Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation |
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The accompanying consolidated financial statements include the accounts of Protea Biosciences Group, Inc. and its wholly-owned subsidiary, Protea Biosciences, Inc. All material accounts and transactions have been eliminated in consolidation. During 2014, the Company sold Proteabio Europe but retains continued involvement through an equity method investment in AzurRx BioPharma, Inc., the Buyer of Proteabio Europe. (See Note 3 Subsidiary Sale) As the sale was not fully consummated due to an outstanding contingency, the transaction was not recognized until December 12, 2014. As such, the results of Proteabio Europe are consolidated into the Company’s financial statements for the year ended December 31, 2014. |
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Liquidity Disclosure [Policy Text Block] | Going Concern |
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The Company’s financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has funded its activities to date almost exclusively from debt and equity financings. The Company will continue to require substantial funds to advance the research and development of its core technologies and to develop new products and services based upon its proprietary protein recovery and identification technologies. |
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Management intends to meet its operating cash flow requirements primarily from the sale of equity and debt securities. The Company seeks additional capital through sales of equity securities or convertible debt and, if appropriate, to pursue partnerships to advance various research and development activities. The Company may also consider the sale of certain assets, or entering into a transaction such as a merger with a business complimentary to theirs. |
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While the Company believes that it will be successful in obtaining the necessary financing to fund its operations, they have no committed sources of funding and are not assured that additional funding will be available to them. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. |
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Use of Estimates, Policy [Policy Text Block] | Estimates and Assumptions |
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The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents |
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The Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents. The Company has cash on deposit at banks that may exceed the federally-insured limits at times. |
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Trade and Other Accounts Receivable, Policy [Policy Text Block] | Trade Accounts Receivable |
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Trade accounts receivable are reported at the amount management expects to collect from outstanding balances. Differences between the amount due and the amount management expects to collect are reported in the statement of operations of the year in which those differences are determined, with an offsetting entry to a valuation allowance for trade accounts receivable. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. |
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The Company maintains allowances for doubtful accounts based on management’s analysis of historical losses from uncollectible accounts and risks identified for specific customers who may not be able to make required payments. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. An allowance of $3,000 was deemed necessary as of December 31, 2014 and $4,000 as of December 31, 2013. |
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Equity Method Investments, Policy [Policy Text Block] | Equity Method Investments |
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The Company’s 33% interest in AzurRx BioPharma, Inc. (“AzurRx”) is accounted for on the equity method. AzurRx is a private biotechnology company formed to focus on the development of the early stage pharmaceutical assets of ProteaBio Europe. Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several factors including, among others, representation on the Investee Company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee Company. Under the equity method of accounting, an Investee company’s accounts are not reflected within the Company’s Consolidated Balance Sheets and Consolidated Statements of Income; however, the Company’s share of the earnings or losses of the Investee Company is reflected in the caption “Income from equity method investments” in the Consolidated Statements of Income. The Company’s carrying value in an equity method Investee company would be reflected in the caption “Equity method investments” in the Company’s Consolidated Balance Sheets. |
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Other Receivables and Other Noncurrent assets [Policy Text Block] | Other Receivables and Other Noncurrent assets |
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Other receivables, which reflect amounts from non-trade activity and other noncurrent assets, consist of the following at: |
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| | December 31, 2014 | | December 31, 2013 | | | | | | | |
French government R&D credit | | $ | - | | $ | 400,379 | | | | | | | |
Other receivables | | | 119,230 | | | 34,899 | | | | | | | |
Other receivables - current | | $ | 119,230 | | $ | 435,278 | | | | | | | |
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Deposits | | $ | 136,693 | | $ | 23,249 | | | | | | | |
Other noncurrent assets | | $ | 136,693 | | $ | 23,249 | | | | | | | |
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Inventory, Policy [Policy Text Block] | Inventory |
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Inventory represents finished goods and work in progress. Finished goods and work in progress consist primarily of specifically identifiable items that are valued at the lower of cost or fair market value using the first-in, first-out (FIFO) method. Inventory consists of the following at: |
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| | December 31, 2014 | | December 31, 2013 | | | | | | | |
Finished goods | | $ | 18,739 | | $ | 360,607 | | | | | | | |
Work in progress | | | 142,562 | | | 104,727 | | | | | | | |
Total Inventory | | $ | 161,301 | | $ | 465,334 | | | | | | | |
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Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment |
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Expenditures for maintenance and repairs are charged to expense and the costs of significant improvements that extend the life of underlying assets are capitalized. |
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Property and equipment and leasehold improvements are capitalized at cost and depreciated using the straight-line method (the Company used the double-declining balance method for property and equipment placed in service prior to January 2011) over estimated lives as follows: |
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Laboratory Equipment | 5 - 10 years | | | | | | | | | | | | |
Computers | 5 years | | | | | | | | | | | | |
Leasehold improvements | Life of lease | | | | | | | | | | | | |
Software | 3 years | | | | | | | | | | | | |
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Property and equipment consists of the following at: |
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| | December 31, 2014 | | December 31, 2013 | | | | | | | |
Lab equipment | | $ | 7,313,979 | | $ | 6,620,662 | | | | | | | |
Computer equipment | | | 540,814 | | | 563,976 | | | | | | | |
Office equipment | | | 229,785 | | | 248,490 | | | | | | | |
Leasehold improvements | | | 434,304 | | | 477,682 | | | | | | | |
| | | 8,518,882 | | | 7,910,810 | | | | | | | |
Accumulated depreciation | | | -5,558,792 | | | -5,024,634 | | | | | | | |
Property and equipment, net | | $ | 2,960,090 | | $ | 2,886,176 | | | | | | | |
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Depreciation expense is charged to either research and development or selling, general and administrative expenses and totals $825,780 in 2014 and $844,888 in 2013. |
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The Company evaluates the potential impairment of property and equipment whenever events or changes in circumstances indicate that the carrying value of a group of assets may not be recoverable. An impairment loss would be recognized when the carrying amount of the asset group exceeds the estimated undiscounted future cash flows expected to be generated from the use of the asset group and its eventual disposition. The amount of impairment loss to be recorded is measured as the excess of the carrying value of the asset group over its fair value. Fair value is generally determined using a discounted cash flow analysis or market prices for similar assets. |
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Revenue Recognition, Deferred Revenue [Policy Text Block] | Revenue Recognition |
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We follow the provisions of FASB ASC 605, “Revenue Recognition”. We recognize revenue of products when persuasive evidence of a sale arrangement exists, the price to the buyer is fixed or determinable, delivery has occurred /title has passed, and collectability of the sales price is reasonably assured. The Company recognizes revenue from the sale of its ProteaPlot™ software when bundled with the LAESI platform, which facilitates operating the instrument and storage and display of datasets. The Company also recognizes revenue of standalone sales of ProteaPlot™, which generally consists of additional user licenses. Revenue is recognized once the title is passed to the customer. |
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We account for shipping and handling fees and costs in accordance with the provisions of FASB ASC 605-45-45, “Revenue Recognition – Principal Agent Considerations”, which requires all amounts charged to customers for shipping and handling to be classified as revenues. Shipping and handling costs charged to customers are recorded in the period the related product sales revenue is recognized. |
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Regarding short-term service contracts, the majority of these service contracts involve the processing of imaging and bioanalytical samples for pharmaceutical and academic/clinical research laboratories. These contracts generally provide for a fixed fee for each method developed or sample processed and revenue is recognized when the analysis is complete and a report is delivered. |
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For longer-term contracts involving multiple elements, the items included in the arrangement (deliverables) are evaluated to determine whether they represent separate units of accounting. We perform this evaluation at the inception of an arrangement and as each item in the arrangement is delivered. Generally, we account for a deliverable (or a group of deliverables) separately if: (i) the delivered item(s) have standalone value to the customer, and the delivery or performance of the service(s) is probable and substantially in our control. Revenue on multiple revenue arrangements is recognized using a proportional method for each separately identified element. All revenue from contracts determined not to have separate units of accounting is recognized based on consideration of the most substantive delivery factor of all the elements in the contract or, if there is no predominant deliverable, upon delivery of the final element of the arrangement. |
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Revenues from grants are based upon internal costs that are specifically covered by the grants, and where applicable, an additional facilities and administrative rate that provides funding for overhead expenses. These revenues are recognized when expenses have been incurred by the Company that is related to the grants. The Company has revenue from four major components: molecular information services, LAESI instrument platform, research products, and grants and other collaboration revenues. Revenue by component was as follows: |
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| | Year Ended | | | | | | | |
| | December 31, 2014 | | December 31, 2013 | | | | | | | |
Molecular Information Services | | $ | 504,750 | | $ | 199,220 | | | | | | | |
LAESI Instrument Platform | | | 743,250 | | | 651,584 | | | | | | | |
Research Products | | | 400,141 | | | 372,688 | | | | | | | |
Grants and Other Collaborations | | | 120,171 | | | - | | | | | | | |
Gross Revenue | | $ | 1,768,312 | | $ | 1,223,492 | | | | | | | |
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A small number of customers have accounted for a substantial portion of our revenues in 2014. Five customers represented 42% of gross revenues for the year ended December 31, 2014. The Company is not dependent on a limited number of customers for sale of its products and services. |
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Other Payables and Accrued Expenses [Policy Text Block] | Other Payables and Accrued Expenses |
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Other payables and accrued expenses, which reflect amounts due from non-trade activity, consist of the following at: |
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| | December 31, 2014 | | December 31, 2013 | | | | | | | |
Accrued expenses | | $ | 31,104 | | $ | 653,047 | | | | | | | |
Accrued interest | | | 201,844 | | | 39,911 | | | | | | | |
Accrued warranties | | | 50,000 | | | 81,250 | | | | | | | |
Accrued payroll and benefits | | | 219,973 | | | 286,979 | | | | | | | |
Unearned revenue | | | 15,900 | | | 7,980 | | | | | | | |
Other payables and accrued expenses | | $ | 518,821 | | $ | 1,069,167 | | | | | | | |
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Standard Product Warranty, Policy [Policy Text Block] | Warranty Costs |
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The Company provides for a one-year warranty with the sale of its LAESI instrument. Additionally, the Company sells extended warranties for an additional cost. To date, the Company has not sold any extended warranties. All other product warranties are 90 days from the date of delivery of the goods. As the Company does not currently have sufficient historical data on warranty claims, the Company's estimates of anticipated rates of warranty claims and costs are primarily based on comparable industry metrics. The Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its product. During the year ended December 31, 2014, the Company recorded accrued warranty expense of $50,000 compared to $81,250 accrued warranty expense for the year ended December 31, 2013. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency |
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Foreign currency adjustments resulting from international sales are reflected in accumulated other comprehensive income/loss. |
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Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block] | Advertising |
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The Company follows the policy of charging the costs of advertising to expense as incurred. |
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Research and Development Expense, Policy [Policy Text Block] | Research and Development Credit |
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The Company follows the policy of charging the costs of research and development to expense as incurred. Research and Development expense disclosed on the Consolidated Statement of Operations is net of the French Government Research Credit, which was $379,737 in 2014 and $398,285 in 2013. |
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Earnings Per Share, Policy [Policy Text Block] | Net Loss per Share |
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Basic and diluted loss per common share is computed based on the weighted average number of common shares outstanding. Common share equivalents (which may consist of convertible preferred stock and dividends, options, warrants and convertible debt) are excluded from the computation of diluted loss per share since the effect would be anti-dilutive. Common share equivalents which could potentially dilute basic earnings per share in the future, and which were excluded from the computation of diluted loss per share, totaled approximately 84,834,000 and 56,711,000 at December 31, 2014 and 2013, respectively. |
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Reclassification, Policy [Policy Text Block] | Reclassification |
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Certain amounts have been reclassified in the presentation of the Consolidated Financial Statements for the year ended December 31, 2013 to be consistent with the presentation in the Consolidated Financial Statements for the year ended December 31, 2014. This reclassification had no impact on previously reported net loss, cash flow from operations or changes in stockholder equity. |
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Income Tax, Policy [Policy Text Block] | Income Taxes |
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Deferred income taxes are reported using the liability method. Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
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Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation |
The Company follows the provisions of FASB ASC 718, “Stock-Based Compensation”. Stock-Based compensation expense is estimated as of the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period. Fair value of Company stock options is estimated using the Black-Scholes option-pricing model. The associated compensation expense is recognized on a straight-line basis over the requisite service period, net of estimated forfeitures. |
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Estimating the fair value for stock options for each grant requires judgment, including estimating stock-price volatility, expected term, expected dividends and risk-free interest rates. The expected volatility rates are estimated based on the volatility of similar entities whose share information is publicly available. The expected term represents the average time that options are expected to be outstanding and is estimated based on the average of the contractual term and the vesting period of the options as provided in SEC Staff Accounting Bulletin #110 as the “simplified” method. The risk-free interest rate for periods approximating the expected term of the options is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividends are zero as the Company has no plans to issue dividends on common stock. |
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Prior to becoming a public company, the Company used an index to calculate the expected volatility component of the fair value model. Subsequent to becoming a public company and due to a lack of trading history, the Company utilizes a peer group to estimate its expected volatility assumptions used in the Black-Scholes option-pricing model. The Company completed an analysis and identified four similar companies considering their industry, stage of life cycle, size, and financial leverage. (See Note 9, Stock Options and Stock-Compensation) |
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Derivatives, Embedded Derivatives [Policy Text Block] | Derivative Liabilities |
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The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks; however, the Company has certain financial instruments that are embedded derivatives associated with capital raises and common stock purchase warrants. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with FASB ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion or exercise, the derivative liability is marked to fair value at the conversion date and then the related fair value is reclassified to equity. |
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Fair Value Measurement, Policy [Policy Text Block] | Fair value of financial assets and liabilities – Derivative Instruments |
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We measure the fair value of financial assets and liabilities in accordance with GAAP, which defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements. |
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GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP also establishes the 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. |
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The three levels of inputs used to measure fair value: |
Level 1 – quoted prices in active markets for identical assets or liabilities. |
Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable. |
Level 3 – inputs that are unobservable (for example, the probability of a capital raise in a “binomial” methodology for valuation of a derivative liability directly related to the issuance of common stock warrants). |
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The Company has entered into certain financial instruments and contracts such as, equity financing arrangements for the issuance of common stock, which include anti-dilution arrangements and detachable stock warrants that are i) not afforded equity classification, ii) embody risks not clearly and closely related to host contracts, or iii) may be net-cash settled by the counterparty. These instruments are recorded as derivative liabilities at fair value at the issuance date. Subsequent changes in fair value are recorded through the statement of operations. |
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The Company’s derivative liabilities are related to common stock issuances, detachable common stock purchase warrants (“warrants”) issued in conjunction with debt and common stock, or warrants issued to the placement agents for financial instrument issuances. We estimate fair values of the warrants that do contain “Down Round Protections” utilizing valuation models and techniques that have been developed and are widely accepted that take into account the additional value inherent in “Down Round Protection.” These widely accepted techniques include “Modified Binomial”, “Monte Carlo Simulation” and the “Lattice Model.” The “core” assumptions and inputs to the “Binomial” model are the same as for “Black-Scholes”, such as trading volatility, remaining term to maturity, market price, strike price, and risk free rates; all Level 2 inputs. Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable. However, a key input to a “Binomial” model (in our case, the “Monte Carlo Simulation”, for which we engaged an independent valuation firm to perform) is the probability of a future capital raise. By definition, this input assumption does not meet the requirements for Level 1 or Level 2 outlined above; therefore, the entire fair value calculation is deemed to be Level 3 under accounting requirements due to this single Level 3 assumption. This input to the Monte Carlo Simulation model was developed with significant input from management based on its knowledge of the business, current financial position and the strategic business plan with its best efforts. |
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As discussed above, financial liabilities are considered Level 3 when their fair values are determined using pricing models or similar techniques and at least one significant model assumption or input is unobservable. For the Company, the Level 3 financial liability is the derivative liability related to the common stock and warrants that include “Down Round Protection” and they were valued using the “Monte Carlo Simulation” technique. This technique, while the majority of inputs are Level 2, necessarily incorporates a Capital Raise Assumption which is unobservable and, therefore, a Level 3 input. |
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A range of key quantitative assumptions related to the common stock and warrants issued during 2014 and 2013 are as follows: |
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| | December 31, 2014 | | |
| | Expected | Risk Free | | Volatility | | Probability of a Capital | | |
Life (Years) | Rate | Raise | |
Derivative liabilities | | 5-Jan | | | 1.38 | % | | | 77.86 | % | 100 | % | |
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| | December 31, 2013 | |
| | Expected | | Risk Free | | Volatility | | Probability of a Capital | |
Life (Years) | Rate | Raise |
Derivative liabilities | | 5-Jan | | 0.13-1.75 | % | | | 83.3-88.3 | % | | | 100 | % |
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Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis |
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The Company’s derivative liabilities are related to common stock issuances, detachable warrants issued in conjunction with debt and common stock, or warrants issued to the placement agents for financial instrument issuances. The derivative liabilities measured at fair value on a recurring basis are summarized below: |
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| | Fair Value Measurements at December 31, 2014 | |
| | Carrying Value | | Level 1 | | Level 2 | | Level 3 | |
Derivative liabilities – common stock | | $ | 88,871 | | | - | | | - | | $ | 88,871 | |
Derivative liabilities – warrants | | | 65,187 | | | - | | | - | | | 65,187 | |
Total | | $ | 154,058 | | | - | | | - | | $ | 154,058 | |
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| | Fair Value Measurements at December 31, 2013 | |
| | Carrying Value | | Level 1 | | Level 2 | | Level 3 | |
Derivative liabilities – common stock | | $ | 558,799 | | | - | | | - | | $ | 558,799 | |
Derivative liabilities – warrants | | | 64,788 | | | - | | | - | | | 64,788 | |
Total | | $ | 623,587 | | | - | | | - | | $ | 623,587 | |
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As a result of the 2014 Preferred Stock issuance, the Company has an obligation to issue 10,122,067 shares of Common Stock related to anti-dilution protection rights to various stockholders. As the Company had not issued these shares at December 31, 2014, the fair value of these shares, which was $1,771,362, was reduced from the derivative liability, and recorded as Common Stock to be issued in additional paid in capital as of December 31, 2014. The table below provides a summary of the changes in fair value of the derivative liabilities measured at fair value on a recurring basis: |
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| | Year Ended December 31, 2014 | | | | |
| | Derivative | | Derivative | | Total Fair Value | | | | |
liabilities - | liabilities - | Measurements | | | |
Common Stock | Warrants | Using Level 3 | | | |
| | Inputs | | | |
Beginning balance | | $ | 558,799 | | $ | 64,788 | | $ | 623,587 | | | | |
Issuance of warrants | | | - | | | 2,550 | | | 2,550 | | | | |
Anti-dilution shares to be issued | | | -1,771,362 | | | - | | | -1,771,362 | | | | |
Unrealized (gain) loss on derivative liabilities | | | 1,301,434 | | | -11,449 | | | 1,289,985 | | | | |
Recognition of derivative liabilities | | | - | | | 9,298 | | | 9,298 | | | | |
Ending balance | | $ | 88,871 | | $ | 65,187 | | $ | 154,058 | | | | |
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| | Year Ended December 31, 2013 | | | | |
| | Derivative | | Derivative | | Total Fair Value | | | | |
liabilities - | liabilities - | Measurements | | | |
Common Stock | Warrants | Using Level 3 | | | |
| | Inputs | | | |
Beginning balance | | $ | - | | $ | - | | $ | - | | | | |
Issuance of warrants | | | - | | | 45,685 | | | 45,685 | | | | |
Unrealized (gain) loss on derivative liabilities | | | -257,846 | | | -122,140 | | | -379,986 | | | | |
Recognition of derivative liabilities | | | 816,645 | | | 141,243 | | | 957,888 | | | | |
Ending balance | | $ | 558,799 | | $ | 64,788 | | $ | 623,587 | | | | |
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New Accounting Pronouncements, Policy [Policy Text Block] | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
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In April 2014, the FASB issued a standard that updated the guidance on Presentation of Financial Statements, and Property, Plant and Equipment. The amendments in this standard change the criteria for reporting discontinued operations for all public and nonpublic entities. The amendments also require new disclosures about discontinued operations and disposals of components of an entity that does not qualify for discontinued operations reporting. This guidance will become effective for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years, and therefore will become effective for us as of the beginning of our 2015 fiscal year. The Company is evaluating the impact that this standard will have on its consolidated financial statements. |
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In May 2014, the FASB issued a standard on revenue recognition that provides a single, comprehensive revenue recognition model for all contracts with customers. The standard is principle-based and provides a five-step model to determine the measurement of revenue and timing of when it is recognized. The core principle is that a company will recognize revenue to reflect the transfer of goods or services to customers at an amount that the company expects to be entitled to in exchange for those goods or services. This standard is to be applied retrospectively and is effective for fiscal years beginning after December 15, 2016. The Company is evaluating the impact that this standard will have on its consolidated financial statements. |
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In June 2014, the FASB issued authoritative guidance which eliminates the concept of a development stage entity. The incremental reporting requirements for presenting the development stage operations and cash flows since inception will no longer apply to development stage entities. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 are to be applied retrospectively and are effective for fiscal years beginning after December 15, 2014. The Company has elected to early adopt this standard effective December 31, 2014 and removed all references to since inception values presented in the consolidated financial statements. |
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In June 2014, the FASB issued authoritative guidance on stock compensation, which requires performance targets that affect vesting and can be achieved after the requisite service period, to be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If achievement of the performance target becomes probable before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The amendments are effective for fiscal years beginning after December 15, 2015. The Company is evaluating the impact that this standard will have on its consolidated financial statements. |
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In August 2014, the FASB issued authoritative guidance on going concern disclosures and financial statement presentation, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). This standard provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the financial statement footnotes. This standard is effective for annual reporting periods ending after December 15, 2016, and to annual and interim periods thereafter. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this standard on our consolidated financial statements and related disclosures. |
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In November, 2014, the FASB issued ASU 2014-16, "Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force)." The ASU clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. The ASU is effective for fiscal years and interim periods beginning after December 15, 2015. The Company is currently in the process of evaluating the impact of adoption of this standard on our consolidated financial statements. |
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