| Document and Entity Information (USD $) | 6 Months Ended | |
| Jun. 30, 2014 | Aug. 14, 2014 | |
| Document and Entity Information: | ' | ' |
| Entity Registrant Name | 'ProText Mobility, Inc. | ' |
| Document Type | '10-Q | ' |
| Document Period End Date | 30-Jun-14 | ' |
| Amendment Flag | 'false | ' |
| Entity Central Index Key | '0001163573 | ' |
| Current Fiscal Year End Date | '--12-31 | ' |
| Entity Common Stock, Shares Outstanding | ' | 112,068,328 |
| Entity Public Float | $336,205 | ' |
| Entity Filer Category | 'Smaller Reporting Company | ' |
| Entity Current Reporting Status | 'Yes | ' |
| Entity Voluntary Filers | 'No | ' |
| Entity Well-known Seasoned Issuer | 'No | ' |
| Document Fiscal Year Focus | '2014 | ' |
| Document Fiscal Period Focus | 'Q2 | ' |
| CONSOLIDATED BALANCE SHEETS (USD $) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
| Statement of Financial Position | ' | ' |
| Cash | $11,403 | $41 |
| Inventory, Net | 9,730 | ' |
| Prepaid expenses | 4,500 | 4,500 |
| TOTAL CURRENT ASSETS | 25,633 | 4,541 |
| TOTAL ASSETS | 25,633 | 4,541 |
| Accounts payable and accrued expenses | 2,476,053 | 2,406,430 |
| Accrued expenses - related party | 34,632 | 11,850 |
| Current portion of 10% convertible notes payable | 114,034 | 114,034 |
| Convertible short term bridge notes payable, net | 1,168,257 | 1,193,460 |
| Related party convertible loans | 122,000 | 122,000 |
| Loans payable | 12,500 | ' |
| Derivative liability | 870,729 | 345,857 |
| TOTAL CURRENT LIABILITIES | 4,798,205 | 4,193,631 |
| Convertible notes payable, net of debt discount | ' | 4,331 |
| TOTAL OTHER LIABILITIES | 1,737,175 | 1,509,546 |
| TOTAL LIABILITIES | 6,535,380 | 5,703,177 |
| Preferred A Stock | 3 | 3 |
| Preferred B Stock | 51 | 51 |
| Preferred C Stock | 100,000 | 100,000 |
| Common Stock | 527 | 17 |
| Additional paid-in capital | 46,096,246 | 45,548,849 |
| Accumulated deficit | -52,706,574 | -51,347,556 |
| TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | -6,509,747 | -5,698,636 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $25,633 | $4,541 |
| CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
| Statement of Financial Position | ' | ' |
| 10% Convertible notes payable | $114,034 | $114,034 |
| Convertible short term bridge notes payable, net of debt discount | 1,168,257 | 1,193,460 |
| Convertible loans - related party | 122,000 | 122,000 |
| Common Stock, par value | $0.00 | $0.00 |
| Common Stock, authorized | 10,000,000,000 | 10,000,000,000 |
| Common Stock, issued | 52,706,574 | 1,733,570 |
| Common Stock, outstanding | 52,706,574 | 1,733,570 |
| Preferred Stock, par value | $0.00 | $0.00 |
| Preferred Stock, authorized | 25,000,000 | 25,000,000 |
| Preferred A Stock, par value | $0.00 | $0.00 |
| Preferred A Stock, liquidation value | $2.62 | $2.62 |
| Preferred A Stock, designated | 1,526,718 | 1,526,718 |
| Preferred A Stock, issued | 28,968 | 28,968 |
| Preferred A Stock, outstanding | 28,968 | 28,968 |
| Preferred B Stock, par value | $0.00 | $0.00 |
| Preferred B Stock, liquidation value | $9.09 | $9.09 |
| Preferred B Stock, designated | 1,000,000 | 1,000,000 |
| Preferred B Stock, issued | 511,551 | 511,551 |
| Preferred B Stock, outstanding | 511,551 | 511,551 |
| Preferred C Stock, par value | $0.00 | $0.00 |
| Preferred C Stock, designated | 3,900,000 | 3,900,000 |
| Preferred C Stock, issued | 3,650,000 | 3,650,000 |
| Preferred C Stock, outstanding | 3,650,000 | 3,650,000 |
| STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
| Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
| Income Statement | ' | ' | ' | ' |
| REVENUES | ' | $377 | ' | $642 |
| GROSS LOSS | ' | 377 | ' | 642 |
| Research and Development Expense | 37,200 | ' | 37,200 | ' |
| Selling, general and administrative | 211,428 | 191,266 | 431,820 | 386,268 |
| TOTAL OPERATING EXPENSES | 248,628 | 191,266 | 469,020 | 386,268 |
| LOSS FROM OPERATIONS | -248,628 | -190,889 | -469,020 | -385,626 |
| OTHER (INCOME) EXPENSES | ' | ' | ' | ' |
| Interest Expense | 316,560 | 124,608 | 527,796 | 224,994 |
| Derivative expense | 130,028 | -41,699 | 124,090 | 81,241 |
| Interest expense - related parties | 3,074 | 2,925 | 6,150 | 5,850 |
| TOTAL OTHER EXPENSES | 449,662 | 169,232 | 658,038 | 312,085 |
| Net Income (Loss) | -698,290 | -360,121 | -1,127,058 | -697,711 |
| Common stock dividends to be issued for Series B Preferred Stock | 117,002 | 117,542 | 231,960 | 232,500 |
| NET LOSS APPLICABLE TO COMMON STOCK HOLDERS | ($815,292) | ($477,663) | ($1,359,018) | ($930,211) |
| BASIC AND DILUTED - LOSS PER SHARE | ($0.03) | ($0.68) | ($0.04) | ($1.61) |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ' | ' | ' | ' |
| Basic and Diluted | 24,583,687 | 705,930 | 36,558,358 | 577,082 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
| Jun. 30, 2014 | Jun. 30, 2013 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
| Net loss | ($1,127,058) | ($697,711) |
| Common stock issued for services | 18,817 | 36,200 |
| Common stock issued for compensation | 80,000 | 80,000 |
| Original issue discount | 4,500 | ' |
| Stock issued for interest | ' | 6,918 |
| Loss on change in derivative liability | 124,092 | 81,241 |
| (Gain) loss on settlement of debt | ' | 58,049 |
| Amortization of debt discount | 446,364 | 96,027 |
| Increase (Decrease) in Inventories | -9,730 | ' |
| Increase (Decrease) in Deposits | ' | 2,700 |
| Accounts payable and accrued expenses-related parties | 6,150 | 3,074 |
| Accounts payable and accrued expenses | 94,057 | 167,101 |
| Net cash used in operating activities | -362,808 | -166,401 |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
| Proceeds from sale of common stock | ' | 20,848 |
| Proceeds from loans payable | 24,750 | 6,000 |
| Principal repayments of loan payable | -12,250 | ' |
| Proceeds from convertible notes payable | 436,500 | 180,500 |
| Principal repayments of convertible notes payable | -74,830 | -25,000 |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 374,170 | 182,348 |
| NET INCREASE (DECREASE) IN CASH | 11,362 | 15,947 |
| CASH - BEGINNING OF PERIOD | 41 | 349 |
| CASH - END OF PERIOD | 11,403 | 16,296 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ' | ' |
| Cash paid for interest | 13,552 | ' |
| SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
| Common stock issued as a result of convertible debt conversions | 212,368 | 142,210 |
| Restricted stock issued in connection with bridge loans | ' | 3,965 |
| Embedded conversion features | $644,736 | $10,000 |
| Description of Business and Going Concern | 6 Months Ended |
| Jun. 30, 2014 | |
| Notes | ' |
| Description of Business and Going Concern | ' |
| DESCRIPTION OF BUSINESS AND GOING CONCERN | |
| ProText Mobility Inc. (the “Company”) was incorporated in the State of Delaware on September 5, 2001 under the name SearchHelp, Inc. and completed its initial public offering on July 23, 2003. During the fiscal year ended December 31, 2008, the Company acquired 100% of the stock of EchoMetrix, Inc, which then became a wholly owned subsidiary, and in May of 2009 the Company filed a Certificate of Ownership and Merger with the State of Delaware pursuant to which EchoMetrix was merged with and into the Company, and the Company's corporate name was changed to EchoMetrix, Inc. In December 2010, filed a Certificate of Ownership and Merger with the state of Delaware pursuant to which the Company’s then wholly owned subsidiary, ProText Mobility, Inc., was merged with and into the Company, and the Company’s corporate name was changed to Protext Mobility, Inc. | |
| ProText Mobility, Inc. develops, markets and sells software solutions for the mobile communications market primarily aimed at protecting children from dangers derived from mobile communications and mobile device use. The Company has evolved its business plan from developing software solely for personal computers (“PCs”) to developing software for products designed for the mobile industry. The Company’s offerings include solutions for both the consumer and enterprise markets, with downloadable applications for mobile communications devices: SafeText, DriveAlert & CompliantWireless. | |
| SafeText is a service for mobile devices that provides parents a tool to help manage their children’s mobile communication activities. DriveAlert is a virtual "lock-box" designed to help mitigate the risk of driving while distracted. Compliant Wireless is a proprietary mobile platform designed for small to large companies to manage employee’s use of mobile devices for business by providing insight into the content and activity generated within their mobile work environment. | |
| The consolidated balance sheet presented as of December 31, 2013 has been derived from our audited consolidated financial statements. The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to those rules and regulations, but we believe that the disclosures are adequate to make the information presented not misleading. The unaudited consolidated financial statements and notes included herein should be read in conjunction with the annual financial statements and notes for the year ended December 31, 2013 included in our Annual Report on Form 10-K/A filed with the SEC on May 9, 2014. In the opinion of management, all adjustments, consisting of normal, recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results of operations for the three and six-month period ended June 30, 2014 are not necessarily indicative of the results for the year ending December 31, 2014. | |
| The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. To date, the Company has generated minimal revenue and has a history of net losses. As reflected in the consolidated financial statements, the Company incurred net losses of approximately $1.1 million and $700,000 for the six months ended June 30, 2014 and 2013, respectively. In addition, the Company had a working capital deficiency of approximately $4.8 million and an accumulated deficit of approximately $52.7 million at June 30, 2014. | |
| As noted in the Company’s auditor report for the year ended December 31, 2013, these circumstances raise substantial doubt about the Company's ability to continue as a going concern. The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management's efforts have been directed towards the development and implementation of a plan to generate sufficient revenues to cover all of its present and future costs and expenses. This plan is to address mobile messaging market opportunities with novel, comprehensive and robust solutions for the consumer and enterprise market. | |
| If the Company does not generate sufficient revenues from the sales of its products in an amount necessary to meet its cash needs, the Company will need additional financing to continue to operate. There are no assurances that the Company can continue to successfully raise additional financing. If the Company fails to raise additional financing, it might have to file for reorganization under bankruptcy laws to satisfy its outstanding liabilities. | |
| The accompanying unaudited consolidated financial statements have been prepared, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. |
| Summary of Significant Accounting Policies | 6 Months Ended | |||||||||||||||||
| Jun. 30, 2014 | ||||||||||||||||||
| Notes | ' | |||||||||||||||||
| Summary of Significant Accounting Policies: | ' | |||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | ||||||||||||||||||
| Basis of Presentation: | ||||||||||||||||||
| ProText Mobility, Inc. is organized as a single reporting unit. References in this report to “ProText Mobility”, the “Company”, “we”, “us” or “our” refers to ProText Mobility Inc. and its consolidated divisions. All intercompany transactions have been eliminated in consolidation. | ||||||||||||||||||
| Revenue Recognition: | ||||||||||||||||||
| The Company recognizes revenues in accordance with authoritative guidance when services have been rendered, the sales price is determinable and collectability is reasonably assured. | ||||||||||||||||||
| The Company has launched DriveAlert, one of the Company’s products, with certain U.S. auto dealerships during the second quarter of 2014. Revenue from DriveAlert, , consists of fees charged for the use of car device with downloadable software. The terms with the end-users range between one to seven years and are payable upfront to the dealerships, which then remits the proceeds, net of their commissions to the Company. | ||||||||||||||||||
| The Company’s sold hardware contains software components that are essential to the overall functionality of the products. The Company recognizes revenue recognition to remove tangible products containing software components and non-software components that function together to deliver the product’s essential functionality from the scope of industry-specific software revenue recognition guidance. | ||||||||||||||||||
| For multiple element arrangements that include software and non-software related elements, the Company allocates revenue to each software and non-software element as a group based upon the relative selling price of each in accordance with the selling price hierarchy, which includes VSOE if available, third-party evidence (“TPE”), if VSOE is not available, and estimated selling price, if VSOE or TPE are not available. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element. | ||||||||||||||||||
| In unique circumstances, we are unable to establish VSOE for all deliverables in a multiple-element arrangement. This is due to an infrequent requested item from a customer. When VSOE cannot be established, we attempt to establish a selling price based on TPE, which is primarily based on competitor prices for similar deliverables. TPE and ESP are rarely used and mostly on insignificant items. | ||||||||||||||||||
| Revenue from online Internet sales is recognized upon the settlement of credit card charges, typically within three days of the sale. | ||||||||||||||||||
| Use of Estimates: | ||||||||||||||||||
| The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions about collection of accounts receivable, useful life of fixed assets and intangible assets, and assumptions used in the valuation of derivative liability using the binomial method, such as expected volatility, risk-free interest rate, and expected dividend rate. | ||||||||||||||||||
| Stock Based Compensation: | ||||||||||||||||||
| The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or ASC 718. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period. | ||||||||||||||||||
| The Company has elected to use the BSM option-pricing model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | ||||||||||||||||||
| Research and Development Costs: | ||||||||||||||||||
| Costs incurred in the research and development of software products and significant upgrades and enhancements thereto during the preliminary project stage and the post-implementation operation stage are expensed as incurred. Costs incurred for maintenance and relatively minor upgrades and enhancements are expensed as incurred. Costs associated with the application development stage of new software products and significant upgrades and enhancements thereto are capitalized when 1) management implicitly or explicitly authorizes and commits to funding a software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended. | ||||||||||||||||||
| Research and development costs were expensed as incurred. The Company’s research and development costs amounted to $37,200 during the six months ended June 30, 2014 and 2013. | ||||||||||||||||||
| Inventory: | ||||||||||||||||||
| Inventory at June 30, 2014 consists of units of DriverAlert held at the Company’s premises and at auto dealerships which have not been seen sold yet. The inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out method. | ||||||||||||||||||
| Derivative Liabilities: | ||||||||||||||||||
| The Company assessed the classification of its derivative financial instruments as of June 30, 2014, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. | ||||||||||||||||||
| ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional. | ||||||||||||||||||
| During the six months ended June 30, 2014 and 2013, the Company had notes payable outstanding in which the conversion rate was variable and the embedded conversion feature was not clearly and closely related to the economic characteristics and risks of the host contract. Accordingly, the Company has recognized a derivative liability in connection with such instruments. The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance at every balance sheet thereafter and in determining which valuation is most appropriate for the instrument (e.g., Binomial), the expected volatility, the implied risk free interest rate, as well as the expected dividend rate. | ||||||||||||||||||
| Cash Equivalents: | ||||||||||||||||||
| For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investments with a remaining maturity of three months or less, when purchased, to be cash equivalents. | ||||||||||||||||||
| Fair Value of Financial Instruments: | ||||||||||||||||||
| ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: | ||||||||||||||||||
| Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||||
| Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||||||
| Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. | ||||||||||||||||||
| To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of June 30, 2014 and December 31, 2013: | ||||||||||||||||||
| Fair Value Measurements at June 30, 2014 using: | ||||||||||||||||||
| June 30, | Quoted Prices | Significant | Significant | |||||||||||||||
| 2014 | in Active | Other | Unobservable | |||||||||||||||
| Markets for | Observable | Inputs | ||||||||||||||||
| Identical | Inputs (Level 2) | (Level 3) | ||||||||||||||||
| Assets | ||||||||||||||||||
| (Level 1) | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||
| Debt Derivative liabilities | $ | 870,729 | $ | - | $ | - | $ | 870,729 | ||||||||||
| Fair Value Measurements at December 31, 2013 using: | ||||||||||||||||||
| December 31, | Quoted Prices | Significant | Significant | |||||||||||||||
| 2013 | in Active | Other | Unobservable | |||||||||||||||
| Markets for | Observable | Inputs | ||||||||||||||||
| Identical | Inputs (Level 2) | (Level 3) | ||||||||||||||||
| Assets | ||||||||||||||||||
| (Level 1) | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||
| Debt Derivative liabilities | $ | 345,857 | $ | - | $ | - | $ | 345,857 | ||||||||||
| The debt derivative and warrant liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical prices for the Company’s common stock and are classified within Level 3 of the valuation hierarchy. | ||||||||||||||||||
| The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of and for the periods ended June 30, 2014 and December 31, 2013, respectively. | ||||||||||||||||||
| Debt Derivative | ||||||||||||||||||
| Liability | ||||||||||||||||||
| Balance, January 1, 2013 | $ | - | ||||||||||||||||
| Initial fair value of embedded conversion features at note issuances | 379,952 | |||||||||||||||||
| Reclassification of liability contract to equity | - | |||||||||||||||||
| Changes in fair value between measurement dates | (34,095) | |||||||||||||||||
| Balance, December 31, 2013 | $ | 345,857 | ||||||||||||||||
| Debt Derivative | ||||||||||||||||||
| Liability | ||||||||||||||||||
| Balance, January 1, 2014 | $ | 345,857 | ||||||||||||||||
| Initial fair value of embedded conversion features at note issuances | 644,736 | |||||||||||||||||
| Reclassification of liability contract to equity | (244,406) | |||||||||||||||||
| Changes in fair value between measurement dates | 124,092 | |||||||||||||||||
| Balance, March 31, 2014 | $ | 870,279 | ||||||||||||||||
| Level 3 Liabilities are comprised of our bifurcated convertible debt features on Companies our convertible notes. | ||||||||||||||||||
| Concentration of Credit Risk: | ||||||||||||||||||
| Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company from time to time may maintain cash balances, which exceed the Federal | ||||||||||||||||||
| Depository Insurance Coverage limit. The Company performs periodic reviews of the relative credit rating of its bank to lower its risk. Concentrations of credit risk with respect to accounts receivable are limited because a number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. | ||||||||||||||||||
| Recently Issued Accounting Pronouncements: | ||||||||||||||||||
| We have reviewed accounting pronouncements issued during the past two years and have adopted any that are applicable to our company. We have determined that none had a material impact on our unaudited consolidated financial position, results of operations, or cash flows for the six months ended June 30, 2014 and 2013. | ||||||||||||||||||
| Earnings Per Share | 6 Months Ended | |||
| Jun. 30, 2014 | ||||
| Notes | ' | |||
| Earnings Per Share | ' | |||
| Earnings Per Share | ||||
| Earnings Per Share: | ||||
| The Company utilizes the guidance per FASB Codification “ASC 260 "Earnings Per Share". Basic earnings per share is calculated on the weighted effect of all common shares issued and outstanding, and is calculated by dividing net income available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share, which is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation, plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding, is not presented separately as it is anti-dilutive. Such securities, shown below, presented on a common share equivalent basis and outstanding as of June 30, 2014 and 2013 have been excluded from the per share computations as their effect would be anti-dilutive: | ||||
| Anti-dilutive common share equivalents at: | June 30, | June 30, | ||
| 2014 | 2013 | |||
| Stock options | 22,428 | 23,772 | ||
| Convertible Preferred Stock | 64,306 | 64,306 | ||
| Convertible Notes Payable | 646,636,756 | 610,977 | ||
| Warrants | 40,912 | 41,161 | ||
| 646,764,644 | 740,216 | |||
| Stock Compensation | 6 Months Ended |
| Jun. 30, 2014 | |
| Notes | ' |
| Stock Compensation | ' |
| STOCK COMPENSATION | |
| The Company’s 2004 Stock Plan (the “ 2004 Plan”), which is shareholder approved, permits the grant of share options and shares to its employees for up to 1,500,000 shares of Common Stock as stock compensation. All stock options under the 2004 Stock Plan are granted at the fair market value of the Common Stock at the grant date. Employee stock options vest ratably over a three-year period and generally expire 5 years from the grant date. | |
| The Company’s 2009 Incentive Stock Plan, (the “2009 Plan”), which is Board of Director approved, permits the grant of share options and shares to directors, executives and selected employees and consultants for up to 25,000,000 shares of Common Stock as stock compensation. | |
| Accounting for Employee Awards: | |
| The Company adheres to the provisions of Share Based Compensation as defined in the FASB codification, topic ASC 718. The codification focuses primarily on accounting for transactions in which an entity obtains employee services through share-based payment transactions. This guidance requires an entity to measure the cost of employee services received in exchange for the award of equity instruments based on the fair value of the award at the date of grant. The cost is recognized over the period during which an employee is required to provide services in exchange for the award. | |
| As a result of the adoption of the provision of Share Based Compensation, the Company's results for the six months ended June 30, 2014 and 2013 include share-based compensation expense for employees and board of directors totaled approximately $80,000 and $80,000, respectively, which have been included in the general and administrative expenses line item in the accompanying consolidated statement of operations. No income tax benefit has been recognized in the income statement for share-based compensation arrangements as the Company has provided a 100% valuation allowance on its’ net deferred tax asset. Stock option compensation expense is the estimated fair value of options granted amortized on a straight-line basis over the requisite service period for the entire portion of the award. The Company has not adjusted the expense by estimated forfeitures, as required for employee options, since the forfeiture rate based upon historical data was determined to be immaterial. | |
| Accounting for Non-employee Awards: | |
| The Company records its stock-based compensation expense in accordance with ASC 718-10, formerly SFAS 123R, “Share Based Payment” to its non-employee consultants for stock granted. | |
| Stock compensation expense related to non-employee options was $18,817 and $36,200 for the six-month periods ended June 30, 2014 and 2013, respectively. The amounts of stock compensation expense included in research development amounted to $3,200 during the six-month ended June 30, 2014. The amounts of stock compensation expense included in selling, general, and administrative expenses amounted to $15,317 and $36,200 during the six-month ended June 30, 2014 and 2013, respectively. | |
| There were no options granted to non-employees during the six months ended June 30, 2014 and 2013. | |
| As of June 30, 2014, $0 of compensation cost related to non-vested stock options was unrecognized |
| Debt | 6 Months Ended | |||
| Jun. 30, 2014 | ||||
| Notes | ' | |||
| Debt | ' | |||
| CONVERTIBLE NOTES PAYABLE | ||||
| June 30, | December 31, | |||
| 2014 | 2013 | |||
| 10% Convertible notes, issued prior to January 1, 2012, bears interest at a rate of 12% ( default rate), past due, payable on demand, convertible at $320 per share | $ 114,034 | $ 114,034 | ||
| Convertible notes, bear interest at rates ranging between 10% and 15%, maturing between March 2012 and September 2015, convertible at variable rates ranging between50% to 65% of a prince ranging from the volume weighted-average price for the ten days prior to conversion (highest) to the average of the 2 lowest closing bids of the 15 days prior to conversion (lowest) | 872,752 | 534,188 | ||
| Convertible notes, past due, convertible at fixed rates ranging between $56 and $112 per share | 865,749 | 909,455 | ||
| Loan payable, interest bearing at 10%, payable on demand | 12,500 | - | ||
| 1865,035 | 1,516,777 | |||
| Unamortized debt discount | (447,244) | (245,852) | ||
| $ 1,416,791 | $ 1,4291,494 | |||
| The loans mature during the following fiscal years | ||||
| 2014 | $ 1,679,842 | |||
| 2015 | 185,193 | |||
| $ 1,865,035 | ||||
| The Company generated proceeds of $436,500 and $180,500 from the issuance of convertible notes payable during the six-month period ended June 30, 2014 and 2013, respectively. | ||||
| The Company generated proceeds of $24,750 and $6,000 from the issuance of loans payable during the six-month period ended June 30, 2014 and 2013, respectively. | ||||
| The Company made principal repayments of $74,830 and $12,250 of the convertible notes payable and loans payable during the six-month period ended June 30, 2014. | ||||
| The Company issued 42,396,446 and 348,427 shares of its common stock to satisfy its obligations under an aggregate principal of $212,368 and $142,000 of convertible promissory notes and loans payable during the six-month period ended June 30, 2014 and 2013, respectively. Additionally, upon conversion of such promissory notes during the six month period ended June 30, 2014, the Company reclassified embedded conversion features associated with the promissory notes amounting to $236,722 from liability contracts to equity, which is recorded in the Company’s additional paid-in capital. | ||||
| The Company satisfied its obligations accrued interest aggregating $3,900 by issuing 10,050 shares of its common stock during the six-month period ended June 30, 2013. | ||||
| The Company issued 125,000 shares of its common stock in connection with the issuance of two notes payable during the six-month period ended June 30, 2014. | ||||
| During the six-month period ended June 30, 2014, certain holders of convertible notes aggregating $276,312 in principal assigned their rights to certain investors. Contemporaneously to the assignment, the Company restructured certain terms of the convertible notes, primarily as they related to the conversion terms. The revised conversion terms provide for conversion rates ranging from 50% to 65% of a price ranging from the average of the lowest closing price of the 45 days prior to conversion ( highest conversion ratio) to the average of the two lowest closing bids of the 15 days prior to conversion ( lowest conversion ratio). This change in terms resulted in embedded conversion features and debt discount amounting to approximately $276,000 recognized at the date of restructure and were recognized as derivative liabilities during the six-month period ended June 30, 2014. | ||||
| During the six-month period ended June 30, 2013, the Company and a holder of three convertible notes payable and accrued interest aggregating $45,861 restructured such notes to a non-convertible loan amounting to $55,000. The Company recorded an additional $9,139 as interest expense pursuant to this restructure. | ||||
| The Company recognized amortization of debt discount amounting to $446,364 and $96,027 for the six-month period ended June 30, 2014 and 2013, respectively, which are included in the Company’s interest expense of approximately $528,000 and $225,000, respectively. | ||||
| The aggregate amount of outstanding principal under convertible notes payable which have matured at June 30, 2014 amounts to $1,119,832. | ||||
| Other terms- Revenue Linked Convertible Notes Payable: | ||||
| During 2012, the Company entered in to several short term convertible notes totaling $401,000. These noninterest bearing notes are in default and convertible at a rate of $56 at maturity. The Company is unable to assert that it will generate revenue relating to third party managed carrier branded corporate websites, as well as through the sales of its products, and through the proposed test and launch of a national direct response marketing and distribution campaign for its products. The noteholders, upon repayment in full, will be entitled to 10%, on a pro-rated basis, of the aforementioned gross revenue, as adjusted, over a 12 month period following the repayment. | ||||
| Derivative Liabilities | 6 Months Ended | |||||
| Jun. 30, 2014 | ||||||
| Notes | ' | |||||
| Derivative Liabilities | ' | |||||
| The following table provides a summary of changes in fair value of the Company’s derivative liabilities as of and for the periods ended June 30, 2014 and December 31, 2013, respectively. | ||||||
| Debt Derivative | ||||||
| Liability | ||||||
| Balance, January 1, 2013 | $ | - | ||||
| Initial fair value of embedded conversion features at note issuances | 379,952 | |||||
| Reclassification of liability contract to equity | - | |||||
| Changes in fair value between measurement dates | -34,095 | |||||
| Balance, December 31, 2013 | $ | 345,857 | ||||
| Debt Derivative | ||||||
| Liability | ||||||
| Balance, January 1, 2014 | $ | 345,857 | ||||
| Initial fair value of embedded conversion features at note issuances | 644,736 | |||||
| Reclassification of liability contract to equity | -244,406 | |||||
| Changes in fair value between measurement dates | 124,092 | |||||
| Balance, March 31, 2014 | $ | 870,279 | ||||
| The fair values of the embedded conversion features were determined using Binomial Lattice based on the following assumptions (1) dividend yield of 0%, (2) expected volatility of 200 to 323% (3) weighted average risk free rate of 0.11% to 0.14%, expected life of 0.04 to 0.5 years and (5) estimated fair value of the Company’s common stock of $0.003 to $0.08 and $1 to $1.20 during the six-month period ended June 30, 2014 and 2013, respectively. | ||||||
| Equity Transactions | 6 Months Ended |
| Jun. 30, 2014 | |
| Notes | ' |
| Equity Transactions | ' |
| EQUITY TRANSACTIONS | |
| Common Stock: | |
| Services Rendered | |
| The Company issued 1,862,500 and 27,438 shares of its common stock (valued at $18,817 and $36,200, respectively) for services rendered by consultants during the six-month period ended June 30, 2014 and 2013, respectively. | |
| The Company issued 6,614,209 and 75,476 shares of its common stock (valued at $80,000 for both periods) as payment for services to the Board of Directors during the six-month period ended June 30, 2014 and 2013, respectively. | |
| Debt Conversion and related interest | |
| The Company issued 42,396,446 and 133,120 shares of its common stock to satisfy its obligations under an aggregate principal of $212,368 and $64,000 of convertible promissory notes and loans payable during the six-month period ended June 30, 2014 and 2013, respectively. Additionally, upon conversion of such promissory notes during the six month period ended June 30, 2014, the Company reclassified embedded conversion features associated with the promissory notes amounting to $244,406 from liability contracts to equity, which is recorded in the Company’s additional paid-in capital. | |
| The Company satisfied its obligations accrued interest aggregating $3,900 by issuing 10,050 shares of its common stock during the six-month period ended June 30, 2013. | |
| The Company issued 125,000 shares of its common stock in connection with the issuance of two notes payable during the six-month period ended June 30, 2014. The fair value of the shares of common stock amounted to $10,000 and was recorded as interest expense. | |
| Issuance of Common Stock as a Result of Sale of Securities | |
| The Company issued 23,435 shares of common stock for proceeds from the sale of the Company’s common stock of $20,848 during the six month period ending June 30, 2013. | |
| Subsequent Events | 6 Months Ended |
| Jun. 30, 2014 | |
| Notes | ' |
| Subsequent Events | ' |
| SUBSEQUENT EVENTS | |
| Since July 1, 2014, the Company issued 59,461,603 shares of its common stock pursuant to the conversion of convertible notes payable. | |
| Related Party Transactions | 6 Months Ended |
| Jun. 30, 2014 | |
| Notes | ' |
| Related Party Transactions | ' |
| RELATED PARTY TRANSACTIONS | |
| The Company had outstanding obligations under certain convertible notes payable certain related parties at June 30, 2014 and 2013. | |
| The Company had senior secured convertible notes payable to one of its directors, amounting to $25,000 at June 30, 2014 and December 31, 2013. This class of notes bears interest at 10% and is convertible at the lesser of 1) 60% of the weighted-average price for the 5-day immediately prior to the conversion or 2) the lowest conversion price of the 120-day period prior to conversion, but no less than the par value. The accrued interest under such notes amounted to $7,604 at June 30, 2014, respectively and the interest expense amounted to $1,250 during the six-month period ended June 30, 2014 and 2013, respectively. The notes are currently due. | |
| The Company had senior secured convertible notes payable to the father of one of the directors, amounting to $92,000 at June 30, 2014 and December 31, 2013. This class of notes bears interest at 10% and is convertible at the lesser of 1) 60% of the weighted-average price for the 5-day immediately prior to the conversion or 2) the lowest conversion price of the 120-day period prior to conversion, but no less than the par value. The accrued interest under such notes amounted to $26,525 at June 30, 2014 and the interest expense amounted to $4,600 during the six-month period ended June 30, 2014 and 2013, respectively. The notes are currently due. | |
| The Company had a convertible note payable of $5,000 to the son of the Company’s chief executive officer at June 30, 2014 and December 31, 2013. The note bears interest at 12% and matured in January 2014. The accrued interest under such notes amounted to $503 at June 30, 2014 and the interest expense amounted to $300 during the six-month period ended June 30, 2014. |
| Summary of Significant Accounting Policies: Schedule of Derivative Liabilities at Fair Value (Tables) | 6 Months Ended | |||||||||||||||||
| Jun. 30, 2014 | ||||||||||||||||||
| Tables/Schedules | ' | |||||||||||||||||
| Schedule of Derivative Liabilities at Fair Value | ' | |||||||||||||||||
| Fair Value Measurements at June 30, 2014 using: | ||||||||||||||||||
| June 30, | Quoted Prices | Significant | Significant | |||||||||||||||
| 2014 | in Active | Other | Unobservable | |||||||||||||||
| Markets for | Observable | Inputs | ||||||||||||||||
| Identical | Inputs (Level 2) | (Level 3) | ||||||||||||||||
| Assets | ||||||||||||||||||
| (Level 1) | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||
| Debt Derivative liabilities | $ | 870,729 | $ | - | $ | - | $ | 870,729 | ||||||||||
| Fair Value Measurements at December 31, 2013 using: | ||||||||||||||||||
| December 31, | Quoted Prices | Significant | Significant | |||||||||||||||
| 2013 | in Active | Other | Unobservable | |||||||||||||||
| Markets for | Observable | Inputs | ||||||||||||||||
| Identical | Inputs (Level 2) | (Level 3) | ||||||||||||||||
| Assets | ||||||||||||||||||
| (Level 1) | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||
| Debt Derivative liabilities | $ | 345,857 | $ | - | $ | - | $ | 345,857 | ||||||||||
| Summary of Significant Accounting Policies: Fair Value, by Balance Sheet Grouping (Tables) | 6 Months Ended | |||||
| Jun. 30, 2014 | ||||||
| Tables/Schedules | ' | |||||
| Fair Value, by Balance Sheet Grouping | ' | |||||
| Debt Derivative | ||||||
| Liability | ||||||
| Balance, January 1, 2013 | $ | - | ||||
| Initial fair value of embedded conversion features at note issuances | 379,952 | |||||
| Reclassification of liability contract to equity | - | |||||
| Changes in fair value between measurement dates | (34,095) | |||||
| Balance, December 31, 2013 | $ | 345,857 | ||||
| Debt Derivative | ||||||
| Liability | ||||||
| Balance, January 1, 2014 | $ | 345,857 | ||||
| Initial fair value of embedded conversion features at note issuances | 644,736 | |||||
| Reclassification of liability contract to equity | (244,406) | |||||
| Changes in fair value between measurement dates | 124,092 | |||||
| Balance, March 31, 2014 | $ | 870,279 | ||||
