Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Feb. 17, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | DEBT RESOLVE INC | |
Entity Central Index Key | 1106645 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 98,187,082 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2013 |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
ASSETS | ||
Cash | $8,725 | $30,850 |
Accounts receivable, net | 21,063 | 62,922 |
Prepaid expenses | 66,823 | 30,036 |
Total current assets | 96,611 | 123,808 |
Fixed assets, net | 908 | |
Other assets: | ||
Deposits | 1,000 | 1,000 |
Total assets | 97,611 | 125,716 |
LIABILITIES AND STOCKHOLDERS' DEFICIENCY | ||
Accounts payable and accrued liabilities | 3,104,978 | 2,908,055 |
Due to shareholders | 433,141 | 394,917 |
Notes payable, current portion | 452,867 | 446,617 |
Notes payable-related parties | 230,221 | 131,000 |
Convertible short-term notes, net of deferred debt discount of $456 and $70,779 as of September 30, 2013 and December 31, 2012, respectively | 347,044 | 1,231,221 |
Lines of credit, related parties | 151,000 | 151,000 |
Derivative liabilities | 527,621 | |
Total current liabilities | 5,246,872 | 5,262,810 |
Long term debt: | ||
Bank loan, long term portion | 68,750 | 131,250 |
Note payable, related party | 6,000 | |
Convertible long-term notes, net of deferred debt discount of $685 and $3,709 as of September 30, 2013 and December 31, 2012, respectively | 978,815 | 21,291 |
Convertible long-term notes, related parties | 63,000 | 138,000 |
Total liabilities | 6,357,437 | 5,559,351 |
Stockholders' deficiency: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.001 par value, 200,000,000 shares authorized; 93,137,703 and 90,137,703 shares issued and outstanding as of September 30, 2013 and December 31, 2012, | 98,138 | 90,138 |
Additional paid in capital | 66,827,587 | 67,221,499 |
Accumulated deficit | -73,185,551 | -72,745,272 |
Total stockholders' deficiency | -6,259,826 | -5,433,635 |
Total liabilities and stockholders' deficiency | $97,611 | $125,716 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current liabilities: | ||
Convertible Short-term notes, net of deferred debt discoun | $456 | $70,779 |
Long term debt: | ||
Convertible long-term notes, net of deferred debt discount | $685 | $3,709 |
Stockholders' deficiency: | ||
Preferred stock par value | $0.00 | $0.00 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 93,137,703 | 90,137,703 |
Common stock shares outstanding | 93,137,703 | 90,137,703 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Condensed Statements Of Operations | ||||
Revenues: | $32,786 | $33,430 | $110,720 | $119,320 |
Costs and expenses: | ||||
Payroll, payroll taxes, penalties and related expenses | 92,453 | 105,165 | 317,653 | 496,107 |
Selling, general and administrative expenses | 48,084 | 125,566 | 266,932 | 437,108 |
Depreciation and amortization | 303 | 303 | 908 | 1,507 |
Total costs and expenses | 140,840 | 231,034 | 585,493 | 934,722 |
Net loss from operations | -108,054 | -197,604 | -474,773 | -815,402 |
Other income (expense): | ||||
Gain on change in fair value of derivative liabilities | 272,280 | 277,239 | ||
Gain on settlement of debt | 53,829 | 53,829 | ||
Interest expense | -73,731 | -71,588 | -223,227 | -209,753 |
Amortization of debt discounts | -4,258 | -97,817 | -73,347 | -316,992 |
Total other income (expense) | 248,120 | -169,406 | 34,494 | -526,746 |
Net loss before provision for income taxes | 140,066 | -367,010 | -440,279 | -1,342,148 |
Income tax (benefit) | ||||
Net income (loss) | $140,066 | ($367,010) | ($440,279) | ($1,342,148) |
Net Income (loss) per common share -basic | 0 | 0 | 0 | -0.02 |
Net Income (loss) per common share -diluted | $0 | $0 | $0 | ($0.02) |
Weighted average number of common shares outstanding, basic | 97,300,746 | 87,624,116 | 94,632,208 | 86,945,367 |
Weighted average number of common shares outstanding, diluted | 111,489,080 | 87,624,116 | 94,632,208 | 86,945,367 |
SHAREHOLDERS_EQUITY_Unaudited
SHAREHOLDERS EQUITY (Unaudited) (USD $) | Preferred stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance,Amount at Dec. 31, 2012 | $90,138 | $67,221,499 | ($72,745,272) | ($5,433,635) | |
Beginning Balance,Shares at Dec. 31, 2012 | 90,137,703 | ||||
Sale of common stock,Shares | 8,000,000 | ||||
Sale of common stock,Amount | 8,000 | 392,000 | 400,000 | ||
Fair value of warrants issued for services | 8,948 | 8,948 | |||
Fair value of vesting options issued to employees for services | 10,000 | 10,000 | |||
Reclassification of common stock equivalents issued in excess of aggregate authorized availability | -804,860 | -804,860 | |||
Net loss | -440,279 | -440,279 | |||
Ending Balance,Amount at Sep. 30, 2013 | $98,138 | $66,827,587 | ($73,185,551) | ($6,259,826) | |
Ending Balance,Shares at Sep. 30, 2013 | 98,137,703 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($440,279) | ($1,342,148) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 908 | 1,507 |
Amortization of debt discounts | 73,347 | 316,992 |
Stock based compensation | 18,948 | 105,000 |
Gain on settlement of debt | -53,829 | |
Gain on change in fair value of derivative liabilities | 277,239 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 41,859 | -24,361 |
Prepaid expenses | -36,787 | 36,123 |
Accounts payable and accrued liabilities | 288,976 | 602,689 |
Net cash used in operating activities | -384,096 | -304,198 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Bank overdraft | 8,279 | |
Proceeds from sale of common stock | 400,000 | 230,000 |
Proceeds from issuance of short term notes-related party | 5,221 | 45,000 |
Repayment of short term notes | -56,250 | -56,250 |
Proceeds from long term notes | 20,000 | |
Proceeds from long term notes, related party | 13,000 | 31,000 |
Net cash provided by financing activities | 361,971 | 278,029 |
Net (decrease) increase in cash and cash equivalents | -22,125 | -26,169 |
Cash at beginning of period | 30,850 | 26,832 |
Cash at end of period | 8,725 | 663 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during period for interest | 8,217 | 7,744 |
Cash paid during period for taxes | ||
Non-cash financing and investing transactions: Note payable issued for accrued liability | $43,000 |
BASIS_AND_BUSINESS_PRESENTATIO
BASIS AND BUSINESS PRESENTATION | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
NOTE 1 - BASIS AND BUSINESS PRESENTATION | Debt Resolve, Inc. (the “Company”) was incorporated under the laws of the State of Delaware on April 21, 1997. The Company offers its service as a Software-as-a-Service (SaaS) model, enabling clients to introduce this collection or payment software option with no modifications to their existing collections computer systems. Its products capitalize on using the Internet as a tool for communication, resolution, settlement and payment of delinquent or defaulted consumer debt and as part of a complete accounts receivable management solution for consumer creditors. In December 2014, we began operation of Progress Advocates, LLC in the student loan document preparation industry (see Note 13). |
Basis of Presentation | |
These unaudited condensed financial statements have been prepared in accordance with the instructions to the Form 10-Q and Article 10 of Regulation S-X, and therefore, do not include all the information necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. | |
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2013. The unaudited condensed financial statements should be read in conjunction with the December 31, 2012 financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC"). |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | A summary of the significant accounting policies applied in the presentation of the accompanying unaudited condensed financial statements follows: |
Estimates | |
The preparation of the unaudited condensed financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. | |
Reclassification | |
Certain reclassifications have been made to prior period data to conform to the current period's presentation. These reclassifications had no effect on reported income or losses. | |
Concentrations and Credit Risk | |
The Company extends credit to large, mid-size and small companies for the use of its software solutions. At September 30, 2013, three clients represented receivables of $2,500 (11%), $5,000 (22%) and $10,000 (44%). At December 31, 2012, two clients represented receivables of $10,000 (16%) and $45,000 (72%). As of September 30, 2013 and December 31, 2012, no allowance for doubtful accounts has been recognized. | |
The Company had two clients accounting for 45.8% and 45.8%; (total of 91.6%) of total revenues for the three months ended September 30, 2013, respectively, and had two clients accounting for 40.7% and 40.6%; (total of 81.3%) of total revenues for the nine months ended September 30, 2013. | |
The Company had two clients accounting for 44.9% and 44.9%; (total of 89.8%) of total revenues for the three months ended September 30, 2012, respectively, and had two clients accounting for 37.7% and 37.7%; (total of 75.4%) of total revenues for the nine months ended September 30, 2012. | |
Income Taxes | |
The Company follows Accounting Standards Codification subtopic 740-10, Income Taxes ("ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes primarily relate to debt costs. | |
Net Loss per Share | |
The Company follows Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants have been excluded as common stock equivalents in the diluted loss per share on the computation for the nine months ended September 30, 2013 and for the three and nine months ended September 30, 2012 because their effect is anti-dilutive. Fully diluted shares outstanding were 108,820,542 for the nine months ended September 30, 2013. Fully diluted shares outstanding were 101,801,118 and 103,622,369 for the three and nine month periods ended September 30, 2012, respectively. | |
Stock-based compensation | |
Total employee and non-employee stock-based compensation expense for the three and nine months ended September 30, 2013 amounted to $18,948 and for the three and nine months ended September 30, 2012 amounted to $30,000 and $105,000, respectively. | |
Defined Contribution (401k) Plan | |
The Company maintains a defined contribution (401k) plan for our employees. The plan provides for a company match in the amount of 100% of the first 3% of pre-tax salary contributed and 50% of the next 3% of pre-tax salary contributed. Due to the severe cash limitations that the Company has experienced, the match was suspended from mid-2008 to the present and will only be re-instated when business conditions warrant. | |
Derivative Liability | |
The Company accounts for derivatives in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At September 30, 2013 and December 31, 2012, the Company did not have any derivative instruments that were designated as hedges. See Note 8 for discussion of the Company’s derivative liabilities. | |
Recent accounting pronouncements | |
There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows. |
LIQUIDITY
LIQUIDITY | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
NOTE 3 - LIQUIDITY | The accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed financial statements, the Company incurred a net loss of $440,279 for the nine months ended September 30, 2013. Additionally, the Company has negative working capital (total current liabilities exceeded total current assets) of $5,150,261 as of September 30, 2013. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern. |
The Company has undertaken further steps as part of a plan to improve operations with the goal of sustaining our operations for the next twelve months and beyond to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof. However, there can be no assurance that the Company can successfully accomplish these steps and or business plans, and it is uncertain that the Company will achieve a profitable level of operations and be able to obtain additional financing. | |
The Company’s continued existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems. There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all. In the event that the Company is unable to continue as a going concern, it may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. | |
The accompanying unaudited condensed financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. |
ACCOUNTS_PAYABLE_AND_ACCRUED_L
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | Accounts payable and accrued liabilities as of September 30, 2013 and December 31, 2012 are comprised of the following: | ||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Accounts payable and accrued expenses | $ | 1,158,052 | $ | 1,168,853 | |||||
Accrued interest | 1,048,850 | 835,175 | |||||||
Payroll and related accruals, net of advance to employees | 898,076 | 904,027 | |||||||
Total | $ | 3,104,978 | $ | 2,908,055 | |||||
During the three months ended September 30, 2013 the Company settled an accounts payable of $63,829 for $10,000 resulting in a gain on settlement of debt of $53,829. |
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
NOTE 5 - NOTES PAYABLE | As of September 30, 2013 and December 31, 2012, short term notes are as follows: | ||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Bank loans | $ | 143,750 | $ | 200,000 | |||||
Investor notes payable, 12% per annum, currently in default | 377,867 | 377,867 | |||||||
Total | 521,617 | 577,867 | |||||||
Less current portion | 452,867 | 446,617 | |||||||
Long term portion (only bank loan) | $ | 68,750 | $ | 131,250 |
NOTES_PAYABLE_RELATED_PARTIES
NOTES PAYABLE, RELATED PARTIES | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
NOTE 6 - NOTES PAYABLE, RELATED PARTIES | As of September 30, 2013 and December 31, 2012, notes payable, related parties are as follows: | ||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Note payable dated January 14, 2011, in default | $ | 6,000 | $ | 6,000 | |||||
Note payable dated April 14, 2011, in default | 25,000 | 25,000 | |||||||
Note payable dated April 15, 2011, in default | 25,000 | 25,000 | |||||||
Note payable dated May 27, 2011, in default | 10,000 | 10,000 | |||||||
Note payable dated January 18, 2012 | 5,000 | 5,000 | |||||||
Note payable dated January 20, 2012 | 5,000 | 5,000 | |||||||
Note payable dated May 21, 2012 | 15,000 | 15,000 | |||||||
Note payable dated May 30, 2012 | 20,000 | 20,000 | |||||||
Note payable dated September 17, 2013 | 5,221 | - | |||||||
Series A Convertible note, in default | 20,000 | 20,000 | |||||||
Convertible notes payable, dated July 6, 2012 | 30,000 | 30,000 | |||||||
Convertible note payable, dated July 10, 2012 | 15,000 | 15,000 | |||||||
Note payable, dated September 14, 2012 | 6,000 | 6,000 | |||||||
Convertible note payable, dated September 7, 2012 | 43,000 | 43,000 | |||||||
Convertible note payable, dated October 4, 2012 | 50,000 | 50,000 | |||||||
Convertible note payable, dated September 5, 2013 | 10,000 | - | |||||||
Convertible note payable, dated September 16, 2013 | 3,000 | - | |||||||
Total | 293,221 | 275,000 | |||||||
Less current portion | 230,221 | 131,000 | |||||||
Long term portion | $ | 63,000 | $ | 144,000 | |||||
On September 5, 2013, a stockholder and board member loaned $10,000 (unsecured) to the Company due September 5, 2015 with interest at 12% per annum and convertible into the Company's common stock at $0.10 per share at the holder's option. The Company determined there was no beneficial conversion features at the times of issuances. | |||||||||
On September 16, 2013, a stockholder and board member loaned $3,000 (unsecured) to the Company due September 16, 2015 with interest at 12% per annum and convertible into the Company's common stock at $0.10 per share at the holder's option. The Company determined there was no beneficial conversion features at the times of issuances. | |||||||||
On September 17, 2013, a stockholder and Board member loaned $5,221 (unsecured) to the Company due September 17, 2014 with interest at 10% per annum. | |||||||||
Total unpaid accrued interest on the notes payable to related parties as of September 30, 2013 and December 31, 2012 was $63,991 and $37,314, respectively. During the nine months ended September 30, 2013 and 2012, the Company recorded interest expense of $26,676 and $13,266, respectively, in connection with the notes payable to related parties. |
CONVERTIBLE_NOTES
CONVERTIBLE NOTES | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | |||||||||
NOTE 7 - CONVERTIBLE NOTES | Convertible notes of non-related party investors are comprised of the following: | ||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Series A Convertible Notes, net of unamortized debt discount of $-0- and $18,958, respectively | $ | 817,000 | $ | 798,042 | |||||
Series B Convertible Notes, net of unamortized debt discount of $-0- and $14,798, respectively | 225,000 | 210,202 | |||||||
Series C Convertible Notes, net of unamortized debt discount of $-0- and $37,023, respectively | 260,000 | 222,977 | |||||||
Series D Convertible Notes, net of unamortized debt discount of $1,141 and $3,709 respectively | 23,859 | 21,291 | |||||||
Total | 1,325,859 | 1,252,512 | |||||||
Less: Current portion | (347,044 | ) | (1,231,221 | ) | |||||
Long term portion | $ | 978,815 | $ | 21,291 | |||||
Certain convertible note holders, representing an aggregate of $979,500 of these notes entered, into an agreement in December 2014 and January 2015 whereby their obligations were extended for a period of 18 months from the date of execution of the agreement. The terms of the agreement included a payment of accrued interest of $500 for every $25,000 of outstanding principal. All other terms (including any amendments or earlier extensions) of the notes remain the same. The remaining convertible notes are in default. | |||||||||
In addition to the above non-related party convertible notes, there was $171,000 of related party convertible notes outstanding as of September 30, 2013. Please see Note 7 – Notes Payable, Related Parties for a discussion of those convertible notes. |
DERIVATIVE_LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Notes to Financial Statements | |||||
NOTE 8 - DERIVATIVE LIABILITIES | Excessive committed shares | ||||
On April 11, 2013, in connection with the previously issued stock options and warrants, the Company had the possibility of exceeding their common shares authorized when considering the number of possible shares that may be issuable to satisfy settlement provisions of these agreements after consideration of all existing instruments that could be settled in shares. The accounting treatment of derivative financial instruments required that the Company reclassify the derivative from equity to a liability at their fair values as of the date possible issuable shares exceeded the authorized level and at fair value as of each subsequent balance sheet date. | |||||
The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed below. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed are that of volatility and market price of the underlying common stock of the Company. | |||||
At September 30, 2013, the fair value of the derivative liabilities of $527,621 was determined using the Black Scholes Option Pricing model with the following assumptions: dividend yield: 0%; volatility: 197.45%; risk free rate: 1.39%; and expected life: 4.66 years. | |||||
As of September 30, 2013 and December 31, 2012, the Company did not have any derivative instruments that were designated as hedges. | |||||
The derivative liability as of September 30, 2013, in the amount of $527,621 has a level 3 classification. | |||||
The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of September 30, 2013: | |||||
Excess Share Derivative | |||||
Balance, December 31, 2012 | $ | - | |||
Total (gains) losses | |||||
Transfers in of Level 3 upon exceeding in authorized shares | 804,860 | ||||
Mark-to-market at September 30, 2013: | (277,239 | ) | |||
Balance, September 30, 2013 | $ | 527,621 | |||
Net gain for the period included in earnings relating to the liabilities held at September 30, 2013 | $ | 277,239 | |||
Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. The Company’s stock price decreased by 33% from April 11, 2013 (date of exceeding authorized level) to September 30, 2013. As the stock price decreases for each of the related derivative instruments, the value to the holder of the instrument generally decreases, therefore decreasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
Note 9 - STOCKHOLDERS' EQUITY | Common stock |
At September 30, 2013 and December 31, 2012, the Company has authorized 200,000,000 shares of common stock, par value $0.001, of which 98,137,703 and 90,137,703 are issued and outstanding, respectively. | |
During the nine months ended September 30, 2013, the Company sold 8,000,000 shares of stock to a Board member for net proceeds of $400,000. The Board member also received 24,000,000 warrants to purchase the common stock of the Company at an exercise price of $0.10 per share. The warrants are “cashless” for their exercise and have a five year exercise period. |
WARRANTS_AND_OPTIONS
WARRANTS AND OPTIONS | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||
NOTE 10 - WARRANTS AND OPTIONS | Warrants | ||||||||||||||||||||||
The following table summarizes warrants outstanding and related prices for the shares of the Company's common stock issued to shareholders at September 30, 2013: | |||||||||||||||||||||||
Exercise Price | Number Outstanding | Warrants Outstanding Weighted Average Remaining Contractual Life (years) | Weighted Average Exercise price | Number Exercisable | Warrants Exercisable Weighted Average Exercise Price | ||||||||||||||||||
$ | 0.1 | 28,771,600 | 3.39 | $ | 0.1 | 28,771,600 | $ | 0.1 | |||||||||||||||
0.15 | 4,283,334 | 1.58 | 0.15 | 4,283,334 | 0.15 | ||||||||||||||||||
0.25 | 45,581,750 | 2.19 | 0.25 | 45,581,750 | 0.25 | ||||||||||||||||||
0.3 | 250,000 | 2.36 | 0.3 | 250,000 | 0.3 | ||||||||||||||||||
0.4 | 12,974,590 | 1.1 | 0.4 | 12,974,590 | 0.4 | ||||||||||||||||||
Total | 91,861,274 | 2.38 | $ | 0.23 | 91,861,274 | $ | 0.23 | ||||||||||||||||
Transactions involving the Company's warrant issuance are summarized as follows: | |||||||||||||||||||||||
Number of Shares | Weighted Average Price Per Share | ||||||||||||||||||||||
Outstanding at December 31, 2011 | 59,413,274 | $ | 0.3 | ||||||||||||||||||||
Issued | 9,700,000 | 0.2 | |||||||||||||||||||||
Exercised | - | ||||||||||||||||||||||
Expired | (903,000 | ) | (1.00 | ) | |||||||||||||||||||
Outstanding at December 31, 2012 | 68,210,274 | 0.29 | |||||||||||||||||||||
Issued | 24,100,000 | 0.1 | |||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||
Expired | (449,000 | ) | (1.56 | ) | |||||||||||||||||||
Outstanding at September 30, 2013 | 91,861,274 | $ | 0.23 | ||||||||||||||||||||
In conjunction with the sale of common stock during nine months ended September 30, 2013, the Company issued an aggregate of warrants to purchase 24,000,000 shares of common stock with an exercise price of $0.10 per share expiring five years from the date of issuance and are cashless at exercise, if elected. | |||||||||||||||||||||||
During the nine months ended September 30, 2013, the Company issued a consultant a warrant to purchase 100,000 shares of its common stock at $0.15 per share for five years. The warrant was valued using the Black-Scholes model and had a value of $8,948 and was charged to operations for the nine months ended September 30, 2013. The fair value of the warrants were determined using the Black-Scholes option pricing method with the following assumptions: Dividend yield: 0%; Volatility: 254.08%; and Risk Free rate: 0.76%. | |||||||||||||||||||||||
Non-Employee Options | |||||||||||||||||||||||
The following table summarizes non-employee options outstanding and related prices for the shares of the Company's common stock issued to shareholders at September 30, 2013: | |||||||||||||||||||||||
Exercise Price | Number Outstanding | Option Outstanding Options Average Remaining Contractual Life (years) | Weighted Average Exercise price | Number Exercisable | Options Exercisable Weighted Average Exercise Price | ||||||||||||||||||
$ | 0.1 | 650,000 | 4.58 | $ | 0.1 | 650,000 | $ | 0.1 | |||||||||||||||
0.13 | 500,000 | 3.59 | 0.13 | 500,000 | 0.13 | ||||||||||||||||||
0.22 | 175,000 | 3.5 | 0.22 | 175,000 | 0.22 | ||||||||||||||||||
0.7 | 75,000 | 1.94 | 0.7 | 75,000 | 0.7 | ||||||||||||||||||
1.84 | 25,000 | 1.67 | 1.84 | 25,000 | 1.84 | ||||||||||||||||||
Total | 1,425,000 | 3.91 | $ | 0.19 | 1,425,000 | $ | 0.19 | ||||||||||||||||
Transactions involving the Company's non-employee option issuance are summarized as follows: | |||||||||||||||||||||||
Number of Shares | Weighted Average Price Per Share | ||||||||||||||||||||||
Outstanding at December 31, 2011 | 4,850,000 | $ | 0.12 | ||||||||||||||||||||
Issued | -- | -- | |||||||||||||||||||||
Exercised | -- | -- | |||||||||||||||||||||
Canceled or expired | -- | -- | |||||||||||||||||||||
Outstanding at December 31, 2012 | 4,850,000 | 0.12 | |||||||||||||||||||||
Transfer status from employee to non-employee status | 175,000 | 0.22 | |||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||
Canceled or expired | (3,600,000 | ) | 0.1 | ||||||||||||||||||||
Outstanding at September 30, 2013 | 1,425,000 | $ | 0.19 | ||||||||||||||||||||
Employee Options | |||||||||||||||||||||||
The following table summarizes employee options outstanding and related prices for the shares of the Company's common stock issued to shareholders at September 30, 2013: | |||||||||||||||||||||||
Exercise Price | Number Outstanding | Option Outstanding Options Average Remaining Contractual Life (years) | Weighted Average Exercise price | Number Exercisable | Options Exercisable Weighted Average Exercise price | ||||||||||||||||||
$ | 0.06 | 3,000,000 | 4.67 | $ | 0.06 | 3,000,000 | $ | 0.06 | |||||||||||||||
0.09 | 250,000 | 5.18 | 0.09 | 250,000 | 0.09 | ||||||||||||||||||
0.095 | 500,000 | 5.3 | 0.095 | 500,000 | 0.095 | ||||||||||||||||||
0.15 | 250,000 | 0.13 | 0.15 | 250,000 | 0.15 | ||||||||||||||||||
0.17 | 4,500,000 | 3.52 | 0.17 | 4,500,000 | 0.17 | ||||||||||||||||||
0.19 | 1,000,000 | 2.85 | 0.19 | 1,000,000 | 0.19 | ||||||||||||||||||
0.8 | 350,000 | 1.32 | 0.8 | 350,000 | 0.8 | ||||||||||||||||||
1 | 350,000 | 1.79 | 1 | 350,000 | 1 | ||||||||||||||||||
1.25 | 523,000 | 1.36 | 1.25 | 523,000 | 1.25 | ||||||||||||||||||
1.4 | 350,000 | 1.7 | 1.4 | 350,000 | 1.4 | ||||||||||||||||||
1.5 | 200,000 | 0.57 | 1.5 | 200,000 | 1.5 | ||||||||||||||||||
1.63 | 20,000 | 1.71 | 1.63 | 20,000 | 1.63 | ||||||||||||||||||
1.84 | 10,000 | 1.67 | 1.84 | 10,000 | 1.84 | ||||||||||||||||||
4.75 | 203,000 | 0.57 | 4.75 | 203,000 | 4.75 | ||||||||||||||||||
5 | 1,529,934 | 2.13 | 5 | 1,529,934 | 5 | ||||||||||||||||||
Total | 13,035,934 | 3.27 | $ | 0.98 | 13,055,934 | $ | 0.92 | ||||||||||||||||
Transactions involving the Company's employee option issuance are summarized as follows: | |||||||||||||||||||||||
Number of Shares | Weighted Average Price Per Share | ||||||||||||||||||||||
Outstanding at December 31, 2011 | 13,955,934 | $ | 0.99 | ||||||||||||||||||||
Issued | 500,000 | 0.095 | |||||||||||||||||||||
Exercised | -- | -- | |||||||||||||||||||||
Expired | (20,000 | ) | 1.5 | ||||||||||||||||||||
Outstanding at December 31, 2012 | 14,435,934 | 0.97 | |||||||||||||||||||||
Transfer status from employee to non-employee status | (175,000 | ) | 0.22 | ||||||||||||||||||||
Exercised | -- | -- | |||||||||||||||||||||
Expired | (1,225,000 | ) | 1.62 | ||||||||||||||||||||
Outstanding at September 30, 2013 | 13,035,934 | $ | 0.92 | ||||||||||||||||||||
Total stock-based compensation expense for employee options for the nine months ended September 30, 2013 and 2012 amounted to $10,000 and $85,000, respectively. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
NOTE 11 - COMMITMENTS AND CONTINGENCIES | Litigation: |
Dreier LLP | |
On July 17, 2008, Dreier LLP, a law firm, filed a complaint in the Supreme Court of New York, County of New York, seeking damages of $311,023.32 plus interest for legal services allegedly rendered to us. The complaint was answered on August 14, 2008 raising various affirmative defenses. On December 16, 2008, Dreier LLP filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. A settlement was reached on September 30, 2014 requiring the Company to pay $22,500 of installment payments. The first installment of $10,000 was paid on October 10, 2014. The second, third and fourth installments of $2,500 were paid on November 10, 2014, December 11, 2014, and January 12, 2015, respectively. The remaining unpaid balance of $5,000 is scheduled to be paid in the first quarter of 2015. The full amount in dispute was included in the Company’s accounts payable at September 30, 2013. | |
Mathew L Johnson & Associates, P.C. v. Debt Resolve, Inc. (District Court, Clark County, of the State of Nevada Case No.A-12-665900-C): | |
Mathew L. Johnson & Associates, P. C. ("MLJ"), the plaintiff, filed a complaint on or about July 27, 2012 related to a claim for breach of contract for failure to pay for services. On or about August 23, 2010, MLJ preformed certain legal services on behalf of the Company. The Company entered into an agreement with MLJ, which provided for, among other things, a payment for services. In December 2012, we entered into a payment arrangement with the plaintiff for a down payment of $3,500 and monthly payments of $3,000 against the balance due. At September 30, 2013, the remaining balance due is $7,955 and included in accounts payable. Subsequently, the entire balance due has been paid. | |
From time to time, the Company is involved in various litigation matters in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's financial position or results of operations. | |
Other: | |
Payroll taxes | |
Due to a lack of capital, the Company has been unable to pay all of the compensation owed to its employees. In addition, in 2011, 2012 and the third quarter of 2013, the Company did not pay certain federal and state payroll tax obligations due for employees' compensation, and they have become delinquent. The amounts of accrued employees' compensation included $203,428 of unpaid payroll taxes. As a result, the Company has included in accrued expenses an amount of approximately $258,000 that represents an estimate of federal and state interest and penalties that could be expected upon settlement of payment of these payroll taxes with the respective taxing authorities. The Company is currently in discussions with the IRS about the federal portion of the liability about a workout plan. Upon agreement with the IRS, the Company will then initiate a discussion with the states involved. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
NOTE 12 - RELATED PARTY TRANSACTIONS | During the nine months ended September 30, 2013 and 2012, certain Company directors personally guarantee the Company's notes payable and its' bank loan (Notes 6). Also, certain directors and officers made short-term or longer term loans as discussed in Note 7. Total interest expense in connection with notes payable to related parties and related party line of credits amounted $40,229 and $26,868 for the nine months ended September 30, 2013 and 2012, respectively (Note 7 and Note 8). Finally, in the nine months ended September 30, 2013, a director purchased $400,000 of stock, receiving 8,000,000 shares and 24,000,000 warrants for the investment. Also, “Due to shareholders” represents amounts due for certain consulting services provided the Company by these individuals. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | |
NOTE 13 - SUBSEQUENT EVENTS | Equity: |
Common stock | |
In March 2014, the Company issued an aggregate of 3,250,000 shares of common stock options to Board members. The options have exercise prices ranging from $0.015 to $0.20 per share, have a cashless option and expire seven years from the date of issuance. | |
On July 21, 2014, the Company issued 49,379 shares of its common stock in settlement of $4,000 note payable and related accrued interest of $1,925. | |
Preferred stock: | |
On May 2, 2014, the Company’s board of directors designated 5,000,000 shares of its preferred stock as Series A Convertible Stock (“Series A”) with a $0.001 par value. The Series A preferred stock which has rank senior to common and all other preferred stock of the corporation and equal or junior to any preferred stock that may be issued in regard to liquidation; not entitled to dividends and is convertible, at the holders’ option, at 10 shares of common stock for each share of Series A preferred stock. | |
On July 10, 2014, the Company issued an aggregate of 595,000 shares of its Series A preferred stock for services rendered, including 500,000 shares issued to a Board member. | |
In 2014, the Company issued an aggregate of 414,500 warrants to purchase Series A preferred stock for services rendered and a debt obligation, with exercise prices ranging from $0.50 to $1.50 per share, expiring three years from the date of issuance. | |
In connection with entering into the Progress Advocates LLC joint venture with LSH, LLC, (see below), the Company issued to LSH, LLC two five-year warrants to purchase an aggregate of 1,500,000 shares of series A convertible preferred stock of Debt Resolve at an exercise price of $0.50 per preferred share. The first warrant for 1,000,000 shares of Debt Resolve preferred stock vests and becomes exercisable 25% upon issuance and the balance upon the achievement by Progress Advocates of specific increasing revenue goals. The second warrant for 500,000 shares of Debt Resolve preferred stock vests and becomes exercisable when Progress Advocates achieves at least $1,000,000 in cumulative “operating income.” | |
Debt: | |
On October 24, 2013, a stockholder loaned $30,000 (unsecured) to the Company due October 24, 2016 with interest at 10% per annum. | |
On November 7, 2013, a stockholder and Board member loaned $40,000 (unsecured) to the Company due November 7, 2017 with interest at 10% per annum. | |
On December 6, 2013, a stockholder and Board member loaned $5,000 (unsecured) to the Company due December 6, 2016 with interest at 12% per annum. | |
On December 18, 2013, a stockholder and Board member loaned $30,000 (unsecured) to the Company due December 18, 2018 with interest at 10% per annum. | |
In December 2014 and January 2015, the Company executed maturity date extension agreements with unaffiliated holders of Series A Convertible Notes extending the original maturity date 18 months to June through July 2016 for $979,500 of outstanding principle. | |
In 2014, the Company issued an aggregate of $1,025,000 convertible notes due two years from the date of issuance with interest, due at maturity, of 10% per annum. The notes are convertible into common stock at $0.05 per share, at the holders’ election 6 months after issuance. In connection with the issuance, the Company issued warrants to purchase 10,250,000 shares of common stock with an exercise price of $0.15 per share expiring three years from the date of issuance. Board members were issued $250,000 in notes and 2,500,000 common stock warrants. | |
Financial Options Group, LLC | |
In October 2014, the Company formed an LLC initially called Financial Options Group, LLC, subsequently changed to Progress Advocates LLC with LSH, LLC to focus on the student loan market with ownership of 51% owned by the Company and 49% owned by LSH, LLC. | |
In connection with entering into the Progress Advocates LLC joint venture with LSH, LLC, (see above), the Company issued to LSH, LLC two five-year warrants to purchase an aggregate of 1,500,000 shares of series A convertible preferred stock of the Company with vesting of the majority of these shares conditional upon meeting performance objectives. | |
Employment: | |
On November 1, 2013, the Company appointed Claremont Ventures LLC as CEO through its Managing Member, Stanley E. Freimuth. On March 1, 2014, Mr. Freimuth became the full-time CEO of the Company and was appointed to the Board of Directors. | |
On March 1, 2014, the Company appointed Stanley E. Freimuth as Chief Executive Officer of the Company with an initial term of three years and monthly compensation of $17,500. In addition, Mr. Freimuth received 5,000,000 shares of the Company’s common stock for which 500,000 shares of series A convertible preferred stock was issued in exchange per board resolution, options to purchase 3,000,000 shares of the common stock exercisable at $0.015 per share for 7 years, vesting over three years on anniversary, and a $25,000 sign on bonus. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Significant Accounting Policies Policies | |
Estimates | The preparation of the unaudited condensed financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. |
Reclassification | Certain reclassifications have been made to prior period data to conform to the current period's presentation. These reclassifications had no effect on reported income or losses. |
Concentrations and Credit Risk | The Company extends credit to large, mid-size and small companies for the use of its software solutions. At September 30, 2013, three clients represented receivables of $2,500 (11%), $5,000 (22%) and $10,000 (44%). At December 31, 2012, two clients represented receivables of $10,000 (16%) and $45,000 (72%). As of September 30, 2013 and December 31, 2012, no allowance for doubtful accounts has been recognized. |
The Company had two clients accounting for 45.8% and 45.8%; (total of 91.6%) of total revenues for the three months ended September 30, 2013, respectively, and had two clients accounting for 40.7% and 40.6%; (total of 81.3%) of total revenues for the nine months ended September 30, 2013. | |
The Company had two clients accounting for 44.9% and 44.9%; (total of 89.8%) of total revenues for the three months ended September 30, 2012, respectively, and had two clients accounting for 37.7% and 37.7%; (total of 75.4%) of total revenues for the nine months ended September 30, 2012. | |
Income Taxes | The Company follows Accounting Standards Codification subtopic 740-10, Income Taxes ("ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes primarily relate to debt costs. |
Net Loss per Share | The Company follows Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants have been excluded as common stock equivalents in the diluted loss per share on the computation for the nine months ended September 30, 2013 and for the three and nine months ended September 30, 2012 because their effect is anti-dilutive. Fully diluted shares outstanding were 108,820,542 for the nine months ended September 30, 2013. Fully diluted shares outstanding were 101,801,118 and 103,622,369 for the three and nine month periods ended September 30, 2012, respectively. |
Stock-based compensation | Total employee and non-employee stock-based compensation expense for the three and nine months ended September 30, 2013 amounted to $18,948 and for the three and nine months ended September 30, 2012 amounted to $30,000 and $105,000, respectively. |
Defined Contribution (401k) Plan | The Company maintains a defined contribution (401k) plan for our employees. The plan provides for a company match in the amount of 100% of the first 3% of pre-tax salary contributed and 50% of the next 3% of pre-tax salary contributed. Due to the severe cash limitations that the Company has experienced, the match was suspended from mid-2008 to the present and will only be re-instated when business conditions warrant. |
Derivative Liability | The Company accounts for derivatives in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At September 30, 2013 and December 31, 2012, the Company did not have any derivative instruments that were designated as hedges. See Note 8 for discussion of the Company’s derivative liabilities. |
Recent accounting pronouncements | There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows. |
ACCOUNTS_PAYABLE_AND_ACCRUED_L1
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounts Payable And Accrued Liabilities Tables | |||||||||
Accounts payable and accrued liabilities | 30-Sep-13 | 31-Dec-12 | |||||||
Accounts payable and accrued expenses | $ | 1,158,052 | $ | 1,168,853 | |||||
Accrued interest | 1,048,850 | 835,175 | |||||||
Payroll and related accruals, net of advance to employees | 898,076 | 904,027 | |||||||
Total | $ | 3,104,978 | $ | 2,908,055 |
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes Payable Tables | |||||||||
Short term notes | 30-Sep-13 | 31-Dec-12 | |||||||
Bank loans | $ | 143,750 | $ | 200,000 | |||||
Investor notes payable, 12% per annum, currently in default | 377,867 | 377,867 | |||||||
Total | 521,617 | 577,867 | |||||||
Less current portion | 452,867 | 446,617 | |||||||
Long term portion (only bank loan) | $ | 68,750 | $ | 131,250 |
NOTES_PAYABLE_RELATED_PARTIES_
NOTES PAYABLE, RELATED PARTIES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes Payable Related Parties Tables | |||||||||
Notes payable, related parties | 30-Sep-13 | 31-Dec-12 | |||||||
Note payable dated January 14, 2011, in default | $ | 6,000 | $ | 6,000 | |||||
Note payable dated April 14, 2011, in default | 25,000 | 25,000 | |||||||
Note payable dated April 15, 2011, in default | 25,000 | 25,000 | |||||||
Note payable dated May 27, 2011, in default | 10,000 | 10,000 | |||||||
Note payable dated January 18, 2012 | 5,000 | 5,000 | |||||||
Note payable dated January 20, 2012 | 5,000 | 5,000 | |||||||
Note payable dated May 21, 2012 | 15,000 | 15,000 | |||||||
Note payable dated May 30, 2012 | 20,000 | 20,000 | |||||||
Note payable dated September 17, 2013 | 5,221 | - | |||||||
Series A Convertible note, in default | 20,000 | 20,000 | |||||||
Convertible notes payable, dated July 6, 2012 | 30,000 | 30,000 | |||||||
Convertible note payable, dated July 10, 2012 | 15,000 | 15,000 | |||||||
Note payable, dated September 14, 2012 | 6,000 | 6,000 | |||||||
Convertible note payable, dated September 7, 2012 | 43,000 | 43,000 | |||||||
Convertible note payable, dated October 4, 2012 | 50,000 | 50,000 | |||||||
Convertible note payable, dated September 5, 2013 | 10,000 | - | |||||||
Convertible note payable, dated September 16, 2013 | 3,000 | - | |||||||
Total | 293,221 | 275,000 | |||||||
Less current portion | 230,221 | 131,000 | |||||||
Long term portion | $ | 63,000 | $ | 144,000 |
DERIVATIVE_LIABILITIES_Tables
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Derivative Liabilities Tables | |||||
DERIVATIVE LIABILITIES | Excess Share Derivative | ||||
Balance, December 31, 2012 | $ | - | |||
Total (gains) losses | |||||
Transfers in of Level 3 upon exceeding in authorized shares | 804,860 | ||||
Mark-to-market at September 30, 2013: | (277,239 | ) | |||
Balance, September 30, 2013 | $ | 527,621 | |||
Net gain for the period included in earnings relating to the liabilities held at September 30, 2013 | $ | 277,239 |
CONVERTIBLE_NOTES_Tables
CONVERTIBLE NOTES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Convertible Notes Tables | |||||||||
Convertible notes | 30-Sep-13 | 31-Dec-12 | |||||||
Series A Convertible Notes, net of unamortized debt discount of $-0- and $18,958, respectively | $ | 817,000 | $ | 798,042 | |||||
Series B Convertible Notes, net of unamortized debt discount of $-0- and $14,798, respectively | 225,000 | 210,202 | |||||||
Series C Convertible Notes, net of unamortized debt discount of $-0- and $37,023, respectively | 260,000 | 222,977 | |||||||
Series D Convertible Notes, net of unamortized debt discount of $1,141 and $3,709 respectively | 23,859 | 21,291 | |||||||
Total | 1,325,859 | 1,252,512 | |||||||
Less: Current portion | (347,044 | ) | (1,231,221 | ) | |||||
Long term portion | $ | 978,815 | $ | 21,291 |
WARRANTS_AND_OPTIONS_Tables
WARRANTS AND OPTIONS (Tables) | 9 Months Ended | ||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||
Derivative Liabilities Tables | |||||||||||||||||||||||
Warrant | Exercise Price | Number Outstanding | Warrants Outstanding Weighted Average Remaining Contractual Life (years) | Weighted Average Exercise price | Number Exercisable | Warrants Exercisable Weighted Average Exercise Price | |||||||||||||||||
$ | 0.1 | 28,771,600 | 3.39 | $ | 0.1 | 28,771,600 | $ | 0.1 | |||||||||||||||
0.15 | 4,283,334 | 1.58 | 0.15 | 4,283,334 | 0.15 | ||||||||||||||||||
0.25 | 45,581,750 | 2.19 | 0.25 | 45,581,750 | 0.25 | ||||||||||||||||||
0.3 | 250,000 | 2.36 | 0.3 | 250,000 | 0.3 | ||||||||||||||||||
0.4 | 12,974,590 | 1.1 | 0.4 | 12,974,590 | 0.4 | ||||||||||||||||||
Total | 91,861,274 | 2.38 | $ | 0.23 | 91,861,274 | $ | 0.23 | ||||||||||||||||
Warrant issuance | Number of Shares | Weighted Average Price Per Share | |||||||||||||||||||||
Outstanding at December 31, 2011 | 59,413,274 | $ | 0.3 | ||||||||||||||||||||
Issued | 9,700,000 | 0.2 | |||||||||||||||||||||
Exercised | - | ||||||||||||||||||||||
Expired | (903,000 | ) | (1.00 | ) | |||||||||||||||||||
Outstanding at December 31, 2012 | 68,210,274 | 0.29 | |||||||||||||||||||||
Issued | 24,100,000 | 0.1 | |||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||
Expired | (449,000 | ) | (1.56 | ) | |||||||||||||||||||
Outstanding at September 30, 2013 | 91,861,274 | $ | 0.23 | ||||||||||||||||||||
Non-Employee Options | Exercise Price | Number Outstanding | Option Outstanding Options Average Remaining Contractual Life (years) | Weighted Average Exercise price | Number Exercisable | Options Exercisable Weighted Average Exercise Price | |||||||||||||||||
$ | 0.1 | 650,000 | 4.58 | $ | 0.1 | 650,000 | $ | 0.1 | |||||||||||||||
0.13 | 500,000 | 3.59 | 0.13 | 500,000 | 0.13 | ||||||||||||||||||
0.22 | 175,000 | 3.5 | 0.22 | 175,000 | 0.22 | ||||||||||||||||||
0.7 | 75,000 | 1.94 | 0.7 | 75,000 | 0.7 | ||||||||||||||||||
1.84 | 25,000 | 1.67 | 1.84 | 25,000 | 1.84 | ||||||||||||||||||
Total | 1,425,000 | 3.91 | $ | 0.19 | 1,425,000 | $ | 0.19 | ||||||||||||||||
Non-employee option issuance | Number of Shares | Weighted Average Price Per Share | |||||||||||||||||||||
Outstanding at December 31, 2011 | 4,850,000 | $ | 0.12 | ||||||||||||||||||||
Issued | -- | -- | |||||||||||||||||||||
Exercised | -- | -- | |||||||||||||||||||||
Canceled or expired | -- | -- | |||||||||||||||||||||
Outstanding at December 31, 2012 | 4,850,000 | 0.12 | |||||||||||||||||||||
Transfer status from employee to non-employee status | 175,000 | 0.22 | |||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||
Canceled or expired | (3,600,000 | ) | 0.1 | ||||||||||||||||||||
Outstanding at September 30, 2013 | 1,425,000 | $ | 0.19 | ||||||||||||||||||||
Employee Options | Exercise Price | Number Outstanding | Option Outstanding Options Average Remaining Contractual Life (years) | Weighted Average Exercise price | Number Exercisable | Options Exercisable Weighted Average Exercise price | |||||||||||||||||
$ | 0.06 | 3,000,000 | 4.67 | $ | 0.06 | 3,000,000 | $ | 0.06 | |||||||||||||||
0.09 | 250,000 | 5.18 | 0.09 | 250,000 | 0.09 | ||||||||||||||||||
0.095 | 500,000 | 5.3 | 0.095 | 500,000 | 0.095 | ||||||||||||||||||
0.15 | 250,000 | 0.13 | 0.15 | 250,000 | 0.15 | ||||||||||||||||||
0.17 | 4,500,000 | 3.52 | 0.17 | 4,500,000 | 0.17 | ||||||||||||||||||
0.19 | 1,000,000 | 2.85 | 0.19 | 1,000,000 | 0.19 | ||||||||||||||||||
0.8 | 350,000 | 1.32 | 0.8 | 350,000 | 0.8 | ||||||||||||||||||
1 | 350,000 | 1.79 | 1 | 350,000 | 1 | ||||||||||||||||||
1.25 | 523,000 | 1.36 | 1.25 | 523,000 | 1.25 | ||||||||||||||||||
1.4 | 350,000 | 1.7 | 1.4 | 350,000 | 1.4 | ||||||||||||||||||
1.5 | 200,000 | 0.57 | 1.5 | 200,000 | 1.5 | ||||||||||||||||||
1.63 | 20,000 | 1.71 | 1.63 | 20,000 | 1.63 | ||||||||||||||||||
1.84 | 10,000 | 1.67 | 1.84 | 10,000 | 1.84 | ||||||||||||||||||
4.75 | 203,000 | 0.57 | 4.75 | 203,000 | 4.75 | ||||||||||||||||||
5 | 1,529,934 | 2.13 | 5 | 1,529,934 | 5 | ||||||||||||||||||
Total | 13,035,934 | 3.27 | $ | 0.98 | 13,055,934 | $ | 0.92 | ||||||||||||||||
Employee option issuance | Number of Shares | Weighted Average Price Per Share | |||||||||||||||||||||
Outstanding at December 31, 2011 | 13,955,934 | $ | 0.99 | ||||||||||||||||||||
Issued | 500,000 | 0.095 | |||||||||||||||||||||
Exercised | -- | -- | |||||||||||||||||||||
Expired | (20,000 | ) | 1.5 | ||||||||||||||||||||
Outstanding at December 31, 2012 | 14,435,934 | 0.97 | |||||||||||||||||||||
Transfer status from employee to non-employee status | (175,000 | ) | 0.22 | ||||||||||||||||||||
Exercised | -- | -- | |||||||||||||||||||||
Expired | (1,225,000 | ) | 1.62 | ||||||||||||||||||||
Outstanding at September 30, 2013 | 13,035,934 | $ | 0.92 |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Significant Accounting Policies Details Narrative | |||||
Company extends credit to large, mid-size and small companies for collection services | Three clients represented receivables of $2,500 (11%), $5,000 (22%) and $10,000 (44%). | Two clients represented receivables of $10,000 (16%) and $45,000 (72%). | |||
Customer Risk, Total revenue | Two clients accounting for 45.8% and 45.8%; (total of 91.6%) | Two clients accounting for 44.9% and 44.9%; (total of 89.8%) | Two clients accounting for 40.7% and 40.6%; (total of 81.3%) | Two clients accounting for 37.7% and 37.7%; (total of 75.4%) | |
Diluted shares outstanding | 101,801,118 | 108,820,542 | 103,622,369 | ||
Stock-based compensation expense | $18,948 | $30,000 | $18,948 | $105,000 |
LIQUIDITY_Details_Narrative
LIQUIDITY (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Liquidity Details Narrative | ||||
Net loss | $140,066 | ($367,010) | ($440,279) | ($1,342,148) |
Working capital | ($5,150,261) | ($5,150,261) |
ACCOUNTS_PAYABLE_AND_ACCRUED_L2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Accounts Payable And Accrued Liabilities Details | ||
Accounts payable and accrued expense | $1,158,052 | $1,168,853 |
Accrued interest | 1,048,850 | 835,175 |
Payroll and related accruals, net of advance to employees | 898,076 | 904,027 |
Total | $3,104,978 | $2,908,055 |
ACCOUNTS_PAYABLE_AND_ACCRUED_L3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Accounts Payable And Accrued Liabilities Details Narrative | ||||
Accounts payable settled | $63,829 | |||
Settled accounts payable value | 10,000 | |||
Gain on settlement of debt | $53,829 | $53,829 |
NOTES_PAYABLE_Details
NOTES PAYABLE (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Notes Payable Details | ||
Bank loans | $143,750 | $200,000 |
Investor notes payable, 12% per annum, currently in default | 377,867 | 377,867 |
Total | 521,617 | 577,867 |
Less current portion | 452,867 | 446,617 |
Long term portion (only bank loan) | $68,750 | $131,250 |
NOTES_PAYABLE_RELATED_PARTIES_1
NOTES PAYABLE, RELATED PARTIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Notes Payable | $293,221 | $275,000 |
Less current portion | 230,221 | 131,000 |
Long term portion | 63,000 | 144,000 |
NotePayableDatedJanuaryFourteenTwoThousandElevenMember | ||
Notes Payable | 6,000 | 6,000 |
NotePayableDatedAprilFourteenTwoThousandElevenMember | ||
Notes Payable | 25,000 | 25,000 |
NotePayableDatedAprilFifteenThousandElevenMember | ||
Notes Payable | 25,000 | 25,000 |
NotePayableDatedMayTwentySevenTwoThousandElevenMember | ||
Notes Payable | 10,000 | 10,000 |
NotePayableDatedJanuaryEighteenTwoThousandTwelveMember | ||
Notes Payable | 5,000 | 5,000 |
NotePayableDatedJanuaryTwentyTwoThousandTwelveMember | ||
Notes Payable | 5,000 | 5,000 |
NotePayableDatedMayTwentyOneTwoThousandTwelveMember | ||
Notes Payable | 15,000 | 15,000 |
NotePayableDatedMayThirtyTwoThousandTwelveMember | ||
Notes Payable | 20,000 | 20,000 |
Convertible Note Payable Dated September Seventeen Two Thousand Thirteen Member | ||
Notes Payable | 5,221 | |
SeriesAConvertibleNoteMember | ||
Notes Payable | 20,000 | 20,000 |
ConvertibleNotePayableDatedJulySixTwoThousandTwelveMember | ||
Notes Payable | 30,000 | 30,000 |
ConvertibleNotePayableDatedJulyTenTwoThousandTwelveMember | ||
Notes Payable | 15,000 | 15,000 |
ConvertibleNotePayableDatedSeptemberFourteenTwoThousandTwelveMember | ||
Notes Payable | 6,000 | 6,000 |
ConvertibleNotePayableDatedSeptemberSevenTwoThousandTwelveMember | ||
Notes Payable | 43,000 | 43,000 |
ConvertibleNotePayableDatedOctoberFourTwoThousandTwelveMember | ||
Notes Payable | 50,000 | 50,000 |
custom:Convertible Note Payable Dated September Five Two Thousand Thirteen Member | ||
Notes Payable | 10,000 | |
custom:Convertible Note Payable Dated September Sixteen Two Thousand Thirteen Member | ||
Notes Payable | $3,000 |
NOTES_PAYABLE_RELATED_PARTIES_2
NOTES PAYABLE, RELATED PARTIES (Details Narrtive) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Notes Payable Related Parties Details Narrtive | |||
Unpaid accrued interest | $63,991 | $37,314 | |
Interest expense, related parties | $26,676 | $13,266 |
CONVERTIBLE_NOTES_Details
CONVERTIBLE NOTES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
CONVERTIBLE NOTES | ||
Convertible Notes | $1,325,859 | $1,252,512 |
Less: Current portion | -347,044 | -1,231,221 |
Long term portion | 978,815 | 21,291 |
Series A Convertible Notes [Member] | ||
CONVERTIBLE NOTES | ||
Convertible Notes | 817,000 | 798,042 |
Series B Convertible Notes [Member] | ||
CONVERTIBLE NOTES | ||
Convertible Notes | 225,000 | 210,202 |
Series C Convertible Notes [Member] | ||
CONVERTIBLE NOTES | ||
Convertible Notes | 260,000 | 222,977 |
Series D Convertible Notes [Member] | ||
CONVERTIBLE NOTES | ||
Convertible Notes | $23,859 | $21,291 |
CONVERTIBLE_NOTES_Details_Narr
CONVERTIBLE NOTES (Details Narrative) (USD $) | Sep. 30, 2013 |
Convertible Notes Details Narrative | |
Convertible notes outstanding | $171,000 |
DERIVATIVE_LIABILITIES_Details
DERIVATIVE LIABILITIES (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Derivative Liabilities Details | |
Beginning Balance | |
Total (gains) losses | |
Transfers in of Level 3 upon exceeding in authorized shares | 804,860 |
Mark-to-market | -277,239 |
Ending Balance | 527,621 |
Net Gain for the period included in earnings relating to the liabilities held | $277,239 |
DERIVATIVE_LIABILITIES_Details1
DERIVATIVE LIABILITIES (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Derivative Liabilities Details Narrative | ||
Derivative liabilities | $527,621 | |
Dividend yield | 0.00% | |
Volatility | 240.04% | |
Risk free rate | 1.41% | |
Expected life | 4 years 7 months 28 days |
STOCKHOLDERS_EQUITY_Details_Na
STOCKHOLDERS' EQUITY (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 93,137,703 | 90,137,703 |
Common stock shares outstanding | 93,137,703 | 90,137,703 |
Board Member | ||
Common stock sold, shares | 8,000,000 | |
Common stock sold, value | $400,000 | |
Warrants purchased | 24,000,000 | |
Exercise price of warrant | $0.10 |
WARRANTS_AND_OPTIONS_Details
WARRANTS AND OPTIONS (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Share Based Compensation Warrants One [Member] | |
Exercise Price | $0.10 |
Number Outstanding | 28,771,600 |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 3 years 4 months 21 days |
Weighted Average Exercise price | $0.10 |
Number Exercisable | 28,771,600 |
Warrants Exercisable Weighted Average Exercise Price | $0.10 |
Share Based Compensation Warrants Two [Member] | |
Exercise Price | $0.15 |
Number Outstanding | 4,283,334 |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 6 months 29 days |
Weighted Average Exercise price | $0.15 |
Number Exercisable | 4,283,334 |
Warrants Exercisable Weighted Average Exercise Price | $0.15 |
Share Based Compensation Warrants Three [Member] | |
Exercise Price | $0.25 |
Number Outstanding | 45,581,750 |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 2 years 2 months 9 days |
Weighted Average Exercise price | $0.25 |
Number Exercisable | 45,581,750 |
Warrants Exercisable Weighted Average Exercise Price | $0.25 |
Share Based Compensation Warrants Four [Member] | |
Exercise Price | $0.30 |
Number Outstanding | 250,000 |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 2 years 4 months 10 days |
Weighted Average Exercise price | $0.30 |
Number Exercisable | 250,000 |
Warrants Exercisable Weighted Average Exercise Price | $0.30 |
Share Based Compensation Warrants Five [Member] | |
Exercise Price | $0.40 |
Number Outstanding | 12,974,590 |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 1 month 6 days |
Weighted Average Exercise price | $0.40 |
Number Exercisable | 12,974,590 |
Warrants Exercisable Weighted Average Exercise Price | $0.40 |
Warrants | |
Number Outstanding | 91,861,274 |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 2 years 4 months 17 days |
Weighted Average Exercise price | $0.23 |
Number Exercisable | 91,861,274 |
Warrants Exercisable Weighted Average Exercise Price | $0.23 |
WARRANTS_AND_OPTIONS_Details_1
WARRANTS AND OPTIONS (Details 1) (Warrant Issuance, USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Warrant Issuance | ||
Number of Shares | ||
Beginning Balance | 68,210,274 | 59,413,274 |
Issued | 24,100,000 | 9,700,000 |
Exercised | ||
Expired | -449,000 | -903,000 |
Ending Balance | 91,861,274 | 68,210,274 |
Weighted Average Exercise Price | ||
Beginning Balance | $0.29 | $0.30 |
Issued | $0.10 | $0.20 |
Exercised | ||
Expired | ($1.56) | ($1) |
Ending Balance | $0.23 | $0.29 |
WARRANTS_AND_OPTIONS_Details_2
WARRANTS AND OPTIONS (Details 2) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Non-Employee Options [Member] | |||
Number Outstanding | 1,425,000 | 4,850,000 | 4,850,000 |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 3 years 10 months 28 days | ||
Weighted Average Exercise price | $0.19 | $0.12 | $0.12 |
Number Exercisable | 1,425,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.19 | ||
Share Based Compensation Stock Option Non Employee One [Member] | |||
Exercise Price | $0.10 | ||
Number Outstanding | 650,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 4 years 6 months 29 days | ||
Weighted Average Exercise price | $0.10 | ||
Number Exercisable | 650,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.10 | ||
Share Based Compensation Stock Option Non Employee Two [Member] | |||
Exercise Price | $0.13 | ||
Number Outstanding | 500,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 3 years 7 months 2 days | ||
Weighted Average Exercise price | $0.13 | ||
Number Exercisable | 500,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.13 | ||
Share Based Compensation Stock Option Non Employee Three [Member] | |||
Exercise Price | $0.22 | ||
Number Outstanding | 175,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 3 years 6 months | ||
Weighted Average Exercise price | $0.22 | ||
Number Exercisable | 175,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.22 | ||
Share Based Compensation Stock Option Non Employee Four [Member] | |||
Exercise Price | $0.70 | ||
Number Outstanding | 75,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 11 months 9 days | ||
Weighted Average Exercise price | $0.70 | ||
Number Exercisable | 75,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.70 | ||
Share Based Compensation Stock Option Non Employee Five [Member] | |||
Exercise Price | $1.84 | ||
Number Outstanding | 25,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 8 months 1 day | ||
Weighted Average Exercise price | $1.84 | ||
Number Exercisable | 25,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $1.84 |
WARRANTS_AND_OPTIONS_Details_3
WARRANTS AND OPTIONS (Details 3) (NonEmployeeOptionsMember, USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
NonEmployeeOptionsMember | ||
Number of option | ||
Beginning Balance | 4,850,000 | 4,850,000 |
Transfer status from employee to non-employee status | 175,000 | |
Issued | ||
Exercised | ||
Canceled or expired | -3,600,000 | |
Ending Balance | 1,425,000 | 4,850,000 |
Weighted Average Exercise Price | ||
Beginning Balance | $0.12 | $0.12 |
Transfer status from employee to non-employee status | $0.22 | |
Issued | ||
Exercised | ||
Canceled or expired | $0.10 | |
Ending Balance | $0.19 | $0.12 |
WARRANTS_AND_OPTIONS_Details_4
WARRANTS AND OPTIONS (Details 4) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Employee Stock Option [Member] | |||
Number Outstanding | 13,035,934 | 14,435,934 | 13,955,934 |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 3 years 3 months 7 days | ||
Weighted Average Exercise price | $0.98 | $0.97 | $0.99 |
Number Exercisable | 13,055,934 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.92 | ||
Share Based Compensation Stock Option One [Member] | |||
Exercise Price | $0.06 | ||
Number Outstanding | 3,000,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 4 years 8 months 1 day | ||
Weighted Average Exercise price | $0.06 | ||
Number Exercisable | 3,000,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.06 | ||
Share Based Compensation Stock Option Two [Member] | |||
Exercise Price | $0.09 | ||
Number Outstanding | 250,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 5 years 2 months 5 days | ||
Weighted Average Exercise price | $0.09 | ||
Number Exercisable | 250,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.09 | ||
Share Based Compensation Stock Option Three [Member] | |||
Exercise Price | $0.10 | ||
Number Outstanding | 500,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 5 years 3 months 18 days | ||
Weighted Average Exercise price | $0.10 | ||
Number Exercisable | 500,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.10 | ||
Share Based Compensation Stock Option Four [Member] | |||
Exercise Price | $0.15 | ||
Number Outstanding | 250,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 month 17 days | ||
Weighted Average Exercise price | $0.15 | ||
Number Exercisable | 250,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.15 | ||
Share Based Compensation Stock Option Five [Member] | |||
Exercise Price | $0.17 | ||
Number Outstanding | 4,500,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 3 years 6 months 7 days | ||
Weighted Average Exercise price | $0.17 | ||
Number Exercisable | 4,500,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.17 | ||
Share Based Compensation Stock Option Six [Member] | |||
Exercise Price | $0.19 | ||
Number Outstanding | 1,000,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 2 years 10 months 6 days | ||
Weighted Average Exercise price | $0.19 | ||
Number Exercisable | 1,000,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.19 | ||
Share Based Compensation Stock Option Seven [Member] | |||
Exercise Price | $0.80 | ||
Number Outstanding | 350,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 3 months 26 days | ||
Weighted Average Exercise price | $0.80 | ||
Number Exercisable | 350,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $0.80 | ||
Share Based Compensation Stock Option Eight [Member] | |||
Exercise Price | $1 | ||
Number Outstanding | 350,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 9 months 15 days | ||
Weighted Average Exercise price | $1 | ||
Number Exercisable | 350,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $1 | ||
Share Based Compensation Stock Option Nine [Member] | |||
Exercise Price | $1.25 | ||
Number Outstanding | 523,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 4 months 10 days | ||
Weighted Average Exercise price | $1.25 | ||
Number Exercisable | 523,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $1.25 | ||
Share Based Compensation Stock Option Ten [Member] | |||
Exercise Price | $1.40 | ||
Number Outstanding | 350,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 8 months 12 days | ||
Weighted Average Exercise price | $1.40 | ||
Number Exercisable | 350,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $1.40 | ||
Share Based Compensation Stock Option Eleven [Member] | |||
Exercise Price | $1.50 | ||
Number Outstanding | 200,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 6 months 26 days | ||
Weighted Average Exercise price | $1.50 | ||
Number Exercisable | 200,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $1.50 | ||
Share Based Compensation Stock Option Twelve [Member] | |||
Exercise Price | $1.63 | ||
Number Outstanding | 20,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 8 months 16 days | ||
Weighted Average Exercise price | $1.63 | ||
Number Exercisable | 20,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $1.63 | ||
Share Based Compensation Stock Option Thitreen [Member] | |||
Exercise Price | $1.84 | ||
Number Outstanding | 10,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 1 year 8 months 1 day | ||
Weighted Average Exercise price | $1.84 | ||
Number Exercisable | 10,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $1.84 | ||
Share Based Compensation Stock Option Fourteen [Member] | |||
Exercise Price | $4.75 | ||
Number Outstanding | 203,000 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 6 months 26 days | ||
Weighted Average Exercise price | $4.75 | ||
Number Exercisable | 203,000 | ||
Warrants Exercisable Weighted Average Exercise Price | $4.75 | ||
Share Based Compensation Stock Option Fifteen [Member] | |||
Exercise Price | $5 | ||
Number Outstanding | 1,529,934 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 2 years 1 month 17 days | ||
Weighted Average Exercise price | $5 | ||
Number Exercisable | 1,529,934 | ||
Warrants Exercisable Weighted Average Exercise Price | $5 |
WARRANTS_AND_OPTIONS_Details_5
WARRANTS AND OPTIONS (Details 5) (Employee Stock Option [Member], USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Employee Stock Option [Member] | ||
Number of option | ||
Beginning Balance | 14,435,934 | 13,955,934 |
Transfer status from employee to non-employee status | -175,000 | |
Issued | 500,000 | |
Exercised | ||
Canceled or expired | -1,225,000 | -20,000 |
Ending Balance | 13,035,934 | 14,435,934 |
Weighted Average Exercise Price | ||
Beginning Balance | $0.97 | $0.99 |
Transfer status from employee to non-employee status | $0.22 | |
Issued | $0.10 | |
Exercised | ||
Canceled or expired | $1.62 | $1.50 |
Ending Balance | $0.98 | $0.97 |
WARRANTS_AND_OPTIONS_Details_N
WARRANTS AND OPTIONS (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Warrants And Options Details Narrative | ||
Company issued warrants | 24,000,000 | |
Exercise price | $0.10 | |
Expires from the date of issuance | 5 years | |
Dividend yield | 0.00% | |
Volatility | 254.08% | |
Risk free rate | 0.76% | |
Stock warrants issued | 100,000 | |
Exercise price | $0.15 | |
Value of warrant | $8,948 | |
Compensation expense | $10,000 | $85,000 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | Sep. 30, 2013 |
Commitments And Contingencies Details Narrative | |
Balance due | $7,955 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Related Party Transactions Details Narrative | ||
Interest expense in connection with notes payable to related parties and related party line of credits amount | $40,229 | $26,868 |
Director purchase shares | $400,000 | |
Shares Received | 8,000,000 | |
Warrants for investment | 24,000,000 |