Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 28, 2013 | Jun. 29, 2012 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'Wizard World, Inc. | ' | ' |
Entity Central Index Key | '0001162896 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $0 |
Entity Common Stock, Shares Outstanding | ' | 0 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Cash | $3,633,846 | $1,957,060 |
Accounts receivable, net | 17,757 | 40,545 |
Inventory | 27,002 | ' |
Prepaid expenses | 620,188 | 262,033 |
Total Current Assets | 4,298,793 | 2,259,638 |
Property and equipment, net | 50,960 | 3,337 |
Security deposit | 34,800 | 15,120 |
Total Assets | 4,384,553 | 2,278,095 |
Current Liabilities: | ' | ' |
Accounts payable and accrued liabilites | 1,230,799 | 684,046 |
Accrued dividends | ' | 387,042 |
Unearned convention revenue | 861,627 | 176,191 |
Total Current Liabilities | 2,092,426 | 1,247,279 |
Non-current Liabilities: | ' | ' |
Derivative liability | ' | 4,784,035 |
Total Non-current Liabilities | ' | 4,784,035 |
Total Liabilities | 2,092,426 | 6,031,314 |
Commitments and contingencies | ' | ' |
Stockholders' Equity (Deficit) | ' | ' |
Series A convertible preferred stock par value $0.0001: 50,000 shares authorized; 0 and 39,101 shares issued and outstanding, respectively | ' | 4 |
Common stock par value $0.0001: 80,000,000 shares authorized; 51,104,024 and 35,794,878 shares issued and outstanding, respectively | 5,111 | 3,580 |
Additional paid-in capital | 15,043,762 | 5,119,726 |
Accumulated deficit | -12,756,746 | -8,876,529 |
Total Stockholders' Equity (Deficit) | 2,292,127 | -3,753,219 |
Total Liabilities and Stockholders' Equity (Deficit) | $4,384,553 | $2,278,095 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Series A convertible preferred stock, par value | $0.00 | $0.00 |
Series A convertible preferred stock, shares authorized | 50,000 | 50,000 |
Series A convertible preferred stock, shares issued | 0 | 39,101 |
Series A convertible preferred stock, shares outstanding | 0 | 39,101 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 51,104,024 | 35,794,878 |
Common stock, shares outstanding | 51,104,024 | 35,794,878 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | ' | ' |
Convention revenue | $11,186,134 | $6,743,502 |
Cost of revenue | 6,921,044 | 4,324,267 |
Gross margin | 4,265,090 | 2,419,235 |
Operating expenses | ' | ' |
Compensation | 1,892,894 | 972,887 |
Consulting fees | 1,040,925 | 415,190 |
Web development fees | 6,673 | 10,980 |
General and administrative | 981,093 | 822,369 |
Total operating expenses | 3,921,585 | 2,221,426 |
Income from operations | 343,506 | 197,809 |
Other income (expenses) | ' | ' |
Interest income | ' | 14 |
Interest expense | -10,288 | -251,971 |
Gain on debt settlement | ' | 47,501 |
Change in the fair value of derivative liabilities | -3,970,952 | -1,012,274 |
Total other income (expenses) | -3,981,240 | -1,216,730 |
Loss before income tax provision | -3,637,735 | -1,018,921 |
Income tax provision | ' | ' |
Net loss | -3,637,735 | -1,018,921 |
Deemed dividend on Series A Convertible Preferred Stock | -242,482 | -2,120,284 |
Net loss attributable to common stockholders | ($3,880,217) | ($3,139,205) |
Net loss attributable to common stockholders - Basic and diluted | ($0.09) | ($0.09) |
Weighted average common shares outstanding - basic and diluted | 41,367,509 | 35,237,501 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders' Equity (Deficit) (USD $) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2011 | $2 | $3,505 | $2,344,746 | ($5,737,324) | ($3,389,071) |
Balance, shares at Dec. 31, 2011 | 15,510 | 35,044,878 | ' | ' | ' |
Share-based compensation | ' | ' | 302,310 | ' | 302,310 |
Conversion of accrued liabilities to common stock | ' | 75 | 321,925 | ' | 322,000 |
Conversion of accrued liabilities to common stock, shares | ' | 750,000 | ' | ' | ' |
Issuance of preferred stock and warrants for cash | 1 | ' | 1,549,999 | ' | 1,550,000 |
Issuance of preferred stock and warrants for cash, shares | 15,500 | ' | ' | ' | ' |
Conversion of convertible promissory notes and interest to preferred stock | 1 | ' | 809,138 | ' | 809,139 |
Conversion of convertible promissory notes and interest to preferred stock, shares | 8,091 | ' | ' | ' | ' |
Stock issuance costs | ' | ' | -233,236 | ' | -233,236 |
Extinguishment of derivative liability associated with conversion of preferred shares, warrants and accrued dividends | ' | ' | 24,844 | ' | 24,844 |
Deemed dividend | ' | ' | ' | -2,120,284 | -2,120,284 |
Net loss | ' | ' | ' | -1,018,921 | -1,018,921 |
Balances at Dec. 31, 2012 | 4 | 3,580 | 5,119,726 | -8,876,529 | -3,753,219 |
Balances, shares at Dec. 31, 2012 | 39,101 | 35,794,878 | ' | ' | ' |
Share-based compensation | ' | ' | 661,802 | ' | 661,802 |
Stock issuance costs | ' | ' | -120,750 | ' | -120,750 |
Extinguishment of derivative liability associated with conversion of preferred shares, warrants and accrued dividends | ' | ' | 8,754,987 | ' | 8,754,987 |
Deemed dividend | ' | ' | ' | -242,482 | -242,482 |
Conversion of preferred shares, warrants and accrued dividends | -4 | 1,531 | 627,997 | ' | 629,524 |
Conversion of preferred shares, warrants and accrued dividends, shares | -39,101 | 15,309,146 | ' | ' | ' |
Net loss | ' | ' | ' | -3,637,735 | -3,637,735 |
Balances at Dec. 31, 2013 | ' | $5,111 | $15,043,762 | ($12,756,746) | $2,292,127 |
Balances, shares at Dec. 31, 2013 | ' | 51,104,024 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash Flows From Operating Activities: | ' | ' |
Net loss | ($3,637,735) | ($1,018,921) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation | 7,296 | 3,014 |
Loss on disposal of computer equipment | ' | 1,697 |
Amortization of debt issuance costs | ' | 29,500 |
Gain on settlement of accrued liabilities | ' | -47,501 |
Accretion of debt discount | ' | 144,954 |
Change in fair value of derivative liabilities | 3,970,952 | 1,012,274 |
Share based payments | 661,802 | 302,310 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 22,788 | 13,657 |
Inventory | -27,002 | ' |
Prepaid expenses | -358,155 | -99,643 |
Security deposit | -19,680 | ' |
Accounts payable and accrued liabilities | 426,004 | -105,017 |
Unearned convention revenue | 685,435 | 6,837 |
Net Cash Provided by Operating Activities | 1,731,705 | 243,161 |
Cash Flows from Investing Activities: | ' | ' |
Purchases of property and equipment | -54,919 | ' |
Net Cash Used In Investing Activities | -54,919 | 0 |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from the issuance of convertible preferred stock | ' | 1,550,000 |
Payment of stock issuance costs | ' | -233,236 |
Repayment of convertible promissory note | ' | -25,000 |
Net Cash Provided By Financing Activities | 0 | 1,291,764 |
Net change in cash | 1,676,786 | 1,534,925 |
Cash at beginning of reporting period | 1,957,060 | 422,135 |
Cash at end of reporting period | 3,633,846 | 1,957,060 |
Supplemental disclosures of cash flow information: | ' | ' |
Interest paid | ' | ' |
Income tax paid | ' | ' |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Conversion of convertible notes and interest to preferred stock | ' | 809,139 |
Conversion of accrued dividends to common stock | 629,524 | ' |
Conversion of preferred stock to common stock | 100,000 | ' |
Extinguishment of derivative liability | 8,754,987 | 24,844 |
Stock issuance costs accrued to additional paid-in capital | 120,750 | ' |
Issuance of common stock for settlement of accrued liabilities | ' | 322,000 |
Deemed dividend | $242,482 | $1,018,921 |
Organization_and_Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization and Operations | ' |
Note 1 – Organization and Operations | |
Wizard World, Inc. | |
Wizard World, Inc., formerly GoEnergy, Inc. (“Wizard World” or the “Company”) was incorporated on May 2, 2001, under the laws of the State of Delaware. | |
Kick the Can Corp. | |
Kick The Can Corp. was incorporated on September 20, 2010, under the laws of the State of Nevada. | |
Kicking the Can, L.L.C. | |
Kicking The Can, L.L.C. was formed on April 17, 2009, under the laws of the State of Delaware. | |
Wizard Conventions, Inc. | |
Wizard Conventions, Inc. was incorporated on February 28, 1997, under the laws of the State of New York. The Company is a producer of pop culture and live multimedia conventions across North America that provides a social networking and entertainment venue for popular fiction enthusiasts of movies, TV shows, video games, technology, toys, social networking/gaming platforms, comic books and graphic novels. | |
Acquisition of Kick the Can Corp./ Wizard Conventions, Inc. Recognized as a Reverse Acquisition | |
On December 7, 2010, the Company entered into and consummated a share exchange agreement (“Share Exchange Agreement”) with its successor, Kick the Can Corp. (“KTC Corp.”) and its predecessors Wizard Conventions, Inc. and Kicking The Can, L.L.C. (collectively, “Conventions”). Pursuant to the Share Exchange Agreement, the Company issued 32,927,596 shares of its common stock to the KTC Corp. shareholders in exchange for 100% of the issued and outstanding shares of KTC Corp. The shares issued represented approximately 94.9% of the issued and outstanding common stock immediately after the consummation of the Share Exchange Agreement. | |
As a result of the controlling financial interest of the former stockholder of Conventions, for financial statement reporting purposes, the merger between the Company and Conventions has been treated as a reverse acquisition with KTC Corp. deemed the accounting acquirer and the Company deemed the accounting acquire under the acquisition method of accounting in accordance with section 805-10-55 of the FASB Accounting Standards Codification. The reverse merger is deemed a capital transaction and the net assets of KTC Corp. (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of KTC Corp. which are recorded at historical cost. The equity of the Company is the historical equity of KTC Corp. retroactively restated to reflect the number of shares issued by the Company in the transaction. Because of the predecessor/successor relationship between the Company and KTC Corp., Conventions ultimately became the accounting acquirer. | |
Wizard World Digital, Inc. | |
On March 18, 2011, the Company formed a wholly-owned subsidiary called Wizard World Digital, Inc., a Nevada corporation (“Digital”). Digital never commenced operations or has employees, and is currently dormant, pending execution of a digital strategy. |
Significant_and_Critical_Accou
Significant and Critical Accounting Policies and Practices | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||
Significant and Critical Accounting Policies and Practices | ' | ||||||||||||||||||||
Note 2 - Significant and Critical Accounting Policies and Practices | |||||||||||||||||||||
Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. | |||||||||||||||||||||
Basis of Presentation | |||||||||||||||||||||
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) | |||||||||||||||||||||
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | |||||||||||||||||||||
The preparation of financial statements in conformity with US GAAP 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(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s). | |||||||||||||||||||||
Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were: | |||||||||||||||||||||
(i) | Allowance for doubtful accounts: Management’s estimate of the allowance for doubtful accounts is based on historical sales, historical loss levels, and an analysis of the collectability of individual accounts; and general economic conditions that may affect a client’s ability to pay. The Company evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. | ||||||||||||||||||||
(ii) | Inventory Obsolescence and Markdowns: The Company’s estimate of potentially excess and slow-moving inventories is based on evaluation of inventory levels and aging, review of inventory turns and historical sales experiences. The Company’s estimate of reserve for inventory shrinkage is based on the historical results of physical inventory cycle counts. | ||||||||||||||||||||
(iii) | Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. | ||||||||||||||||||||
(iv) | Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors. | ||||||||||||||||||||
(v) | Estimates and assumptions used in valuation of equity instruments: Management estimates expected term of share options and similar instruments, expected volatility of the Company’s common shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk free rate(s) to value share options and similar instruments. | ||||||||||||||||||||
These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. | |||||||||||||||||||||
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. | |||||||||||||||||||||
Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. | |||||||||||||||||||||
Actual results could differ from those estimates. | |||||||||||||||||||||
Principles of Consolidation | |||||||||||||||||||||
The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10, all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment-company investee. Pursuant to ASC Paragraph 810-10-15-8, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists. | |||||||||||||||||||||
The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s) as follows: | |||||||||||||||||||||
Name of consolidated subsidiary or entity | State or other jurisdiction of | Date of incorporation or formation | Attributable | ||||||||||||||||||
incorporation or organization | (date of acquisition, if applicable) | interest | |||||||||||||||||||
KTC Corp. | The State of Nevada, U.S.A. | 20-Sep-10 | 100 | % | |||||||||||||||||
Kicking the Can L.L.C. | The State of Delaware, U.S.A. | 17-Apr-09 | 100 | % | |||||||||||||||||
Wizard Conventions, Inc. | The State of New York, U.S.A. | 28-Feb-97 | 100 | % | |||||||||||||||||
Wizard World Digital, Inc. | The State of Nevada, U.S.A. | 18-Mar-11 | 100 | % | |||||||||||||||||
All inter-company balances and transactions have been eliminated. | |||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: | |||||||||||||||||||||
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | ||||||||||||||||||||
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | ||||||||||||||||||||
Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. | ||||||||||||||||||||
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. | |||||||||||||||||||||
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. | |||||||||||||||||||||
The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, accrued dividends and unearned convention revenue approximate their fair value because of the short maturity of those instruments. | |||||||||||||||||||||
The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative warrant liability at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative warrant liability. | |||||||||||||||||||||
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. | |||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | |||||||||||||||||||||
Level 3 Financial Liabilities – Derivative conversion features and warrant liabilities | |||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as December 31, 2013: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Carrying | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Value | |||||||||||||||||||||
Derivative conversion features and warrant liabilities | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as of December 31, 2012: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivative conversion features and warrant liabilities | $ | 4,784,035 | $ | - | $ | - | $ | 4,784,035 | $ | 4,784,035 | |||||||||||
The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2013: | |||||||||||||||||||||
Fair Value Measurement Using Level 3 Inputs | |||||||||||||||||||||
Derivative Liabilities | Total | ||||||||||||||||||||
Balance, December 31, 2012 | $ | 4,784,035 | $ | 4,784,035 | |||||||||||||||||
Total (gains) or losses (realized/unrealized) included in consolidated statements of operations | 3,970,952 | 3,970,952 | |||||||||||||||||||
Purchases, issuances and settlements | - | - | |||||||||||||||||||
Transfers in and/or out of Level 3 | (8,754,987 | ) | (8,754,987 | ) | |||||||||||||||||
Balance, December 31, 2013 | $ | - | $ | - | |||||||||||||||||
The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2012: | |||||||||||||||||||||
Fair Value Measurement Using Level 3 Inputs | |||||||||||||||||||||
Derivative Liabilities | Total | ||||||||||||||||||||
Balance, December 31, 2011 | $ | 1,946,669 | $ | 1,946,669 | |||||||||||||||||
Total gains or losses (realized/unrealized) included in net loss | 1,012,274 | 1,012,274 | |||||||||||||||||||
Purchases, issuances and settlements | 1,849,936 | 1,849,936 | |||||||||||||||||||
Transfers in and/or out of Level 3 | (24,844 | ) | (24,844 | ) | |||||||||||||||||
Balance, December 31, 2012 | $ | 4,784,035 | $ | 4,784,035 | |||||||||||||||||
During the year ended December 31, 2012, the Company recorded the value of the derivative liability associated with the features embedded in the Series A Cumulative Convertible Preferred Stock directly to retained earnings, similar to a deemed dividend. | |||||||||||||||||||||
Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis | |||||||||||||||||||||
The Company’s non-financial assets include inventory. The Company identifies potentially excess and slow-moving inventory by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts. | |||||||||||||||||||||
Carrying Value, Recoverability and Impairment of Long-Lived Assets | |||||||||||||||||||||
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | |||||||||||||||||||||
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. | |||||||||||||||||||||
The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; and (v) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. | |||||||||||||||||||||
The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets. | |||||||||||||||||||||
The impairment charges, if any, are included in operating expenses in the accompanying statements of operations. | |||||||||||||||||||||
Cash Equivalents | |||||||||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. | |||||||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | |||||||||||||||||||||
Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions. | |||||||||||||||||||||
Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification, account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification to determine when receivables are past due or delinquent based on how recently payments have been received. | |||||||||||||||||||||
Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any. | |||||||||||||||||||||
The Company does not have any off-balance-sheet credit exposure to its customers. | |||||||||||||||||||||
Inventory | |||||||||||||||||||||
Inventory Valuation | |||||||||||||||||||||
The Company values inventory, entirely consisting of finished goods, at the lower of cost or market. Cost is determined on the first-in and first-out (“FIFO”) method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. Factors utilized in the determination of estimated market value include: (i) current sales data and historical return rates, (ii) estimates of future demand, and (iii) competitive pricing pressures. | |||||||||||||||||||||
Inventory Obsolescence and Markdowns | |||||||||||||||||||||
The Company evaluates its current level of inventory considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification to adjust inventory to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. | |||||||||||||||||||||
There was no inventory obsolescence at December 31, 2013 or 2012. | |||||||||||||||||||||
Property and Equipment | |||||||||||||||||||||
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: | |||||||||||||||||||||
Estimated Useful | |||||||||||||||||||||
Life (Years) | |||||||||||||||||||||
Computer equipment | 3 | ||||||||||||||||||||
Equipment | 5 | ||||||||||||||||||||
Furniture and fixture | 7 | ||||||||||||||||||||
Leasehold improvement | * | ||||||||||||||||||||
(*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. | |||||||||||||||||||||
Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. | |||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||
The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Paragraph 810-10-05-4 of the FASB Accounting Standards Codification and Paragraph 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. | |||||||||||||||||||||
In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. | |||||||||||||||||||||
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. | |||||||||||||||||||||
The Company marks to market the fair value of the remaining embedded derivative warrants at each balance sheet date and records the change in the fair value of the remaining embedded derivative warrants as other income or expense in the consolidated statements of operations and comprehensive income (loss). | |||||||||||||||||||||
The Company utilizes the Lattice model that values the liability of the derivative warrants based on a probability weighted discounted cash flow model with the assistance of the third party valuation firm. The reason the Company picks the Lattice model is that in many cases there may be multiple embedded features or the features of the bifurcated derivatives may be so complex that a Black-Scholes valuation does not consider all of the terms of the instrument. Therefore, the fair value may not be appropriately captured by simple models. In other words, simple models such as Black-Scholes may not be appropriate in many situations given complex features and terms of conversion option (e.g., combined embedded derivatives). The Lattice model is based on future projections of the various potential outcomes. The features that were analyzed and incorporated into the model included the exercise and full reset features. Based on these features, there are two primary events that can occur; the holder exercises the warrants or the warrants are held to expiration. The Lattice model analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e., stock price, exercise price, volatility, etc.). Projections were then made on the underlying factors which led to potential scenarios. Probabilities were assigned to each scenario based on management projections. This led to a cash flow projection and a probability associated with that cash flow. A discounted weighted average cash flow over the various scenarios was completed to determine the value of the derivative warrants. | |||||||||||||||||||||
Related Parties | |||||||||||||||||||||
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. | |||||||||||||||||||||
Pursuant to Section 850-10-20 FASB Accounting Standards, the related parties include (a.) affiliates of the Company; (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15 FASB Accounting Standards, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company; (e.) management of the Company; (f.) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. | |||||||||||||||||||||
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. | |||||||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | |||||||||||||||||||||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. | |||||||||||||||||||||
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. | |||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. | |||||||||||||||||||||
Unearned convention revenue is deposits received for conventions that have not yet taken place, which are fully or partially refundable depending upon the terms and conditions of the agreements. | |||||||||||||||||||||
Stock-Based Compensation for Obtaining Employee Services | |||||||||||||||||||||
The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | |||||||||||||||||||||
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: | |||||||||||||||||||||
● | Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification, the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments. Pursuant to Paragraph 718-10-S99-1 of the FASB Accounting Standards Codification, it may be appropriate to use the simplified method, i.e., expected term =(vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. | ||||||||||||||||||||
● | Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) of the FASB Accounting Standards Codification, a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | ||||||||||||||||||||
● | Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. | ||||||||||||||||||||
● | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. | ||||||||||||||||||||
The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. | |||||||||||||||||||||
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services | |||||||||||||||||||||
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”). | |||||||||||||||||||||
Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If shares of the Company are thinly traded the use of share prices established in the Company’s most recent PPM, or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | |||||||||||||||||||||
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: | |||||||||||||||||||||
● | Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification, the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data to estimate holder’s expected exercise behavior. If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. | ||||||||||||||||||||
● | Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) of the FASB Accounting Standards Codification, a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | ||||||||||||||||||||
● | Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. | ||||||||||||||||||||
● | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. | ||||||||||||||||||||
Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic. | |||||||||||||||||||||
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a stock option that the counterparty has the right to exercise expires unexercised. | |||||||||||||||||||||
Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded. | |||||||||||||||||||||
Income Tax Provision | |||||||||||||||||||||
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. | |||||||||||||||||||||
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. | |||||||||||||||||||||
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. | |||||||||||||||||||||
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. | |||||||||||||||||||||
Uncertain Tax Positions | |||||||||||||||||||||
The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting period ended December 31, 2013 or 2012. | |||||||||||||||||||||
Net Income (Loss) per Common Share | |||||||||||||||||||||
Net income (loss) per common share is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through convertible debt, stock options or warrants. | |||||||||||||||||||||
The following table shows the potentially outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: | |||||||||||||||||||||
Potentially Outstanding Dilutive | |||||||||||||||||||||
Common Shares | |||||||||||||||||||||
For the Year Ended | For the Year Ended | ||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||
Convertible preferred stock | - | 9,775,268 | |||||||||||||||||||
Stock options | 4,462,500 | 3,350,000 | |||||||||||||||||||
Stock purchase warrants | - | 7,987,274 | |||||||||||||||||||
Total potentially outstanding dilutive common shares | 4,462,500 | 21,112,542 | |||||||||||||||||||
Cash Flows Reporting | |||||||||||||||||||||
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (the “Indirect Method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments | |||||||||||||||||||||
Subsequent Events | |||||||||||||||||||||
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as a filer with the United States Securities & Exchange Commission (the “SEC”) considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. | |||||||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||||||
In February 2013, the FASB issued ASU No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. This ASU is effective for public entities for fiscal years beginning after December 15, 2013. | |||||||||||||||||||||
In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date.” This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. This ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. | |||||||||||||||||||||
In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. | |||||||||||||||||||||
In March 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under US GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted. | |||||||||||||||||||||
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
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 | |||||||||||
Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: | |||||||||||
December 31,, 2013 | 31-Dec-12 | Estimated Useful Life | |||||||||
Computer Equipment | $ | 16,544 | 7,607 | 3 years | |||||||
Equipment | 7,175 | - | 5 years | ||||||||
Furniture & Fixtures | 37,850 | - | 7 years | ||||||||
61,569 | 7,607 | ||||||||||
Less: Accumulated depreciation and amortization | (10,609 | ) | (4,270 | ) | |||||||
$ | 50,960 | $ | 3,337 | ||||||||
Depreciation and Amortization Expense | |||||||||||
Depreciation and amortization expense was $7,296 and $3,014 for the year ended December 31, 2013 and 2012, respectively. |
Convertible_Promissory_Notes
Convertible Promissory Notes | 12 Months Ended |
Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' |
Convertible Promissory Notes | ' |
Note 4 – Convertible Promissory Notes | |
August 19, 2011 Convertible Notes | |
On August 19, 2011, Wizard World entered into stock subscription agreements with certain investors in connection with an offering of up to $455,000 principal amount of Convertible Promissory Notes, with $453,100 being issued. The Notes accrue interest at 14% per annum and are due four (4) months from the date of issuance. The Notes are convertible to common shares at $0.40 per share. | |
In conjunction with the Notes, each investor was granted a Common Stock Purchase Warrant exercisable for one share of common stock of the Company for each $2.00 of investment. The Warrants are earned upon issuance with an exercise price of $0.40 per common share expiring five (5) years from the date of issuance, which may be paid via a cashless exercise. | |
On August 3, 2012, four (4) note-holders converted notes and accrued interest into the Company’s Series A Cumulative Convertible Preferred Stock (the “Series A Preferred”), by entering into Securities Exchange Agreements for the issuance and sale of (i) an aggregate of $406,039 in Series A Preferred. The Series A Preferred is convertible into shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), at a conversion price of $0.40 per share, subject to adjustment. | |
One (1) note-holder was re-paid $25,000 on his convertible note, and converted his remaining principal of $78,100 into the Company’s Series A Preferred. The note-holder forgave the accrued interest due in the amount of $21,298. | |
December 6, 2011 Convertible Debentures | |
Issuance of Convertible Debentures | |
On December 6, 2011, Wizard World entered into stock subscription agreements with certain accredited investors, for the issuance and sale of an aggregate of $325,000 in Senior Convertible Debentures. The Debentures bear interest at six percent (6%) per annum, maturing February 28, 2012. The notes, at issuance, gave rise to a debt discount of $206,375 which is being amortized over the lives of the notes. The debt discount was fully amortized as of February 28, 2012. | |
Mandatory Conversion of Debentures to Series A Convertible Preferred Stock | |
In connection with the March 30, 2012 Series A Preferred Stock Closing, and pursuant to mandatory conversion features of those certain Senior Convertible Debentures in the aggregate amount of $325,000, issued on December 6, 2011, the Debentures were mandatorily converted into shares of Series A Preferred and Warrants upon the same terms of the Offering. A total of 3,250 shares of Series A Preferred and 162,500 Warrants were issued by the Company to the Debenture Investors pursuant to such mandatory conversion. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Note 5 - Commitments and Contingencies | |
Employment and Director Agreements | |
John M. Macaluso Agreements | |
Employment Agreement | |
On March 19, 2012, the Company entered into an employment agreement (the “Employment Agreement”) with Mr. John Macaluso (“Macaluso”), a director of the Company, in connection with his appointment as the Company’s President and Chief Executive Officer. The initial term of the Employment Agreement is for a period of three (3) years (the”Initial Term”), commencing on March 19, 2012 (the “Commencement Date”). The term of the Employment Agreement will be automatically extended for additional terms of one (1) year each (each a “Renewal Term” and together with the Initial Term, the “Term”), unless either the Company or Macaluso gives prior written notice of non-renewal to the other party no later than sixty (60) days prior to the expiration of the then current Term. | |
During the Term, the Company will pay Macaluso a base salary (the “Base Salary”) consisting of the following: (i) for the period from the Commencement Date to June 30, 2012, a salary of $10,000 per month; (ii) for the period from July 1, 2012 to December 31, 2012, a salary of $30,000 per month, $20,000 of which shall be paid in cash and $10,000 of which shall accrue until December 31, 2012, for a total accrual amount of $60,000. In addition to the Base Salary, the Company agreed to issue to Macaluso a common stock purchase warrant to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $0.44 per share. The warrants vest quarterly over the Initial Term. | |
In accordance with the Employment Agreement, during the year ended December 31, 2013, the Company accrued a bonus of $404,088. | |
Option Agreement | |
In connection with the Employment Agreement, Macaluso entered into an option agreement with the Company, pursuant to which the Company granted to Macaluso options to purchase 2,750,000 shares of the Company’s common stock, par value $0.0001 per share. Such options shall vest quarterly over a three (3) year period, subject to Macaluso continuing to perform services for the Company in the capacity in which the grant was received on each applicable vesting date. In lieu of fractional vesting, the number of such options shall be rounded up each time until fractional options are eliminated. | |
Director Agreement | |
On May 13, 2011, Wizard World entered into a Director Agreement with Mr. John Macaluso in connection with his appointment to the Board of Directors of the Company (the “Board”). The term of the Director Agreement is from May 13, 2011 through the Company’s next annual stockholders’ meeting. The Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Macaluso is re-elected to the Board. | |
Mr. Macaluso received, upon execution of the Director Agreement and pursuant to a Non-Qualified Stock Option Agreement, entered into as of May 13, 2011, by and between the Company and Mr. Macaluso, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000) shares of the Company’s common stock, par value $0.0001 per share, at an exercise price per share equal to the closing price of the Company’s common stock on the execution date of the Director Agreement. The option is exercisable for a period of five years and vests in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred (12,500) shares per fiscal quarter at the end of such quarter, commencing in the quarter ending July 31, 2011, and pro-rated for the number of days Mr. Macaluso served on the Board during such fiscal quarter. Notwithstanding the foregoing, if Mr. Macaluso ceases to be a member of Board at any time during the three (3) year vesting period for any reason (such as resignation, withdrawal, death, disability or any other reason), then any un-vested options shall be irrefutably forfeited. | |
Director Agreements | |
John D. Maatta Agreement | |
On May 25, 2011, Wizard World entered into a Director Agreement with Mr. John D. Maatta in connection with his appointment to the Board. The term of the Director Agreement commences on May 25, 2011 and continues through the Company’s next annual stockholders’ meeting. However, the Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Maatta is re-elected to the Board. | |
Mr. Maatta received, upon execution of the Director Agreement and pursuant to a Non-Qualified Stock Option Agreement, entered into as of May 25, 2011, by and between the Company and Mr. Maatta, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000) shares of the Company’s common stock, par value $0.0001 per share, at an exercise price per share equal to the closing price of the Company’s common stock on the execution date of the Director Agreement. The option is exercisable for a period of five years and vests in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred (12,500) shares per fiscal quarter at the end of such quarter, commencing in the quarter ending July 31, 2011, and pro-rated for the number of days Mr. Maatta served on the Board during such fiscal quarter. Notwithstanding the foregoing, if Mr. Maatta ceases to be a member of the Board at any time during the three (3)-year vesting period for any reason (such as resignation, withdrawal, death, disability or any other reason), then any un-vested options shall be irrefutably forfeited. | |
Greg Suess Agreement | |
On May 9, 2011, Wizard World entered into a Director Agreement, made as of May 9, 2011 with Mr. Greg Suess in connection with his appointment to the Board. The term of the Director Agreement is from May 9, 2011 through the Company’s next annual stockholders’ meeting. The Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Suess is re-elected to the Board. | |
Mr. Suess received, upon execution of the Director Agreement, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000) shares of the Company’s common stock at an exercise price per share equal to the closing price of the Company’s common stock on the execution date of the Director Agreement. The option is exercisable for a period of five years and vests in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred (12,500) shares per fiscal quarter at the end of such quarter, commencing in the quarter ending July 31, 2011, and pro-rated for the number of days Mr. Suess served on the Board during the fiscal quarter. Notwithstanding the foregoing, if Mr. Suess ceases to be a member of the Board at any time during the three (3) year vesting period for any reason (such as resignation, withdrawal, death, disability or any other reason), then any un-vested options shall be irrefutably forfeited. | |
ROAR Agreement | |
On September 1, 2012, the Company entered into an agreement with ROAR, LLC, (“ROAR”), an entity which is partially owned by a member of the Board. ROAR agrees to provide the Company strategic management consulting services. The term is for 3 months and following the initial three months, month to month thereafter. The Company agrees to compensate ROAR with a $5,000/month payment and a 10% commission on any contractual introduction for business development introduced by ROAR. | |
Gareb Shamus Agreement | |
On May 25, 2011, Wizard World, Inc. entered into an employment agreement with Mr. Gareb Shamus, President and CEO of the Company. | |
On May 25, 2011, the Company also entered into a Director Agreement with Mr. Shamus. The term of the Director Agreement commences on May 25, 2011 and continues through the Company’s next annual stockholders’ meeting. However, the Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Shamus is re-elected to the Board. | |
For Mr. Shamus’ service on the Board, he received, upon execution of the Director Agreement, and in accordance with a Non-Qualified Stock Option Agreement, entered into as of May 25, 2011, by and between the Company and Mr. Shamus, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000) shares of the Company’s common stock, par value $.0001 per share, at an exercise price per share equal to the closing price of the Company’s common stock on the execution date of the Director Agreement. The option is exercisable for a period of five years and vests 33% annually over a period of three (3) years, pro-rated for the number of days Mr. Shamus served on the Board. | |
On December 1, 2011, Mr. Gareb Shamus resigned his positions as President, Chief Executive Officer and Director of the Company. | |
Paul Kessler Agreement | |
On March 17, 2013, Wizard World entered into a Director Agreement with Mr. Paul Kessler in connection with his appointment to the Board. The Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Kessler is re-elected to the Board. | |
Mr. Kessler received, upon execution of the Director Agreement, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000) shares of the Company’s common stock at an exercise price per share equal to the closing price of the Company’s common stock on the execution date of the Director Agreement. The option is exercisable for a period of five years and vests in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred (12,500) shares per fiscal quarter at the end of such quarter, commencing in the quarter ending March 31, 2013, and pro-rated for the number of days Mr. Kessler served on the Board during the fiscal quarter. Notwithstanding the foregoing, if Mr. Kessler ceases to be a member of the Board at any time during the three (3) year vesting period for any reason (such as resignation, withdrawal, death, disability or any other reason), then any un-vested options shall be irrefutably forfeited. | |
Kenneth Shamus Agreement | |
On March 17, 2013, Wizard World entered into a Director Agreement with Mr. Kenneth Shamus in connection with his appointment to the Board. The Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Shamus is re-elected to the Board. | |
Mr. Shamus received, upon execution of the Director Agreement, a non-qualified stock option to purchase up to one hundred and fifty thousand (150,000) shares of the Company’s common stock at an exercise price per share equal to the closing price of the Company’s common stock on the execution date of the Director Agreement. The option is exercisable for a period of five years and vests in equal amounts over a period of three (3) years at the rate of twelve thousand five hundred (12,500) shares per fiscal quarter at the end of such quarter, commencing in the quarter ending March 31, 2013, and pro-rated for the number of days Mr. Shamus served on the Board during the fiscal quarter. Notwithstanding the foregoing, if Mr. Shamus ceases to be a member of the Board at any time during the three (3) year vesting period for any reason (such as resignation, withdrawal, death, disability or any other reason), then any un-vested options shall be irrefutably forfeited. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Related Party Transactions [Abstract] | ' | ||||
Related Party Transactions | ' | ||||
Note 6 – Related Party Transactions | |||||
Related Parties | |||||
Related parties with whom the Company had transactions are: | |||||
Related Parties | Relationship | ||||
Bristol Capital, LLC | An entity owned and controlled by a member of the Board | ||||
225 California Street, LLC | An entity owned and controlled by significant stockholder and Chief Executive Officer of the Company | ||||
Operating Lease with Related Parties | |||||
Effective April 22, 2013, the Company entered into a commercial real estate lease, as lessee, with Bristol Capital, LLC, a Delaware limited liability company (“Bristol”), and 225 California Street, LLC, a California limited liability company (“225 California”), as lessors, for new office space located in El Segundo, California (the “Lease”), with each of Bristol and 225 California holding an undivided 50% tenant-in-common interest. The initial term of the Lease is for seven (7) years ending on March 31, 2020. Pursuant to the Lease, the Company shall pay base rent of $6,900 per month and an initial security deposit of $13,800 is required. | |||||
Future minimum lease payments inclusive of related tax required under the non-cancelable operating lease are as follows: | |||||
Fiscal year ending December 31: | |||||
2014 | 82,800 | ||||
` | |||||
2015 | 82,800 | ||||
2016 | 82,800 | ||||
2017 | 82,800 | ||||
2018 | 82,800 | ||||
2019 | 82,800 | ||||
2020 | 20,700 | ||||
$ | 517,500 |
Stockholders_Equity_Deficit
Stockholders' Equity (Deficit) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||
Stockholders' Equity (Deficit) | ' | ||||||||||||||||||||
Note 7 – Stockholders’ Equity (Deficit) | |||||||||||||||||||||
Series A Cumulative Convertible Preferred Stock | |||||||||||||||||||||
On March 30, 2012, the Company closed on a first round of financing related to an offering of up to $2,000,000 of the Company’s Series A Preferred, by entering into subscription agreements with ten (10) accredited investors for the issuance and sale of (i) an aggregate amount of $825,000 (8,250 shares) in Series A Preferred and (ii) Common Stock Purchase Warrants, on the basis of one warrant for every $2.00 of investment. | |||||||||||||||||||||
In connection with the Closing, and pursuant to mandatory conversion features of those certain Senior Convertible Debentures in the aggregate amount of $325,000, issued on December 6, 2011, the Debentures were mandatorily converted (into shares of Series A Preferred and Warrants upon the same terms of the Offering. A total of 3,250 shares of Series A Preferred and 162,500 Warrants were issued by the Company to the Debenture Investors pursuant to the Mandatory Conversion. | |||||||||||||||||||||
The Company paid $142,250 in stock issuance costs to complete the convertible preferred stock and warrant raise. In addition, the Company issued 206,250 warrants to the placement agent. The warrants were recorded as stock issuance costs. | |||||||||||||||||||||
On April 27, 2012, the Company entered into Subscription Agreements with the Subscribers for the issuance and sale of (i) $725,000 (7,250 shares) in shares of Series A Preferred with the rights and preferences set forth in the Amended and Restated Certificate to set forth Designations, Voting Powers, Preferences, Limitations, Restrictions, and Relative Rights of Series A Cumulative Convertible Preferred Stock, $0.0001 par value per share, and (ii) 362,500 Warrants. The Series A Preferred is convertible into shares of the Company’s common stock, par value $0.0001 per share, at a per share conversion price of $0.40, subject to adjustment, and the Warrants are exercisable to purchase shares of the Company’s common stock at a per share exercise price of $0.60, subject to adjustment. | |||||||||||||||||||||
The Company paid $90,986 in stock issuance costs to complete the convertible preferred stock and warrant raise. In addition, the Company issued 181,250 warrants to the placement agent. The warrants were recorded as stock issuance costs. | |||||||||||||||||||||
On August 3, 2012, four (4) note-holders exchanged notes and accrued interest into the Series A Preferred, by entering into Securities Exchange Agreements for the issuance and sale of (i) an aggregate of $406,039 (4,060 shares) in Series A Preferred. The Series A Preferred is convertible into shares of the Company’s common stock, par value $0.0001 per share, at a conversion price of $0.40 per share, subject to adjustment. | |||||||||||||||||||||
On May 3, 2013, a stockholder converted $100,000 of the Series A Preferred into 250,000 shares of the Company’s common stock, par value $0.0001 per share, at a conversion price of $0.40 per share. | |||||||||||||||||||||
On August 21, 2013, the Company’s Series A Preferred Shareholders converted all outstanding Series A Cumulative Convertible Preferred Stock (“Preferred Stock”) into approximately 9.5 million shares of the Company’s common stock (“Common Stock”), par value $0.0001 per share. In addition, the Series A Shareholders and certain other shareholders exchanged approximately 8.0 million outstanding Series A Common Stock Purchase Warrants for approximately 4.0 million shares of Common Stock. In connection with the conversion of the Preferred Stock, the Company issued approximately 1.6 million shares of Common Stock as payment for accrued and unpaid dividends. | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
On December 17, 2010, the Company entered into a financial reporting services agreement with Brio Financial Group (“Brio”). Pursuant to the agreement, the Company is required to pay the firm $4,500 per month. In addition, a retainer of $8,000 is included in prepaid expenses as of December 31, 2010 and was expensed during the year ended December 31, 2011. The Company also agreed to issue Brio 30,000 shares of restricted common stock per quarter payable at the end of each quarter. Through September 30, 2012, Brio has earned 240,000 shares of common stock valued at $0.40 - $0.60 per share, or $108,000 in the aggregate, and recorded as consulting expense. On September 28, 2012, the Company issued the consultant 240,000 shares of the Company’s common stock to satisfy an accrued liability and account payable in the amount of $108,000, in accordance with the consultant’s agreement. By mutual consent, there will be no further issuance of common stock. | |||||||||||||||||||||
On January 14, 2011, the Board approved by unanimous written consent and the stockholders of the Company holding a majority in interest of the Company’s voting equity approved by written consent the appointment of Mr. Vadim Mats as a member of the Board, effective as of January 14, 2011. Mr. Mats earns 10,000 shares of the company’s common stock quarterly. The Company has valued the issuance and has recorded and accrual of $28,000. On September 28, 2012, the Company issued 60,000 shares of the Company’s common stock to Mr. Mats to satisfy an accrued liability due under such agreement. By mutual consent, there will be no further issuance of common stock. | |||||||||||||||||||||
On February 1, 2011, the Company entered into an engagement with a law firm to provide legal services with respect to certain securities work. Pursuant to the agreement the Company is required to pay the firm $4,000 per month along with 5,000 shares of the Company’s common stock. The Company also agreed to issue such law firm 150,000 shares of restricted common stock upon execution of the agreement. As of September 30, 2012, such law firm had earned 450,000 shares of the Company’s common stock valued at $0.40 - $0.60 per share, or $186,000 in the aggregate, and recorded as consulting expense. On September 28, 2012, the Company issued such law firm 450,000 shares of the Company’s common stock to satisfy the accrued liability of $186,000. By mutual consent, there will be no further issuance of common stock. | |||||||||||||||||||||
On March 23, 2011, Wizard World entered into a Director Agreement with Michael Mathews, pursuant to which Mr. Mathews was appointed Chairman of the Board. The term of the Director Agreement is from March 23, 2011 through the Company’s next annual stockholders’ meeting. The Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Mathews is re-elected to the Board. Under the Director Agreement, Mr. Mathews shall be paid a quarterly stipend of twenty thousand dollars ($20,000). On October 10, 2012, Mr. Mathews resigned from the Board. Mr. Mathews has waived this stipend through October 10, 2012. | |||||||||||||||||||||
On March 23, 2011, the Company entered into a Consulting Agreement with Mr. Mathews pursuant to which Mr. Mathews will, among other things, develop a digital platform for the Company and establish digital planning systems that will include all forms of digital media and social, search, content, and video applications. The term of the Consulting Agreement is for a four (4) year period. As compensation for his services, Mr. Mathews shall receive, with the first issuance of 250,000 shares occurring on March 23, 2011, and the second issuance of 250,000 on March 31, 2012, one million (1,000,000) restricted shares of the Company’s common stock, issuable in four yearly installments. On February 27, 2014, Mr. Mathews and the Company formally terminated the Consulting Agreement effective October 10, 2012. The Company and Mr. Mathews agreed to waive all compensation, fees, and penalties except for the 250,000 shares of the Company’s common stock that was due to Mr. Mathews. As of December 31, 2013, the Company has an accrued liability in the amount of $103,750 relating to this issuance. | |||||||||||||||||||||
On March 23, 2011, the Company entered into a Consulting Agreement with Brad Powers pursuant to which Mr. Powers will, among other things, develop a digital platform for the Company and establish digital planning systems that will include all forms of digital media and social, search, content, and video applications. The term of the Consulting Agreement is for a four (4) year period. As compensation for his services, Mr. Powers shall receive 62,500 shares of restricted Company common stock upon execution of the agreement and an additional 62,500 restricted shares of the Company’s common stock, issuable in annual installments on the anniversary of the execution of the agreement. The 156,250 shares vested as of September 30, 2012 were valued at $0.40 - $0.60 per share, or $68,750 in the aggregate, and recorded as consulting fees. The common stock has not yet been issued and the liability is included in accounts payable and accrued liabilities. On October 17, 2012, the Company entered into a termination agreement with Brad Powers. Mr. Powers agreed to forfeit all shares of common stock that were due to him. | |||||||||||||||||||||
On December 21, 2011, Wizard World, entered into a stock subscription agreement with one investor, the Michael Mathews 2011 Children’s GRAT (the “Trust”). Michael Mathews is the Company’s former Executive Chairman and Chairman. Pursuant to the terms of such agreement, the Company issued 357,143 shares of the Company’s common stock, par value $0.0001 per share, at $0.70 per share, for a total subscription price of $250,000. | |||||||||||||||||||||
Warrants | |||||||||||||||||||||
On January 3, 2011, the Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not limited to, strategic planning; management and business operations; introductions to further the Company’s business goals; provide advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which the Company reasonably requests that Consultant provide to the Company. The Term is for six months and the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price of $0.40 per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance. On March 19, 2012, the consultant agreed to cancel these 1,000,000 warrants. | |||||||||||||||||||||
On January 3, 2011, the Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not limited to, strategic planning; management and business operations; introductions to further the Company’s business goals; provide advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which the Company reasonably requests that Consultant provide to the Company. The Term is for six months and the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price of $0.40 per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance. On March 19, 2012, the consultant agreed to cancel these 250,000 warrants. | |||||||||||||||||||||
On March 3, 2011, the Company entered into an agreement with a consultant to assist the Company in general corporate activities, including, but not limited to, strategic planning; management and business operations; introductions to further the Company’s business goals; provide advice and services related to the Company’s growth initiatives; and any other consulting or advisory services which the Company reasonably requests that Consultant provide to the Company. The Term is for six months and the consultant was compensated with 1,000,000 stock purchase warrants with a maturity of 5 years and an exercise price of $0.40 per share. As of December 31, 2011, the Company expensed $222,761 to consulting expense for this issuance. On March 19, 2012, the consultant agreed to cancel these 250,000 warrants. | |||||||||||||||||||||
On August 21, 2013, the warrant holders exchanged approximately 8.0 million outstanding Series A Common Stock Purchase Warrants for approximately 4.0 million shares of Common Stock. In connection with the conversion of the Series A Preferred, the Company issued approximately 1.6 million shares of common stock as payment for accrued and unpaid dividends. | |||||||||||||||||||||
The following is a summary of the Company’s warrant activity during the year ended December 31, 2013: | |||||||||||||||||||||
Warrants | Weighted Average | ||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Outstanding – December 31, 2012 | 7,987,274 | $ | 0.45 | ||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||
Exercised | 7,987,274 | $ | 0.45 | ||||||||||||||||||
Forfeited/Cancelled | - | $ | - | ||||||||||||||||||
Outstanding – December 31, 2013 | - | $ | - | ||||||||||||||||||
Exercisable – December 31, 2013 | - | $ | - | ||||||||||||||||||
The following is a summary of the Company’s warrant activity during the year ended December 31, 2012: | |||||||||||||||||||||
Warrants | Weighted Average | ||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Outstanding – December 31, 2011 | 6,956,024 | $ | 0.4 | ||||||||||||||||||
Granted | 2,531,250 | $ | 0.6 | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Forfeited/Cancelled | (1,500,000 | ) | $ | 0.4 | |||||||||||||||||
Outstanding – December 31, 2012 | 7,987,274 | $ | 0.45 | ||||||||||||||||||
Exercisable – December 31, 2012 | 7,987,274 | $ | 0.45 | ||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||
Range of | Number | Weighted Average | Weighted Average | Number | Weighted Average | ||||||||||||||||
exercise price | Outstanding | Remaining Contractual | Exercise Price | Exercisable | Exercise Price | ||||||||||||||||
Life (in years) | |||||||||||||||||||||
$ | - | - | - | $ | - | $ | - | ||||||||||||||
At December 31, 2013 and 2012, the total intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively. | |||||||||||||||||||||
Stock Options | |||||||||||||||||||||
On October 8, 2013, the Board resolved to authorize the issuance of 812,500 stock options to employees and advisors of the Company. The options are fully vested at issuance, exercisable at $0.40 and are exercisable for a period of five years. The Company valued the issuance using a Black-Scholes option pricing model, and recorded and expense of $262,611 as a result of the fully vested issuance. | |||||||||||||||||||||
The following assumptions were utilized: vesting: immediate; fair value of the common stock: $0.40; exercise price: $0.40; volatility: 176%; dividend rate: 0%; risk-free interest rate: 1.43%. | |||||||||||||||||||||
Equity Incentive Plan | |||||||||||||||||||||
On July 9, 2012, the Board approved by unanimous written consent the Amended Plan amending Section 4 of the Plan solely to increase the number of authorized shares subject to the Plan from 5,000,000 shares to 7,500,000 shares of common stock. | |||||||||||||||||||||
On May 9, 2011, the Board approved, authorized and adopted (subject to stockholder approval) the 2011 Incentive Stock and Award Plan (the “Plan”). The Plan provides for the issuance of up to 3,000,000 shares of common stock, par value $.0001 per share, of the Company through the grant of non-qualified options (the “Non-qualified Options”), incentive options (the “Incentive Options” and together with the Non-qualified Options, the “Options”) and restricted stock (the “Restricted Stock”) to directors, officers, consultants, attorneys, advisors and employees. | |||||||||||||||||||||
The 2011 Award Plan shall be administered by a committee consisting of two or more independent, non-employee and outside directors (the “Committee”). In the absence of such a Committee, the Board shall administer the Plan. | |||||||||||||||||||||
Each Option shall contain the following material terms: | |||||||||||||||||||||
(i) | the exercise price, which shall be determined by the Committee at the time of grant, shall not be less than 100% of the Fair Market Value (defined as the closing price on the final trading day immediately prior to the grant on the principal exchange or quotation system on which the common stock is listed or quoted, as applicable) of the common stock of the Company, provided that if the recipient of the Option owns more than ten percent (10%) of the total combined voting power of the Company, the exercise price shall be at least 110% of the Fair Market Value; | ||||||||||||||||||||
(ii) | the term of each Option shall be fixed by the Committee, provided that such Option shall not be exercisable more than five (5) years after the date such Option is granted, and provided further that with respect to an Incentive Option, if the recipient owns more than ten percent (10%) of the total combined voting power of the Company, the Incentive Option shall not be exercisable more than five (5) years after the date such Incentive Option is granted; | ||||||||||||||||||||
(iii) | subject to acceleration in the event of a Change of Control of the Company (as further described in the Plan), the period during which the Options vest shall be designated by the Committee or, in the absence of any Option vesting periods designated by the Committee at the time of grant, shall vest and become exercisable in equal amounts on each fiscal quarter of the Company through the four (4) year anniversary of the date on which the Option was granted; | ||||||||||||||||||||
(iv) | no Option is transferable and each is exercisable only by the recipient of such Option except in the event of the death of the recipient; and | ||||||||||||||||||||
(v) | with respect to Incentive Options, the aggregate Fair Market Value of common stock exercisable for the first time during any calendar year shall not exceed $100,000. | ||||||||||||||||||||
Each award of Restricted Stock is subject to the following material terms: | |||||||||||||||||||||
(i) | no rights to an award of Restricted Stock is granted to the intended recipient of Restricted Stock unless and until the grant of Restricted Stock is accepted within the period prescribed by the Committee; | ||||||||||||||||||||
(ii) | Restricted Stock shall not be delivered until they are free of any restrictions specified by the Committee at the time of grant; | ||||||||||||||||||||
(iii) | recipients of Restricted Stock have the rights of a stockholder of the Company as of the date of the grant of the Restricted Stock; | ||||||||||||||||||||
(iv) | shares of Restricted Stock are forfeitable until the terms of the Restricted Stock grant have been satisfied or the employment with the Company is terminated; and | ||||||||||||||||||||
(v) | the Restricted Stock is not transferable until the date on which the Committee has specified such restrictions have lapsed. |
Income_Tax_Provision
Income Tax Provision | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Tax Provision | ' | ||||||||
Note 8 – Income Tax Provision | |||||||||
Deferred Tax Assets | |||||||||
At December 31, 2013, the Company has available for federal income tax purposes a net operating loss (“NOL”) carry-forwards of approximately $1,127,000, net of (i) $- of the fair value of derivative warrants included in the debt discounts and deferred financing costs and (ii) ($4.0 million) of accumulated change in the fair value of derivative warrants included in the consolidated statements of operations, that may be used to offset future taxable income through the fiscal year ending December 31, 2033. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying consolidated financial statements since the Company believes that the realization of its net deferred tax asset of approximately $405,000 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $405,000. | |||||||||
Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. The valuation allowance decreased approximately $82,000 and increased $67,000 for the year ended December 31, 2013 and 2012, respectively. | |||||||||
Components of deferred tax assets are as follows: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Net deferred tax assets – Non-current: | |||||||||
Expected income tax benefit from NOL carry-forwards | $ | 405,000 | $ | 487,000 | |||||
Less valuation allowance | (405,000 | ) | (487,000 | ) | |||||
Deferred tax assets, net of valuation allowance | $ | - | $ | - | |||||
Income Tax Provision in the Consolidated Statements of Operations | |||||||||
A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows: | |||||||||
For the Year Ended December 31, 2013 | For the Year Ended December 31, 2012 | ||||||||
Federal statutory income tax rate | 34 | % | 34 | % | |||||
Change in valuation allowance on net operating loss carry-forwards | (34.0 | )% | (34.0 | )% | |||||
Effective income tax rate | 0 | % | 0 | % |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 9 – Subsequent Events | |
The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent event(s) to be disclosed. |
Significant_and_Critical_Accou1
Significant and Critical Accounting Policies and Practices (Policies) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||||||
Basis of Presentation | |||||||||||||||||||||
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) | |||||||||||||||||||||
Use of Estimates and Assumptions | ' | ||||||||||||||||||||
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | |||||||||||||||||||||
The preparation of financial statements in conformity with US GAAP 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(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s). | |||||||||||||||||||||
Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were: | |||||||||||||||||||||
(i) | Allowance for doubtful accounts: Management’s estimate of the allowance for doubtful accounts is based on historical sales, historical loss levels, and an analysis of the collectability of individual accounts; and general economic conditions that may affect a client’s ability to pay. The Company evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. | ||||||||||||||||||||
(ii) | Inventory Obsolescence and Markdowns: The Company’s estimate of potentially excess and slow-moving inventories is based on evaluation of inventory levels and aging, review of inventory turns and historical sales experiences. The Company’s estimate of reserve for inventory shrinkage is based on the historical results of physical inventory cycle counts. | ||||||||||||||||||||
(iii) | Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. | ||||||||||||||||||||
(iv) | Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors. | ||||||||||||||||||||
(v) | Estimates and assumptions used in valuation of equity instruments: Management estimates expected term of share options and similar instruments, expected volatility of the Company’s common shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk free rate(s) to value share options and similar instruments. | ||||||||||||||||||||
These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. | |||||||||||||||||||||
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. | |||||||||||||||||||||
Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. | |||||||||||||||||||||
Actual results could differ from those estimates. | |||||||||||||||||||||
Principles of Consolidation | ' | ||||||||||||||||||||
Principles of Consolidation | |||||||||||||||||||||
The Company applies the guidance of Topic 810 “Consolidation” of the FASB Accounting Standards Codification to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10, all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—shall be consolidated except (1) when control does not rest with the parent, the majority owner; (2) if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary; (3) consolidation by an investment company within the scope of Topic 946 of a non-investment-company investee. Pursuant to ASC Paragraph 810-10-15-8, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree. The Company consolidates all less-than-majority-owned subsidiaries, if any, in which the parent’s power to control exists. | |||||||||||||||||||||
The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s) as follows: | |||||||||||||||||||||
Name of consolidated subsidiary or entity | State or other jurisdiction of | Date of incorporation or formation | Attributable | ||||||||||||||||||
incorporation or organization | (date of acquisition, if applicable) | interest | |||||||||||||||||||
KTC Corp. | The State of Nevada, U.S.A. | 20-Sep-10 | 100 | % | |||||||||||||||||
Kicking the Can L.L.C. | The State of Delaware, U.S.A. | 17-Apr-09 | 100 | % | |||||||||||||||||
Wizard Conventions, Inc. | The State of New York, U.S.A. | 28-Feb-97 | 100 | % | |||||||||||||||||
Wizard World Digital, Inc. | The State of Nevada, U.S.A. | 18-Mar-11 | 100 | % | |||||||||||||||||
All inter-company balances and transactions have been eliminated. | |||||||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: | |||||||||||||||||||||
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | ||||||||||||||||||||
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | ||||||||||||||||||||
Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. | ||||||||||||||||||||
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. | |||||||||||||||||||||
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. | |||||||||||||||||||||
The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, accrued dividends and unearned convention revenue approximate their fair value because of the short maturity of those instruments. | |||||||||||||||||||||
The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative warrant liability at every reporting period and recognizes gains or losses in the consolidated statements of operations and comprehensive income (loss) that are attributable to the change in the fair value of the derivative warrant liability. | |||||||||||||||||||||
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. | |||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | ' | ||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | |||||||||||||||||||||
Level 3 Financial Liabilities – Derivative conversion features and warrant liabilities | |||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as December 31, 2013: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Carrying | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Value | |||||||||||||||||||||
Derivative conversion features and warrant liabilities | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as of December 31, 2012: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivative conversion features and warrant liabilities | $ | 4,784,035 | $ | - | $ | - | $ | 4,784,035 | $ | 4,784,035 | |||||||||||
The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2013: | |||||||||||||||||||||
Fair Value Measurement Using Level 3 Inputs | |||||||||||||||||||||
Derivative Liabilities | Total | ||||||||||||||||||||
Balance, December 31, 2012 | $ | 4,784,035 | $ | 4,784,035 | |||||||||||||||||
Total (gains) or losses (realized/unrealized) included in consolidated statements of operations | 3,970,952 | 3,970,952 | |||||||||||||||||||
Purchases, issuances and settlements | - | - | |||||||||||||||||||
Transfers in and/or out of Level 3 | (8,754,987 | ) | (8,754,987 | ) | |||||||||||||||||
Balance, December 31, 2013 | $ | - | $ | - | |||||||||||||||||
The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2012: | |||||||||||||||||||||
Fair Value Measurement Using Level 3 Inputs | |||||||||||||||||||||
Derivative Liabilities | Total | ||||||||||||||||||||
Balance, December 31, 2011 | $ | 1,946,669 | $ | 1,946,669 | |||||||||||||||||
Total gains or losses (realized/unrealized) included in net loss | 1,012,274 | 1,012,274 | |||||||||||||||||||
Purchases, issuances and settlements | 1,849,936 | 1,849,936 | |||||||||||||||||||
Transfers in and/or out of Level 3 | (24,844 | ) | (24,844 | ) | |||||||||||||||||
Balance, December 31, 2012 | $ | 4,784,035 | $ | 4,784,035 | |||||||||||||||||
During the year ended December 31, 2012, the Company recorded the value of the derivative liability associated with the features embedded in the Series A Cumulative Convertible Preferred Stock directly to retained earnings, similar to a deemed dividend. | |||||||||||||||||||||
Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis | ' | ||||||||||||||||||||
Fair Value of Non-Financial Assets or Liabilities Measured on a Recurring Basis | |||||||||||||||||||||
The Company’s non-financial assets include inventory. The Company identifies potentially excess and slow-moving inventory by evaluating turn rates, inventory levels and other factors. Excess quantities are identified through evaluation of inventory aging, review of inventory turns and historical sales experiences. The Company provides lower of cost or market reserves for such identified excess and slow-moving inventories. The Company establishes a reserve for inventory shrinkage, if any, based on the historical results of physical inventory cycle counts. | |||||||||||||||||||||
Carrying Value, Recoverability and Impairment of Long-Lived Assets | ' | ||||||||||||||||||||
Carrying Value, Recoverability and Impairment of Long-Lived Assets | |||||||||||||||||||||
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | |||||||||||||||||||||
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. | |||||||||||||||||||||
The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; and (v) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events. | |||||||||||||||||||||
The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets. | |||||||||||||||||||||
The impairment charges, if any, are included in operating expenses in the accompanying statements of operations. | |||||||||||||||||||||
Cash Equivalents | ' | ||||||||||||||||||||
Cash Equivalents | |||||||||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. | |||||||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ' | ||||||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | |||||||||||||||||||||
Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions. | |||||||||||||||||||||
Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification, account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification to determine when receivables are past due or delinquent based on how recently payments have been received. | |||||||||||||||||||||
Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any. | |||||||||||||||||||||
The Company does not have any off-balance-sheet credit exposure to its customers. | |||||||||||||||||||||
Inventory | ' | ||||||||||||||||||||
Inventory | |||||||||||||||||||||
Inventory Valuation | |||||||||||||||||||||
The Company values inventory, entirely consisting of finished goods, at the lower of cost or market. Cost is determined on the first-in and first-out (“FIFO”) method. The Company reduces inventory for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated market value. Factors utilized in the determination of estimated market value include: (i) current sales data and historical return rates, (ii) estimates of future demand, and (iii) competitive pricing pressures. | |||||||||||||||||||||
Inventory Obsolescence and Markdowns | |||||||||||||||||||||
The Company evaluates its current level of inventory considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification to adjust inventory to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations. | |||||||||||||||||||||
There was no inventory obsolescence at December 31, 2013 or 2012. | |||||||||||||||||||||
Property and Equipment | ' | ||||||||||||||||||||
Property and Equipment | |||||||||||||||||||||
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: | |||||||||||||||||||||
Estimated Useful | |||||||||||||||||||||
Life (Years) | |||||||||||||||||||||
Computer equipment | 3 | ||||||||||||||||||||
Equipment | 5 | ||||||||||||||||||||
Furniture and fixture | 7 | ||||||||||||||||||||
Leasehold improvement | * | ||||||||||||||||||||
(*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. | |||||||||||||||||||||
Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. | |||||||||||||||||||||
Derivative Instruments | ' | ||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||
The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Paragraph 810-10-05-4 of the FASB Accounting Standards Codification and Paragraph 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. | |||||||||||||||||||||
In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. | |||||||||||||||||||||
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. | |||||||||||||||||||||
The Company marks to market the fair value of the remaining embedded derivative warrants at each balance sheet date and records the change in the fair value of the remaining embedded derivative warrants as other income or expense in the consolidated statements of operations and comprehensive income (loss). | |||||||||||||||||||||
The Company utilizes the Lattice model that values the liability of the derivative warrants based on a probability weighted discounted cash flow model with the assistance of the third party valuation firm. The reason the Company picks the Lattice model is that in many cases there may be multiple embedded features or the features of the bifurcated derivatives may be so complex that a Black-Scholes valuation does not consider all of the terms of the instrument. Therefore, the fair value may not be appropriately captured by simple models. In other words, simple models such as Black-Scholes may not be appropriate in many situations given complex features and terms of conversion option (e.g., combined embedded derivatives). The Lattice model is based on future projections of the various potential outcomes. The features that were analyzed and incorporated into the model included the exercise and full reset features. Based on these features, there are two primary events that can occur; the holder exercises the warrants or the warrants are held to expiration. The Lattice model analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e., stock price, exercise price, volatility, etc.). Projections were then made on the underlying factors which led to potential scenarios. Probabilities were assigned to each scenario based on management projections. This led to a cash flow projection and a probability associated with that cash flow. A discounted weighted average cash flow over the various scenarios was completed to determine the value of the derivative warrants. | |||||||||||||||||||||
Related Parties | ' | ||||||||||||||||||||
Related Parties | |||||||||||||||||||||
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. | |||||||||||||||||||||
Pursuant to Section 850-10-20 FASB Accounting Standards, the related parties include (a.) affiliates of the Company; (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15 FASB Accounting Standards, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company; (e.) management of the Company; (f.) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. | |||||||||||||||||||||
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. | |||||||||||||||||||||
Commitments and Contingencies | ' | ||||||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | |||||||||||||||||||||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. | |||||||||||||||||||||
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. | |||||||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. | |||||||||||||||||||||
Unearned convention revenue is deposits received for conventions that have not yet taken place, which are fully or partially refundable depending upon the terms and conditions of the agreements. | |||||||||||||||||||||
Stock-Based Compensation for Obtaining Employee Services | ' | ||||||||||||||||||||
Stock-Based Compensation for Obtaining Employee Services | |||||||||||||||||||||
The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | |||||||||||||||||||||
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: | |||||||||||||||||||||
● | Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification, the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments. Pursuant to Paragraph 718-10-S99-1 of the FASB Accounting Standards Codification, it may be appropriate to use the simplified method, i.e., expected term =(vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. | ||||||||||||||||||||
● | Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) of the FASB Accounting Standards Codification, a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | ||||||||||||||||||||
● | Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. | ||||||||||||||||||||
● | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. | ||||||||||||||||||||
The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. | |||||||||||||||||||||
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services | ' | ||||||||||||||||||||
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services | |||||||||||||||||||||
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”). | |||||||||||||||||||||
Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If shares of the Company are thinly traded the use of share prices established in the Company’s most recent PPM, or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | |||||||||||||||||||||
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: | |||||||||||||||||||||
● | Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification, the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data to estimate holder’s expected exercise behavior. If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. | ||||||||||||||||||||
● | Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) of the FASB Accounting Standards Codification, a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | ||||||||||||||||||||
● | Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. | ||||||||||||||||||||
● | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. | ||||||||||||||||||||
Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic. | |||||||||||||||||||||
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a stock option that the counterparty has the right to exercise expires unexercised. | |||||||||||||||||||||
Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded. | |||||||||||||||||||||
Income Tax Provision | ' | ||||||||||||||||||||
Income Tax Provision | |||||||||||||||||||||
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. | |||||||||||||||||||||
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. | |||||||||||||||||||||
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary. | |||||||||||||||||||||
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. | |||||||||||||||||||||
Uncertain Tax Positions | ' | ||||||||||||||||||||
Uncertain Tax Positions | |||||||||||||||||||||
The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting period ended December 31, 2013 or 2012. | |||||||||||||||||||||
Net Income (Loss) Per Common Share | ' | ||||||||||||||||||||
Net Income (Loss) per Common Share | |||||||||||||||||||||
Net income (loss) per common share is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through convertible debt, stock options or warrants. | |||||||||||||||||||||
The following table shows the potentially outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: | |||||||||||||||||||||
Potentially Outstanding Dilutive | |||||||||||||||||||||
Common Shares | |||||||||||||||||||||
For the Year Ended | For the Year Ended | ||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||
Convertible preferred stock | - | 9,775,268 | |||||||||||||||||||
Stock options | 4,462,500 | 3,350,000 | |||||||||||||||||||
Stock purchase warrants | - | 7,987,274 | |||||||||||||||||||
Total potentially outstanding dilutive common shares | 4,462,500 | 21,112,542 | |||||||||||||||||||
Cash Flows Reporting | ' | ||||||||||||||||||||
Cash Flows Reporting | |||||||||||||||||||||
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (the “Indirect Method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments | |||||||||||||||||||||
Subsequent Events | ' | ||||||||||||||||||||
Subsequent Events | |||||||||||||||||||||
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as a filer with the United States Securities & Exchange Commission (the “SEC”) considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. | |||||||||||||||||||||
Recently Issued Accounting Pronouncements | ' | ||||||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||||||
In February 2013, the FASB issued ASU No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. This ASU is effective for public entities for fiscal years beginning after December 15, 2013. | |||||||||||||||||||||
In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date.” This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. This ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. | |||||||||||||||||||||
In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. | |||||||||||||||||||||
In March 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under US GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted. | |||||||||||||||||||||
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Significant_and_Critical_Accou2
Significant and Critical Accounting Policies and Practices (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||
Schedule of Consolidated Interest in Controlling Entities | ' | ||||||||||||||||||||
The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s) as follows: | |||||||||||||||||||||
Name of consolidated subsidiary or entity | State or other jurisdiction of | Date of incorporation or formation | Attributable | ||||||||||||||||||
incorporation or organization | (date of acquisition, if applicable) | interest | |||||||||||||||||||
KTC Corp. | The State of Nevada, U.S.A. | 20-Sep-10 | 100 | % | |||||||||||||||||
Kicking the Can L.L.C. | The State of Delaware, U.S.A. | 17-Apr-09 | 100 | % | |||||||||||||||||
Wizard Conventions, Inc. | The State of New York, U.S.A. | 28-Feb-97 | 100 | % | |||||||||||||||||
Wizard World Digital, Inc. | The State of Nevada, U.S.A. | 18-Mar-11 | 100 | % | |||||||||||||||||
Financial Liabilities - Derivative Conversion Features and Warrant Liabilities | ' | ||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as December 31, 2013: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Carrying | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Value | |||||||||||||||||||||
Derivative conversion features and warrant liabilities | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as of December 31, 2012: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivative conversion features and warrant liabilities | $ | 4,784,035 | $ | - | $ | - | $ | 4,784,035 | $ | 4,784,035 | |||||||||||
Schedule of Fair Value of Assets and Liabilities Measured at Recurring Basis Using Significant Unobservable Inputs | ' | ||||||||||||||||||||
The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2013: | |||||||||||||||||||||
Fair Value Measurement Using Level 3 Inputs | |||||||||||||||||||||
Derivative Liabilities | Total | ||||||||||||||||||||
Balance, December 31, 2012 | $ | 4,784,035 | $ | 4,784,035 | |||||||||||||||||
Total (gains) or losses (realized/unrealized) included in consolidated statements of operations | 3,970,952 | 3,970,952 | |||||||||||||||||||
Purchases, issuances and settlements | - | - | |||||||||||||||||||
Transfers in and/or out of Level 3 | (8,754,987 | ) | (8,754,987 | ) | |||||||||||||||||
Balance, December 31, 2013 | $ | - | $ | - | |||||||||||||||||
The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2012: | |||||||||||||||||||||
Fair Value Measurement Using Level 3 Inputs | |||||||||||||||||||||
Derivative Liabilities | Total | ||||||||||||||||||||
Balance, December 31, 2011 | $ | 1,946,669 | $ | 1,946,669 | |||||||||||||||||
Total gains or losses (realized/unrealized) included in net loss | 1,012,274 | 1,012,274 | |||||||||||||||||||
Purchases, issuances and settlements | 1,849,936 | 1,849,936 | |||||||||||||||||||
Transfers in and/or out of Level 3 | (24,844 | ) | (24,844 | ) | |||||||||||||||||
Balance, December 31, 2012 | $ | 4,784,035 | $ | 4,784,035 | |||||||||||||||||
Schedule of Estimated Useful Life | ' | ||||||||||||||||||||
Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows: | |||||||||||||||||||||
Estimated Useful | |||||||||||||||||||||
Life (Years) | |||||||||||||||||||||
Computer equipment | 3 | ||||||||||||||||||||
Equipment | 5 | ||||||||||||||||||||
Furniture and fixture | 7 | ||||||||||||||||||||
Leasehold improvement | * | ||||||||||||||||||||
(*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. | |||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ||||||||||||||||||||
The following table shows the potentially outstanding dilutive common shares excluded from the diluted net income (loss) per share calculation as they were anti-dilutive: | |||||||||||||||||||||
Potentially Outstanding Dilutive | |||||||||||||||||||||
Common Shares | |||||||||||||||||||||
For the Year Ended | For the Year Ended | ||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||
Convertible preferred stock | - | 9,775,268 | |||||||||||||||||||
Stock options | 4,462,500 | 3,350,000 | |||||||||||||||||||
Stock purchase warrants | - | 7,987,274 | |||||||||||||||||||
Total potentially outstanding dilutive common shares | 4,462,500 | 21,112,542 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||
Schedule of Property and Equipment | ' | ||||||||||
Note 3 – Property and Equipment | |||||||||||
Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following: | |||||||||||
December 31,, 2013 | 31-Dec-12 | Estimated Useful Life | |||||||||
Computer Equipment | $ | 16,544 | 7,607 | 3 years | |||||||
Equipment | 7,175 | - | 5 years | ||||||||
Furniture & Fixtures | 37,850 | - | 7 years | ||||||||
61,569 | 7,607 | ||||||||||
Less: Accumulated depreciation and amortization | (10,609 | ) | (4,270 | ) | |||||||
$ | 50,960 | $ | 3,337 |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Related Party Transactions [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases | ' | ||||
Future minimum lease payments inclusive of related tax required under the non-cancelable operating lease are as follows: | |||||
Fiscal year ending December 31: | |||||
2014 | 82,800 | ||||
` | |||||
2015 | 82,800 | ||||
2016 | 82,800 | ||||
2017 | 82,800 | ||||
2018 | 82,800 | ||||
2019 | 82,800 | ||||
2020 | 20,700 | ||||
$ | 517,500 |
Stockholders_Equity_Deficit_Ta
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||
Summary of Warrant Activity | ' | ||||||||||||||||||||
The following is a summary of the Company’s warrant activity during the year ended December 31, 2013: | |||||||||||||||||||||
Warrants | Weighted Average | ||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Outstanding – December 31, 2012 | 7,987,274 | $ | 0.45 | ||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||
Exercised | 7,987,274 | $ | 0.45 | ||||||||||||||||||
Forfeited/Cancelled | - | $ | - | ||||||||||||||||||
Outstanding – December 31, 2013 | - | $ | - | ||||||||||||||||||
Exercisable – December 31, 2013 | - | $ | - | ||||||||||||||||||
The following is a summary of the Company’s warrant activity during the year ended December 31, 2012: | |||||||||||||||||||||
Warrants | Weighted Average | ||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Outstanding – December 31, 2011 | 6,956,024 | $ | 0.4 | ||||||||||||||||||
Granted | 2,531,250 | $ | 0.6 | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Forfeited/Cancelled | (1,500,000 | ) | $ | 0.4 | |||||||||||||||||
Outstanding – December 31, 2012 | 7,987,274 | $ | 0.45 | ||||||||||||||||||
Exercisable – December 31, 2012 | 7,987,274 | $ | 0.45 | ||||||||||||||||||
Schedule of Warrants Outstanding and Exercisable | ' | ||||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||
Range of | Number | Weighted Average | Weighted Average | Number | Weighted Average | ||||||||||||||||
exercise price | Outstanding | Remaining Contractual | Exercise Price | Exercisable | Exercise Price | ||||||||||||||||
Life (in years) | |||||||||||||||||||||
$ | - | - | - | $ | - | $ | - |
Income_Tax_Provision_Tables
Income Tax Provision (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Components of Deferred Tax Assets | ' | ||||||||
Components of deferred tax assets are as follows: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Net deferred tax assets – Non-current: | |||||||||
Expected income tax benefit from NOL carry-forwards | $ | 405,000 | $ | 487,000 | |||||
Less valuation allowance | (405,000 | ) | (487,000 | ) | |||||
Deferred tax assets, net of valuation allowance | $ | - | $ | - | |||||
Schedule of Reconciliation of Federal Statutory Income Tax Rate | ' | ||||||||
A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows: | |||||||||
For the Year Ended December 31, 2013 | For the Year Ended December 31, 2012 | ||||||||
Federal statutory income tax rate | 34 | % | 34 | % | |||||
Change in valuation allowance on net operating loss carry-forwards | (34.0 | )% | (34.0 | )% | |||||
Effective income tax rate | 0 | % | 0 | % |
Organization_and_Operations_De
Organization and Operations (Details Narrative) | 0 Months Ended |
Dec. 07, 2010 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Stock issued during period, shares, acquisitions | 32,927,596 |
Exchange percentage of the issued and outstanding shares of KTC Corp | 100.00% |
Percentage of represented shares after the consummation of the share exchange agreement | 94.90% |
Significant_and_Critical_Accou3
Significant and Critical Accounting Policies and Practices (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | 9-May-11 | |
Accounting Policies [Abstract] | ' | ' | ' |
Percentage of outstanding voting shares in another entity | 50.00% | ' | 0.01% |
Inventory obsolescence | $0 | $0 | ' |
Income tax ultimate settlement rate | 50.00% | ' | ' |
Significant_and_Critical_Accou4
Significant and Critical Accounting Policies and Practices - Schedule of Consolidated Interest in Controlling Entities (Details) | Dec. 31, 2013 | 9-May-11 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
KTC Corp. [Member] | Kicking The Can L.L.C. [Member] | Wizard Conventions, Inc. [Member] | Wizard World Digital, Inc. [Member] | |||
State or other jurisdiction of incorporation or organization | ' | ' | ' | ' | ' | ' |
The State of Nevada, U.S.A. | The State of Delaware, U.S.A. | The State of New York, U.S.A. | The State of Nevada, U.S.A. | |||
Date of incorporation or formation (date of acquisition, if applicable) | ' | ' | 20-Sep-10 | 17-Apr-09 | 28-Feb-97 | 18-Mar-11 |
Attributable Interest | 50.00% | 0.01% | 100.00% | 100.00% | 100.00% | 100.00% |
Significant_and_Critical_Accou5
Significant and Critical Accounting Policies and Practices - Financial Liabilities - Derivative Conversion Features and Warrant Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative conversion features and warrant liabilities | ' | $4,784,035 |
Level 1 [Member] | ' | ' |
Derivative conversion features and warrant liabilities | ' | ' |
Level 2 [Member] | ' | ' |
Derivative conversion features and warrant liabilities | ' | ' |
Level 3 [Member] | ' | ' |
Derivative conversion features and warrant liabilities | ' | 4,784,035 |
Carrying Value [Member] | ' | ' |
Derivative conversion features and warrant liabilities | ' | $4,784,035 |
Significant_and_Critical_Accou6
Significant and Critical Accounting Policies and Practices - Schedule of Changes in Fair Value of Assets and Liabilities Measured at Recurring Significant Unobservable Inputs (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Balance | $4,784,035 | $1,946,669 |
Total (gains) or losses (realized/unrealized) included in consolidated statements of operations | 3,970,952 | 1,012,274 |
Purchases, issuances and settlements | ' | 1,849,936 |
Transfers in and/or out of Level 3 | -8,754,987 | -24,844 |
Balance | ' | 4,784,035 |
Derivative Liabilities [Member] | ' | ' |
Balance | 4,784,035 | 1,946,669 |
Total (gains) or losses (realized/unrealized) included in consolidated statements of operations | 3,970,952 | 1,012,274 |
Purchases, issuances and settlements | ' | 1,849,936 |
Transfers in and/or out of Level 3 | -8,754,987 | -24,844 |
Balance | ' | $4,784,035 |
Significant_and_Critical_Accou7
Significant and Critical Accounting Policies and Practices - Schedule of Estimated Useful Life (Details) | 12 Months Ended | |
Dec. 31, 2013 | ||
Computer Equipment [Member] | ' | |
Property plant and equipment estimated useful life | '3 years | |
Equipment [Member] | ' | |
Property plant and equipment estimated useful life | '5 years | |
Furniture And Fixtures [Member] | ' | |
Property plant and equipment estimated useful life | '7 years | |
Leasehold Improvements [Member] | ' | |
Property plant and equipment estimated useful life | '0 years | [1] |
[1] | Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter. |
Significant_and_Critical_Accou8
Significant and Critical Accounting Policies and Practices - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounting Policies [Abstract] | ' | ' |
Convertible preferred stock | ' | 9,775,268 |
Stock options | 4,462,500 | 3,350,000 |
Stock purchase warrants | ' | 7,987,274 |
Total potentially outstanding dilutive common shares | 4,462,500 | 21,112,542 |
Property_and_Equipment_Details
Property and Equipment (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation expense | $7,296 | $3,014 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Computer Equipment [Member] | Equipment [Member] | Furniture And Fixtures [Member] | |||
Computer Equipment | $16,544 | $7,607 | ' | ' | ' |
Equipment | 7,175 | ' | ' | ' | ' |
Furniture & Fixtures | 37,850 | ' | ' | ' | ' |
Total | 61,569 | 7,607 | ' | ' | ' |
Less: Accumulated depreciation and amortization | -10,609 | -4,270 | ' | ' | ' |
Property and equipment, net | $50,960 | $3,337 | ' | ' | ' |
Computer equipment, estimated useful life | ' | ' | '3 years | '5 years | '7 years |
Convertible_Promissory_Notes_D
Convertible Promissory Notes (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended | |||||
Aug. 03, 2012 | Mar. 30, 2012 | Dec. 06, 2011 | Aug. 19, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 27, 2012 | |
Debt instrument, principal amount | ' | ' | ' | $455,000 | ' | ' | ' |
Convertible promissory notes, issued | 406,039 | ' | ' | 453,100 | ' | ' | ' |
Note accrued interest rate | ' | ' | ' | 14.00% | ' | ' | ' |
Due period from the issuance date | ' | ' | ' | '4 months | ' | ' | ' |
Debt instrument convertible to common stock, price per share | $0.40 | ' | ' | $0.40 | ' | ' | ' |
Convertible note investment, description | ' | ' | ' | ' | ' | ' | ' |
In conjunction with the Notes, each investor was granted a Common Stock Purchase Warrant exercisable for one share of common stock of the Company for each $2.00 of investment. | |||||||
Amount of investment required to receive each common stock purchase warrants | ' | $2 | ' | $2 | ' | ' | ' |
Warrants exercisable price | ' | ' | ' | $0.40 | ' | ' | ' |
Warrants expiration term | ' | ' | ' | '5 years | ' | ' | ' |
Series A Cumulative Convertible Preferred stock, shares issued value | 406,039 | 825,000 | ' | ' | ' | 4 | 725,000 |
Common stock, par value | $0.00 | ' | ' | ' | $0.00 | $0.00 | $0.00 |
Repayment of convertible promissory note | ' | ' | ' | ' | 25,000 | ' | ' |
Debt instrument, remaining principal amount | ' | ' | ' | ' | 78,100 | ' | ' |
Accured interest | ' | ' | ' | ' | 21,298 | ' | ' |
Senior convertible debentures | ' | ' | 325,000 | ' | ' | ' | ' |
Debenture interest rate | ' | ' | 6.00% | ' | ' | ' | ' |
Debt instrument, maturity date | ' | ' | 28-Feb-12 | ' | ' | ' | ' |
Amortization of debt discount | ' | ' | 206,375 | ' | ' | ' | ' |
Series A Preferred Stock shares issued to debenture investors upon conversion | ' | ' | ' | ' | 0 | 39,101 | ' |
Warrants issued to debenture investors upon conversion | ' | ' | ' | ' | 100,000 | ' | ' |
Series A Preferred Stock [Member] | ' | ' | ' | ' | ' | ' | ' |
Debt instrument conversion, converted to equity amount | ' | ' | $325,000 | ' | ' | ' | ' |
Series A Preferred Stock shares issued to debenture investors upon conversion | ' | ' | 3,250 | ' | ' | ' | ' |
Warrants issued to debenture investors upon conversion | ' | ' | 162,500 | ' | ' | ' | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 2 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | 9-May-11 | 13-May-11 | Jul. 31, 2011 | 25-May-11 | Jul. 31, 2011 | 9-May-11 | Jul. 31, 2011 | Sep. 01, 2012 | 25-May-12 | Mar. 17, 2013 | Mar. 31, 2013 | Mar. 17, 2013 | Mar. 31, 2013 | Mar. 19, 2012 | Jun. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | |
Director Agreement [Member] | Director Agreement [Member] | John D. Maatta Agreement [Member] | John D. Maatta Agreement [Member] | Greg Suess Agreement [Member] | Greg Suess Agreement [Member] | ROAR Agreement [Member] | Gareb Shamus Agreement [Member] | Paul Kessler Agreement [Member] | Paul Kessler Agreement [Member] | Kenneth Shamus Agreement [Member] | Kenneth Shamus Agreement [Member] | John Macaluso [Member] | John Macaluso [Member] | John Macaluso [Member] | John Macaluso [Member] | ||||
Employment agreement term description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
The initial term of the Agreement is for a period of three (3) years, commencing on March 19, 2012. The term of the Employment Agreement will be automatically extended for additional terms of one (1) year each, unless either the Company or Macaluso gives prior written notice of non-renewal to the other party no later than sixty (60) days prior to the expiration of the then current Term. | |||||||||||||||||||
Base salary | $1,892,894 | $972,887 | ' | ' | ' | ' | ' | ' | ' | $5,000 | ' | ' | ' | ' | ' | ' | $10,000 | $30,000 | ' |
Salary paid in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000 | ' |
Accrued salary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' |
Total accrual amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' |
Issuance of common stock purchase warrants to purchase of common stock, number | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' |
Issuance of common stock purchase warrants to purchase of common stock, price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.44 | ' |
Accrued bonus | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $404,088 |
Options granted to purchase common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,750,000 | ' |
Common stock price per share | ' | ' | ' | $0.00 | ' | $0.00 | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | $0.00 | ' |
Options exercisable period | ' | ' | ' | ' | '5 years | ' | '5 years | ' | '5 years | ' | '5 years | ' | '5 years | ' | '5 years | ' | ' | ' | ' |
Options vesting period | ' | ' | ' | ' | '3 years | ' | '3 years | ' | '3 years | ' | '3 years | ' | '3 years | ' | '3 years | ' | ' | '3 years | ' |
Non-qualified stock option to purchase common stock | ' | ' | ' | 150,000 | ' | 150,000 | ' | 150,000 | ' | ' | 150,000 | 150,000 | ' | 150,000 | ' | ' | ' | ' | ' |
Stock options exercised | ' | ' | ' | ' | 12,500 | ' | 12,500 | ' | 12,500 | ' | ' | ' | 12,500 | ' | 12,500 | ' | ' | ' | ' |
Percentage of outstanding voting shares in another entity | 50.00% | ' | 0.01% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of commission on contractual introduction for business development | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of stock options vesting annually | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Percentage of undivided tenant, common interest | 50.00% |
Initial lease term | '7 years |
Lease expiration date | 31-Mar-20 |
Lease base rent per month | $6,900 |
Initial security deposit | $13,800 |
Related_Party_Transactions_Sch
Related Party Transactions - Schedule of Future Minimum Rental Payments for Operating Leases (Details) (USD $) | Dec. 31, 2013 |
Related Party Transactions [Abstract] | ' |
2014 | $82,800 |
2015 | 82,800 |
2016 | 82,800 |
2017 | 82,800 |
2018 | 82,800 |
2019 | 82,800 |
2020 | 20,700 |
Operating leases, future minimum payments due | $517,500 |
Stockholders_Equity_Deficit_De
Stockholdersb Equity (Deficit) (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||||||||||||||||||||||||
Oct. 08, 2013 | Sep. 30, 2012 | Aug. 03, 2012 | Apr. 27, 2012 | Mar. 30, 2012 | Dec. 06, 2011 | Aug. 19, 2011 | 9-May-11 | Feb. 01, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 21, 2013 | Sep. 28, 2012 | Dec. 31, 2010 | 9-May-11 | Dec. 31, 2011 | Jan. 03, 2011 | Mar. 19, 2012 | Dec. 31, 2011 | Jan. 03, 2011 | Mar. 19, 2012 | Dec. 31, 2011 | Mar. 03, 2011 | Mar. 19, 2012 | Dec. 31, 2013 | Dec. 17, 2010 | Sep. 30, 2012 | Jan. 14, 2011 | Sep. 28, 2012 | Mar. 31, 2012 | Mar. 23, 2011 | Sep. 30, 2012 | Mar. 23, 2011 | Sep. 30, 2012 | Dec. 21, 2011 | Oct. 08, 2013 | Aug. 21, 2013 | 3-May-13 | Dec. 06, 2011 | 3-May-13 | Dec. 31, 2012 | Jul. 09, 2012 | Mar. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | 9-May-11 | Dec. 31, 2012 | Jul. 09, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | |
2011 Incentive Stock and Award Plan [Member] | Period One [Member] | Period One [Member] | Period One [Member] | Period Two [Member] | Period Two [Member] | Period Two [Member] | Period Three [Member] | Period Three [Member] | Period Three [Member] | Michael Mathews [Member] | Brio Financial Group [Member] | Brio Financial Group [Member] | Mr. Vadim Mats [Member] | Mr. Vadim Mats [Member] | Michael Mathews [Member] | Michael Mathews [Member] | Michael Mathews [Member] | Brad Powers [Member] | Brad Powers [Member] | Michael Mathews [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Series A Preferred Stock [Member] | Series A Cumulative Convertible Preferred Stock [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | |||||||||||||||
Brio Financial Group [Member] | Brad Powers [Member] | Brio Financial Group [Member] | Brad Powers [Member] | |||||||||||||||||||||||||||||||||||||||||||||||
Series A Cumulative Convertible Preferred stock, shares issued value | ' | ' | $406,039 | $725,000 | $825,000 | ' | ' | ' | ' | ' | $4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000 | ' | ' | $2,000,000 | ' | ' | ' | ' | ' | ' | ' |
Series A Cumulative Convertible Preferred stock, shares | ' | ' | 4,060 | 7,250 | 8,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,500,000 | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of investment required to receive each common stock purchase warrants | ' | ' | ' | ' | $2 | ' | $2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior convertible debentures | ' | ' | ' | ' | ' | 325,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series A Preferred Stock shares issued to debenture investors upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 39,101 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued to the debenture investors | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 162,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issuance costs paid | ' | ' | ' | 90,986 | ' | 142,250 | ' | ' | ' | ' | 233,236 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued to placement agent | ' | ' | ' | 181,250 | ' | 206,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series A Cumulative Convertible Preferred stock, par value | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued | ' | ' | ' | 362,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | $0.00 | $0.00 | ' | ' | $0.40 | ' | ' | $0.60 | $0.60 | ' | $0.60 | ' | $0.40 | $0.40 |
Preferred stock conversion price per share | ' | ' | $0.40 | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exchange of outstanding Series A Common Stock Purchase Warrants, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common stock shares issues on exchange of outstanding Series A Common Stock Purchase Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued for payment of accrued and unpaid dividends | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | $0.40 | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible promissory notes, issued | ' | ' | 406,039 | ' | ' | ' | 453,100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial reporting service expense per month | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,040,925 | 415,190 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of restricted common stock shares | ' | ' | ' | ' | ' | ' | ' | ' | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000 | ' | ' | ' | 1,000,000 | ' | ' | 62,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional restricted common stock shares issuable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 62,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued for services | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 240,000 | 10,000 | ' | 250,000 | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued due to related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued liability to related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 103,750 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued for services ,value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 108,000 | 28,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued for accrued liabilities and accounts payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 240,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of common stock shares issued for accrued liabilities and accounts payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 108,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Legal service cost per month | ' | ' | ' | ' | ' | ' | ' | ' | 4,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued for consulting services | ' | 450,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 156,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued value for consulting services | ' | 186,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued for accrued liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 450,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of common stock shares issued for accrued liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 186,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 275,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly payment of stipend payable for services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consulting agreement term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares to be issued for services rendered | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued for cash during the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 357,143 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of common stock shares issued for cash during the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consulting expenses for issuance of common shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 68,750 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock, price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of stock and warrants for services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | 1,000,000 | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants maturity term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'P5Y | ' | ' | 'P5Y | ' | ' | 'P5Y | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consulting expenses for issuance of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 222,761 | ' | ' | 222,761 | ' | ' | 222,761 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cancellation of warrants, number | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | 250,000 | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants outstanding and exercisable, intrinsic value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options issued, during period for services of Employees and Advisors, shares | 812,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options, exercisable price | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options, exercisable period | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share based compensation to employees and advisors | 262,611 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Faie value of assumptions, exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value assumptions, volatality rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 176.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of assumptions, dividend rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of assumptions, risk free interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.43% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,000,000 | 80,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | ' | ' | ' | ' | 5,000,000 | ' | ' |
Common stock, shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51,104,024 | 35,794,878 | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of fair market value of the common stock | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 110.00% | ' | ' | ' | ' |
Minimum percentage of total combined voting power | ' | ' | ' | ' | ' | ' | ' | 0.01% | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options expiration term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' |
Incentive options expiration term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' |
Standard percentage of total combined voting power owes by recipient differs expiration term for Incentive Option | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Aggregate fair market value of common stock exercisable | ' | ' | ' | ' | ' | ' | ' | $100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Deficit_Su
Stockholders' Equity (Deficit) - Summary of Warrant Activity (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Warrants, Exercisable, Ending balance | ' | ' |
Weighted Average Exercise Price of Warrants, Exercisable, Ending balance | ' | ' |
Warrant [Member] | ' | ' |
Warrants, Outstanding, Beginning balance | 7,987,274 | 6,956,024 |
Warrants, Granted | ' | 2,531,250 |
Warrants, Exercised | 7,987,274 | ' |
Warrants, Forfeited/Cancelled | ' | -1,500,000 |
Warrants, Outstanding, Ending balance | ' | 7,987,274 |
Warrants, Exercisable, Ending balance | ' | 7,987,274 |
Weighted Average Exercise Price of Warrants, Outstanding, Beginning balance | $0.45 | $0.40 |
Weighted Average Exercise Price of Warrants, Granted | ' | 0.6 |
Weighted Average Exercise Price of Warrants, Exercised | 0.45 | ' |
Weighted Average Exercise Price of Warrants, Forfeited/Cancelled | ' | 0.4 |
Weighted Average Exercise Price of Warrants, Outstanding, Ending balance | ' | $0.45 |
Weighted Average Exercise Price of Warrants, Exercisable, Ending balance | ' | 0.45 |
Stockholders_Equity_Deficit_Sc
Stockholders' Equity (Deficit) - Schedule of Warrants Outstanding and Exercisable (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Equity [Abstract] | ' |
Warrants Outstanding, Range of exercise price | ' |
Number of Warrants Outstanding | ' |
Weighted Average Remaining Contractual Life Of Warrants Outstanding (in years) | '0 years |
Weighted Average Exercise Price of Warrants Outstanding | ' |
Number of Warrants Exercisable | ' |
Weighted Average Exercise Price of Warrants Exercisable | ' |
Income_Tax_Provision_Details_N
Income Tax Provision (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Operating loss carry-forward | $1,127,000 | ' |
Fair value of derivative warrants amount included in debt | 0 | ' |
Accumulated change in the fair value of derivative | 4,000,000 | ' |
Expected income tax benefit from NOL carry-forwards | 405,000 | 487,000 |
Valuation allowance | 405,000 | 487,000 |
Deferred tax assets increase in valuation allowance | $82,000 | $67,000 |
Income_Tax_Provision_Schedule_
Income Tax Provision - Schedule of Components of Deferred Tax Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Expected income tax benefit from NOL carry-forwards | $405,000 | $487,000 |
Less valuation allowance | -405,000 | -487,000 |
Deferred tax assets, net of valuation allowance | $0 | $0 |
Income_Tax_Provision_Schedule_1
Income Tax Provision - Schedule of Reconciliation of Federal Statutory Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Federal statutory income tax rate | 34.00% | 34.00% |
Change in valuation allowance on net operating loss carry-forwards | -34.00% | -34.00% |
Effective income tax rate | 0.00% | 0.00% |