Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 04, 2014 | Jun. 30, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'MMRGlobal, Inc. | ' | ' |
Entity Central Index Key | '0001285701 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-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 Public Float | ' | ' | $39,893,320 |
Entity Common Stock, Shares Outstanding | ' | 722,852,821 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $10,359 | $36,655 |
Accounts receivable, less allowances of $345,692 and $80,000 in 2013 and 2012, respectively | 146,298 | 404,024 |
Inventory | 65,238 | 2,865 |
Prepaid expenses and other current assets | 154,637 | 108,360 |
Total current assets | 376,532 | 551,904 |
Long-term investments: | ' | ' |
Investment in equity securities, at cost | 87,500 | 56,000 |
Total long-term investments | 87,500 | 56,000 |
Property and equipment, net | 38,393 | 20,301 |
Deposits | 0 | 3,370 |
Intangible assets, net | 1,670,033 | 1,347,859 |
Total assets | 2,172,458 | 1,979,434 |
Current liabilities: | ' | ' |
Line of credit, related party | 979,545 | 1,045,947 |
Related party payables | 1,147,697 | 1,328,533 |
Compensation payable | 402,079 | 206,548 |
Severance liability | 620,613 | 620,613 |
Accounts payable and accrued expenses | 5,264,527 | 3,985,741 |
Deferred revenue | 61,211 | 24,531 |
Convertible notes payable, net | 981,215 | 763,857 |
Notes payable, current portion | 375,343 | 375,343 |
Notes payable, related party | 196,921 | 242,921 |
Capital leases payable, current portion | 13,336 | 0 |
Total current liabilities | 10,042,487 | 8,594,034 |
Capital leases payable, less current portion | 3,522 | 0 |
Total liabilities | 10,046,009 | 8,594,034 |
Stockholders' deficit: | ' | ' |
Preferred stock - $0.001 per value, 5,000,000 shares authorized, 0 issued and outstanding. | ' | ' |
Common stock, $0.001 par value, 1,250,000,000 shares authorized, 684,367,465 and 522,152,225 shares issued and outstanding as of December 31, 2013 and 2012, respectively | 684,536 | 522,144 |
Additional paid-in capital | 53,215,960 | 46,998,534 |
Accumulated deficit | -61,774,047 | -54,135,278 |
Total stockholders' deficit | -7,873,551 | -6,614,600 |
Total liabilities and stockholders' deficit | $2,172,458 | $1,979,434 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Allowances | $345,692 | $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 | 1,250,000,000 | 1,250,000,000 |
Common stock, shares issued | 684,367,465 | 522,152,225 |
Common stock, shares outstanding | 684,367,465 | 522,152,225 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues | ' | ' |
Subscriber | $177,687 | $161,923 |
MMR Pro | 288,197 | 453,048 |
License fees | 64,011 | 128,000 |
Other income | 57,410 | 61,372 |
Total revenues | 587,305 | 804,343 |
Cost of revenues | 262,653 | 588,672 |
Gross profit | 324,652 | 215,671 |
General and administrative expenses | 5,344,713 | 3,356,382 |
Sales and marketing expenses | 1,966,694 | 2,055,089 |
Technology development | 77,715 | 245,663 |
Loss from operations | -7,064,470 | -5,441,463 |
Other income | 16,884 | 0 |
Interest and other finance charges, net | -591,183 | -461,040 |
Net loss | ($7,638,769) | ($5,902,503) |
Net loss per share: | ' | ' |
Basic and diluted | ($0.01) | ($0.01) |
Weighted average common shares outstanding: | ' | ' |
Basic and diluted | 606,477,128 | 425,856,713 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Deficit (USD $) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balances at Dec. 31, 2011 | ' | $359,155 | $42,550,551 | ($48,232,775) | ($5,283,069) |
Beginning balances, shares at Dec. 31, 2011 | ' | 359,162,894 | ' | ' | ' |
Convertible debt conversions | ' | 54,369 | 1,150,043 | ' | 1,204,412 |
Convertible debt conversions, shares | ' | 54,369,677 | ' | ' | ' |
Reclassification of derivative liabilities and creation of note discount | ' | ' | 76,928 | ' | 76,928 |
Shares issued for services or reduction to liabilities | ' | 36,416 | 935,975 | ' | 972,391 |
Shares issued for services or reduction to liabilities, shares | ' | 36,416,272 | ' | ' | ' |
Shares issued for financing activities | ' | 65,341 | 1,189,281 | ' | 1,254,622 |
Shares issued for financing activities, shares | ' | 65,340,882 | ' | ' | ' |
Stock option exercises, shares | ' | ' | ' | ' | 0 |
Stock-based compensation | ' | 6,250 | 839,193 | ' | 845,443 |
Stock-based compensation, shares | ' | 6,250,000 | ' | ' | ' |
Warrant exercises | ' | 613 | 58,887 | ' | 59,500 |
Warrant exercises, shares | ' | 612,500 | ' | ' | ' |
Warrants issued for services | ' | ' | 157,676 | ' | 157,676 |
Net loss | ' | ' | ' | -5,902,503 | -5,902,503 |
Ending balances at Dec. 31, 2012 | 0 | 522,144 | 46,998,534 | -54,135,278 | -6,614,600 |
Ending balance, shares at Dec. 31, 2012 | 0 | 522,152,225 | ' | ' | ' |
Convertible debt conversions | ' | 51,612 | 1,581,307 | ' | 1,632,919 |
Convertible debt conversions, shares | ' | 51,610,840 | ' | ' | ' |
Shares issued for services or reduction to liabilities | ' | 32,094 | 1,412,278 | ' | 1,444,372 |
Shares issued for services or reduction to liabilities, shares | ' | 31,918,265 | ' | ' | ' |
Shares issued for financing activities | ' | 58,986 | 1,457,050 | ' | 1,516,036 |
Shares issued for financing activities, shares | ' | 58,986,135 | ' | ' | ' |
Stock option exercises, shares | ' | ' | ' | ' | 717,461 |
Stock-based compensation | ' | 14,350 | 636,920 | ' | 651,270 |
Stock-based compensation, shares | ' | 14,350,000 | ' | ' | ' |
Warrant exercises | ' | 6,150 | 134,075 | ' | 140,225 |
Warrant exercises, shares | ' | 6,150,000 | ' | ' | ' |
Warrants issued for services | ' | ' | 692,073 | ' | 692,073 |
Creation of note discount | ' | ' | 358,923 | ' | 358,923 |
Cancellation of investment | ' | -800 | -55,200 | ' | -56,000 |
Cancellation of investment, shares | ' | -800,000 | ' | ' | ' |
Net loss | ' | ' | ' | -7,638,769 | -7,638,769 |
Ending balances at Dec. 31, 2013 | $0 | $684,536 | $53,215,960 | ($61,774,047) | ($7,873,551) |
Ending balance, shares at Dec. 31, 2013 | 0 | 684,367,465 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Operating activities: | ' | ' |
Net loss | ($7,638,769) | ($5,902,503) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 237,463 | 267,891 |
Non-cash write down of assets | 262,500 | 0 |
Allowance for doubtful accounts | 289,947 | 188,834 |
Warrants issued for services | 692,073 | 157,676 |
Stock-based compensation | 651,270 | 845,443 |
Common stock issued for services | 1,064,752 | 597,302 |
Amortization of loan discount | 333,915 | 150,902 |
Loan commitment fee amortization | 0 | 918 |
Subtotal - non-cash adjustments | 3,531,920 | 2,208,966 |
Effect of changes in: | ' | ' |
Accounts receivable | -431,802 | -280,662 |
Inventory | -12,792 | 47,749 |
Prepaid expenses and other current assets | -46,276 | 146,274 |
Deposits | 3,370 | 0 |
Accounts payable and accrued expenses | 1,382,490 | 1,378,443 |
Related party payables | 55,132 | 178,931 |
Compensation payable | 195,531 | 97,261 |
Deferred revenue | 36,681 | 2,980 |
Subtotal - net change in operating assets and liabilities | 1,182,334 | 1,570,976 |
Net cash used in operating activities | -2,924,515 | -2,122,561 |
Investing activities: | ' | ' |
Purchase of property and equipment | 0 | -555 |
Filing of patents | -483,649 | -333,157 |
Cost of continuing MMRPro and website development | -60,250 | -61,995 |
Net cash used in investing activities | -543,899 | -395,707 |
Financing activities: | ' | ' |
Net proceeds from convertible notes | 1,879,300 | 957,995 |
Net proceeds from warrant exercises | 140,225 | 59,500 |
Proceeds from equity line of credit | 1,516,036 | 1,254,622 |
Proceeds from note payable | 20,000 | 547,624 |
Payments of note payable | -70,000 | -525,383 |
Proceeds from note payable, related party | 84,000 | 285,771 |
Payments of note payable, related party | -20,000 | -140,091 |
Proceeds from line of credit | 113,000 | 15,000 |
Payments of line of credit | -203,472 | -208,583 |
Payments of capital lease | -16,971 | -2,635 |
Net cash provided by financing activities | 3,442,118 | 2,243,820 |
Net decrease in cash | -26,296 | -274,448 |
Cash, beginning of period | 36,655 | 311,103 |
Cash, end of period | 10,359 | 36,655 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 149,903 | 80,576 |
Cash paid for income taxes | 4,201 | 5,734 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Conversion of convertible notes into common stock | 1,632,919 | 1,204,412 |
Receipt of investment in equity securities | 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 | 48,697 | 375,089 |
Payment of payables through issuance of notes payable | 0 | 120,000 |
Reclassification of derivative liabilities and creation of note discounts | $0 | $76,928 |
NATURE_OF_OPERATIONS_AND_BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Note 1 | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Note 1 | ' |
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 (with MyMedicalRecords, Inc. in 2009), 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, 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. | |
The Company's professional offering, MMRPro, is an end-to-end electronic document management and imaging system designed to give physicians' offices, community hospitals and surgery centers 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 its 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 products and services. Through the most recent quarter, the Company had received three major patents covering the transmission of electronic medical records. The Company believes these patents represent a foundational patent portfolio which could have significant ramifications to healthcare professionals and vendors of Health IT products and services. As a result of the issuance of these patents, and certain requirements affecting the use of Health IT products and services, the Company's 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 the company's anti-CD 20 antibodies and related 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. | |
The Company (formerly Favrille) was 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 and Going Concern | |
The accompanying financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP. | |
GOING CONCERN | |
As of December 31, 2013, the Company's current liabilities exceeded its current assets by $9.73 million. Furthermore, during the years ended December 31, 2013, and 2012, the Company incurred losses of $7.44 million and $5.90 million, respectively. | |
At December 31, 2013 and December 31, 2012, we had $10,359 and $36,655, respectively, in cash and cash equivalents. Historically, we issued capital stock, sold 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 $1,355,761 at December 31, 2013 and a total Unpaid Balance (as defined in the Line of Credit) of $2,625,160, 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 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 December 31, 2013 are as follows: $979,545, which is included in the line of credit, related party; and $376,216 related to other obligations due to The RHL Group which are included in related party payables. | |
Management's plan regarding this matter is to, amongst other things, continue to utilize the Line of Credit. At December 31, 2013, there was approximately $1.9 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, the Company plans to continue to sell additional debt and equity securities, continue to settle its existing liabilities through the issuance of equity securities, explore other debt financing arrangements, continue to increase its existing subscriber and affiliate customer base, sell MMRPro products, and collect licensing fees from parties infringing upon the Company's 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, 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 the Company 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 | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Notes to Financial Statements | ' | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Note 2 | ' | |||
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 $10,359 and $36,655 as of December 31, 2013, and 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) 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 December 31, 2013, and 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 GAAP 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. | |||
(e) PROPERTY AND EQUIPMENT | ||||
We record property and equipment at cost. We record equipment under capital leases at the present value of the minimum lease payments. We calculate depreciation using the straight-line method, based upon the following estimated useful lives: | ||||
Furniture and Fixtures: 5 Years | ||||
Computer Equipment: 5 Years | ||||
When we retire or dispose of items, we charge or credit income for the difference between the net book value of the asset and the proceeds realized thereon. | ||||
We charge expenditures for maintenance and repairs to operations as incurred while we capitalize renewals and betterments. | ||||
We have pledged as collateral all property and equipment, along with all of our other assets, for a line of credit from The RHL Group, a related party (see Note 3 - Related Party Note Payable). | ||||
(f) INTANGIBLE ASSETS | ||||
Intangible assets are comprised of website and software development costs, domain names and patents. We account for website and software development costs in accordance with ASC 350-50, Website Development Costs, and ASC 985-20, Costs of Software to Be Sold, Leased or Marketed. Pursuant to ASC 350-50 and 985-20, we capitalize internally developed website and software costs when the website or software under development has reached technological feasibility. We amortize these costs, typically over an estimated life of five years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio between current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance sheet date, we evaluate the unamortized capitalized website and software costs compared to the net realizable value. We then write off the amount by which the unamortized capitalized website costs exceed its net realizable value. | ||||
We account for domain names and patents in accordance with ASC 350-30, General Intangibles Other than Goodwill. We capitalize patent costs representing legal fees associated with filing patent applications and amortize them on a straight-line basis. We are in the process of evaluating our patents' estimated useful life and will begin amortizing the patents when they are brought to the market or otherwise commercialized. We amortize identifiable intangible assets over their estimated useful lives as follows: | ||||
Website and Software Development Costs: 5 Years | ||||
Domain Name: 5 Years | ||||
Patents: 20 Years | ||||
(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 years ended December 31, 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 services. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and we reasonably are 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 usually are 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. | ||||
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 the Celgene Agreement, we adopted ASC 605-28-25, Revenue Recognition, Milestone Method. | ||||
(i) INCOME TAXES AND UNCERTAIN TAX POSITIONS | ||||
We account for income taxes in accordance with ASC 740-10, Income Taxes. We recognize deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. We record a valuation allowance related to a deferred tax asset when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. | ||||
ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. We classify interest and penalties as a component of interest and other expenses. To date, we have not been assessed, nor have we paid, any interest or penalties. | ||||
We measure and record uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. | ||||
(j) ADVERTISING | ||||
We expense advertising costs as we incur them. Advertising expense for the years ended December 31, 2013 and 2012 was $78,230 and $19,917, respectively. | ||||
(k) 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 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 warrants during the years ended December 31, 2013 and 2012 using the following assumptions: | ||||
31-Dec-13 | 31-Dec-12 | |||
Expected life in years | 0 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 120.51% - 157.58% | 123.47% - 124.21% | ||
Risk free interest rate | 0.04% - 1.58% | 0.35% - 0.46% | ||
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. | ||||
(l) 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 years ended December 31, 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 203,329,108 and 178,065,471 shares as of December 31, 2013 and 2012, respectively. | ||||
(m) RESEARCH, DEVELOPMENT AND ENGINEERING | ||||
We expense research, development and engineering costs as incurred and presented as technology development in the accompanying consolidated statements of operations. We capitalize and amortize costs for software development relating to our website incurred subsequent to establishing technological feasibility, in the form of a working model, over their estimated useful lives. | ||||
(n) COST METHOD INVESTMENT | ||||
We hold a minority equity investment in a private company, which is recorded as Investment in equity securities. This investment is accounted for under the cost method of accounting as we own less than 20% of the voting equity and only have the ability to exercise nominal, not significant, influence over the investee. We monitor this investment for impairment and make appropriate reductions in carrying value if necessary | ||||
(o) 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_NOTE_PAYABLE_Not
RELATED PARTY NOTE PAYABLE - Note 3 | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
RELATED PARTY NOTE PAYABLE - Note 3 | ' |
3. RELATED PARTY NOTE PAYABLE | |
As contemplated by the Merger Agreement and the Creditor Plan, as a condition to the Merger, at the effective time of the Merger, MMR and The RHL Group, Inc. entered into an allonge to the RHL Note and the Security Agreement ("The Allonge") pursuant to which The RHL Group, Inc. agreed to suspend certain of its rights under the Security Agreement and the RHL Note until the earlier of (a) the date that we repay all amounts outstanding under any promissory notes issued to Old Favrille's creditors under the Creditor Plan, (b) the date that we deposit into an escrow fund the maximum amount of cash payable in satisfaction of the promissory notes issued to Old Favrille's creditors under the Creditor Plan or (c) ten days after the two year anniversary of the closing date of the Merger. The suspended rights include any right of The RHL Group, Inc. to (1) declare a default or event of default under the Security Agreement or the RHL Note, (2) accelerate the maturity date of the RHL Note, (3) exercise any of its principal remedies for a default or event of default under the Security Agreement, (4) assign the RHL Note, the proceeds of the RHL Note or to otherwise negotiate the RHL Note and (5) receive payment of the outstanding principal and interest owing under the RHL Note. | |
On April 29, 2011, we entered into a Fifth Amended and Restated Secured Promissory Note, or the Fifth Amended Note, with The RHL Group and we agreed to guaranty MMR's obligations under the Fifth Amended Note (the "Guaranty"). The Fifth Amended Note amends and restates the April 29, 2010 Fourth Amended and Restated Secured Promissory Note Agreement. The Fifth Amended Note matured April 29, 2012, and bears interest at the lesser of 10% or the highest rate then permitted by law, and is secured by the Security Agreement. The reserve credit line of the Fifth Amended Note remains at $3,000,000. | |
On June 22, 2012, the Company 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 that certain Fifth Amended and Restated Promissory 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 Amended Note does not materially alter the terms of the Existing 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, the Company issued The RHL Group warrants to purchase 2,852,200 shares of the Company 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, the Company 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 "Amended Note"), effective as of July 30, 2012. The Amended Note amends and restates that certain Sixth Amended and Restated Promissory Note entered into between the foregoing parties, effective April 29, 2012 (the "Existing Note" and together with its predecessor notes and the 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 additional financing needs of the Company and/or MMR Inc.; and (ii) granting The RHL Group the right to convert, at any time following the date of the Amended Note, up to an aggregate of $500,000 in outstanding principal of the Credit Facility into shares of the Company's Common Stock at a conversion price of $0.02 per share. The amendment did not change the maturity date of the Existing Note, which was due on April 29, 2013. There were no loan origination fees charged by, or warrants issued to, The RHL Group with respect to the Amended Note. Except as set forth above, the Amended Note does not materially alter the terms of the Existing Note. | |
On August 13, 2013, the Company and The RHL Group entered into an Eighth Amended and Restated Promissory Note, effective as of April 29, 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, which was recorded as a charge to interest expense. Except as set forth above, the Amended Note does not materially alter the terms of the Existing Note. | |
The Eighth Amended Note had a balance of $1,355,761 and $1,587,160 at December 31, 2013 and 2012, respectively. The components of the Eighth Amended Note and the related balance sheet presentation as of December 31, 2013 are as follows: $979,545, which is included in the line of credit, related party; and $376,216 for other obligations due to The RHL Group, which are included in related party payables. | |
Total interest expense on the Line of Credit for the years ended December 31, 2013 and 2012 amounted to $132,804 and $155,866, respectively. The unpaid interest balances as of December 31, 2013 and December 31, 2012 were $24,049 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 December 31, 2013. Since we weren't able to meet the covenants as of December 31, 2013, we received a waiver from The RHL Group until April 5, 2014. | |
PREPAID_EXPENSES_AND_OTHER_CUR
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Note 4 | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Note 4 | ' | ||||||
4. PREPAID EXPENSES AND OTHER CURRENT ASSETS | |||||||
Prepaid expenses and other current assets include the following: | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Prepaid consulting fees from issuance of common stock | $ | 141,315 | $ | 91,778 | |||
Prepaid insurance | 8,947 | 12,207 | |||||
Prepaid trade shows | 4,375 | 4,375 | |||||
Total prepaid expenses and other current assets | $ | 154,637 | $ | 108,360 | |||
PROPERTY_AND_EQUIPMENT_Note_5
PROPERTY AND EQUIPMENT - Note 5 | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
PROPERTY AND EQUIPMENT - Note 5 | ' | ||||||
5. PROPERTY AND EQUIPMENT | |||||||
Property and equipment, at December 31, 2013 and 2012 consisted of the following. | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Furnitures and fixtures | $ | 3,170 | $ | 3,170 | |||
Computers and related equipment | 153,335 | 119,506 | |||||
156,505 | 122,676 | ||||||
Less: Accumulated depreciation and amortization | -118,112 | -102,375 | |||||
$ | 38,393 | $ | 20,301 | ||||
Depreciation expense for the years ended December 31, 2013 and 2012 amounted to $15,737 and $8,184, respectively, which is recorded in general and administrative expenses in the Consolidated Statement of Operations. | |||||||
INTANGIBLE_ASSETS_Note_6
INTANGIBLE ASSETS - Note 6 | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
INTANGIBLE ASSETS - Note 6 | ' | ||||||
6. INTANGIBLE ASSETS | |||||||
Intangible assets as of December 31, 2013 and 2012 consisted of the following: | |||||||
Years Ended December 31, | |||||||
2013 | 2012 | ||||||
Website development | $ | 326,394 | $ | 327,094 | |||
MMR Pro website development | 863,561 | 756,511 | |||||
Patents | 1,246,739 | 809,889 | |||||
Domain name | 86,375 | 86,375 | |||||
2,523,069 | 1,979,869 | ||||||
Less: Accumulated amortization | -853,036 | -632,010 | |||||
$ | 1,670,033 | $ | 1,347,859 | ||||
Amortization expense for the years ended December 31, 2013 and 2012 amounted to $221,726 and $259,953, respectively. Estimated amortization expense for each of the next five succeeding years is expected to be as follows: | |||||||
Year Ending | |||||||
December 31, | |||||||
2014 | $ | 231,505 | |||||
2015 | 208,946 | ||||||
2016 | 58,806 | ||||||
2017 | 7,631 | ||||||
2018 | 9,398 | ||||||
Total | $ | 516,286 | |||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Note 7 | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Note 7 | ' | ||||||
7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Legal and accounting fees | $ | 3,501,978 | $ | 2,542,536 | |||
Accounts payable and accruals from Favrille Merger | 309,791 | 300,971 | |||||
Trade payables | 976,820 | 819,129 | |||||
Consulting services | 401,994 | 265,665 | |||||
Accrued vacation | 73,944 | 57,440 | |||||
Total accounts payable and accrued expenses | $ | 5,264,527 | $ | 3,985,741 | |||
INCOME_TAXES_Note_8
INCOME TAXES - Note 8 | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
INCOME TAXES - Note 8 | ' | ||||||
8. INCOME TAXES | |||||||
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows: | |||||||
Years Ended December 31, | |||||||
2013 | 2012 | ||||||
Federal statutory rate | -34.00% | -34.00% | |||||
State tax, net of federal benefit | -5.82% | -5.82% | |||||
Non-deductible items | 0.07% | 0.08% | |||||
Valuation allowance | 39.75% | 39.74% | |||||
Effective income tax rate | 0.00% | 0.00% | |||||
Significant components of deferred tax assets and (liabilities) are as follows: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Net operating loss carryforwards | $ | 18,674,820 | $ | 15,934,479 | |||
Depreciation and amortization | -145,605 | -222,850 | |||||
Share-based compensation | 2,061,862 | 1,733,105 | |||||
R&D tax credit | 2,455,964 | 2,455,964 | |||||
State tax and other | -1,446,425 | -1,207,439 | |||||
Deferred tax assets, net | 21,600,616 | 18,693,259 | |||||
Less: valuation allowance | -21,600,616 | -18,693,259 | |||||
$ | - | $ | - | ||||
At December 31, 2013, the Company had Federal and State net operating loss carry forwards available to offset future taxable income of $43,632,481 and $43,436,381, respectively. These carry forwards will begin to expire in the years ending December 31, 2026 and December 31, 2016, respectively. These net operating losses may be subject to various limitations on utilization based on ownership changes under Internal Revenue Code Section 382 as a result of the Merger, and the Company is in the process of evaluating the impact of this before any losses are used to offset future taxable income. The Company's net operating loss carry forwards are subject to examination until such time as the NOLs are used and the tax year is closed. | |||||||
The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by a valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to us for tax reporting purposes, and other relevant factors. | |||||||
At December 31, 2013, based on available evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more likely than not that its deferred tax assets would not be realized. The Company has recorded an $21,600,616 valuation allowance, or 100% of its cumulative deferred tax assets. | |||||||
The Company performed an analysis of its tax filings and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of December 31, 2013 and 2012. | |||||||
Future changes in the unrecognized tax benefit are not expected to have an impact on the effective tax rate due to the existence of the valuation allowance. The Company estimates that the unrecognized tax benefit will not change within the next twelve months. The Company will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in its consolidated statements of operations. The Company incurred $0 of interest and penalties during the years ended December 31, 2013 and 2012. | |||||||
The Company files income tax returns in the United States ("Federal") and California ("State") jurisdictions. The Company is subject to Federal and State income tax examinations by the tax authorities. | |||||||
The following table summarizes the open tax years for each major jurisdiction: | |||||||
Jurisdiction Open Tax Years | |||||||
Federal 2010 - 2013 | |||||||
California State 2009 - 2013 | |||||||
As the Company has significant net operating loss carryforwards, even if certain of the Company's tax positions were disallowed, it is not foreseen that the Company would have to pay any taxes in the near future. Consequently, the Company does not calculate the impact of interest or penalties on amounts that might be disallowed. The Company's net operating loss carryforwards are subject to examination until they are fully utilized and such tax years are closed. | |||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES - Note 9 | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
COMMITMENTS AND CONTINGENCIES - Note 9 | ' | ||||||
9. COMMITMENTS AND CONTIGENCIES | |||||||
Leases | |||||||
Effective September 1, 2013, we renewed our lease for office space in Los Angeles, California with a term through August 31, 2015. The lease currently requires a monthly payment of $8,250. Total rent expense for the years ended December 31, 2013 and 2012 were $120,472 and $116,142 respectively. Future minimum lease payments as of December 31, 2013, under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) are as follows: | |||||||
Year Ending | Operating | Capital | |||||
December 31, | Leases | Leases | |||||
2014 | $ | 147,125 | $ | 13,336 | |||
2015 | 170,500 | 3,522 | |||||
2016 | 187,550 | - | |||||
2017 | 206,305 | - | |||||
2018 and there after | 146,410 | - | |||||
857,890 | 16,858 | ||||||
Less current portion | -13,336 | ||||||
Total minimum lease payments | $ | 857,890 | $ | 3,522 | |||
Concentration Risk Disclosure - Note 9 | ' | ||||||
Concentrations | |||||||
During 2013, our three largest customers (Visi, Inc. $302,000, Thorson Insurance Services $50,000 and XN Financial $44,000) accounted for approximately 67% of our total revenue. Due to the contributions of these customers to our consolidated revenue, we are somewhat dependent upon our relationships with these customers. | |||||||
Revenue from our largest customer, which comprised 52% and 33% of our total revenue for the years ended December 31, 2013 and 2012, respectively, was transacted with a private entity in which we hold a minority equity investment. | |||||||
For the year ended December 31, 2012, our three largest customers (Visi, Inc. $267,000, Celgene $100,000 and E-mail Frequency $81,971) accounted for approximately 56% of our total revenue. | |||||||
Legal Matters and Contingencies - Note 9 | ' | ||||||
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 Fifth Amended Note or any subsequent renewals. Additionally, any balances due to this vendor at any given time will reduce the amount available under the Fifth 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 MMR 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. | |||||||
Employment Agreements | |||||||
The Company has employment agreements with its Chairman, President and Chief Executive Officer, Robert H. Lorsch, its Vice President of Finance and Chief Financial Officer, Ingrid Safranek, its Vice President Telecommunications & Carrier Relations, Rafael "Ralph" Salazar, and Executive Vice President, Richard Lagani. Under each employment agreement, the executive officers receive a base salary, subject to annual increases as determined by the board of directors, certain benefits as set forth in the employment agreements, and an annual bonus at the discretion of the board of directors. | |||||||
On January 29, 2009 we entered into an employment agreement with our Chairman, President and Chief Executive Officer, Robert H. Lorsch, with an initial term ending on December 31, 2011, subject to successive automatic extension unless we or Mr. Lorsch elect not to extend. Under the terms of his agreement, Mr. Lorsch shall serve as both our President and Chief Executive Officer and President and Chief Executive Officer of our wholly-owned subsidiary, MMR. The agreement provides for a base salary of $15,000 per month, subject to an upward increase and with an annual bonus and stock option grants in such amounts, if any, as the Board of Directors may determine in its sole discretion. Mr. Lorsch receives a monthly auto allowance, reimbursement of certain life insurance premiums, and reimbursement for certain other insurance coverage, and is entitled to participate in benefits generally made to our senior executives. | |||||||
On December 28, 2011, the Board of Directors agreed to renew Mr. Lorsch's employment agreement effective January 1, 2012 for an additional three year term ending on December 31, 2014. The term of the Renewal expires on December 31, 2014, but may be extended automatically for successive additional one-year periods at the expiration of the then-current term unless written notice of non-extension is provided to Mr. Lorsch with at least 90 days prior notice to the expiration of such term. In addition, on December 31, 2013, the Board of Directors agreed to extend Mr. Lorsch's employment term to December 31, 2015 under the same terms. Mr. Lorsch's current annual base salary will remain unchanged, except for the minimum 5% annual increase as called under the agreement, with the understanding that, as in the past, portions of the payments could be deferred into future periods. Mr. Lorsch may terminate the agreement upon 30 days written notice without reason or for good reason (as defined in the agreements) if we fail to cure acts or omissions constituting good reason within 30 days. If Mr. Lorsch's employment is terminated by us for cause or voluntarily by Mr. Lorsch without good reason, he will not be entitled to receive any severance payments or benefits under the employment agreement. If Mr. Lorsch's employment is terminated by us without cause or voluntarily by Mr. Lorsch for good reason, Mr. Lorsch will be entitled to one year of salary at his then current rate of pay, including all monthly benefits, and the pro rata portion of the annual bonus otherwise due Mr. Lorsch. In the event of his disability, Mr. Lorsch would be entitled to receive compensation equal to 60% of his base salary as then in effect. Mr. Lorsch's employment agreement includes provisions that prohibit Mr. Lorsch from disclosing our confidential information and trade secrets and competing with us during the term of his employment agreement or soliciting our employees for 12 months following termination of employment. | |||||||
We also have entered into a consulting agreement with The RHL Group, Inc., which is wholly-owned by Mr. Lorsch that provides for a monthly fee of $25,000 plus reimbursement of expenses including medical insurance. The RHL Group provides consulting, operational and technical services to the Company, which we refer to as the RHL Services. As part of the RHL Services, the RHL Group provides the Company 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 the Company. The RHL Group also provides infrastructure support to the Company, including allowing the Company unlimited access to its facilities, equipment, and data, information management and server systems. The RHL Group has also consented to allow the Company to utilize the full-time services of Mr. Lorsch as the Company's 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 the Company's spokesperson. Ms. Reed, who is Mr. Lorsch's spouse, also manages the Company's social networking activities. | |||||||
On January 26, 2010, we entered into an employment agreement with Ingrid Safranek as our Vice President, Chief Financial Officer and Secretary. Under the employment agreement, Ms. Safranek receives a base salary, subject to annual increases as determined by the Board of Directors, certain benefits as set forth in the employment agreement, and an annual bonus at the discretion of the board of directors. Ms. Safranek's employment agreement was effective until June 15, 2010, but was extended until June 15, 2011. On December 10, 2010, the Board approved Ms. Safranek's employment agreement to be amended to extend the term for an additional one year commencing on January 1, 2011. On December 28, 2011, the Board extended the current employment agreement for an additional two years term and approved an increase in her base salary with the understanding that, from time to time, it could be necessary to defer certain payments or benefits into future periods. Furthermore, on December 31, 2013, the Board elected to renew Ms. Safranek's agreement for an additional two year term under the same terms as before. | |||||||
The current term of Ms. Safranek's employment agreement is effective until December 31, 2015 and will automatically renew for successive 12 month periods unless terminated at least 30 days prior to the end of the term. The employment agreement may be terminated by the Company without cause (as defined in the agreement) upon 90 days written notice or for cause if Ms. Safranek fails to cure the acts or omissions constituting cause within 30 days. If Ms. Safranek's employment is terminated by the Company for cause or voluntarily by Ms. Safranek without good reason, she will not be entitled to receive any severance payments or benefits under the employment agreement. If Ms. Safranek's employment is terminated by the Company without cause or voluntarily by Ms. Safranek for good reason, Ms. Safranek will be entitled to one year of salary at her then current rate of pay, including all monthly benefits, and the pro rata portion of the annual bonus otherwise due Ms. Safranek. In the event of her disability, Ms. Safranek would be entitled to receive compensation equal to 60% of her base salary as then in effect. Ms. Safranek's employment agreement includes provisions that prohibit her from disclosing our confidential information and trade secrets and competing with us during the term of his employment agreement or soliciting our employees for 12 months following termination of employment. | |||||||
On June 15, 2010, we entered into an employment agreement with Rafael "Ralph" Salazar as our Vice President Telecommunications & Carrier Relations. Under the employment agreement, Mr. Salazar received a base salary, subject to annual increase as determined by the board of directors, certain benefits as set forth in the employment agreement, and an annual bonus at the discretion of the board of directors. Mr. Salazar's employment agreement was effective until June 15, 2012. On December 28, 2011, the Board extended the current employment agreement for an additional two year term and approved an increase in his base salary with the understanding that, from time to time, it could be necessary to defer certain payments or benefits into future periods. The term of Mr. Salazar's employment agreement was effective until December 31, 2013 and was not renewed as Mr. Salazar elected to retire. | |||||||
On April 1, 2011, we entered into an employment agreement with Richard Lagani as our Executive Vice President. Under the employment agreement, Mr. Lagani received a base salary, subject to annual increase as determined by the board of directors, certain benefits as set forth in the employment agreement and an annual bonus at the discretion of the board of directors. The term of Mr. Lagani's employment agreement was effective until April 30, 2013 and was converted into a consulting agreement at the end of the term as Mr. Lagani continued working for us from London. On August 1, 2012, Mr. Lagani relocated his primary residence to London England where he continues to provide services to the Company on a special projects basis. | |||||||
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. 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. On or about February 13, 2014, SCM answered the MMR complaint and filed a cross-complaint against MMR alleging claims of breach of contract, among other things. We do not have enough facts at this time to predict the chances of either a favorable or unfavorable outcome, nor do we 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 ("Walgreen I"). The complaint alleges that Walgreen Co. is infringing MMR's Personal Health Records patent, U.S. Patent No. 8,301,466. On January 13, 2014, MMR filed a complaint for patent infringement against Walgreen Co., titled MyMedicalRecords, Inc. v. Walgreen Co., United States District Court, Central District of California ("Walgreen II"). The complaint alleges that Walgreen Co. is infringing MMR's Personal Health Records patent, U.S. Patent No. 8,498,883. On February 13, 2014, Walgreen Co. filed a Petition for Inter Partes Review of U.S. Patent No. 8,301,466 ("IPR Proceeding") at the United States Patent and Trademark Office. On March 6, 2014, the Company and Walgreen Co. entered into a settlement agreement, the terms of which are confidential, which will result in the dismissal with prejudice of Walgreen I and Walgreen II and the dismissal of the IPR Proceeding. On March 25, 2014 the USPTO ordered that the joint motion to terminate the [IPR] proceeding be granted and the proceeding thereby terminated. | |||||||
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. That complaint alleged 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 new complaint against WebMD in the United States District Court for the Central District of California, alleging infringement of U.S. Patent Nos. 8,301,466 and 8,498,883. This matter is currently in the initial stages and we do not have enough facts at this time to predict the changes of either a favorable or unfavorable outcome, nor do we 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. ("Quest") in the United States District Court for the Central District of California, alleging 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 granted on October 29, 2013. This matter is currently in the initial stages and we do not have enough facts at this time to predict the chances of either a favorable or unfavorable outcome, nor do we 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 (the "Jardogs Complaint") in the United States District Court for the Central District of California, alleging that Jardogs, LLC infringes U.S. Patent No. 8,301,466. On September 23, 2013, MMR filed a separate complaint for patent infringement against Allscripts Healthcare Solutions Inc. ("Allscripts") titled MyMedicalRecords, Inc. v. Allscripts Healthcare Solutions Inc., United States District Court, Central District of California (the "Separate Allscripts Complaint"). The Separate Allscripts Complaint alleged that Allscripts is infringing U.S. Patent Nos. 8,301,466 and 8,498,883. On October 4, 2013, MMR filed a motion to amend the Jardogs Complaint to add Allscripts as a party defendant and to allege that Allscripts is infringing U.S. Patent Nos. 8,301,466 and 8,498,883. The Court granted that motion on November 1, 2013. Thereafter, MMR dismissed the Separate Allscripts Complaint. This matter is currently in the initial stages and we do not have enough facts at this time to predict the changes of either a favorable or unfavorable outcome, nor do we have any facts upon which to base any information regarding collectability. | |||||||
MMR has received a letter from Sunil Singhal, a former employee. Mr. Sunil Singhal was employed as Executive Vice President of Technology and Product Development at MMR. He was placed on a 30-day administrative leave on February 13, 2012 and was given a 30-day notice of termination as approved by the Board of Directors of MMRGlobal on February 29, 2012. On March 30, 2012, Mr. Singhal was officially terminated. He filed a charge with the U.S. Equal Employment Opportunity Commission, but that body has declined to take action. In turn, he filed a claim with the California Department of Fair Employment and Housing ("DFEH"). The DFEH had declined to bring a citation, but it has issued a "right to sue" notice. Mr. Singhal filed suit in the Los Angeles County Superior Court in 2013. MMR answered the complaint denying liability and damages. Discovery is underway. The Superior Court has requested that the parties engage in mediation. No trial date has been set. | |||||||
On October 18, 2012, MMR was named as a defendant in an action filed in the California Superior Court, County of Los Angeles, by Naj Allana. The matter was settled and the case dismissed. | |||||||
STOCKHOLDERS_DEFICIT_Note_10
STOCKHOLDERS' DEFICIT - Note 10 | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
STOCKHOLDERS' DEFICIT - Note 10 | ' |
10. STOCKHOLDERS' DEFICIT | |
Preferred Stock | |
The Company has 5,000,000 shares of preferred stock authorized. As of December 31, 2013, and 2012, there were no shares of preferred stock issued and outstanding. | |
Common Stock | |
As of December 31, 2013, we are authorized to issue 1,250,000,000 shares of common stock. | |
On May 24, 2012, the Company filed a 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 pursuant to the Investment Agreement, and an additional 1,000,000 shares were issued to Granite as partial consideration for the preparation of the documents for its investment in the Company. Subject to the terms and conditions of the Investment Agreement, the Company has the right to put up to $15 million in shares of our common stock to Granite. As of December 31, 2013, the amount available under the equity line facility was $13.5 million; however, that amount could be reduced based on the market price of our stock at the time any shares are sold. | |
As of December 31, 2013, the total shares of our common stock issued and outstanding amounted to 684,367,465. | |
EQUITY_TRANSACTIONS_Note_11
EQUITY TRANSACTIONS - Note 11 | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
EQUITY TRANSACTIONS - Note 11 | ' | ||||||||||||||||
11. EQUITY TRANSACTIONS | |||||||||||||||||
Stock Option Activity | |||||||||||||||||
On January 21, 2010, our Board of Directors approved an increase to the number of shares authorized for issuance under our 2001 Equity Incentive Plan (the "Plan") from 12,000,000 to 27,000,000 shares as we determined that the number of shares remaining under the Plan was inadequate to retain our key directors, executives and managers. Our stockholders approved the increase to the Plan on June 15, 2010.The Plan expired on June 5, 2011 and no options were issued under the Plan since that date. On September 1, 2011, our Board of Directors approved the adoption of a new plan to replace the Plan under the same general terms. On June 20, 2012, the shareholder voted and approved the 2011 Equity Incentive Plan at the 2012 Annual Shareholder Meeting. | |||||||||||||||||
As of December 31, 2013, total unrecognized stock-based compensation expense related to non-vested stock options was $110,284, which is expected to be recognized over a weighted average period of 1.37 years. | |||||||||||||||||
A summary of option activity for the years ended December 31, 2012 and 2013 is presented below. Options granted by MMR Inc. prior to the date of the Merger of January 27, 2009 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, 2011 | 40,773,523 | $ | 0.11 | 6.29 | $ | - | |||||||||||
Granted | 7,750,000 | 0.06 | |||||||||||||||
Exercised | - | - | |||||||||||||||
Cancelled | -6,125,972 | 0.09 | |||||||||||||||
Outstanding at December 31, 2012 | 42,397,551 | 0.11 | 5.93 | - | |||||||||||||
Granted | 2,200,000 | 0.06 | |||||||||||||||
Exercised | -717,461 | 0.10 | |||||||||||||||
Cancelled | -3,988,368 | 0.11 | |||||||||||||||
Outstanding at December 31, 2013 | 39,891,722 | $ | 0.10 | 5.08 | $ | - | |||||||||||
Vested and expected to vest | |||||||||||||||||
at December 31, 2013 | 39,891,722 | $ | 0.10 | 5.08 | $ | - | |||||||||||
Exercisable at December 31, 2013 | 32,766,722 | $ | 0.11 | 4.47 | $ | - | |||||||||||
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 years ended December 31, 2013 and 2012 were $241,428 and $708,982, respectively, and is reflected in operating expenses in the accompanying consolidated statements of operations. | |||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 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 | 14,150,000 | 7.71 | $ | 0.07 | 7,025,000 | 7.55 | $ | 0.07 | ||||||||
$ | 0.10 - 0.15 | 23,111,461 | 3.48 | $ | 0.11 | 23,111,461 | 3.48 | $ | 0.11 | ||||||||
$ | > 0.15 | 2,630,261 | 4.96 | $ | 0.19 | 2,630,261 | 4.96 | $ | 0.19 | ||||||||
39,891,722 | 32,766,722 | ||||||||||||||||
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 a total of 12,000,000 shares of our common stock at an average price per share of $0.10. The Warrants vest immediately and have expiration dates of November 18, 2013, December 18, 2013, January 18, 2014, September 13, 2015, and August 14, 2018. | |||||||||||||||||
On various dates between October 17, 2013 and November 13, 2013, we granted three different unrelated third-parties three different warrants to purchase up to a total of 4,941,198 shares of our common stock at an average price per share of $0.03. The Warrants vest immediately and have expiration dates of December 20, 2013, December 31, 2013, and October 17, 2014. | |||||||||||||||||
On November 14, 2013, we granted three different unrelated third-parties four different warrants to purchase a total of 10,750,000 shares of our common stock in consideration for services. Three of the warrants vests in a month and a half and have an average exercise price of $0.04 per share, and an expiration date of December 31, 2014 and December 31, 2015. One warrant vests immediately at an exercise price of $0.04 per share and an expiration date of November 15, 2016. | |||||||||||||||||
On December 13, 2013, we granted an unrelated third-party a warrant to purchase 500,000 shares of our common stock in consideration for services. The warrant vests six months after completion of services and have an exercise price of $0.05 per share, and an expiration date of December 31, 2014. | |||||||||||||||||
On December 19, 2013, we granted two different unrelated third-party a warrant to purchase up to 1,000,000 shares of our common stock in consideration for services. The warrants vests immediately and have an exercise price of $0.05 per share, and an expiration date of December 19, 2014. | |||||||||||||||||
A summary of the activity of the Company's warrants for the years ended December 31, 2013 is presented below. | |||||||||||||||||
Weighted Avg | |||||||||||||||||
Shares | Exercise Price | ||||||||||||||||
Outstanding at December 31, 2012 | 64,652,375 | $ | 0.09 | ||||||||||||||
Granted | 44,643,398 | $ | 0.05 | ||||||||||||||
Exercised | -12,468,526 | $ | 0.03 | ||||||||||||||
Cancelled | -8,255,406 | $ | 0.13 | ||||||||||||||
Outstanding at December 31, 2013 | 88,571,841 | $ | 0.07 | ||||||||||||||
Exercisable at December 31, 2013 | 77,263,508 | $ | 0.07 | ||||||||||||||
The following summarizes the total warrants outstanding and exercisable as of December 31, 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 | 88,571,841 | 1.92 | $ | 0.07 | 77,263,508 | 1.92 | $ | 0.07 | |||||||||
$0.25 - $2.50 | - | - | $ | - | - | - | $ | - | |||||||||
88,571,841 | 77,263,508 | ||||||||||||||||
Shares Issued for Services or Reduction to Liabilities | |||||||||||||||||
During the year ended December 31, 2013, we issued 25,382,278 shares of common stock with a value of $1,444,372 to non-employees and charged to the appropriate accounts for the following reasons: | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Purpose | Shares | Value | |||||||||||||||
Reduction of payables | 8,195,054 | $ | 379,620 | ||||||||||||||
Services provided | 23,723,211 | $ | 1,064,752 | ||||||||||||||
Totals | 31,918,265 | $ | 1,444,372 | ||||||||||||||
The 31,918,265 shares were not contractually restricted, however as they have not been registered under the Act, they are restricted from sale until they are registered under the Securities Act of 1933, as amended (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. | |||||||||||||||||
Restricted Stock Program | |||||||||||||||||
Under the Restricted Stock Program, a restricted stock award is an offer by the Company to sell to an eligible person shares that are subject to restrictions relating to the sale or transfer of the shares. A committee appointed by the Board to administer the program or the Board itself shall determine to whom an offer will be made, the number of shares the person may purchase, the price to be paid and the restriction to which the shares shall be subject. The offer must be accepted by the eligible person within thirty days from the date of the offer evidenced by the Restricted Stock Purchase Agreement. The purchase price of shares shall not be less than 85% of the fair market value of such shares on the issue date, with the provision that the purchase price for a 10% stockholder shall not be less than 110% of such fair market value. Shares are either fully and immediately vested upon issuance, or may vest in installments upon attainment of specified performance objectives. | |||||||||||||||||
During the year ended December 31, 2013 and 2012, the Company issued 31,918,265 and 36,416,272, respectively, shares of common stock in consideration for goods and services from both employees and non-employees valued at $1,444,372 and $972,391, respectively. | |||||||||||||||||
Stock Bonus Program | |||||||||||||||||
Under the Stock Bonus Program, shares are issued as a bonus for services rendered pursuant to the Stock Bonus Agreement. 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. The consultants' stock bonus were remeasured on December 31, 2013 based on the share price on that date. Total stock bonus expenses recorded during the year ended December 31, 2013 was approximately $360,000, and is reflected in operating expenses in the accompanying consolidated statements of operations. | |||||||||||||||||
On December 31, 2013, we issued a total of 7,000,000 shares of our common stock at $0.05 per share as an incentive to our board members and members of our management team under the Stock Bonus Program. All shares vest on January 1, 2015 and are forfeitable before such time. | |||||||||||||||||
As of December 31, 2013, 14,350,000 shares of restricted stock were not vested, and unrecognized compensation cost with respect to these instruments amounted to $267,586 and will be recognized during 2014. | |||||||||||||||||
NOTES_PAYABLE_Note_12
NOTES PAYABLE - Note 12 | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
NOTES PAYABLE - Note 12 | ' | ||||||
12. NOTES PAYABLE | |||||||
The Notes payable consisted of the following: | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
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 | $ | 76,783 | $ | 76,783 | |||
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 | 50,000 | |||||
375,343 | 375,343 | ||||||
Less: current portion | -375,343 | -375,343 | |||||
Notes payable, less current portion | $ | - | $ | - | |||
Short term loan due to a related-party, payable in full on January 2, 2014 with 12% interest | $ | 196,921 | $ | 192,921 | |||
Short term loan due to a related-party, payable in full on January 20, 2014 with 12% interest | - | 50,000 | |||||
Notes payable related party, current portion | 196,921 | 242,921 | |||||
Less: current portion | -196,921 | -242,921 | |||||
Notes payable related party, less current portion | $ | - | $ | - | |||
CONVERTIBLE_PROMISSORY_NOTES_N
CONVERTIBLE PROMISSORY NOTES - Note 13 | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
CONVERTIBLE PROMISSORY NOTES - Note 13 | ' |
13. CONVERTIBLE PROMISSORY NOTES | |
From time to time we enter into Convertible Promissory Notes ("Note(s)"). 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 have 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 have 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 fourth quarter of 2013, we did not enter into any Convertible Promissory Notes and one note with a principal of $50,000 has been converted. | |
We recognized the intrinsic value of the embedded beneficial conversion feature as additional paid-in capital and an equivalent discount that reduced the carrying value of the convertible notes in the amount of $358,923 and $76,928 for the years ended December 31, 2013 and 2012, respectively. | |
The related discount for the beneficial conversion outstanding was $81,393 and $0 as of December 31, 2013 and 2012, respectively. | |
Shares issuable upon conversion for convertible notes payable was 81,015,545 and 71,015,545 as of December 31, 2013 and 2012, respectively. | |
The total interest expense attributed to the Notes and related warrants for the years ended December 31, 2013 and 2012 was $333,915 and $137,655, respectively. | |
RESTRUCTURING_ACTIVITIES_Note_
RESTRUCTURING ACTIVITIES - Note 14 | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
RESTRUCTURING ACTIVITIES - Note 14 | ' |
14. 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, the Company issued warrants as settlement of $985,020 of these amounts. In addition, the Company signed promissory notes with certain former executives totaling $76,783. | |
As of December 31, 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 as well as $49,251 in estimated payroll tax. No payments were made during the years ended December 31, 2013 or 2012 on these severance liabilities. | |
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, in 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. | |
RELATED_PARTY_TRANSACTIONS_Not
RELATED PARTY TRANSACTIONS - Note 15 | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
RELATED PARTY TRANSACTIONS - Note 15 | ' |
15. 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 14% our total outstanding voting stock. The RHL Group, Inc. has loaned us money pursuant to the Eighth Amended Note and any predecessor notes. The RHL Group Note payable had a balance of $1,355,761 and $1,587,160 as of December 31, 2013, and 2012, respectively. See Note 3 - Related Party Note Payable above. | |
The RHL Group is an investment holding company which provides consulting, operational and technical services to the Company, which we refer to as the RHL Services. As part of the RHL Services, the RHL Group provides the Company 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 the Company. The RHL Group also provides infrastructure support to the Company, including allowing the Company unlimited access to its facilities, equipment, and data, information management and server systems. In addition to allowing the Company the use of its office support personnel, the RHL Group has also consented to allow the Company to utilize the full-time services of Mr. Lorsch as the Company's 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 the Company's spokesperson. Ms. Reed, who is Mr. Lorsch's spouse, also manages the Company's 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 current report on Form 8-K filed with the SEC on May 4, 2009 and is hereby incorporated by reference. | |
We incurred $50,000 each year during the years ended December 31, 2013 and 2012, toward marketing consulting services from Bernard Stolar, a director. We included $109,756 and $41,250 in related party payables as of December 31, 2013, and 2012, respectively, in connection with these services. | |
We also incurred $16,667 and $50,000 during the years ended December 31, 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 December 31, 2013 and 2012 of $0 and $58,667, respectively, in connection with these services. | |
We also have an agreement with our current director Jack Zwissig to provide individual executive coaching services to our management team on an as needed basis. Mr. Zwissig receives compensation in the form of stock as determined by our Board of Directors commensurate with the services performed. The agreement with Mr. Zwissig is on a month-to-month basis and continues until terminated by either party. We incurred $0 and $394 during the years ended December 31, 2013 and 2012, respectively, for consulting services. We included in related party payables as of December 31, 2013 and 2012 of $29,376 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 year ended December 31, 2013 and 2012, the total expenses relating to this stockholder amounted to $120,000 and $181,117, respectively. In addition, we capitalized $107,050 of software development costs for the year ended December 31, 2013. As of December 31, 2013 and 2012, the total amounts due to the stockholder and included in related party payables amounted to $396,800 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, a significant stockholder of the Company. We will 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. Amortization expense for the years ended December 31, 2013 and 2012 was $50,000. In addition, we incurred a total of $15,020 and $27,905 during the years ended December 31, 2013 and 2012, respectively, toward convertible notes interest to Mr. Loftus. We included in related party payables at December 31, 2013 and December 31, 2012 of $64,615 and $49,595, respectively, in respect to these services. Furthermore, Mr. Loftus is a value-added-reseller of MMRPro systems. We recognized $18,421 and $67,883 in revenue from E-Mail Frequency for the sale of MMRPro systems, during 2013 and 2012, respectively. On July 19, 2012, 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 an Amendment to the Agreement dated September 15, 2009 to provide licensor a non- exclusive right to target, market and exploit the Employee Benefits market. | |
SUBSEQUENT_EVENTS_Note_16
SUBSEQUENT EVENTS - Note 16 | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
SUBSEQUENT EVENTS - Note 16 | ' |
16. SUBSEQUENT EVENTS | |
Following are the subsequent events the Company has evaluated through March 28, 2014: | |
On March 6, 2014, the Company and Walgreen Co. announced that they have entered into a Settlement and Licensing Agreement (the "Agreement") to resolve two patent infringement lawsuits brought by MMR. Pursuant to the terms of the Agreement, Walgreens purchased a Non-Exclusive License to the MMR family of patents. The settlement arises from litigation involving MMR's U.S. Patent No. 8,301,466 and U.S. Patent No. 8,498,883. MMR's patent portfolio also includes U.S. Patent Nos. 8,121,855; 8,117,045; 8,117,646; 8,301,466; 8,321,240; 8,352,287; 8,352,288; 8,498,883; 8,626,532 and 8,645,161 as well as numerous pending applications. Pursuant to the terms of the Agreement, Walgreens has also agreed to sell MMR's MyMedicalRecords Personal Health Record (the "MMR-PHR") on drugstore.com. The remaining terms of the Agreement are confidential. | |
On March 12, 2014 the Company announced an agreement with Cerner Corporation relating to MMR's MyMedicalRecords, Inc. Personal Health Record patent portfolio, including U.S. Patent Nos. 8,117,045; 8,117,646; 8,121,855; 8,301,466; 8,321,240; 8,352,287; 8,352,288; 8,498,883, 8,626,532 and 8,645,161. The confidential agreement includes other terms and conditions related to an ongoing business relationship between the parties. | |
On March 25, 2014 we received a Notice of Allowance ("NOA") from the United States Patent and Trademark Office for U.S. Patent Application Serial No. 12/204,498 entitled "Method and System for Providing Online Records." The application represents the first step in expanding MMR's health information technology ("HIT") Patent Portfolio from the medical profession to the legal profession. The NOA includes 28 claims directed toward accessing, collecting, storing, managing, and sharing legal documents and records. | |
Recovered_Sheet1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 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. We eliminated all intercompany transactions upon consolidation. | ||||
Basis of Presentation | ' | |||
Basis of Presentation | ||||
The accompanying financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP. | ||||
Going Concern and Management's Plan | ' | |||
GOING CONCERN | ||||
As of December 31, 2013, the Company's current liabilities exceeded its current assets by $9.73 million. Furthermore, during the years ended December 31, 2013, and 2012, the Company incurred losses of $7.44 million and $5.90 million, respectively. | ||||
At December 31, 2013 and December 31, 2012, we had $10,359 and $36,655, respectively, in cash and cash equivalents. Historically, we issued capital stock, sold 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 $1,355,761 at December 31, 2013 and a total Unpaid Balance (as defined in the Line of Credit) of $2,625,160, 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 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 December 31, 2013 are as follows: $979,545, which is included in the line of credit, related party; and $376,216 related to other obligations due to The RHL Group which are included in related party payables. | ||||
Management's plan regarding this matter is to, amongst other things, continue to utilize the Line of Credit. At December 31, 2013, there was approximately $1.9 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, the Company plans to continue to sell additional debt and equity securities, continue to settle its existing liabilities through the issuance of equity securities, explore other debt financing arrangements, continue to increase its existing subscriber and affiliate customer base, sell MMRPro products, and collect licensing fees from parties infringing upon the Company's 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, 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 the Company 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 $10,359 and $36,655 as of December 31, 2013, and 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. | ||||
Fair Value of Financial Instruments | ' | |||
(d) 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 December 31, 2013, and 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 GAAP 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. | |||
Property and Equipment | ' | |||
(e) PROPERTY AND EQUIPMENT | ||||
We record property and equipment at cost. We record equipment under capital leases at the present value of the minimum lease payments. We calculate depreciation using the straight-line method, based upon the following estimated useful lives: | ||||
Furniture and Fixtures: 5 Years | ||||
Computer Equipment: 5 Years | ||||
When we retire or dispose of items, we charge or credit income for the difference between the net book value of the asset and the proceeds realized thereon. | ||||
We charge expenditures for maintenance and repairs to operations as incurred while we capitalize renewals and betterments. | ||||
We have pledged as collateral all property and equipment, along with all of our other assets, for a line of credit from The RHL Group, a related party (see Note 3 - Related Party Note Payable). | ||||
Intangible Assets | ' | |||
(f) INTANGIBLE ASSETS | ||||
Intangible assets are comprised of website and software development costs, domain names and patents. We account for website and software development costs in accordance with ASC 350-50, Website Development Costs, and ASC 985-20, Costs of Software to Be Sold, Leased or Marketed. Pursuant to ASC 350-50 and 985-20, we capitalize internally developed website and software costs when the website or software under development has reached technological feasibility. We amortize these costs, typically over an estimated life of five years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio between current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance sheet date, we evaluate the unamortized capitalized website and software costs compared to the net realizable value. We then write off the amount by which the unamortized capitalized website costs exceed its net realizable value. | ||||
We account for domain names and patents in accordance with ASC 350-30, General Intangibles Other than Goodwill. We capitalize patent costs representing legal fees associated with filing patent applications and amortize them on a straight-line basis. We are in the process of evaluating our patents' estimated useful life and will begin amortizing the patents when they are brought to the market or otherwise commercialized. We amortize identifiable intangible assets over their estimated useful lives as follows: | ||||
Website and Software Development Costs: 5 Years | ||||
Domain Name: 5 Years | ||||
Patents: 20 Years | ||||
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 years ended December 31, 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 services. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and we reasonably are 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 usually are 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. | ||||
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 the Celgene Agreement, we adopted ASC 605-28-25, Revenue Recognition, Milestone Method. | ||||
Income Taxes | ' | |||
(i) INCOME TAXES | ||||
We account for income taxes in accordance with ASC 740-10, Income Taxes. We recognize deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. We record a valuation allowance related to a deferred tax asset when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. | ||||
ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. We classify interest and penalties as a component of interest and other expenses. To date, we have not been assessed, nor have we paid, any interest or penalties. | ||||
Income Tax Uncertainties, Policy | ' | |||
(i) UNCERTAIN TAX POSITIONS | ||||
We measure and record uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. | ||||
Advertising | ' | |||
(j) ADVERTISING | ||||
We expense advertising costs as we incur them. Advertising expense for the years ended December 31, 2013 and 2012 was $78,230 and $19,917, respectively. | ||||
Shared-Based Compensation | ' | |||
(k) 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 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 warrants during the years ended December 31, 2013 and 2012 using the following assumptions: | ||||
31-Dec-13 | 31-Dec-12 | |||
Expected life in years | 0 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 120.51% - 157.58% | 123.47% - 124.21% | ||
Risk free interest rate | 0.04% - 1.58% | 0.35% - 0.46% | ||
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 | ' | |||
(l) 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 years ended December 31, 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 203,329,108 and 178,065,471 shares as of December 31, 2013 and 2012, respectively. | ||||
Research, development and engineering costs | ' | |||
(m) RESEARCH, DEVELOPMENT AND ENGINEERING | ||||
We expense research, development and engineering costs as incurred and presented as technology development in the accompanying consolidated statements of operations. We capitalize and amortize costs for software development relating to our website incurred subsequent to establishing technological feasibility, in the form of a working model, over their estimated useful lives. | ||||
Cost Method Investment | ' | |||
(n) COST METHOD INVESTMENT | ||||
We hold a minority equity investment in a private company, which is recorded as Investment in equity securities. This investment is accounted for under the cost method of accounting as we own less than 20% of the voting equity and only have the ability to exercise nominal, not significant, influence over the investee. We monitor this investment for impairment and make appropriate reductions in carrying value if necessary. | ||||
Recent Accounting Pronouncements | ' | |||
(o) 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. | ||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Black-Scholes Assumptions) (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Summary Of Significant Accounting Policies Black-Scholes Assumptions Tables | ' | |||
Black-Scholes option and valuation model assumptions | ' | |||
We valued grants of warrants during the years ended December 31, 2013 and 2012 using the following assumptions. | ||||
31-Dec-13 | 31-Dec-12 | |||
Expected life in years | 0 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 120.51% - 157.58% | 123.47% - 124.21% | ||
Risk free interest rate | 0.04% - 1.58% | 0.35% - 0.46% | ||
Expected dividends | None | None | ||
Forfeiture rate | 0% | 0% | ||
Recovered_Sheet2
Prepaid Expenses and other Current Assets (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Prepaid Expenses And Other Current Assets Tables | ' | ||||||
Prepaid Expenses and Other Current Assets | ' | ||||||
Prepaid expenses and other current assets include the following: | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Prepaid consulting fees from issuance of common stock | $ | 141,315 | $ | 91,778 | |||
Prepaid insurance | 8,947 | 12,207 | |||||
Prepaid trade shows | 4,375 | 4,375 | |||||
Total prepaid expenses and other current assets | $ | 154,637 | $ | 108,360 | |||
Property_and_equipment_net_Tab
Property and equipment, net (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Property And Equipment Net Tables | ' | ||||||
Components of Property, Plant and Equipment | ' | ||||||
Property and equipment, at December 31, 2013 and 2012 consisted of the following. | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Furnitures and fixtures | $ | 3,170 | $ | 3,170 | |||
Computers and related equipment | 153,335 | 119,506 | |||||
156,505 | 122,676 | ||||||
Less: Accumulated depreciation and amortization | -118,112 | -102,375 | |||||
$ | 38,393 | $ | 20,301 | ||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Intangible Assets Tables | ' | ||||||
Intangible Assets | ' | ||||||
Intangible assets as of December 31, 2013 and 2012 consisted of the following: | |||||||
Years Ended December 31, | |||||||
2013 | 2012 | ||||||
Website development | $ | 326,394 | $ | 327,094 | |||
MMR Pro website development | 863,561 | 756,511 | |||||
Patents | 1,246,739 | 809,889 | |||||
Domain name | 86,375 | 86,375 | |||||
2,523,069 | 1,979,869 | ||||||
Less: Accumulated amortization | -853,036 | -632,010 | |||||
$ | 1,670,033 | $ | 1,347,859 | ||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | ||||||
Estimated amortization expense for each of the next five succeeding years is expected to be as follows: | |||||||
Year Ending | |||||||
December 31, | |||||||
2014 | $ | 231,505 | |||||
2015 | 208,946 | ||||||
2016 | 58,806 | ||||||
2017 | 7,631 | ||||||
2018 | 9,398 | ||||||
Total | $ | 516,286 | |||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E1
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Accounts Payable And Accrued Expenses Tables | ' | ||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | ' | ||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Legal and accounting fees | $ | 3,501,978 | $ | 2,542,536 | |||
Accounts payable and accruals from Favrille Merger | 309,791 | 300,971 | |||||
Trade payables | 976,820 | 819,129 | |||||
Consulting services | 401,994 | 265,665 | |||||
Accrued vacation | 73,944 | 57,440 | |||||
Total accounts payable and accrued expenses | $ | 5,264,527 | $ | 3,985,741 | |||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Income Taxes Tables | ' | ||||||
Reconciliation of U.S. statutory income tax rate to company's effective tax rate | ' | ||||||
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows: | |||||||
Years Ended December 31, | |||||||
2013 | 2012 | ||||||
Federal statutory rate | -34.00% | -34.00% | |||||
State tax, net of federal benefit | -5.82% | -5.82% | |||||
Non-deductible items | 0.07% | 0.08% | |||||
Valuation allowance | 39.75% | 39.74% | |||||
Effective income tax rate | 0.00% | 0.00% | |||||
Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities | ' | ||||||
Significant components of deferred tax assets and (liabilities) are as follows: | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Net operating loss carryforwards | $ | 18,674,820 | $ | 15,934,479 | |||
Depreciation and amortization | -145,605 | -222,850 | |||||
Share-based compensation | 2,061,862 | 1,733,105 | |||||
R&D tax credit | 2,455,964 | 2,455,964 | |||||
State tax and other | -1,446,425 | -1,207,439 | |||||
Deferred tax assets, net | 21,600,616 | 18,693,259 | |||||
Less: valuation allowance | -21,600,616 | -18,693,259 | |||||
$ | - | $ | - | ||||
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments And Contingencies Tables | ' | ||||
Schedule of Future Minimum Rental Payments for Operating and Capital Leases | ' | ||||
Future minimum lease payments as of December 31, 2013, under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) are as follows: | |||||
Year Ending | Operating | ||||
December 31, | Leases | ||||
2014 | $ | 147,125 | |||
2015 | 170,500 | ||||
2016 | 187,550 | ||||
2017 | 206,305 | ||||
2018 and there after | 146,410 | ||||
857,890 | |||||
Less current portion | |||||
Total minimum lease payments | $ | 857,890 | |||
Schedule of Future Minimum Lease Payments for Capital Leases | ' | ||||
Future minimum lease payments as of December 31, 2013, under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) are as follows: | |||||
Year Ending | Capital | ||||
December 31, | Leases | ||||
2014 | $ | 13,336 | |||
2015 | 3,522 | ||||
2016 | - | ||||
2017 | - | ||||
2018 and there after | - | ||||
16,858 | |||||
Less current portion | -13,336 | ||||
Total minimum lease payments | $ | 3,522 | |||
EQUITY_ISSUANCES_Tables
EQUITY ISSUANCES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Summary of Outstanding Option Awards | ' | ||||||||||||||||
A summary of option activity for the years ended December 31, 2012 and 2013 is presented below. Options granted by MMR Inc. prior to the date of the Merger of January 27, 2009 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, 2011 | 40,773,523 | $ | 0.11 | 6.29 | $ | - | |||||||||||
Granted | 7,750,000 | 0.06 | |||||||||||||||
Exercised | - | - | |||||||||||||||
Cancelled | -6,125,972 | 0.09 | |||||||||||||||
Outstanding at December 31, 2012 | 42,397,551 | 0.11 | 5.93 | - | |||||||||||||
Granted | 2,200,000 | 0.06 | |||||||||||||||
Exercised | -717,461 | 0.10 | |||||||||||||||
Cancelled | -3,988,368 | 0.11 | |||||||||||||||
Outstanding at December 31, 2013 | 39,891,722 | $ | 0.10 | 5.08 | $ | - | |||||||||||
Vested and expected to vest | |||||||||||||||||
at December 31, 2013 | 39,891,722 | $ | 0.10 | 5.08 | $ | - | |||||||||||
Exercisable at December 31, 2013 | 32,766,722 | $ | 0.11 | 4.47 | $ | - | |||||||||||
Summary of Stock Options Outstanding and Exercisable | ' | ||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 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 | 14,150,000 | 7.71 | $ | 0.07 | 7,025,000 | 7.55 | $ | 0.07 | ||||||||
$ | 0.10 - 0.15 | 23,111,461 | 3.48 | $ | 0.11 | 23,111,461 | 3.48 | $ | 0.11 | ||||||||
$ | > 0.15 | 2,630,261 | 4.96 | $ | 0.19 | 2,630,261 | 4.96 | $ | 0.19 | ||||||||
39,891,722 | 32,766,722 | ||||||||||||||||
Summary of Outstanding Warrant Awards | ' | ||||||||||||||||
A summary of the activity of the Company's warrants for the years ended December 31, 2013 is presented below. | |||||||||||||||||
Weighted Avg | |||||||||||||||||
Shares | Exercise Price | ||||||||||||||||
Outstanding at December 31, 2012 | 64,652,375 | $ | 0.09 | ||||||||||||||
Granted | 44,643,398 | $ | 0.05 | ||||||||||||||
Exercised | -12,468,526 | $ | 0.03 | ||||||||||||||
Cancelled | -8,255,406 | $ | 0.13 | ||||||||||||||
Outstanding at December 31, 2013 | 88,571,841 | $ | 0.07 | ||||||||||||||
Exercisable at December 31, 2013 | 77,263,508 | $ | 0.07 | ||||||||||||||
The following summarizes the total warrants outstanding and exercisable as of December 31, 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 | 88,571,841 | 1.92 | $ | 0.07 | 77,263,508 | 1.92 | $ | 0.07 | |||||||||
$0.25 - $2.50 | - | - | $ | - | - | - | $ | - | |||||||||
88,571,841 | 77,263,508 | ||||||||||||||||
Shares Issued for Services or Reduction to Liabilities | ' | ||||||||||||||||
During the year ended December 31, 2013, we issued 25,382,278 shares of common stock with a value of $1,444,372 to non-employees and charged to the appropriate accounts for the following reasons: | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Purpose | Shares | Value | |||||||||||||||
Reduction of payables | 8,195,054 | $ | 379,620 | ||||||||||||||
Services provided | 23,723,211 | $ | 1,064,752 | ||||||||||||||
Totals | 31,918,265 | $ | 1,444,372 | ||||||||||||||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Notes Payable Tables | ' | ||||||
Notes Payable | ' | ||||||
The Notes payable consisted of the following: | |||||||
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
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 | $ | 76,783 | $ | 76,783 | |||
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 | 50,000 | |||||
375,343 | 375,343 | ||||||
Less: current portion | -375,343 | -375,343 | |||||
Notes payable, less current portion | $ | - | $ | - | |||
Short term loan due to a related-party, payable in full on January 2, 2014 with 12% interest | $ | 196,921 | $ | 192,921 | |||
Short term loan due to a related-party, payable in full on January 20, 2014 with 12% interest | - | 50,000 | |||||
Notes payable related party, current portion | 196,921 | 242,921 | |||||
Less: current portion | -196,921 | -242,921 | |||||
Notes payable related party, less current portion | $ | - | $ | - | |||
Accounting_Policies_Cash_and_C
Accounting Policies (Cash and Cash Equivalents) (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounting Policies Cash And Cash Equivalents Narrative Details | ' | ' | ' |
Cash and cash equivalents | $10,359 | $36,655 | $311,103 |
Accounting_Policies_Property_a
Accounting Policies (Property and Equipment Useful Lives) (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Computer Equipment | ' |
Property and Equipment, Depreciation Methods | ' |
We record property and equipment at cost. We record equipment under capital leases at the present value of the minimum lease payments. We calculate depreciation using the straight-line method, based upon the following estimated useful lives: | |
Computer Equipment: 5 Years | |
When we retire or dispose of items, we charge or credit income for the difference between the net book value of the asset and the proceeds realized thereon. | |
We charge expenditures for maintenance and repairs to operations as incurred while we capitalize renewals and betterments. | |
Property and Equipment, Estimated Useful Lives, years | '5 |
Furniture and Fixtures | ' |
Property and Equipment, Depreciation Methods | ' |
We record property and equipment at cost. We record equipment under capital leases at the present value of the minimum lease payments. We calculate depreciation using the straight-line method, based upon the following estimated useful lives: | |
Furniture and Fixtures: 5 Years | |
When we retire or dispose of items, we charge or credit income for the difference between the net book value of the asset and the proceeds realized thereon. | |
We charge expenditures for maintenance and repairs to operations as incurred while we capitalize renewals and betterments. | |
Property and Equipment, Estimated Useful Lives, years | '5 |
Accounting_Policies_Intangible
Accounting Policies (Intangible Assets Lives and Impairments) (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Impairment charges | $0 | $0 |
Patents | ' | ' |
Finite-Lived Intangible Assets, Amortization Method | ' | ' |
Intangible assets are comprised of website and software development costs, domain names and patents. We account for website and software development costs in accordance with ASC 350-50, Website Development Costs, and ASC 985-20, Costs of Software to Be Sold, Leased or Marketed. Pursuant to ASC 350-50 and 985-20, we capitalize internally developed website and software costs when the website or software under development has reached technological feasibility. We amortize these costs, typically over an estimated life of five years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio between current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance sheet date, we evaluate the unamortized capitalized website and software costs compared to the net realizable value. We then write off the amount by which the unamortized capitalized website costs exceed its net realizable value. | ||
We account for domain names and patents in accordance with ASC 350-30, General Intangibles Other than Goodwill. We capitalize patent costs representing legal fees associated with filing patent applications and amortize them on a straight-line basis. We are in the process of evaluating our patents' estimated useful life and will begin amortizing the patents when they are brought to the market or otherwise commercialized. | ||
Finite-Lived Intangible Assets, Average Useful Life, years | '20 years | ' |
Domain Names | ' | ' |
Finite-Lived Intangible Assets, Amortization Method | ' | ' |
Intangible assets are comprised of website and software development costs, domain names and patents. We account for website and software development costs in accordance with ASC 350-50, Website Development Costs, and ASC 985-20, Costs of Software to Be Sold, Leased or Marketed. Pursuant to ASC 350-50 and 985-20, we capitalize internally developed website and software costs when the website or software under development has reached technological feasibility. We amortize these costs, typically over an estimated life of five years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio between current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance sheet date, we evaluate the unamortized capitalized website and software costs compared to the net realizable value. We then write off the amount by which the unamortized capitalized website costs exceed its net realizable value. | ||
We account for domain names and patents in accordance with ASC 350-30, General Intangibles Other than Goodwill. We capitalize patent costs representing legal fees associated with filing patent applications and amortize them on a straight-line basis. We are in the process of evaluating our patents' estimated useful life and will begin amortizing the patents when they are brought to the market or otherwise commercialized. | ||
Finite-Lived Intangible Assets, Average Useful Life, years | '5 years | ' |
Website and Software Development Costs | ' | ' |
Finite-Lived Intangible Assets, Amortization Method | ' | ' |
Intangible assets are comprised of website and software development costs, domain names and patents. We account for website and software development costs in accordance with ASC 350-50, Website Development Costs, and ASC 985-20, Costs of Software to Be Sold, Leased or Marketed. Pursuant to ASC 350-50 and 985-20, we capitalize internally developed website and software costs when the website or software under development has reached technological feasibility. We amortize these costs, typically over an estimated life of five years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio between current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance sheet date, we evaluate the unamortized capitalized website and software costs compared to the net realizable value. We then write off the amount by which the unamortized capitalized website costs exceed its net realizable value. | ||
We account for domain names and patents in accordance with ASC 350-30, General Intangibles Other than Goodwill. We capitalize patent costs representing legal fees associated with filing patent applications and amortize them on a straight-line basis. We are in the process of evaluating our patents' estimated useful life and will begin amortizing the patents when they are brought to the market or otherwise commercialized. | ||
Finite-Lived Intangible Assets, Average Useful Life, years | '5 years | ' |
Accounting_Policies_Income_Tax
Accounting Policies (Income Taxes and Uncertain Tax Positions) (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies Income Taxes And Uncertain Tax Positions Narrative Details | ' | ' |
Tax interest or penalties assessed and paid | $0 | $0 |
Accounting_Policies_Advertisin
Accounting Policies (Advertising) (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounting Policies Advertising Narrative Details | ' | ' |
Advertising expense | $78,230 | $19,917 |
Accounting_Policies_ShareBased
Accounting Policies (Share-Based Compensation Assumptions Used In Black-Scholes) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounting Policies Share-Based Compensation Assumptions Used In Black-Scholes Details | ' | ' |
Expected life, in years, minimum | 0 | 0 |
Expected life, in years, maximum | '5 years 0 months 0 days | '5 years 0 months 0 days |
Stock price volatility, minimum | 120.51% | 123.47% |
Stock price volatility, maximum | 157.58% | 124.21% |
Risk-free interest rate, minimum | 0.04% | 0.35% |
Risk-free interest rate, maximum | 1.58% | 0.46% |
Expected dividends | $0 | $0 |
Forfeiture rate | 0.00% | 0.00% |
Accounting_Policies_Net_Income
Accounting Policies (Net Income/Loss Per Share) (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounting Policies Net Incomeloss Per Share Narrative Details | ' | ' |
Stock options, warrants and convertible notes excluded from the computation of net loss per share | 203,329,108 | 178,065,471 |
Related_Party_Note_Payable_Nar
Related Party Note Payable (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Fifth Amended and Restated Secured Promissory Note | ' | ' |
Maximum line of credit under note | ' | ' |
As contemplated by the Merger Agreement and the Creditor Plan, as a condition to the Merger, at the effective time of the Merger, MMR and The RHL Group, Inc. entered into an allonge to the RHL Note and the Security Agreement ("The Allonge") pursuant to which The RHL Group, Inc. agreed to suspend certain of its rights under the Security Agreement and the RHL Note until the earlier of (a) the date that we repay all amounts outstanding under any promissory notes issued to Old Favrille's creditors under the Creditor Plan, (b) the date that we deposit into an escrow fund the maximum amount of cash payable in satisfaction of the promissory notes issued to Old Favrille's creditors under the Creditor Plan or (c) ten days after the two year anniversary of the closing date of the Merger. The suspended rights include any right of The RHL Group, Inc. to (1) declare a default or event of default under the Security Agreement or the RHL Note, (2) accelerate the maturity date of the RHL Note, (3) exercise any of its principal remedies for a default or event of default under the Security Agreement, (4) assign the RHL Note, the proceeds of the RHL Note or to otherwise negotiate the RHL Note and (5) receive payment of the outstanding principal and interest owing under the RHL Note. | ||
On April 29, 2011, we entered into a Fifth Amended and Restated Secured Promissory Note, or the Fifth Amended Note, with The RHL Group and we agreed to guaranty MMR's obligations under the Fifth Amended Note (the "Guaranty"). The Fifth Amended Note amends and restates the April 29, 2010 Fourth Amended and Restated Secured Promissory Note Agreement. The Fifth Amended Note matured April 29, 2012, and bears interest at the lesser of 10% or the highest rate then permitted by law, and is secured by the Security Agreement. The reserve credit line of the Fifth Amended Note remains at $3,000,000. | ||
Sixth Amended and Restated Secured Promissory Note | ' | ' |
Date of note | 22-Jun-12 | ' |
Maximum line of credit under note | ' | ' |
On June 22, 2012, the Company 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 that certain Fifth Amended and Restated Promissory 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 Amended Note does not materially alter the terms of the Existing 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, the Company issued The RHL Group warrants to purchase 2,852,200 shares of the Company 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. | ||
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 | 30-Jul-12 | ' |
Maximum line of credit under note | ' | ' |
On July 30, 2012, the Company 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 "Amended Note"), effective as of July 30, 2012. The Amended Note amends and restates that certain Sixth Amended and Restated Promissory Note entered into between the foregoing parties, effective April 29, 2012 (the "Existing Note" and together with its predecessor notes and the 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 additional financing needs of the Company and/or MMR Inc.; and (ii) granting The RHL Group the right to convert, at any time following the date of the Amended Note, up to an aggregate of $500,000 in outstanding principal of the Credit Facility into shares of the Company's Common Stock at a conversion price of $0.02 per share. The amendment did not change the maturity date of the Existing Note, which was due on April 29, 2013. There were no loan origination fees charged by, or warrants issued to, The RHL Group with respect to the Amended Note. Except as set forth above, the Amended Note does not materially alter the terms of the Existing Note. | ||
Maturity date | 29-Apr-13 | ' |
Eighth Amended and Restated Secured Promissory Note | ' | ' |
Maximum line of credit under note | ' | ' |
On August 13, 2013, the Company and The RHL Group entered into an Eighth Amended and Restated Promissory Note, effective as of April 29, 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, which was recorded as a charge to interest expense. Except as set forth above, the Amended Note does not materially alter the terms of the Existing Note. | ||
The Eighth Amended Note had a balance of $1,355,761 and $1,587,160 at December 31, 2013 and 2012, respectively. The components of the Eighth Amended Note and the related balance sheet presentation as of December 31, 2013 are as follows: $979,545, which is included in the line of credit, related party; and $376,216 for other obligations due to The RHL Group, which are included in related party payables. | ||
Total interest expense on the Line of Credit for the years ended December 31, 2013 and 2012 amounted to $132,804 and $155,866, respectively. The unpaid interest balances as of December 31, 2013 and December 31, 2012 were $24,049 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 December 31, 2013. Since we weren't able to meet the covenants as of December 31, 2013, we received a waiver from The RHL Group until April 5, 2014. | ||
Maturity date | 29-Apr-14 | ' |
Debt component classification: | ' | ' |
Line of credit, related party | $979,545 | ' |
Related party payables | 376,216 | ' |
Total note payable balance | 1,355,761 | 1,587,160 |
Interest expense on line of credit | 132,804 | 155,866 |
Related party accrued interest | $24,049 | $35,451 |
Recovered_Sheet3
Prepaid Expenses and Other Current Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Prepaid Expenses And Other Current Assets Details | ' | ' |
Prepaid consulting fees from issuance of common stock | $141,315 | $91,778 |
Prepaid insurance | 8,947 | 12,207 |
Prepaid trade shows | 4,375 | 4,375 |
Total prepaid expenses and other current assets | $154,637 | $108,360 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Balance Sheet Related Disclosures [Abstract] | ' | ' |
Furniture and fixtures | $3,170 | $3,170 |
Computers and related equipment | 153,335 | 119,506 |
Property and equipment, gross | 156,505 | 122,676 |
Less: Accumulated depreciation | -118,112 | -102,375 |
Property, plant and equipment, net | 38,393 | 20,301 |
Depreciation expense | $15,737 | $8,184 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible Assets Details | ' | ' |
Website development | $326,394 | $327,094 |
MMR Pro website development | 863,561 | 756,511 |
Patents | 1,246,739 | 809,889 |
Domain name | 86,375 | 86,375 |
Total | 2,523,069 | 1,979,869 |
Less: Accumulated Amortization | -853,036 | -632,010 |
Intangible assets, net | 1,670,033 | 1,347,859 |
Amortization expense | $221,726 | $259,953 |
Intangible_Assets_Future_Amort
Intangible Assets (Future Amortization) (Details) (USD $) | Dec. 31, 2013 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ' |
2014 | $231,505 |
2015 | 208,946 |
2016 | 58,806 |
2017 | 7,631 |
2018 | 9,398 |
Total | $516,286 |
Recovered_Sheet4
Accounts Payable and Accrued Expenses (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts Payable And Accrued Expenses Details | ' | ' |
Legal and accounting fees | $3,501,978 | $2,542,536 |
Accounts payable and accruals from Favrille Merger | 309,791 | 300,971 |
Trade payables | 976,820 | 819,129 |
Consulting services | 401,994 | 265,665 |
Accrued vacation | 73,944 | 57,440 |
Accounts payable and accrued expenses | $5,264,527 | $3,985,741 |
Income_Tax_Schedule_of_Effecti
Income Tax (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Schedule Of Effective Income Tax Rate Reconciliation Details | ' | ' |
Federal statutory rate | -34.00% | -34.00% |
State tax, net of federal benefit | -5.82% | -5.82% |
Non-deductible items | 0.07% | 0.08% |
Valuation allowance | 39.75% | 39.74% |
Effective income tax rate | 0.00% | 0.00% |
Income_Tax_Schedule_of_Tax_Eff
Income Tax (Schedule of Tax Effects of Temporary Differences in Deferred Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Schedule Of Tax Effects Of Temporary Differences In Deferred Tax Assets And Liabilities Details | ' | ' |
Net operating loss carryforwards | $18,674,820 | $15,934,479 |
Depreciation and amortization | -145,605 | -222,850 |
Share based compensation | 2,061,862 | 1,733,105 |
R&D tax credit | 2,455,964 | 2,455,964 |
State tax and other | -1,446,425 | -1,207,439 |
Deferred tax assets, net | 21,600,616 | 18,693,259 |
Less: valuation allowance | -21,600,616 | -18,693,259 |
Total deferred tax assets | $0 | $0 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred tax asset valuation allowance | $21,600,616 | $18,693,259 |
Unrecognized tax benefits | 0 | 0 |
Tax interest and penalties | 0 | 0 |
Federal | ' | ' |
Operating Loss Carryforwards | 43,632,481 | ' |
Operating loss carryforwards, expiration dates | 'Begin in 2026 | ' |
Open Tax Years by Major Tax Jurisdiction | ' | ' |
Federal 2010 - 2013 | ||
State | ' | ' |
Operating Loss Carryforwards | $43,436,381 | ' |
Operating loss carryforwards, expiration dates | 'Begin in 2016 | ' |
Open Tax Years by Major Tax Jurisdiction | ' | ' |
California State 2009 - 2013 | ||
Recovered_Sheet5
Commitments and Contingencies (Operating Leases) (Details) (USD $) | Dec. 31, 2013 |
Year ending December 31: | ' |
2014 | $147,125 |
2015 | 170,500 |
2016 | 187,550 |
2017 | 206,305 |
2018 and there after | 146,410 |
Total minimum lease payments | $857,890 |
Recovered_Sheet6
Commitments and Contingencies (Capital Leases) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Year ending December31: | ' | ' |
2014 | $13,336 | ' |
2015 | 3,522 | ' |
Total minimum lease payments | 16,858 | ' |
Less: current portion of capital lease obligations | -13,336 | 0 |
Long-term portion of capital lease obligations | $3,522 | $0 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Leases Narrative 2) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments And Contingencies Leases Narrative 2 Details | ' | ' |
Operating lease description | ' | ' |
Effective September 1, 2013, we renewed our lease for office space in Los Angeles, California with a term through August 31, 2015. The lease currently requires a monthly payment of $8,250. | ||
Rent expense | $120,472 | $116,142 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Guarantees Provided To The Company Narrative) (Details) (USD $) | 12 Months Ended |
Dec. 31, 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 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 $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Sales revenue, major customer, percentage | 67.00% | 56.00% |
VisiInc. | ' | ' |
Entity-Wide Revenue, Major Customer, Amount | 302,000 | 267,000 |
Sales revenue, major customer, percentage | 52.00% | 33.00% |
Thorson Insurance | ' | ' |
Entity-Wide Revenue, Major Customer, Amount | 50,000 | ' |
XN Financial | ' | ' |
Entity-Wide Revenue, Major Customer, Amount | 44,000 | ' |
Celgene | ' | ' |
Entity-Wide Revenue, Major Customer, Amount | ' | 100,000 |
E-Mail Frequency | ' | ' |
Entity-Wide Revenue, Major Customer, Amount | ' | 81,971 |
Commitments_and_Contingencies_5
Commitments and Contingencies (Employment Agreements Narrative) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Lorsch | ' |
Description of Employment Arrangements | ' |
The Company has employment agreements with its Chairman, President and Chief Executive Officer, Robert H. Lorsch, its Vice President of Finance and Chief Financial Officer, Ingrid Safranek, its Vice President Telecommunications & Carrier Relations, Rafael "Ralph" Salazar, and Executive Vice President, Richard Lagani. Under each employment agreement, the executive officers receive a base salary, subject to annual increases as determined by the board of directors, certain benefits as set forth in the employment agreements, and an annual bonus at the discretion of the board of directors. | |
On January 29, 2009 we entered into an employment agreement with our Chairman, President and Chief Executive Officer, Robert H. Lorsch, with an initial term ending on December 31, 2011, subject to successive automatic extension unless we or Mr. Lorsch elect not to extend. Under the terms of his agreement, Mr. Lorsch shall serve as both our President and Chief Executive Officer and President and Chief Executive Officer of our wholly-owned subsidiary, MMR. The agreement provides for a base salary of $15,000 per month, subject to an upward increase and with an annual bonus and stock option grants in such amounts, if any, as the Board of Directors may determine in its sole discretion. Mr. Lorsch receives a monthly auto allowance, reimbursement of certain life insurance premiums, and reimbursement for certain other insurance coverage, and is entitled to participate in benefits generally made to our senior executives. | |
On December 28, 2011, the Board of Directors agreed to renew Mr. Lorsch's employment agreement effective January 1, 2012 for an additional three year term ending on December 31, 2014. The term of the Renewal expires on December 31, 2014, but may be extended automatically for successive additional one-year periods at the expiration of the then-current term unless written notice of non-extension is provided to Mr. Lorsch with at least 90 days prior notice to the expiration of such term. In addition, on December 31, 2013, the Board of Directors agreed to extend Mr. Lorsch's employment term to December 31, 2015 under the same terms. Mr. Lorsch's current annual base salary will remain unchanged, except for the minimum 5% annual increase as called under the agreement, with the understanding that, as in the past, portions of the payments could be deferred into future periods. Mr. Lorsch may terminate the agreement upon 30 days written notice without reason or for good reason (as defined in the agreements) if we fail to cure acts or omissions constituting good reason within 30 days. If Mr. Lorsch's employment is terminated by us for cause or voluntarily by Mr. Lorsch without good reason, he will not be entitled to receive any severance payments or benefits under the employment agreement. If Mr. Lorsch's employment is terminated by us without cause or voluntarily by Mr. Lorsch for good reason, Mr. Lorsch will be entitled to one year of salary at his then current rate of pay, including all monthly benefits, and the pro rata portion of the annual bonus otherwise due Mr. Lorsch. In the event of his disability, Mr. Lorsch would be entitled to receive compensation equal to 60% of his base salary as then in effect. Mr. Lorsch's employment agreement includes provisions that prohibit Mr. Lorsch from disclosing our confidential information and trade secrets and competing with us during the term of his employment agreement or soliciting our employees for 12 months following termination of employment. | |
We also have entered into a consulting agreement with The RHL Group, Inc., which is wholly-owned by Mr. Lorsch that provides for a monthly fee of $25,000 plus reimbursement of expenses including medical insurance. The RHL Group provides consulting, operational and technical services to the Company, which we refer to as the RHL Services. As part of the RHL Services, the RHL Group provides the Company 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 the Company. The RHL Group also provides infrastructure support to the Company, including allowing the Company unlimited access to its facilities, equipment, and data, information management and server systems. The RHL Group has also consented to allow the Company to utilize the full-time services of Mr. Lorsch as the Company's 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 the Company's spokesperson. Ms. Reed, who is Mr. Lorsch's spouse, also manages the Company's social networking activities. | |
Safranek | ' |
Description of Employment Arrangements | ' |
On January 26, 2010, we entered into an employment agreement with Ingrid Safranek as our Vice President, Chief Financial Officer and Secretary. Under the employment agreement, Ms. Safranek receives a base salary, subject to annual increases as determined by the Board of Directors, certain benefits as set forth in the employment agreement, and an annual bonus at the discretion of the board of directors. Ms. Safranek's employment agreement was effective until June 15, 2010, but was extended until June 15, 2011. On December 10, 2010, the Board approved Ms. Safranek's employment agreement to be amended to extend the term for an additional one year commencing on January 1, 2011. On December 28, 2011, the Board extended the current employment agreement for an additional two years term and approved an increase in her base salary with the understanding that, from time to time, it could be necessary to defer certain payments or benefits into future periods. Furthermore, on December 31, 2013, the Board elected to renew Ms. Safranek's agreement for an additional two year term under the same terms as before. | |
The current term of Ms. Safranek's employment agreement is effective until December 31, 2015 and will automatically renew for successive 12 month periods unless terminated at least 30 days prior to the end of the term. The employment agreement may be terminated by the Company without cause (as defined in the agreement) upon 90 days written notice or for cause if Ms. Safranek fails to cure the acts or omissions constituting cause within 30 days. If Ms. Safranek's employment is terminated by the Company for cause or voluntarily by Ms. Safranek without good reason, she will not be entitled to receive any severance payments or benefits under the employment agreement. If Ms. Safranek's employment is terminated by the Company without cause or voluntarily by Ms. Safranek for good reason, Ms. Safranek will be entitled to one year of salary at her then current rate of pay, including all monthly benefits, and the pro rata portion of the annual bonus otherwise due Ms. Safranek. In the event of her disability, Ms. Safranek would be entitled to receive compensation equal to 60% of her base salary as then in effect. Ms. Safranek's employment agreement includes provisions that prohibit her from disclosing our confidential information and trade secrets and competing with us during the term of his employment agreement or soliciting our employees for 12 months following termination of employment. | |
Salazar | ' |
Description of Employment Arrangements | ' |
On June 15, 2010, we entered into an employment agreement with Rafael "Ralph" Salazar as our Vice President Telecommunications & Carrier Relations. Under the employment agreement, Mr. Salazar received a base salary, subject to annual increase as determined by the board of directors, certain benefits as set forth in the employment agreement, and an annual bonus at the discretion of the board of directors. Mr. Salazar's employment agreement was effective until June 15, 2012. On December 28, 2011, the Board extended the current employment agreement for an additional two year term and approved an increase in his base salary with the understanding that, from time to time, it could be necessary to defer certain payments or benefits into future periods. The term of Mr. Salazar's employment agreement was effective until December 31, 2013 and was not renewed as Mr. Salazar elected to retire. | |
Lagani | ' |
Description of Employment Arrangements | ' |
On April 1, 2011, we entered into an employment agreement with Richard Lagani as our Executive Vice President. Under the employment agreement, Mr. Lagani received a base salary, subject to annual increase as determined by the board of directors, certain benefits as set forth in the employment agreement and an annual bonus at the discretion of the board of directors. The term of Mr. Lagani's employment agreement was effective until April 30, 2013 and was converted into a consulting agreement at the end of the term as Mr. Lagani continued working for us from London. On August 1, 2012, Mr. Lagani relocated his primary residence to London England where he continues to provide services to the Company on a special projects basis. | |
Stockholders_Deficit_Narrative
Stockholders' Deficit (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2012 | |
Stockholders Deficit Narrative Details | ' |
Investment agreement | ' |
On May 24, 2012, the Company filed a 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 pursuant to the Investment Agreement, and an additional 1,000,000 shares were issued to Granite as partial consideration for the preparation of the documents for its investment in the Company. Subject to the terms and conditions of the Investment Agreement, the Company has the right to put up to $15 million in shares of our common stock to Granite. As of December 31, 2013, the amount available under the equity line facility was $13.5 million; however, that amount could be reduced based on the market price of our stock at the time any shares are sold. | |
Equity_Issuances_Stock_Option_
Equity Issuances (Stock Option Activity Summary Of Option Activity) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Equity Issuances Stock Option Activity Summary Of Option Activity Details | ' | ' | ' |
Outstanding at beginning of period | 42,397,551 | 40,773,523 | ' |
Granted | 2,200,000 | 7,750,000 | ' |
Exercised | -717,461 | 0 | ' |
Cancelled | -2,736,647 | -6,125,972 | ' |
Outstanding at end of period | 39,891,722 | 42,397,551 | 40,773,523 |
Vested and expected to vest at December 31, 2013 | 39,891,722 | ' | ' |
Exercisable at end of period | 32,766,722 | ' | ' |
Weighted-Average Exercise Prices, Outstanding at beginning of period | $0.11 | $0.11 | ' |
Weighted-Average Exercise Prices, Granted | $0.06 | $0.06 | ' |
Weighted-Average Exercise Prices, Exercised | $0.10 | $0 | ' |
Weighted-Average Exercise Prices, Cancelled | $0.11 | $0.09 | ' |
Weighted-Average Exercise Prices, Outstanding at end of period | $0.10 | $0.11 | $0.11 |
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 end of period | '5 years 29 days | '5 years 339 days | '6 years 106 days |
Weighted-Average Remaining Contractual Life (in years), Vested and expected to vest | ' | '5 years 29 days | ' |
Weighted-Average Remaining Contractual Life (in years), Exercisable | ' | '4 years 172 days | ' |
Aggregate Intrinsic Value, Outstanding at end of period | $0 | ' | ' |
Equity_Issuances_Stock_Option_1
Equity Issuances (Stock Option Activity Summary Of Stock Options Outstanding and Exercisable) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 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 | 39,891,722 | 42,397,551 | 40,773,523 | 14,150,000 | 23,111,461 | 2,630,261 |
Options Outstanding, Weighted-Average Remaining Life (in years) | ' | ' | ' | '7 years 259 days | '3 years 175 days | '4 years 350 days |
Options Outstanding, Weighted-Average Exercise Price Per Share | $0.10 | $0.11 | $0.11 | $0.07 | $0.11 | $0.19 |
Options Exercisable, Number of Shares | 32,766,722 | ' | ' | 7,025,000 | 23,111,461 | 2,630,261 |
Options Exercisable, Weighted-Average Remaining Life (in years) | ' | ' | ' | '7 years 201 days | '3 years 175 days | '4 years 350 days |
Options Exercisable, Weighted-Average Exercise Price Per Share | $0.11 | ' | ' | $0.07 | $0.11 | $0.19 |
Equity_Issuances_Summary_Of_Wa
Equity Issuances (Summary Of Warrant Activity) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Equity Issuances Summary Of Warrant Activity Details | ' |
Warrants outstanding at December 31, 2012 | 64,652,375 |
Granted | 44,643,398 |
Exercised | -12,468,526 |
Cancelled | -8,255,406 |
Warrants outstanding at end of period | 88,571,841 |
Warrants exercisable at December 31, 2013 | 77,263,508 |
Weighted-average exercise price, beginning balance | $0.09 |
Weighted-average exercise price, granted | $0.05 |
Weighted-average exercise price, exercised during period | $0.03 |
Weighted-average exercise price, cancelled during period | $0.13 |
Weighted-average exercise price, ending balance | $0.07 |
Warrants exercisable, weighted average exercise price | $0.07 |
Equity_Issuances_Summary_Of_Wa1
Equity Issuances (Summary Of Warrants Outstanding and Exercisable) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
$0.03 - $0.25 | $0.25 - $2.50 | |||
Range of Exercise Price, Minimum | ' | ' | $0.03 | $0.25 |
Range of Exercise Price, Maximum | ' | ' | $0.25 | $2.50 |
Warrants outstanding at end of period | 88,571,841 | 64,652,375 | 88,571,841 | 0 |
Warrants outstanding, Weighted-average remaining life, in years | ' | ' | '1 year 336 days | '0 years 0 days |
Warrants outstanding, Weighted-average exercise price | ' | ' | $0.07 | $0 |
Warrants exercisable, at December 31, 2013 | 77,263,508 | ' | 77,263,508 | 0 |
Warrants exercisable, Weighted-average remaining life, in years | ' | ' | 1.92 | 0 |
Warrants exercisable, Weighted-average exercise price | ' | ' | $0.07 | $0 |
Equity_Issuances_Shares_Issued
Equity Issuances (Shares Issued for Services or Reduction to Liabilities) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Equity Issuances Shares Issued For Services Or Reduction To Liabilities Details | ' | ' |
Reduction of payables, shares | 8,195,054 | ' |
Reduction of payables, amount | $379,620 | ' |
Services provided, shares | 23,723,211 | ' |
Services provided, amount | 1,064,752 | ' |
Total payment of services provided through issuance of common stock, shares | 31,918,265 | 36,416,272 |
Total payment of accounts payable through issuance of common stock, amount | $1,444,372 | $972,391 |
Equity_Issuances_Stock_Option_2
Equity Issuances (Stock Option Expense Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Equity Issuances Stock Option Expense Narrative Details | ' | ' |
Stock option expense | $241,428 | $708,982 |
Unrecognized compensation cost related to share-based compensation | $110,284 | ' |
Weighted-average service period, years | ' | '1 year 135 days |
Equity_Issuances_Warrants_Narr
Equity Issuances (Warrants) (Narrative) (Details) | 12 Months Ended |
Dec. 31, 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 | 0.1 |
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 | 0.1 |
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 | 0.1 |
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 | 0.048 |
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 | 0.048 |
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. | |
August 13 2013 | ' |
Number of warrants granted | 2,852,000 |
Exercise price, per share | 0.04 |
Title of Warrants Outstanding | ' |
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. | |
August 15 2013 | ' |
Number of warrants granted | 900,000 |
Exercise price, per share | 0.06 |
Title of Warrants Outstanding | ' |
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. | |
August and September 2013 | ' |
Number of warrants granted | 12,000,000 |
Exercise price, per share | 0.1 |
Title of Warrants Outstanding | ' |
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 $0.10. The Warrants vest immediately and have expiration dates of November 18, 2013, December 18, 2013, January 18, 2014, September 13, 2015, and August 14, 2018. | |
October and November 2013 | ' |
Number of warrants granted | 4,941,198 |
Exercise price, per share | 0.03 |
Title of Warrants Outstanding | ' |
On various dates between October 17, 2013 and November 13, 2013, we granted three different unrelated third-parties three different warrants to purchase up to a total of 4,941,198 shares of our common stock at an average price per share of $0.03. The Warrants vest immediately and have expiration dates of December 20, 2013, December 31, 2013, and October 17, 2014. | |
November 14 2013 | ' |
Number of warrants granted | 10,750,000 |
Exercise price, per share | 0.04 |
Title of Warrants Outstanding | ' |
On November 14, 2013, we granted three different unrelated third-parties four different warrants to purchase a total of 10,750,000 shares of our common stock in consideration for services. Three of the warrants vests in a month and a half and have an average exercise price of $0.04 per share, and an expiration date of December 31, 2014 and December 31, 2015. One warrant vests immediately at an exercise price of $0.04 per share and an expiration date of November 15, 2016. | |
December 13 2013 | ' |
Number of warrants granted | 500,000 |
Exercise price, per share | 0.05 |
Title of Warrants Outstanding | ' |
On December 13, 2013, we granted an unrelated third-party a warrant to purchase 500,000 shares of our common stock in consideration for services. The warrant vests six months after completion of services and have an exercise price of $0.05 per share, and an expiration date of December 31, 2014. | |
December 19 2013 | ' |
Number of warrants granted | 1,000,000 |
Exercise price, per share | 0.05 |
Title of Warrants Outstanding | ' |
On December 19, 2013, we granted two different unrelated third-party a warrant to purchase up to 1,000,000 shares of our common stock in consideration for services. The warrants vests immediately and have an exercise price of $0.05 per share, and an expiration date of December 19, 2014. | |
Equity_Issuances_Restricted_St
Equity Issuances (Restricted Stock Program) (Narrative) (Details) (USD $) | Dec. 31, 2013 |
Equity Issuances Restricted Stock Program Narrative Details | ' |
Restricted stock sales price, minimum percent of fair market value | 85.00% |
Restricted stock sales price for 10% stockholder, minimum percent of fair market value | 110.00% |
Restricted stock vesting schedule | ' |
Shares are either fully and immediately vested upon issuance, or may vest in installments upon attainment of specified performance objectives. | |
Restricted stock, shares not vested | 14,350,000 |
Restricted stock, unrecognized compensation cost to be recognized within one year | $267,586 |
Equity_Issuances_Stock_Bonus_P
Equity Issuances (Stock Bonus Program) (Narrative) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Stock Bonus Agreement expense | $360,000 |
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 |
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 |
Dec-13 | ' |
Shares issued for services under Stock Bonus Agreement, shares | 14,350,000 |
Shares issued for services, price per share | $0.05 |
Date of share vesting | '2015-01-01 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Notes payable consisted of the following: | ' | ' |
Short-term Debt | $375,343 | $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 | 50,000 | 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 | 196,921 | 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 | $0 | $50,000 |
Recovered_Sheet7
Convertible Promissory Notes (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Shares issuable upon conversion for convertible notes payable | 81,015,545 | 71,015,545 |
Discount for the beneficial conversion outstanding | $81,393 | $0 |
Interest expense | 333,915 | 137,655 |
First Quarter 2013 | ' | ' |
Debt instrument, description | ' | ' |
From time to time we enter into Convertible Promissory Notes ("Note(s)"). 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 have been converted. | ||
Convertible notes converted | 490,000 | ' |
Converted notes, shares issued | 24,035,715 | ' |
Second Quarter 2013 | ' | ' |
Debt instrument, description | ' | ' |
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 have been converted. | ||
Convertible notes converted | 890,000 | ' |
Converted notes, shares issued | 19,263,258 | ' |
Third Quarter 2013 | ' | ' |
Debt instrument, description | ' | ' |
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. | ||
Convertible notes converted | 170,000 | ' |
Fourth Quarter 2013 | ' | ' |
Debt instrument, description | ' | ' |
During the fourth quarter of 2013, we did not enter into any Convertible Promissory Notes and one note with a principal of $50,000 has been converted. | ||
Convertible notes converted | $50,000 | ' |
Restructuring_Activities_Narra
Restructuring Activities (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 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, the Company issued warrants as settlement of $985,020 of these amounts. In addition, the Company signed promissory notes with certain former executives totaling $76,783. | 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, in 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. | |||
As of December 31, 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 as well as $49,251 in estimated payroll tax. No payments were made during the years ended December 31, 2013 or 2012 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 $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Related party payables | $1,147,697 | $1,328,533 |
Amortization of licensee fee | 221,726 | 259,953 |
The RHL Group, Inc. | ' | ' |
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 14% our total outstanding voting stock. The RHL Group, Inc. has loaned us money pursuant to the Eighth Amended Note and any predecessor notes. The RHL Group Note payable had a balance of $1,355,761 and $1,587,160 as of December 31, 2013, and 2012, respectively. See Note 3 - Related Party Note Payable above. | ||
The RHL Group is an investment holding company which provides consulting, operational and technical services to the Company, which we refer to as the RHL Services. As part of the RHL Services, the RHL Group provides the Company 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 the Company. The RHL Group also provides infrastructure support to the Company, including allowing the Company unlimited access to its facilities, equipment, and data, information management and server systems. In addition to allowing the Company the use of its office support personnel, the RHL Group has also consented to allow the Company to utilize the full-time services of Mr. Lorsch as the Company's 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 the Company's spokesperson. Ms. Reed, who is Mr. Lorsch's spouse, also manages the Company's 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 current report on Form 8-K filed with the SEC on May 4, 2009 and is hereby incorporated by reference. | ||
Related party payables | 1,355,761 | 1,587,160 |
Bernard Stolar | ' | ' |
Nature of Common Ownership or Management Control Relationships | ' | ' |
We incurred $50,000 each year during the years ended December 31, 2013 and 2012, toward marketing consulting services from Bernard Stolar, a director. We included $109,756 and $41,250 in related party payables as of December 31, 2013, and 2012, respectively, in connection with these services. | ||
Related Party Transaction, Expenses from Transactions with Related Party | 50,000 | 50,000 |
Related party payables | 109,756 | 41,250 |
Hector Barreto | ' | ' |
Nature of Common Ownership or Management Control Relationships | ' | ' |
We also incurred $16,667 and $50,000 during the years ended December 31, 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 December 31, 2013 and 2012 of $0 and $58,667, respectively, in connection with these services. | ||
Related Party Transaction, Expenses from Transactions with Related Party | 16,667 | 50,000 |
Related party payables | 0 | 58,667 |
Jack Zwissig | ' | ' |
Nature of Common Ownership or Management Control Relationships | ' | ' |
We also have an agreement with our current director Jack Zwissig to provide individual executive coaching services to our management team on an as needed basis. Mr. Zwissig receives compensation in the form of stock as determined by our Board of Directors commensurate with the services performed. The agreement with Mr. Zwissig is on a month-to-month basis and continues until terminated by either party. We incurred $0 and $394 during the years ended December 31, 2013 and 2012, respectively, for consulting services. We included in related party payables as of December 31, 2013 and 2012 of $29,376 and $13,376, respectively, in connection with these services. | ||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | 394 |
Related party payables | 29,376 | 13,376 |
Significant Vendor | ' | ' |
Nature of Common Ownership or Management Control Relationships | ' | ' |
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 year ended December 31, 2013 and 2012, the total expenses relating to this stockholder amounted to $120,000 and $181,117, respectively. In addition, we capitalized $107,050 of software development costs for the year ended December 31, 2013. As of December 31, 2013 and 2012, the total amounts due to the stockholder and included in related party payables amounted to $396,800 and $447,429, respectively. | ||
Related Party Transaction, Expenses from Transactions with Related Party | 120,000 | 181,117 |
Related party payables | 396,800 | 447,429 |
Software development costs | 107,050 | 41,184 |
E-Mail Frequency, LLC | ' | ' |
Nature of Common Ownership or Management Control Relationships | ' | ' |
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, a significant stockholder of the Company. We will 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. Amortization expense for the years ended December 31, 2013 and 2012 was $50,000. In addition, we incurred a total of $15,020 and $27,905 during the years ended December 31, 2013 and 2012, respectively, toward convertible notes interest to Mr. Loftus. We included in related party payables at December 31, 2013 and December 31, 2012 of $64,615 and $49,595, respectively, in respect to these services. Furthermore, Mr. Loftus is a value-added-reseller of MMRPro systems. We recognized $18,421 and $67,883 in revenue from E-Mail Frequency for the sale of MMRPro systems, during 2013 and 2012, respectively. On July 19, 2012, 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 an Amendment to the Agreement dated September 15, 2009 to provide licensor a non- exclusive right to target, market and exploit the Employee Benefits market. | ||
Related Party Transaction, Revenues from Transactions with Related Party | 18,421 | 67,883 |
Amortization of licensee fee | 50,000 | 50,000 |
David Loftus | ' | ' |
Nature of Common Ownership or Management Control Relationships | ' | ' |
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, a significant stockholder of the Company. We will 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. Amortization expense for the years ended December 31, 2013 and 2012 was $50,000. In addition, we incurred a total of $15,020 and $27,905 during the years ended December 31, 2013 and 2012, respectively, toward convertible notes interest to Mr. Loftus. We included in related party payables at December 31, 2013 and December 31, 2012 of $64,615 and $49,595, respectively, in respect to these services. Furthermore, Mr. Loftus is a value-added-reseller of MMRPro systems. We recognized $18,421 and $67,883 in revenue from E-Mail Frequency for the sale of MMRPro systems, during 2013 and 2012, respectively. On July 19, 2012, 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 an Amendment to the Agreement dated September 15, 2009 to provide licensor a non- exclusive right to target, market and exploit the Employee Benefits market. | ||
Related Party Transaction, Expenses from Transactions with Related Party | 15,020 | 27,905 |
Related party payables | $64,615 | $49,595 |
Subsequent_Events_Narrative_De
Subsequent Events (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events Narrative Details | ' |
Subsequent Event, Description | ' |
On March 6, 2014, the Company and Walgreen Co. announced that they have entered into a Settlement and Licensing Agreement (the "Agreement") to resolve two patent infringement lawsuits brought by MMR. Pursuant to the terms of the Agreement, Walgreens purchased a Non-Exclusive License to the MMR family of patents. The settlement arises from litigation involving MMR's U.S. Patent No. 8,301,466 and U.S. Patent No. 8,498,883. MMR's patent portfolio also includes U.S. Patent Nos. 8,121,855; 8,117,045; 8,117,646; 8,301,466; 8,321,240; 8,352,287; 8,352,288; 8,498,883; 8,626,532 and 8,645,161 as well as numerous pending applications. Pursuant to the terms of the Agreement, Walgreens has also agreed to sell MMR's MyMedicalRecords Personal Health Record (the "MMR-PHR") on drugstore.com. The remaining terms of the Agreement are confidential. | |
On March 12, 2014 the Company announced an agreement with Cerner Corporation relating to MMR's MyMedicalRecords, Inc. Personal Health Record patent portfolio, including U.S. Patent Nos. 8,117,045; 8,117,646; 8,121,855; 8,301,466; 8,321,240; 8,352,287; 8,352,288; 8,498,883, 8,626,532 and 8,645,161. The confidential agreement includes other terms and conditions related to an ongoing business relationship between the parties. | |
On March 25, 2014 we received a Notice of Allowance ("NOA") from the United States Patent and Trademark Office for U.S. Patent Application Serial No. 12/204,498 entitled "Method and System for Providing Online Records." The application represents the first step in expanding MMR's health information technology ("HIT") Patent Portfolio from the medical profession to the legal profession. The NOA includes 28 claims directed toward accessing, collecting, storing, managing, and sharing legal documents and records. | |