Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 13, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Wild Craze, Inc. | ' |
Entity Central Index Key | '0001245841 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity's Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 32,885,201 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Cash | $118,373 | $12,772 |
Accounts receivable, net | 110,220 | ' |
Inventory | 221,491 | 11,758 |
Prepaid expenses | 50,381 | 10,000 |
Security deposits | 1,482 | ' |
Current portion - note receivable | 6,058 | ' |
Other current assets | 13,827 | ' |
Debt issue costs, net | 84,164 | ' |
Total Current Assets | 605,996 | 34,530 |
Property and Equipment, net | 54,033 | ' |
Other Assets | ' | ' |
Goodwill | 1,585,142 | ' |
Intangible assets, net | 702,544 | ' |
Note receivable | 4,914 | ' |
Deferred financing costs, net | 43,000 | ' |
Total Other Assets | 2,335,600 | ' |
Total Assets | 2,995,629 | 34,530 |
Current Liabilities: | ' | ' |
Accounts payable and accrued liabilites | 545,492 | 139,046 |
Liability to be settled in stock | 70,966 | 10,146 |
Loan payable | ' | 20,000 |
Loans payable - related parties | 775,106 | 237,018 |
Convertible notes payable, net of debt discount | 214,831 | ' |
Derivative liability -convertible notes payable | 409,596 | ' |
Convertible notes payable -related party | 152,259 | 152,259 |
Total Current Liabilities | 2,168,250 | 558,469 |
Other Liabilities: | ' | ' |
Contingent stock | 396,816 | ' |
Total Liabilities | 2,565,066 | 558,469 |
Stockholders' Equity (Deficit) | ' | ' |
Series A, preferred stock, $0.001 par value; 51 shares authorized, 51 and 0 shares issued and outstanding, respectively | ' | ' |
Undesignated preferred stock, $0.001 par value; 49,999,949 shares authorized; none issued or outstanding | ' | ' |
Common stock, $0.001 par value; 500,000,000 shares authorized;Â 32,920,201 and 26,123,760 shares issued and outstanding, respectively | 32,920 | 26,124 |
Additional paid in capital | 4,522,917 | 66,681 |
Accumulated deficit | -4,125,274 | -616,744 |
Total Stockholders' Equity (Deficit) | 430,563 | -523,939 |
Total Liabilities and Stockholders' Equity (Deficit) | $2,995,629 | $34,530 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Series A, preferred stock, par value | $0.00 | $0.00 |
Series A, preferred stock, shares authorized | 51 | 51 |
Series A, preferred stock, shares issued | 51 | 0 |
Series A, preferred stock, shares outstanding | 51 | 0 |
Undesignated preferred stock, par value | $0.00 | $0.00 |
Undesignated preferred stock, authorized | 49,999,949 | 49,999,949 |
Undesignated preferred stock, issued | ' | ' |
Undesignated preferred stock, outstanding | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 32,920,201 | 26,123,760 |
Common stock, shares outstanding | 32,920,201 | 26,123,760 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Sales | $231,523 | ' | $514,756 | $2 |
Cost of sales | 48,408 | ' | 167,550 | 1 |
Gross Profit | 183,115 | ' | 347,206 | 1 |
Selling, general and administrative expenses | 1,144,225 | 110,592 | 3,541,692 | 275,871 |
Loss from operations | -961,110 | -110,592 | -3,194,486 | -275,870 |
Other income (expense): | ' | ' | ' | ' |
Interest income | 319 | ' | 513 | ' |
Interest expense | -38,088 | -4,593 | -103,450 | -12,056 |
Interest expense - discount on notes | -85,184 | ' | -85,184 | ' |
Change in fair value of derivative liabilities | 42,548 | ' | 42,548 | ' |
Derivative expense | -171,471 | ' | -171,471 | ' |
Gain on disposition of vehicle | ' | ' | 3,000 | ' |
Total other income (expense) | -251,876 | -4,593 | -314,044 | -12,056 |
Net loss | ($1,212,986) | ($115,185) | ($3,508,530) | ($287,926) |
Net loss per common share - basic and diluted | ($0.04) | $0 | ($0.11) | ($0.01) |
Weighted average common shares outstanding - basic and diluted | 32,761,825 | 26,123,760 | 31,787,892 | 26,123,760 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders' Equity (Deficit) (Unaudited) (USD $) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2011 | ' | $26,124 | $66,681 | ($202,884) | ($110,079) |
Balance, shares at Dec. 31, 2011 | ' | 26,123,760 | ' | ' | ' |
Net loss | ' | ' | ' | -413,860 | -413,860 |
Balance at Dec. 31, 2012 | ' | 26,124 | 66,681 | -616,744 | -523,939 |
Balance, shares at Dec. 31, 2012 | ' | 26,123,760 | ' | ' | ' |
Preferred stock issued for services | ' | ' | 730,000 | ' | 730,000 |
Preferred stock issued for services, shares | 51 | ' | ' | ' | ' |
Stock issued for services | ' | 3,144 | 1,770,097 | ' | 1,773,241 |
Stock issued for services, shares | ' | 3,143,941 | ' | ' | 2,791,000 |
Common stock issued to settle vendor liabilities | ' | 653 | 32,177 | ' | 32,830 |
Common stock issued to settle vendor liabilities, shares | ' | 652,500 | ' | ' | ' |
Common stock issued in asset acquisition | ' | 3,000 | 1,917,000 | ' | 1,920,000 |
Common stock issued in asset acquisition, shares | ' | 3,000,000 | ' | ' | ' |
Stock options issued for services | ' | ' | 2,932 | ' | 2,932 |
Reclassification of conversion option relating to partial repayment of note payable | ' | ' | 4,030 | ' | 4,030 |
Net loss | ' | ' | ' | -3,508,530 | -3,508,530 |
Balance at Sep. 30, 2013 | ' | $32,920 | $4,522,917 | ($4,125,274) | $430,563 |
Balance, shares at Sep. 30, 2013 | 51 | 32,920,201 | ' | ' | ' |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flows From Operating Activities: | ' | ' |
Net loss | ($3,508,530) | ($287,926) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Depreciation and amortization | 33,068 | ' |
Bad debt | 8,439 | ' |
Stock based compensation | 2,465,792 | ' |
Amortization of debt discount | 85,184 | ' |
Amortization of debt issuance costs | 53,436 | ' |
Derivative liability recognized as interest expense | 171,471 | ' |
Change in fair value of derivative liabilities | -42,548 | ' |
(Increase) decrease in: | ' | ' |
Accounts receivable | -47,340 | ' |
Prepaid and other | -15,309 | ' |
Inventory | -15,656 | -11,296 |
Increase (decrease) in: | ' | ' |
Accounts payable and accrued liabilities | 335,461 | 59,930 |
Net Cash Used In Operating Activities | -476,532 | -239,292 |
Cash Flows From Investing Activities: | ' | ' |
Related party loans repaid | ' | 30,525 |
Purchase of property and equipment | -6,500 | ' |
Cash paid in asset acquisition | -100,000 | ' |
Cash acquired through asset acquisition | 504 | ' |
Principal payments received on notes receivable | 3,291 | ' |
Net Cash Provided by (Used In) Investing Activities | -102,705 | 30,525 |
Cash Flows From Financing Activities: | ' | ' |
Repayment of loan payable | -20,000 | ' |
Proceeds from related party loans | 338,088 | 111,182 |
Proceeds from convertible notes - related party | ' | 146,759 |
Repayment of related party loans | ' | -46,759 |
Proceeds from convertible notes | 431,000 | ' |
Debt issue costs paid in cash | -47,600 | ' |
Repayment of convertible notes | -16,650 | ' |
Net Cash Provided By Financing Activities | 684,838 | 211,182 |
Net change in cash | 105,601 | 2,415 |
Cash at beginning of period | 12,772 | 1,066 |
Cash at end of period | 118,373 | 3,481 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 6,346 | ' |
Cash paid for taxes | ' | ' |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Related party loan payable converted into related party convertible note | ' | 5,500 |
652,500 shares common stock issued to settle vendor liabilities | 32,830 | ' |
100,000 shares common stock issued for financing arrangement | 43,000 | ' |
352,941 shares common stock issued for debt issuance | 90,000 | ' |
Reclassification of derivative liability to additional paid in capital | 4,030 | ' |
Debt discount recorded on convertible debt accounted for as derivative liabilities | 284,703 | ' |
Assets acquired and liabilities assumed through assets acquisition as follows: | ' | ' |
Accounts receivable | 71,319 | ' |
Inventory | 194,077 | ' |
Equipment | 59,310 | ' |
Goodwill | 1,585,142 | ' |
Intangible assets | 723,835 | ' |
Note receivable | 14,263 | ' |
Accounts payable | 31,633 | ' |
Note payable | 200,000 | ' |
Contingent stock | $396,816 | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Parenthetical) | 9 Months Ended |
Sep. 30, 2013 | |
Statement of Cash Flows [Abstract] | ' |
Shares common stock issued to settle vendor liabilities, shares | 652,500 |
Shares common stock issued for financing arrangement, shares | 100,000 |
Shares common stock issued for debt issuance, shares | 352,941 |
Nature_of_Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Nature of Operations | ' |
Note 1 Nature of Operations | |
Business | |
Wild Craze, Inc. (formerly known as Wired Associates Solutions, Inc.) (the “Company”) was incorporated under the laws of the State of Nevada on February 14, 2003. The Company was originally formed as a multimedia/marketing company that specializes in the design and creation of effective marketing products and services, primarily internet based. | |
In December 2011, the Company ceased to engage in the multimedia and marketing industry and acquired the business of SnapTagz, LLC to engage in the production, distribution and marketing of fabric accessories. | |
On February 25, 2013, the Company and Crescent Moon Holdings, LLC, a South Carolina limited liability company (“Crescent Moon”) and Wild Creations, Inc.(“Wild Creations”), a wholly-owned subsidiary of Crescent Moon entered into an Asset Purchase Agreement (the “Agreement”); setting forth the acquisition of Wild Creations assets. | |
Further, also on February 25, 2013, the Company as parent, Wild Creations, as buyer, and FlipOutz, LLC, a Delaware limited liability company (“FlipOutz”) as seller, entered into an Asset Purchase Agreement pursuant to which Wild Creations acquired certain assets of FlipOutz. | |
Wild Creations products include mini eco-aquariums that feature live African Dwarf Frogs and toys that inspire play, imagination, and exploration. | |
FlipOutz products include bracelets you can wear and personalize, which can then be collected, traded, and tracked online. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||||||
Note 2 Summary of Significant Accounting Policies | |||||||||||||||||||||
Basis of Presentation | |||||||||||||||||||||
The condensed consolidated financial statements and accompanying footnotes are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||||||
The unaudited financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2012 filed on April 16, 2013. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosures, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the year ended December 31, 2012 have been omitted. The results of operations for the interim periods presented are not necessarily indicative of results for the entire year ending December 31, 2013. | |||||||||||||||||||||
Principles of consolidation | |||||||||||||||||||||
All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||
The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. | |||||||||||||||||||||
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. | |||||||||||||||||||||
Risks and Uncertainties | |||||||||||||||||||||
The Company’s condensed consolidated operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure. See Note 3 regarding going concern matters. | |||||||||||||||||||||
Cash | |||||||||||||||||||||
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at September 30, 2013 and December 31, 2012. | |||||||||||||||||||||
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. | |||||||||||||||||||||
Accounts receivable and allowance for doubtful accounts | |||||||||||||||||||||
Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable, net of the allowance for doubtful accounts. As of September 30, 2013 and December 31, 2012 the Company had an allowance for doubtful accounts of $5,800 and $0, respectively. | |||||||||||||||||||||
Inventories | |||||||||||||||||||||
Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) valuation method. | |||||||||||||||||||||
Depreciation | |||||||||||||||||||||
Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives. | |||||||||||||||||||||
Asset lives for financial statement reporting of depreciation are: | |||||||||||||||||||||
Machinery and equipment | 2-7 years | ||||||||||||||||||||
Leasehold improvements | 5 years | ||||||||||||||||||||
Goodwill | |||||||||||||||||||||
Goodwill is measured for impairment on an annual basis (December 1 for us) and between annual tests if events indicate that an impairment exists. The Company calculates impairment as the excess of the carrying value of its indefinite-lived assets over their estimated fair value. If the carrying value exceeds the estimate of fair value a write-down is recorded. | |||||||||||||||||||||
Intangibles | |||||||||||||||||||||
Intangibles are comprised of trade names and customer lists. In accordance with ASC 350, intangible assets with indefinite lives are not amortized but instead are measured for impairment at least annually (December 1 for us), or when events indicate that an impairment exists. The Company calculates impairment as the excess of the carrying value of its indefinite-lived assets over their estimated fair value. If the carrying value exceeds the estimate of fair value a write-down is recorded. The Company amortizes it’s intangibles with finite useful lives over their respective useful lives. | |||||||||||||||||||||
Long-Lived Assets | |||||||||||||||||||||
Management regularly reviews property and equipment and other long-lived assets, including certain definite-lived intangible assets, for possible impairment. This review occurs annually (December 1 for us), or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If there is indication of impairment, generally, management then prepares an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. The fair value is estimated using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks. Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions. | |||||||||||||||||||||
Debt Issue Costs and Debt Discount | |||||||||||||||||||||
These items are amortized over the life of the debt to interest expense. If a conversion, extinguishment or repayment of the underlying debt occurs, a proportionate share of these amounts is immediately expensed. | |||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||
The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 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 unobservable 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 amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, notes receivable and other current assets, accounts payable and accrued liabilities approximate their fair values because of the short maturity of these instruments. | |||||||||||||||||||||
We have determined that it is not practical to estimate the fair value of our notes payable because of their unique nature and the costs that would be incurred to obtain an independent valuation. We do not have comparable outstanding debt on which to base an estimated current borrowing rate or other discount rate for purposes of estimating the fair value of the notes payable and we have not been able to develop a valuation model that can be applied consistently in a cost efficient manner. These factors all contribute to the impracticability of estimating the fair value of the notes payable. At September 30, 2013 and December 31, 2012, the carrying value of the notes payable and accrued interest was $1,287,392 and $405,926. Accrued interest is included on the Balance sheet in the accounts payable and accrued liabilities line item. | |||||||||||||||||||||
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. It is not, however, practical to determine the fair value of loans payable –related parties due to their related party nature. | |||||||||||||||||||||
The Company’s Level 3 financial liabilities consist of the derivative conversion features issued in July 2013 and August 2013 for which there is no current market for this security such that the determination of fair value requires significant judgment or estimation. The Company valued the conversion features using a binomial model. These models incorporate transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date. | |||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | |||||||||||||||||||||
The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liability at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative liability. | |||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: | |||||||||||||||||||||
30-Sep-13 | Fair Value Measurement Using | ||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivative conversion features | $ | 409,596 | $ | - | $ | - | $ | 409,596 | $ | 409,596 | |||||||||||
31-Dec-12 | Fair Value Measurement Using | ||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
The Company adopted the disclosure requirements of ASU 2011-04, Fair Value Measurements, during the year ended December 31, 2012. The unobservable level 3 inputs used by the Company was the expected volatility assumption used in the option pricing model. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity. | |||||||||||||||||||||
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 period December 31, 2011 through September 30, 2013: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Level 3 Inputs | |||||||||||||||||||||
Derivative | Total | ||||||||||||||||||||
conversion | |||||||||||||||||||||
features | |||||||||||||||||||||
Balance, December 31, 2011 | $ | - | $ | - | |||||||||||||||||
Purchases, issuances and settlements | - | - | |||||||||||||||||||
Change in fair value | - | - | |||||||||||||||||||
Balance, December 31, 2012 | - | - | |||||||||||||||||||
Purchases, issuances and settlements | 456,174 | 456,174 | |||||||||||||||||||
Change in fair value | (42,548 | ) | (42,548 | ) | |||||||||||||||||
Reduction from repayment of debt | (4,030 | ) | (4,030 | ) | |||||||||||||||||
Balance, September 30, 2013 | $ | 409,596 | $ | 409,596 | |||||||||||||||||
Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements is the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement. | |||||||||||||||||||||
Discount on Debt | |||||||||||||||||||||
The Company allocated the proceeds received from convertible debt instruments between the underlying debt instruments and has recorded the conversion feature as a liability in accordance with FASB Accounting Standard Codification 815-15 (ASC 815-15). The conversion feature and certain other features that are considered embedded derivative instruments, such as a conversion reset provision have been recorded at their fair value within the terms of ASC 815-15 as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The value of the embedded derivative liability was bifurcated from the debt host contract and recorded as a derivative liability, which resulted in a reduction of the initial carrying amount (as unamortized discount) of the notes. The conversion liability is marked to market each reporting period with the resulting gains or losses shown in the 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 ASC 815-15. 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 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. | |||||||||||||||||||||
Research and Development | |||||||||||||||||||||
Research and development is expensed as incurred. There was no such expense for the nine months ended September 30, 2013 and 2012. | |||||||||||||||||||||
Share-Based Payments | |||||||||||||||||||||
Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments is recorded as general and administrative expense. During the nine months ended September 30, 2013 the Company recorded an expense relating to 225,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $93,650 (range $0.176-$0.64/share). During the nine months ended September 30, 2013 the Company issued 2,791,000 shares of common stock to consultants, for services rendered, at a fair value of $1,773,240 (range $0.51-$0.64/share). During the nine months ended September 30, 2012 the Company recorded an expense relating to 240,000 shares of common stock to be issued to attorneys and consultants, for services rendered, at a fair value of $3,418 ($0.014/share). | |||||||||||||||||||||
On July 24, 2013 the Company issued 352,941 restricted shares of common stock to a creditor as compensation for financing costs of $90,000. The issuance of the 352,941 shares have been recorded at par value with a corresponding decrease to paid-in capital. Upon the sale of the shares by the creditor, the financing cost liability will be reduced by the amount of the proceeds with a corresponding increase to paid-in capital. The Company will still be liable for any shortfall from the proceeds realized by the creditor. The ultimate amount to be recorded in satisfaction of the debt will not exceed the balance of the financing cost recorded. As of September 30, 2013 the creditor did not sell any of these shares. | |||||||||||||||||||||
On August 16, 2013 the Company issued 51 shares of preferred stock to a related entity, for services rendered, at a fair value of $730,000 ($14,314/share) as determined by the independent third party appraisal company. The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. (See Note 13) | |||||||||||||||||||||
Income Taxes | |||||||||||||||||||||
Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. | |||||||||||||||||||||
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||||||||||||||
For income tax benefits arising from uncertain income tax positions, a tax benefit arising from an uncertain tax position can only be recognized for financial reporting purposes if, and to the extent that, the position is more likely than not to be sustained in an audit by the applicable taxing authority. | |||||||||||||||||||||
Penalties related to uncertain tax positions are recorded as a component of general and administrative expenses. Interest relating to uncertain tax positions is recorded as a component of interest expense. The Company has not recorded any uncertain tax positions at September 30, 2013 and December 31, 2012. | |||||||||||||||||||||
Penalties and interest assessed by income taxing authorities are included in general and administrative expenses. | |||||||||||||||||||||
Revenue | |||||||||||||||||||||
The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products. | |||||||||||||||||||||
The Company meets these criteria upon shipment. | |||||||||||||||||||||
Advertising | |||||||||||||||||||||
The Company expenses advertising when incurred. Advertising expense for the nine months ended September 30, 2013 and 2012 was $35,055 and $0, respectively. | |||||||||||||||||||||
Basic Earnings per Share | |||||||||||||||||||||
Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible debt, exercise of stock options and warrants, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. | |||||||||||||||||||||
The Company had the following potential common stock equivalents at September 30, 2013: | |||||||||||||||||||||
On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259. | 1,045,256 | ||||||||||||||||||||
In July 2013 the Company issued a convertible note in the principal amount of $68,000 to an investor. The convertible note has a term of nine months, maturing March 27, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. | 962,310 | ||||||||||||||||||||
On July 23, 2013, Wild Craze, Inc. (the “Company”) closed a Credit Agreement (the “Credit Agreement”) by and among the Company, Wild Creations, Inc. and SnapTagz LLC (the “Borrowers”) and TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, as lender (“TCA”). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to a maximum of $2 million for general operating expenses. An initial amount of $300,000 was funded by TCA at the closing of the Credit Agreement. Any increase in the amount extended to the Borrowers shall be at the discretion of TCA. TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion. | 2,426,146 | ||||||||||||||||||||
In August 2013 the Company issued a convertible note in the principal amount of $63,000 to an investor. The convertible note has a term of nine months, maturing May 30, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. | 891,552 | ||||||||||||||||||||
Stock options, with exercise price of $0.75 per share | 30,000 | ||||||||||||||||||||
Liability to be settled in stock | 285,000 | ||||||||||||||||||||
Total common stock equivalents | 5,640,264 | ||||||||||||||||||||
Since the Company reflected a net loss for the three and nine months ended September 30, 2013, the inclusion of any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. | |||||||||||||||||||||
The Company had the following potential common stock equivalents at December 31, 2012: | |||||||||||||||||||||
On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259. | 10,722,465 | ||||||||||||||||||||
Liability to be issued in stock | 712,500 | ||||||||||||||||||||
Total common stock equivalents | 11,434,965 | ||||||||||||||||||||
Since the Company reflected a net loss in 2012, the inclusion of any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. | |||||||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||||||
On July 18, 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, except as follows. The unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets to the extent (a) a net operating loss carry forward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or (b) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax assets for such purpose. The amendments in ASU 20103-11 are effective prospectively for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on our financial position, results of operations or cash flows. | |||||||||||||||||||||
Management does not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period. |
Going_Concern
Going Concern | 9 Months Ended |
Sep. 30, 2013 | |
Going Concern | ' |
Going Concern | ' |
Note 3 Going Concern | |
As reflected in the accompanying consolidated financial statements, the Company has a net loss and net cash used in operations of $3,508,530 and $476,532, respectively, for the nine months ended September 30, 2013 and an accumulated net loss totaling $4,125,274. In addition, the company has a working capital deficit of approximately $1,562,254 at September 30, 2013. These factors raise substantial doubt about our ability to continue as a going concern. | |
The ability of the Company to continue its operations is dependent on Management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence. | |
The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. | |
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
Acquisitions
Acquisitions | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
Acquisitions | ' | ||||||||
Note 4 Acquisitions | |||||||||
(A) | Wild Creations | ||||||||
On February 25, 2013, the Company entered into a Purchase Agreement with Crescent Moon Holdings, LLC, a South Carolina limited liability company (“Crescent Moon”) and Wild Creations, Inc.(“Wild Creations”), a wholly-owned subsidiary of Crescent Moon; setting forth the acquisition of Wild Creations assets and assumption of liabilities. | |||||||||
Pursuant to the terms of the Purchase Agreement, the Company acquired all of the assets of Wild Creations in exchange for $100,000, the issuance of 2,000,000 shares of our common stock, $0.001 par value, and assumption of a note, including accrued interest, in the amount of $231,165. Total price paid for Wild Creations assets in the acquisition was $1,611,165. | |||||||||
The following sets forth the components of the purchase price: | |||||||||
Purchase Price: | |||||||||
Cash | $ | 100,000 | |||||||
2,000,000 shares of common stock, ($0.64/share), based upon the fair value of the shares issued | 1,280,000 | ||||||||
Assumed Note | 231,165 | ||||||||
Total Purchase Price | 1,611,165 | ||||||||
Assets acquired | |||||||||
Cash | 234 | ||||||||
Accounts Receivable | 70,974 | ||||||||
Inventory | 179,291 | ||||||||
Fixed Assets | 59,310 | ||||||||
Note Receivable | 14,263 | ||||||||
Total assets acquired | 324,072 | ||||||||
Liabilities assumed | |||||||||
Accounts payable | 468 | ||||||||
Total liabilities assumed | 468 | ||||||||
Net assets acquired | 323,604 | ||||||||
Excess purchase price | $ | 1,287,561 | |||||||
Based on a preliminary independent appraisal, the Company has tentatively allocated the excess purchase price to intangible assets and Goodwill as follows: | |||||||||
Customer List | $ | 350,951 | |||||||
Trade Name | $ | 298,104 | |||||||
Goodwill | $ | 638,506 | |||||||
The purchase price allocation will be adjusted if necessary upon the Company receiving the final valuation report from the independent appraisal company. | |||||||||
The intangible assets subject to amortization have been assigned useful lives as follows: | |||||||||
Customer list | 11 years | ||||||||
(B) | FlipOutz | ||||||||
On February 25, 2013, the Company as parent, Wild Creations (a wholly-owned subsidiary of the Company), as buyer, entered into a Purchase Agreement with FlipOutz, LLC, a Delaware limited liability company (“FlipOutz”); setting forth the acquisition of FlipOutz assets and assumption of liabilities. | |||||||||
Pursuant to the terms of the Purchase Agreement, Wild Creations acquired all of the assets of FlipOutz in exchange for the issuance of 1,000,000 shares of our common stock, $0.001 par value, and contingent stock consideration with a fair value at date of purchase of $396,816. Total price paid for FlipOutz assets in the acquisition was $1,036,816. | |||||||||
The following sets forth the components of the purchase price: | |||||||||
Purchase Price: | |||||||||
1,000,000 shares of common stock, ($0.64/share), based upon the fair value of the shares issued | 640,000 | ||||||||
Contingent stock consideration | 396,816 | ||||||||
Total Purchase Price | 1,036,816 | ||||||||
Assets acquired | |||||||||
Cash | 270 | ||||||||
Accounts Receivable | 345 | ||||||||
Inventory | 14,785 | ||||||||
Total assets acquired | 15,400 | ||||||||
Liabilities assumed | |||||||||
Total liabilities assumed | - | ||||||||
Net assets acquired | 15,400 | ||||||||
Excess purchase price | $ | 1,021,416 | |||||||
Based on a preliminary independent appraisal, the Company has tentatively allocated the excess purchase price to intangible assets and Goodwill as follows: | |||||||||
Customer List | $ | 50,544 | |||||||
Trade Name | $ | 24,236 | |||||||
Goodwill | $ | 946,636 | |||||||
The purchase price allocation will be adjusted if necessary upon the Company receiving the final valuation report from the independent appraisal company. | |||||||||
The intangible assets subject to amortization have been assigned useful lives as follows: | |||||||||
Customer list | 11 years | ||||||||
The following table summarizes, on an unaudited pro forma basis, the results of operations of the Company as though the acquisitions had occurred as of January 1, 2012. The pro forma amounts give effect to appropriate adjustments of amortization of intangible assets. The pro forma amounts presented are not necessarily indicative of the actual operation results had the acquisition transactions occurred as of January 1, 2012. | |||||||||
For the Nine Months Ended | |||||||||
September 30, 2013 | September 30, 2012 | ||||||||
Revenues | $ | 621,919 | $ | 847,844 | |||||
Net loss | (3,539,412 | ) | (524,828 | ) | |||||
Loss per share of common stock | (0.11 | ) | (0.02 | ) | |||||
Basic and diluted | 32,018,295 | 29,123,760 |
Property_Plant_and_Equipment
Property, Plant and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment | ' | ||||||||
Note 5 Property, Plant and Equipment | |||||||||
Property, plant and equipment on September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, 2013 | 31-Dec-12 | ||||||||
Machinery and Equipment | $ | 61,310 | $ | - | |||||
Leasehold Improvements | 4,500 | - | |||||||
Total | 65,810 | - | |||||||
Less: Accumulated Depreciation | 11,777 | - | |||||||
$ | 54,033 | $ | - | ||||||
Depreciation expense charged to income for the nine months ended September 30, 2013 and 2012 amounted to $11,777 and $0 respectively. |
Note_Receivable
Note Receivable | 9 Months Ended |
Sep. 30, 2013 | |
Receivables [Abstract] | ' |
Note Receivable | ' |
Note 6 Note Receivable | |
As of September 30, 2013 the Company had a note receivable in the amount of $10,972. The note accrues interest at 9.00% per annum with monthly installments of $566.67. The note matures on June 5, 2015. The Company acquired the note on February 25, 2013 upon entering into an asset purchase agreement with Crescent Moon. (See Note 4) The note is secured by real estate. |
Goodwill
Goodwill | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||
Goodwill | ' | ||||||||||||||||
Note 7 Goodwill | |||||||||||||||||
There were no balances or activity for Goodwill during 2012. The following table summarizes changes in our Goodwill as of September 30, 2013: | |||||||||||||||||
December 31, 2012 | Acquisitions | Impairment | 30-Sep-13 | ||||||||||||||
Charges | |||||||||||||||||
Goodwill | $ | - | $ | 1,585,142 | $ | - | $ | 1,585,142 | |||||||||
$ | - | $ | 1,585,142 | $ | - | $ | 1,585,142 |
Intangible_Assets
Intangible Assets | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||
Intangible Assets | ' | ||||||||||||||||||||
Note 8 Intangible Assets | |||||||||||||||||||||
There were no balances or activity for intangible assets during 2012. The following table summarizes changes in our intangible assets as of September 30, 2013: | |||||||||||||||||||||
December 31, 2012 | Acquisitions | Accumulated Amortization | Impairment Charges | 30-Sep-13 | |||||||||||||||||
Customer List | $ | - | $ | 401,495 | $ | (21,291 | ) | $ | - | $ | 380,204 | ||||||||||
Trade Name | - | 322,340 | - | - | 322,340 | ||||||||||||||||
$ | - | $ | 723,835 | $ | (21,291 | ) | $ | - | $ | 702,544 | |||||||||||
The intangible assets useful lives are as follows: | |||||||||||||||||||||
Estimated Life | |||||||||||||||||||||
Customer List | 11 years | ||||||||||||||||||||
Trade Name | Indefinite | ||||||||||||||||||||
Amortization expense related to the customer list totaled $21,291 for the nine months ended September 30, 2013. | |||||||||||||||||||||
Amortization expense for the next five years is as follows: | |||||||||||||||||||||
Year ending December 31: | |||||||||||||||||||||
2013 (remainder of the year) | $ | 9,126 | |||||||||||||||||||
2014 | 36,500 | ||||||||||||||||||||
2015 | 36,500 | ||||||||||||||||||||
2016 | 36,500 | ||||||||||||||||||||
2017 | 36,500 | ||||||||||||||||||||
Thereafter | 225,078 | ||||||||||||||||||||
$ | 380,204 |
Accounts_Payable_and_Accrued_L
Accounts Payable and Accrued Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ' | ||||||||
Accounts Payable and Accrued Liabilities | ' | ||||||||
Note 9 Accounts Payable and Accrued Liabilities | |||||||||
Accounts payable and accrued liabilities consist of the following: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Accounts payable | $ | 287,832 | $ | 112,355 | |||||
Sales tax payable | 6,785 | - | |||||||
Accrued expenses | 91,680 | 10,042 | |||||||
Accrued payroll | 14,000 | - | |||||||
Accrued interest convertible notes | 2,120 | - | |||||||
Accrued interest – related party | 143,076 | 16,649 | |||||||
$ | 545,492 | $ | 139,046 |
Convertible_Notes_Payable
Convertible Notes Payable | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Convertible Notes Payable | ' | ||||||||
Note 10 Convertible Notes Payable | |||||||||
Debt Offering (A) | |||||||||
In July 2013 the Company issued a convertible note in the principal amount of $68,000 to an investor. The convertible note has a term of nine months, maturing March 27, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. The conversion price will be subject to an adjustment to reduce dilution in the event that the Company issues additional equity securities. The conversion price is subject to anti-dilution protection in the event that the Company issues additional equity securities at a price less than the conversion price. | |||||||||
Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC No. 815, due to the potential for settlement in a variable quantity of shares. The convertible notes have been measured at fair value using a binomial model at period end with gains and losses from the change in fair value of derivative liabilities recognized on the statements of operations. | |||||||||
The convertible notes, when issued, gave rise to a derivative liability of $236,922 of which $68,000 was recorded as a discount to the notes and $168,922 was expensed immediately as it exceeded the gross proceeds of the offering. | |||||||||
The embedded derivative of the convertible notes was re-measured at September 30, 2013 yielding a gain on change in fair value of the derivatives of $125,875 for the nine months ended September 30, 2013. The derivative value of the convertible notes at September 30, 2013 yielded a derivative liability at fair value of $111,047. | |||||||||
As of September 30, 2013, accrued and unpaid interest under the Note was $1,163. | |||||||||
Debt Offering (B) | |||||||||
On July 23, 2013, Wild Craze, Inc. (the “Company”) closed a Credit Agreement (the “Credit Agreement”) by and among the Company, Wild Creations, Inc. and SnapTagz LLC (the “Borrowers”) and TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, as lender (“TCA”). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to a maximum of $2 million for general operating expenses. An initial amount of $300,000 was funded by TCA at the closing of the Credit Agreement. Any increase in the amount extended to the Borrowers shall be at the discretion of TCA. | |||||||||
The amounts borrowed pursuant to the Credit Agreement are evidenced by a Revolving Note (the “Revolving Note”) and the repayment of the Revolving Note is secured by a first position security interest in substantially all of the Company’s assets in favor of TCA, as evidenced by a Security Agreement by and among the Borrowers and TCA (the “Security Agreement”). The Revolving Note is in the original principal amount of $300,000 is due and payable, along with interest thereon, on January 22, 2014, and bears interest at the rate of 12% per annum, increasing to the highest rate permitted by law upon the occurrence of an event of default. The Credit Agreement calls for the establishment of a lock-box account. In addition, the Credit Agreement calls for a reserve amount equal to 15% of the revolving loan commitment. Following the collection of the reserve amount in full and payment of all items and fees as required, a minimum of 15% of all amounts collected into the lock-box account shall be paid to the Lender to reduce the then outstanding principal balance of the revolving loans. | |||||||||
During September 2013 note principal in the amount of $16,650 was repaid. The principal balance on the note as of September 30, 2013 was $283,350. | |||||||||
TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion. The conversion price is subject to anti-dilution protection in the event that the Company issues additional equity securities at a price less than the conversion price. | |||||||||
As consideration for TCA entering into and structuring the Credit Agreement, the Company shall pay to TCA TCA 352,941 shares of the Company’s common stock. It is the intention of the Company and TCA that the value of the Shares shall equal $90,000. In the event the value of the Shares issued to TCA and net proceeds received by TCA for the sale thereof do not equal $90,000, the Credit Agreement provides for an adjustment provision allowing for necessary action to adjust the number of shares issued. The issuance of the 352,941 shares have been recorded at par value with a corresponding decrease to paid-in capital. Upon the sale of the shares by TCA, the financing cost liability will be reduced by the amount of the proceeds with a corresponding increase to paid-in capital. The Company will still be liable for any shortfall from the proceeds realized by TCA. The ultimate amount to be recorded in satisfaction of the debt will not exceed the balance of the financing cost recorded. As of September 30, 2013 TCA did not sell any of these shares. | |||||||||
Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC No. 815, due to the potential for settlement in a variable quantity of shares. The convertible notes have been measured at fair value using a binomial model at period end with gains and losses from the change in fair value of derivative liabilities recognized on the statements of operations. | |||||||||
The convertible notes, when issued, gave rise to a derivative liability of $153,703 which was recorded as a discount to the notes. | |||||||||
The embedded derivative of the convertible notes was re-measured at September 30, 2013 yielding a loss on change in fair value of the derivatives of $90,564 for the nine months ended September 30, 2013. The derivative value of the convertible notes at September 30, 2013 yielded a derivative liability at fair value of $193,616. | |||||||||
As of September 30, 2013, accrued and unpaid interest under the Note was $472. | |||||||||
Make-Whole Rights | |||||||||
Upon liquidation by TCA of the Shares issued pursuant to a Conversion Notice, provided that TCA realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the “Realized Amount”), the Company shall issue to the TCA additional shares “Make-Whole Shares” of the Company’s Common Stock equal to: (i) the Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount. In the event that TCA received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice. | |||||||||
Penalties | |||||||||
Prepayment penalty | |||||||||
If the Company elects to terminate the Credit Agreement within the first three months after the closing date, the Company shall pay a prepayment penalty of 2.50% of the outstanding balance of the loan. | |||||||||
Inability to timely submit required reporting | |||||||||
If the Company fails to timely submit the required post-closing reporting, the Company, at TCA’s discretion, will be required to monetize 8.33% of the investment banking advisory fee. This penalty will be paid in cash by the Company at the time of the assessment. Multiple violations may lead to a default on the Credit Agreement, at the Lender’s sole discretion. | |||||||||
Event of Default | |||||||||
Default Interest Rate | |||||||||
Upon the occurrence of a default, the interest rate on all outstanding obligations of the Company to the Lender shall automatically be increased to the maximum interest rate allowable by law. | |||||||||
Conversion Provision | |||||||||
Upon an event of default and in its sole discretion TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date. At no time, unless the Company is in default on the Credit Agreement, shall TCA beneficially own more than 4.99% of our outstanding common stock upon any conversion. | |||||||||
Default and Potential Violation | |||||||||
Under the terms of the Credit Agreement, the Company is required to comply with several financial ratios and restrictive financial covenants as described in the Credit Agreement. At September 30, 2013, the Company was not in compliance with certain covenants contained in the Credit Agreement. TCA may, at its option, upon the occurrence and during the continuance of an Event of Default, declare its commitments to the Company to be terminated and all obligations to be immediately due and payable. As of September 30, 2013, the Company has not received notice from TCA declaring this action. | |||||||||
Debt Offering (C) | |||||||||
In August 2013 the Company issued a convertible note in the principal amount of $63,000 to an investor. The convertible note has a term of nine months, maturing May 30, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. The conversion price is subject to anti-dilution protection in the event that the Company issues additional equity securities at a price less than the conversion price. | |||||||||
Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC No. 815, due to the potential for settlement in a variable quantity of shares. The convertible notes have been measured at fair value using a binomial model at period end with gains and losses from the change in fair value of derivative liabilities recognized on the statements of operations. | |||||||||
The convertible notes, when issued, gave rise to a derivative liability of $65,549 of which $63,000 was recorded as a discount to the notes and $2,549 was expensed immediately as it exceeded the gross proceeds of the offering. | |||||||||
The embedded derivative of the convertible notes was re-measured at September 30, 2013 yielding a loss on change in fair value of the derivatives of $39,385 for the nine months ended September 30, 2013. The derivative value of the convertible notes at September 30, 2013 yielded a derivative liability at fair value of $104,933. | |||||||||
As of September 30, 2013, accrued and unpaid interest under the Note was $207. | |||||||||
Convertible notes payable consisted of the following at September 30, 2013 and December 31, 2012: | |||||||||
September 30, 2013 | 31-Dec-12 | ||||||||
Convertible notes payable | $ | 431,000 | $ | - | |||||
Discount on convertible notes | (199,519 | ) | - | ||||||
Repayments | (16,650 | ) | - | ||||||
Convertible notes payable, net | 214,831 | - | |||||||
Long-term portion | - | - | |||||||
Current maturities | $ | 214,831 | $ | - | |||||
The fair value of the Company’s derivative liabilities at the commitment and re-measurement dates were based upon the following management assumptions as of the commitment date and September 30, 2013: | |||||||||
Commitment Date | 30-Sep-13 | ||||||||
Expected dividends | 0 | % | 0 | % | |||||
Expected volatility | 133%-144% | 133%-144 | % | ||||||
Expected term: | 5.9 months -8.4 months | 3.6 months – 8 months | |||||||
Risk free interest rate | 0.07% - 0.13 | % | 0.02% - 0.10 | % | |||||
Debt Discount | |||||||||
The debt discounts recorded in 2013 pertain to the derivative liability classification of the embedded conversion option. | |||||||||
The following is a summary of the Company’s debt discount: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Debt discount | $ | 284,703 | $ | - | |||||
Amortization of debt discount | (85,184 | ) | - | ||||||
Debt discount - net | $ | 199,519 | $ | - |
Debt_Issuance_Costs
Debt Issuance Costs | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Debt Issuance Costs | ' | ||||
Debt Issuance Costs | ' | ||||
Note 11 Debt Issuance Costs | |||||
Debt issuance costs, net are as follows: | |||||
Balance December 31, 2012 | $ | - | |||
Debt issuance costs – 2013 financings | 137,600 | ||||
Amortization of debt issue costs during the nine months ended September 30, 2013 | (53,436 | ) | |||
Balance – September 30, 2013 | $ | 84,164 |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Related Party Transactions | ' | ||||||||
Note 12 Related Party Transactions | |||||||||
(A) | Convertible notes payable – related parties | ||||||||
On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. The Note may be prepaid in whole or in part at the Company’s option without penalty. Further, the Note grants to Omega a continuing, first priority security interest in all of the Company’s assets, wheresoever located and whether now existing or hereafter arising or acquired. | |||||||||
On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259. | |||||||||
As of September 30, 2013, accrued and unpaid interest under the Note was $30,314. | |||||||||
As of December 31, 2012, accrued and unpaid interest under the Note was $16,649. | |||||||||
Accrued interest is included on the Balance sheet in the accounts payable and accrued liabilities line item. | |||||||||
Related Party convertible notes payable consisted of the following at September 30, 2013 and December 31, 2012: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Convertible note payable, originally entered into on January 23, 2012, due on demand, with interest at 12% per annum with interest due on the demand date. Note was amended on March 2, 2012 due to a principal increase. | $ | 152,259 | $ | 152,259 | |||||
$ | 152,259 | $ | 152,259 | ||||||
The Company recorded $13,665 and $12,056 interest expense on the convertible note for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||
(B) | Loans payable-related parties | ||||||||
i) | As of September 30, 2013 the Company owed $569,631 to a related entity relating to monies advanced to the Company to fund operating expenses and to fund acquisitions. The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. The loan accrues interest at 12.00% per annum. The loan is unsecured and is due on demand. Accrued and unpaid interest on the note at September 30, 2013 was $52,402 and is included on the Balance sheet in the accounts payable and accrued liabilities line item. | ||||||||
The Company recorded $52,402 and $0 interest expense on the loan for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||
ii) | As of September 30, 2013 the Company has a senior secured promissory note in the principal amount of $200,000 to a related entity. The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. The Company assumed the note, along with accrued interest, on February 25, 2013 upon entering into an asset purchase agreement with Crescent Moon. (See Note 4) The note accrues interest at 16.00% per annum. The note is due on demand and secured by all assets of the Company. Accrued and unpaid interest on the note at September 30, 2013 was $60,360 and is included on the Balance sheet in the accounts payable and accrued liabilities line item.. | ||||||||
The Company recorded $29,195 and $0 interest expense on the note for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||
iii) | As of September 30, 2013 the Company owed $5,475 to an officer of the Company relating to monies advanced to the Company to fund operating expenses. The loan is unsecured and is due on demand. | ||||||||
iv) | On August 16, 2013 the Company issued 51 shares of preferred stock to a related entity, for services rendered, at a fair value of $730,000 ($14,314/share). The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. (See Note 13) |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||
Stockholders' Equity | ' | ||||||||
Note 13 Stockholders’ Equity | |||||||||
Stock Transactions | |||||||||
Issuance of Series A Preferred Stock | |||||||||
On August 16, 2013, by unanimous written consent of the Board of Directors, the Company issued 51 shares of the Company’s Series A Preferred Stock, par value $0.001 per share (the “Preferred Stock”), to Park Investment Holdings, LLC. Steven Spiegel, Director, has beneficial ownership of the Preferred Stock because Mr. Spiegel has a 5% ownership interest in Park Investment Holdings, LLC and Mr. Spiegel is the trustee for a trust that has a 95% ownership interest in Park Investment Holdings, LLC. | |||||||||
The rights of the Series A Preferred Stock are as follows: | |||||||||
Dividend rights – Initially, there will be no dividends due or payable on the Series A Preferred. Any future terms with respect to dividends shall be determined by the Board consistent with the Corporation’s Articles of Incorporation. Any and all such future terms concerning dividends shall be reflected in an amendment to this Certificate of Designation, which the Board shall promptly file or cause to be filed. | |||||||||
Voting rights – Each one (1) share of the Series A Preferred shall have voting rights equal to(x) 0.019607 multiplied by the total issued and outstanding shares of Common Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series A Preferred Stock shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Articles of Incorporation or bylaws. | |||||||||
Liquidation rights – The holders of Series A Preferred Stock shall have no rights (whether in the form of distributions or otherwise) in respect of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, and shall be subordinate to all other classes of the Corporation’s capital stock in respect thereto. | |||||||||
Protection Provisions – So long as any shares of Series A Preferred are outstanding, the Corporation shall not, without first obtaining the unanimous written consent of the holders of Series A Preferred, (i) alter or change the rights, preferences or privileges of the Series A Preferred so as to affect adversely the holders of Series A Preferred or (ii) create Pari Passu Shares or Senior Shares. | |||||||||
During the nine months ended September 30, 2013 the Company issued common stock for the following: | |||||||||
The Company issued a total of 3,000,000 shares of common stock in conjunction with an asset acquisition. | |||||||||
The Company issued a total of 2,491,000 shares of common stock to various consultants, for services rendered, at a fair value of $1,594,240 ($0.64/share). | |||||||||
The Company issued a total of 502,500 shares of common stock to attorneys and consultants to settle liabilities in the amount of $7,156. | |||||||||
The Company issued 200,000 shares of common stock to attorneys, for services rendered, at a fair value of $128,000 ($0.64/share). | |||||||||
The Company issued 150,000 shares of common stock to a consultant to settle liabilities in the amount of $25,673. | |||||||||
The Company issued 352,941 restricted shares of common stock to a creditor as compensation for financing costs of $90,000. The issuance of the 352,941 shares have been recorded at par value with a corresponding decrease to paid-in capital. Upon the sale of the shares by the creditor, the financing cost liability will be reduced by the amount of the proceeds with a corresponding increase to paid-in capital. The Company will still be liable for any shortfall from the proceeds realized by the creditor. The ultimate amount to be recorded in satisfaction of the debt will not exceed the balance of the financing cost recorded. As of September 30, 2013 the creditor did not sell any of these shares. | |||||||||
The Company issued 100,000 shares of common stock to three consultants, for services rendered, at a fair value of $51,000 ($0.51/share). | |||||||||
There was no stock issued during the nine months ended September 30, 2012. | |||||||||
Stock to be issued | |||||||||
During January 2012 the Company accrued a liability relating to 90,000 shares of common stock to be issued to attorneys, for services rendered, at a fair value of $1,282 ($0.014/share), based upon a third party valuation of the Company. | |||||||||
During March 2012 the Company accrued a liability relating to 25,000 shares of common stock to be issued to a consultant, for services rendered, at a fair value of $356 ($0.014/share), based upon a third party valuation of the Company. | |||||||||
During June 2012 the Company accrued a liability relating to 25,000 shares of common stock to be issued to a consultant, for services rendered, at a fair value of $356 ($0.014/share), based upon a third party valuation of the Company. | |||||||||
During September 2012 the Company accrued a liability relating to 100,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $1,424 ($0.014/share), based upon a third party valuation of the Company. | |||||||||
During December 2012 the Company accrued a liability relating to 50,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $712 ($0.014/share), based upon a third party valuation of the Company. | |||||||||
During March 2013 the Company accrued a liability relating to 50,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $32,000 ($0.64/share). | |||||||||
During May 2013 the Company accrued a liability relating to 25,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $8,250 ($0.33/share). | |||||||||
During June 2013 the Company accrued a liability relating to 25,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $6,000 ($0.24/share). | |||||||||
During July 2013 the Company accrued a liability relating to 100,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $43,000 ($0.43/share). | |||||||||
During September 2013 the Company accrued a liability relating to 25,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $4,400 ($0.176/share). | |||||||||
The following is a summary of the Company’s liability to be settled in stock: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Beginning balance, January 1 | $ | 10,146 | $ | 6,016 | |||||
Liability accrued during the period | 93,650 | 4,130 | |||||||
Liability settled during the period | (32,830 | ) | - | ||||||
Liability to be settled in stock | $ | 70,966 | $ | 10,146 |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |
Sep. 30, 2013 | ||
Commitments and contingencies | ' | |
Commitments and Contingencies | ' | |
Note 14 Commitments and Contingencies | ||
Litigations, Claims and Assessments | ||
The Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results. | ||
Assignment and Assumption Agreements | ||
On May 18, 2011, the Company entered into an assignment and assumption agreement (the “Assignment Agreement #1”) with a member of SnapTagz, LLC and a third party. The member assigned the exclusive right to a patent to the Company. In exchange, the Company assumed the obligation to pay a 3% royalty on all net profits realized from the monetization of the patent, not to exceed $310,000. The royalty payments are payable quarterly. In addition, the Company was required to pay a $10,000 royalty prepaid upon execution of the Assignment Agreement #1. | ||
In addition, on May 18, 2011, the Company entered into a second assignment and assumption agreement (the “Assignment Agreement #2”) with a member of SnapTagz, LLC and a third party. The member assigned the exclusive right to a patent to the Company. In exchange, the Company assumed the obligation to pay a 3% royalty on all net profits realized from the monetization of the patent within the United States of America and territories controlled by the United States of America. The royalty payments are payable quarterly. The Company is required to pay a minimum royalty of $3,000 for all quarters ended during the 2011 calendar year, $4,000 for all quarters ended during the 2012 calendar year, and $5,000 per quarter thereafter. | ||
License and Distribution Agreement | ||
On February 17, 2012, Wired Associates Solutions, Inc. a Nevada corporation (the “Licensor”), entered into a definitive product license and distribution agreement (the “Agreement”) by and between the Licensor and Crescent Moon Holdings, LLC., a South Carolina limited liability company that focuses on toy development and distribution (the “Licensee”). Upon execution of the Agreement, the Company ceased being a “shell company” (as such term is defined in Rule 12b-2 under the Exchange Act). | ||
Pursuant to the terms of the Agreement, for a one year period the Licensee will market, sell and distribute the Licensor’s consumer product, SnapTagz, for the benefit of the Licensor (the “Product Line”). As consideration for entering into the Agreement, Licensee agrees to pay the Licensor 6% of the gross sales of any items of the Product Line which are marketed, sold and distributed by the Licensee (the “Royalties”). Licensee will make payment to Licensor within thirty days after the end of each calendar quarter. Additionally, during the one year period commencing on February 17, 2012, Licensee shall pay to Licensor the minimum sum of $10,000, said amount being payable on the one year anniversary thereof and shall be creditable towards Royalties due to Licensor. | ||
As part of the asset purchase agreement with Crescent Moon (Note 4), this licensing agreement was assigned to the Company on February 25, 2013. | ||
Operating Leases | ||
The Company currently leases office and warehouse space in Oakville Ontario, Canada and office and warehouse space in Myrtle Beach, SC. | ||
The lease for office space in Oakville Ontario, Canada is on a month to month basis and calls for monthly payments of $1,380 plus a portion of the operating expenses. | ||
The lease for office and warehouse space in Myrtle Beach, SC is presently on a month to month basis and calls for monthly payments of $2,405. | ||
Consulting Agreements | ||
On May 13, 2012, the Company entered into a one year consulting agreement with Sandra R. Danon to provide product development services, guidance on manufacturing logistics, and sales development. The Company will compensate Ms. Danon a base consulting fee of $5,000 per month relating to this agreement. After the second month, Ms. Danon’s fee shall be increased periodically based on incoming revenues due to her performance. In addition, the Company will issue 150,000 shares of restricted common stock, of which 50,000 shares vested immediately and the remaining shares shall vest quarterly over the initial term of the agreement. | ||
On December 1, 2012, the Company entered into one year consulting agreement with Josh Ketroser to provide general business consulting services. The Company will compensate Mr. Ketroser $5,000 per month relating to this agreement. | ||
On January 3, 2013, the Company entered into a month to month consulting agreement with MFI Industries (“MFI”) to provide sales consulting services. The Company will compensate MFI $1,500 per month relating to this agreement. | ||
On March 12, 2013, the Company entered into a one year consulting agreement with Wave Consulting, Inc. (“WC”) to solicit potential customers to purchase the Company’s SnapTagz product. The Company will compensate WC as follows; | ||
● | WC shall be paid a commission of 5% of the gross sales revenues, less all discounts, allowances and returns generated by WC. | |
● | Monthly fee of $2,500 for the first 3 months of the agreement starting March 12, 2013. | |
● | Starting the fourth month of the agreement, at the Consultant’s request, advances on commissions of $2,500 per month, starting July 12, 2013. | |
● | 5,000 common stock options monthly, immediately exercisable with an exercise price of $0.75 and a term of 24 months. | |
● | The Company shall issue additional common stock options as a bonus to WC, based on Marketing and Branding milestones. | |
On July 16, 2013, the Company entered into a one year consulting agreement with Garden State Securities, Inc. (“GSS”) as a non-exclusive financial advisor. The Company will compensate GSS as follows; | ||
● | 100,000 restricted shares of common stock of the Company | |
During the nine months ended September 30, 2013, 100,000 shares of common stock were issued relating to this agreement. These shares were valued at $0.51 per share the quoted closing trading price, or $51,000. | ||
Employment Agreements | ||
On February 25, 2013, the Company entered into a two year employment agreement with Peter Gasca, Jr. as its Chief Executive Officer of Wild Creations, Inc. The Company will compensate Mr. Gasca as follows; | ||
● | Monthly salary of $7,000 per month. | |
● | Stock incentive - 750,000 shares of common stock upon the Company achieving Gross Revenue of $10,000,000. | |
● | An additional 750,000 shares of common stock upon the Company achieving Gross Revenue of $15,000,000. | |
● | The executive shall only be eligible to receive such incentive shares if one or both milestones are achieved during the two year employment agreement | |
. | ||
On February 25, 2013, the Company entered into a two year employment agreement with Rhett Power as its Chief Marketing Officer of Wild Creations, Inc. The Company will compensate Mr. Power as follows; | ||
● | Monthly salary of $7,000 per month. | |
● | Stock incentive - 750,000 shares of common stock upon the Company achieving Gross Revenue of $10,000,000. | |
● | An additional 750,000 shares of common stock upon the Company achieving Gross Revenue of $15,000,000. | |
● | The executive shall only be eligible to receive such incentive shares if one or both milestones are achieved during the two year employment agreement. | |
Investment Agreement | ||
On July 30, 2013, Wild Craze, Inc. (the “Company”) entered into an Investment Agreement (the “Investment Agreement”) with KVM Capital Partners (“KVM”), whereby the parties also agreed to enter into a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the terms of the Investment Agreement, for a period of thirty-six (36) months commencing on the trading day immediately following date of effectiveness of the Registration Statement (as defined below), KVM shall commit to purchase up to $2,800,000 of the Company’s common stock, par value $0.001 per share (the “Shares”), pursuant to Puts (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Investment Agreement is equal to a twenty-two and one half (22.5%) percent discount to the average of the three lowest closing bids as calculated using the average of the three lowest closing bids during the last seven trading days after the Company delivers to KVM a Put notice in writing requiring KVM to purchase shares of the Company, subject to the terms of the Investment Agreement. | ||
The “Registrable Securities” include (i) the Shares and (ii) any shares of capital stock issued or issuable with respect to the Shares, if any, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, which have not been (x) included in the Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances meeting all of the applicable conditions of Rule 144 (or any similar provision then in force) under the 1933 Act. | ||
As further consideration for KVM entering into and structuring the Investment Agreement, the Company shall pay to KVM a facility fee by issuing to KVM 100,000 shares of the Company’s common stock. | ||
The Company accrued a liability relating to 100,000 shares of common stock to be issued to KVM, at a fair value of $43,000 ($0.43/share). The Company recorded deferred financing costs of $43,000 and will amortize the costs to stock issuance as shares are purchased over the term of the agreement. | ||
Registration Rights Agreement | ||
On July 30, 2013, the Company entered into the Registration Rights Agreement with KVM. Pursuant to the terms of the Registration Rights Agreement, the Company is obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC’) to cover the Registrable Securities within twenty-one (21) days of closing. The Company must use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC. In the event that the Registration Statement is not declared effective by the SEC within 180 days of the date of the Registration Rights Agreement, the Company shall issue to the Investor $25,000 of restricted shares of the Company’s Common Stock as calculated using the average of the three lowest closing bids during the last seven trading days of the period ending 180 days after the date of the Registration Rights Agreement. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 15 Subsequent Events | |
The Company has evaluated all events that occurred after the balance sheet date through the date when the consolidated financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent events to be disclosed. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||||||
Basis of Presentation | |||||||||||||||||||||
The condensed consolidated financial statements and accompanying footnotes are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||||||
The unaudited financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2012 filed on April 16, 2013. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosures, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the year ended December 31, 2012 have been omitted. The results of operations for the interim periods presented are not necessarily indicative of results for the entire year ending December 31, 2013. | |||||||||||||||||||||
Principles of Consolidation | ' | ||||||||||||||||||||
Principles of consolidation | |||||||||||||||||||||
All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||||||
Use of Estimates | ' | ||||||||||||||||||||
Use of Estimates | |||||||||||||||||||||
The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. | |||||||||||||||||||||
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates. | |||||||||||||||||||||
Risk and Uncertainties | ' | ||||||||||||||||||||
Risks and Uncertainties | |||||||||||||||||||||
The Company’s condensed consolidated operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure. See Note 3 regarding going concern matters. | |||||||||||||||||||||
Cash | ' | ||||||||||||||||||||
Cash | |||||||||||||||||||||
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at September 30, 2013 and December 31, 2012. | |||||||||||||||||||||
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. | |||||||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ' | ||||||||||||||||||||
Accounts receivable and allowance for doubtful accounts | |||||||||||||||||||||
Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable, net of the allowance for doubtful accounts. As of September 30, 2013 and December 31, 2012 the Company had an allowance for doubtful accounts of $5,800 and $0, respectively. | |||||||||||||||||||||
Inventories | ' | ||||||||||||||||||||
Inventories | |||||||||||||||||||||
Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) valuation method. | |||||||||||||||||||||
Depreciation | ' | ||||||||||||||||||||
Depreciation | |||||||||||||||||||||
Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives. | |||||||||||||||||||||
Asset lives for financial statement reporting of depreciation are: | |||||||||||||||||||||
Machinery and equipment | 2-7 years | ||||||||||||||||||||
Leasehold improvements | 5 years | ||||||||||||||||||||
Goodwill | ' | ||||||||||||||||||||
Goodwill | |||||||||||||||||||||
Goodwill is measured for impairment on an annual basis (December 1 for us) and between annual tests if events indicate that an impairment exists. The Company calculates impairment as the excess of the carrying value of its indefinite-lived assets over their estimated fair value. If the carrying value exceeds the estimate of fair value a write-down is recorded. | |||||||||||||||||||||
Intangibles | ' | ||||||||||||||||||||
Intangibles | |||||||||||||||||||||
Intangibles are comprised of trade names and customer lists. In accordance with ASC 350, intangible assets with indefinite lives are not amortized but instead are measured for impairment at least annually (December 1 for us), or when events indicate that an impairment exists. The Company calculates impairment as the excess of the carrying value of its indefinite-lived assets over their estimated fair value. If the carrying value exceeds the estimate of fair value a write-down is recorded. The Company amortizes it’s intangibles with finite useful lives over their respective useful lives. | |||||||||||||||||||||
Long-Lived Assets | ' | ||||||||||||||||||||
Long-Lived Assets | |||||||||||||||||||||
Management regularly reviews property and equipment and other long-lived assets, including certain definite-lived intangible assets, for possible impairment. This review occurs annually (December 1 for us), or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If there is indication of impairment, generally, management then prepares an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. The fair value is estimated using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks. Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions. | |||||||||||||||||||||
Debt Issue Costs and Debt Discount | ' | ||||||||||||||||||||
Debt Issue Costs and Debt Discount | |||||||||||||||||||||
These items are amortized over the life of the debt to interest expense. If a conversion, extinguishment or repayment of the underlying debt occurs, a proportionate share of these amounts is immediately expensed. | |||||||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||
The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 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 unobservable 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 amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, notes receivable and other current assets, accounts payable and accrued liabilities approximate their fair values because of the short maturity of these instruments. | |||||||||||||||||||||
We have determined that it is not practical to estimate the fair value of our notes payable because of their unique nature and the costs that would be incurred to obtain an independent valuation. We do not have comparable outstanding debt on which to base an estimated current borrowing rate or other discount rate for purposes of estimating the fair value of the notes payable and we have not been able to develop a valuation model that can be applied consistently in a cost efficient manner. These factors all contribute to the impracticability of estimating the fair value of the notes payable. At September 30, 2013 and December 31, 2012, the carrying value of the notes payable and accrued interest was $1,287,392 and $405,926. Accrued interest is included on the Balance sheet in the accounts payable and accrued liabilities line item. | |||||||||||||||||||||
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. It is not, however, practical to determine the fair value of loans payable –related parties due to their related party nature. | |||||||||||||||||||||
The Company’s Level 3 financial liabilities consist of the derivative conversion features issued in July 2013 and August 2013 for which there is no current market for this security such that the determination of fair value requires significant judgment or estimation. The Company valued the conversion features using a binomial model. These models incorporate transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as assumptions about future financings, volatility, and holder behavior as of the date of issuance and each balance sheet date. | |||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | ' | ||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | |||||||||||||||||||||
The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liability at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative liability. | |||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: | |||||||||||||||||||||
30-Sep-13 | Fair Value Measurement Using | ||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivative conversion features | $ | 409,596 | $ | - | $ | - | $ | 409,596 | $ | 409,596 | |||||||||||
31-Dec-12 | Fair Value Measurement Using | ||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
The Company adopted the disclosure requirements of ASU 2011-04, Fair Value Measurements, during the year ended December 31, 2012. The unobservable level 3 inputs used by the Company was the expected volatility assumption used in the option pricing model. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity. | |||||||||||||||||||||
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 period December 31, 2011 through September 30, 2013: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Level 3 Inputs | |||||||||||||||||||||
Derivative | Total | ||||||||||||||||||||
conversion | |||||||||||||||||||||
features | |||||||||||||||||||||
Balance, December 31, 2011 | $ | - | $ | - | |||||||||||||||||
Purchases, issuances and settlements | - | - | |||||||||||||||||||
Change in fair value | - | - | |||||||||||||||||||
Balance, December 31, 2012 | - | - | |||||||||||||||||||
Purchases, issuances and settlements | 456,174 | 456,174 | |||||||||||||||||||
Change in fair value | (42,548 | ) | (42,548 | ) | |||||||||||||||||
Reduction from repayment of debt | (4,030 | ) | (4,030 | ) | |||||||||||||||||
Balance, September 30, 2013 | $ | 409,596 | $ | 409,596 | |||||||||||||||||
Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements is the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement. | |||||||||||||||||||||
Discount on Debt | ' | ||||||||||||||||||||
Discount on Debt | |||||||||||||||||||||
The Company allocated the proceeds received from convertible debt instruments between the underlying debt instruments and has recorded the conversion feature as a liability in accordance with FASB Accounting Standard Codification 815-15 (ASC 815-15). The conversion feature and certain other features that are considered embedded derivative instruments, such as a conversion reset provision have been recorded at their fair value within the terms of ASC 815-15 as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The value of the embedded derivative liability was bifurcated from the debt host contract and recorded as a derivative liability, which resulted in a reduction of the initial carrying amount (as unamortized discount) of the notes. The conversion liability is marked to market each reporting period with the resulting gains or losses shown in the 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 ASC 815-15. 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 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. | |||||||||||||||||||||
Research and Development | ' | ||||||||||||||||||||
Research and Development | |||||||||||||||||||||
Research and development is expensed as incurred. There was no such expense for the nine months ended September 30, 2013 and 2012. | |||||||||||||||||||||
Share-Based Payments | ' | ||||||||||||||||||||
Share-Based Payments | |||||||||||||||||||||
Generally, all forms of share-based payments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments is recorded as general and administrative expense. During the nine months ended September 30, 2013 the Company recorded an expense relating to 225,000 shares of common stock to be issued to consultants, for services rendered, at a fair value of $93,650 (range $0.176-$0.64/share). During the nine months ended September 30, 2013 the Company issued 2,791,000 shares of common stock to consultants, for services rendered, at a fair value of $1,773,240 (range $0.51-$0.64/share). During the nine months ended September 30, 2012 the Company recorded an expense relating to 240,000 shares of common stock to be issued to attorneys and consultants, for services rendered, at a fair value of $3,418 ($0.014/share). | |||||||||||||||||||||
On July 24, 2013 the Company issued 352,941 restricted shares of common stock to a creditor as compensation for financing costs of $90,000. The issuance of the 352,941 shares have been recorded at par value with a corresponding decrease to paid-in capital. Upon the sale of the shares by the creditor, the financing cost liability will be reduced by the amount of the proceeds with a corresponding increase to paid-in capital. The Company will still be liable for any shortfall from the proceeds realized by the creditor. The ultimate amount to be recorded in satisfaction of the debt will not exceed the balance of the financing cost recorded. As of September 30, 2013 the creditor did not sell any of these shares. | |||||||||||||||||||||
On August 16, 2013 the Company issued 51 shares of preferred stock to a related entity, for services rendered, at a fair value of $730,000 ($14,314/share). The sole member of the Board of Directors and significant shareholder of the Company is a controlling shareholder of the related entity. (See Note 13). | |||||||||||||||||||||
Income Taxes | ' | ||||||||||||||||||||
Income Taxes | |||||||||||||||||||||
Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. | |||||||||||||||||||||
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||||||||||||||
For income tax benefits arising from uncertain income tax positions, a tax benefit arising from an uncertain tax position can only be recognized for financial reporting purposes if, and to the extent that, the position is more likely than not to be sustained in an audit by the applicable taxing authority. | |||||||||||||||||||||
Penalties related to uncertain tax positions are recorded as a component of general and administrative expenses. Interest relating to uncertain tax positions is recorded as a component of interest expense. The Company has not recorded any uncertain tax positions at September 30, 2013 and December 31, 2012. | |||||||||||||||||||||
Penalties and interest assessed by income taxing authorities are included in general and administrative expenses. | |||||||||||||||||||||
Revenue | ' | ||||||||||||||||||||
Revenue | |||||||||||||||||||||
The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products. | |||||||||||||||||||||
The Company meets these criteria upon shipment. | |||||||||||||||||||||
Advertising | ' | ||||||||||||||||||||
Advertising | |||||||||||||||||||||
The Company expenses advertising when incurred. Advertising expense for the nine months ended September 30, 2013 and 2012 was $35,055 and $0, respectively. | |||||||||||||||||||||
Basic Earnings Per Share | ' | ||||||||||||||||||||
Basic Earnings per Share | |||||||||||||||||||||
Basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible debt, exercise of stock options and warrants, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. | |||||||||||||||||||||
The Company had the following potential common stock equivalents at September 30, 2013: | |||||||||||||||||||||
On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259. | 1,045,256 | ||||||||||||||||||||
In July 2013 the Company issued a convertible note in the principal amount of $68,000 to an investor. The convertible note has a term of nine months, maturing March 27, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. | 962,310 | ||||||||||||||||||||
On July 23, 2013, Wild Craze, Inc. (the “Company”) closed a Credit Agreement (the “Credit Agreement”) by and among the Company, Wild Creations, Inc. and SnapTagz LLC (the “Borrowers”) and TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, as lender (“TCA”). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to a maximum of $2 million for general operating expenses. An initial amount of $300,000 was funded by TCA at the closing of the Credit Agreement. Any increase in the amount extended to the Borrowers shall be at the discretion of TCA. TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion. | 2,426,146 | ||||||||||||||||||||
In August 2013 the Company issued a convertible note in the principal amount of $63,000 to an investor. The convertible note has a term of nine months, maturing May 30, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. | 891,552 | ||||||||||||||||||||
Stock options, with exercise price of $0.75 per share | 30,000 | ||||||||||||||||||||
Liability to be settled in stock | 285,000 | ||||||||||||||||||||
Total common stock equivalents | 5,640,264 | ||||||||||||||||||||
Since the Company reflected a net loss for the three and nine months ended September 30, 2013, the inclusion of any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. | |||||||||||||||||||||
The Company had the following potential common stock equivalents at December 31, 2012: | |||||||||||||||||||||
On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259. | 10,722,465 | ||||||||||||||||||||
Liability to be issued in stock | 712,500 | ||||||||||||||||||||
Total common stock equivalents | 11,434,965 | ||||||||||||||||||||
Since the Company reflected a net loss in 2012, the inclusion of any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. | |||||||||||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||||||
On July 18, 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, except as follows. The unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets to the extent (a) a net operating loss carry forward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or (b) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax assets for such purpose. The amendments in ASU 20103-11 are effective prospectively for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on our financial position, results of operations or cash flows. | |||||||||||||||||||||
Management does not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||||||
Schedule of Property and Equipment Useful Lives | ' | ||||||||||||||||||||
Asset lives for financial statement reporting of depreciation are: | |||||||||||||||||||||
Machinery and equipment | 2-7 years | ||||||||||||||||||||
Leasehold improvements | 5 years | ||||||||||||||||||||
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: | |||||||||||||||||||||
30-Sep-13 | Fair Value Measurement Using | ||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Derivative conversion features | $ | 409,596 | $ | - | $ | - | $ | 409,596 | $ | 409,596 | |||||||||||
31-Dec-12 | Fair Value Measurement Using | ||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ' | ||||||||||||||||||||
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 period December 31, 2011 through September 30, 2013: | |||||||||||||||||||||
Fair Value Measurement Using | |||||||||||||||||||||
Level 3 Inputs | |||||||||||||||||||||
Derivative | Total | ||||||||||||||||||||
conversion | |||||||||||||||||||||
features | |||||||||||||||||||||
Balance, December 31, 2011 | $ | - | $ | - | |||||||||||||||||
Purchases, issuances and settlements | - | - | |||||||||||||||||||
Change in fair value | - | - | |||||||||||||||||||
Balance, December 31, 2012 | - | - | |||||||||||||||||||
Purchases, issuances and settlements | 456,174 | 456,174 | |||||||||||||||||||
Change in fair value | (42,548 | ) | (42,548 | ) | |||||||||||||||||
Reduction from repayment of debt | (4,030 | ) | (4,030 | ) | |||||||||||||||||
Balance, September 30, 2013 | $ | 409,596 | $ | 409,596 | |||||||||||||||||
Schedule of Potential Common Stock Equivalents | ' | ||||||||||||||||||||
The Company had the following potential common stock equivalents at September 30, 2013: | |||||||||||||||||||||
On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259. | 1,045,256 | ||||||||||||||||||||
In July 2013 the Company issued a convertible note in the principal amount of $68,000 to an investor. The convertible note has a term of nine months, maturing March 27, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. | 962,310 | ||||||||||||||||||||
On July 23, 2013, Wild Craze, Inc. (the “Company”) closed a Credit Agreement (the “Credit Agreement”) by and among the Company, Wild Creations, Inc. and SnapTagz LLC (the “Borrowers”) and TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, as lender (“TCA”). Pursuant to the Credit Agreement, TCA agreed to loan the Company up to a maximum of $2 million for general operating expenses. An initial amount of $300,000 was funded by TCA at the closing of the Credit Agreement. Any increase in the amount extended to the Borrowers shall be at the discretion of TCA. TCA may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Revolving Note into shares of the Company’s common stock at a conversion price equal to 85% of the lowest daily volume weighted average price of the Company’s common stock during the five trading days immediately prior to such applicable conversion date, in each case subject to TCA not being able to beneficially own more than 4.99% of our outstanding common stock upon any conversion. | 2,426,146 | ||||||||||||||||||||
In August 2013 the Company issued a convertible note in the principal amount of $63,000 to an investor. The convertible note has a term of nine months, maturing May 30, 2014, and accrues interest at 8% per annum. The holder of the convertible note has the right from 180 days after the issuance thereof until such time as the convertible note is fully paid, to convert any outstanding and unpaid principal portion thereof into shares of common stock. The conversion price is adjustable, based on a 42% discount to the average of the lowest three trading prices during the ten trading day period ending on the latest complete trading day prior to the conversion date, in each case subject to the note-holder not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion. | 891,552 | ||||||||||||||||||||
Stock options, with exercise price of $0.75 per share | 30,000 | ||||||||||||||||||||
Liability to be settled in stock | 285,000 | ||||||||||||||||||||
Total common stock equivalents | 5,640,264 | ||||||||||||||||||||
The Company had the following potential common stock equivalents at December 31, 2012: | |||||||||||||||||||||
On January 23, 2012, the Company issued a senior secured convertible promissory note in the principal amount of $102,259 (the “Note”) in favor of Omega Global Enterprises, LLC, a Delaware limited liability company (“Omega”). The Note is due on demand and bears interest at a rate of twelve percent (12%) per annum. The Note is convertible into shares of the Company’s common stock at a price equal to the average of the immediately preceding three volume weighted average prices prior to receipt by the Company of a notice of conversion delivered by the holder. On February 24, 2012, Omega advanced the Company $50,000 and on March 2, 2012 the note was amended and the note principal was increased to $152,259. | 10,722,465 | ||||||||||||||||||||
Liability to be issued in stock | 712,500 | ||||||||||||||||||||
Total common stock equivalents | 11,434,965 |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Crescent Moon [Member] | ' | ||||||||
Components of Purchase Price | ' | ||||||||
The following sets forth the components of the purchase price: | |||||||||
Purchase Price: | |||||||||
Cash | $ | 100,000 | |||||||
2,000,000 shares of common stock, ($0.64/share), based upon the fair value of the shares issued | 1,280,000 | ||||||||
Assumed Note | 231,165 | ||||||||
Total Purchase Price | 1,611,165 | ||||||||
Assets acquired | |||||||||
Cash | 234 | ||||||||
Accounts Receivable | 70,974 | ||||||||
Inventory | 179,291 | ||||||||
Fixed Assets | 59,310 | ||||||||
Note Receivable | 14,263 | ||||||||
Total assets acquired | 324,072 | ||||||||
Liabilities assumed | |||||||||
Accounts payable | 468 | ||||||||
Total liabilities assumed | 468 | ||||||||
Net assets acquired | 323,604 | ||||||||
Excess purchase price | $ | 1,287,561 | |||||||
Schedule of Excess Purchase Price Allocation on Intangible Assets and Goodwill | ' | ||||||||
Based on a preliminary independent appraisal, the Company has tentatively allocated the excess purchase price to intangible assets and Goodwill as follows: | |||||||||
Customer List | $ | 350,951 | |||||||
Trade Name | $ | 298,104 | |||||||
Goodwill | $ | 638,506 | |||||||
FlipOutz [Member] | ' | ||||||||
Components of Purchase Price | ' | ||||||||
The following sets forth the components of the purchase price: | |||||||||
Purchase Price: | |||||||||
1,000,000 shares of common stock, ($0.64/share), based upon the fair value of the shares issued | 640,000 | ||||||||
Contingent stock consideration | 396,816 | ||||||||
Total Purchase Price | 1,036,816 | ||||||||
Assets acquired | |||||||||
Cash | 270 | ||||||||
Accounts Receivable | 345 | ||||||||
Inventory | 14,785 | ||||||||
Total assets acquired | 15,400 | ||||||||
Liabilities assumed | |||||||||
Total liabilities assumed | - | ||||||||
Net assets acquired | 15,400 | ||||||||
Excess purchase price | $ | 1,021,416 | |||||||
Schedule of Excess Purchase Price Allocation on Intangible Assets and Goodwill | ' | ||||||||
Based on a preliminary independent appraisal, the Company has tentatively allocated the excess purchase price to intangible assets and Goodwill as follows: | |||||||||
Customer List | $ | 50,544 | |||||||
Trade Name | $ | 24,236 | |||||||
Goodwill | $ | 946,636 | |||||||
Pro-forma Operation Results of Acquisition Transactions | ' | ||||||||
The pro forma amounts presented are not necessarily indicative of the actual operation results had the acquisition transactions occurred as of January 1, 2012. | |||||||||
For the Nine Months Ended | |||||||||
September 30, 2013 | September 30, 2012 | ||||||||
Revenues | $ | 621,919 | $ | 847,844 | |||||
Net loss | (3,539,412 | ) | (524,828 | ) | |||||
Loss per share of common stock | (0.11 | ) | (0.02 | ) | |||||
Basic and diluted | 32,018,295 | 29,123,760 |
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of Property, Plant and Equipment | ' | ||||||||
Property, plant and equipment on September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, 2013 | 31-Dec-12 | ||||||||
Machinery and Equipment | $ | 61,310 | $ | - | |||||
Leasehold Improvements | 4,500 | - | |||||||
Total | 65,810 | - | |||||||
Less: Accumulated Depreciation | 11,777 | - | |||||||
$ | 54,033 | $ | - |
Goodwill_Tables
Goodwill (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of Goodwill | ' | ||||||||||||||||
There were no balances or activity for Goodwill during 2012. The following table summarizes changes in our Goodwill as of September 30, 2013: | |||||||||||||||||
December 31, 2012 | Acquisitions | Impairment | 30-Sep-13 | ||||||||||||||
Charges | |||||||||||||||||
Goodwill | $ | - | $ | 1,585,142 | $ | - | $ | 1,585,142 | |||||||||
$ | - | $ | 1,585,142 | $ | - | $ | 1,585,142 |
Intangible_Assets_Tables
Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||
Schedule of Changes in Intangible Assets | ' | ||||||||||||||||||||
There were no balances or activity for intangible assets during 2012. The following table summarizes changes in our intangible assets as of September 30, 2013: | |||||||||||||||||||||
December 31, 2012 | Acquisitions | Accumulated Amortization | Impairment Charges | 30-Sep-13 | |||||||||||||||||
Customer List | $ | - | $ | 401,495 | $ | (21,291 | ) | $ | - | $ | 380,204 | ||||||||||
Trade Name | - | 322,340 | - | - | 322,340 | ||||||||||||||||
$ | - | $ | 723,835 | $ | (21,291 | ) | $ | - | $ | 702,544 | |||||||||||
Summary of Future Amortization Expense | ' | ||||||||||||||||||||
Amortization expense for the next five years is as follows: | |||||||||||||||||||||
Year ending December 31: | |||||||||||||||||||||
2013 (remainder of the year) | $ | 9,126 | |||||||||||||||||||
2014 | 36,500 | ||||||||||||||||||||
2015 | 36,500 | ||||||||||||||||||||
2016 | 36,500 | ||||||||||||||||||||
2017 | 36,500 | ||||||||||||||||||||
Thereafter | 225,078 | ||||||||||||||||||||
$ | 380,204 |
Accounts_Payable_and_Accrued_L1
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ' | ||||||||
Schedule of Accounts Payable and Accrued Liabilities | ' | ||||||||
Accounts payable and accrued liabilities consist of the following: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Accounts payable | $ | 287,832 | $ | 112,355 | |||||
Sales tax payable | 6,785 | - | |||||||
Accrued expenses | 91,680 | 10,042 | |||||||
Accrued payroll | 14,000 | - | |||||||
Accrued interest convertible notes | 2,120 | - | |||||||
Accrued interest – related party | 143,076 | 16,649 | |||||||
$ | 545,492 | $ | 139,046 |
Convertible_Notes_Payable_Tabl
Convertible Notes Payable (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Summary of Convertible Notes Payable | ' | ||||||||
Convertible notes payable consisted of the following at September 30, 2013 and December 31, 2012: | |||||||||
September 30, 2013 | 31-Dec-12 | ||||||||
Convertible notes payable | $ | 431,000 | $ | - | |||||
Discount on convertible notes | (199,519 | ) | - | ||||||
Repayments | (16,650 | ) | - | ||||||
Convertible notes payable, net | 214,831 | - | |||||||
Long-term portion | - | - | |||||||
Current maturities | $ | 214,831 | $ | - | |||||
Summary of Fair Value of Derivative Liabilities | ' | ||||||||
The fair value of the Company’s derivative liabilities at the commitment and re-measurement dates were based upon the following management assumptions as of the commitment date and September 30, 2013: | |||||||||
Commitment Date | 30-Sep-13 | ||||||||
Expected dividends | 0 | % | 0 | % | |||||
Expected volatility | 133%-144% | 133%-144 | % | ||||||
Expected term: | 5.9 months -8.4 months | 3.6 months – 8 months | |||||||
Risk free interest rate | 0.07% - 0.13 | % | 0.02% - 0.10 | % | |||||
Summary of Debt Discount | ' | ||||||||
The following is a summary of the Company’s debt discount: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Debt discount | $ | 284,703 | $ | - | |||||
Amortization of debt discount | (85,184 | ) | - | ||||||
Debt discount - net | $ | 199,519 | $ | - |
Debt_Issuance_Costs_Tables
Debt Issuance Costs (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Debt Issuance Costs | ' | ||||
Schedule of Debt Issuance Cost | ' | ||||
Debt issuance costs, net are as follows: | |||||
Balance December 31, 2012 | $ | - | |||
Debt issuance costs – 2013 financings | 137,600 | ||||
Amortization of debt issue costs during the nine months ended September 30, 2013 | (53,436 | ) | |||
Balance – September 30, 2013 | $ | 84,164 |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Schedule of Related Party Convertible Notes Payable | ' | ||||||||
Related Party convertible notes payable consisted of the following at September 30, 2013 and December 31, 2012: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Convertible note payable, originally entered into on January 23, 2012, due on demand, with interest at 12% per annum with interest due on the demand date. Note was amended on March 2, 2012 due to a principal increase. | $ | 152,259 | $ | 152,259 | |||||
$ | 152,259 | $ | 152,259 |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||
Schedule of Company's Liability to be Settled in Stock | ' | ||||||||
The following is a summary of the Company’s liability to be settled in stock: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Beginning balance, January 1 | $ | 10,146 | $ | 6,016 | |||||
Liability accrued during the period | 93,650 | 4,130 | |||||||
Liability settled during the period | (32,830 | ) | - | ||||||
Liability to be settled in stock | $ | 70,966 | $ | 10,146 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | |||
Aug. 16, 2013 | Jul. 24, 2013 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Cash equivalents | ' | ' | ' | $0 | ' | $0 |
Allowance for doubtful accounts | ' | ' | ' | 5,800 | ' | 0 |
Notes payable | ' | ' | ' | 1,287,392 | ' | 1,287,392 |
Accrued interest | ' | ' | ' | 405,926 | ' | 405,926 |
Research and development | ' | ' | ' | 0 | 0 | ' |
Common stock issued to attorneys and consultants for services, shares | 51 | ' | 90,000 | 2,791,000 | 240,000 | ' |
Common stock issued to attorneys and consultants for services | 730,000 | ' | 1,282 | 1,773,241 | 3,418 | ' |
Stock issuance, price per share | $14,314 | ' | $0.01 | ' | $0.01 | ' |
Restricted stock issued during period Share for financing costs, shares | ' | 352,941 | ' | ' | ' | ' |
Restricted stock issued during period Share for financing costs | ' | 90,000 | ' | ' | ' | ' |
Uncertain tax positions | ' | ' | ' | 0 | ' | 0 |
Advertising expense | ' | ' | ' | 35,055 | 0 | ' |
Minimum [Member] | ' | ' | ' | ' | ' | ' |
Stock issuance, price per share | ' | ' | ' | $0.51 | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' | ' |
Stock issuance, price per share | ' | ' | ' | $0.64 | ' | ' |
Accured Liability [Member] | ' | ' | ' | ' | ' | ' |
Common stock issued to attorneys and consultants for services, shares | ' | ' | ' | 225,000 | ' | ' |
Common stock issued to attorneys and consultants for services | ' | ' | ' | $93,650 | ' | ' |
Stock issuance, price per share | ' | ' | ' | $0.18 | ' | ' |
Accrued Liability [Member] | Maximum [Member] | ' | ' | ' | ' | ' | ' |
Stock issuance, price per share | ' | ' | ' | $0.64 | ' | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Schedule of Property and Equipment Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Machinery And Equipment [Member] | Minimum [Member] | ' |
Property and equipment useful lives | '2 years |
Machinery And Equipment [Member] | Maximum [Member] | ' |
Property and equipment useful lives | '7 years |
Leasehold Improvements [Member] | ' |
Property and equipment useful lives | '5 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Derivative conversion features | $409,596 | ' |
Level 1 [Member] | ' | ' |
Derivative conversion features | ' | ' |
Level 2 [Member] | ' | ' |
Derivative conversion features | ' | ' |
Level 3 [Member] | ' | ' |
Derivative conversion features | 409,596 | ' |
Carrying Value [Member] | ' | ' |
Derivative conversion features | $409,596 | ' |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Fair Value of Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Accounting Policies [Abstract] | ' | ' |
Balance | ' | ' |
Purchases, issuances and settlements | 456,174 | ' |
Change in fair value | -42,548 | ' |
Reduction from repayment of debt | -4,030 | ' |
Balance | 409,596 | ' |
Balance | ' | ' |
Purchases, issuances and settlements | 456,174 | ' |
Change in fair value | -42,548 | ' |
Reduction from repayment of debt | -4,030 | ' |
Balance | $409,596 | ' |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies - Schedule of Potential Common Stock Equivalents (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Stock options, with exercise price of $0.75 per share | 30,000 | ' |
Liability to be settled in stock | 285,000 | 712,500 |
Total common stock equivalents | 5,640,264 | 11,434,965 |
Credit Agreement [Member] | ' | ' |
Conversion of debt into common stock | 2,426,146 | ' |
Omega Global Enterprises, LLC [Member] | ' | ' |
Conversion of debt into common stock | 1,045,256 | 10,722,465 |
Investor [Member] | ' | ' |
Conversion of debt into common stock | 962,310 | ' |
Investor 2 [Member] | ' | ' |
Conversion of debt into common stock | 891,552 | ' |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies - Schedule of Potential Common Stock Equivalents (Details) (Parenthetical) (USD $) | 0 Months Ended | 0 Months Ended | 1 Months Ended | ||||
Sep. 30, 2013 | Dec. 31, 2012 | Jul. 23, 2013 | Mar. 02, 2012 | Jan. 23, 2012 | Jul. 31, 2013 | Aug. 31, 2013 | |
Credit Agreement [Member] | Omega Global Enterprises, LLC [Member] | Omega Global Enterprises, LLC [Member] | Investor [Member] | Investor 2 [Member] | |||
Senior secured convertible promissory note | $431,000 | ' | ' | ' | $102,259 | $68,000 | $63,000 |
Note bears interest rate | ' | ' | ' | ' | 12.00% | 8.00% | 8.00% |
Advances from related party | ' | ' | ' | ' | 50,000 | ' | ' |
Increase in notes | ' | ' | ' | 152,259 | 152,259 | ' | ' |
Stock options, exercise price | $0.75 | ' | ' | ' | ' | ' | ' |
Notes maturity date | 5-Jun-15 | ' | ' | ' | ' | 27-Mar-14 | 30-May-14 |
Conversion price of notes adjustable on discount rate | ' | ' | 85.00% | ' | ' | 42.00% | 42.00% |
Maximum amount of loan owed | ' | ' | 2,000,000 | ' | ' | ' | ' |
Initial amount funded by TCA | ' | ' | $300,000 | ' | ' | ' | ' |
Maximum percentage of ownership owns upon conversion of outstanding common stock | ' | ' | 4.99% | ' | ' | 9.99% | 9.99% |
Going_Concern_Details_Narrativ
Going Concern (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Going Concern | ' | ' | ' | ' | ' |
Net income (loss) | $1,212,986 | $115,185 | $3,508,530 | $287,926 | $413,860 |
Net cash used in operating activities | ' | ' | 476,532 | 239,292 | ' |
Accumulated net loss | 4,125,274 | ' | 4,125,274 | ' | 616,744 |
Working capital deficit | $1,562,254 | ' | $1,562,254 | ' | ' |
Acquisitions_Details_Narrative
Acquisitions (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Crescent Moon [Member] | ' |
Common stock shares issued in business acquisition | 2,000,000 |
Acquisition of assets exchange value | $100,000 |
Business acquisition, share price | $0.00 |
Business combination, total price paid | 1,611,165 |
Business combination, accrued interest | 231,165 |
Customer list assigned useful life | '11 years |
FlipOutz [Member] | ' |
Common stock shares issued in business acquisition | 1,000,000 |
Acquisition of assets exchange value | 396,816 |
Business acquisition, share price | $0.00 |
Business combination, total price paid | $1,036,816 |
Customer list assigned useful life | '11 years |
Components_of_Purchase_Price_D
Components of Purchase Price (Details) (USD $) | Sep. 30, 2013 |
Crescent Moon [Member] | ' |
Cash | $100,000 |
Common stock based upon the fair value of the shares issued | 1,280,000 |
Assumed Note | 231,165 |
Total Purchase Price | 1,611,165 |
Cash | 234 |
Accounts Receivable | 70,974 |
Inventory | 179,291 |
Fixed Assets | 59,310 |
Note Receivable | 14,263 |
Total assets acquired | 324,072 |
Accounts payable | 468 |
Total liabilities assumed | 468 |
Net assets acquired | 323,604 |
Excess purchase price in business acquisition | 1,287,561 |
FlipOutz [Member] | ' |
Common stock based upon the fair value of the shares issued | 640,000 |
Contingent stock consideration | 396,816 |
Total Purchase Price | 1,036,816 |
Cash | 270 |
Accounts Receivable | 345 |
Inventory | 14,785 |
Total assets acquired | 15,400 |
Total liabilities assumed | ' |
Net assets acquired | 15,400 |
Excess purchase price in business acquisition | $1,021,416 |
Acquisitions_Schedule_of_Exces
Acquisitions - Schedule of Excess Purchase Price Allocation on Intangible Assets and Goodwill (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Goodwill | $1,585,142 | ' |
Crescent Moon [Member] | ' | ' |
Goodwill | 638,506 | ' |
Crescent Moon [Member] | Customer List [Member] | ' | ' |
Goodwill | 350,951 | ' |
Crescent Moon [Member] | Trade Name [Member] | ' | ' |
Goodwill | 298,104 | ' |
FlipOutz [Member] | ' | ' |
Goodwill | 946,636 | ' |
FlipOutz [Member] | Customer List [Member] | ' | ' |
Goodwill | 50,544 | ' |
FlipOutz [Member] | Trade Name [Member] | ' | ' |
Goodwill | $24,236 | ' |
Acquisitions_Proforma_Operatio
Acquisitions - Pro-forma Operation Results of Acquisition Transactions (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Business Combinations [Abstract] | ' | ' |
Revenues | $621,919 | $847,844 |
Net loss | ($3,529,412) | ($524,828) |
Loss per share of common stock | ($0.11) | ($0.02) |
Basic and diluted | 31,018,295 | 29,123,760 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation expense | $11,777 | $0 |
Property_Plant_and_Equipment_S
Property, Plant and Equipment - Schedule of Property, plant and equipment (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Abstract] | ' | ' |
Machinery and Equipment | $61,310 | ' |
Leasehold Improvements | 4,500 | ' |
Total | 65,810 | 0 |
Less: Accumulated Depreciation | 11,777 | ' |
Property, Plant and Equipment, net | $54,033 | ' |
Note_Receivable_Details_Narrat
Note Receivable (Details Narrative) (USD $) | 0 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Receivables [Abstract] | ' | ' |
Note receivable | $4,914 | ' |
Accrues interest, percentage | 9.00% | ' |
Accrues interest monthly installment | $567 | ' |
Notes payable, maturity date | 5-Jun-15 | ' |
Goodwill_Schedule_of_Goodwill_
Goodwill - Schedule of Goodwill (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Goodwill | ' |
Acquisitions | 1,585,142 |
Impairment Charges | ' |
Goodwill | $1,585,142 |
Intangible_Assets_Details_Narr
Intangible Assets (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Amortization expense related intangible assets | $21,291 |
Customer List [Member] | ' |
Amortization expense related intangible assets | $21,291 |
Intangible_Assets_Schedule_of_
Intangible Assets - Schedule of Changes in Intangible Assets (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Gross amount | ' |
Acquisitions | 723,835 |
Accumulated amortization | -21,291 |
Impairment charges | ' |
Gross amount | 702,544 |
Customer List [Member] | ' |
Gross amount | ' |
Acquisitions | 401,495 |
Accumulated amortization | -21,291 |
Impairment charges | ' |
Gross amount | 380,204 |
Estimated life | '11 years |
Trade Name [Member] | ' |
Gross amount | ' |
Acquisitions | 322,340 |
Accumulated amortization | ' |
Impairment charges | ' |
Gross amount | $322,340 |
Intangible_Assets_Summary_of_F
Intangible Assets - Summary of Future Amortization Expense (Details) (USD $) | Sep. 30, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
2013 (remainder of the year) | $9,126 |
2014 | 36,500 |
2015 | 36,500 |
2016 | 36,500 |
2017 | 36,500 |
Thereafter | 225,078 |
Total | $380,204 |
Accounts_Payable_and_Accrued_L2
Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Accounts Payable and Accrued Liabilities [Abstract] | ' | ' |
Accounts payable | $287,832 | $112,355 |
Sales tax payable | 6,785 | ' |
Accrued expenses | 91,680 | 10,042 |
Accrued payroll | 14,000 | ' |
Accrued interest convertible notes | 2,120 | ' |
Accrued interest - related party | 143,076 | 16,649 |
Accounts Payable and Accrued Liabilities | $545,492 | $139,046 |
Convertible_Notes_Payable_Deta
Convertible Notes Payable (Details Narrative) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jul. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 23, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | |
Debt Offering A [Member] | Debt Offering A [Member] | Debt Offering B [Member] | Debt Offering B [Member] | Debt Offering B [Member] | Debt Offering C [Member] | Debt Offering C [Member] | |||||
TCA Global Credit Master Fund, LP [Member] | TCA Global Credit Master Fund, LP [Member] | ||||||||||
Convertible note | $431,000 | $431,000 | ' | ' | $68,000 | ' | ' | ' | ' | $63,000 | ' |
Notes maturity date | 5-Jun-15 | ' | ' | ' | 27-Mar-14 | ' | ' | ' | ' | 30-May-14 | ' |
Accrues interest rate | ' | ' | ' | ' | 8.00% | ' | ' | ' | 12.00% | 8.00% | ' |
Debt discount percentage for average trading prices | ' | ' | ' | ' | 42.00% | ' | ' | ' | ' | 42.00% | ' |
Maximum percentage of ownership owns upon conversion of outstanding common stock | ' | ' | ' | ' | 9.99% | ' | ' | 4.99% | ' | 9.99% | ' |
Derivative liability | ' | ' | ' | ' | ' | 236,922 | 153,703 | ' | ' | ' | 65,549 |
Discount on debt | ' | ' | ' | ' | ' | 68,000 | ' | ' | ' | ' | 63,000 |
Incurred expense related to convertible note | ' | ' | ' | ' | ' | 168,922 | ' | ' | ' | 2,549 | ' |
Gain on change in fair value of the derivatives | ' | ' | ' | ' | ' | 125,875 | ' | ' | ' | ' | ' |
Derivative liability at fair value | ' | ' | ' | ' | ' | 111,047 | 193,616 | ' | ' | ' | 104,933 |
Accrued and unpaid interest | ' | ' | ' | ' | ' | 1,163 | 472 | ' | ' | ' | 207 |
Maximum loan value agreed to the company | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Initial debt amount | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' |
Percentage of revolving loan commitment equal to credit agreement calls for reserve | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' |
Minimum percentage of all amounts collected into the lock box | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' |
Repayment of convertible notes | ' | -16,650 | ' | ' | ' | ' | 16,650 | ' | ' | ' | ' |
Principal balance on note | ' | ' | ' | ' | ' | ' | 283,350 | ' | ' | ' | ' |
Percentage of weighted average price equal to companies common stock | ' | ' | ' | ' | ' | ' | 85.00% | ' | ' | ' | ' |
Number of stock issued for debt agreement, shares | ' | ' | ' | ' | ' | ' | ' | 352,941 | ' | ' | ' |
Number of stock issued for debt agreement | ' | ' | ' | ' | ' | ' | ' | 90,000 | ' | ' | ' |
Loss on change in fair value of the derivatives | ' | ' | ' | ' | ' | ' | $90,564 | ' | ' | ' | $39,385 |
Percentage of prepayment penalty | 2.50% | 2.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of investment banking advisory fee | 8.33% | 8.33% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_Notes_Payable_Summ
Convertible Notes Payable - Summary of Convertible Notes Payable (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Debt Disclosure [Abstract] | ' | ' | ' |
Convertible notes payable | $431,000 | ' | ' |
Discount on convertible notes | -199,519 | ' | ' |
Repayments | -16,650 | ' | ' |
Convertible notes payable, net | 214,831 | ' | ' |
Long-term portion | ' | ' | ' |
Current maturities | $214,831 | ' | ' |
Convertible_Notes_Payable_Summ1
Convertible Notes Payable - Summary of Fair Value of Derivative Liabilities (Details) (Derivative Liabilities [Member]) | 9 Months Ended |
Sep. 30, 2013 | |
Expected dividends | 0.00% |
Minimum [Member] | ' |
Expected volatility | 133.00% |
Expected term: | '3 months 18 days |
Risk free interest rate | 0.20% |
Maximum [Member] | ' |
Expected volatility | 144.00% |
Expected term: | '8 months |
Risk free interest rate | 0.10% |
Commitment Date [Member] | ' |
Expected dividends | 0.00% |
Commitment Date [Member] | Minimum [Member] | ' |
Expected volatility | 133.00% |
Expected term: | '5 months 27 days |
Risk free interest rate | 0.70% |
Commitment Date [Member] | Maximum [Member] | ' |
Expected dividends | 0.00% |
Expected volatility | 144.00% |
Expected term: | '8 months 12 days |
Risk free interest rate | 0.13% |
Convertible_Notes_Payable_Summ2
Convertible Notes Payable - Summary of Debt Discount (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Debt Disclosure [Abstract] | ' | ' | ' |
Debt discount | $284,703 | ' | ' |
Amortization of debt discount | -85,184 | ' | ' |
Debt discount - net | $199,519 | ' | ' |
Debt_Issuance_Costs_Schedule_o
Debt Issuance Costs - Schedule of Debt Issuance Cost (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Debt Issuance Costs | ' |
Balance at the beginning | ' |
Debt issuance costs - 2013 financings | 137,600 |
Amortization of debt issue costs during the nine months ended September 30, 2013 | -53,436 |
Balance at the end | $84,164 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||||
Aug. 16, 2013 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Aug. 16, 2013 | Mar. 02, 2012 | Jan. 23, 2012 | Feb. 24, 2012 | Jan. 23, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Preferred Stock [Member] | Omega Global Enterprises, LLC [Member] | Omega Global Enterprises, LLC [Member] | Omega Global Enterprises, LLC [Member] | Omega Global Enterprises, LLC [Member] | Omega Global Enterprises, LLC [Member] | Omega Global Enterprises, LLC [Member] | Omega Global Enterprises, LLC [Member] | Monies Member] | Monies Member] | Related Party [Member] | Related Party [Member] | ||||||
Convertible debt | ' | ' | ' | ' | ' | ' | ' | $102,259 | ' | $102,259 | ' | ' | ' | ' | ' | ' | ' |
Senior secured convertible debt, interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | 12.00% | ' | 16.00% | ' |
Advances received from related party | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | 200,000 | ' |
Notes payable increased | ' | ' | ' | ' | ' | ' | 152,259 | 152,259 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued and unpaid interest | ' | ' | 405,926 | ' | 405,926 | ' | ' | ' | ' | ' | 30,314 | ' | 16,649 | 52,402 | ' | 60,360 | ' |
Interest expense, debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,665 | 12,056 | ' | 52,402 | 0 | 29,195 | 0 |
Senior secured promissory note due to related entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 569,631 | ' | 5,475 | ' |
Number of preferred stock issued to a related entity for service, shares | 51 | 90,000 | 2,791,000 | 240,000 | ' | 51 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of preferred stock issued to a related entity for service | $730,000 | $1,282 | $1,773,241 | $3,418 | ' | $730,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of preferred stock issued to a related entity for service, per share | ' | ' | ' | ' | ' | $14,314 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Sch
Related Party Transactions - Schedule of Related Party Convertible Notes Payable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Related party convertible notes payable | $152,259 | $152,259 |
Convertible Notes Payable [Member] | ' | ' |
Related party convertible notes payable | $152,259 | $152,259 |
Debt interest rate | 12.00% | 12.00% |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||||||
Aug. 16, 2013 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Jun. 30, 2013 | 31-May-13 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 16, 2013 | |
Various Consultant [Member] | Attorneys [Member] | Consultant [Member] | Consultant [Member] | Consultant [Member] | Consultant [Member] | Consultant [Member] | Consultant [Member] | Consultant [Member] | Consultant [Member] | Consultant [Member] | Consultant [Member] | Three Consultant [Member] | Attorneys And Consultants [Member] | Park Investment Holdings, LLC [Member] | ||||||
Mr Spiegel [Member] | ||||||||||||||||||||
Series A preferred stock, shares issued | 51 | ' | 51 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series A preferred stock, par value | $0.00 | ' | $0.00 | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Percentage of trustee ownership | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% |
Preferred stock, voting rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Voting rights – Each one (1) share of the Series A Preferred shall have voting rights equal to(x) 0.019607 multiplied by the total issued and outstanding shares of Common Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. | ||||||||||||||||||||
Stock issued for assets acquisitions, shares | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued for services, shares | 51 | 90,000 | 2,791,000 | 240,000 | ' | 2,491,000 | 200,000 | 25,000 | 100,000 | 25,000 | 25,000 | 50,000 | 50,000 | 100,000 | 25,000 | 25,000 | ' | 100,000 | ' | ' |
Stock issued for services | $730,000 | $1,282 | $1,773,241 | $3,418 | ' | $1,594,240 | $128,000 | $4,400 | $43,000 | $6,000 | $8,250 | $32,000 | $712 | $1,424 | $356 | $356 | ' | $51,000 | ' | ' |
Share Price | $14,314 | $0.01 | ' | $0.01 | ' | $0.64 | $0.64 | $0.18 | $0.43 | $0.24 | $0.33 | $0.64 | $0.01 | $0.01 | $0.01 | $0.01 | $0.17 | $0.51 | ' | ' |
Stock issued during period for consideration of debt, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000 | ' | 502,500 | ' |
Stock issued during period for consideration of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,673 | ' | 7,156 | ' |
Restricted shares issued during period for compensation, shares | ' | ' | 352,941 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted shares issued during period for compensation | ' | ' | $90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of stock options issued during period | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Schedule_o
Stockholders' Equity - Schedule of Company's Liability to be Settled in Stock (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Stockholders' Equity Note [Abstract] | ' | ' |
Balance at the beginning | $10,146 | $6,016 |
Liability accrued during the period | 93,650 | 4,130 |
Liability settled during the period | -32,830 | ' |
Liability to be settled in stock | $70,966 | $10,146 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | |||||||||||||||||||
Aug. 16, 2013 | Jul. 30, 2013 | Jun. 16, 2013 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 01, 2012 | Jan. 03, 2013 | Mar. 12, 2013 | 13-May-12 | Feb. 25, 2013 | Feb. 25, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | 18-May-11 | 18-May-11 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | |||||||
Consultant One [Member] | Mr.Josh Ketroser [Member] | MFI Industries [Member] | Wave Consulting, Inc. [Member] | Sandra R. Danon [Member] | Peter Gasca [Member] | Rhett Power [Member] | KVM Capital Partners [Member] | Oakville Ontario [Member] | Myrtle Beach [Member] | Assignment And Assumption Agreements [Member] | Second Assignment and Assumption Agreements [Member] | Second Assignment and Assumption Agreements [Member] | Second Assignment and Assumption Agreements [Member] | Second Assignment and Assumption Agreements [Member] | License and Distribution Agreement [Member] | |||||||||||||
Percentage of royalty obligation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | 3.00% | ' | ' | ' | ' | ||||||
Royalty amount maximum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $310,000 | ' | ' | ' | ' | ' | ||||||
Prepaid royalty expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | ||||||
Minimum amount of royalties payable on quarterly for subsequent periods | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | 4,000 | 3,000 | ' | ||||||
Percentage of royalties income payable to Licensor | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.00% | ||||||
Royalties due to Licensor | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ||||||
Lease rental expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,380 | 2,405 | ' | ' | ' | ' | ' | ' | ||||||
Professional fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Stock issued during period, shares, restricted stock award, gross | ' | 25,000 | 100,000 | ' | ' | ' | 100,000 | ' | ' | ' | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Share based compensation arrangement by share based payment award options vested number | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Payments for consulting services | ' | ' | ' | ' | ' | ' | ' | 5,000 | 1,500 | 2,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Commission percentage on gross sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Commissions paid per month | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Common stock options issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Exercise price of stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Stock issued for services, shares | 51 | ' | ' | 90,000 | 2,791,000 | 240,000 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Stock issued for services | 730,000 | ' | ' | 1,282 | 1,773,241 | 3,418 | 51,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Share Price | $14,314 | ' | ' | $0.01 | ' | $0.01 | $0.51 | ' | ' | ' | ' | ' | ' | $0.43 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Monthly salary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,000 | 7,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Stock incentive, description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
● | Stock incentive - 750,000 shares of common stock upon the Company achieving Gross Revenue of $10,000,000. | ● | Stock incentive - 750,000 shares of common stock upon the Company achieving Gross Revenue of $10,000,000. | |||||||||||||||||||||||||
● | An additional 750,000 shares of common stock upon the Company achieving Gross Revenue of $15,000,000. | ● | An additional 750,000 shares of common stock upon the Company achieving Gross Revenue of $15,000,000. | |||||||||||||||||||||||||
Shares issued on stock incentive plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Additional stock issued on stock incentive plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Purchase commitment description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
KVM shall commit to purchase up to $2,800,000 of the Company’s common stock, par value $0.001 per share (the “Shares”), pursuant to Puts (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Investment Agreement is equal to a twenty-two and one half (22.5%) percent discount to the average of the three lowest closing bids as calculated using the average of the three lowest closing bids during the last seven trading days after the Company delivers to KVM a Put notice in writing requiring KVM to purchase shares of the Company, subject to the terms of the Investment Agreement. | ||||||||||||||||||||||||||||
Commitment to purchase number of stock | ' | 2,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Commitment to purchase number of stock, per share | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Percentage of average closing bids equal to purchase price of the shares | ' | 22.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Number of shares issued during period for facility fee, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Number of shares issued during period for facility fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $43,000 | ' | ' | ' | ' | ' | ' | ' | ' |