Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 02, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'MMRGlobal, Inc. | ' |
Entity Central Index Key | '0001285701 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 623,414,735 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $6,578 | $36,655 |
Accounts receivable, less allowances of $80,000 in 2013 and 2012 | 461,955 | 404,024 |
Inventory | 49,581 | 2,865 |
Prepaid expenses and other current assets | 169,413 | 108,360 |
Total current assets | 687,527 | 551,904 |
Long-term investments: | ' | ' |
Investment in equity securities, at cost | 350,000 | 56,000 |
Total long-term investments | 350,000 | 56,000 |
Property and equipment, net | 42,306 | 20,301 |
Deposits | 0 | 3,370 |
Intangible assets, net | 1,614,236 | 1,347,859 |
Total assets | 2,694,069 | 1,979,434 |
Current liabilities: | ' | ' |
Line of credit, related party | 983,279 | 1,045,947 |
Related party payables | 1,117,949 | 1,328,533 |
Compensation payable | 384,439 | 206,548 |
Severance liability | 620,613 | 620,613 |
Accounts payable and accrued expenses | 5,140,232 | 3,985,741 |
Deferred revenue | 57,992 | 24,531 |
Convertible notes payable | 954,846 | 763,857 |
Notes payable, current portion | 325,343 | 375,343 |
Notes payable, related party | 196,921 | 242,921 |
Capital leases payable, current portion | 7,161 | 0 |
Total current liabilities | 9,788,775 | 8,594,034 |
Capital leases payable, less current portion | 15,759 | 0 |
Total liabilities | 9,804,534 | 8,594,034 |
Commitments and contingencies (See Note 5) | ' | ' |
Stockholders' deficit: | ' | ' |
Preferred stock - $0.001 per value, 5,000,000 shares authorized, 0 issued and outstanding. | ' | ' |
Common stock, $0.001 par value, 950,000,000 shares authorized, 632,029,838 and 522,152,225 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively | 632,021 | 522,144 |
Additional paid-in capital | 51,294,880 | 46,998,534 |
Accumulated deficit | -59,037,366 | -54,135,278 |
Total stockholders' deficit | -7,110,465 | -6,614,600 |
Total liabilities and stockholders' deficit | $2,694,069 | $1,979,434 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Allowances | $80,000 | $80,000 |
Stockholders' deficit: | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 950,000,000 | 950,000,000 |
Common stock, shares issued | 632,029,838 | 522,152,225 |
Common stock, shares outstanding | 632,029,838 | 522,152,225 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenues | ' | ' | ' | ' |
Subscriber | $32,542 | $31,017 | $149,412 | $130,943 |
MMR Pro | 25,716 | 314,804 | 263,313 | 425,083 |
License fees | 54,311 | 0 | 61,011 | 100,000 |
Other income | 0 | 0 | 61,410 | 61,372 |
Total revenues | 112,569 | 345,821 | 535,146 | 717,398 |
Cost of revenues | 93,825 | 101,727 | 198,079 | 420,449 |
Gross profit | 18,744 | 244,094 | 337,067 | 296,949 |
General and administrative expenses | 1,500,914 | 960,278 | 3,394,570 | 2,682,072 |
Sales and marketing expenses | 459,353 | 643,291 | 1,368,096 | 1,541,604 |
Technology development | 25,214 | 54,109 | 58,456 | 217,589 |
Loss from operations | -1,966,737 | -1,413,584 | -4,484,055 | -4,144,316 |
Other income | 6,650 | 0 | 16,884 | 0 |
Interest and other finance charges, net | -283,229 | -113,131 | -434,918 | -341,215 |
Net loss | ($2,243,316) | ($1,526,715) | ($4,902,089) | ($4,485,531) |
Net loss per share: | ' | ' | ' | ' |
Basic and diluted | $0 | $0 | ($0.01) | ($0.01) |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic and diluted | 622,461,551 | 446,047,171 | 589,935,992 | 398,815,354 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Operating activities: | ' | ' |
Net loss | ($4,902,089) | ($4,485,531) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 176,044 | 167,600 |
Warrants issued for services | 366,777 | 134,272 |
Stock-based compensation | 415,431 | 655,124 |
Common stock issued for services | 740,280 | 427,702 |
Amortization of loan discount | 265,664 | 103,902 |
Loan commitment fee amortization | 0 | 918 |
Subtotal - non-cash adjustments | 1,964,196 | 1,489,518 |
Effect of changes in: | ' | ' |
Accounts receivable | -457,512 | -139,643 |
Inventory | 2,865 | 41,726 |
Prepaid expenses and other current assets | -61,053 | 132,959 |
Deposits | 3,370 | 0 |
Accounts payable and accrued expenses | 1,164,427 | 988,400 |
Related party payables | -99,955 | 233,235 |
Compensation payable | 177,891 | 63,187 |
Deferred revenue | 33,461 | 37,424 |
Subtotal - net change in operating assets and liabilities | 763,494 | 1,357,288 |
Net cash used in operating activities | -2,174,399 | -1,638,725 |
Investing activities: | ' | ' |
Purchase of property and equipment | 0 | -555 |
Filing of patents | -370,346 | -206,386 |
Cost of continuing MMRPro and website development | -60,250 | -61,995 |
Net cash used in investing activities | -430,596 | -268,936 |
Financing activities: | ' | ' |
Net proceeds from convertible notes | 1,879,300 | 781,995 |
Net proceeds from warrant exercises | 70,000 | 59,500 |
Proceeds from equity line of credit | 828,952 | 865,999 |
Proceeds from note payable | 54,000 | 520,771 |
Payments of note payable | -90,000 | -399,100 |
Proceeds from line of credit | 0 | 15,000 |
Payments of line of credit | -156,425 | -204,895 |
Payments of capital lease | -10,909 | 0 |
Net cash provided by financing activities | 2,574,918 | 1,639,270 |
Net decrease in cash | -30,077 | -268,391 |
Cash, beginning of period | 36,655 | 311,103 |
Cash, end of period | 6,578 | 42,712 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 38,860 | 80,576 |
Cash paid for income taxes | 3,882 | 4,894 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Conversion of convertible notes into common stock | 1,582,919 | 767,182 |
Receipt of investment in equity securities in lieu of cash | 350,000 | 0 |
Cancellation of investment in equity securities | 56,000 | 0 |
Acquisition of assets through capital lease | 35,829 | 0 |
Payment of accounts payable and related party payables through issuance of common stock | $576,882 | $373,214 |
NATURE_OF_OPERATIONS_AND_BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Note 1 | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Note 1 | ' |
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION | |
MMRGlobal Inc. (referred to herein, unless otherwise indicated, as "MMR," the "Company," "we," "us," and "our") was originally incorporated as Favrille, Inc. ("Favrille") in Delaware in 2000, and since its inception and before the Merger (as defined below), operated under a different management team as a biopharmaceutical company focused on the development and commercialization of targeted immunotherapies for the treatment of cancer and other diseases of the immune system. In May 2008, Favrille's ongoing Phase 3 registration trial for its lead product candidate failed to show a statistically significant improvement in the treatment of patients with follicular B-cell Non-Hodgkin's lymphoma. | |
Through our wholly-owned operating subsidiary MyMedicalRecords, Inc. ("MMR Inc."), we provide secure and easy-to-use online Personal Health Records ("PHR") and MyEsafeDepositBox storage solutions, serving consumers, healthcare professionals, retailers, employers, insurance companies, financial institutions, and professional organizations and affinity groups. Our PHR, marketed both directly via our website at www.mymedicalrecords.com and as a private-label service, enables individuals and families to access their medical records and other important documents, such as birth certificates, passports, insurance policies and wills, anytime from anywhere using an Internet-connected device. The MyMedicalRecords PHR is built on proprietary, patented and patent-pending technologies to allow documents, images and voicemail messages to be transmitted and stored in the system using a variety of methods, including fax, phone, or file upload without relying on any specific electronic medical record platform to populate a user's account. We also offer the MyEsafeDepositBox service which provides secure online storage for vital financial, legal and insurance documents in addition to medical records using the same patented technologies that drive the MyMedicalRecords PHR service. | |
Our professional offering, MMRPro, is an end-to-end electronic document management and imaging system designed to give physicians' offices, community hospitals and surgery centers, and other organizations an easy and cost-effective solution to digitizing paper-based medical records and sharing them with patients in a timely manner through an integrated patient portal, MMRPatientView. The MMR Stimulus Program is offered with the MMRPro product offerings to help healthcare professionals recoup some or all of the cost of digital conversion of patient charts when they upgrade patients from the free MMRPatientView portal to a full-featured MyMedicalRecords PHR. In addition, in January 2009, as a result of the Merger, we acquired biotech assets and other intellectual property including anti-CD20 antibodies and data and samples from the FavId™/Specifid™ vaccine clinical trials for the treatment of B-cell Non- Hodgkin's lymphoma. | |
Since 2005, MMR Inc. began filing for patent protection for its health IT products and services. Our health IT patent portfolio, through the recent quarter includes eight U.S. patents (with over 200 issued claims), 20 pending U.S. patent applications (with over 400 claims), seven international patents including two in Australia with others in New Zealand, Singapore, Japan, Canada and Mexico, and 15 other pending patent applications in foreign countries. These patents give us a unique marketplace position in Personal Health Records, being well-positioned to benefit from the growth in health IT globally. The full term of our health IT patents will not expire until September 12, 2025 or after. We also own a portfolio of biotech patents which MMR acquired from the Merger with Favrille which include, but are not limited to, data from our pre-Merger clinical vaccine trials, the FavId™/Specifid™ vaccine, and the anti-CD20 antibodies. As a result of the issuance of these patents, our business is evolving to include both an operating entity and a licensor of intellectual property. | |
On March 8, 2011, we formed a subsidiary, which we named MMR Life Sciences Group, Inc., exclusively to maximize the value of our biotech assets including our patents, anti-CD 20 antibodies, and FavId vaccine technologies acquired by MyMedicalRecords, Inc. through the merger with Favrille. As of this date the assets have not been transferred to the subsidiary. | |
We (formerly Favrille) were incorporated in Delaware in 2000, MMR Inc. was incorporated in Delaware in 2005, and both are headquartered in Los Angeles, CA. | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of MMRGlobal, and its wholly-owned subsidiaries MMR and MMR Life Sciences Group, Inc. All intercompany transactions and balances are eliminated upon consolidation. | |
Basis of Presentation | |
We have prepared the accompanying consolidated unaudited financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial statements and with instructions to Form 10-Q pursuant to the rules and regulations of Securities and Exchange Act of 1934, as amended, or the Exchange Act and Article 8-03 of Regulation S-X promulgated under the Exchange Act. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, we have included all adjustments considered necessary (consisting of normal recurring adjustments) for a fair presentation. Operating results for the nine months ended September 30, 2013 are not indicative of the results that may be expected for the fiscal year ending December 31, 2013. You should read these unaudited condensed consolidated financial statements in conjunction with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012. | |
Going Concern and Management's Plan | |
As of September 30, 2013, our current liabilities exceeded our current assets by $9.23 million. Furthermore, during the nine months ended September 30, 2013, we incurred losses of $4.84 million, as further explained in Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in Item 2 of Part I of this Quarterly Report on Form 10-Q. | |
At September 30, 2013 and December 31, 2012, we had $6,578 and $36,655, respectively, in cash and cash equivalents. Historically, we issued capital stock, sold convertible debt and equity securities and received funds from The RHL Group, Inc. (a significant stockholder that is wholly-owned by our Chairman and Chief Executive Officer, Robert H. Lorsch) to operate our business. Although we received additional funding from The RHL Group pursuant to the Eighth Amended and Restated Note effective August 13, 2013 (the "Line of Credit"), we will still be required to obtain additional financing in order to meet installment payment obligations and the previously existing obligations under the Line of Credit, which had a balance of $1.31 million at September 30, 2013 and a total Unpaid Balance (as defined in the Line of Credit) of $2.73 million, which includes amounts borrowed under the Line of Credit, unpaid interest fees, any amounts guaranteed by The RHL Group, and other obligations due the RHL Group pursuant to the terms of the Eighth Amended and Restated Note and the First Amended Security Agreement dated June 26, 2012 (the "Security Agreement"). As a result of the above, we express uncertainty about our ability to continue as a going concern. The components of the RHL Group Note payable and the related balance sheet presentation as of September 30, 2013 are as follows: $0.98 million, which is included in the line of credit, related party; and $0.33 million related to other obligations due to The RHL Group which are included in related party payables. | |
Management's plan regarding our going concern is to continue utilizing the Line of Credit. At September 30, 2013, there was approximately $1.77 million available under the Line of Credit. Furthermore, we plan to utilize portions of our standby equity facility with Granite State Capital LLC ("Granite") as needed. Finally, we plan to sell additional convertible debt and equity securities, settle our existing liabilities through the issuance of equity securities, explore other debt financing arrangements, increase our existing subscriber and affiliate customer base, sell our products and services, and collect licensing fees from parties utilizing our intellectual property to obtain additional cash flow over the next twelve months. There can be no assurance that funds from these sources will be available when needed or, if available, will be on terms favorable to us or to our stockholders. If additional funds are raised by issuing equity securities, the percentage of ownership of our stockholders will be reduced, stockholders will experience additional dilution and/or such equity securities may provide for rights, preferences or privileges senior to those of the holders of our common stock. If we are unable to utilize our Line of Credit, our equity facility with Granite, obtain suitable alternative debt or equity financing, or increase sales of our products of increase licensing fees from the use of our intellectual property, our ability to execute our business plan and continue as a going concern may be adversely affected. | |
These matters raise substantial doubt about our ability to continue as a going concern. These financial statements were prepared under the assumption that we will continue as a going concern and do not include any adjustments that might result from the outcome of that uncertainty. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Note 2 | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Notes to Financial Statements | ' | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Note 2 | ' | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
(a) MANAGEMENT'S USE OF ESTIMATES | ||||
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses during each reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, allowances for doubtful accounts, the valuation of deferred income taxes, tax contingencies, long-lived and intangible assets, valuation of derivative liabilities and stock-based compensation. These estimates are based on historical experience and on various other factors that management believes to be reasonable under the circumstances, although actual results could differ from those estimates. | ||||
(b) CASH AND CASH EQUIVALENTS | ||||
We consider cash equivalents to be only those investments that are highly liquid, readily convertible to cash and with maturities of 90 days or less at the purchase date. We maintain our cash in bank deposit accounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and believe that we are not exposed to any significant credit or deposit risk on our cash. We had cash and cash equivalents of $6,578 and $36,655 as of September 30, 2013 and December 31, 2012, respectively. | ||||
(c) TRADE AND OTHER RECEIVABLES | ||||
Receivables represent claims against third parties that will be settled in cash. The carrying value of receivables, net of an allowance for doubtful accounts, if any, represents their estimated net realizable value. We estimate the allowance for doubtful accounts, if any, based on historical collection trends, type of customer, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, we give further consideration to the collectability of those balances and the allowance is adjusted accordingly. We write off past due receivable balances when collection efforts have been unsuccessful in collecting the amount due. | ||||
(d) INVESTMENT | ||||
We account for our long-term investments in accordance to ASC 325-20. As of September 30, 2013, we own $350,000 in equity securities in VisiInc. The cost method is used to account for this investment due to our small ownership percentage in the investee. | ||||
(e) INVENTORY | ||||
Inventory is stated at the actual cost, using the first-in, first-out method. On an on-going basis, we evaluate our inventory for obsolescence. This evaluation includes analysis of sales levels, sales projections, and purchases by item. If future demand or market conditions are different than our current estimates, an inventory adjustment may be required, and would be reflected in cost of goods sold in the period the revision is made. | ||||
(f) FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||
ASC 820-10, Fair Value Measurements and Disclosures, requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2013 and December 31, 2012, the carrying value of accounts receivable, deposits, related party payables, compensation payable, severance liabilities, and accounts payable and accrued expenses approximates fair value due to the short-term nature of such instruments. The carrying value of short-term debt approximates fair value as the related interest rates approximate rates currently available to us. | ||||
We utilize ASC 820-10 for valuing financial assets and liabilities measured on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value and generally accepted accounting principles, and expands disclosures about fair value measurements. This standard applies in situations where other accounting pronouncements either permit or require fair value measurements. ASC 820-10 does not require any new fair value measurements. | ||||
Accounting guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | ||||
The standard describes three levels of inputs that may be used to measure fair value: | ||||
Level 1: | Quoted prices in active markets for identical or similar assets and liabilities. | |||
Level 2: | Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities. | |||
Level 3: | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||
(g) IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLES | ||||
We account for long-lived assets, which include property and equipment and identifiable intangible assets with finite useful lives (subject to amortization), in accordance with ASC 350-30. ASC 350-30 requires that we review long-lived assets for impairment whenever events or changes in circumstances indicate that we may not recover the carrying amount of an asset. We measure recoverability by comparing the carrying amount of an asset to the expected future undiscounted net cash flows generated by the asset. If we determine that the asset may not be recoverable, or if the carrying amount of an asset exceeds its estimated future undiscounted cash flows, we recognize an impairment charge to the extent of the difference between the fair value and the asset's carrying amount. Our assessment of the undiscounted future cash flows indicated that the carrying amount of the long-lived and intangible assets are recoverable, therefore, we had no impairment charges during the nine months ended September 30, 2013 and 2012. | ||||
(h) REVENUE RECOGNITION | ||||
We generate our revenues from services, which are comprised of providing electronic access to consumer medical records and other vital documents, and from the licensing of our intellectual property and services. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and we are reasonably assured of collectability of the resulting receivable. | ||||
Our subscriber revenues consist of annual and monthly recurring retail subscriptions and usage-based fees, which are primarily paid in advance by credit card, and corporate accounts that are based on either an access-fee or actual number of users, and in each case billed in advance at the beginning of each month of service. We defer the portions of annual recurring subscription fees collected in advance and recognize them on a straight line basis over the subscription period. | ||||
We grant exclusive licenses for the sale and marketing of our services in international territories in consideration of license fees and ongoing royalties. The royalty fee is usually a percentage of revenue earned by the licensee and there are usually certain minimum guarantees. We defer the recognition of license fee revenues received in advance from international licensees for the grant of the license and recognize them over the period covered by the agreement. We defer the recognition of minimum guaranteed royalty payments received in advance and recognize them over the period to which the royalty relates. We include all such revenues under "License Fees." In those cases where a license agreement contains multiple deliverables, we account for the agreement in accordance with ASC 605-25, Revenue Recognition - Multiple-Element Arrangements. | ||||
We recognize revenue on sales of our MMRPro system in accordance with ASC 605-25, Revenue Recognition, Multiple-Element Arrangements. We have also adopted Accounting Standards Update ("ASU") 2009-13, "Revenue Recognition (Topic 605): Multiple- Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force" effective January 1, 2010. | ||||
Our multiple-deliverable arrangements consist solely of our MMRPro product. Significant deliverables within these arrangements include sophisticated scanning equipment, various licenses to use third party software, a license to use our proprietary MMRPro application software, installation and training, dedicated telephone lines, secure online storage and warranties. | ||||
We determined all elements to be separate units of accounting as they have standalone value to the customers and/or they are sold by other vendors on a standalone basis. Delivery of the hardware and certain software elements of these arrangements occur at the inception of the agreement. We deliver installation and training at the inception of the agreement. We provide other software licenses, telephone lines and online secure storage over the three year term of the agreement. We include warranties in the arrangements, however the third party product manufacturer, and not us, is obligated to fulfill such warranties. The third-party warranty contracts are paid in advance and are not refundable. | ||||
We allocate the revenue derived from these arrangements among all the deliverables. We base such allocation on the relative selling price of each deliverable. With the exception of our proprietary MMRPro application software, we use third party evidence to set the selling prices used for this allocation. In all such cases, third parties sell the same or very similar products. For the MMRPro application software, we estimate the selling price based on recent discussions regarding licensure of that particular application on a standalone basis. To date, we have not licensed this software on a standalone basis. | ||||
We recognize the allocated revenue for each deliverable in accordance with SEC Staff Accounting Bulletin ("SAB") No. 104, Topic 13: Revenue Recognition. Under this guidance, we recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed and determinable and collectability is reasonably assured. This results in us recognizing revenue for the hardware, certain software and the warranties upon delivery to the customer, for the installation and training upon completion of these services, and ratably over the contract period for the software licenses, telephone lines and online secure storage. | ||||
Revenue from the licensing of our biotech assets may include non-refundable license and up-front fees, non- refundable milestone payments that are triggered upon achievement of a specific event, and future royalties or lump- sum payments on sales of related products. For agreements that provide for milestone payments, such as our agreement with Celgene, we adopted ASC 605-28-25, Revenue Recognition, Milestone Method. | ||||
(i) SHARE-BASED COMPENSATION | ||||
We account for share-based compensation in accordance with ASC 718-20, Awards Classified as Equity. We apply ASC 718- 20 in accounting for stock-based awards issued to employees under the recognition of compensation expense related to the fair value of employee share-based awards, including stock options and restricted stock. Determining the fair value of options at the grant date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise, the associated volatility and the expected dividends. Judgment is required in estimating the amount of share-based awards expected to be forfeited prior to vesting. If actual forfeitures differ significantly from these estimates, share-based compensation expense could be materially impacted. | ||||
We account for options and warrants issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non- Employees. We treat options and warrants issued to non-employees the same as those issued to employees with the exception of determination of the measurement date. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Options and warrants granted to consultants are valued at their respective measurement dates, and recognized as an expense based on the portion of the total consulting services provided during the applicable period. As further consulting services are provided in future periods, we will revalue the associated options and warrants and recognize additional expense based on their then current values. | ||||
We estimate the fair value of each stock option on the date of grant using the Black-Scholes option pricing model. We determine assumptions relative to volatility and anticipated forfeitures at the time of grant. We valued grants of stock options and warrants during the nine months ended September 30, 2013 and 2012 using the following assumptions. | ||||
30-Sep-13 | 30-Sep-12 | |||
(Unaudited) | (Unaudited) | |||
Expected life in years | 0 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 120.51% - 122.72% | 144.34% - 148.34% | ||
Risk free interest rate | 0.04% - 1.38% | 0.35% | ||
Expected dividends | None | None | ||
Forfeiture rate | 0% | 0% | ||
We base the assumptions used in the Black-Scholes models upon the following data: (1) our use of the contractual life of the underlying non-employee warrants as the expected life; the expected life of the employee options used in this calculation is the period of time the options are expected to be outstanding and has been determined based on historical exercise experience; (2) in the absence of an extensive public market for our shares, the expected stock price volatility of the underlying shares over the expected term of the option or warrant was taken at approximately the mid-point of the range for similar companies at the various grant dates; (3) we base the risk free interest rate on published U.S. Treasury Department interest rates for the expected terms of the underlying options or warrants; (4) we base expected dividends on historical dividend data and expected future dividend activity; and (5) we base the expected forfeiture rate on historical forfeiture activity and assumptions regarding future forfeitures based on the composition of current grantees. | ||||
(j) NET INCOME/LOSS PER SHARE | ||||
We apply the guidance of ASC 260-10, Earnings Per Share for calculating the basic and diluted loss per share. We calculate basic loss per share by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding. We compute diluted loss per share similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive. We exclude common equivalent shares from the computation of net loss per share if their effect is anti-dilutive. | ||||
We excluded all potential common shares from the computation of diluted net loss per common share for the three and nine months ended September 30, 2013 and 2012 because they were anti-dilutive due to our net loss position. Stock options, warrants and convertible notes excluded from the computation totaled 201,195,775 shares for the three and nine months ended September 30, 2013, and 111,249,836 shares for the three and nine months ended September 30, 2012, respectively. | ||||
(k) RECENT ACCOUNTING PRONOUNCEMENTS | ||||
During July 2012, FASB issued ASU no. 2012-02, "Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment". Under the amendments in Update 2012-02, entities have the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Subtopic 350-30. The amendments in this Update are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this standard did not have a material impact on our financial statements. |
RELATED_PARTY_PAYABLES_LINE_OF
RELATED PARTY PAYABLES, LINE OF CREDIT AND NOTE PAYABLE - Note 3 | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
RELATED PARTY PAYABLES, LINE OF CREDIT AND NOTE PAYABLE - Note 3 | ' |
NOTE 3 - RELATED PARTY PAYABLES, LINE OF CREDIT AND NOTE PAYABLE | |
On June 22, 2012, we and The RHL Group entered into a Sixth Amended and Restated Promissory Note (the "Sixth Amended Note"). The Sixth Amended Note amended and restated the Fifth Amended Note by extending the maturity date of the Existing Note for one year to April 29, 2013 based on the original maturity date of the Fifth Amended Note of April 29, 2012. The Sixth Amended Note did not materially alter the terms of the Fifth Amended Note other than for the fact that there were no loan origination fees charged by The RHL Group on this renewal. In connection with the Sixth Amended Note, we issued The RHL Group warrants to purchase 2,852,200 shares of our common stock at $0.02 per share. Such warrants are fully vested and are exercisable either in cash or on a cashless basis at any time prior to the fifth anniversary of the date of issuance. | |
On July 30, 2012, we and The RHL Group entered into a Seventh Amended and Restated Promissory Note (the "Seventh Amended Note") which amended and restated the Sixth Amended and Restated Note. The Seventh Amended Note amends and restates the Sixth Amended Note and together with its predecessor notes, the "Credit Facility" or the "Line of Credit"), by: (i) increasing the amount available under the Credit Facility from $3,000,000 to $4,500,000 to accommodate the additional financing needs of us and/or MMR Inc.; and (ii) granting The RHL Group the right to convert, at any time following the date of the Seventh Amended Note, up to an aggregate of $500,000 in outstanding principal of the Credit Facility into shares of our Common Stock at a conversion price of $0.02 per share. The amendment retained the maturity date of the Sixth Amended Note which was set to mature on April 29, 2013. There were no loan origination fees charged by, or warrants issued to, The RHL Group with respect to the Seventh Amended Note. Except as set forth above, the Seventh Amended Note does not materially altered the terms of the Sixth Amended Note. | |
On August 13, 2013, we and The RHL Group entered into an Eighth Amended and Restated Promissory Note (the "Amended Note"), effective as of August 13, 2013. The Amended Note amends and restates that certain Seventh Amended Note entered into between the foregoing parties, effective April 29, 2013 (the "Existing Note" and together with its predecessor notes and the Amended Note, the "Credit Facility"), by: (i) extending the maturity date to April 29, 2014; (ii) requiring a $1,000 per month minimum payment. In connection with the Eighth Amended Note, we issued The RHL Group warrants to purchase 2,852,200 shares of our common stock at $0.04 per share. Except as set forth above, the Amended Note does not materially alter the terms of the Existing Note. | |
Historically, the predecessor notes have, over time, increased the maximum amount of credit available under the Credit Facility from $100,000 to $1,000,000 to $3,000,000. The maximum amount of the Amended Note is $4,500,000. The Amended Note continues to bear interest at the lesser of 10% or the highest rate then permitted by law, and is secured (similar to the Existing Note) by a Security Agreement, which has been in effect since July 31, 2007, as renewed and amended to date (the "Security Agreement"). | |
The Eighth Amended Note had a balance of $1.31 million at September 30, 2013. The components of the Eight Amended Note and the related balance sheet presentation as of September 30, 2013 are as follows: $0.98 million, which is included in the line of credit, related party; and $0.33 million for other obligations due to The RHL Group, which is included in related party payables. | |
Total interest expense on the Line of Credit for the three months ended September 30, 2013 and 2012 amounted to $32,613 and $39,201, respectively. Total interest expense on the Line of Credit for the nine months ended September 30, 2013 and 2012 amounted to $101,613 and $116,155, respectively. The unpaid interest balances as of September 30, 2013 and December 31, 2012 were $32,783 and $35,451, respectively. | |
In conjunction with the Eighth Amended Note, we were required to maintain certain financial covenants, including the requirement that we have at least $200,000 of cash in our bank accounts or such other amount as necessary to maintain operations through the subsequent thirty (30) days and timely pay any obligations due respecting payroll and all associated payroll taxes on and after September 30, 2013. Since we did not meet these covenants as of September 30, 2013, we received a waiver from The RHL Group until December 1, 2013. | |
INCOME_TAXES_Note_4
INCOME TAXES - Note 4 | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
INCOME TAXES - Note 4 | ' |
NOTE 4 - INCOME TAXES | |
Under ASC 740-270, Income Taxes - Interim Reporting, we are required to adjust our effective tax rate each quarter to be consistent with the estimated annual effective tax rate. We are also required to record the tax impact of certain discrete items, unusual or infrequently occurring, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, we exclude jurisdictions with a projected loss for the year or a year-to-date loss where we cannot recognize a tax benefit from our estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. | |
As a result of the implementation of certain provisions of ASC 740, Income Taxes, (formerly FIN 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109), we performed an analysis of its previous tax filings and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of September 30, 2013. | |
MMR Inc., in its capacity as the operating company taking over our income tax positions in addition to its own positions after January 27, 2009 (see Note 1), has estimated its annual effective tax rate to be zero. MMRGlobal has based this on an expectation that the combined entity will generate net operating losses in 2013, and it is not likely that those losses will be recovered using future taxable income. Therefore, no provision for income tax has been recorded as of and for the three and nine months ended September 30, 2013. |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES - Note 5 | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Notes to Financial Statements | ' | |||||
COMMITMENTS AND CONTINGENCIES - Note 5 | ' | |||||
NOTE 5 - COMMITMENTS AND CONTINGENCIES | ||||||
Leases | ||||||
We lease certain facilities and equipment under non-cancelable capital and operating leases, which expire at various dates through 2014. Effective September 1, 2013, we entered into a lease agreement to lease office space in Los Angeles, California which expires August 31, 2018. The lease currently requires a monthly payment of $8,500. Total rent expense for the three months ended September 30, 2013 and 2012 were $24,840 and $37,594, respectively. Total rent expense for the nine months ended September 30, 2013 and 2012 were $76,615 and $93,052, respectively. | ||||||
Future minimum lease payments as of September 30, 2013, under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments are as follows: | ||||||
Year Ending | Operating | Capital | ||||
December 31, | Leases | Leases | ||||
2013 (Remainder of) | $ | 24,750 | $ | 3,524 | ||
2014 | 147,125 | 15,759 | ||||
2015 | 170,500 | - | ||||
2016 | 187,550 | - | ||||
2017 | 206,305 | - | ||||
and there after | 146,410 | - | ||||
Total minimum lease payments | $ | 882,640 | $ | 19,283 | ||
Guarantee provided by The RHL Group | ||||||
On May 6, 2011, the RHL Group agreed to guarantee up to $250,000 in payments to a vendor for future services to be rendered. In consideration of this guarantee, the RHL Group received (i) a warrant to purchase 625,000 shares of our common stock, at an exercise price of $0.046 per share, which was the closing price of our common stock on the date of the transaction, and (ii) 125,000 shares of our common stock priced as of the same date. In the event that the RHL Group has to perform on this guarantee, interest on any outstanding balance paid to the vendor by the RHL Group will be added to the balance of the Amended Note or any subsequent renewals. Additionally, any balances due to this vendor at any given time will reduce the amount available under the Amended Note or any subsequent renewals. The warrants and shares were issued on November 11, 2011 to the RHL Group. | ||||||
On July 31, 2012, the RHL Group entered into guarantee agreements to guarantee certain obligations of MMRGlobal in the amount of $1,014,629. In consideration of this guarantee, the RHL Group received a warrant to purchase 3,055,432 shares of our common stock at an exercise price of $0.02 per share, which was the closing price of our common stock on the date of the transaction. | ||||||
Guarantee provided by Robert H. Lorsch | ||||||
On February 17, 2012, Mr. Lorsch agreed to guarantee a convertible note to a third-party only in the event that we fail to issue shares pursuant to a notice of conversion provided by that third-party. As of September 30, 2013, the Note had an outstanding balance of $25,000. | ||||||
Concentration Risk Disclosure - Note 5 | ' | |||||
Concentrations | ||||||
For the three months ended September 30, 2013, our two largest customers (VisiInc. at $15,106 and Olympia at $50,000) accounted for approximately 57% of our total revenue. | ||||||
For the nine months ended September 30, 2013, our two largest customers (VisiInc. at $286,515 and Olympia at $50,000) accounted for approximately 63% of our total revenue. | ||||||
For the three months ended September 30, 2012, our three largest customers (VisiInc PLC at $259,367, Ambulatory Surgery Center at $15,842 and DDS/Coverdell at $10,273) accounted for approximately 83% of our total revenue. | ||||||
For the nine months ended September 30, 2012, our three largest customers (VisiInc PLC at $259,367, Celgene at $100,000 and E-Mail Frequency at $54,425) accounted for approximately 58% of our total revenue. | ||||||
Legal Matters and Contingencies - Note 5 | ' | |||||
Litigation Matters | ||||||
From time to time, we are involved in various legal proceedings generally incidental to our business. While the result of any litigation contains an element of uncertainty, our management presently believes that the outcome of any known, pending or threatened legal proceeding or claim, individually or combined, will not have a material adverse effect on our financial statements. | ||||||
On December 9, 2011, MyMedicalRecords, Inc. ("MMR") entered into a Non-Exclusive Settlement and Patent License Agreement (the "Agreement") with Surgery Center Management LLC ("SCM"). In consideration for the rights granted under the Agreement and in consideration of a settlement and release agreement, SCM contracted to pay MMR an initial payment of $5 million payable on December 23, 2011 and additional payments of $5 million per year for five consecutive years. After numerous attempts to collect the past due amount of $5 million, on January 19, 2012, MyMedicalRecords, Inc. filed a lawsuit in the Superior Court of the State of California for the County of Los Angeles for breach of contract and is seeking damages in an amount of $30 million. The Agreement contains an arbitration clause and arbitration proceedings have been completed. An appeal was filed by SCM which was recently denied without a published opinion remanding the underling case back to Superior Court. Remittitur to Superior Court occurred on September 4, 2013. Counsel does not have any facts upon which to base any information regarding collectability. | ||||||
On January 29, 2013, MMR filed a complaint for patent infringement against Walgreen Co., titled MyMedicalRecords, Inc. v. Walgreen Co., United States District Court, Central District of California seeking monetary damages and other remedies. The complaint alleges that Walgreen Co. is infringing MMR's Personal Health Records patent, U.S. Patent No. 8,301,466. Trial in this matter has been set by the court for August 2014. Counsel does not have any facts upon which to base any information regarding collectability. | ||||||
On February 11, 2013, MMR filed a complaint for patent infringement against WebMD Health Corp. and its wholly owned subsidiary WebMD Health Services Group, Inc. (collectively, "WebMD"), titled MyMedicalRecords, Inc. v. WebMD Health Corp et al., United States District Court, Central District of California seeking monetary damages and other remedies. The complaint alleges that WebMD is infringing MMR's Personal Health Records patent U.S. Patent No. 8,301,466. MMR subsequently withdrew the complaint per an agreement allowing MMR to the right to re-file without prejudice unless an agreement is reached within a specific period of time. On August 27, 2013, MMR terminated the agreement with WebMD. On October 2, 2013, MMR filed a complaint against WebMD alleging infringement of U.S. Patent Nos. 8,301,466 and 8,498,883. Counsel does not have any facts upon which to base any information regarding collectability. | ||||||
On April 10, 2013, MMR filed a complaint for patent infringement against Quest Diagnostics Inc. in the United States District Court for the Central District of California seeking monetary damages and other remedies. We have alleged that Quest Diagnostics Inc. is infringing U.S. Patent No. 8,301,466. On October 11, 2013, MMR filed an unopposed motion to add a claim of infringement of U.S. Patent 8,498,883 to its complaint against Quest, which was approved by the Court on October 30, 2013. MMR filed its first amended complaint against Quest alleging infringement of both the 8,301,466 and the 8,498,883 patents on October 30, 2013. Counsel does not have any facts upon which to base any information regarding collectability. | ||||||
On May 17, 2013, MMR filed a complaint for patent infringement against Jardogs, LLC in the United States District Court for the Central District of California seeking monetary damages and other remedies. We have alleged that Jardogs, LLC is infringing U.S. Patent No. 8,301,466. On October 4, 2013, MMR filed a motion to amend the complaint to add Allscripts Healthcare Solutions Inc. ("Allscripts") as a party defendant and to allege Allscripts is infringing U.S. Patent Nos. 8,301,466 and 8,498,883. On November 2, 2013 the Court approved the motion to amend the Jardogs complaint to add Allscripts as a party and to include claims of infringement of the 8,301,466 and the 8,498,883 patents against Allscripts. Counsel does not have any facts upon which to base any information regarding collectability. | ||||||
On September 23, 2013, MMR filed a complaint for patent infringement against Allscripts titled MyMedicalRecords, Inc. v. Allscripts Healthcare Solutions Inc., United States District Court, Central District of California seeking monetary damages and other remedies. The complaint alleges Allscripts is infringing U.S. Patent Nos. 8,301,466 and 8,498,883. Pursuant to the Court's November 2, 2013 order discussed above, the claims against Allscripts will be included in the Jardogs action. | ||||||
In 2013, Sunil Singhal, the company's former executive vice president of technology and product development, filed a claim in Superior Court of Los Angeles County, California, against the company for breach of his employment contract and for other employment-related matters. The complaint has been tendered to the Company's Employment Practices Liability Insurance Carrier (EPLI), and the company is being defended under a reservation of rights. A motion to strike certain allegations of his complaint was granted by the Superior Court. The Company's answer, which will deny all claims and assert certain affirmative defenses, is due to be filed by mid-December. At present there is insufficient information to assess factors of liability or to calculate a range of potential damages, and those damages that the claimant seems to be seeking appear to be highly speculative. Questions of liability and damages will remain open until discovery is completed. The Superior Court has yet to set a trial date; but in accord with the schedules and budgeting of the Los Angeles Superior Court, a trial date of last 2014 or early 2015 seems likely. |
STOCKHOLDERS_DEFICIT_Note_6
STOCKHOLDERS' DEFICIT - Note 6 | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
STOCKHOLDERS' DEFICIT - Note 6 | ' |
NOTE 6 - STOCKHOLDERS' DEFICIT | |
Preferred Stock | |
We have 5,000,000 shares of preferred stock authorized. As of September 30, 2013, and December 31, 2012, there were no shares of preferred stock issued and outstanding. | |
Common Stock | |
As of September 30, 2013, we are authorized to issue 1,250,000,000 shares of common stock. | |
On May 24, 2012, we filed a registration statement on Form S-1 related to the offer and resale of up to 100,000,000 shares of our common stock by Granite. Granite has agreed to purchase all 100,000,000 shares offered sale under the registration statement, and an additional 1,000,000 shares were issued to Granite as partial consideration for the preparation of the documents related to the registration statement. Subject to the terms and conditions of the agreement with Granite, we have the right to put up to $15 million in shares of our common stock to Granite. As of September 30, 2013, the amount available under the equity line facility was $15 million; however, that amount could be reduced based on the market price of our stock at the time any shares are sold. | |
As of September 30, 2013, the total shares of our common stock issued and outstanding amounted to 632,029,838. | |
EQUITY_ISSUANCES_Note_7
EQUITY ISSUANCES - Note 7 | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||
EQUITY ISSUANCES - Note 7 | ' | ||||||||||||||
NOTE 7 - EQUITY ISSUANCES | |||||||||||||||
Our 2001 Equity Incentive Plan (the "2001 Plan") expired on June 5, 2011 and no options were issued under the 2001 Plan since that date. As of September 30, 2013, 17,634,557 shares remain issued under the 2001 Plan. | |||||||||||||||
On September 1, 2011, our Board of Directors approved the adoption of a new plan to replace the 2001 Plan under the same general terms as the 2001 Plan. On June 20, 2012, our stockholders voted and approved the 2011 Equity Incentive Plan (the " 2011 Plan") at our 2012 Annual Stockholder Meeting. As of September 30, 2013, 34.6 million shares remain issued under the 2011 Plan, and 22.4 million shares of our common stock are reserved for future issuance under our 2011 Plan, which includes an automatic 5 million share annual increase pursuant to the terms of the 2011 Plan and a 20 million share increase authorized during our 2013 Annual Stockholder's Meeting. | |||||||||||||||
On May 28, 2013, we granted Mr. Royston, a non-employee director, options to purchase an aggregate of 1,050,000 shares of common stock at a price of $0.08 per share in consideration for services. The options vest annually over three years and expire ten years from the date of issuance, and were granted pursuant to the 2011 Plan. | |||||||||||||||
A summary of option activity for the nine months ended September 30, 2013 is presented below. Options granted by MMR Inc. prior to the date of the Merger have been retroactively restated to reflect the conversion ratio of MMR Inc. to MMR shares. | |||||||||||||||
Weighted- | |||||||||||||||
Average | |||||||||||||||
Weighted- | Remaining | ||||||||||||||
Average | Contractual | Aggregate | |||||||||||||
Exercise | Life | Intrinsic | |||||||||||||
Options | Price | (Years) | Value | ||||||||||||
Outstanding at December 31, 2012 | 42,157,551 | $ | 0.11 | 5.93 | $ | - | |||||||||
Granted | 1,050,000 | $ | 0.08 | - | $ | - | |||||||||
Exercised | -717,461 | $ | 0.10 | - | $ | - | |||||||||
Cancelled | -3,548,368 | $ | - | - | $ | - | |||||||||
Outstanding at September 30, 2013 (Unaudited) | 38,941,722 | $ | 0.10 | 5.35 | $ | 7,500 | |||||||||
Vested and expected to vest | |||||||||||||||
at September 30, 2013 (Unaudited) | 38,941,722 | $ | 0.10 | 5.35 | $ | 7,500 | |||||||||
Exercisable at September 30, 2013 (Unaudited) | 32,866,722 | $ | 0.11 | 4.74 | $ | 3,750 | |||||||||
The aggregate intrinsic value in the table above is before applicable income taxes and is calculated based on the difference between the exercise price of the options and the quoted price of the common stock as of the reporting date. | |||||||||||||||
Total stock option expenses recorded during the three months ended September 30, 2013 and 2012 were $69,728 and $208,444, respectively. | |||||||||||||||
Total stock option expenses recorded during the nine months ended September 30, 2013 and 2012 were $177,931 and $655,124, respectively. | |||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at September 30, 2013. | |||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||
Average | Average | Average | Average | ||||||||||||
Exercise | Number | Remaining | Exercise | Number | Remaining | Exercise | |||||||||
Price | of Shares | Life (Years) | Price | of Shares | Life (Years) | Price | |||||||||
$ | 0.05 - 0.09 | 13,200,000 | 8.2 | $ | 0.07 | 7,125,000 | 7.81 | $ | 0.07 | ||||||
$ | 0.10 - 0.15 | 23,111,461 | 3.74 | $ | 0.11 | 23,111,461 | 3.74 | $ | 0.11 | ||||||
$ | > 0.15 | 2,630,261 | 5.22 | $ | 0.19 | 2,630,261 | 5.22 | $ | 0.19 | ||||||
38,941,722 | 32,866,722 | ||||||||||||||
Warrants | |||||||||||||||
On January 10, 2013, we granted a warrant to purchase 100,000 shares of our common stock to a consultant in consideration for services. This warrant vested immediately and has an exercise price of $0.04 per share, and an expiration date of January 10, 2014. | |||||||||||||||
On January 21, 2013, we granted three separate warrants, each to purchase 1,000,000 shares of our common stock, to a consultant in consideration for services. These warrants vested immediately and have an exercise price of $0.04, $0.08 and $0.12 per share, and an expiration date of January 21, 2014. | |||||||||||||||
On February 20, 2013, we granted a warrant to purchase 100,000 shares of our common stock to a consultant in consideration for services. This warrant vested immediately and has an exercise price of $0.04 per share, and an expiration date of February 20, 2014. | |||||||||||||||
On March 13, 2013, we granted a warrant to purchase 1,000,000 shares of our common stock to a third-party in consideration for services. This warrant vested immediately and has an exercise price of $0.10 per share, and an expiration date of March 13, 2014. | |||||||||||||||
On March 18, 2013, we granted two separate warrants, each to purchase 500,000 shares of our common stock to two different unrelated third-parties in consideration for services. These warrants vest immediately and have exercise prices of $0.10 per share, and an expiration date of March 18, 2014. | |||||||||||||||
On April 1, 2013, we granted two separate warrants, each to purchase 250,000 shares of our common stock to two different unrelated third-parties in consideration for rendering services in our Advisory Board. These warrants vest annually over three years and have an exercise price of $0.06 per share, and an expiration date of April 1, 2018. | |||||||||||||||
On May 13, 2013, we granted four separate warrants to purchase 500,000 shares each of our common stock to two unrelated third-parties in consideration for services. These warrants vest upon certain revenue generating criteria is met, and have exercise prices of $0.08 and $0.12 per share, and an expiration date of May 13, 2015. | |||||||||||||||
On May 20, 2013, we granted a warrant to purchase 2,000,000 shares each of our common stock to an unrelated third-party in consideration for services. This warrant vests immediately and has exercise prices of $0.05 per share, and an expiration date of May 20, 2018. | |||||||||||||||
On June 12, 2013, we granted two separate warrants to purchase 1,000,000 shares each of our common stock to an unrelated third-party in consideration for services. These warrants vest in six months and have exercise prices of $0.048 per share, and an expiration date of June 12, 2015. | |||||||||||||||
On August 13, 2013, we granted the RHL Group a warrant to purchase 2,852,200 shares of our common stock in connection with the renewal of the line of credit through the Eighth Amended Note. This warrant has an exercise price of $0.04 per share, with a contractual life through August 13, 2018, vests at commencement. | |||||||||||||||
On August 15, 2013, we granted an unrelated third-party a warrant to purchase 900,000 shares of our common stock in consideration for services. The warrant vests quarterly over a year and have an exercise price of $0.06 per share, and an expiration date of August 15, 2018. | |||||||||||||||
On various dates between August 14, 2013 and September 18, 2013, we granted three different unrelated third-parties three different warrants to purchase up to 12,000,000 shares of our common stock at an average price per share of $0.04. The Warrants vest immediately and have expiration dates of November 18, 2013, December 18, 2013, January 18, 2013, September 13, 2015, and August 14, 2018. | |||||||||||||||
A summary of the activity of our warrants for the nine months ended September 30, 2013 is presented below: | |||||||||||||||
Weighted Avg | |||||||||||||||
Shares | Exercise Price | ||||||||||||||
Outstanding at December 31, 2012 | 66,329,641 | $ | 0.09 | ||||||||||||
Granted | 27,452,200 | $ | 0.06 | ||||||||||||
Exercised | -5,000,000 | $ | 0.03 | ||||||||||||
Cancelled | -9,210,000 | $ | 0.11 | ||||||||||||
Outstanding at September 30, 2013 (Unaudited) | 79,571,841 | $ | 0.08 | ||||||||||||
Exercisable at September 30, 2013 (Unaudited) | 68,263,508 | $ | 0.08 | ||||||||||||
Total warrant expenses recorded during the three months ended September 30, 2013 and 2012 were $215,222 and $103,332, respectively. | |||||||||||||||
Total warrant expenses recorded during the nine months ended September 30, 2013 and 2012 were $346,777 and $323,493, respectively. | |||||||||||||||
The following summarizes the total warrants outstanding and exercisable as of September 30, 2013: | |||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||
Warrants | Weighted Avg | Weighted Avg | Warrants | Weighted Avg | Weighted Avg | ||||||||||
Ranges | Outstanding | Remaining Life | Exercise Price | Exercisable | Remaining Life | Exercise Price | |||||||||
$0.03 - $0.25 | 79,071,841 | 2.05 | $ | 0.08 | 67,763,508 | 2.60 | $ | 0.08 | |||||||
$0.25 - $2.50 | 500,000 | 0.25 | $ | 0.35 | 500,000 | 0.83 | $ | 0.35 | |||||||
79,571,841 | 68,263,508 | ||||||||||||||
The inputs used for the Black-Scholes option and warrant valuation model were as follows: | |||||||||||||||
30-Sep-13 | 30-Sep-12 | ||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Expected life in years | 0 - 5 Years | 0 - 5 Years | |||||||||||||
Stock price volatility | 120.51% - 122.72% | 144.34% - 148.34% | |||||||||||||
Risk free interest rate | 0.04% - 1.38% | 0.35% | |||||||||||||
Expected dividends | None | None | |||||||||||||
Forfeiture rate | 0% | 0% | |||||||||||||
Shares Issued for Services or Reduction to Liabilities | |||||||||||||||
During the nine months ended September 30, 2013, we issued 13,868,540 shares of common stock with a value of $0.74 million to various third parties and charged the proceeds to the appropriate accounts for the following reasons: | |||||||||||||||
Nine-Months Ended September 30, 2013 | |||||||||||||||
(Unaudited) | |||||||||||||||
Purpose | Shares | Value | |||||||||||||
Services Provided | 13,868,540 | $ | 740,280 | ||||||||||||
Totals | 13,868,540 | $ | 740,280 | ||||||||||||
The 13,868,540 issued shares were not contractually restricted. However, as these shares have not been registered under the Securities Act of 1933, as amended (the "Act"), they are restricted from sale until they are registered under the Act, or qualify for resale under the rules promulgated under the Act. All such shares were issued at the trading closing price on the date of issuance and the corresponding values were calculated therefrom. | |||||||||||||||
Stock Bonus Agreements | |||||||||||||||
From time to time, we issue shares of our common stock as a bonus for services rendered. Stock bonuses may be awarded upon satisfaction of specified performance goals pursuant to the Performance Stock Bonus Agreement. On May 10, 2013, we granted a total of 7,250,000 shares of common stock at $0.06 per share to eight employees, two consultants and four directors as an incentive and in consideration for services rendered. All shares from this grant vest on January 10, 2014 and are forfeitable before such time. On May 28, 2013, we granted an additional 500,000 shares of common stock at $0.08 per share to a director as an incentive and in consideration for services rendered. All shares from this grant vest on January 28, 2014 and are forfeitable before such time. On each grant date, we valued the stock bonus based on the share price and the expenses were amortized using the straight line method. Total stock bonus expenses recorded during the three and nine months ended September 30, 2013 were $178,125 and 237,500, respectively, and are reflected in operating expenses in the accompanying consolidated statements of operations. |
NOTES_PAYABLE_Note_8
NOTES PAYABLE - Note 8 | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
NOTES PAYABLE - Note 8 | ' | ||||||
NOTE 8 - NOTES PAYABLE | |||||||
Notes payable consisted of the following: | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
(Unaudited) | |||||||
Promissory notes payable due to the former officers of MMRGlobal as part of severance | $ | 76,783 | $ | 76,783 | |||
packages, due in full on August 31, 2009 with no stated interest | |||||||
Promissory notes payable due to the former officers of MMRGlobal pursuant to the | 25,444 | 25,444 | |||||
Resignation and Post-Merger Employment Arrangement, due in full on August 31, 2009 | |||||||
with no stated interest | |||||||
Promissory notes payable due to vendors relating to settlement of certain outstanding | 223,116 | 223,116 | |||||
accounts payable, payable in 18 equal monthly installments commencing on July 27, | |||||||
2009 and ending on January 27, 2011, with no stated interest | |||||||
Short term loan due to a third-party with no stated interest | - | 50,000 | |||||
Notes payable, current portion | $ | 325,343 | $ | 375,343 | |||
Short term loan due to a related-party | 146,921 | 192,921 | |||||
Short term loan due to a related-party | 50,000 | 50,000 | |||||
Notes payable related party, current portion | $ | 196,921 | $ | 242,921 | |||
CONVERTIBLE_PROMISSORY_NOTES_N
CONVERTIBLE PROMISSORY NOTES - Note 9 | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
CONVERTIBLE PROMISSORY NOTES - Note 9 | ' |
NOTE 9 - CONVERTIBLE PROMISSORY NOTES | |
From time to time, we issue Convertible Promissory Notes. As of September 30, 2013, a total of $1.1 million in convertible notes remained outstanding with unamortized discounts of $0.16 million, for a net balance of $0.96 million. The note holders have chosen not to convert their note balances into shares of our common stock as of September 30, 2013. | |
Each Note contains the following general terms and provisions: | |
The principal amount owed under each note becomes due and payable one year or less from the investment date provided that, upon ten (10) days' prior written notice to the holder, we may, in our sole discretion, extend the maturity date for an additional six month term. The Notes can be further extended upon mutual agreement. | |
These notes bear interest at a rate of 6% per annum payable in cash or shares of common stock or a combination of cash and shares of common stock at our option. | |
During the first quarter of 2013, we entered into 14 different Convertible Promissory Notes with 11 different unrelated third-parties for principal amounts totaling $0.49 million, with fixed conversion prices ranging from $0.02 to $0.028. These notes have the option to be converted into a total of 24,035,715 shares of our common stock. As of June 30, 2013, all of these notes had been converted. | |
During the second quarter of 2013, we entered into 13 different Convertible Promissory Notes with 13 different unrelated third- parties for principal amounts totaling $0.89 million with fixed conversion prices ranging from $0.0339 to $0.08. These notes have the option to be converted into a total of 19,263,258 shares of our common stock. As of June 30, 2013, all of these notes had been converted. | |
During the third quarter of 2013, we entered into seven different Convertible Promissory Notes with seven different unrelated third-parties for principal amounts totaling $0.52 million with fixed conversion prices ranging from $0.0265 to $0.035. These notes have the option to be converted into a total of 17,691,199 shares of our common stock. As of September 30, 2013, four notes with total principal of $0.17 million have been converted. | |
During the third quarter, pursuant to ASC 470-20, we recognized the intrinsic value of the embedded beneficial conversion feature of $0.24 million as additional paid-in capital and an equivalent discount that reduced the carrying value of the convertible notes. During the third quarter, $0.08 million of the discount was expensed to interest. The discount is expensed over the term of the loan to increase the carrying value to the face value of the loan. | |
For the nine months ended September 30, 2013, we recognized the intrinsic value of the embedded beneficial conversion feature of $0.37 million as additional paid-in capital and an equivalent discount that reduced the carrying value of the convertible notes. For the nine months ended September 30, 2013, $0.21 million of the discount was expensed to interest. | |
The total interest expense attributed to the Notes and related warrants for the three months ended September 30, 2013 and 2012 was $198,380 and $24,989, respectively. The total interest expense attributed to the Notes and related warrants for the nine months ended September 30, 2013 and 2012 was $265,664 and $72,668, respectively. | |
RESTRUCTURING_ACTIVITIES_Note_
RESTRUCTURING ACTIVITIES - Note 10 | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
RESTRUCTURING ACTIVITIES - Note 10 | ' |
NOTE 10 - RESTRUCTURING ACTIVITIES | |
From May 29, 2008 to November 7, 2008, Favrille, Inc. had provided notices under the Federal Worker Adjustment and Retraining Notification Act to 142 employees, including six members of senior management, that it planned to conduct a workforce reduction at its facility in San Diego, California and that their employment was expected to end on various dates between June 6, 2008 to November 7, 2008. Immediately prior to the date of the Merger on January 27, 2009, the total severance liability relating to former Favrille employees amounted to $1,682,416. On January 27, 2009, immediately prior to the Merger, as part of the 9,999,992 warrants issued to creditors, we issued warrants as settlement of $985,020 of these amounts. In addition, we signed promissory notes with certain former executives totaling $76,783, which notes are payable in full on August 31, 2009 (see Note 8). No payments were made during the nine months ended September 30, 2013. | |
As of September 30, 2013, the total remaining severance liabilities amounted to $620,613, which is reflected as severance liability on the accompanying consolidated balance sheets. This consists of $571,362 payable to former non- executive employees in 18 monthly installments starting on July 27, 2009, as well as $49,251 in estimated payroll tax. No payments were made during the nine months ended September 30, 2013 on these severance liabilities. | |
During the period from January 27, 2009 through June 30, 2009, we entered into a series of settlement agreements with certain vendors of Favrille pursuant to the Creditor Plan, pursuant to which we settled $302,982 of its outstanding accounts payable for an aggregate settlement amount of $214,402, including promissory notes of $139,355 payable in 18 monthly installments starting on July 27, 2009 (see Note 8). No payments were made during the nine months ended September 30, 2013. |
RELATED_PARTY_TRANSACTIONS_Not
RELATED PARTY TRANSACTIONS - Note 11 | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
RELATED PARTY TRANSACTIONS - Note 11 | ' |
NOTE 11 - RELATED PARTY TRANSACTIONS | |
Our Chairman and Chief Executive Officer, Robert H. Lorsch, is also the Chief Executive Officer of The RHL Group, Inc. and has full voting power over all of the capital stock of The RHL Group, Inc. Mr. Lorsch directly and indirectly through The RHL Group, Inc., beneficially owns approximately 16.6% our total outstanding voting stock. The RHL Group, Inc. has loaned us money pursuant to the Eight Amended Note and all predecessor notes. See Note 3 - Related Party Note Payable above. | |
The RHL Group is an investment holding company which provides consulting, operational and technical services to us, which we refer to as the RHL Services. As part of the RHL Services, The RHL Group provides us with unrestricted access to its internal business and relationship contact database of more than 10,000 persons and entities, which includes clients of The RHL Group and other individuals which may hold value to us. The RHL Group also provides infrastructure support to us, including allowing us unlimited access to its facilities, equipment, and data, information management and server systems. In addition to allowing us the use of its office support personnel, The RHL Group has also consented to allow us to utilize the full-time services of Mr. Lorsch as our President, Chairman and Chief Executive Officer, which requires substantial time and energy away from his required duties as The RHL Group's Chairman and Chief Executive Officer. In addition, The RHL Group has made its President, Kira Reed, available as our spokesperson. Ms. Reed, who is Mr. Lorsch's spouse, also manages our social networking activities. | |
In consideration for the above, The RHL Group, Inc. has a consulting arrangement with MMR. A copy of the consulting agreement is filed as an exhibit in our Form 8-K, as filed with the SEC on May 4, 2009 and is hereby incorporated by reference. | |
We incurred $12,500 during the three months ended September 30, 2013 and 2012 and $37,500 during the nine months ended September 30, 2013 and 2012, toward marketing consulting services from Bernard Stolar, a director. We included $92,005 and $41,250 in related party payables as of September 30, 2013 and December 31, 2012, respectively, in connection with these services. | |
We also incurred $0 and $12,500 during the three months ended September 30, 2013 and 2012 and $16,667 and $37,500 during the nine months ended September 30, 2013 and 2012, respectively, toward marketing consulting services from Hector Barreto, a former director and member of our Advisory Board. We included in related party payables as of September 30, 2013 and December 31, 2012 of $0 and $58,667, respectively, in connection with these services. Mr. Barreto ceased to be a related party upon his departure from the Board of Directors on September 30, 2011. | |
We also incurred $0 and $0 during the three months ended September 30, 2013 and 2012, respectively and $0 and $394 during the nine months ended September 30, 2013 and 2012, respectively, for consulting services from Jack Zwissig, a director. We included in related party payables as of September 30, 2013 and December 31, 2012 of $14,876 and $13,376, respectively, in connection with these services. | |
We contract with a significant vendor for the development and maintenance of the software applications necessary to run our MyMedicalRecords PHR, MyEsafeDepositBox and MyMedicalRecords Pro products. Our outside developer supports our software development needs through a team of software engineers, programmers, quality control personnel and testers, who work with our internal product development team on all aspects of application development, design, integration and support of our products. This vendor is also a stockholder. For the three months ended September 30, 2013 and 2012, the total expenses relating to this stockholder amounted to $30,000 and $15,000, respectively and $90,000 and $156,117 during the nine months ended September 30, 2013 and 2012, respectively. As of September 30, 2013 and December 31, 2012, the total amounts due to the stockholder and included in related party payables amounted to $336,800 and $447,429, respectively. | |
On September 15, 2009, we entered into a five year agreement with E-Mail Frequency, LLC and David Loftus, managing partner of E-Mail Frequency, LLC, who is also a significant stockholder of ours. We license an existing 80 million person direct marketing database (the "Database") of street addresses, cellular phone numbers, e-mail addresses and other comprehensive data with E-Mail Frequency. The agreement allows us to market, through the use of the Database, our MyMedicalRecords PHR, MyEsafeDepositBox virtual vault, and MMRPro document management system to physicians and their patients. Under the terms of the Agreement, we paid $250,000 to David Loftus as a one-time consulting fee in the form of 2,777,778 shares of our common stock. We recorded the $250,000 one-time licensee fee as a prepaid consulting fee and included in the prepaid expenses and other current assets as of December 31, 2009, less amortization of $12,500 included in operating expensed for the year ended December 31, 2009. Amortization expense for the three months ended September 30, 2013 and 2012 was $12,500, and amortization expense for the nine months ended September 30, 2013 and 2012 was $37,500. In addition, we incurred a total of $0 and $7,015 during the three months ended September 30, 2013 and 2012, respectively, and we incurred a total of $15,020 and $20,893 during the nine months ended September 30, 2013 and 2012, respectively, toward convertible notes interest to Mr. Loftus. We included in related party payables at September 30, 2013 and December 31, 2012 of $69,595 and $49,595, respectively. Furthermore, Mr. Loftus is a value-added-reseller of MMRPro systems. We recognized $14,808 and $87,000 in revenue from E-Mail Frequency for the sale of MMRPro systems, during 2013 and 2012, respectively. Furthermore, on January 6, 2010, we entered into 12% Convertible Promissory Notes with Mr. Loftus for a principal amount totaling $400,000 and warrants to purchase our common stock, which Mr. Loftus immediately converted both into shares of our common stock, for a total 8,860,606 shares of our common stock. On July 26, 2010 and September 21, 2010, we entered into 6% Convertible Promissory Notes with Mr. Loftus for a total principal amount of $450,000 and warrants to purchase the our common stock. On April 15, 2011, we entered into a 6% Convertible Promissory Note with Mr. Loftus for a principal amount of $156,436 and warrants to purchase our common stock. On July 19, 2011, we entered into a 6% Convertible Promissory Note with Mr. Loftus for a principal amount of $157,422 and warrants to purchase our common stock. Effective September 1, 2011, we signed and Amendment to the Agreement dated September 15, 2009 to provide licensor a non-exclusive right to target, market and sell into the Employee Benefits market. | |
SUBSEQUENT_EVENTS_Note_12
SUBSEQUENT EVENTS - Note 12 | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
SUBSEQUENT EVENTS - Note 12 | ' |
NOTE 12 - SUBSEQUENT EVENTS | |
On October 2, 2013, MMR announced that two additional patents will be granted for its B-cell vaccine technologies. MMR has been notified it will receive another U.S. patent protecting methods of making compositions for B-cell vaccines pursuant to a Notice of Allowance from the United States Patent and Trademark Office. The patent, U.S. Serial No. 3/293,495 entitled "Method and Composition for Altering a B- cell Mediated Pathology," will represent the fourth U.S. manufacturing patent that covers the methods of making compositions for B-cell vaccines used in the fight against lymphoma and potentially other forms of cancer. Earlier this month, MMR also received a Notice of Allowance in Mexico for protecting the same technology, Mexico Serial No. MX/a/2012/009182 entitled "Method and Composition for Altering a B-cell Mediated Pathology." This will be the third issued patent in Mexico to protect this technology. | |
On October 3, 2013, MMR announced the filing on October 2, 2013, of a complaint for infringement of two of MMR's U.S. patents against WebMD Health Corp. and WebMD Health Services Group, Inc. (collectively "WebMD") which was filed in United States District Court for the Central District of California, case number CV13-7285 (CAS/ASx). The complaint alleges that WebMD is infringing on two of MMR's Personal Health Records (PHR) patents, specifically U.S. Patent No. 8,301,466 (the '466 Patent) and U.S. Patent No. 8,498,883 (the '883 Patent), and as a result, MMR is seeking monetary damages as well as a permanent injunction. | |
On November 4, 2013, MMR announced that the United States District Court, Central District of California, granted the MMR's motion to consolidate its complaint for patent infringement against Allscripts Healthcare Solutions, Inc. with its previously filed complaint against Jardogs, LLC. The order was granted on November 1, 2013, Case No. 2:13-cv-03560-ODW (SHx), and is available on the court's website http://www.pacer.gov/. Two days earlier the court also approved MMR's request to amend its complaint against Quest Diagnostics Inc., Case No. CV-13-02538-CBM (MNx) to add a second patent, U.S. Patent No. 8,498,883, entitled "Method for Providing a User with a Service for Accessing and Collecting Prescriptions." The Allscripts/Jardogs and Quest Diagnostics complaints each now involve two MyMedicalRecords U.S. patents: U.S. Patent No. 8,301,466, entitled "Method and System for Providing Online Records," and U.S. Patent No. 8,498,883, entitled "Method for Providing a User with a Service for Accessing and Collecting Prescriptions." |
Recovered_Sheet1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Notes to Financial Statements | ' | |||
Principles of Consolidation | ' | |||
Principles of Consolidation | ||||
The consolidated financial statements include the accounts of MMRGlobal, and its wholly-owned subsidiaries MMR and MMR Life Sciences Group, Inc. All intercompany transactions and balances are eliminated upon consolidation. | ||||
Basis of Presentation | ' | |||
Basis of Presentation | ||||
We have prepared the accompanying consolidated unaudited financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial statements and with instructions to Form 10-Q pursuant to the rules and regulations of Securities and Exchange Act of 1934, as amended, or the Exchange Act and Article 8-03 of Regulation S-X promulgated under the Exchange Act. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, we have included all adjustments considered necessary (consisting of normal recurring adjustments) for a fair presentation. Operating results for the six months ended June 30, 2013 are not indicative of the results that may be expected for the fiscal year ending December 31, 2013. You should read these unaudited condensed consolidated financial statements in conjunction with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012. | ||||
Going Concern and Management's Plan | ' | |||
Going Concern and Management's Plan | ||||
As of June 30, 2013, our current liabilities exceeded our current assets by $8.4 million. Furthermore, during the six months ended June 30, 2013, we incurred losses of $2.66 million, as further explained in Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in Item 2 of Part I of this Quarterly Report on Form 10-Q. | ||||
At June 30, 2013 and December 31, 2012, we had $10,630 and $36,655, respectively, in cash and cash equivalents. Historically, we issued capital stock, sold convertible debt and equity securities and received funds from The RHL Group, Inc. (a significant stockholder that is wholly-owned by our Chairman and Chief Executive Officer, Robert H. Lorsch) to operate our business. Although we received additional funding from The RHL Group pursuant to the Seventh Amended and Restated Note effective July 30, 2012 (the "Line of Credit"), we will still be required to obtain additional financing in order to meet installment payment obligations and the previously existing obligations under the Line of Credit, which had a balance of $1,376,065 at June 30, 2013 and a total Unpaid Balance (as defined in the Line of Credit) of $2,794,632, which includes amounts borrowed under the Line of Credit, unpaid interest fees, any amounts guaranteed by The RHL Group, and other obligations due the RHL Group pursuant to the terms of the Seventh Amended and Restated Note and the First Amended Security Agreement dated June 26, 2012 (the "Security Agreement"). As a result of the above, we express uncertainty about our ability to continue as a going concern. The components of the RHL Group Note payable and the related balance sheet presentation as of June 30, 2013 are as follows: $960,666, which is included in the line of credit, related party; and $415,399 related to other obligations due to The RHL Group which are included in related party payables. | ||||
Management's plan regarding our going concern is to continue utilizing the Line of Credit. At June 30, 2013, there was approximately $1,705,368 available under the Line of Credit. Furthermore, we plan to utilize portions of our standby equity facility with Granite State Capital LLC ("Granite") as needed. Finally, we plan to sell additional convertible debt and equity securities, settle our existing liabilities through the issuance of equity securities, explore other debt financing arrangements, increase our existing subscriber and affiliate customer base, sell our products and services, and collect licensing fees from parties utilizing upon our intellectual property to obtain additional cash flow over the next twelve months. There can be no assurance that funds from these sources will be available when needed or, if available, will be on terms favorable to us or to our stockholders. If additional funds are raised by issuing equity securities, the percentage of ownership of our stockholders will be reduced, stockholders will experience additional dilution and/or such equity securities may provide for rights, preferences or privileges senior to those of the holders of our common stock. If we are unable to utilize our Line of Credit, our equity facility with Granite, obtain suitable alternative debt or equity financing, or increase sales of our products of increase licensing fees from the use of our intellectual property, our ability to execute our business plan and continue as a going concern may be adversely affected. | ||||
These matters raise substantial doubt about our ability to continue as a going concern. These financial statements were prepared under the assumption that we will continue as a going concern and do not include any adjustments that might result from the outcome of that uncertainty. | ||||
Management's Use of Estimates | ' | |||
(a) MANAGEMENT'S USE OF ESTIMATES | ||||
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses during each reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, allowances for doubtful accounts, the valuation of deferred income taxes, tax contingencies, long-lived and intangible assets, valuation of derivative liabilities and stock-based compensation. These estimates are based on historical experience and on various other factors that management believes to be reasonable under the circumstances, although actual results could differ from those estimates. | ||||
Cash and Cash Equivalents | ' | |||
(b) CASH AND CASH EQUIVALENTS | ||||
We consider cash equivalents to be only those investments that are highly liquid, readily convertible to cash and with maturities of 90 days or less at the purchase date. We maintain our cash in bank deposit accounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and believe that we are not exposed to any significant credit or deposit risk on our cash. We had cash and cash equivalents of $10,630 and $36,655 as of June 30, 2013 and December 31, 2012, respectively. | ||||
Trade and Other Receivables | ' | |||
(c) TRADE AND OTHER RECEIVABLES | ||||
Receivables represent claims against third parties that will be settled in cash. The carrying value of receivables, net of an allowance for doubtful accounts, if any, represents their estimated net realizable value. We estimate the allowance for doubtful accounts, if any, based on historical collection trends, type of customer, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, we give further consideration to the collectability of those balances and the allowance is adjusted accordingly. We write off past due receivable balances when collection efforts have been unsuccessful in collecting the amount due. | ||||
Investment | ' | |||
(d) INVESTMENT | ||||
We account for our long-term investments in accordance to ASC 320. As of June 30, 2013, we own $350,000 in equity securities in VisiInc. The cost method is used to account for this investment due to our small ownership percentage in the investee. | ||||
Inventory | ' | |||
(e) INVENTORY | ||||
Inventory is stated at the actual cost, using the first-in, first-out method. On an on-going basis, we evaluate our inventory for obsolescence. This evaluation includes analysis of sales levels, sales projections, and purchases by item. If future demand or market conditions are different than our current estimates, an inventory adjustment may be required, and would be reflected in cost of goods sold in the period the revision is made. | ||||
Fair Value of Financial Instruments | ' | |||
(f) FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||
ASC 820-10, Fair Value Measurements and Disclosures, requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of June 30, 2013 and December 31, 2012, the carrying value of accounts receivable, deposits, related party payables, compensation payable, severance liabilities, and accounts payable and accrued expenses approximates fair value due to the short-term nature of such instruments. The carrying value of short-term debt approximates fair value as the related interest rates approximate rates currently available to us. | ||||
We utilize ASC 820-10 for valuing financial assets and liabilities measured on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value and generally accepted accounting principles, and expands disclosures about fair value measurements. This standard applies in situations where other accounting pronouncements either permit or require fair value measurements. ASC 820-10 does not require any new fair value measurements. | ||||
We account for our long-term investments in accordance to ASC 320. As of June 30, 2013, we have $350,000 of investment in equity securities. The cost method is used to account for this investment. The carrying value of this investment approximates fair value currently available to us. | ||||
Accounting guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | ||||
The standard describes three levels of inputs that may be used to measure fair value: | ||||
Level 1: | Quoted prices in active markets for identical or similar assets and liabilities. | |||
Level 2: | Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities. | |||
Level 3: | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||
Impairment of Long-Lived Assets and Intangibles | ' | |||
(g) IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLES | ||||
We account for long-lived assets, which include property and equipment and identifiable intangible assets with finite useful lives (subject to amortization), in accordance with ASC 350-30. ASC 350-30 requires that we review long-lived assets for impairment whenever events or changes in circumstances indicate that we may not recover the carrying amount of an asset. We measure recoverability by comparing the carrying amount of an asset to the expected future undiscounted net cash flows generated by the asset. If we determine that the asset may not be recoverable, or if the carrying amount of an asset exceeds its estimated future undiscounted cash flows, we recognize an impairment charge to the extent of the difference between the fair value and the asset's carrying amount. Our assessment of the undiscounted future cash flows indicated that the carrying amount of the long-lived and intangible assets are recoverable, therefore, we had no impairment charges during the six months ended June 30, 2013 and 2012. | ||||
Revenue Recognition | ' | |||
(h) REVENUE RECOGNITION | ||||
We generate our revenues from services, which are comprised of providing electronic access to consumer medical records and other vital documents, and from the licensing of our intellectual property and services. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and we are reasonably assured of collectability of the resulting receivable. | ||||
Our subscriber revenues consist of annual and monthly recurring retail subscriptions and usage-based fees, which are primarily paid in advance by credit card, and corporate accounts that are based on either an access-fee or actual number of users, and in each case billed in advance at the beginning of each month of service. We defer the portions of annual recurring subscription fees collected in advance and recognize them on a straight line basis over the subscription period. | ||||
We grant exclusive licenses for the sale and marketing of our services in international territories in consideration of an up-front license fee and an ongoing royalty. The royalty fee is usually a percentage of revenue earned by the licensee and there are usually certain minimum guarantees. We defer the recognition of license fee revenues received in advance from international licensees for the grant of the license and recognized them over the period covered by the agreement. We defer the recognition of minimum guaranteed royalty payments received in advance and recognize them over the period to which the royalty relates. We include all such revenues under "License Fees." In those cases where a license agreement contains multiple deliverables, we account for the agreement in accordance with ASC 605-25, Revenue Recognition - Multiple-Element Arrangements. | ||||
We recognize revenue on sales of our MMRPro system in accordance with ASC 605-25, Revenue Recognition, Multiple- Element Arrangements. We have also adopted Accounting Standards Update ("ASU") 2009-13, "Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force" effective January 1, 2010. | ||||
Our multiple-deliverable arrangements consist solely of our MMRPro product. Significant deliverables within these arrangements include sophisticated scanning equipment, various licenses to use third party software, a license to use our proprietary MMRPro application software, installation and training, dedicated telephone lines, secure online storage and warranties. | ||||
We determined all elements to be separate units of accounting as they have standalone value to the customers and/or they are sold by other vendors on a standalone basis. Delivery of the hardware and certain software elements of these arrangements occur at the inception of the agreement. We deliver installation and training at the inception of the agreement. We provide other software licenses, telephone lines and online secure storage over the three year term of the agreement. We include warranties in the arrangements, however the third party product manufacturer, and not us, is obligated to fulfill such warranties. The third-party warranty contracts are paid in advance and are not refundable. | ||||
We allocate the revenue derived from these arrangements among all the deliverables. We base such allocation on the relative selling price of each deliverable. With the exception of our proprietary MMRPro application software, we use third party evidence to set the selling prices used for this allocation. In all such cases, third parties sell the same or very similar products. For the MMRPro application software, we estimate the selling price based on recent discussions regarding licensure of that particular application on a standalone basis. To date, we have not licensed this software on a standalone basis. | ||||
We recognize the allocated revenue for each deliverable in accordance with SEC Staff Accounting Bulletin ("SAB") No. 104, Topic 13: Revenue Recognition. Under this guidance, we recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed and determinable and collectability is reasonably assured. This results in us recognizing revenue for the hardware, certain software and the warranties upon delivery to the customer, for the installation and training upon completion of these services, and ratably over the contract period for the software licenses, telephone lines and online secure storage. | ||||
Revenue from the licensing of our biotech assets may include non-refundable license and up-front fees, non- refundable milestone payments that are triggered upon achievement of a specific event, and future royalties or lump- sum payments on sales of related products. For agreements that provide for milestone payments, such as our agreement with Celgene, we adopted ASC 605-28-25, Revenue Recognition, Milestone Method. | ||||
Shared-Based Compensation | ' | |||
(i) SHARE-BASED COMPENSATION | ||||
We account for share-based compensation in accordance with ASC 718-20, Awards Classified as Equity. We apply ASC 718-20 in accounting for stock-based awards issued to employees under the recognition of compensation expense related to the fair value of employee share-based awards, including stock options and restricted stock. Determining the fair value of options at the grant date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise, the associated volatility and the expected dividends. Judgment is required in estimating the amount of share-based awards expected to be forfeited prior to vesting. If actual forfeitures differ significantly from these estimates, share-based compensation expense could be materially impacted. | ||||
We account for options and warrants issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. We treat options and warrants issued to non-employees the same as those issued to employees with the exception of determination of the measurement date. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Options and warrants granted to consultants are valued at their respective measurement dates, and recognized as an expense based on the portion of the total consulting services provided during the applicable period. As further consulting services are provided in future periods, we will revalue the associated options and warrants and recognize additional expense based on their then current values. | ||||
We estimate the fair value of each stock option on the date of grant using the Black-Scholes option pricing model. We determine assumptions relative to volatility and anticipated forfeitures at the time of grant. We valued grants of stock options and warrants during the six months ended June 30, 2013 and 2012 using the following assumptions. | ||||
30-Jun-13 | 30-Jun-12 | |||
(Unaudited) | (Unaudited) | |||
Expected life in years | 0 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 123.47% - 124.21% | 144.34% - 148.34% | ||
Risk free interest rate | 0.35% - 0.46% | 0.35% | ||
Expected dividends | None | None | ||
Forfeiture rate | 0% | 0% | ||
We base the assumptions used in the Black-Scholes models upon the following data: (1) our use of the contractual life of the underlying non-employee warrants as the expected life; the expected life of the employee options used in this calculation is the period of time the options are expected to be outstanding and has been determined based on historical exercise experience; (2) in the absence of an extensive public market for our shares, the expected stock price volatility of the underlying shares over the expected term of the option or warrant was taken at approximately the mid-point of the range for similar companies at the various grant dates; (3) we base the risk free interest rate on published U.S. Treasury Department interest rates for the expected terms of the underlying options or warrants; (4) we base expected dividends on historical dividend data and expected future dividend activity; and (5) we base the expected forfeiture rate on historical forfeiture activity and assumptions regarding future forfeitures based on the composition of current grantees. | ||||
Net Income/Loss Per Share | ' | |||
(j) NET INCOME/LOSS PER SHARE | ||||
We apply the guidance of ASC 260-10, Earnings Per Share for calculating the basic and diluted loss per share. We calculate basic loss per share by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding. We compute diluted loss per share similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive. We exclude common equivalent shares from the computation of net loss per share if their effect is anti- dilutive. | ||||
We excluded all potential common shares from the computation of diluted net loss per common share for the three and six months ended June 30, 2013 and 2012 because they were anti-dilutive due to our net loss position. Stock options, warrants and convertible notes excluded from the computation totaled 183,042,737 shares for the three and six months ended June 30, 2013, and 104,581,442 shares for the three and six months ended June 30, 2012, respectively. | ||||
Recent Accounting Pronouncements | ' | |||
(k) RECENT ACCOUNTING PRONOUNCEMENTS | ||||
During July 2012, FASB issued ASU no. 2012-02, "Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment". Under the amendments in Update 2012-02, entities have the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Subtopic 350-30. The amendments in this Update are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this standard did not have a material impact on our financial statements. | ||||
Income Taxes | ' | |||
Under ASC 740-270, Income Taxes - Interim Reporting, we are required to adjust our effective tax rate each quarter to be consistent with the estimated annual effective tax rate. We are also required to record the tax impact of certain discrete items, unusual or infrequently occurring, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, we exclude jurisdictions with a projected loss for the year or a year-to-date loss where we cannot recognize a tax benefit from our estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. | ||||
As a result of the implementation of certain provisions of ASC 740, Income Taxes, (formerly FIN 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109), we performed an analysis of its previous tax filings and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of June 30, 2013. | ||||
SHAREBASED_COMPENSATION_Tables
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Share-Based Compensation Tables | ' | |||
Schedule of Valuation Assumptions to Determine the Fair Value of Stock Options | ' | |||
We valued grants of stock options and warrants during the nine months ended September 30, 2013 and 2012 using the following assumptions. | ||||
30-Sep-13 | 30-Sep-12 | |||
(Unaudited) | (Unaudited) | |||
Expected life in years | 0 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 120.51% - 122.72% | 144.34% - 148.34% | ||
Risk free interest rate | 0.04% - 1.38% | 0.35% | ||
Expected dividends | None | None | ||
Forfeiture rate | 0% | 0% | ||
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Commitments And Contingencies Tables | ' | |||||
Schedule of Future Minimum Rental Payments for Operating and Capital Leases | ' | |||||
Future minimum lease payments as of September 30, 2013, under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments are as follows: | ||||||
Year Ending | Operating | Capital | ||||
December 31, | Leases | Leases | ||||
2013 (Remainder of) | $ | 24,750 | $ | 3,524 | ||
2014 | 147,125 | 15,759 | ||||
2015 | 170,500 | - | ||||
2016 | 187,550 | - | ||||
2017 | 206,305 | - | ||||
and there after | 146,410 | - | ||||
Total minimum lease payments | $ | 882,640 | $ | 19,283 | ||
EQUITY_ISSUANCES_Tables
EQUITY ISSUANCES (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||
Summary of Outstanding Option Awards | ' | ||||||||||||||
A summary of option activity for the nine months ended September 30, 2013 is presented below. Options granted by MMR Inc. prior to the date of the Merger have been retroactively restated to reflect the conversion ratio of MMR Inc. to MMR shares. | |||||||||||||||
Weighted- | |||||||||||||||
Average | |||||||||||||||
Weighted- | Remaining | ||||||||||||||
Average | Contractual | Aggregate | |||||||||||||
Exercise | Life | Intrinsic | |||||||||||||
Options | Price | (Years) | Value | ||||||||||||
Outstanding at December 31, 2012 | 42,157,551 | $ | 0.11 | 5.93 | $ | - | |||||||||
Granted | 1,050,000 | $ | 0.08 | - | $ | - | |||||||||
Exercised | -717,461 | $ | 0.10 | - | $ | - | |||||||||
Cancelled | -3,548,368 | $ | - | - | $ | - | |||||||||
Outstanding at September 30, 2013 (Unaudited) | 38,941,722 | $ | 0.10 | 5.35 | $ | 7,500 | |||||||||
Vested and expected to vest | |||||||||||||||
at September 30, 2013 (Unaudited) | 38,941,722 | $ | 0.10 | 5.35 | $ | 7,500 | |||||||||
Exercisable at September 30, 2013 (Unaudited) | 32,866,722 | $ | 0.11 | 4.74 | $ | 3,750 | |||||||||
Summary of Stock Options Outstanding and Exercisable | ' | ||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at September 30, 2013. | |||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||
Average | Average | Average | Average | ||||||||||||
Exercise | Number | Remaining | Exercise | Number | Remaining | Exercise | |||||||||
Price | of Shares | Life (Years) | Price | of Shares | Life (Years) | Price | |||||||||
$ | 0.05 - 0.09 | 13,200,000 | 8.2 | $ | 0.07 | 7,125,000 | 7.81 | $ | 0.07 | ||||||
$ | 0.10 - 0.15 | 23,111,461 | 3.74 | $ | 0.11 | 23,111,461 | 3.74 | $ | 0.11 | ||||||
$ | > 0.15 | 2,630,261 | 5.22 | $ | 0.19 | 2,630,261 | 5.22 | $ | 0.19 | ||||||
38,941,722 | 32,866,722 | ||||||||||||||
Summary of Outstanding Warrant Awards | ' | ||||||||||||||
A summary of the activity of our warrants for the nine months ended September 30, 2013 is presented below: | |||||||||||||||
Weighted Avg | |||||||||||||||
Shares | Exercise Price | ||||||||||||||
Outstanding at December 31, 2012 | 66,329,641 | $ | 0.09 | ||||||||||||
Granted | 27,452,200 | $ | 0.06 | ||||||||||||
Exercised | -5,000,000 | $ | 0.03 | ||||||||||||
Cancelled | -9,210,000 | $ | 0.11 | ||||||||||||
Outstanding at September 30, 2013 (Unaudited) | 79,571,841 | $ | 0.08 | ||||||||||||
Exercisable at September 30, 2013 (Unaudited) | 68,263,508 | $ | 0.08 | ||||||||||||
The following summarizes the total warrants outstanding and exercisable as of September 30, 2013: | |||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||
Warrants | Weighted Avg | Weighted Avg | Warrants | Weighted Avg | Weighted Avg | ||||||||||
Ranges | Outstanding | Remaining Life | Exercise Price | Exercisable | Remaining Life | Exercise Price | |||||||||
$0.03 - $0.25 | 79,071,841 | 2.05 | $ | 0.08 | 67,763,508 | 2.60 | $ | 0.08 | |||||||
$0.25 - $2.50 | 500,000 | 0.25 | $ | 0.35 | 500,000 | 0.83 | $ | 0.35 | |||||||
79,571,841 | 68,263,508 | ||||||||||||||
Black-Scholes option and valuation model assumptions | ' | ||||||||||||||
We valued grants of stock options and warrants during the nine months ended September 30, 2013 and 2012 using the following assumptions. | |||||||||||||||
30-Sep-13 | 30-Sep-12 | ||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Expected life in years | 0 - 5 Years | 0 - 5 Years | |||||||||||||
Stock price volatility | 120.51% - 122.72% | 144.34% - 148.34% | |||||||||||||
Risk free interest rate | 0.04% - 1.38% | 0.35% | |||||||||||||
Expected dividends | None | None | |||||||||||||
Forfeiture rate | 0% | 0% | |||||||||||||
Shares Issued for Services or Reduction to Liabilities | ' | ||||||||||||||
During the nine months ended September 30, 2013, we issued 13,868,540 shares of common stock with a value of $0.74 million to various third parties and charged the proceeds to the appropriate accounts for the following reasons: | |||||||||||||||
Nine-Months Ended September 30, 2013 | |||||||||||||||
(Unaudited) | |||||||||||||||
Purpose | Shares | Value | |||||||||||||
Services Provided | 13,868,540 | $ | 740,280 | ||||||||||||
Totals | 13,868,540 | $ | 740,280 | ||||||||||||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Notes Payable Tables | ' | ||||||
Notes Payable | ' | ||||||
Notes payable consisted of the following: | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
(Unaudited) | |||||||
Promissory notes payable due to the former officers of MMRGlobal as part of severance | $ | 76,783 | $ | 76,783 | |||
packages, due in full on August 31, 2009 with no stated interest | |||||||
Promissory notes payable due to the former officers of MMRGlobal pursuant to the | 25,444 | 25,444 | |||||
Resignation and Post-Merger Employment Arrangement, due in full on August 31, 2009 | |||||||
with no stated interest | |||||||
Promissory notes payable due to vendors relating to settlement of certain outstanding | 223,116 | 223,116 | |||||
accounts payable, payable in 18 equal monthly installments commencing on July 27, | |||||||
2009 and ending on January 27, 2011, with no stated interest | |||||||
Short term loan due to a third-party with no stated interest | - | 50,000 | |||||
Notes payable, current portion | $ | 325,343 | $ | 375,343 | |||
Short term loan due to a related-party | 146,921 | 192,921 | |||||
Short term loan due to a related-party | 50,000 | 50,000 | |||||
Notes payable related party, current portion | $ | 196,921 | $ | 242,921 | |||
Accounting_Policies_Cash_and_C
Accounting Policies (Cash and Cash Equivalents) (Narrative) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
Accounting Policies Cash And Cash Equivalents Narrative Details | ' | ' | ' | ' |
Cash and cash equivalents | $6,578 | $36,655 | $42,712 | $311,103 |
Investment in equity securities, at cost | $350,000 | $56,000 | ' | ' |
Accounting_Policies_Intangible
Accounting Policies (Intangible Assets and Impairments) (Narrative) (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Accounting Policies Intangible Assets And Impairments Narrative Details | ' | ' |
Impairment charges | $0 | $0 |
Accounting_Policies_ShareBased
Accounting Policies (Share-Based Compensation Schedule Of Assumptions Used In Black-Scholes Model) (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Accounting Policies Share-Based Compensation Schedule Of Assumptions Used In Black-Scholes Model Details | ' | ' |
Expected life, in years, maximum | '5 years 0 months 0 days | '5 years 0 months 0 days |
Stock price volatility, minimum | 123.47% | 144.34% |
Stock price volatility, maximum | 124.21% | 148.34% |
Risk-free interest rate, mimimum | 0.35% | 0.35% |
Risk-free interest rate, maximum | 0.46% | 0.35% |
Expected dividends | $0 | $0 |
Forfeiture rate | 0.00% | 0.00% |
Accounting_Policies_Net_Income
Accounting Policies (Net Income/Loss Per Share) (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Accounting Policies Net Incomeloss Per Share Narrative Details | ' | ' | ' | ' |
Stock options, warrants and convertible notes excluded from the computation of net loss per share | 183,042,737 | 111,249,836 | 183,042,737 | 111,249,836 |
Related_Party_Note_Payable_Nar
Related Party Note Payable (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Sixth Amended and Restated Secured Promissory Note | ' | ' | ' | ' | ' |
Date of note | ' | ' | '2012-06-22 | ' | ' |
Maximum line of credit under note | ' | ' | ' | ' | ' |
On June 22, 2012, we and The RHL Group entered into a Sixth Amended and Restated Promissory Note, or the Sixth Amended Note. The Sixth Amended Note amended and restated the Fifth Amended Note by extending the maturity date of the Existing Note for one year to April 29, 2013 based on the original maturity date of April 29, 2012. The Six Amended Note does not materially alter the terms of the Fifth Amended Note other than for the fact that there were no loan origination fees charged by The RHL Group on this renewal. In connection with the Sixth Amended Note, we issued The RHL Group warrants to purchase 2,852,200 shares of our common stock at $0.02 per share. Such warrants are fully vested and are exercisable either in cash or on a cashless basis at any time prior to the fifth anniversary of the date of issuance. | |||||
Additional information regarding the Sixth Amended Note and Seventh Amended Note are contained in our Quarterly Report on Form 10-Q filed with the SEC on August 14, 2012. | |||||
Maturity date | ' | ' | 29-Apr-13 | ' | ' |
Warrants granted for shares | ' | ' | 2,852,200 | ' | ' |
Warrant price per share | ' | ' | $0.02 | ' | ' |
Expiration date of warrants | ' | ' | '2017-06-22 | ' | ' |
Seventh Amended and Restated Secured Promissory Note | ' | ' | ' | ' | ' |
Date of note | ' | ' | '2012-07-30 | ' | ' |
Maximum line of credit under note | ' | ' | ' | ' | ' |
On July 30, 2012, we and The RHL Group amended and restated the Sixth Amended and Restated Note by entering into that certain Seventh Amended and Restated Promissory Note (the "Seventh Amended Note"), effective as of July 30, 2012. The Seventh Amended Note amends and restates the Sixth Amended Note and together with its predecessor notes and the Seventh Amended Note, the "Credit Facility" or the "Line of Credit"), by: (i) increasing the amount available under the Credit Facility from $3,000,000 to $4,500,000 to accommodate the additional financing needs of us and/or MMR Inc.; and (ii) granting The RHL Group the right to convert, at any time following the date of the Seventh Amended Note, up to an aggregate of $500,000 in outstanding principal of the Credit Facility into shares of our Common Stock at a conversion price of $0.02 per share. The amendment did not change the maturity date of the Sixth Amended Note which matured on April 29, 2013. There were no loan origination fees charged by, or warrants issued to, The RHL Group with respect to the Seventh Amended Note. Except as set forth above, the Seventh Amended Note does not materially alter the terms of the Sixth Amended Note. | |||||
The Seventh Amended Note had a balance of $1,376,065 at June 30, 2013. The components of the Seventh Amended Note and the related balance sheet presentation as of June 30, 2013 are as follows: $960,666, which is included in the line of credit, related party; and $415,399 for other obligations due to The RHL Group, which is included in related party payables. | |||||
In conjunction with the Seventh Amended Note, we were required to maintain certain financial covenants, including the requirement that we have at least $200,000 of cash in our bank accounts or such other amount as necessary to maintain operations through the subsequent thirty (30) days and timely pay any obligations due respecting payroll and all associated payroll taxes on and after June 30, 2013. Since we did not meet these covenants as of June 30, 2013, we received a waiver from The RHL Group until August 31, 2013. | |||||
Additional information regarding the Sixth Amended Note and Seventh Amended Note are contained in our Quarterly Report on Form 10-Q filed with the SEC on August 14, 2012. | |||||
Maturity date | ' | ' | 29-Apr-13 | ' | ' |
Debt component classification: | ' | ' | ' | ' | ' |
Line of credit, related party | $960,666 | ' | $960,666 | ' | ' |
Related party payables | 415,399 | ' | 415,399 | ' | ' |
Total note payable balance | 1,376,065 | ' | 1,376,065 | ' | ' |
Interest expense on line of credit | 32,449 | 38,650 | 69,000 | 76,954 | ' |
Related party accrued interest | $10,170 | ' | $10,170 | ' | $35,451 |
Eighth Amended and Restated Secured Promissory Note | ' | ' | ' | ' | ' |
Maximum line of credit under note | ' | ' | ' | ' | ' |
On August 13, 2013, we and The RHL Group amended and restated the Seventh Amended and Restated Note by entering into that certain Eighth Amended and Restated Promissory Note (the "Eighth Amended Note"), effective as of August 13, 2013. The Eighth Amended Note amends and restates the Seventh Amended Note and together with its predecessor notes and the Eighth Amended Note, the "Credit Facility" or the "Line of Credit"), by: (i) granting The RHL Group the right to convert, at any time following the date of the Eighth Amended Note, up to an aggregate of $114,088 in outstanding principal of the Credit Facility into shares of our Common Stock at a conversion price of $0.05 per share. The Eighth Amended Note was approved by the board of directors and will mature on April 29, 2014. There were no loan origination fees charged by, or warrants issued to, The RHL Group with respect to the Eighth Amended Note. Except as set forth above, the Eighth Amended Note does not materially alter the terms of the Seventh Amended Note. | |||||
Maturity date | ' | ' | 29-Apr-14 | ' | ' |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes Narrative Details | ' |
Unrecognized tax benefits | $0 |
Income tax rate | 0.00% |
Recovered_Sheet2
Commitments and Contingencies (Operating Leases) (Details) (USD $) | Sep. 30, 2013 |
Year ending December 31: | ' |
2013 (Remainder of) | $49,240 |
2014 | 0 |
Total minimum lease payments | $49,240 |
Recovered_Sheet3
Commitments and Contingencies (Capital Leases) (Details) (USD $) | Sep. 30, 2013 |
Year ending December31: | ' |
2013 (Remainder of) | $8,373 |
2014 | 15,759 |
Total minimum lease payments | $24,132 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Leases Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Rent expense | $21,271 | $27,729 | $51,774 | $55,458 |
September 2010 Lease | ' | ' | ' | ' |
Operating lease description | ' | ' | ' | ' |
We lease certain facilities and equipment under non-cancelable capital and operating leases, which expire at various dates through 2014. Effective September 1, 2010, we entered into a lease agreement to lease office space in Los Angeles, California. The lease currently requires a monthly payment of $6,655. Effective November 1, 2010, we entered into a lease agreement to lease additional space adjacent to the current office space in Los Angeles, California. The lease currently requires an additional monthly payment of $3,512. Both leases expire on August 31, 2013 unless renewed. | ||||
November 2010 Lease | ' | ' | ' | ' |
Operating lease description | ' | ' | ' | ' |
We lease certain facilities and equipment under non-cancelable capital and operating leases, which expire at various dates through 2014. Effective September 1, 2010, we entered into a lease agreement to lease office space in Los Angeles, California. The lease currently requires a monthly payment of $6,655. Effective November 1, 2010, we entered into a lease agreement to lease additional space adjacent to the current office space in Los Angeles, California. The lease currently requires an additional monthly payment of $3,512. Both leases expire on August 31, 2013 unless renewed. | ||||
January 2013 Lease | ' | ' | ' | ' |
Operating lease description | ' | ' | ' | ' |
Also effective January 4, 2013, we entered into a sub-lease agreement to lease office space for a monthly rent of $3,2000. This sub-lease will expire on August 31, 2013. Total rent income was $10,234 for the three months ended June 30, 2013 and $23,394 for the six months ended June 30, 2013. | ||||
Rent income | $10,234 | ' | $23,394 | ' |
Commitments_and_Contingencies_3
Commitments and Contingencies (Guarantees Provided To The Company Narrative) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Guarantee provided by The RHL Group | ' |
Date of guarantee | '2011-05-06 |
Amount of guarantee | $250,000 |
Warrants granted | 625,000 |
Warrant price per share | $0.05 |
Shares granted | 125,000 |
Share price per share | $0.05 |
Guarantee provided by Robert H. Lorsch of February 17, 2012 | ' |
Date of guarantee | '2011-02-17 |
Amount of guarantee | 150,000 |
Guarantee Provided The RHL Group July 31 2012 | ' |
Date of guarantee | '2012-07-31 |
Amount of guarantee | $1,014,629 |
Warrants granted | 3,055,432 |
Warrant price per share | $0.02 |
Commitments_and_Contingencies_4
Commitments and Contingencies (Concentrations Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Sales | Group A | ' | ' | ' | ' |
Sales revenue, major customer, percentage | 92.00% | ' | ' | ' |
Sales | Group C | ' | ' | ' | ' |
Sales revenue, major customer, percentage | ' | 47.00% | ' | ' |
Sales | Group B | ' | ' | ' | ' |
Sales revenue, major customer, percentage | ' | ' | 71.00% | ' |
Sales | Group D | ' | ' | ' | ' |
Sales revenue, major customer, percentage | ' | ' | ' | 48.00% |
Sales | VisiInc. | ' | ' | ' | ' |
Revenue by largest customers | $256,303 | $25,000 | $256,303 | $25,000 |
Sales | XN Financial | ' | ' | ' | ' |
Revenue by largest customers | ' | ' | 29,031 | ' |
Sales | UST Global | ' | ' | ' | ' |
Revenue by largest customers | ' | ' | 15,000 | ' |
Sales | E-Mail Frequency | ' | ' | ' | ' |
Revenue by largest customers | ' | 51,447 | ' | 51,447 |
Sales | Paramount | ' | ' | ' | ' |
Revenue by largest customers | ' | 15,673 | ' | ' |
Sales | Celgene | ' | ' | ' | ' |
Revenue by largest customers | ' | ' | ' | 100,000 |
XN Financial | Sales | ' | ' | ' | ' |
Revenue by largest customers | $21,531 | ' | ' | ' |
Equity_Issuances_Stock_Option_
Equity Issuances (Stock Option Activity Summary Of Option Activity) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Equity Issuances Stock Option Activity Summary Of Option Activity Details | ' |
Outstanding at December 31, 2012 | 42,157,551 |
Granted | 1,050,000 |
Exercised | 0 |
Cancelled | 0 |
Outstanding at September 30, 2013 (Unaudited) | 43,207,551 |
Vested and expected to vest at September 30, 2013 (Unaudited) | 43,207,551 |
Exercisable at September 30, 2013 (Unaudited) | 37,132,551 |
Weighted-Average Exercise Prices, Outstanding at December 31, 2012 | $0.11 |
Weighted-Average Exercise Prices, Granted | $0.08 |
Weighted-Average Exercise Prices, Exercised | $0 |
Weighted-Average Exercise Prices, Forfeited, cancelled or expired | $0 |
Weighted-Average Exercise Prices, Outstanding at September 30, 2013 | $0.10 |
Weighted-Average Exercise Prices, Vested and expected to vest | $0.10 |
Weighted-Average Exercise Prices, Exercisable | $0.11 |
Weighted-Average Remaining Contractual Life (in years), Outstanding at December 31, 2012 | 5.93 |
Weighted-Average Remaining Contractual Life (in years), Outstanding at September 30, 2013 | 5.57 |
Weighted-Average Remaining Contractual Life (in years), Vested and expected to vest | '5 years 6 months 25 days |
Weighted-Average Remaining Contractual Life (in years), Exercisable | '5 years 0 months 11 days |
Aggregate Intrinsic Value, Outstanding at December 31, 2012 | $0 |
Aggregate Intrinsic Value, Outstanding at September 30, 2013 | 7,500 |
Aggregate Intrinsic Value, Vested and expected to vest | 7,500 |
Aggregate Intrinsic Value, Exercisable | $3,750 |
Equity_Issuances_Stock_Option_1
Equity Issuances (Stock Option Activity Summary Of Stock Options Outstanding and Exercisable) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
$0.05 - $0.09 | $0.1 - $0.15 | > $0.15 | |||
Range of Exercise Price, Minimum | ' | ' | $0.05 | $0.10 | $0.15 |
Range of Exercise Price, Maximum | ' | ' | $0.09 | $0.15 | ' |
Options Outstanding, Number of Shares | 43,207,551 | 42,157,551 | 13,200,000 | 27,122,290 | 2,885,261 |
Options Outstanding, Weighted-Average Remaining Life (in years) | ' | ' | '8 years 5 months 12 days | '4 years 2 months 19 days | '5 years 0 months 22 days |
Options Outstanding, Weighted-Average Exercise Price Per Share | $0.10 | $0.11 | $0.07 | $0.11 | $0.19 |
Options Exercisable, Number of Shares | 37,132,551 | ' | 7,125,000 | 27,122,290 | 2,885,261 |
Options Exercisable, Weighted-Average Remaining Life (in years) | ' | ' | '8 years 0 months 22 days | '4 years 2 months 19 days | '5 years 0 months 22 days |
Options Exercisable, Weighted-Average Exercise Price Per Share | $0.11 | ' | $0.07 | $0.11 | $0.19 |
Equity_Issuances_Stock_Option_2
Equity Issuances (Stock Option and Warrant Expense Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Equity Issuances Stock Option And Warrant Expense Narrative Details | ' | ' | ' | ' |
Stock option expense | $44,671 | $208,444 | $108,203 | $655,124 |
Warrant expense | $117,933 | $35,612 | $142,578 | $77,070 |
Equity_Issuances_Summary_Of_Wa
Equity Issuances (Summary Of Warrant Activity) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Equity Issuances Summary Of Warrant Activity Details | ' |
Warrants outstanding at December 31, 2012 | 66,329,641 |
Granted | 11,700,000 |
Exercised | -5,000,000 |
Cancelled | -4,210,000 |
Warrants outstanding at September 30, 2013 | 68,819,641 |
Warrants exercisable at September 30, 2013 | 62,911,308 |
Weighted-average exercise price, beginning balance | $0.09 |
Weighted-average exercise price, granted | $0.07 |
Weighted-average exercise price, exercised during period | $0.03 |
Weighted-average exercise price, cancelled during period | $0.06 |
Weighted-average exercise price, ending balance | $0.09 |
Warrants exercisable, weighted average exercise price | $0.09 |
Equity_Issuances_Summary_Of_Wa1
Equity Issuances (Summary Of Warrants Outstanding and Exercisable) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
$0.03 - $0.25 | $0.25 - $2.50 | > $2.50 | |||
Range of Exercise Price, Minimum | ' | ' | $0.03 | $0.25 | $2.50 |
Range of Exercise Price, Maximum | ' | ' | $0.25 | $2.50 | ' |
Warrants outstanding at September 30, 2013 | 68,819,641 | 66,329,641 | 68,319,641 | 500,000 | ' |
Warrants outstanding, Weighted-average remaining life, in years | ' | ' | '1 year 10 months 6 days | '0 years 6 months 0 days | ' |
Warrants outstanding, Weighted-average exercise price | ' | ' | $0.09 | $0.35 | ' |
Warrants exercisable, at September 30, 2013 | 62,911,308 | ' | 62,411,308 | 500,000 | ' |
Warrants exercisable, Weighted-average remaining life, in years | ' | ' | 2.6 | 0.83 | ' |
Warrants exercisable, Weighted-average exercise price | ' | ' | $0.09 | $0.35 | ' |
Equity_Issuances_Inputs_Used_I
Equity Issuances (Inputs Used In Black-Scholesl) (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Equity Issuances Inputs Used In Black-Scholesl Details | ' | ' |
Expected life, in years, maximum | '5 years 0 months 0 days | '5 years 0 months 0 days |
Stock price volatility, minimum | 123.47% | 144.34% |
Stock price volatility, maximum | 124.21% | 148.34% |
Risk-free interest rate, minimum | 0.35% | 0.35% |
Risk-free interest rate, maximum | 0.46% | 0.35% |
Expected dividends | $0 | $0 |
Forfeiture rate | 0.00% | 0.00% |
Equity_Issuances_Shares_Issued
Equity Issuances (Shares Issued for Services or Reduction to Liabilities) (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Equity Issuances Shares Issued For Services Or Reduction To Liabilities Details | ' | ' |
Services provided, shares | 7,868,540 | ' |
Services provided, amount | $376,280 | ' |
Total payment of services provided through issuance of common stock, shares | 7,868,540 | ' |
Total payment of accounts payable through issuance of common stock, amount | $576,882 | $373,214 |
Equity_Issuances_Warrants_Narr
Equity Issuances (Warrants) (Narrative) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
January 10 2013 | ' |
Number of warrants granted | 100,000 |
Exercise price, per share | $0.04 |
Title of Warrants Outstanding | ' |
On January 10, 2013, we granted a warrant to purchase 100,000 shares of our common stock to a consultant in consideration for services. This warrant vested immediately and has an exercise price of $0.04 per share, and an expiration date of January 10, 2014. | |
January 21 2013 First | ' |
Number of warrants granted | 1,000,000 |
Exercise price, per share | $0.04 |
Title of Warrants Outstanding | ' |
On January 21, 2013, we granted three separate warrants, each to purchase 1,000,000 shares of our common stock, to a consultant in consideration for services. These warrants vested immediately and have an exercise price of $0.04, $0.08 and $0.12 per share, and an expiration date of January 21, 2014. | |
January 21 2013 Second | ' |
Number of warrants granted | 1,000,000 |
Exercise price, per share | $0.08 |
Title of Warrants Outstanding | ' |
On January 21, 2013, we granted three separate warrants, each to purchase 1,000,000 shares of our common stock, to a consultant in consideration for services. These warrants vested immediately and have an exercise price of $0.04, $0.08 and $0.12 per share, and an expiration date of January 21, 2014. | |
January 21 2013 Third | ' |
Number of warrants granted | 1,000,000 |
Exercise price, per share | $0.12 |
Title of Warrants Outstanding | ' |
On January 21, 2013, we granted three separate warrants, each to purchase 1,000,000 shares of our common stock, to a consultant in consideration for services. These warrants vested immediately and have an exercise price of $0.04, $0.08 and $0.12 per share, and an expiration date of January 21, 2014. | |
February 20 2013 | ' |
Number of warrants granted | 100,000 |
Exercise price, per share | $0.04 |
Title of Warrants Outstanding | ' |
On February 20, 2013, we granted a warrant to purchase 100,000 shares of our common stock to a consultant in consideration for services. This warrant vested immediately and has an exercise price of $0.04 per share, and an expiration date of February 20, 2014. | |
March 13 2013 | ' |
Number of warrants granted | 1,000,000 |
Exercise price, per share | $0.10 |
Title of Warrants Outstanding | ' |
On March 13, 2013, we granted a warrant to purchase 1,000,000 shares of our common stock to a third-party in consideration for services. This warrant vested immediately and has an exercise price of $0.10 per share, and an expiration date of March 13, 2014. | |
March 18 2013 A | ' |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.10 |
Title of Warrants Outstanding | ' |
On March 18, 2013, we granted two separate warrants, each to purchase 500,000 shares of our common stock to two different unrelated third-parties in consideration for services. These warrants vest immediately and have exercise prices of $0.10 per share, and an expiration date of March 18, 2014. | |
March 18 2013 B | ' |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.10 |
Title of Warrants Outstanding | ' |
On March 18, 2013, we granted two separate warrants, each to purchase 500,000 shares of our common stock to two different unrelated third-parties in consideration for services. These warrants vest immediately and have exercise prices of $0.10 per share, and an expiration date of March 18, 2014. | |
April 1 2013 A | ' |
Number of warrants granted | 250,000 |
Exercise price, per share | $0.06 |
Title of Warrants Outstanding | ' |
On April 1, 2013, we granted two separate warrants, each to purchase 250,000 shares of our common stock to two different unrelated third-parties in consideration for rendering services in our Advisory Board. These warrants vest annually over three years and have an exercise price of $0.06 per share, and an expiration date of April 1, 2018. | |
April 1 2013 B | ' |
Number of warrants granted | 250,000 |
Exercise price, per share | $0.06 |
Title of Warrants Outstanding | ' |
On April 1, 2013, we granted two separate warrants, each to purchase 250,000 shares of our common stock to two different unrelated third-parties in consideration for rendering services in our Advisory Board. These warrants vest annually over three years and have an exercise price of $0.06 per share, and an expiration date of April 1, 2018. | |
May 13 2013 A | ' |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.12 |
Title of Warrants Outstanding | ' |
On May 13, 2013, we granted four separate warrants to purchase 500,000 shares each of our common stock to two unrelated third- parties in consideration for services. These warrants vest upon certain revenue generating criteria is met, and have exercise prices of $0.08 and $0.12 per share, and an expiration date of May 13, 2015. | |
May 13 2013 B | ' |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.12 |
Title of Warrants Outstanding | ' |
On May 13, 2013, we granted four separate warrants to purchase 500,000 shares each of our common stock to two unrelated third- parties in consideration for services. These warrants vest upon certain revenue generating criteria is met, and have exercise prices of $0.08 and $0.12 per share, and an expiration date of May 13, 2015. | |
May 13 2013 C | ' |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.08 |
Title of Warrants Outstanding | ' |
On May 13, 2013, we granted four separate warrants to purchase 500,000 shares each of our common stock to two unrelated third- parties in consideration for services. These warrants vest upon certain revenue generating criteria is met, and have exercise prices of $0.08 and $0.12 per share, and an expiration date of May 13, 2015. | |
May 13 2013 D | ' |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.08 |
Title of Warrants Outstanding | ' |
On May 13, 2013, we granted four separate warrants to purchase 500,000 shares each of our common stock to two unrelated third- parties in consideration for services. These warrants vest upon certain revenue generating criteria is met, and have exercise prices of $0.08 and $0.12 per share, and an expiration date of May 13, 2015. | |
May 20 2013 | ' |
Number of warrants granted | 2,000,000 |
Exercise price, per share | $0.05 |
Title of Warrants Outstanding | ' |
On May 20, 2013, we granted a warrant to purchase 2,000,000 shares each of our common stock to an unrelated third-party in consideration for services. This warrant vests immediately and has exercise prices of $0.05 per share, and an expiration date of May 20, 2018. | |
June 12 2013 A | ' |
Number of warrants granted | 1,000,000 |
Exercise price, per share | $0.05 |
Title of Warrants Outstanding | ' |
On June 12, 2013, we granted two separate warrants to purchase 1,000,000 shares each of our common stock to an unrelated third-party in consideration for services. These warrants vest in six months and have exercise prices of $0.048 per share, and an expiration date of June 12, 2015. | |
June 12 2013 B | ' |
Number of warrants granted | 1,000,000 |
Exercise price, per share | $0.05 |
Title of Warrants Outstanding | ' |
On June 12, 2013, we granted two separate warrants to purchase 1,000,000 shares each of our common stock to an unrelated third-party in consideration for services. These warrants vest in six months and have exercise prices of $0.048 per share, and an expiration date of June 12, 2015. | |
Equity_Issuances_Stock_Bonus_A
Equity Issuances (Stock Bonus Agreements) (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Stock Bonus Agreement expense | $33,929 | $33,929 |
May 10 2013 | ' | ' |
Shares issued for services under Stock Bonus Agreement, shares | ' | 7,250,000 |
Shares issued for services, price per share | ' | $0.06 |
Date of share vesting | '2014-01-10 | '2014-01-10 |
May 28 2013 | ' | ' |
Shares issued for services under Stock Bonus Agreement, shares | ' | 500,000 |
Shares issued for services, price per share | ' | $0.08 |
Date of share vesting | '2014-01-28 | '2014-01-28 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Notes payable consisted of the following: | ' | ' |
Short-term Debt | $325,343 | $375,343 |
Related party short-term debt | 196,921 | 242,921 |
Severance Package Notes | ' | ' |
Notes payable consisted of the following: | ' | ' |
Short-term Debt, Terms | ' | ' |
Promissory notes payable due to the former officers of MMRGlobal as part of severance packages, due in full on August 31, 2009 with no stated interest | ||
Short-term Debt | 76,783 | 76,783 |
Resignation and Post-Merger Employment Arrangement Notes | ' | ' |
Notes payable consisted of the following: | ' | ' |
Short-term Debt, Terms | ' | ' |
Promissory notes payable due to the former officers of | ||
MMRGlobal pursuant to the Resignation and Post-Merger Employment | ||
Arrangement, due in full on August 31, 2009 with no stated interest | ||
Short-term Debt | 25,444 | 25,444 |
Notes Payable - Vendors | ' | ' |
Notes payable consisted of the following: | ' | ' |
Short-term Debt, Terms | ' | ' |
Promissory notes payable due to vendors relating to settlement of certain | ||
outstanding accounts payable, payable in 18 equal monthly installments commencing | ||
on July 27, 2009 and ending on January 27, 2011, with no stated interest | ||
Short-term Debt | 223,116 | 223,116 |
Short Term Loan Two | ' | ' |
Notes payable consisted of the following: | ' | ' |
Short-term Debt, Terms | ' | ' |
Short term loan due to a third-party with no stated interest | ||
Short-term Debt | 0 | 50,000 |
Related Party One | ' | ' |
Notes payable consisted of the following: | ' | ' |
Short-term Debt, Terms | ' | ' |
Short term loan due to a related-party | ||
Related party short-term debt | 132,921 | 192,921 |
Related Party Two | ' | ' |
Notes payable consisted of the following: | ' | ' |
Short-term Debt, Terms | ' | ' |
Short term loan due to a related-party | ||
Related party short-term debt | $50,000 | $50,000 |
Convertible_Notes_Payable_Narr
Convertible Notes Payable (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Convertible Notes Payable Narrative Details | ' | ' | ' | ' | ' |
Debt instrument, description | ' | ' | ' | ' | ' |
From time to time, we enter into Convertible Promissory Notes. As of June 30, 2013, a total of $762,607 in convertible notes remained outstanding and the investors had not chosen to convert their note balances into shares of our common stock. | |||||
Each Note contains the following general terms and provisions: | |||||
The principal amount owed under each note becomes due and payable one year from the investment date provided that, upon ten (10) days' prior written notice to the holder, we may, in our sole discretion, extend the maturity date for an additional six month term. | |||||
These notes bear interest at a rate of 6% per annum payable in cash or shares of common stock or a combination of cash and shares of common stock at our option. | |||||
During the first quarter of 2013, we entered into fourteen different Convertible Promissory Notes with eleven different unrelated third-parties for principal amounts totaling $493,750, with fixed conversion prices ranging from $0.02 to $0.028. These notes have the option to be converted into a total of 24,035,715 shares of our common stock. The loan discount for the convertible note feature totaled $73,500 and was amortized to interest. As of June 30, 2013, all of these notes had been converted. | |||||
During the second quarter of 2013, we entered into thirteen different Convertible Promissory Notes with thirteen different unrelated third-parties for principal amounts totaling $892,500 with fixed conversion prices ranging from $0.0339 to $0.08. These notes have the option to be converted into a total of 19,263,258 shares of our common stock. As of June 30, 2013, all of these notes had been converted. | |||||
The total interest expense attributed to the Notes and related warrants for the three months ended June 30, 2013 and 2012 was $10,706 and $11,537, respectively. The total interest expense attributed to the Notes and related warrants for the six months ended June 30, 2013 and 2012 was $95,507 and $47,679, respectively. | |||||
Amortization of loan discount | ' | $73,500 | ' | $73,500 | ' |
Convertible notes converted | 892,500 | 493,750 | ' | 493,750 | ' |
Converted notes, shares issued | 19,263,258 | 24,035,715 | ' | ' | ' |
Interest expense | $10,706 | ' | $11,537 | $95,507 | $47,679 |
Restructuring_Activities_Narra
Restructuring Activities (Narrative) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
Favrille | Creditor Plan | |||
Restructuring and Related Activities, Description | ' | ' | ' | ' |
From May 29, 2008 to November 7, 2008, Favrille, Inc. had provided notices under the federal Worker Adjustment and Retraining Notification Act to 142 employees, including six members of senior management, that it planned to conduct a workforce reduction at its facility in San Diego, California and that their employment was expected to end on various dates between June 6, 2008 to November 7, 2008. Immediately prior to the date of the Merger on January 27, 2009, the total severance liability relating to former Favrille employees amounted to $1,682,416. On January 27, 2009, immediately prior to the Merger, as part of the 9,999,992 warrants issued to creditors, we issued warrants as settlement of $985,020 of these amounts. In addition, we signed promissory notes with certain former executives totaling $76,783, which notes are payable in full on August 31, 2009 (see Note 8). | During the period from January 27, 2009 through June 30, 2009, the Company entered into a series of settlement agreements with certain vendors of Favrille pursuant to the Creditor Plan, pursuant to which the Company settled $302,982 of its outstanding accounts payable for an aggregate settlement amount of $214,402, including promissory notes of $139,355 payable in 18 monthly installments starting on July 27, 2009 (see Note 8). | |||
As of June 30, 2013, the total remaining severance liabilities amounted to $620,613, which is reflected as severance liability on the accompanying consolidated balance sheets. This consists of $571,362 payable to former non- executive employees in 18 monthly installments starting on July 27, 2009, as well as $49,251 in estimated payroll tax. No payments were made during the six months ended June 30, 2013 on these severance liabilities. | ||||
Number of employees terminated | ' | ' | 142 | ' |
Severance liability relating to former Favrille employees at merger date | ' | ' | $1,682,416 | ' |
Warrants issued as settlement of severance liability | ' | ' | 985,020 | ' |
Promissory notes with certain former executives | ' | ' | 76,783 | ' |
Severance liabilty payable to former non-executive employees in 18 monthly installments starting on July 27, 2009 | ' | ' | 571,362 | ' |
Estimated payroll tax on severance liabilty | ' | ' | 49,251 | ' |
Total remaining severance liability | 620,613 | 620,613 | 620,613 | ' |
Amount settled under creditor plan | ' | ' | ' | 302,982 |
Accounts payable settled | ' | ' | ' | 214,402 |
Promissory notes settled | ' | ' | ' | $139,355 |
Related_Party_Transactions_Nar
Related Party Transactions (Narrative) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2009 | Dec. 31, 2012 |
The RHL Group, Inc. | Bernard Stolar | Bernard Stolar | Bernard Stolar | Bernard Stolar | Bernard Stolar | Hector Barreto | Hector Barreto | Hector Barreto | Hector Barreto | Hector Barreto | Jack Zwissig | Jack Zwissig | Jack Zwissig | Jack Zwissig | Jack Zwissig | Significant Vendor | Significant Vendor | Significant Vendor | Significant Vendor | Significant Vendor | E-Mail Frequency, LLC | E-Mail Frequency, LLC | E-Mail Frequency, LLC | E-Mail Frequency, LLC | E-Mail Frequency, LLC | David Loftus | David Loftus | David Loftus | David Loftus | David Loftus | David Loftus | |||
Nature of Common Ownership or Management Control Relationships | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Our Chairman and Chief Executive Officer, Robert H. Lorsch, is also the Chief Executive Officer of The RHL Group, Inc. and has full voting power over all of the capital stock of The RHL Group, Inc. Mr. Lorsch directly and indirectly through The RHL Group, Inc., beneficially owns approximately 16.6% our total outstanding voting stock. The RHL Group, Inc. has loaned us money pursuant to the Seventh Amended Note and all predecessor notes. See Note 3 - Related Party Note Payable above. | We incurred $12,500 during the three months ended June 30, 2013 and 2012 and $25,000 during the six months ended June 30, 2013 and 2012, toward marketing consulting services from Bernard Stolar, a director. We included $74,250 and $41,250 in related party payables as of June 30, 2013 and December 31, 2012, respectively, in connection with these services. | We also incurred $4,167 and $12,500 during the three months ended June 30, 2013 and 2012 and $16,667 and $25,000 during the six months ended June 30, 2013 and 2012, respectively, toward marketing consulting services from Hector Barreto, a former director and member of our Advisory Board. We included in related party payables as of June 30, 2013 and December 31, 2012 of $75,335 and $58,667, respectively, in connection with these services. Mr. Barreto ceased to be a related party upon his departure from the Board of Directors on September 30, 2011. | We also incurred $0 and $394 during the three months ended June 30, 2013 and 2012, respectively and $0 and $394 during the six months ended June 30, 2013 and 2012, respectively, for consulting services from Jack Zwissig, a director. We included in related party payables as of June 30, 2013 and December 31, 2012 of $20,376 and $13,376, respectively, in connection with these services. | We contract with a significant vendor for the development and maintenance of the software applications necessary to run our MyMedicalRecords PHR, MyEsafeDepositBox and MyMedicalRecords Pro products. Our outside developer supports our software development needs through a team of software engineers, programmers, quality control personnel and testers, who work with our internal product development team on all aspects of application development, design, integration and support of our products. This vendor is also a stockholder. For the three months ended June 30, 2013 and 2012, the total expenses relating to this stockholder amounted to $30,000 and $15,000, respectively and $60,000 and $141,117 during the six months ended June 30, 2013 and 2012, respectively. As of June 30, 2013 and December 31, 2012, the total amounts due to the stockholder and included in related party payables amounted to $336,800 and $447,429, respectively. | On September 15, 2009, we entered into a five year agreement with E-Mail Frequency, LLC and David Loftus, managing partner of E-Mail Frequency, LLC, who is also a significant stockholder of ours. We license an existing 80 million person direct marketing database (the "Database") of street addresses, cellular phone numbers, e-mail addresses and other comprehensive data with E-Mail Frequency. The agreement allows us to market, through the use of the Database, our MyMedicalRecords PHR, MyEsafeDepositBox virtual vault, and MMRPro document management system to physicians and their patients. Under the terms of the Agreement, we paid $250,000 to David Loftus as a one-time consulting fee in the form of 2,777,778 shares of our common stock. We recorded the $250,000 one-time licensee fee as a prepaid consulting fee and included in the prepaid expenses and other current assets as of December 31, 2009, less amortization of $12,500 included in operating expensed for the year ended December 31, 2009. Amortization expense for the three months ended June 30, 2013 and 2012 was $12,500, and amortization expense for the six months ended June 30, 2013 and 2012 was $25,000. In addition, we incurred a total of $8,216 and $6,939 during the three months ended June 30, 2013 and 2012, respectively, and we incurred a total of $15,020 and $13,878 during the six months ended June 30, 2013 and 2012, respectively, toward convertible notes interest to Mr. Loftus. We included in related party payables at June 30, 2013 and December 31, 2012 of $69,595 and $49,595, respectively. Furthermore, Mr. Loftus is a value-added-reseller of MMRPro systems. We recognized $11,195 and $67,883 in revenue from E-Mail Frequency for the sale of MMRPro systems, during 2013 and 2012, respectively. Furthermore, on January 6, 2010, we entered into 12% Convertible Promissory Notes with Mr. Loftus for a principal amount totaling $400,000 and warrants to purchase our common stock, which Mr. Loftus immediately converted both into shares of our common stock, for a total 8,860,606 shares of our common stock. On July 26, 2010 and September 21, 2010, we entered into 6% Convertible Promissory Notes with Mr. Loftus for a total principal amount of $450,000 and warrants to purchase the our common stock. On April 15, 2011, we entered into a 6% Convertible Promissory Note with Mr. Loftus for a principal amount of $156,436 and warrants to purchase our common stock. On July 19, 2011, we entered into a 6% Convertible Promissory Note with Mr. Loftus for a principal amount of $157,422 and warrants to purchase our common stock. Effective September 1, 2011, we signed and Amendment to the Agreement dated September 15, 2009 to provide licensor a non-exclusive right to target, market and sell into the Employee Benefits market. | On September 15, 2009, we entered into a five year agreement with E-Mail Frequency, LLC and David Loftus, managing partner of E-Mail Frequency, LLC, who is also a significant stockholder of ours. We license an existing 80 million person direct marketing database (the "Database") of street addresses, cellular phone numbers, e-mail addresses and other comprehensive data with E-Mail Frequency. The agreement allows us to market, through the use of the Database, our MyMedicalRecords PHR, MyEsafeDepositBox virtual vault, and MMRPro document management system to physicians and their patients. Under the terms of the Agreement, we paid $250,000 to David Loftus as a one-time consulting fee in the form of 2,777,778 shares of our common stock. We recorded the $250,000 one-time licensee fee as a prepaid consulting fee and included in the prepaid expenses and other current assets as of December 31, 2009, less amortization of $12,500 included in operating expensed for the year ended December 31, 2009. Amortization expense for the three months ended June 30, 2013 and 2012 was $12,500, and amortization expense for the six months ended June 30, 2013 and 2012 was $25,000. In addition, we incurred a total of $8,216 and $6,939 during the three months ended June 30, 2013 and 2012, respectively, and we incurred a total of $15,020 and $13,878 during the six months ended June 30, 2013 and 2012, respectively, toward convertible notes interest to Mr. Loftus. We included in related party payables at June 30, 2013 and December 31, 2012 of $69,595 and $49,595, respectively. Furthermore, Mr. Loftus is a value-added-reseller of MMRPro systems. We recognized $11,195 and $67,883 in revenue from E-Mail Frequency for the sale of MMRPro systems, during 2013 and 2012, respectively. Furthermore, on January 6, 2010, we entered into 12% Convertible Promissory Notes with Mr. Loftus for a principal amount totaling $400,000 and warrants to purchase our common stock, which Mr. Loftus immediately converted both into shares of our common stock, for a total 8,860,606 shares of our common stock. On July 26, 2010 and September 21, 2010, we entered into 6% Convertible Promissory Notes with Mr. Loftus for a total principal amount of $450,000 and warrants to purchase the our common stock. On April 15, 2011, we entered into a 6% Convertible Promissory Note with Mr. Loftus for a principal amount of $156,436 and warrants to purchase our common stock. On July 19, 2011, we entered into a 6% Convertible Promissory Note with Mr. Loftus for a principal amount of $157,422 and warrants to purchase our common stock. Effective September 1, 2011, we signed and Amendment to the Agreement dated September 15, 2009 to provide licensor a non-exclusive right to target, market and sell into the Employee Benefits market. | ||||||||||||||||||||||||||||
The RHL Group is an investment holding company which provides consulting, operational and technical services to us, which we refer to as the RHL Services. As part of the RHL Services, The RHL Group provides us with unrestricted access to its internal business and relationship contact database of more than 10,000 persons and entities, which includes clients of The RHL Group and other individuals which may hold value to us. The RHL Group also provides infrastructure support to us, including allowing us unlimited access to its facilities, equipment, and data, information management and server systems. In addition to allowing us the use of its office support personnel, The RHL Group has also consented to allow us to utilize the full-time services of Mr. Lorsch as our President, Chairman and Chief Executive Officer, which requires substantial time and energy away from his required duties as The RHL Group's Chairman and Chief Executive Officer. In addition, The RHL Group has made its President, Kira Reed, available as our spokesperson. Ms. Reed, who is Mr. Lorsch's spouse, also manages our social networking activities. | ||||||||||||||||||||||||||||||||||
In consideration for the above, The RHL Group, Inc. has a consulting arrangement with MMR. A copy of the consulting agreement is filed as an exhibit in our Form 8-K, as filed with the SEC on May 4, 2009 and is hereby incorporated by reference. | ||||||||||||||||||||||||||||||||||
Related Party Transaction, Expenses from Transactions with Related Party | ' | ' | ' | $12,500 | $12,500 | $25,000 | $25,000 | ' | $4,167 | $12,500 | $16,667 | $25,000 | ' | $0 | $394 | $0 | $394 | ' | $30,000 | $15,000 | $60,000 | $141,117 | ' | ' | ' | $0 | $0 | ' | $8,216 | $6,939 | $15,020 | $13,878 | ' | ' |
Related Party Transaction, Revenues from Transactions with Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,195 | ' | 67,883 | ' | ' | ' | ' | ' | ' |
Related party payables | 1,117,949 | 1,328,533 | ' | 74,250 | ' | 74,250 | ' | 41,250 | 75,335 | ' | 75,335 | ' | 58,667 | 20,376 | ' | 20,376 | ' | 13,376 | 336,800 | ' | 336,800 | ' | 447,429 | ' | ' | ' | ' | ' | 69,595 | ' | 69,595 | ' | ' | 49,595 |
Shares issued for services, related party, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,777,778 | ' |
Shares issued for services, related party, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' |
Amortization of licensee fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $12,500 | $12,500 | $25,000 | $25,000 | ' | ' | ' | ' | ' | ' | ' |