of notes will have the right, at their option, to convert the outstanding principal and interest of the notes into shares at a discount of 30% of the price per share in the qualified financing. | |||||||
Percentage of discount on price per share | ' | 30.00% | ' | ' | ' | ' | ' |
CONVERTIBLE_NOTES_PAYABLE_Deta
CONVERTIBLE NOTES PAYABLE (Detail Textuals) (USD $) | 12 Months Ended | 170 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | ||||
Dec. 31, 2012 | Dec. 31, 2013 | Mar. 19, 2013 | Aug. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2008 | Dec. 31, 2007 | Dec. 31, 2007 | Mar. 19, 2013 | Mar. 19, 2013 | |
10% Convertible Promissory Notes | 10% Convertible Promissory Notes | 10% Convertible Promissory Notes | 10% Convertible Promissory Notes | 10% Convertible Promissory Notes | 10% Convertible Promissory Notes | 10% Convertible Promissory Notes | ||||
Series A Preferred Stock | Vice Chairman | Investor | ||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument principal amount | ' | ' | ' | ' | ' | ' | $400,000 | ' | ' | ' |
Interest rate | ' | ' | ' | 10.00% | ' | ' | 10.00% | ' | ' | ' |
Maturity date | ' | ' | ' | '2015-09 | ' | ' | '2008-08 | ' | ' | ' |
Proceeds from issuance of notes payable | 200,000 | 2,789,000 | ' | ' | ' | 25,000 | 375,000 | ' | ' | ' |
Amount of notes converted in to common stock shares | ' | ' | ' | 260,000 | ' | ' | 260,000 | ' | ' | ' |
Number of common stock shares issued on conversion of notes | ' | ' | ' | 48,750,000 | ' | ' | ' | ' | ' | ' |
Initial conversion price per share (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.01 | $0.01 | ' | ' |
Convertible notes payable | 140,000 | ' | 126,000 | 140,000 | 98,000 | ' | ' | ' | 14,000 | 28,000 |
Common stock shares issued on conversion of debt (in shares) | ' | ' | ' | ' | 12,375,000 | ' | ' | ' | 2,625,000 | 5,250,000 |
Warrants issued | ' | ' | ' | 26,250,000 | ' | ' | ' | ' | ' | ' |
Accrued interest | ' | ' | ' | ' | 87,150 | ' | ' | ' | ' | ' |
Beneficial conversion feature related to the issuance of convertible notes payable | ' | ' | ' | ' | ' | $25,000 | $375,000 | ' | ' | ' |
Common stock issuance price per share for convertible notes payable (in dollars per share) | ' | ' | ' | ' | ' | ' | 0.016 | ' | ' | ' |
NOTES_PAYABLE_Summary_of_notes
NOTES PAYABLE - Summary of notes payable (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | ' | ' |
Less: Debt discount | ' | ($13,632) |
Notes payable | 380,000 | 897,368 |
Less: Current portion | 50,000 | 200,000 |
Long-term portion | 330,000 | 697,368 |
Unsecured notes payable due to related parties; interest at 10% per annum; principal and accrued interest due at maturity in September 2015 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Less: Debt discount | -9,914 | ' |
Notes payable | 330,000 | 561,000 |
Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Notes payable | ' | 150,000 |
Series A notes payable; interest at 8% per annum; principal and accrued interest due at maturity in October 2011 (past due) | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Notes payable | 50,000 | 50,000 |
Notes payable, interest at 25% per annum; principal and interest due September 2013 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Notes payable | ' | $150,000 |
NOTES_PAYABLE_Information_rega
NOTES PAYABLE - Information regarding notes payable - (Parentheticals) (Details) | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Unsecured notes payable due to related parties; interest at 10% per annum; principal and accrued interest due at maturity in September 2015 | Unsecured notes payable due to related parties; interest at 10% per annum; principal and accrued interest due at maturity in September 2015 | Unsecured notes payable due to related parties; interest at 10% per annum; principal and accrued interest due at maturity in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at maturity in October 2011 (past due) | Series A notes payable; interest at 8% per annum; principal and accrued interest due at maturity in October 2011 (past due) | Notes payable, interest at 25% per annum; principal and interest due September 2013 | Notes payable, interest at 25% per annum; principal and interest due September 2013 | |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | 10.00% | 10.00% | 10.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 25.00% | 25.00% |
NOTES_PAYABLE_Aggregate_Maturi
NOTES PAYABLE - Aggregate Maturities of Long-term Debt (Details 1) (USD $) | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ' |
2014 | $50,000 |
2015 | 330,249 |
2016 | ' |
2017 | ' |
2018 | ' |
NOTES_PAYABLE_Detail_Textuals
NOTES PAYABLE (Detail Textuals) (USD $) | 12 Months Ended | 170 Months Ended | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Unsecured notes payable | Unsecured notes payable | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Amount of note payable | ' | ' | ' | ' | $561,000 |
Amount of unamortized discount | ' | 13,632 | ' | ' | 9,914 |
Accrued interest | ' | ' | ' | 9,167 | 83,715 |
Number of shares issued upon conversion of debt | ' | ' | ' | 4,703,711 | 4,473,333 |
Amount of cash repaid | $150,000 | $6,251 | $352,751 | ' | $150,000 |
NOTES_PAYABLE_Detail_Textuals_
NOTES PAYABLE (Detail Textuals 1) (USD $) | 12 Months Ended | 170 Months Ended | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 30, 2012 | |
Unsecured notes payable | Unsecured notes payable | Unsecured notes payable | |||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Proceeds from issuance of notes payable | $200,000 | $2,789,000 | ' | ' | $200,000 |
Interest rate | ' | ' | 10.00% | 10.00% | 10.00% |
Accrued interest | ' | ' | $9,167 | $83,715 | ' |
Number of shares issued upon conversion of debt | ' | ' | 4,703,711 | 4,473,333 | ' |
NOTES_PAYABLE_Detail_Textuals_1
NOTES PAYABLE (Detail Textuals 2) (USD $) | Mar. 19, 2013 | Dec. 31, 2012 | Jan. 31, 2010 | Aug. 31, 2009 | Dec. 31, 2009 | Sep. 30, 2011 | Jun. 30, 2011 |
8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | |||
Unit | Unit | Unit | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Convertible notes payable | $126,000 | $140,000 | $25,000 | $300,000 | $200,000 | $50,000 | ' |
Number of units | ' | ' | 0.5 | 6 | 4 | ' | ' |
Interest rate | ' | ' | 8.00% | ' | 8.00% | 8.00% | 8.00% |
Number of shares of common stock | ' | ' | ' | ' | ' | 2,000,000 | ' |
Warrants issued | ' | ' | 1,000,000 | ' | 8,000,000 | ' | ' |
Proceeds from issuance of units | ' | ' | 17,500 | ' | 180,000 | ' | ' |
Commissions charges | ' | ' | $7,500 | ' | $20,000 | ' | ' |
NOTES_PAYABLE_Detail_Textuals_2
NOTES PAYABLE (Detail Textuals 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jan. 31, 2010 | Dec. 31, 2013 | Sep. 30, 2011 | Dec. 31, 2009 | Dec. 31, 2012 | Jun. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2010 | Jun. 30, 2011 | Dec. 31, 2013 | 23-May-13 | 22-May-13 | Dec. 31, 2012 | Jun. 30, 2011 | Dec. 31, 2009 | Dec. 31, 2009 | Dec. 31, 2009 |
Common Stock | 8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | 8% Series A Notes Payable | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | Series A notes payable; interest at 8% per annum; principal and accrued interest due at extended maturity date in September 2015 | |||
Common Stock | Warrant | Warrant | Warrant | Warrant | Warrant | |||||||||||||||
Minimum | Maximum | |||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of note payable | ' | ' | ' | ' | $150,000 | ' | ' | ' | ' | ' | ' | $150,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | 8.00% | ' | 8.00% | 8.00% | ' | 8.00% | ' | ' | 8.00% | 8.00% | ' | ' | 8.00% | ' | ' | ' | ' |
Warrants issued | ' | ' | ' | 1,000,000 | ' | ' | 8,000,000 | ' | ' | ' | 1,000,000 | 6,000,000 | ' | ' | ' | ' | ' | 8,000,000 | ' | ' |
Fair value of the warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,143 | ' | ' | ' | ' | ' | 21,275 | 15,450 | ' | ' |
Method used to calculate fair value of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Black-Scholes option pricing model | ' | ' | ' | ' | ' | 'Black-Scholes option pricing model | 'Black-Scholes option pricing model | ' | ' |
Dividend yield | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | 0.00% | 0.00% | ' | ' |
Expected volatility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28.60% | ' | ' | ' | ' | ' | 60.00% | ' | 30.90% | 34.50% |
Risk-free interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.84% | ' | ' | ' | ' | ' | 1.52% | ' | 0.95% | 1.06% |
Expected warrant term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | '1 year 3 months | '2 years | ' | ' |
Discount, notes payable (in dollars) | ' | 13,632 | ' | ' | ' | ' | ' | 13,632 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of notes payable repaid with accrued interest | ' | ' | ' | ' | ' | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants expired unexercised | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | 675,000,000 | 675,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 675,000,000 | 425,000,000 | ' | ' | ' | ' | ' |
Reduction in value of debt | ' | ' | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants exercised for conversion of securities | ' | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common stock called by warrants (in shares) | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance amount of debt | ' | ' | ' | ' | 90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of accrued interest | ' | ' | ' | ' | $49,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued upon conversion of debt | ' | ' | 25,974,697 | ' | ' | ' | ' | ' | ' | 1,226,363 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTES_PAYABLE_Detail_Textuals_3
NOTES PAYABLE (Detail Textuals 4) (Private Placement of 25% Notes Payable, USD $) | Dec. 31, 2010 |
Private Placement of 25% Notes Payable | ' |
Debt Instrument [Line Items] | ' |
Note payable, amount | $400,000 |
Interest rate | 25.00% |
NOTES_PAYABLE_Detail_Textuals_4
NOTES PAYABLE (Detail Textuals 5) (Private Placement of 25% Notes Payable, USD $) | 12 Months Ended |
Dec. 31, 2010 | |
Litigation Case Three | ' |
Debt Instrument [Line Items] | ' |
Proceeds from litigation settlement | $825,000 |
Percentage allocated to company | 50.00% |
Percentage allocated to lenders | 50.00% |
Litigation Case Four | ' |
Debt Instrument [Line Items] | ' |
Proceeds from litigation settlement | 1,000,000 |
Percentage allocated to company | 90.00% |
Percentage allocated to lenders | 10.00% |
Litigation Case Five | ' |
Debt Instrument [Line Items] | ' |
Proceeds from litigation settlement | $1,000,000 |
Percentage allocated to company | 85.00% |
Percentage allocated to lenders | 15.00% |
Litigation Case Six | ' |
Debt Instrument [Line Items] | ' |
Percentage allocated to company | 80.00% |
Percentage allocated to lenders | 20.00% |
NOTES_PAYABLE_Detail_Textuals_5
NOTES PAYABLE (Detail Textuals 6) (USD $) | 12 Months Ended | 170 Months Ended | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | |
Private Placement of 25% Notes Payable | Private Placement of 25% Notes Payable | Private Placement of 25% Notes Payable | Notes Payable | Notes Payable | |||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | 25.00% | ' | ' |
Debt placement fees | ' | ' | ' | ' | $34,500 | ' | ' |
Amortization of deferred finance charges | ' | 40,800 | ' | 13,625 | ' | ' | ' |
Private placement of convertible notes | ' | ' | 150,000 | 250,000 | ' | ' | ' |
Accrued interest | ' | ' | 70,000 | 122,397 | ' | 317,344 | 394,281 |
Accrued interest paid in cash | $13,895 | $53,336 | ' | $13,895 | ' | ' | ' |
Number of shares issued upon conversion of debt | ' | ' | 3,000,000 | 8,219,911 | ' | ' | ' |
WARRANT_LIABILITY_Detail_Textu
WARRANT LIABILITY (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Major Agreements [Line Items] | ' | ' |
Warrant liability | $6,000,000 | $2,400,000 |
Agreements | Zaah Technologies | ' | ' |
Major Agreements [Line Items] | ' | ' |
Warrant liability | ' | 2,400,000 |
Value of the warrants increased | $3,700,000 | ' |
CONVERTIBLE_PREFERRED_STOCK_De
CONVERTIBLE PREFERRED STOCK (Detail textuals) (USD $) | 12 Months Ended | 170 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2013 | Jan. 31, 2013 | Jan. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 31, 2013 | Jan. 31, 2013 | Aug. 31, 2013 | Jan. 31, 2013 | |
Subscription Agreement | Subscription Agreement | Subscription Agreement | Subscription Agreement | Subscription Agreement | Subscription Agreement | Subscription Agreement | Subscription Agreement | |||
Verify Me | Verify Me | Preferred Class | Convertible Preferred Stock | Convertible Preferred Stock | Common Stock | Common Stock | ||||
Verify Me | Verify Me | Verify Me | Verify Me | |||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of preferred stock purchased | ' | ' | ' | ' | ' | ' | ' | 33,333,333 | ' | ' |
Number of common stock called by warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,333,333 |
Value of shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,000,000 |
Exercise price of warrants | ' | ' | ' | ' | ' | ' | ' | 0.12 | ' | 0.12 |
Convertible preferred stock description | ' | ' | '(i) the consummation of any bona fide business acquisition, (ii) the incurring of any indebtedness by the Company in an amount in excess of $2 million, (iii) the issuance or sale of any security having a preference on liquidation senior to common stock, or (iv) the sale by the Company of capital stock or warrants exercisable for its capital stock at a price below $0.03 per share. | ' | ' | ' | ' | ' | ' | ' |
Excess amount for incurring indebtedness | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' |
Exercise price of capital stock or warrant | ' | ' | $0.03 | ' | ' | ' | ' | ' | ' | ' |
Preferred stock value | 633,333 | 633,333 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' |
Beneficial conversion feature at fair market value | ' | ' | ' | 1,000,000 | 800,000 | ' | ' | ' | ' | ' |
Fair value of warrants in excess of consideration for convertible preferred stock | 2,995,791 | 2,995,791 | 2,995,791 | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants recorded as charge to expenses | ' | ' | 2,995,791 | ' | ' | ' | ' | ' | ' | ' |
Initial conversion price per share (in dollars per share) | ' | ' | ' | ' | ' | $0.03 | ' | ' | ' | ' |
Preferred stock value in noncash transaction | ' | ' | ' | ' | ' | ' | 366,667 | ' | ' | ' |
Shares of common stock shares issued on conversion | ' | ' | ' | ' | ' | ' | ' | ' | 12,222,222 | ' |
Fair value of warrants | $2,300,000 | $2,300,000 | ' | ' | ' | ' | ' | ' | ' | ' |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS - Liabilities measured at fair value on recurring basis (Details) (Fair value on a recurring basis, USD $) | Dec. 31, 2013 | Dec. 31, 2002 |
Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative liability related to fair value of beneficial conversion feature | ' | ' |
Derivative liability related to fair value of warrants | ' | ' |
Total | ' | ' |
Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative liability related to fair value of beneficial conversion feature | 800,000 | ' |
Derivative liability related to fair value of warrants | ' | ' |
Total | 800,000 | ' |
Level 3 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative liability related to fair value of beneficial conversion feature | ' | ' |
Derivative liability related to fair value of warrants | 6,000,000 | 2,400,000 |
Total | 6,000,000 | 2,400,000 |
Total | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative liability related to fair value of beneficial conversion feature | 800,000 | ' |
Derivative liability related to fair value of warrants | 6,000,000 | 2,400,000 |
Total | $6,800,000 | $2,400,000 |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair value measurements within fair value hierarchy of derivative liabilities using Level 3 inputs (Details 1) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' |
Balance at January 1, 2013 | $2,400,000 |
Derivative liabilities resulting from Subscription Agreement | 2,998,027 |
Change in fair value of derivative liabilities | 601,973 |
Balance at December 31, 2013 | $6,000,000 |
FAIR_VALUE_OF_FINANCIAL_INSTRU4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated fair value of embedded derivative liability using Black-Scholes (Details 2) (USD $) | Dec. 31, 2013 |
Fair Value Disclosures [Abstract] | ' |
Closing trade price of Common Stock | $0.07 |
Series A Preferred Stock Conversion Price | $0.03 |
Intrinsic value of conversion option per share | $0.04 |
FAIR_VALUE_OF_FINANCIAL_INSTRU5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated fair value of warrants using Black-Scholes (Details 3) (Warrants treated as Derivative Liabilities) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value Inputs Quantitative Information [Line Items] | ' |
Annual Dividend Yield | 0.00% |
Risk-Free Interest Rate | 1.39% |
Expected Volatility | 267.30% |
Minimum | ' |
Fair Value Inputs Quantitative Information [Line Items] | ' |
Expected Life (Years) | '4 years |
Maximum | ' |
Fair Value Inputs Quantitative Information [Line Items] | ' |
Expected Life (Years) | '4 years 29 days |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS' EQUITY (Details Textuals) (USD $) | 0 Months Ended | 2 Months Ended | 12 Months Ended | 170 Months Ended | 0 Months Ended | 1 Months Ended | 2 Months Ended | 1 Months Ended | 2 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 05, 2012 | Dec. 31, 1999 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2006 | Dec. 31, 2003 | Dec. 31, 2013 | Nov. 13, 2012 | Nov. 21, 2012 | Mar. 31, 2013 | Feb. 01, 2013 | Dec. 20, 2012 | Jan. 31, 2013 | Oct. 31, 2012 | Feb. 28, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2012 | |
Unit | Employee and Consultant | Board member | Investor | Investor | Investor | Private placement | Private placement | Private placement | Private placement | Private placement | Private placement | ||||||||||
Unit | Warrant | Unit | Unit | Warrant | Unit | ||||||||||||||||
Warrant | Warrant | ||||||||||||||||||||
Stockholders Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants exercise price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.15 | 0.12 | 0.1 | 0.1 | ' | 0.1 | ' |
Sale of units under private offering, Issue price per unit (in dollars per unit) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.045 | 0.045 | 0.05 | ' | 0.05 | ' |
Number of units sold under private offering (in units) | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,111,111 | ' | 3,700,000 | 6,888,889 | ' | 15,000,000 |
Number of units sold under private offering value | ' | ' | ' | $750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000 | ' | $185,000 | $310,000 | ' | $750,000 |
Number of share of common stock consist in each offering unit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | 1 | ' | 1 | ' |
Number of warrant consist in each offering unit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | 1 | ' | 1 | ' |
Stock option exercised share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,490,996 | ' | 3,335,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from exercise of stock options | ' | ' | 17,919 | 13,113 | ' | ' | ' | ' | ' | 273,401 | 13,114 | ' | 17,919 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option exercised per share (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares for services (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares for services | ' | 36,960 | ' | 46,500 | 30,000 | 208,600 | 47,700 | 55,000 | 24,000 | ' | ' | 46,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock share issue for retired notes payable and accrued interest (in shares) | 12,923,622 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of common stock issued | 581,564 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock value issue for retired notes payable | 450,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock value issued for accrued interest | 131,564 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common stock called by warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 333,333 | ' | ' | ' | ' | ' | ' |
Amount received for exercised of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,000 | $50,000 | ' | ' | ' | ' | ' | ' |
Number of investors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' |
STOCK_OPTIONS_AND_WARRANTS_Non
STOCK OPTIONS AND WARRANTS - Non-Employee Stock Option/Warrant Activity (Details) (Stock Options and Warrants, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Option/Warrant Shares | ' | ' |
Outstanding | 82,807,221 | 15,585,996 |
Granted | 38,144,444 | 72,422,221 |
Transferred to employee options | ' | -200,000 |
Exercised | -9,435,000 | -5,000,996 |
Expired | ' | ' |
Outstanding | 111,516,665 | 82,807,221 |
Exercisable, December 2013 | 111,516,665 | ' |
Weighted Average Remaining Life, Exercisable, December 31, 2013 (years) | '7 years | ' |
Exercise Price | ' | ' |
Transferred to employee options | ' | ($0.05) |
Exercised | ' | $0.00 |
Expired | ' | ' |
Weighted Average Exercise Price | ' | ' |
Outstanding | $0 | $0.01 |
Granted | $0.03 | $0.08 |
Transferred to employee options | ' | ' |
Exercised | ' | ' |
Expired | ' | ' |
Outstanding | $0.10 | $0 |
Exercisable, December 2013 | $0.10 | ' |
Minimum | ' | ' |
Exercise Price | ' | ' |
Outstanding | $0.00 | $0.00 |
Granted | $0.10 | $0.05 |
Exercised | $0.00 | ' |
Outstanding | $0.01 | $0.00 |
Exercisable, December 2013 | $0.01 | ' |
Maximum | ' | ' |
Exercise Price | ' | ' |
Outstanding | $0.20 | $0.20 |
Granted | $0.15 | $0.10 |
Exercised | $0.07 | ' |
Outstanding | $0.20 | $0.20 |
Exercisable, December 2013 | $0.20 | ' |
STOCK_OPTIONS_AND_WARRANTS_Inc
STOCK OPTIONS AND WARRANTS - Incentive Stock Option Transactions (Details 1) (Incentive stock options, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Option/Warrant Shares | ' | ' |
Outstanding | 15,766,667 | 6,390,000 |
Granted | 45,500,000 | 15,000,000 |
Transferred from non-employee options | ' | 200,000 |
Exercised | -900,000 | -5,823,333 |
Expired/Returned | -500,000 | ' |
Outstanding | 59,866,667 | 15,766,667 |
Exercisable | 50,116,667 | ' |
Weighted Average Remaining Life, Exercisable, December 31, 2013 (years) | '9 years 7 months 6 days | ' |
Exercise Price | ' | ' |
Outstanding | ' | $0.00 |
Transferred from non-employee options | ' | $0.05 |
Exercised | $0.00 | ' |
Expired/Returned | $0.05 | ' |
Weighted Average Exercise Price | ' | ' |
Outstanding | $0.06 | $0.00 |
Granted | $0.04 | $0.06 |
Transferred from non-employee options | ' | ' |
Exercised | ' | ' |
Expired/Returned | ' | ' |
Outstanding | $0.05 | $0.06 |
Weighted Average Remaining Life, Exercisable, December 31, 2013 (years) | $0.06 | ' |
Minimum | ' | ' |
Exercise Price | ' | ' |
Outstanding | $0.00 | ' |
Granted | $0.05 | $0.05 |
Exercised | ' | $0.00 |
Outstanding | $0.05 | $0.00 |
Exercisable | $0.05 | ' |
Maximum | ' | ' |
Exercise Price | ' | ' |
Outstanding | $0.10 | ' |
Granted | $0.15 | $0.15 |
Exercised | ' | $0.15 |
Outstanding | $0.15 | $0.10 |
Exercisable | $0.15 | ' |
STOCK_OPTIONS_AND_WARRANTS_Det
STOCK OPTIONS AND WARRANTS (Detail Textuals) | Dec. 31, 2000 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 17, 2013 |
Stock option 2000 plan | Stock option 2003 plan | Stock option 2003 plan | Stock option 2003 plan | |
Stock options | Common Stock | Stock options | Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Number of shares authorized to grant options | 1,500,000 | 20,000,000 | ' | 18,000,000 |
Number of option issued | ' | ' | 18,425,996 | ' |
Number of options available to be issued | ' | ' | 19,574,004 | ' |
STOCK_OPTIONS_AND_WARRANTS_Det1
STOCK OPTIONS AND WARRANTS (Detail Textuals 1) (USD $) | 0 Months Ended | ||
Oct. 08, 2012 | Oct. 16, 2012 | Dec. 31, 2013 | |
Board of Directors Chairman | President and Chief Operating Officer | Stock option 2003 plan | |
Incentive stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Minimum percentage for exercise price of option, percentage of the fair market value of the common stock | ' | ' | 100.00% |
Minimum percentage for exercise price of option in case outstanding stock held by grantee, percentage of the fair market value of the common stock | ' | ' | 110.00% |
Percentage of outstanding stock held by grantee | ' | ' | 10.00% |
Maximum threshold limit for aggregate fair market value of stock for which an employee may exercise incentive stock options | ' | ' | $1,000,000 |
Maximum value of options to be exercised | ' | ' | 100,000 |
Maximum value of options shall be deemed to be Non-Statutory stock options | ' | ' | 100,000 |
Term of agreement | '3 years | '3 years | ' |
Officers compensation | 200,000 | 200,000 | ' |
Percentage shares purchase (in shares) | 5.00% | 5.00% | ' |
Exercise price of funding (in dollars per share) | $0.05 | $0.05 | ' |
Funding received by company | 2,500,000 | 2,500,000 | ' |
Number of options issued | 19,000,000 | 19,000,000 | ' |
Percentage of fully diluted common stock issued as options | 5.00% | 5.00% | ' |
Method used to calculate grant-date fair value | 'Black-Scholes option pricing model | 'Black-Scholes option pricing model | ' |
Expected Volatility | 146.10% | 146.10% | ' |
Risk-free interest rate | 2.60% | 2.60% | ' |
Expected Life (Years) | '10 years | '10 years | ' |
Fair value of options issued | $3,767,700 | $3,767,700 | ' |
STOCK_OPTIONS_AND_WARRANTS_Det2
STOCK OPTIONS AND WARRANTS (Detail Textuals 2) (Stock options, Exercise price of $.05, Consultant, USD $) | 0 Months Ended |
Jul. 16, 2012 | |
Stock options | Exercise price of $.05 | Consultant | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Exercise of options (in shares) | 200,000 |
Exercise price of common stock | $0.05 |
Term for options | '10 years |
Fair value of options issued | $11,638 |
Method used to calculate the grant-date fair value of the warrants | 'Black-Scholes option pricing model |
Expected volatility | 133.00% |
Risk-free interest rate | 1.50% |
Expected option life (in years) | '10 years |
Consulting expense | $11,638 |
STOCK_OPTIONS_AND_WARRANTS_Det3
STOCK OPTIONS AND WARRANTS (Details Textuals 3) (USD $) | 1 Months Ended | 12 Months Ended |
Nov. 21, 2012 | Dec. 31, 2013 | |
Director | ||
Board of Directors | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of options issued to purchase aggregate common stocks | 10,000,000 | ' |
Stock options | Chief Executive Officer and Chief Operating Officer | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of options issued to purchase aggregate common stocks | 2,000,000 | ' |
Exercisable common stock share price | $0.05 | ' |
Term for options | '10 years | ' |
Fair value of options issued | $89,538 | ' |
Stock options | Board of Directors | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of options issued to purchase aggregate common stocks | 10,000,000 | ' |
Exercisable common stock share price | $0.05 | ' |
Term for options | '10 years | ' |
Fair value of options issued | 447,689 | ' |
Fair value of option issued expensed immediately | 223,844 | ' |
Fair value of option issued expensed over one year | $18,564 | $199,313 |
Number of board of directors | 5 | ' |
Expected volatility | 131.00% | ' |
Risk-free interest rate | 1.70% | ' |
Expected option life (in years) | '10 years | ' |
STOCK_OPTIONS_AND_WARRANTS_Det4
STOCK OPTIONS AND WARRANTS (Details Textuals 4) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | |||
Nov. 21, 2012 | Nov. 21, 2012 | Jan. 22, 2013 | Dec. 31, 2013 | Feb. 25, 2013 | Dec. 31, 2013 | Mar. 13, 2013 | Dec. 31, 2013 | 4-May-13 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 02, 2013 | Dec. 31, 2013 | |
Director | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | |
Director | 22-Jan-13 | 22-Jan-13 | 25-Feb-13 | 25-Feb-13 | 13-Mar-13 | 13-Mar-13 | 4-May-13 | 4-May-13 | 30-Sep-13 | 30-Sep-13 | 30-Sep-13 | 30-Sep-13 | 2-Dec-13 | 2-Dec-13 | ||
Employee | Employee | Employee | Employee | Director | Director | Director | Director | Chief Operating Officer | Chief Operating Officer | Chief Operating Officer | Chief Operating Officer | Chief Financial Officer | Chief Financial Officer | |||
Maximum | Minimum | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of options issued to purchase aggregate common stocks | 10,000,000 | 10,000,000 | 1,000,000 | ' | 500,000 | ' | 2,000,000 | ' | 2,000,000 | ' | 1,000,000 | ' | ' | ' | 1,000,000 | ' |
Exercisable common stock share price | ' | $0.05 | $0.05 | ' | $0.05 | ' | $0.05 | ' | $0.05 | ' | $0.15 | ' | ' | ' | $0.15 | ' |
Term for options | ' | ' | '10 years | ' | '10 years | ' | '10 years | ' | '10 years | ' | '10 years | ' | ' | ' | '10 years | ' |
Fair value of options issued | ' | $447,689 | $99,972 | ' | $89,998 | ' | $439,963 | ' | $460,000 | ' | $99,840 | ' | ' | ' | $79,994 | ' |
Fair value of option issued expensed immediately | ' | 223,844 | 25,000 | ' | ' | ' | 219,982 | ' | 230,000 | ' | ' | ' | ' | ' | ' | ' |
Fair value of option issued total expense | ' | ' | ' | 71,967 | ' | ' | ' | 396,569 | ' | 381,864 | ' | 18,903 | ' | ' | ' | 15,123 |
Expense recognized upon cancellation | ' | ' | ' | ' | ' | $5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options vest immediately | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options vest one year | ' | ' | 250,000 | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options vest two years | ' | ' | 500,000 | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options vests year three | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of options vests immediately | ' | ' | ' | ' | ' | ' | 50.00% | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' |
Percentage of options vests | ' | ' | ' | ' | ' | ' | 50.00% | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' |
Percentage of option vests after the first year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | 50.00% | ' |
Percentage of option vests at the end of 24 month | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | 50.00% | ' |
Expected volatility | ' | 131.00% | 222.00% | ' | 259.00% | ' | 235.00% | ' | 235.00% | ' | ' | ' | 272.80% | 268.40% | 266.10% | ' |
Risk-free interest rate | ' | 1.70% | 1.90% | ' | 1.90% | ' | 2.00% | ' | 1.78% | ' | 1.39% | ' | ' | ' | 2.64% | ' |
Expected option life (in years) | ' | '10 years | '10 years | ' | '10 years | ' | '10 years | ' | '10 years | ' | '10 years | ' | ' | ' | '10 years | ' |
Method used to calculate the grant-date fair value of the warrants | ' | ' | 'Black-Scholes option pricing model | ' | 'Black-Scholes option pricing model | ' | 'Black-Scholes option pricing model | ' | 'Black-Scholes option pricing model | ' | 'Black-Scholes option pricing model | ' | ' | ' | 'Black-Scholes option pricing model | ' |
OPERATING_LEASES_Details
OPERATING LEASES (Details) (USD $) | Dec. 31, 2013 |
Leases, Operating [Abstract] | ' |
2014 | $71,766 |
2015 | 74,637 |
2016 | 31,605 |
Total | $178,008 |
OPERATING_LEASES_Detail_Textua
OPERATING LEASES (Detail Textuals) (General and administrative expense, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
General and administrative expense | ' | ' |
Schedule Of Operating Lease [Line Items] | ' | ' |
Total rent expense under leases | $59,272 | $0 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Detail Textuals) (USD $) | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Shareholder | Shareholder | ||
Common Stock | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Common stock shares issued on conversion of debt (in shares) | ' | 25,974,697 | ' |
Senior secured convertible notes payable | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Common stock shares issued on conversion of debt (in shares) | 7,400,000 | 7,900,000 | ' |
Number of shareholders | ' | 5 | 5 |
Convertible notes payable | ' | $330,249 | $512,249 |
Amount of accrued interest owed by shareholders | ' | 300,676 | ' |
Convertible notes payable | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Common stock shares issued on conversion of debt (in shares) | ' | 12,375,000 | ' |
Number of shareholders | ' | ' | 1 |
Convertible notes payable | ' | ' | 140,000 |
Unsecured notes payable | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Number of shareholders | ' | ' | 2 |
Unsecured notes payable | ' | ' | $561,000 |
RELATED_PARTY_TRANSACTIONS_Det1
RELATED PARTY TRANSACTIONS (Detail Textuals 1) (Chief Executive Officer, USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Chief Executive Officer | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Occupancy costs | $32,414 | ' |
Accrued and unpaid salary | ' | $208,514 |