Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 10, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | MMRGlobal, Inc. | ||
Entity Central Index Key | 1285701 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
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 | $21,552,658 | ||
Entity Common Stock, Shares Outstanding | 778,972,739 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash and cash equivalents | $309,393 | $10,359 |
Accounts receivable, less allowances of $173, 591 and $345,692 in 2014 and 2013, respectively | 47,718 | 146,298 |
Inventory | 13,537 | 65,238 |
Prepaid expenses and other current assets | 162,184 | 154,637 |
Total current assets | 532,832 | 376,532 |
Long-term investments: | ||
Investment in equity securities, cost method | 0 | 87,500 |
Total long-term investments | 0 | 87,500 |
Property and equipment, net | 32,118 | 38,393 |
Intangible assets, net | 1,790,622 | 1,670,033 |
Total assets | 2,355,572 | 2,172,458 |
Current liabilities: | ||
Line of credit, related party | 753,704 | 979,545 |
Related party payables | 952,835 | 1,147,697 |
Compensation payable | 491,109 | 402,079 |
Severance liability | 620,613 | 620,613 |
Accounts payable and accrued expenses | 4,668,960 | 5,264,527 |
Deferred revenue | 51,312 | 61,211 |
Convertible notes payable | 932,047 | 981,215 |
Notes payable, current portion | 360,343 | 375,343 |
Notes payable, related party | 253,664 | 196,921 |
Capital leases payable, current portion | 13,221 | 13,336 |
Total current liabilities | 9,097,808 | 10,042,487 |
Capital leases payable, less current portion | 0 | 3,522 |
Total liabilities | 9,097,808 | 10,046,009 |
Commitments and contingencies (See Note 9) | ||
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, 774,417,739 and 684,367,465 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively | 774,211 | 684,536 |
Additional paid-in capital | 56,437,812 | 53,215,960 |
Accumulated deficit | -63,954,259 | -61,774,047 |
Total stockholders' deficit | -6,742,236 | -7,873,551 |
Total liabilities and stockholders' deficit | $2,355,572 | $2,172,458 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Allowances | $173,591 | $345,692 |
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 | 774,417,739 | 684,367,465 |
Common stock, shares outstanding | 774,417,739 | 684,367,465 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | ||
Subscriber | $134,984 | $177,687 |
MMR Pro | 44,547 | 288,197 |
License fees | 2,392,538 | 64,011 |
Other income | 7,500 | 57,410 |
Total revenues | 2,579,569 | 587,305 |
Cost of revenues | 378,342 | 262,653 |
Gross profit | 2,201,227 | 324,652 |
General and administrative expenses | 4,238,320 | 5,344,713 |
Sales and marketing expenses | 1,305,901 | 1,966,694 |
Technology development | 76,247 | 77,715 |
Loss from operations | -3,419,241 | -7,064,470 |
Other income | 1,672,820 | 16,884 |
Interest and other finance charges, net | -433,791 | -591,183 |
Net loss | ($2,180,212) | ($7,638,769) |
Net income (loss) per share: | ||
Basic and diluted | $0 | ($0.01) |
Weighted average common shares outstanding: | ||
Basic | 740,604,530 | 606,477,128 |
Diluted | 740,604,530 | 606,477,128 |
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, 2012 | $0 | $522,144 | $46,998,534 | ($54,135,278) | ($6,614,600) |
Beginning balances, 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 | |||
Convertible debt conversions | 15,369 | 324,631 | 340,000 | ||
Convertible debt conversions, shares | 15,369,478 | ||||
Shares issued for services or reduction to liabilities | 18,542 | 585,853 | 604,395 | ||
Shares issued for services or reduction to liabilities, shares | 18,542,529 | ||||
Shares issued for financing activities | 53,138 | 1,367,108 | 1,422,246 | ||
Shares issued for financing activities, shares | 53,138,267 | ||||
Stock option exercises, shares | 450,000 | ||||
Stock-based compensation | -500 | 621,632 | 621,132 | ||
Stock-based compensation, shares | -500,000 | ||||
Warrant exercises | 1,500 | 40,500 | 42,000 | ||
Warrant exercises, shares | 1,500,000 | ||||
Creation of note discount | 124,120 | ||||
Cancellation of investment | 1,626 | 122,959 | 124,585 | ||
Cancellation of investment, shares | 2,000,000 | ||||
Net loss | -2,180,212 | -2,180,212 | |||
Ending balances at Dec. 31, 2014 | $774,211 | $56,437,812 | ($63,954,259) | ($6,742,236) | |
Ending balance, shares at Dec. 31, 2014 | 774,417,739 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities: | ||
Net loss | ($2,180,212) | ($7,638,769) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 302,762 | 237,463 |
Non-cash write down of assets | 152,738 | 262,500 |
Allowance for doubtful accounts | 69,784 | 289,947 |
Warrants issued for services | 159,169 | 692,073 |
Stock-based compensation | 621,132 | 651,270 |
Common stock issued for services | 296,422 | 1,064,752 |
Amortization of loan discount | 214,953 | 333,915 |
Gain on wrie-off of liabilities | -1,672,820 | 0 |
Subtotal - non-cash adjustments | 144,140 | 3,531,920 |
Effect of changes in: | ||
Accounts receivable | 28,796 | -431,802 |
Inventory | -13,537 | -12,792 |
Prepaid expenses and other current assets | -7,547 | -46,276 |
Deposits | 0 | 3,370 |
Accounts payable and accrued expenses | 1,162,790 | 1,382,490 |
Related party payables | 121,938 | 55,132 |
Compensation payable | 89,030 | 195,531 |
Deferred revenue | -9,899 | 36,681 |
Subtotal - net change in operating assets and liabilities | 1,371,571 | 1,182,334 |
Net cash used in operating activities | -664,501 | -2,924,515 |
Investing activities: | ||
Purchase of property and equipment | -7,401 | 0 |
Filing of patents | -356,047 | -483,649 |
Cost of continuing MMRPro and website development | -52,485 | -60,250 |
Net cash used in investing activities | -415,933 | -543,899 |
Financing activities: | ||
Net proceeds from convertible notes and sales of restricted stock | 200,000 | 1,879,300 |
Net proceeds from warrant exercises | 42,000 | 140,225 |
Proceeds from shares issued for financing activities | 1,422,246 | 1,516,036 |
Proceeds from note payable | 85,000 | 20,000 |
Payments of note payable | -50,000 | -70,000 |
Proceeds from note payable, related party | 0 | 84,000 |
Payments of note payable, related party | 0 | -20,000 |
Proceeds from line of credit | 0 | 113,000 |
Payments of line of credit | -316,141 | -203,472 |
Payments of capital lease | -3,637 | -16,971 |
Net cash provided by financing activities | 1,379,468 | 3,442,118 |
Net increase (decrease) in cash | 299,034 | -26,296 |
Cash, beginning of period | 10,359 | 36,655 |
Cash, end of period | 309,393 | 10,359 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 200,929 | 149,903 |
Cash paid for income taxes | 1,457 | 4,201 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of convertible notes into common stock | 340,000 | 1,632,919 |
Receipt of investment in equity securities | 0 | 350,000 |
Cancellation of investment in equity securities | 87,500 | 56,000 |
Acquisition of assets through capital lease | 0 | 35,829 |
Payment of accounts payable and related party payables through issuance of common stock | $296,422 | $48,697 |
NATURE_OF_OPERATIONS_AND_BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Note 1 | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION - Note 1 | NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION |
MMRGlobal Inc. (referred to herein, unless otherwise indicated, as "MMR," the "Company," "we," "us," and "our") was originally incorporated as Favrille, Inc. ("Favrille") in Delaware in 2000, and since its inception and before the Merger (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, retailers, and professional organizations and affinity groups. Our PHR, marketed both directly via our website at www.mymedicalrecords.com, at online retailers 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 thirteen health IT patents pertaining to Personal Health Records, patient portals and Electronic Health 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-CD20 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, 2014, the Company's current liabilities exceeded its current assets by $8.56 million. Furthermore, during the years ended December 31, 2014, and 2013, the Company incurred losses of $2.14 million and $7.44 million, respectively. | |
At December 31, 2014 and December 31, 2013, we had $309,393 and $10,359, 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 Ninth Amended and Restated Note effective April 29, 2014 (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 $1,281,852 at December 31, 2014 and a total Unpaid Balance (as defined in the Line of Credit) of $2,968,148, 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 Ninth 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, 2014 are as follows: $753,704, which is included in the line of credit, related party; and $528,148 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 our available line of credit with The RHL Group (see Note 3). At December 31, 2014, we had approximately $2.968 million remaining as available under The RHL Group line of credit. Furthermore, we plan to continue to utilize portions of our standby equity line facility with Granite as needed. Additionally, we plan to continue selling additional debt and equity securities, continue to settle our existing liabilities through issuance of equity securities, explore other debt financing arrangements, continue to increase our existing subscriber and affiliate customer base, sell MMRPro products, and continue licensing our intellectual property to obtain additional cash flow over the next twelve months. We cannot assure you 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 we raise additional funds or settle liabilities by issuing equity securities, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution 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 available line of credit with The RHL Group, the Granite equity line of credit, or obtain suitable alternative debt or equity financing, 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, 2014 | ||||
Notes to Financial Statements | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Note 2 | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
(a) MANAGEMENT'S USE OF ESTIMATES | ||||
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses during each reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, allowances for doubtful accounts, the valuation of deferred income taxes, tax contingencies, long-lived and intangible assets, valuation of derivative liabilities and stock-based compensation. These estimates are based on historical experience and on various other factors that management believes to be reasonable under the circumstances, although actual results could differ from those estimates. | ||||
(b) CASH AND CASH EQUIVALENTS | ||||
We consider cash equivalents to be only those investments that are highly liquid, readily convertible to cash and with maturities of 90 days or less at the purchase date. We maintain our cash in bank deposit accounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and believe that we are not exposed to any significant credit or deposit risk on our cash. We had cash and cash equivalents of $309,393 and $10,359 as of December 31, 2014, and 2013, 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, 2014, and 2013, 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, 2014 and 2013. | ||||
(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, 2014 and 2013 was $23,884 and $78,230, 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, 2014 and 2013 using the following assumptions. | ||||
31-Dec-14 | 31-Dec-13 | |||
Expected life in years | 2 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 120.51% - 122.72% | 144.34% - 148.34% | ||
Risk free interest rate | 0.04% - 1.38% | 0.035% - 0.035% | ||
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, 2014 and 2013 because they were anti-dilutive due to our net loss position. Stock options, warrants and convertible notes excluded from the computation totaled 191,965,338 and 203,329,108 shares as of December 31, 2014 and 2013, 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. During the years ended December 31, 2014 and 2013, the Company recognized $87,500 and $262,500, respectively, of impairment related to this asset. At December 31, 2014 and 2013, the carrying amount of the investment was $0 and $87,500, respectively. | ||||
(o) RECENT ACCOUNTING PRONOUNCEMENTS | ||||
In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. ASU 2014-09 also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the effect that the adoption of ASU 2014-09 will have on the Company's consolidated financial statements. | ||||
In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015- 02"). This standard modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2015, and requires either a retrospective or a modified retrospective approach to adoption. Early adoption is permitted. After review of this standard, the Company does not believe this will have a material effect on its consolidated financial statements or disclosures. | ||||
RELATED_PARTY_PAYABLES_LINE_OF
RELATED PARTY PAYABLES, LINE OF CREDIT AND NOTE PAYABLE - Note 3 | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
RELATED PARTY PAYABLES, LINE OF CREDIT AND NOTE PAYABLE - Note 3 | NOTE 3 - RELATED PARTY PAYABLES, LINE OF CREDIT AND NOTE PAYABLE |
On 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. | |
On April 29, 2014, the Company and The RHL Group entered into a Ninth Amended and Restated Promissory Note, effective as of April 29, 2014. The Amended Note amends and restates that certain Eight 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, 2015. In connection with the Ninth Amended Note, we issued The RHL Group warrants to purchase 2,781,561 shares of our common stock at $0.035 per share. Except as set forth above, the Amended Note does not materially alter the terms of the Existing Note. | |
The Ninth Amended Note had a balance of $1,281,852 and $1,355,761 at December 31, 2014 and 2013, respectively. The components of the Ninth Amended Note and the related balance sheet presentation as of December 31, 2014 are as follows: $753,704, which is included in the line of credit, related party; and $528,148 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, 2014 and 2013 amounted to $134,523 and $132,804, respectively. The unpaid interest balances as of December 31, 2014 and December 31, 2013 were $30,160 and $24,049, respectively. | |
In conjunction with the Ninth 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, 2014. All covenants were met as of December 31, 2014. | |
PREPAID_EXPENSES_AND_OTHER_CUR
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Note 4 | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
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, | ||||||
2014 | 2013 | ||||||
Prepaid consulting fees from issuance of common stock | $ | 125,625 | $ | 141,315 | |||
Prepaid insurance | 5,984 | 8,947 | |||||
Prepaid trade shows | 30,575 | 4,375 | |||||
Total prepaid expenses and other current assets | $ | 162,184 | $ | 154,637 | |||
PROPERTY_AND_EQUIPMENT_Note_5
PROPERTY AND EQUIPMENT - Note 5 | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Notes to Financial Statements | |||||||
PROPERTY AND EQUIPMENT - Note 5 | 5. PROPERTY AND EQUIPMENT | ||||||
Property and equipment, at year end consisted of the following: | |||||||
December 31, | December 31, | ||||||
2014 | 2013 | ||||||
Furnitures and fixtures | $ | 4,041 | $ | 3,170 | |||
Computers and related equipment | 137,465 | 153,335 | |||||
141,506 | 156,505 | ||||||
Less: Accumulated depreciation and amortization | -109,389 | -118,112 | |||||
$ | 32,118 | $ | 38,393 | ||||
Depreciation expense for the years ended December 31, 2014 and 2013 amounted to $13,677 and $15,737, 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, 2014 | |||||||
Notes to Financial Statements | |||||||
INTANGIBLE ASSETS - Note 6 | 6. INTANGIBLE ASSETS | ||||||
Intangible assets as of December 31, 2014 and 2013 consisted of the following: | |||||||
December 31, | December 31, | ||||||
2014 | 2013 | ||||||
Website development | $ | 332,795 | $ | 326,394 | |||
MMR Pro website development | 910,087 | 863,561 | |||||
Patents | 1,602,786 | 1,246,739 | |||||
Domain name | 86,375 | 86,375 | |||||
2,932,043 | 2,523,069 | ||||||
Less: Accumulated amortization | -1,141,421 | -853,036 | |||||
$ | 1,790,622 | $ | 1,670,033 | ||||
Amortization expense for the years ended December 31, 2014 and 2013 amounted to $289,085 and $221,726, respectively. Estimated amortization expense for each of the next five succeeding years is expected to be as follows: | |||||||
Year Ending | |||||||
December 31, | |||||||
2015 | $ | 254,659 | |||||
2016 | 109,528 | ||||||
2017 | 28,566 | ||||||
2018 | 26,703 | ||||||
2019 | 24,786 | ||||||
Thereafter | 1,346,380 | ||||||
Total | $ | 1,790,622 | |||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Note 7 | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Notes to Financial Statements | |||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Note 7 | 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ||||||
December 31, | December 31, | ||||||
2014 | 2013 | ||||||
Legal and accounting fees | $ | 3,524,788 | $ | 3,501,978 | |||
Accounts payable and accruals from Favrille Merger | 309,791 | 309,791 | |||||
Trade payables | 314,491 | 976,820 | |||||
Consulting services | 417,743 | 401,994 | |||||
Accrued vacation | 102,147 | 73,944 | |||||
Total accounts payable and accrued expenses | $ | 4,668,960 | $ | 5,264,527 | |||
INCOME_TAXES_Note_8
INCOME TAXES - Note 8 | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Notes to Financial Statements | |||||||
INCOME TAXES - Note 8 | NOTE 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, | |||||||
2014 | 2013 | ||||||
Federal statutory rate | -34.00% | -34.00% | |||||
State tax, net of federal benefit | -5.65% | -5.82% | |||||
Non-deductible items | 0.84% | 0.08% | |||||
Valuation allowance | 38.81% | 39.74% | |||||
Effective income tax rate | 0.00% | 0.00% | |||||
Significant components of deferred tax assets and (liabilities) are as follows: | |||||||
December 31, | |||||||
2014 | 2013 | ||||||
Net operating loss carryforwards | $ | 19,345,922 | $ | 18,674,820 | |||
Depreciation and amortization | -55,855 | -145,605 | |||||
Share-based compensation | 2,494,629 | 2,061,862 | |||||
R&D tax credit | 2,455,964 | 2,455,964 | |||||
State tax and other | -1,509,212 | -1,446,425 | |||||
Deferred tax assets, net | 22,731,448 | 21,600,616 | |||||
Less: valuation allowance | -22,731,448 | -21,600,616 | |||||
$ | - | $ | - | ||||
At December 31, 2014, the Company had Federal and State net operating loss carry forwards available to offset future taxable income of $45,371,308 and $44,302,242, 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, 2014, 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 a $22,731,448 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, 2014 and 2013. | |||||||
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, 2014 and 2013. | |||||||
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 2011 - 2014 | |||||||
California State 2010 - 2014 | |||||||
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, 2014 | |||||||
Notes to Financial Statements | |||||||
COMMITMENTS AND CONTINGENCIES - Note 9 | NOTE 9 - COMMITMENTS AND CONTINGENCIES | ||||||
Leases | |||||||
Effective September 1, 2013, we renewed our lease for office space in Los Angeles, California with a term through August 31, 2018. The lease currently requires a monthly payment of $8,250. Total rent expense for the years ended December 31, 2014 and 2013 were $150,720 and $120,472 respectively. Future minimum lease payments as of December 31, 2014, 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 | |||||
2015 | $ | 170,500 | $ | 13,222 | |||
2016 | 187,550 | - | |||||
2017 | 206,305 | - | |||||
2018 and there after | 146,410 | - | |||||
710,765 | 13,222 | ||||||
Less current portion | -13,222 | ||||||
Total minimum lease payments | $ | 710,765 | $ | - | |||
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. | |||||||
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. 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. | |||||||
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 with Surgery Center Management LLC ("SCM"). In consideration for the rights granted under that Agreement and in consideration of a settlement and release agreement, SCM contracted to pay MyMedicalRecords, Inc. an initial payment of $5 million payable on December 23, 2011, and additional payments of $5 million per year for five consecutive years. After unsuccessful 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 it intends to seek $30 million in damages. On February 13, 2014, SCM filed an answer to the complaint and a cross-complaint alleging claims for breach of that contract, among other things. On July 10, 2014, the court granted SCM's motion for summary adjudication on the claim for breach of contract in the complaint and its counterclaim for declaratory relief. On July 30, 2014, SCM filed its second amended cross-complaint, alleging substantially the same claims against the same parties. On December 5, 2014, the Court of Appeal issued an Alternative Writ of Mandate, finding the trial court "erred in granting [SCM's] motion for summary adjudication." Pursuant to the Court of Appeal's Alternative Writ, on January 7, 2015, the trial court vacated its order granting SCM's motion for summary adjudication, and it has scheduled another hearing on that motion on April 10, 2015. MyMedicalRecords, Inc. will continue to pursue its claim and defenses, but the Company cannot predict the chances of either a favorable or unfavorable outcome, nor does the Company have sufficient information regarding its ability to collect any judgment MyMedicalRecords, Inc. may obtain. | |||||||
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. The Court issued a claim construction order on September 4, 2014, and granted MMR's motion to amend its infringement contentions with respect to the `466 Patent against all defendants on November 7. On December 22 and 23, 2014, the Court entered orders finding that the eight claims asserted (of the 42 total claims present) under the two asserted MMR patents were invalid. MMR is appealing those orders to the U.S. Court of Appeals for the Federal Circuit. Quest has agreed to stay the filing of fees and costs until resolution of the appeal. | |||||||
MMR's portfolio of other patents are not affected by this litigation, including U.S. Patent Nos.: 8,117,045 ("Method and System for Providing Online Medical Records"); 8,117,646 ("Method and System for Providing Online Records"); 8,121,855 ("Method and System for Providing Online Medical Records"); 8,321,240 ("Method and System for Providing Online Medical Records"); 8,352,287 ("Method for Proving a User with a Service for Accessing and Collecting Personal Health Records"); 8,352,288 ("Method for Providing a User with a Web-Based Service for Accessing and Collecting Records"); 8,626,532 ("Method for Providing a User with a Web-Based Service for Accessing and Collecting Health Records"); 8,645,161 ("Method and System for Providing Online Records"); 8,725,537 ("Method and System for Providing Online Records"); 8,768,725 ("Method and System for Providing Online Medical Records"); 8,775,212 ("Electronic Health Records in Clinical Trials"); as well as 11 foreign patents including two in Australia, three in Mexico, two in South Korea, with others in New Zealand, Singapore, Japan and Canada. | |||||||
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. The Court issued a claim construction order on September 4, 2014, and granted MMR's motion to amend its infringement contentions with respect to the `466 Patent against all defendants on November 7. On December 22 and 23, 2014, the Court entered orders finding that the eight claims asserted (of the 42 total claims present) under the two asserted MMR patents were invalid. MMR is appealing those orders to the U.S. Court of Appeals for the Federal Circuit. WebMD has filed a motion to recover fees and costs, which MMR opposes, and requests be stayed until resolution of the appeal. | |||||||
MMR's portfolio of other patents are not affected by this litigation, including U.S. Patent Nos.: 8,117,045 ("Method and System for Providing Online Medical Records"); 8,117,646 ("Method and System for Providing Online Records"); 8,121,855 ("Method and System for Providing Online Medical Records"); 8,321,240 ("Method and System for Providing Online Medical Records"); 8,352,287 ("Method for Proving a User with a Service for Accessing and Collecting Personal Health Records"); 8,352,288 ("Method for Providing a User with a Web-Based Service for Accessing and Collecting Records"); 8,626,532 ("Method for Providing a User with a Web-Based Service for Accessing and Collecting Health Records"); 8,645,161 ("Method and System for Providing Online Records"); 8,725,537 ("Method and System for Providing Online Records"); 8,768,725 ("Method and System for Providing Online Medical Records"); 8,775,212 ("Electronic Health Records in Clinical Trials"); as well as 11 foreign patents including two in Australia, three in Mexico, two in South Korea, with others in New Zealand, Singapore, Japan and Canada. | |||||||
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. The Court issued a claim construction order on September 4, 2014, and granted MMR's motion to amend its infringement contentions with respect to the `466 Patent against all defendants on November 7. On December 22 and 23, 2014, the Court entered orders finding that the eight claims asserted (of the 42 total claims present) under the two asserted MMR patents were invalid. MMR is appealing those orders to the U.S. Court of Appeals for the Federal Circuit. Allscripts has filed a motion to recover fees and costs, which MMR opposes, and requests be stayed until resolution of the appeal. Allscripts Healthcare Solutions Inc. also filed a Covered Business Method ("CBM") petition on November 3, 2014, before the Patent Trial and Appeal Board alleging that claims 8-12 of U.S.Patent No. 8,301,466 are invalid. MMR filed a preliminary response on February 20, 2015 and the Patent Office has not yet decided whether or not to institute a CBM proceeding. | |||||||
MMR's portfolio of other patents are not affected by this litigation, including U.S. Patent Nos.: 8,117,045 ("Method and System for Providing Online Medical Records"); 8,117,646 ("Method and System for Providing Online Records"); 8,121,855 ("Method and System for Providing Online Medical Records"); 8,321,240 ("Method and System for Providing Online Medical Records"); 8,352,287 ("Method for Proving a User with a Service for Accessing and Collecting Personal Health Records"); 8,352,288 ("Method for Providing a User with a Web-Based Service for Accessing and Collecting Records"); 8,626,532 ("Method for Providing a User with a Web-Based Service for Accessing and Collecting Health Records"); 8,645,161 ("Method and System for Providing Online Records"); 8,725,537 ("Method and System for Providing Online Records"); 8,768,725 ("Method and System for Providing Online Medical Records"); 8,775,212 ("Electronic Health Records in Clinical Trials"); as well as 11 foreign patents including two in Australia, three in Mexico, two in South Korea, with others in New Zealand, Singapore, Japan and Canada. | |||||||
STOCKHOLDERS_DEFICIT_Note_10
STOCKHOLDERS' DEFICIT - Note 10 | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
STOCKHOLDERS' DEFICIT - Note 10 | NOTE 10 - STOCKHOLDERS' DEFICIT |
Preferred Stock | |
The Company has 5,000,000 shares of preferred stock authorized. As of December 31, 2014, and 2013, there were no shares of preferred stock issued and outstanding. | |
Common Stock | |
As of December 31, 2014, 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, 2014, the amount available under the equity line facility was $13 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, 2014, the total shares of our common stock issued and outstanding amounted to 774,417,739. | |
EQUITY_ISSUANCES_Note_11
EQUITY ISSUANCES - Note 11 | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
EQUITY ISSUANCES - Note 11 | NOTE 11 - EQUITY ISSUANCES | ||||||||||||||||
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, 2014, total unrecognized stock-based compensation expense related to non-vested stock options was $44,853, 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, 2013 and 2014 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, 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 | 0.11 | 5.08 | - | |||||||||||||
Granted | 500,000 | 0.06 | |||||||||||||||
Exercised | -450,000 | 0.08 | |||||||||||||||
Cancelled | -2,400,000 | 0.13 | |||||||||||||||
Outstanding at December 31, 2014 | 37,541,722 | $ | 0.10 | 4.29 | $ | - | |||||||||||
Vested and expected to vest | |||||||||||||||||
at December 31, 2014 | 37,541,722 | $ | 0.10 | 4.29 | $ | - | |||||||||||
Exercisable at December 31, 2014 | 36,841,722 | $ | 0.10 | 4.27 | $ | - | |||||||||||
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, 2014 and 2013 were $157,283 and $241,428, respectively, and is reflected in operating expenses in the accompanying consolidated statements of operations. During the year ended December 31, 2014, the Company modified the terms of certain stock options and warrants held by the Company's CEO and its board of directors to extend the expiration date between 3 and 12 months. The Company recognized $185,476 of incremental cost associated with this modification, which is recorded as a part of stock-based compensation. | |||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 2014. | |||||||||||||||||
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 - 0.08 | 12,900,000 | 6.81 | $ | 0.07 | 12,200,000 | 6.72 | $ | 0.06 | ||||||||
$ | 0.08 - 0.15 | 23,011,461 | 3.44 | $ | 0.11 | 23,011,461 | 3.44 | $ | 0.11 | ||||||||
$ | > 0.15 | 1,630,261 | 3.89 | $ | 0.18 | 1,630,261 | 3.89 | $ | 0.18 | ||||||||
37,541,722 | 36,841,722 | ||||||||||||||||
Warrants | |||||||||||||||||
On March 4, 2014, we granted an unrelated third party a warrant to purchase 500,000 shares of our common stock. This warrant vests immediately and has an exercise price of $0.06 per share, and an expiration date of February 28, 2015. | |||||||||||||||||
On March 4, 2014, we granted an unrelated third party a warrant to purchase 500,000 shares of our common stock. This warrant vests upon three successful Hospital Sign up of MMR Patient View Portal and has an exercise price of $0.10 per share, and an expiration date of February 28, 2015. | |||||||||||||||||
On March 4, 2014, we granted an unrelated third party a warrant to purchase 250,000 shares of our common stock. This warrant vests in six months and has an exercise price of $0.06 per share, and an expiration date of March 4, 2016. | |||||||||||||||||
On March 27, 2014, we granted an unrelated third party a warrant to purchase 250,000 shares of our common stock. This warrant vests in one year and has an exercise price of $0.06 per share, and an expiration date of March 27, 2019. | |||||||||||||||||
On April 8, 2014, we granted and unrelated third-party a warrant to acquire 250,000 shares of common stock in consideration for services. The warrant vests equally over three years, has an exercise price of $0.06 per share, and an expiration date of April 8, 2019. | |||||||||||||||||
On April 30, 2014, we granted and unrelated third-party a warrant to acquire 250,000 shares of common stock in consideration for services. The warrant vests equally over three years, has an exercise price of $0.06 per share, and an expiration date of April 30, 2019. | |||||||||||||||||
On May 29, 2014, we granted an unrelated third party a warrant to purchase 500,000 shares of our common stock as part of a warrant exchange program. This warrant vests immediately and has an exercise price of $0.024 per share, and an expiration date of May 29, 2015. | |||||||||||||||||
On May 29, 2014, we granted an unrelated third party a warrant to purchase 500,000 shares of our common stock in consideration for services. This warrant vests in one year and has an exercise price of $0.06 per share, and an expiration date of May 29, 2015. | |||||||||||||||||
On July 10, 2014, we granted the RHL Group a warrant to purchase 2,781,561 shares of our common stock in connection with the renewal of the line of credit through the Ninth Amended Note. This warrant has an exercise price of $0.035 per share, with an expiration date of June 4, 2019, and vests at commencement. | |||||||||||||||||
A summary of the activity of the Company's warrants for the years ended December 31, 2014 is presented below. | |||||||||||||||||
Weighted Avg | |||||||||||||||||
Shares | Exercise Price | ||||||||||||||||
Outstanding at December 31, 2013 | 88,571,841 | $ | 0.07 | ||||||||||||||
Granted | 5,781,561 | 0.05 | |||||||||||||||
Exercised | -3,250,000 | 0.04 | |||||||||||||||
Cancelled | -21,074,992 | 0.10 | |||||||||||||||
Outstanding at December 31, 2014 | 70,028,410 | $ | 0.06 | ||||||||||||||
Exercisable at December 31, 2014 | 65,900,633 | $ | 0.06 | ||||||||||||||
The following summarizes the total warrants outstanding and exercisable as of December 31, 2014. | |||||||||||||||||
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 | |||||||||||
$0.02 - $0.06 | 48,899,348 | 2.24 | $ | 0.04 | 48,271,571 | 2.21 | $ | 0.04 | |||||||||
$0.06 - $0.10 | 7,525,000 | 0.78 | $ | 0.10 | 5,025,000 | 0.68 | $ | 0.10 | |||||||||
Greater than $0.10 | 13,604,062 | 1.56 | $ | 0.14 | 12,604,062 | 1.6 | $ | 0.15 | |||||||||
70,028,410 | 65,900,633 | ||||||||||||||||
Shares Issued for Services or Reduction to Liabilities | |||||||||||||||||
During the year ended December 31, 2014, we issued 18,542,529 shares of common stock with a value of $604,396 to non-employees and charged to the appropriate accounts for the following reasons: | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Purpose | Shares | Value | |||||||||||||||
Reduction of payables | 9,278,883 | $ | 296,422 | ||||||||||||||
Services provided | 9,263,646 | $ | 307,973 | ||||||||||||||
Totals | 18,542,529 | $ | 604,395 | ||||||||||||||
The 18,542,529 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, 2014 and 2013, the Company issued 18,542,529 and 31,918,265, respectively, shares of common stock in consideration for goods and services from both employees and non-employees valued at $604,396 and $1,444,372, 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. Total stock bonus expenses recorded during the year ended December 31, 2014 was approximately $308,375, 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, 2014, 7,000,000 shares of restricted stock were not vested, and unrecognized compensation cost with respect to these instruments amounted to $0. These shares vest in full on January 1, 2015. | |||||||||||||||||
NOTES_PAYABLE_Note_12
NOTES PAYABLE - Note 12 | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Notes to Financial Statements | |||||||
NOTES PAYABLE - Note 12 | NOTE 12 - NOTES PAYABLE | ||||||
The Notes payable consisted of the following: | |||||||
December 31, | December 31, | ||||||
2014 | 2013 | ||||||
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 6% interest | 35,000 | 50,000 | |||||
360,343 | 375,343 | ||||||
Less: current portion | -360,343 | -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 | $ | 203,664 | $ | 196,921 | |||
Short term loan due to a related-party, payable in full on May 31, 2015 with 12% interest | 50,000 | - | |||||
Notes payable related party, current portion | 253,664 | 196,921 | |||||
Less: current portion | -253,664 | -196,921 | |||||
Notes payable related party, less current portion | $ | - | $ | - | |||
CONVERTIBLE_PROMISSORY_NOTES_N
CONVERTIBLE PROMISSORY NOTES - Note 13 | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
CONVERTIBLE PROMISSORY NOTES - Note 13 | NOTE 13 - CONVERTIBLE PROMISSORY NOTES |
From time to time, we issue Convertible Promissory Notes. As of December 31, 2014, a total of $978,858 in convertible notes remained outstanding. As of December 31, 2014, $778,858 of these Notes have matured, however, the Company and the Holders have agreed to keep the balance as a Note Payable and the note holders have elected not to convert their note balances into shares of our common stock as of December 31, 2014. | |
Each Note contains the following general terms and provisions: | |
The principal amount owed under each note becomes due and payable one year or less from the investment date provided that, upon ten (10) days' prior written notice to the holder, we may, in our sole discretion, extend the maturity date for an additional six month term. The Notes can be further extended upon mutual agreement. | |
These notes bear interest at a rate of 6% per annum payable in cash or shares of common stock or a combination of cash and shares of common stock at our option. | |
During the first quarter of 2014, we did not enter into any Convertible Promissory Notes. | |
During the second quarter of 2014, we entered into one Convertible Promissory Note with one unrelated third-party for a principal amount of $200,000. This note has the option to be converted into a total of 6,779,661shares of our common stock. As of December 31, 2014, this note has not been converted. In addition, during the second quarter of 2014 we entered into an agreement to modify the terms of an existing convertible note by extending the maturity date and reducing the conversion price. As a result, the Company recognized an aggregate of $88,000 of expenses associated with this modification. | |
During the third quarter of 2014, we did not enter into any Convertible Promissory Notes. | |
During the fourth quarter of 2014, we did not enter into any new Convertible Promissory Notes. During this period a Note with principal balance of $150,000 was 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 $124,120 and $358,923, for the years ended December 31, 2014 and 2013, respectively. | |
The related discount for the beneficial conversion outstanding was $45,560 and $81,393 as of December 31, 2014 and 2013 respectively. | |
Shares issuable upon conversion for convertible notes payable was 84,395,206 and 81,015,545 as of December 31, 2014 and 2013, respectively. | |
The total interest expense attributed to the Beneficial Conversion Feature of the Notes and related warrants for the year ended December 31, 2014 and 2013 was $214,953 and $333,915, respectively. | |
RESTRUCTURING_ACTIVITIES_Note_
RESTRUCTURING ACTIVITIES - Note 14 | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
RESTRUCTURING ACTIVITIES - Note 14 | NOTE 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, 2014, the total remaining severance liabilities amounted to $620,613, which is reflected as severance liability on the accompanying consolidated balance sheets. No payments were made during the years ended December 31, 2014 or 2013 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, 2014 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS - Note 15 | NOTE 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 13% our total outstanding voting stock. The RHL Group, Inc. has loaned us money pursuant to the Ninth Amended Note and any predecessor notes. See Note 3 - Related Party Note Payable above. | |
The RHL Group is an investment holding company which provides consulting, operational and technical services to 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 us, including allowing us unlimited access to its facilities, equipment, and data, information management and server systems. In addition to allowing us the use of its office support personnel, the RHL Group has also consented to allow us to utilize the full-time services of Mr. Lorsch as 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 our social networking activities. | |
In consideration for the above, The RHL Group, Inc. has a consulting arrangement with MMR. A copy of the consulting agreement is filed as an Exhibit in our 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, 2014 and 2013, toward marketing consulting services from Bernard Stolar, a director. We included $174,273 and $109,756 in related party payables as of December 31, 2014, and 2013, 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, 2014 and 2013, the total expenses relating to this stockholder amounted to $120,000 and $120,000, respectively. In addition, we capitalized $107,050 of software development costs for the year ended December 31, 2014. As of December 31, 2014 and 2013, the total amounts due to the stockholder and included in related party payables amounted to $10,000 and $396,800, 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, 2014 and 2013 was $50,000 per year. In addition, we incurred a total of $0 and $15,020 during the years ended December 31, 2014 and 2013, respectively, toward convertible notes interest to Mr. Loftus. We included in related party payables at December 31, 2014 and December 31, 2013 of $64,615 and $64,615, respectively, in respect to these services. Furthermore, Mr. Loftus is a value-added-reseller of MMRPro systems. We recognized $0 and $18,421 in revenue from E-Mail Frequency for the sale of MMRPro systems, during 2014 and 2013, 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, 2014 | |
Notes to Financial Statements | |
SUBSEQUENT EVENTS - Note 16 | NOTE 16 - SUBSEQUENT EVENTS |
We have evaluated subsequent events of our condensed consolidated financial statements. There were no material subsequent events requiring additional disclosure in these financial statements. | |
Recovered_Sheet1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Notes to Financial Statements | ||||
Principles of Consolidation | Principles of Consolidation | |||
The consolidated financial statements include the accounts of MMRGlobal, and its wholly-owned subsidiaries MMR and MMR Life Sciences Group, Inc. All intercompany transactions and balances are eliminated upon consolidation. | ||||
Basis of Presentation | Basis of Presentation | |||
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, 2014, the Company's current liabilities exceeded its current assets by $8.56 million. Furthermore, during the years ended December 31, 2014, and 2013, the Company incurred losses of $2.14 million and $7.44 million, respectively. | ||||
At December 31, 2014 and December 31, 2013, we had $309,393 and $10,359, 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 Ninth Amended and Restated Note effective April 29, 2014 (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 $1,281,852 at December 31, 2014 and a total Unpaid Balance (as defined in the Line of Credit) of $2,968,148, 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 Ninth 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, 2014 are as follows: $753,704, which is included in the line of credit, related party; and $528,148 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 our available line of credit with The RHL Group (see Note 3). At December 31, 2014, we had approximately $2.968 million remaining as available under The RHL Group line of credit. Furthermore, we plan to continue to utilize portions of our standby equity line facility with Granite as needed. Additionally, we plan to continue selling additional debt and equity securities, continue to settle our existing liabilities through issuance of equity securities, explore other debt financing arrangements, continue to increase our existing subscriber and affiliate customer base, sell MMRPro products, and continue licensing our intellectual property to obtain additional cash flow over the next twelve months. We cannot assure you 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 we raise additional funds or settle liabilities by issuing equity securities, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution 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 available line of credit with The RHL Group, the Granite equity line of credit, or obtain suitable alternative debt or equity financing, 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 $309,393 and $10,359 as of December 31, 2014, and 2013, 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, 2014, and 2013, 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, 2014 and 2013. | ||||
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, 2014 and 2013 was $23,884 and $78,230, 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, 2014 and 2013 using the following assumptions. | ||||
31-Dec-14 | 31-Dec-13 | |||
Expected life in years | 2 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 120.51% - 122.72% | 144.34% - 148.34% | ||
Risk free interest rate | 0.04% - 1.38% | 0.035% - 0.035% | ||
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, 2014 and 2013 because they were anti-dilutive due to our net loss position. Stock options, warrants and convertible notes excluded from the computation totaled 191,965,338 and 203,329,108 shares as of December 31, 2014 and 2013, 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. During the years ended December 31, 2014 and 2013, the Company recognized $87,500 and $262,500, respectively, of impairment related to this asset. At December 31, 2014 and 2013, the carrying amount of the investment was $0 and $87,500, respectively. | ||||
Recent Accounting Pronouncements | (o) RECENT ACCOUNTING PRONOUNCEMENTS | |||
In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. ASU 2014-09 also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the effect that the adoption of ASU 2014-09 will have on the Company's consolidated financial statements. | ||||
In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis ("ASU 2015- 02"). This standard modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2015, and requires either a retrospective or a modified retrospective approach to adoption. Early adoption is permitted. After review of this standard, the Company does not believe this will have a material effect on its consolidated financial statements or disclosures. | ||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Black-Scholes Assumptions) (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
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, 2014 and 2013 using the following assumptions. | |||
31-Dec-14 | 31-Dec-13 | |||
Expected life in years | 2 - 5 Years | 0 - 5 Years | ||
Stock price volatility | 120.51% - 122.72% | 144.34% - 148.34% | ||
Risk free interest rate | 0.04% - 1.38% | 0.035% - 0.035% | ||
Expected dividends | None | None | ||
Forfeiture rate | 0% | 0% | ||
Recovered_Sheet2
Prepaid Expenses and other Current Assets (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
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, | ||||||
2014 | 2013 | ||||||
Prepaid consulting fees from issuance of common stock | $ | 125,625 | $ | 141,315 | |||
Prepaid insurance | 5,984 | 8,947 | |||||
Prepaid trade shows | 30,575 | 4,375 | |||||
Total prepaid expenses and other current assets | $ | 162,184 | $ | 154,637 | |||
Property_and_equipment_net_Tab
Property and equipment, net (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Property And Equipment Net Tables | |||||||
Components of Property, Plant and Equipment | Property and equipment, at year end consisted of the following: | ||||||
December 31, | December 31, | ||||||
2014 | 2013 | ||||||
Furnitures and fixtures | $ | 4,041 | $ | 3,170 | |||
Computers and related equipment | 137,465 | 153,335 | |||||
141,506 | 156,505 | ||||||
Less: Accumulated depreciation and amortization | -109,389 | -118,112 | |||||
$ | 32,118 | $ | 38,393 | ||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Intangible Assets Tables | |||||||
Intangible Assets | Intangible assets as of December 31, 2014 and 2013 consisted of the following: | ||||||
December 31, | December 31, | ||||||
2014 | 2013 | ||||||
Website development | $ | 332,795 | $ | 326,394 | |||
MMR Pro website development | 910,087 | 863,561 | |||||
Patents | 1,602,786 | 1,246,739 | |||||
Domain name | 86,375 | 86,375 | |||||
2,932,043 | 2,523,069 | ||||||
Less: Accumulated amortization | -1,141,421 | -853,036 | |||||
$ | 1,790,622 | $ | 1,670,033 | ||||
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, | |||||||
2015 | $ | 254,659 | |||||
2016 | 109,528 | ||||||
2017 | 28,566 | ||||||
2018 | 26,703 | ||||||
2019 | 24,786 | ||||||
Thereafter | 1,346,380 | ||||||
Total | $ | 1,790,622 | |||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E1
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Accounts Payable And Accrued Expenses Tables | |||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | December 31, | December 31, | |||||
2014 | 2013 | ||||||
Legal and accounting fees | $ | 3,524,788 | $ | 3,501,978 | |||
Accounts payable and accruals from Favrille Merger | 309,791 | 309,791 | |||||
Trade payables | 314,491 | 976,820 | |||||
Consulting services | 417,743 | 401,994 | |||||
Accrued vacation | 102,147 | 73,944 | |||||
Total accounts payable and accrued expenses | $ | 4,668,960 | $ | 5,264,527 | |||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
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, | |||||||
2014 | 2013 | ||||||
Federal statutory rate | -34.00% | -34.00% | |||||
State tax, net of federal benefit | -5.65% | -5.82% | |||||
Non-deductible items | 0.84% | 0.08% | |||||
Valuation allowance | 38.81% | 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, | |||||||
2014 | 2013 | ||||||
Net operating loss carryforwards | $ | 19,345,922 | $ | 18,674,820 | |||
Depreciation and amortization | -55,855 | -145,605 | |||||
Share-based compensation | 2,494,629 | 2,061,862 | |||||
R&D tax credit | 2,455,964 | 2,455,964 | |||||
State tax and other | -1,509,212 | -1,446,425 | |||||
Deferred tax assets, net | 22,731,448 | 21,600,616 | |||||
Less: valuation allowance | -22,731,448 | -21,600,616 | |||||
$ | - | $ | - | ||||
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Commitments And Contingencies Tables | |||||||
Schedule of Future Minimum Rental Payments for Operating and Capital Leases | Future minimum lease payments as of December 31, 2014, 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 | |||||
2015 | $ | 170,500 | $ | 13,222 | |||
2016 | 187,550 | - | |||||
2017 | 206,305 | - | |||||
2018 and there after | 146,410 | - | |||||
710,765 | 13,222 | ||||||
Less current portion | -13,222 | ||||||
Total minimum lease payments | $ | 710,765 | $ | - | |||
EQUITY_ISSUANCES_Tables
EQUITY ISSUANCES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
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, 2013 and 2014 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, 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 | 0.11 | 5.08 | - | |||||||||||||
Granted | 500,000 | 0.06 | |||||||||||||||
Exercised | -450,000 | 0.08 | |||||||||||||||
Cancelled | -2,400,000 | 0.13 | |||||||||||||||
Outstanding at December 31, 2014 | 37,541,722 | $ | 0.10 | 4.29 | $ | - | |||||||||||
Vested and expected to vest | |||||||||||||||||
at December 31, 2014 | 37,541,722 | $ | 0.10 | 4.29 | $ | - | |||||||||||
Exercisable at December 31, 2014 | 36,841,722 | $ | 0.10 | 4.27 | $ | - | |||||||||||
Summary of Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at December 31, 2014. | ||||||||||||||||
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 - 0.08 | 12,900,000 | 6.81 | $ | 0.07 | 12,200,000 | 6.72 | $ | 0.06 | ||||||||
$ | 0.08 - 0.15 | 23,011,461 | 3.44 | $ | 0.11 | 23,011,461 | 3.44 | $ | 0.11 | ||||||||
$ | > 0.15 | 1,630,261 | 3.89 | $ | 0.18 | 1,630,261 | 3.89 | $ | 0.18 | ||||||||
37,541,722 | 36,841,722 | ||||||||||||||||
Summary of Outstanding Warrant Awards | A summary of the activity of the Company's warrants for the years ended December 31, 2014 is presented below. | ||||||||||||||||
Weighted Avg | |||||||||||||||||
Shares | Exercise Price | ||||||||||||||||
Outstanding at December 31, 2013 | 88,571,841 | $ | 0.07 | ||||||||||||||
Granted | 5,781,561 | 0.05 | |||||||||||||||
Exercised | -3,250,000 | 0.04 | |||||||||||||||
Cancelled | -21,074,992 | 0.10 | |||||||||||||||
Outstanding at December 31, 2014 | 70,028,410 | $ | 0.06 | ||||||||||||||
Exercisable at December 31, 2014 | 65,900,633 | $ | 0.06 | ||||||||||||||
The following summarizes the total warrants outstanding and exercisable as of December 31, 2014. | |||||||||||||||||
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 | |||||||||||
$0.02 - $0.06 | 48,899,348 | 2.24 | $ | 0.04 | 48,271,571 | 2.21 | $ | 0.04 | |||||||||
$0.06 - $0.10 | 7,525,000 | 0.78 | $ | 0.10 | 5,025,000 | 0.68 | $ | 0.10 | |||||||||
Greater than $0.10 | 13,604,062 | 1.56 | $ | 0.14 | 12,604,062 | 1.6 | $ | 0.15 | |||||||||
70,028,410 | 65,900,633 | ||||||||||||||||
Shares Issued for Services or Reduction to Liabilities | During the year ended December 31, 2014, we issued 18,542,529 shares of common stock with a value of $604,396 to non-employees and charged to the appropriate accounts for the following reasons: | ||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Purpose | Shares | Value | |||||||||||||||
Reduction of payables | 9,278,883 | $ | 296,422 | ||||||||||||||
Services provided | 9,263,646 | $ | 307,973 | ||||||||||||||
Totals | 18,542,529 | $ | 604,395 | ||||||||||||||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Notes Payable Tables | |||||||
Notes Payable | The Notes payable consisted of the following: | ||||||
December 31, | December 31, | ||||||
2014 | 2013 | ||||||
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 6% interest | 35,000 | 50,000 | |||||
360,343 | 375,343 | ||||||
Less: current portion | -360,343 | -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 | $ | 203,664 | $ | 196,921 | |||
Short term loan due to a related-party, payable in full on May 31, 2015 with 12% interest | 50,000 | - | |||||
Notes payable related party, current portion | 253,664 | 196,921 | |||||
Less: current portion | -253,664 | -196,921 | |||||
Notes payable related party, less current portion | $ | - | $ | - | |||
Accounting_Policies_Cash_and_C
Accounting Policies (Cash and Cash Equivalents) (Narrative) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies Cash And Cash Equivalents Narrative Details | |||
Cash and cash equivalents | $309,393 | $10,359 | $36,655 |
Accounting_Policies_Property_a
Accounting Policies (Property and Equipment Useful Lives) (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
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, 2014 | Dec. 31, 2013 | |
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, 2014 | Dec. 31, 2013 |
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, 2014 | Dec. 31, 2013 | |
Accounting Policies Advertising Narrative Details | ||
Advertising expense | $23,884 | $78,230 |
Accounting_Policies_ShareBased
Accounting Policies (Share-Based Compensation Schedule Of Assumptions Used In Black-Scholes Model) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies Share-based Compensation Schedule Of Assumptions Used In Black-scholes Model Details | ||
Expected life, in years, maximum | 5 years 0 months 0 days | 5 years 0 months 0 days |
Stock price volatility, minimum | 120.51% | 144.34% |
Stock price volatility, maximum | 122.72% | 148.34% |
Risk-free interest rate, mimimum | 0.40% | 0.35% |
Risk-free interest rate, maximum | 1.38% | 0.35% |
Expected dividends | $0 | $0 |
Forfeiture rate | 0.00% | 0.00% |
Accounting_Policies_Net_Income
Accounting Policies (Net Income/Loss Per Share) (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies Net Incomeloss Per Share Narrative Details | ||
Stock options, warrants and convertible notes excluded from the computation of net loss per share | 191,965,338 | 203,329,108 |
Related_Party_Note_Payable_Nar
Related Party Note Payable (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Ninth Amended and Restated Secured Promissory Note | ||
Date of note | 29-Apr-14 | |
Maximum line of credit under note | On July 10, 2014, we and The RHL Group entered into a Ninth Amended and Restated Promissory Note (the "Amended Note"), effective as of April 29, 2014. The Amended Note amends and restates that certain Eighth Amended Note entered into between the foregoing parties, effective April, 29, 2014 (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, 2015. In connection with the Ninth Amended Note, we issued The RHL Group warrants to purchase 2,781,561 shares of our common stock at $0.035 per share on July 10, 2014. Except as set forth above, the Amended Note does not materially alter the terms of the Existing Note. | |
Historically, the predecessor notes have, over time, increased the maximum amount of credit available under the Credit Facility from $100,000 to $1,000,000 to $3,000,000 to $4,500,000. The maximum amount of the Amended Note is $4,500,000. The Amended Note continues to bear interest at the lesser of 10% or the highest rate then permitted by law, and is secured (similar to the Existing Note) by a Security Agreement, which has been in effect since July 31, 2007, as renewed and amended to date (the "Security Agreement"). | ||
The Ninth Amended Note had a balance of $1.45 million at September 30, 2014. The components of the Ninth Amended Note and the related balance sheet presentation as of September 30, 2014 are as follows: $0.94 million, which is included in the line of credit, related party; and $0.51 million for other obligations due to The RHL Group, which is included in related party payables. | ||
Total interest expense on the Line of Credit for the three months ended September 30, 2014 and 2013 amounted to $36,952 and $32,613, respectively. Total interest expense on the Line of Credit for the nine months ended September 30, 2014 and 2013 amounted to $98,985 and $101,613, respectively. The unpaid interest balances as of September 30, 2014 and December 31, 2013 were $0 and $24,049, respectively. | ||
In conjunction with the Ninth Amended Note, we were required to maintain certain financial covenants, including the requirement that we have at least $200,000 of cash in our bank accounts or such other amount as necessary to maintain operations through the subsequent thirty (30) days and timely pay any obligations due respecting payroll and all associated payroll taxes on and after September 30, 2014. As of September 30, 2014, the Company was in compliance with these covenants. | ||
Maturity date | 29-Apr-15 | |
Warrants granted for shares | 2,781,561 | |
Warrant price per share | $0.04 | |
Debt component classification: | ||
Line of credit, related party | $940,000 | |
Related party payables | 510,000 | |
Total note payable balance | 1,450,000 | |
Interest expense on line of credit | 98,985 | 101,613 |
Related party accrued interest | $0 | $24,049 |
Eighth Amended and Restated Secured Promissory Note | ||
Date of note | 13-Aug-13 | |
Maximum line of credit under note | On August 13, 2013, we and The RHL Group entered into an Eighth Amended and Restated Promissory Note (the "Amended Note"), effective as of August 13, 2013. The Amended Note amends and restates that certain Seventh Amended Note entered into between the foregoing parties, effective April 29, 2013 (the "Existing Note" and together with its predecessor notes and the Amended Note, the "Credit Facility"), by: (i) extending the maturity date to April 29, 2014; (ii) requiring a $1,000 per month minimum payment. In connection with the Eighth Amended Note, we issued The RHL Group warrants to purchase 2,852,200 shares of our common stock at $0.04 per share. Except as set forth above, the Amended Note does not materially alter the terms of the Existing Note. | |
Maturity date | 29-Apr-14 | |
Warrants granted for shares | 2,852,000 | |
Warrant price per share | $0.04 |
Recovered_Sheet3
Prepaid Expenses and Other Current Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Prepaid Expenses And Other Current Assets Details | ||
Prepaid consulting fees from issuance of common stock | $125,625 | $141,315 |
Prepaid insurance | 5,984 | 8,947 |
Prepaid trade shows | 30,575 | 4,375 |
Total prepaid expenses and other current assets | $162,184 | $154,637 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Balance Sheet Related Disclosures [Abstract] | ||
Furniture and fixtures | $4,042 | $3,170 |
Computers and related equipment | 137,465 | 153,335 |
Property and equipment, gross | 141,507 | 156,505 |
Less: Accumulated depreciation | -109,389 | -118,112 |
Property, plant and equipment, net | 32,118 | 38,393 |
Depreciation expense | $13,677 | $15,737 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible Assets Details | ||
Website development | $332,795 | $326,394 |
MMR Pro website development | 910,087 | 863,561 |
Patents | 1,602,786 | 1,246,739 |
Domain name | 86,375 | 86,375 |
Total | 2,932,043 | 2,523,069 |
Less: Accumulated Amortization | -1,141,421 | -853,036 |
Intangible assets, net | 1,790,622 | 1,670,033 |
Amortization expense | $289,085 | $221,726 |
Intangible_Assets_Future_Amort
Intangible Assets (Future Amortization) (Details) (USD $) | Dec. 31, 2014 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |
2015 | $254,659 |
2016 | 109,528 |
2017 | 28,566 |
2018 | 26,703 |
2019 | 24,786 |
Thereafter | 1,346,380 |
Total | $1,790,622 |
Recovered_Sheet4
Accounts Payable and Accrued Expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts Payable And Accrued Expenses Details | ||
Legal and accounting fees | $3,524,788 | $3,501,978 |
Accounts payable and accruals from Favrille Merger | 309,791 | 309,791 |
Trade payables | 314,491 | 976,820 |
Consulting services | 417,743 | 401,994 |
Accrued vacation | 102,147 | 73,944 |
Accounts payable and accrued expenses | $4,668,960 | $5,264,527 |
Income_Tax_Schedule_of_Effecti
Income Tax (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Schedule Of Effective Income Tax Rate Reconciliation Details | ||
Federal statutory rate | -34.00% | -34.00% |
State tax, net of federal benefit | -5.65% | -5.82% |
Non-deductible items | 0.84% | 0.08% |
Valuation allowance | 38.81% | 39.74% |
Effective income tax rate | 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, 2014 | Dec. 31, 2013 |
Income Tax Schedule Of Tax Effects Of Temporary Differences In Deferred Tax Assets And Liabilities Details | ||
Net operating loss carryforwards | $19,345,922 | $18,674,820 |
Depreciation and amortization | -55,855 | -145,605 |
Share-based compensation | 2,494,629 | 2,061,862 |
R&D tax credit | 2,455,964 | 2,455,964 |
State tax and other | -1,509,212 | -1,446,425 |
Deferred tax assets, net | 22,731,448 | 21,600,616 |
Less: valuation allowance | -22,731,448 | -21,600,616 |
Total deferred tax assets | $0 | $0 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred tax asset valuation allowance | $22,731,448 | $21,600,616 |
Unrecognized tax benefits | 0 | 0 |
Tax interest and penalties | 0 | 0 |
Federal | ||
Operating Loss Carryforwards | 45,371,308 | |
Operating loss carryforwards, expiration date | 31-Dec-26 | |
Tax years open for examination | 2011 | |
State | ||
Operating Loss Carryforwards | $44,302,242 | |
Operating loss carryforwards, expiration date | 31-Dec-16 | |
Tax years open for examination | 2010 |
Recovered_Sheet5
Commitments and Contingencies (Operating Leases) (Details) (USD $) | Dec. 31, 2014 |
Year ending December 31: | |
2015 | $170,500 |
2016 | 187,550 |
2017 | 206,305 |
2018 and there after | 146,410 |
Total minimum lease payments | $710,765 |
Recovered_Sheet6
Commitments and Contingencies (Capital Leases) (Details) (USD $) | Dec. 31, 2014 |
Year ending December31: | |
2015 | $13,222 |
Total minimum lease payments | $13,222 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Leases Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Rent expense | $150,720 | $120,472 |
September 2013 Lease | ||
Operating lease description | Effective September 1, 2013, we renewed our lease for office space in Los Angeles, California with a term through August 31, 2018. | |
Commitments_and_Contingencies_3
Commitments and Contingencies (Guarantees Provided To The Company Narrative) (Details) (Guarantee provided by The RHL Group, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Guarantee provided by The RHL Group | |
Date of guarantee | 5/6/11 |
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 |
Commitments_and_Contingencies_4
Commitments and Contingencies (Employment Agreements Narrative) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
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. 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. | |
Stockholders_Deficit_Narrative
Stockholders' Deficit (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
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, 2014, the amount available under the equity line facility was $13 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, 2014 | Dec. 31, 2013 | |
Equity Issuances Stock Option Activity Summary Of Option Activity Details | ||
Outstanding at beginning | 39,891,722 | 42,397,551 |
Granted | 500,000 | 2,200,000 |
Exercised | -450,000 | -717,461 |
Cancelled | -2,400,000 | -3,988,368 |
Outstanding at end | 37,541,722 | 39,891,722 |
Vested and expected to vest at December 31, 2014 | 37,541,722 | |
Exercisable at December 31, 2014 | 36,841,722 | |
Weighted-Average Exercise Prices, Outstanding at beginning | $0.10 | $0.11 |
Weighted-Average Exercise Prices, Granted | $0.06 | $0.06 |
Weighted-Average Exercise Prices, Exercised | $0.08 | $0.10 |
Weighted-Average Exercise Prices, Forfeited, cancelled or expired | $0.13 | $0.11 |
Weighted-Average Exercise Prices, Outstanding at end | $0.10 | $0.10 |
Weighted-Average Exercise Prices, Vested and expected to vest | $0.10 | |
Weighted-Average Remaining Contractual Life (in years), Outstanding at beginning | 5 years 29 days | 5 years 339 days |
Weighted-Average Remaining Contractual Life (in years), Outstanding at end | 4 years 106 days | |
Weighted-Average Remaining Contractual Life (in years), Vested and expected to vest | 4 years 106 days | |
Weighted-Average Remaining Contractual Life (in years), Exercisable | 4 years 99 days | |
Aggregate Intrinsic Value, Outstanding at beginning | $0 | $0 |
Aggregate Intrinsic Value, Outstanding at end | 0 | 0 |
Aggregate Intrinsic Value, Vested and expected to vest | 0 | |
Aggregate Intrinsic Value, Exercisable | $0 |
Equity_Issuances_Stock_Option_1
Equity Issuances (Stock Option Activity Summary Of Stock Options Outstanding and Exercisable) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options Outstanding, Number of Shares | 37,541,722 | 39,891,722 | 42,397,551 |
Options Outstanding, Weighted-Average Exercise Price Per Share | $0.10 | $0.10 | $0.11 |
Options Exercisable, Number of Shares | 36,841,722 | ||
$0.05 - $0.08 | |||
Range of Exercise Price, Minimum | $0.05 | ||
Range of Exercise Price, Maximum | $0.08 | ||
Options Outstanding, Number of Shares | 12,900,000 | ||
Options Outstanding, Weighted-Average Remaining Life (in years) | 6 years 297 days | ||
Options Outstanding, Weighted-Average Exercise Price Per Share | $0.07 | ||
Options Exercisable, Number of Shares | 12,200,000 | ||
Options Exercisable, Weighted-Average Remaining Life (in years) | 6 years 263 days | ||
Options Exercisable, Weighted-Average Exercise Price Per Share | $0.06 | ||
$0.08 - $0.15 | |||
Range of Exercise Price, Minimum | $0.08 | ||
Range of Exercise Price, Maximum | $0.15 | ||
Options Outstanding, Number of Shares | 23,111,461 | ||
Options Outstanding, Weighted-Average Remaining Life (in years) | 3 years 161 days | ||
Options Outstanding, Weighted-Average Exercise Price Per Share | $0.11 | ||
Options Exercisable, Number of Shares | 23,111,461 | ||
Options Exercisable, Weighted-Average Remaining Life (in years) | 3 years 161 days | ||
Options Exercisable, Weighted-Average Exercise Price Per Share | $0.11 | ||
> $0.15 | |||
Range of Exercise Price, Minimum | $0.15 | ||
Options Outstanding, Number of Shares | 1,630,261 | ||
Options Outstanding, Weighted-Average Remaining Life (in years) | 3 years 325 days | ||
Options Outstanding, Weighted-Average Exercise Price Per Share | $0.18 | ||
Options Exercisable, Number of Shares | 1,630,261 | ||
Options Exercisable, Weighted-Average Remaining Life (in years) | 3 years 325 days | ||
Options Exercisable, Weighted-Average Exercise Price Per Share | $0.18 |
Equity_Issuances_Stock_Option_2
Equity Issuances (Stock Option and Warrant Expense Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Equity Issuances Stock Option And Warrant Expense Narrative Details | ||
Stock option expense | $157,283 | $241,428 |
Equity_Issuances_Summary_Of_Wa
Equity Issuances (Summary Of Warrant Activity) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Equity Issuances Summary Of Warrant Activity Details | |
Warrants outstanding at December 31, 2013 | 88,571,841 |
Granted | 5,781,841 |
Exercised | -3,250,000 |
Cancelled | -21,074,992 |
Warrants outstanding at December 31, 2014 | 70,028,410 |
Warrants exercisable at December 31, 2014 | 65,900,633 |
Weighted-average exercise price, beginning balance | $0.07 |
Weighted-average exercise price, granted | $0.05 |
Weighted-average exercise price, exercised during period | $0.04 |
Weighted-average exercise price, cancelled during period | $0.10 |
Weighted-average exercise price, ending balance | $0.06 |
Warrants exercisable, weighted average exercise price | $0.06 |
Equity_Issuances_Summary_Of_Wa1
Equity Issuances (Summary Of Warrants Outstanding and Exercisable) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Warrants outstanding at December 31, 2014 | 70,028,410 | 88,571,841 |
Warrants exercisable | 65,900,633 | |
$0.02 - $0.06 | ||
Range of Exercise Price, Minimum | $0.02 | |
Range of Exercise Price, Maximum | $0.06 | |
Warrants outstanding at December 31, 2014 | 48,899,348 | |
Warrants outstanding, Weighted-average remaining life, in years | 2 years 88 days | |
Warrants outstanding, Weighted-average exercise price | $0.04 | |
Warrants exercisable | 48,271,571 | |
Warrants exercisable, Weighted-average remaining life, in years | 2.21 | |
Warrants exercisable, Weighted-average exercise price | $0.04 | |
$0.06 - $0.10 | ||
Range of Exercise Price, Minimum | $0.06 | |
Range of Exercise Price, Maximum | $0.10 | |
Warrants outstanding at December 31, 2014 | 7,525,000 | |
Warrants outstanding, Weighted-average remaining life, in years | 285 days | |
Warrants outstanding, Weighted-average exercise price | $0.10 | |
Warrants exercisable | 5,025,000 | |
Warrants exercisable, Weighted-average remaining life, in years | 0.68 | |
Warrants exercisable, Weighted-average exercise price | $0.10 | |
> $0.10 | ||
Range of Exercise Price, Minimum | $0.10 | |
Warrants outstanding at December 31, 2014 | 13,604,062 | |
Warrants outstanding, Weighted-average remaining life, in years | 1 year 204 days | |
Warrants outstanding, Weighted-average exercise price | $0.14 | |
Warrants exercisable | 12,604,062 | |
Warrants exercisable, Weighted-average remaining life, in years | 1.6 | |
Warrants exercisable, Weighted-average exercise price | $0.15 |
Equity_Issuances_Shares_Issued
Equity Issuances (Shares Issued for Services or Reduction to Liabilities) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Equity Issuances Shares Issued For Services Or Reduction To Liabilities Details | |
Reduction of payables, shares | 9,278,883 |
Reduction of payables, amount | $296,422 |
Services provided, shares | 9,263,646 |
Services provided, amount | 307,973 |
Total payment of services provided through issuance of common stock, shares | 18,542,529 |
Total payment of accounts payable through issuance of common stock, amount | $604,395 |
Equity_Issuances_Stock_Option_3
Equity Issuances (Stock Option Expense Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Equity Issuances Stock Option And Warrant Expense Narrative Details | ||
Stock option expense | $157,283 | $241,428 |
Unrecognized compensation cost related to share-based compensation | $44,853 | |
Weighted-average service period, years | 1 year 135 days |
Equity_Issuances_Warrants_Narr
Equity Issuances (Warrants) (Narrative) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
March 4 2014 | |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.06 |
Title of Warrants Outstanding | On March 4, 2014, we granted an unrelated third party a warrant to purchase 500,000 shares of our common stock. This warrant vests immediately and has an exercise price of $0.06 per share, and an expiration date of February 28, 2015. |
March 4 2014 B | |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.10 |
Title of Warrants Outstanding | On March 4, 2014, we granted an unrelated third party a warrant to purchase 500,000 shares of our common stock. This warrant vests upon three successful hospital sign ups of MMR Patient View Portal and has an exercise price of $0.10 per share, and an expiration date of February 28, 2015. |
March 4 2014 C | |
Number of warrants granted | 250,000 |
Exercise price, per share | $0.06 |
Title of Warrants Outstanding | On March 4, 2014, we granted an unrelated third party a warrant to purchase 250,000 shares of our common stock. This warrant vests in six months and has an exercise price of $0.06 per share, and an expiration date of March 4, 2016. |
March 27 2014 | |
Number of warrants granted | 250,000 |
Exercise price, per share | $0.06 |
Title of Warrants Outstanding | On March 27, 2014, we granted an unrelated third party a warrant to purchase 250,000 shares of our common stock. This warrant vests in one year and has an exercise price of $0.06 per share, and an expiration date of March 27, 2019. |
April 8 2014 | |
Number of warrants granted | 250,000 |
Exercise price, per share | $0.06 |
Title of Warrants Outstanding | On April 8, 2014, we granted and unrelated third-party a warrant to acquire 250,000 shares of common stock in consideration for services. The warrant vests equally over three years, has an exercise price of $0.06 per share, and an expiration date of April 8, 2019. |
April 30 2014 | |
Number of warrants granted | 250,000 |
Exercise price, per share | $0.06 |
Title of Warrants Outstanding | On April 30, 2014, we granted and unrelated third-party a warrant to acquire 250,000 shares of common stock in consideration for services. The warrant vests equally over three years, has an exercise price of $0.06 per share, and an expiration date of April 30, 2019. |
May 29 2014 A | |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.02 |
Title of Warrants Outstanding | On May 29, 2014, we granted an unrelated third party a warrant to purchase 500,000 shares of our common stock as part of a warrant exchange program. This warrant vests immediately and has an exercise price of $0.024 per share, and an expiration date of May 29, 2015. |
May 29 2014 B | |
Number of warrants granted | 500,000 |
Exercise price, per share | $0.06 |
Title of Warrants Outstanding | On May 29, 2014, we granted an unrelated third party a warrant to purchase 500,000 shares of our common stock in consideration for services. This warrant vests in one year and has an exercise price of $0.06 per share, and an expiration date of May 29, 2015. |
July 10 2014 | |
Number of warrants granted | 2,871,561 |
Exercise price, per share | $0.04 |
Title of Warrants Outstanding | On July 10, 2014, we granted the RHL Group a warrant to purchase 2,781,561 shares of our common stock in connection with the renewal of the line of credit through the Ninth Amended Note. This warrant has an exercise price of $0.035 per share, with an expiration date of June 4, 2019, and vests at commencement. |
Equity_Issuances_Restricted_St
Equity Issuances (Restricted Stock Program) (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation | $621,132 | $651,270 |
Restricted Stock Program | ||
Stock Issued During Period, Shares, Share-based Compensation | 18,452,529 | 31,918,265 |
Share-based Compensation | $604,396 | $1,444,372 |
Equity_Issuances_Stock_Bonus_A
Equity Issuances (Stock Bonus Agreements) (Narrative) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Stock Bonus Agreement expense | $308,375 |
Unrecognized compensation cost | $44,853 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Notes payable consisted of the following: | ||
Short-term debt | $360,343 | $375,343 |
Related party short-term debt | 253,664 | 196,921 |
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 6% interest | |
Short-term debt | 35,000 | 50,000 |
Related Party One | ||
Notes payable consisted of the following: | ||
Short-term Debt, Terms | Short term loan due to a related-party, payable in full on | |
January 2, 2014 with 12% interest | ||
Related party short-term debt | 203,664 | 196,921 |
Related Party Two | ||
Notes payable consisted of the following: | ||
Short-term Debt, Terms | Short term loan due to a related-party, payable in full on | |
May 31, 2015 with 12% interest | ||
Related party short-term debt | $50,000 | $0 |
Recovered_Sheet7
Convertible Promissory Notes (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Convertible Promissory Notes Narrative Details | ||
Debt instrument, description | From time to time, we issue Convertible Promissory Notes. As of December 31, 2014, a total of $978,858 in convertible notes remained outstanding. As of December 31, 2014, $778,858 of these Notes have matured, however, the Company and the Holders have agreed to keep the balance as a Note Payable and the note holders have elected not to convert their note balances into shares of our common stock as of December 31, 2014. | |
Each Note contains the following general terms and provisions: | ||
The principal amount owed under each note becomes due and payable one year or less from the investment date provided that, upon ten (10) days' prior written notice to the holder, we may, in our sole discretion, extend the maturity date for an additional six month term. The Notes can be further extended upon mutual agreement. | ||
These notes bear interest at a rate of 6% per annum payable in cash or shares of common stock or a combination of cash and shares of common stock at our option. | ||
During the first quarter of 2014, we did not enter into any Convertible Promissory Notes. | ||
During the second quarter of 2014, we entered into one Convertible Promissory Note with one unrelated third-party for a principal amount of $200,000. This note has the option to be converted into a total of 6,779,661shares of our common stock. As of December 31, 2014, this note has not been converted. In addition, during the second quarter of 2014 we entered into an agreement to modify the terms of an existing convertible note by extending the maturity date and reducing the conversion price. As a result, the Company recognized an aggregate of $88,000 of expenses associated with this modification. | ||
During the third quarter of 2014, we did not enter into any Convertible Promissory Notes. | ||
During the fourth quarter of 2014, we did not enter into any new Convertible Promissory Notes. During this period a Note with principal balance of $150,000 was 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 $124,120 and $358,923, for the years ended December 31, 2014 and 2013, respectively. | ||
The related discount for the beneficial conversion outstanding was $45,560 and $81,393 as of December 31, 2014 and 2013 respectively. | ||
Shares issuable upon conversion for convertible notes payable was 84,395,206 and 81,015,545 as of December 31, 2014 and 2013, respectively. | ||
The total interest expense attributed to the Beneficial Conversion Feature of the Notes and related warrants for the year ended December 31, 2014 and 2013 was $214,953 and $333,915, respectively. | ||
Debt Instrument, Convertible, Number of Equity Instruments | 84,395,206 | 81,015,545 |
Creation of note discount | $124,120 | $358,923 |
Note discount | 45,560 | 81,393 |
Interest expense | $214,953 | $333,915 |
Restructuring_Activities_Narra
Restructuring Activities (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Total remaining severance liability | $620,613 | $620,613 |
Favrille | ||
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. | |
As of December 31, 2014, the total remaining severance liabilities amounted to $620,613, which is reflected as severance liability on the accompanying consolidated balance sheets. No payments were made during the years ended December 31, 2014 or 2013 on these severance liabilities. | ||
Number of employees terminated | 142 | |
Severance liability relating to former Favrille employees at merger date | 1,682,416 | |
Warrants issued as settlement of severance liability | 985,020 | |
Promissory notes with certain former executives | 76,783 | |
Severance liabilty payable to former non-executive employees in 18 monthly installments starting on July 27, 2009 | 571,362 | |
Estimated payroll tax on severance liabilty | 49,251 | |
Total remaining severance liability | 620,613 | |
Creditor Plan | ||
Restructuring and Related Activities, Description | 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. | |
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 $) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2009 | |
Related party payables | $952,835 | $1,147,697 | |||
Amortization of licensee fee | 289,085 | 221,726 | |||
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 13% our total outstanding voting stock. The RHL Group, Inc. has loaned us money pursuant to the Ninth Amended Note and any predecessor notes. See Note 3 - Related Party Note Payable above. | ||||
The RHL Group is an investment holding company which provides consulting, operational and technical services to 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 us, including allowing us unlimited access to its facilities, equipment, and data, information management and server systems. In addition to allowing us the use of its office support personnel, the RHL Group has also consented to allow us to utilize the full-time services of Mr. Lorsch as 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 our social networking activities. | |||||
In consideration for the above, The RHL Group, Inc. has a consulting arrangement with MMR. A copy of the consulting agreement is filed as an Exhibit in our current report on Form 8-K filed with the SEC on May 4, 2009 and is hereby incorporated by reference. | |||||
Bernard Stolar | |||||
Nature of Common Ownership or Management Control Relationships | We incurred $50,000 each year during the years ended December 31, 2014 and 2013, toward marketing consulting services from Bernard Stolar, a director. We included $174,273 and $109,756 in related party payables as of December 31, 2014, and 2013, respectively, in connection with these services. | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 50,000 | 50,000 | |||
Related party payables | 174,273 | 109,756 | |||
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, 2014 and 2013, the total expenses relating to this stockholder amounted to $120,000 and $120,000, respectively. In addition, we capitalized $107,050 of software development costs for the year ended December 31, 2014. As of December 31, 2014 and 2013, the total amounts due to the stockholder and included in related party payables amounted to $10,000 and $396,800, respectively. | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 120,000 | 120,000 | |||
Related party payables | 10,000 | 396,800 | |||
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, 2014 and 2013 was $50,000 per year. In addition, we incurred a total of $0 and $15,020 during the years ended December 31, 2014 and 2013, respectively, toward convertible notes interest to Mr. Loftus. We included in related party payables at December 31, 2014 and December 31, 2013 of $64,615 and $64,615, respectively, in respect to these services. Furthermore, Mr. Loftus is a value-added-reseller of MMRPro systems. We recognized $0 and $18,421 in revenue from E-Mail Frequency for the sale of MMRPro systems, during 2014 and 2013, 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 | 0 | 15,020 | |||
Amortization of licensee fee | 50,000 | 50,000 | |||
David Loftus | |||||
Related Party Transaction, Revenues from Transactions with Related Party | 0 | 18,421 | |||
Related party payables | 64,615 | 64,615 | |||
Shares issued for services, related party, shares | 2,777,778 | ||||
Shares issued for services, related party, amount | 250,000 | ||||
Interest expense with related party | $0 | $0 |
Subsequent_Events_Narrative_De
Subsequent Events (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events Narrative Details | |
Subsequent Event, Description | We have evaluated subsequent events of our condensed consolidated financial statements. There were no material subsequent events requiring additional disclosure in these financial statements. |