Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 10, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | MEDICAL IMAGING CORP. | ||
Entity Central Index Key | 1,370,804 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 1,086,059 | ||
Entity Common Stock, Shares Outstanding | 26,506,481 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and Cash Equivalents | $ 85,455 | $ 109,914 |
Accounts Receivable | ||
Accounts Receivable, net | 1,106,712 | 880,210 |
Prepaid Expenses | 43,087 | 19,204 |
Total Current Assets | 1,235,254 | 1,009,328 |
Property and Equipment, net | 2,100,058 | 2,456,494 |
Goodwill | 1,977,670 | 1,977,670 |
Deposits | 18,563 | 11,764 |
TOTAL ASSETS | 5,331,545 | 5,455,256 |
Current Liabilities | ||
Accounts Payable | 1,772,752 | 1,212,430 |
Accrued Liabilities | 706,572 | 580,336 |
Current Portion of Capital Lease Obligations | 123,738 | 205,740 |
Current Portion of Promissory Notes | 931,842 | 409,789 |
Current Portion of Royalty Financing | 752,926 | 106,141 |
Current Portion of Convertible Notes | 2,223,706 | 156,425 |
Total Current Liabilities | 6,511,536 | 2,670,861 |
Long Term Liabilities | ||
Capital Lease Obligations, less current portion | 200,536 | 267,146 |
Promissory Notes, less current portion | 112,000 | 0 |
Royalty Financing, less current portion | 1,254,498 | 1,828,960 |
Convertible Notes, less current portion | 142,357 | 2,267,575 |
Total Liabilities | 8,220,927 | 7,034,542 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred Stock | 0 | 0 |
Common Stock | 25,742 | 25,392 |
Additional Paid-In Capital | 2,057,723 | 2,034,759 |
Accumulated Other Comprehensive Income | 138,145 | 140,670 |
Accumulated Deficit | (5,110,992) | (3,780,106) |
Total Stockholders' Deficit | (2,889,382) | (1,579,286) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 5,331,545 | $ 5,455,256 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value in dollars | $ 0.001 | $ 0.001 |
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 in dollars | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 25,741,481 | 25,391,481 |
Common stock, shares outstanding | 25,741,481 | 25,391,481 |
Doubtful accounts, accounts receivable | $ 475,982 | $ 331,475 |
Accumulated depreciation, property and equipment | 1,562,471 | 998,224 |
Unamortized discount, promissory notes | 120,000 | 128,047 |
Royalty financing, unamortized discount | 5,302,853 | 5,618,680 |
Unamortized debt discount, convertible notes | $ 2,634 | $ 31,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | ||
Sales | $ 7,179,085 | $ 7,103,036 |
Cost of Sales | 3,846,687 | 3,742,106 |
Gross Margin | 3,332,398 | 3,360,930 |
Operating Expenses: | ||
Labor | 1,286,411 | 1,297,761 |
General and Administrative | 752,725 | 746,222 |
Depreciation | 561,077 | 546,338 |
Rent Office Space and Servers | 550,241 | 551,268 |
Legal and Professional | 280,353 | 390,300 |
Advertising | 82,946 | 37,005 |
Insurance | 90,174 | 92,055 |
Travel | 45,840 | 41,067 |
Bad Debt Expense | 146,047 | 290,209 |
Management Fees | 20,400 | 33,613 |
Total Operating Expenses | 3,816,214 | 4,025,838 |
Income from Operations | (483,816) | (664,908) |
Other Income and (Expenses): | ||
Other Income | 78,020 | 68,174 |
Foreign Currency Gains (Losses) | 62,196 | (34,826) |
Amortization of Debt Discount | (495,361) | (613,121) |
Interest & Penalties Expense | (491,925) | (495,829) |
Total Other Income (Expenses) | (847,070) | (1,075,602) |
Net Loss | (1,330,886) | (1,740,510) |
Comprehensive Income (Loss) | (2,525) | 119,277 |
Total Comprehensive Loss | $ (1,333,411) | $ (1,621,233) |
Basic and Diluted Loss per Share | $ (0.052) | $ (0.067) |
Weighted Average Shares Outstanding - Basic and Diluted | 25,585,931 | 24,159,122 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Common Stock | Additional Paid-In Capital | Other Comprehensive Income | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2014 | $ 23,947 | $ 1,876,484 | $ 21,393 | $ (2,039,596) | $ (117,772) |
Beginning Balance, shares at Dec. 31, 2014 | 23,946,481 | ||||
Change in Stockholders' Deficit | |||||
Shares issued for Services, value | $ 1,425 | 64,040 | 65,465 | ||
Shares issued for Services, shares | 1,425,000 | ||||
Shares Issued for Convertible Notes, value | $ 20 | 1,020 | 1,040 | ||
Shares Issued for Convertible Notes, shares | 20,000 | ||||
Comprehensive income/loss | 119,277 | 119,277 | |||
Options issued | 82,579 | 82,579 | |||
Warrants Issued | 10,635 | 10,635 | |||
Net Loss | (1,740,510) | (1,740,510) | |||
Ending Balance at Dec. 31, 2015 | $ 25,392 | 2,034,758 | 140,670 | (3,780,106) | (1,579,286) |
Ending Balance, shares at Dec. 31, 2015 | 25,391,481 | ||||
Change in Stockholders' Deficit | |||||
Shares issued for Services, value | $ 150 | 13,850 | 14,000 | ||
Shares issued for Services, shares | 150,000 | ||||
Shares Issued for Convertible Notes, value | $ 200 | 8,830 | 9,030 | ||
Shares Issued for Convertible Notes, shares | 200,000 | ||||
Comprehensive income/loss | (2,525) | (2,525) | |||
Warrants Issued | 285 | 285 | |||
Net Loss | (1,330,886) | (1,330,886) | |||
Ending Balance at Dec. 31, 2016 | $ 25,742 | $ 2,057,723 | $ 138,145 | $ (5,110,992) | $ (2,889,382) |
Ending Balance, shares at Dec. 31, 2016 | 25,741,481 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income (Loss) | $ (1,330,886) | $ (1,740,510) |
Adjustments to Reconcile Net Loss to Net Cash provided by Operating Activities: | ||
Depreciation | 561,077 | 546,338 |
Amortization of Debt Discount | 495,361 | 613,121 |
Stock-based compensation | 14,000 | 148,044 |
Foreign currency transaction (Gain) Loss | (1,959) | (2,130) |
Changes in operating assets and liabilities: | ||
Accounts Receivable, Net of Allowance for Doubtful Accounts | (226,502) | (28,326) |
Prepaid Expenses and Deposits | (28,506) | 4,961 |
Loans Receivable | 0 | 1,497 |
Accounts Payable and Accrued Liabilities | 686,558 | 857,075 |
NET CASH AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES | 169,143 | 400,070 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Equipment Purchase | (139,041) | (45,251) |
NET CASH FROM INVESTING ACTIVITIES | (139,041) | (45,251) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Promissory Notes | 1,133,625 | 1,327,679 |
Proceeds from Convertible Debt | 0 | 20,000 |
Royalty Fee Payment | (240,119) | (410,189) |
Principal Payments on Promissory Notes | (651,158) | (1,234,549) |
Principal Payments on Convertible Debt | (80,000) | (60,000) |
Principal Payments on Capital Lease Obligations | (214,384) | (195,332) |
NET CASH AND CASH EQUIVALENTS FROM FINANCING ACTIVITIES | (52,036) | (552,391) |
Gain (Loss) Due to Foreign Currency Translation | (2,525) | 119,277 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (24,459) | (78,295) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 109,914 | 188,209 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 85,455 | 109,914 |
Cash paid during the year for: | ||
Interest | 307,311 | 483,061 |
Income Taxes | 51,187 | 27,280 |
Non-cash financing and investing activities: | ||
Shares Issued for Convertible Note | 9,030 | 1,040 |
Warrants Issued for Converted Notes | 285 | 10,635 |
Equipment purchase under Capital Lease | 64,618 | 18,384 |
Accrued Interest converted to Note | $ 0 | $ 15,000 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Note 1. Organization and Summary of Significant Accounting Policies Organization and Basis of Presentation Medical Imaging Corp., (“MIC” or the “Company”), a Nevada Corporation was incorporated in 2000. In 2005, the Company developed a business plan for private healthcare opportunities in Canada with the objective of owning and operating private diagnostic imaging clinics. In 2009, the Company purchased Canadian Teleradiology Services Inc., which operates as: Custom Teleradiology Services (“CTS”). CTS provides remote reading of medical diagnostic imaging scans for rural hospitals and clinics in Canada. In early 2010, the Company modified its business plan to grow its CTS subsidiary while commencing the acquisition of existing full service imaging clinics located in the United States and exploring the development of new diagnostic imaging technology. In 2012, the Company purchased Schuylkill Open MRI Inc., which operates as: Schuylkill Medical Imaging (“SMI”), an independent diagnostic imaging facility located in Pottsville, Pennsylvania. In 2014, the Company purchased Partners Imaging Center of Venice, LLC (“PIV”) located in Venice, Florida; Partners Imaging Center of Naples, LLC (“PIN”) located in Naples, Florida; and Partners Imaging Center of Charlotte, LLC (“PIC”) located in Port Charlotte, Florida. Basis of Presentation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year-end is December 31. Principle of Consolidation The consolidated financial statements include the accounts of Medical Imaging, Corp., and its wholly-owned subsidiaries, CTS, SMI, PIV, PIN, and PIC. Intercompany accounts and transactions have been eliminated in the consolidated financial statements. CTS’, SMI’s, PIV’s, PIN’s, and PIC’s accumulated earnings prior to their acquisitions are not included in the consolidated balance sheet. Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the consolidated financial statements are published, and (iii) the reported amount of net sales, expenses and costs recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of consolidated financial statements; accordingly, actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At December 31, 2016, and 2015, cash includes cash on hand and cash in the bank. Accounts Receivable Credit Risk The allowance for doubtful accounts is maintained at a level sufficient to provide for estimated credit losses based on evaluating known and inherent risks in the receivables portfolio. Management evaluates various factors including expected losses and economic conditions to predict the estimated realization on outstanding receivables. In connection with the acquisition of the three facilities located in Venice, Port Charlotte and Naples, Florida, the Company, in October 2014, entered into professional services agreements whereby the seller of those three facilities continued to handle the billing and collection for the imaging centers (the “third party billing”). The seller must still provide a full set of verification data to the Company with respect to its account receivable processing and collections so that the Company can determine the extent to which accounts submitted by the seller in connection with the third party billing have been collected or denied. Final verification will only be able to be completed after the conclusion of the services performed pursuant to the third party billing contract, and review of account balances which is expected during the 2017 fiscal year. As of December 31, 2016, and 2015, the allowance for doubtful accounts from direct billings was $200,982 and $56,475, respectively. The allowance for doubtful accounts from third party billings (Florida operations) was $275,000 in both years. Although the gross receivable balance has increased significantly, management is actively pursuing collection efforts directly with patients and insurance payers and believes that the current allowance for doubtful accounts is sufficient to cover any expected losses. Goodwill and Indefinite Intangible Assets The Company follows the provisions of Financial Accounting Standard Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets No goodwill impairment was recognized during 2016 or 2015. Revenue Recognition The Company holds contracts with several hospitals and groups of health care facilities to provide Teleradiology services for a specific period of time. The Company bills for services rendered on a monthly basis. For the year ended December 31, 2016, CTS held six contracts; four contracts that are renewable on a year-to-year basis and one contract that renewed in 2016 and one to be renewed in 2018. In accordance with the requirement of Staff Accounting Bulletin (“SAB”) 104, the Company recognizes revenue when: (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred (monthly); (3) the seller’s price is fixed or determinable (per the customer’s contract, and services performed); and (4) collectability is reasonably assured (based upon our credit policy). Revenue is accounted for under the guidelines established by SAB 101, Revenue Recognition in Financial Statements, Revenue Recognition Cost of Sales Cost of sales includes fees paid to radiologists for reading services, transcription fees, equipment repairs, system license and usage costs. Impairment of Long-Lived Assets In accordance with ASC 360, Property, Plant and Equipment, Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Stock Based Compensation The Company follows ASC 718, Stock Compensation The Company measures all share-based payments to employees (which includes non-employee Board of Directors), including employee stock options, warrants and restricted stock, at the fair value of the award and expenses it over the requisite service period (generally the vesting period). The fair value of common stock options or warrants granted to employees is estimated at the date of grant using the binomial option pricing model (“BOPM”). The calculation also takes into account the common stock fair market value at the grant date, the exercise price, the expected life of the common stock option or warrant, the dividend yield and the risk-free interest rate. The Company from time to time may issue stock options, warrants and restricted stock to acquire goods or services from third parties. Restricted stock, options or warrants issued to other than employees or directors are recorded on the basis of their fair value. The options or warrants are valued using the BOPM on the basis of the market price of the underlying equity instrument on the “valuation date,” which for options and warrants related to contracts that have substantial disincentives to non-performance, is the date of the contract, and for all other contracts is the vesting date. Expenses related to the options and warrants are recognized on a straight-line basis over the period which services are to be received. There was no stock-based compensation expense to non-employees for the year ended December 31, 2016. For the year ended December 31, 2015, the Company recognized stock-based compensation expenses from stock granted to non-employees of $34,683 from stock options and $20,250 from stock issued. The options were valued using the BOPM and included in the legal and professional operating expenses in the consolidated statements of operations. For the year ended December 31, 2016, the Company recognized stock granted to employees of $14,000. For the year ended December 31, 2015, the Company recognized stock-based compensation expenses of $47,896 from stock options, and $45,215 from stock granted to employees. The options were valued using the BOPM and included in the labor and management fees operating expenses in the consolidated statements of operations for $34,683 and $13,213, respectively. Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation. The carrying amounts of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable, accrued liabilities and notes and loans payable approximate fair value due to their most maturities. Fair Value Measurements The Company follows ASC 820 for disclosures about fair value of its financial instruments and to measure the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values because of the short maturity of these instruments. The Company does not have assets and liabilities that are carried at fair value on a recurring basis. Foreign Currency Translation The Company’s functional currency for its wholly-owned subsidiary, CTS, is the Canadian dollar, and their financial statements have been translated into U.S. dollars. The Canadian dollar based accounts of the Company’s foreign operations have been translated into United States dollars using the current rate method. Assets and liabilities of those operations are translated into U.S. dollars using exchange rates as of the balance sheet date; income and expenses are translated using the weighted average exchange rates for the reporting period. Translation adjustments are recorded as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. The Company recognized a foreign currency gain (loss) on transactions from operations of $62,196 for the year ended December 31, 2016 and $(34,826) for the year ended December 31, 2015. The Company recognized other comprehensive income (loss) of $(2,525) for the year ended December 31, 2016 and $119,277 for the year ended December 31, 2015. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes Net Income (Loss) Per Share The Company follows the provisions of ASC 260, Earnings per Share Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock or conversion of notes into shares of the Company’s common stock that could increase the number of shares outstanding and lower the earnings per share of the Company’s common stock. This calculation is not done for periods in a loss position as this would be antidilutive. Recent Accounting Updates The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow. Reclassification of Accounts Certain prior period amounts have been reclassified to conform to December 31, 2016 presentation. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 2. Property and Equipment Property and equipment are stated at cost. Depreciation is calculated using the straight - line method over the estimated useful life of the assets. At December 31, 2016 and 2015, the major class of property and equipment were as follows: December 31, 2016 December 31, 2015 Estimated useful lives Computer/Office Equipment $ 474,887 $ 454,117 3-7 years Medical Equipment 2,329,872 2,156,820 3-7 years Leasehold Improvements 857,770 843,781 5-39 years Less: Accumulated Depreciation (1,562,471) (998,224) Net Book Value $ 2,100,058 $ 2,456,494 Depreciation expense was $561,077 and $546,338 for the year ended December 31, 2016 and 2015, respectively. |
Operating Lease Commitments
Operating Lease Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Leases, Operating [Abstract] | |
Operating Lease Commitments | Note 3. Operating Lease Commitments CTS has a lease commitment for its office space of approximately $2,450 minimum rental per month, not including utilities, realty taxes, and operating costs. The lease renewed in April 2013 for a period of five years and will expire in March 2018. CTS has sublet the space under the original lease to the end of its original term. In accordance with ASC 840, Leases, CTS has a lease commitment for its new office space in Toronto, Canada of approximately $2,600 minimum rental per month, not including utilities, realty taxes, and operating costs. The lease will expire April 30, 2021. SMI entered into a lease commitment for its office space in Pottsville, Pennsylvania. The lease will expire on July 30, 2021. Monthly rental amounts are $6,908 per month not including utilities, realty taxes, and operating costs. SMI has a lease for its x-ray equipment space in Pottsville, Pennsylvania. The lease term is seven years from commitment date of October 2014. Monthly lease payments are $3,000. SMI has a lease for use of x-ray equipment and space in Pottsville, Pennsylvania. The lease term is two years from commitment date of January 2016. Monthly lease payments are $2,000. PIV has a lease for office space in Venice, Florida. The lease will expire September 30, 2021. Monthly rental amounts are $13,170 per month. PIN has a lease for office space in Naples, Florida. The lease will expire January 1, 2020. Monthly rental amounts are $9,543 per month. PIC has a lease for office space in Port Charlotte, Florida. The lease will expire June 20, 2021. Monthly rental amounts are $5,512 per month. Expected future minimum lease commitments as of December 31, 2016: Year Total 2017 $ 481,050 2018 432,048 2019 427,969 2020 352,483 2021 216,357 Thereafter - $ 1,909,907 |
Capital Lease Obligations
Capital Lease Obligations | 12 Months Ended |
Dec. 31, 2016 | |
Leases, Capital [Abstract] | |
Capital Lease Obligations | Note 4. Capital Lease Obligations A detailed summary of the capital lease obligations is as follows: Description Monthly payments Maturity Date APR * December 31, 2016 Balance December 31, 2015 Balance SMI Two MRI Machines $ 11,013 8-Jul-16 10.52 % $ - $ 113,910 SMI X-Ray Machine 1,495 15-Aug-19 6.32 43,930 58,591 SMI PACS/RIS System 3,115 1-Nov-19 5.69 100,240 130,962 SMI Copier 135 1-Aug-18 27.63 2,144 - SMI Ascentrium 2,450 18-Nov-18 21.48 44,776 - PIV,PIN,PIC PACS/RIS 3,094 1-Jan-20 4.22 107,170 139,045 PIV,PIN,PIC Computers 813 1-Nov-17 10.52 8,509 16,920 PIV,PIN,PIC Digital Printers 423 24-Feb-19 9.90 9,856 - CTS Computers 554 2-Feb-18 2.25 % 7,649 13,458 Total $ 23,092 $ 324,274 $ 472,886 *Annual Percentage Rate (“APR”). Minimum future lease payments under the capital leases as of December 31, 2016 are as follow: Minimum Lease Payments Total 2017 $ 144,140 2018 125,031 2019 84,201 2020 3,094 Total minimum lease payments 356,466 Less amount representing interest 32,192 Present value of minimum lease payments 324,274 Less current portion of minimum lease payments 123,738 Long-term capital lease obligations at December 31, 2016 $ 200,536 |
Promissory Notes
Promissory Notes | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Promissory Notes | Note 5. Promissory Notes A detailed summary of the promissory notes is as follows: Issuance Date Maturity Date APR * Payment Amount Payments Frequency December 31, 2016 Face Value Balance December 31, 2015 Face Value Balance 21-Mar-11 18-Mar-16 6.00 % $ 1,295 Monthly $ - $ 7,752 16-Jun-15 5-Jul-16 41.00 509 Daily - 145,719 16-Jun-15 2-Mar-16 50.95 765 Daily - 72,365 4-Aug-15 5-Jan-16 20.00 13,000 Weekly - 13,000 22-Sep-15 29-Feb-16 20.00 13,000 Weekly - 169,000 22-Dec-15 29-Feb-16 20.00 13,000 Weekly - 130,000 16-Feb-16 23-Feb-17 12.00 1,000 Monthly 100,000 - 22-Feb-16 31-Aug-17 25.00 10,417 Monthly 500,000 - 22-Mar-16 22-Mar-17 12.00 700 Monthly 70,000 - 1-Jul-16 1-Aug-17 20.00 20,000 Monthly 400,000 - 3-Oct-16 27-Dec-17 42.09 % $ 2,255 Weekly 117,261 - Total Face Value 1,187,261 537,836 Unamortized Discount (143,419 ) (128,047 ) Total $ 1,043,842 $ 409,789 *Annual Percentage Rate (“APR”) |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Notes | Note 6. Convertible Notes On December 5, 2012 and March 27, 2013, the Company sold, through a private placement to accredited investors, three year 12% convertible notes (“Series B Notes”) in the aggregate principal amount of $1,865,000, and $365,000, respectively. The Notes pay interest at a rate of 12% per annum, payable to the holder at 1% per month, and are convertible into common shares of the Company at $0.10 per share. In addition, each purchaser of the Notes received shares dependent on the dollar amount of Notes purchased. The total number of shares of common stock issued was 5,315,000 shares. On December 1, 2015, the holders of $1,840,000 Series B Notes have agreed to extend the maturity date of the debt outstanding to July 1, 2017 from its original maturity date of December 31, 2015. As part of the extension the Company issued warrants to entitle the holders to purchase up to 1,840,000 shares of common stock at an exercise price of $0.07 per share at any time from December 1, 2015 to July 1, 2018. The Company has valued the warrants at $0.0058 per issued share, and recorded a total discount of $10,672 to be amortized over the 18-month extension period. On March 31, 2016, the holders of $50,000 Series B Notes have agreed to extend the maturity date of the debt outstanding to September 1, 2017 from its original maturity date of March 31, 2016. As part of the extension the Company issued warrants to entitle the holders to purchase up to 50,000 shares of common stock at an exercise price of $0.07 per share at any time from March 31, 2016 to September 30, 2018. The Company has valued the warrants at $0.00278 per issued share, and recorded a total discount of $139 to be amortized over the 18-month extension period. On March 31, 2016, the holder of $25,000 Series B Notes has agreed to extend the maturity date of the debt outstanding to September 1, 2019 from its original maturity date of March 31, 2016. As part of the extension the Company issued warrants to entitle the holders to purchase up to 25,000 shares of common stock at an exercise price of $0.07 per share at any time from March 31, 2016 to September 30, 2019. The Company has valued the warrants at $0.00583 per issued share, and recorded a total discount of $146 to be amortized over the 30-month extension period. On May 22, 2014, the Company sold, through private placement to accredited investors, three year 12% convertible notes (“Series C Notes”) in the aggregate principal amount of $95,000. The Notes bear interest at a rate of 12% per annum, payable to the holder at1% per month, with the principal amount due on May 31, 2017. The Notes are convertible into shares of the Company’s common stock at an initial conversion rate of $0.15 per share. In addition, each holder of Series C Notes received shares dependent on the dollar amount of Notes purchased. On August 25, 2014, October 31, 2014 and February 17, 2015, the Company sold an additional $75,000, $50,000 and $20,000, respectively of Series C Notes. The total number of shares of common stock issued was 240,000 shares. On March 26, 2014, the Company issued a $300,000 convertible note to a non-affiliate. The note pays interest at a rate of 12% per annum, payable to the holder at 1% per month. In addition to interest payments, the Company is making monthly payments of $5,000 towards the principal balance beginning June 1, 2014 until the note due date of February 27, 2018. The note is convertible into common shares of the Company at $0.15 per share. In addition, the purchaser of the note received 300,000 shares as part of the note agreement. As of December 31, 2016, principal balance of the note was $145,000. In accordance with ASC 470, Debt with conversion and other options, (“ASC 470”) In accordance with ASC 480, Distinguishing Liabilities from Equity, The debt can be transferred without the transfer of the warrants. The warrants can be transferred without the transfer of the debt. The warrants can be exercised while debt still outstanding. In accordance with ASC 470, if the warrants are classified as equity, then the proceeds should be allocated based on the relative fair values of the base instrument and the warrants were valued at $0.0058 per issued share, and recorded a total discount of $10,672 to be amortized over 18 months’ extension period. A detailed summary of the convertible notes is as follows: Issuance Date Maturity Date APR Conversion Rate Monthly Payment December 31, 2016 Face Value Balance December 31, 2015 Face Value Balance 3-Dec-12 1-Jul-17 12.00 % $ 0.10 $ 250 $ 25,000 $ 25,000 3-Dec-12 1-Jul-17 12.00 0.10 750 75,000 75,000 27-Mar-13 1-Jul-17 12.00 0.10 500 50,000 50,000 3-Dec-12 1-Jul-17 12.00 0.10 500 50,000 50,000 3-Dec-12 1-Jul-17 12.00 0.10 250 25,000 25,000 3-Dec-12 1-Jul-17 12.00 0.10 250 25,000 25,000 3-Dec-12 1-Jul-17 12.00 0.10 250 25,000 25,000 3-Dec-12 1-Jul-17 12.00 0.10 15,000 1,500,000 1,500,000 3-Dec-12 1-Jul-17 12.00 0.10 500 50,000 50,000 3-Dec-12 1-Jul-17 12.00 0.10 150 15,000 15,000 3-Dec-12 1-Jul-18 12.00 0.10 5,750 75,000 75,000 3-Dec-12 31-Mar-16 12.00 0.10 - - 25,000 27-Mar-13 30-Sep-17 12.00 0.10 250 25,000 25,000 27-Mar-13 30-Sep-17 12.00 0.10 250 25,000 25,000 27-Mar-13 30-Sep-19 12.00 0.10 250 25,000 25,000 22-May-14 31-May-17 12.00 0.15 500 50,000 50,000 22-May-14 31-May-17 12.00 0.15 225 22,500 22,500 22-May-14 31-May-17 12.00 0.15 225 22,500 22,500 25-Aug-14 31-Jul-17 12.00 0.15 500 50,000 50,000 25-Aug-14 31-Jul-17 12.00 0.15 250 25,000 25,000 31-Oct-14 31-Oct-17 12.00 0.15 500 50,000 50,000 17-Feb-15 28-Feb-18 12.00 0.15 200 20,000 20,000 26-Mar-14 28-Feb-18 12.00 0.15 6,450 145,000 200,000 Total Face Value $ 2,375,000 $ 2,455,000 Unamortized Discount (8,937 ) (31,000 ) Total $ 2,366,063 $ 2,424,000 Following are maturities of the long –term debt as of December 31, 2016: Principal Payments 2017 $ 2,230,000 2018 120,000 2019 25,000 Total $ 2,375,000 |
Royalty Financing
Royalty Financing | 12 Months Ended |
Dec. 31, 2016 | |
Royalty Financing | |
Royalty Financing | Note 7. Royalty Financing On October 31, 2014, the Company entered into a royalty purchase agreement with Grenville Strategic Royalty Corp. (“Grenville”) for the amount of $2,000,000. The agreement calls for a monthly payment to Grenville based on a percentage of the total of certain revenue items and subject to a minimum payment amount until $8,000,000 has been paid. The amount financed is recorded net of discount to be amortized during the term. For the years ended December 31, 2016 and 2015, the Company has recorded discount amortization expense of $315,827 and $340,372, respectively. The balance as shown on the consolidated balance sheet as of December 31, 2016 was $2,007,424, net of $5,302,853 in unamortized discount. The balance as shown on the consolidated balance sheet as of December 31, 2015 was $1,935,101, net of $5,618,680 in unamortized discount. As of December 31, 2016, the Company paid a total of $689,723 in royalty payments, additionally the Company has accrued $181,096 in unpaid royalty fees from August to December 2016. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8. Income Taxes ASC 740 requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. For the year ended December 31, 2016, the Company had a cumulative net operating loss carryover of approximately $1,839,366 available for U.S federal income tax, which expire beginning in 2017. The net operating loss carryovers may be subject to limitations under Internal Revenue Code due to significant changes in the Company’s ownership. The Company has provided a full valuation allowance against the full amount of the net operating loss benefit, since, in the opinion of management, based upon the earnings history of the Company, it is more likely than not that the benefits will not be realized. Deferred net tax asset (34%) consists of the following at December 31, 2016: 2016 2015 Deferred tax asset $ 1,515,712 $ 1,062,352 Less valuation allowance (1,515,712 ) (1,062,352 ) Net deferred tax asset $ - $ - A reconciliation between income taxes at statutory tax rates (34%) and the actual income tax provision for continuing operations as of December 31, 2016 follows: 2016 2015 Expected Provision (based on statutory rate) $ (453,360 ) $ (551,219 ) Increase to deferred tax valuation allowance for net operating loss carry forward 453,360 551,219 Net provision $ - $ - The Company has filed its tax returns through December 31, 2015, and filed for a six months extension on its December 31, 2016 tax return filing. The provisions of ASC 740 require companies to recognize in their financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based upon the technical merits of the position. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods and disclosure. Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense. All past six tax years for the Company remain subject to future examinations by the applicable taxing authorities. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9. Related Party Transactions During January 2015, the Company entered into an agreement with a company that is owned and controlled by a major shareholder to provide consulting services. Fees payable for performance of the consulting services are $10,000 per month. In addition to the monthly fees, the consultant was paid at signing of the agreement, four million two hundred thousand (4,200,000) options to purchase common stock of the client at an exercise price of $0.15 per share with an expiry date of December 31, 2019; details of the options recognition are disclosed in Note 10. On December 28, 2015, 450,000 shares of common stock were issued as compensation of $20,250 owed and outstanding towards the 2015 consulting agreement. Fees incurred to the related party consultant for the years ended December 31, 2016 and 2015 were $120,000, respectively, and are included as an expense in Legal and Professional fees in the accompanying statement of operations for the period. |
Common Stock Transactions
Common Stock Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Common Stock Transactions | Note 10. Common Stock Transactions On November 28, 2016, 100,000 shares were issued for services valued at $9,000 based upon the closing price of the Company’s common stock at the grant date. On June 16, 2016, the Company issued 30,000 shares of common stock of the Company as part of the bridge convertible note to a private investor. The shares were valued at $609 based upon the closing price of the Company’s common stock at the grant date. On June 7, 2016, 50,000 shares were issued for services valued at $5,000 based upon the closing price of the Company’s common stock at the grant date. On March 22, 2016, the Company issued 70,000 shares of common stock of the Company as part of the bridge convertible note to a private investor. The shares were valued at $1,421 based upon the closing price of the Company’s common stock at the grant date. On February 18, 2016, the Company issued 100,000 shares of common stock of the Company as part of the bridge convertible note to a private investor. The shares were valued at $7,000 based upon the closing price of the Company’s common stock at the grant date. For the year ended December 31, 2015, 1,425,000 shares were issued for services valued at $65,465 based upon the closing price of the Company’s common stock at the grant date. For the year ended December 31, 2015, 20,000 shares were issued as part of Series C convertible note agreements. The shares were valued at $1,040 based upon the closing price of the Company’s common stock at the grant date. On December 1, 2015, the Company issued 1,840,000 warrants to holders of Series B convertible notes (see Note 6) as part of the agreements to extend the maturity dates of the notes. The warrants are exercisable at a price of $0.07 per full share at any time from December 1, 2015 to July 1, 2018. The Company has valued the warrants at a $0.0058 per issued share. On January 27, 2015, the Company granted options as considerations for services provided by the CEO of the Company. The options are to purchase up to 4,200,000 shares of common stock, with an exercise price equal to $0.15 per share. The options shall have a five (5) year term. Inputs used in Binomial Option Pricing model were as follow: stock price at grant date: $0.0517, exercise price $0.15, expected life of the option two and a half (2.5) years, volatility of 70%, and risk free rate of 0.03%. The options were recorded on the grant date at a value of $34,683. On January 27, 2015, the Company granted options as considerations for consulting services provided to the Company. The options are to purchase up to 4,200,000 shares of common stock, with an exercise price equal to $0.15 per share. The options shall have a five (5) year term. Inputs used in Binomial Option Pricing model were as follow: stock price at grant date: $0.0517, exercise price $0.15, expected life of the option two and a half (2.5) years, volatility of 70%, and risk free rate of 0.03%. The options were recorded on the grant date at a value of $34,683. On January 27, 2015, the Company granted options as considerations for services provided by the CFO of the Company. The options are to purchase up to 1,600,000 shares of common stock, with an exercise price equal to $0.15 per share. The options shall have a five (5) year term. Inputs used in Binomial Option Pricing model were as follow: stock price at grant date: $0.0517, exercise price $0.15, expected life of the option two and a half (2.5) years, volatility of 70%, and risk free rate of 0.03%. The options were recorded on the grant date at a value of $13,213. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 11. Going Concern As shown in the accompanying consolidated financial statements, the Company incurred net comprehensive loss of $1,333,411, and $1,621,233 for the years ended December 31, 2016 and 2015, as well as a working capital deficit of $5,276,282 at December 31, 2016. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. Management plans to raise additional financing in order to continue its operations and fulfill its debt obligations in 2017, but there can be no assurances that the plan will be successful. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events On February 23, 2017, 765,000 shares were issued for services valued at $30,600 based upon the closing price of the Company’s common stock at the grant date. The Company evaluated subsequent events through the date the consolidated financial statements were issued. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Medical Imaging Corp., (“MIC” or the “Company”), a Nevada Corporation was incorporated in 2000. In 2005, the Company developed a business plan for private healthcare opportunities in Canada with the objective of owning and operating private diagnostic imaging clinics. In 2009, the Company purchased Canadian Teleradiology Services Inc., which operates as: Custom Teleradiology Services (“CTS”). CTS provides remote reading of medical diagnostic imaging scans for rural hospitals and clinics in Canada. In early 2010, the Company modified its business plan to grow its CTS subsidiary while commencing the acquisition of existing full service imaging clinics located in the United States and exploring the development of new diagnostic imaging technology. In 2012, the Company purchased Schuylkill Open MRI Inc., which operates as: Schuylkill Medical Imaging (“SMI”), an independent diagnostic imaging facility located in Pottsville, Pennsylvania. In 2014, the Company purchased Partners Imaging Center of Venice, LLC (“PIV”) located in Venice, Florida; Partners Imaging Center of Naples, LLC (“PIN”) located in Naples, Florida; and Partners Imaging Center of Charlotte, LLC (“PIC”) located in Port Charlotte, Florida. Basis of Presentation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year-end is December 31. |
Principle of Consolidation | Principle of Consolidation The consolidated financial statements include the accounts of Medical Imaging, Corp., and its wholly-owned subsidiaries, CTS, SMI, PIV, PIN, and PIC. Intercompany accounts and transactions have been eliminated in the consolidated financial statements. CTS’, SMI’s, PIV’s, PIN’s, and PIC’s accumulated earnings prior to their acquisitions are not included in the consolidated balance sheet. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the consolidated financial statements are published, and (iii) the reported amount of net sales, expenses and costs recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of consolidated financial statements; accordingly, actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At December 31, 2016, and 2015, cash includes cash on hand and cash in the bank. |
Accounts Receivable Credit Risk | Accounts Receivable Credit Risk The allowance for doubtful accounts is maintained at a level sufficient to provide for estimated credit losses based on evaluating known and inherent risks in the receivables portfolio. Management evaluates various factors including expected losses and economic conditions to predict the estimated realization on outstanding receivables. In connection with the acquisition of the three facilities located in Venice, Port Charlotte and Naples, Florida, the Company, in October 2014, entered into professional services agreements whereby the seller of those three facilities continued to handle the billing and collection for the imaging centers (the “third party billing”). The seller must still provide a full set of verification data to the Company with respect to its account receivable processing and collections so that the Company can determine the extent to which accounts submitted by the seller in connection with the third party billing have been collected or denied. Final verification will only be able to be completed after the conclusion of the services performed pursuant to the third party billing contract, and review of account balances which is expected during the 2017 fiscal year. |
Goodwill and Indefinite Intangible Assets | Goodwill and Indefinite Intangible Assets The Company follows the provisions of Financial Accounting Standard Accounting Standards Codification (“ASC”) 350, Goodwill and Other Intangible Assets |
Revenue Recognition | Revenue Recognition The Company holds contracts with several hospitals and groups of health care facilities to provide Teleradiology services for a specific period of time. The Company bills for services rendered on a monthly basis. For the year ended December 31, 2016, CTS held six contracts; four contracts that are renewable on a year-to-year basis and one contract that renewed in 2016 and one to be renewed in 2018. In accordance with the requirement of Staff Accounting Bulletin (“SAB”) 104, the Company recognizes revenue when: (1) persuasive evidence of an arrangement exists (contracts); (2) delivery has occurred (monthly); (3) the seller’s price is fixed or determinable (per the customer’s contract, and services performed); and (4) collectability is reasonably assured (based upon our credit policy). Revenue is accounted for under the guidelines established by SAB 101, Revenue Recognition in Financial Statements, Revenue Recognition |
Cost of Sales | Cost of Sales Cost of sales includes fees paid to radiologists for reading services, transcription fees, equipment repairs, system license and usage costs. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with ASC 360, Property, Plant and Equipment, Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. |
Stock Based Compensation | Stock Based Compensation The Company follows ASC 718, Stock Compensation The Company measures all share-based payments to employees (which includes non-employee Board of Directors), including employee stock options, warrants and restricted stock, at the fair value of the award and expenses it over the requisite service period (generally the vesting period). The fair value of common stock options or warrants granted to employees is estimated at the date of grant using the binomial option pricing model (“BOPM”). The calculation also takes into account the common stock fair market value at the grant date, the exercise price, the expected life of the common stock option or warrant, the dividend yield and the risk-free interest rate. The Company from time to time may issue stock options, warrants and restricted stock to acquire goods or services from third parties. Restricted stock, options or warrants issued to other than employees or directors are recorded on the basis of their fair value. The options or warrants are valued using the BOPM on the basis of the market price of the underlying equity instrument on the “valuation date,” which for options and warrants related to contracts that have substantial disincentives to non-performance, is the date of the contract, and for all other contracts is the vesting date. Expenses related to the options and warrants are recognized on a straight-line basis over the period which services are to be received. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation. The carrying amounts of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable, accrued liabilities and notes and loans payable approximate fair value due to their most maturities. |
Fair Value Measurements | Fair Value Measurements The Company follows ASC 820 for disclosures about fair value of its financial instruments and to measure the fair value of its financial instruments. ASC 820 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values because of the short maturity of these instruments. |
Foreign Currency Translation | Foreign Currency Translation The Company’s functional currency for its wholly-owned subsidiary, CTS, is the Canadian dollar, and their financial statements have been translated into U.S. dollars. The Canadian dollar based accounts of the Company’s foreign operations have been translated into United States dollars using the current rate method. Assets and liabilities of those operations are translated into U.S. dollars using exchange rates as of the balance sheet date; income and expenses are translated using the weighted average exchange rates for the reporting period. Translation adjustments are recorded as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company follows the provisions of ASC 260, Earnings per Share Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock or conversion of notes into shares of the Company’s common stock that could increase the number of shares outstanding and lower the earnings per share of the Company’s common stock. This calculation is not done for periods in a loss position as this would be antidilutive. |
Recent Accounting Updates | Recent Accounting Updates The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow. |
Reclassification of Accounts | Reclassification of Accounts Certain prior period amounts have been reclassified to conform to December 31, 2016 presentation. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property Plant and Equipment | December 31, 2016 December 31, 2015 Estimated useful lives Computer/Office Equipment $ 474,887 $ 454,117 3-7 years Medical Equipment 2,329,872 2,156,820 3-7 years Leasehold Improvements 857,770 843,781 5-39 years Less: Accumulated Depreciation (1,562,471) (998,224) Net Book Value $ 2,100,058 $ 2,456,494 |
Operating Lease Commitments (Ta
Operating Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases, Operating [Abstract] | |
Schedule of Operating Lease Commitments | Year Total 2017 $ 481,050 2018 432,048 2019 427,969 2020 352,483 2021 216,357 Thereafter - $ 1,909,907 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases, Capital [Abstract] | |
Schedule of Capital Leased Assets | Description Monthly payments Maturity Date APR * December 31, 2016 Balance December 31, 2015 Balance SMI Two MRI Machines $ 11,013 8-Jul-16 10.52 % $ - $ 113,910 SMI X-Ray Machine 1,495 15-Aug-19 6.32 43,930 58,591 SMI PACS/RIS System 3,115 1-Nov-19 5.69 100,240 130,962 SMI Copier 135 1-Aug-18 27.63 2,144 - SMI Ascentrium 2,450 18-Nov-18 21.48 44,776 - PIV,PIN,PIC PACS/RIS 3,094 1-Jan-20 4.22 107,170 139,045 PIV,PIN,PIC Computers 813 1-Nov-17 10.52 8,509 16,920 PIV,PIN,PIC Digital Printers 423 24-Feb-19 9.90 9,856 - CTS Computers 554 2-Feb-18 2.25 % 7,649 13,458 Total $ 23,092 $ 324,274 $ 472,886 |
Schedule of Future Minimum Lease Payments for Capital Leases | Minimum Lease Payments Total 2017 $ 144,140 2018 125,031 2019 84,201 2020 3,094 Total minimum lease payments 356,466 Less amount representing interest 32,192 Present value of minimum lease payments 324,274 Less current portion of minimum lease payments 123,738 Long-term capital lease obligations at December 31, 2016 $ 200,536 |
Promissory Notes (Tables)
Promissory Notes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Promissory Notes | Issuance Date Maturity Date APR * Payment Amount Payments Frequency December 31, 2016 Face Value Balance December 31, 2015 Face Value Balance 21-Mar-11 18-Mar-16 6.00 % $ 1,295 Monthly $ - $ 7,752 16-Jun-15 5-Jul-16 41.00 509 Daily - 145,719 16-Jun-15 2-Mar-16 50.95 765 Daily - 72,365 4-Aug-15 5-Jan-16 20.00 13,000 Weekly - 13,000 22-Sep-15 29-Feb-16 20.00 13,000 Weekly - 169,000 22-Dec-15 29-Feb-16 20.00 13,000 Weekly - 130,000 16-Feb-16 23-Feb-17 12.00 1,000 Monthly 100,000 - 22-Feb-16 31-Aug-17 25.00 10,417 Monthly 500,000 - 22-Mar-16 22-Mar-17 12.00 700 Monthly 70,000 - 1-Jul-16 1-Aug-17 20.00 20,000 Monthly 400,000 - 3-Oct-16 27-Dec-17 42.09 % $ 2,255 Weekly 117,261 - Total Face Value 1,187,261 537,836 Unamortized Discount (143,419 ) (128,047 ) Total $ 1,043,842 $ 409,789 *Annual Percentage Rate (“APR”) |
Convertible Notes (Tables)
Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Debt | Issuance Date Maturity Date APR Conversion Rate Monthly Payment December 31, 2016 Face Value Balance December 31, 2015 Face Value Balance 3-Dec-12 1-Jul-17 12.00 % $ 0.10 $ 250 $ 25,000 $ 25,000 3-Dec-12 1-Jul-17 12.00 0.10 750 75,000 75,000 27-Mar-13 1-Jul-17 12.00 0.10 500 50,000 50,000 3-Dec-12 1-Jul-17 12.00 0.10 500 50,000 50,000 3-Dec-12 1-Jul-17 12.00 0.10 250 25,000 25,000 3-Dec-12 1-Jul-17 12.00 0.10 250 25,000 25,000 3-Dec-12 1-Jul-17 12.00 0.10 250 25,000 25,000 3-Dec-12 1-Jul-17 12.00 0.10 15,000 1,500,000 1,500,000 3-Dec-12 1-Jul-17 12.00 0.10 500 50,000 50,000 3-Dec-12 1-Jul-17 12.00 0.10 150 15,000 15,000 3-Dec-12 1-Jul-18 12.00 0.10 5,750 75,000 75,000 3-Dec-12 31-Mar-16 12.00 0.10 - - 25,000 27-Mar-13 30-Sep-17 12.00 0.10 250 25,000 25,000 27-Mar-13 30-Sep-17 12.00 0.10 250 25,000 25,000 27-Mar-13 30-Sep-19 12.00 0.10 250 25,000 25,000 22-May-14 31-May-17 12.00 0.15 500 50,000 50,000 22-May-14 31-May-17 12.00 0.15 225 22,500 22,500 22-May-14 31-May-17 12.00 0.15 225 22,500 22,500 25-Aug-14 31-Jul-17 12.00 0.15 500 50,000 50,000 25-Aug-14 31-Jul-17 12.00 0.15 250 25,000 25,000 31-Oct-14 31-Oct-17 12.00 0.15 500 50,000 50,000 17-Feb-15 28-Feb-18 12.00 0.15 200 20,000 20,000 26-Mar-14 28-Feb-18 12.00 0.15 6,450 145,000 200,000 Total Face Value $ 2,375,000 $ 2,455,000 Unamortized Discount (8,937 ) (31,000 ) Total $ 2,366,063 $ 2,424,000 |
Schedule of Maturities of Long-term Debt | Principal Payments 2017 $ 2,230,000 2018 120,000 2019 25,000 Total $ 2,375,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | 2016 2015 Deferred tax asset $ 1,515,712 $ 1,062,352 Less valuation allowance (1,515,712 ) (1,062,352 ) Net deferred tax asset $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | 2016 2015 Expected Provision (based on statutory rate) $ (453,360 ) $ (551,219 ) Increase to deferred tax valuation allowance for net operating loss carry forward 453,360 551,219 Net provision $ - $ - |
Organization and Summary of S26
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable, Net, Current | ||
Allowance for doubtful accounts | $ 200,982 | $ 56,475 |
Allowance for Doubtful Accounts - Third Party Billings (Florida Operations) | 275,000 | 275,000 |
Recognized Share-Based Compensation Expense | ||
Value of options granted included in labor fees operating expenses | 1,286,411 | 1,297,761 |
Foreign Currency Translation | ||
Foreign currency loss | 62,196 | (34,826) |
Other comprehensive gain | (2,525) | 119,277 |
Employee Stock | ||
Recognized Share-Based Compensation Expense | ||
Stock-based compensation expense, employees | 45,215 | |
Stock granted, value | $ 14,000 | |
Value of options granted included in labor fees operating expenses | 13,213 | |
Employee Stock Option | ||
Recognized Share-Based Compensation Expense | ||
Stock-based compensation expense, employees | 47,896 | |
Value of options granted included in labor fees operating expenses | 34,683 | |
Non-Employee Stock | ||
Recognized Share-Based Compensation Expense | ||
Stock-based compensation expense, non-employees | 20,250 | |
Non-Employee Stock Option | ||
Recognized Share-Based Compensation Expense | ||
Stock-based compensation expense, non-employees | $ 34,683 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, accumulated depreciation | $ (1,562,471) | $ (998,224) |
Property and equipment, net | 2,100,058 | 2,456,494 |
Computer/Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 474,887 | $ 454,117 |
Property and equipment, estimated useful lives | 3-7 years | 3-7 years |
Medical Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,329,872 | $ 2,156,820 |
Property and equipment, estimated useful lives | 3-7 years | 3-7 years |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 857,770 | $ 843,781 |
Property and equipment, estimated useful lives | 5-39 years | 5-39 years |
Property and Equipment (Detai28
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 561,077 | $ 546,338 |
Operating Lease Commitments (De
Operating Lease Commitments (Details) | Dec. 31, 2016USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity | |
Year 2,017 | $ 481,050 |
Year 2,018 | 432,048 |
Year 2,019 | 427,969 |
Year 2,020 | 352,483 |
Year 2,021 | 216,357 |
Thereafter | 0 |
Operating Leases, Future Minimum Payments Due | $ 1,909,907 |
Operating Lease Commitments (30
Operating Lease Commitments (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
CTS - Office Space | |
Operating lease, minimum payments | $ 2,450 |
Leasing arrangements | CTS has a lease commitment for its office space of approximately $2,450 minimum rental per month, not including utilities, realty taxes, and operating costs. The Lease renewed in April 2013 for a period of five years and will expire in March 2018. |
Loss on sublease | $ 8,000 |
CTS - Office Space - Toronto, Canada | |
Operating lease, minimum payments | $ 2,600 |
Leasing arrangements | CTS has a lease commitment for its new office space in Toronto, Canada of approximately $2,600 minimum rental, not including utilities, realty taxes, and operating costs. The lease will expire April 30, 2021. |
SMI - Office Space - Pottsville, Pennsylvania | |
Operating lease, minimum payments | $ 6,908 |
Leasing arrangements | SMI entered into a lease commitment for its office space in Pottsville, Pennsylvania. The lease will expire on July 30, 2021. Monthly rental amounts are $6,908 per month not including utilities, realty taxes, and operating costs. |
SMI - X-Ray Equipment | |
Operating lease, minimum payments | $ 3,000 |
Leasing arrangements | Lease for x-ray equipment space. The lease term is seven years from commitment date of October 2014. |
SMI - X-Ray Equipment #2 | |
Operating lease, minimum payments | $ 2,000 |
Leasing arrangements | Lease for use of x-ray equipment and space. The lease term is two years from commitment date of January 2016. |
Lease Arrangement | PIC | |
Operating lease, minimum payments | $ 5,512 |
Leasing arrangements | PIC has a lease for office space in Port Charlotte, Florida. The lease will expire June 20, 2021. |
Lease Arrangement | PIN | |
Operating lease, minimum payments | $ 9,543 |
Leasing arrangements | PIN has a lease for office space in Naples, Florida. The lease will expire January 1, 2020. |
Lease Arrangement | PIV | |
Operating lease, minimum payments | $ 13,170 |
Leasing arrangements | PIV has a lease for office space in Venice, Florida. The lease will expire September 30, 2021. |
Capital Lease Obligations - Sch
Capital Lease Obligations - Schedule of Capital Leased Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Capital leases, present value | $ 324,274 | $ 472,886 |
Capital leases, monthly payments | 23,092 | |
SMI - MRI | ||
Capital leases, present value | 113,910 | |
Capital leases, monthly payments | $ 11,013 | |
Capital leases, maturity date | Jul. 8, 2016 | |
Capital leases, annual percentage rate | 10.52% | |
SMI - X-Ray Lease | ||
Capital leases, present value | 43,930 | $ 58,591 |
Capital leases, monthly payments | $ 1,495 | $ 1,495 |
Capital leases, maturity date | Aug. 15, 2019 | Aug. 15, 2019 |
Capital leases, annual percentage rate | 6.32% | 6.32% |
SMI - PACS/RIS Lease | ||
Capital leases, present value | $ 100,240 | $ 130,962 |
Capital leases, monthly payments | $ 3,115 | $ 3,115 |
Capital leases, maturity date | Nov. 1, 2019 | Nov. 1, 2019 |
Capital leases, annual percentage rate | 5.69% | 5.69% |
SMI Copier Lease | ||
Capital leases, present value | $ 2,144 | |
Capital leases, monthly payments | $ 135 | |
Capital leases, maturity date | Aug. 1, 2018 | |
Capital leases, annual percentage rate | 27.63% | |
SMI Ascentrium | ||
Capital leases, present value | $ 44,776 | |
Capital leases, monthly payments | $ 2,450 | |
Capital leases, maturity date | Nov. 18, 2018 | |
Capital leases, annual percentage rate | 21.48% | |
PV, PN, PC PACS/RIS Lease | ||
Capital leases, present value | $ 107,170 | $ 139,045 |
Capital leases, monthly payments | $ 3,094 | $ 3,094 |
Capital leases, maturity date | Jan. 1, 2020 | Jan. 1, 2020 |
Capital leases, annual percentage rate | 4.22% | 4.22% |
PV, PN, PC Computers Lease | ||
Capital leases, present value | $ 8,509 | $ 16,920 |
Capital leases, monthly payments | $ 813 | $ 813 |
Capital leases, maturity date | Nov. 1, 2017 | Nov. 1, 2017 |
Capital leases, annual percentage rate | 10.52% | 10.52% |
PV, PN, PC Digital Printers Lease | ||
Capital leases, present value | $ 9,856 | |
Capital leases, monthly payments | $ 423 | |
Capital leases, maturity date | Feb. 24, 2019 | |
Capital leases, annual percentage rate | 9.90% | |
CTS Computers Lease | ||
Capital leases, present value | $ 7,649 | $ 13,458 |
Capital leases, monthly payments | $ 554 | $ 554 |
Capital leases, maturity date | Feb. 2, 2018 | Feb. 2, 2018 |
Capital leases, annual percentage rate | 2.25% | 2.25% |
Capital Lease Obligations - S32
Capital Lease Obligations - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Capital Leases Future Minimum Payments | ||
Minimum lease payments, 2017 | $ 144,140 | |
Minimum lease payments, 2018 | 125,031 | |
Minimum lease payments, 2019 | 84,201 | |
Minimum lease payments, 2020 | 3,094 | |
Total minimum lease payments | 356,466 | |
Less amount representing interest | 32,192 | |
Present value of minimum lease payments | 324,274 | $ 472,886 |
Less current portion of minimum lease payments | 123,738 | 205,740 |
Long-term Capital Lease Obligations at December 31, 2016 | $ 200,536 | $ 267,146 |
Promissory Notes (Details)
Promissory Notes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Short-term Debt [Line Items] | ||
Promissory notes, balance | $ 1,187,261 | $ 537,836 |
Unamortized Discount | $ (143,419) | $ (128,047) |
Promissory Note #1 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Mar. 21, 2011 | |
Promissory note, maturity date | Mar. 18, 2016 | |
Promissory note, interest rate | 6.00% | |
Promissory notes, payments | $ 1,295 | |
Promissory notes, payment frequency | Monthly | |
Promissory notes, balance | $ 7,752 | |
Promissory Note #2 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Jun. 16, 2015 | |
Promissory note, maturity date | Jul. 5, 2016 | |
Promissory note, interest rate | 41.00% | |
Promissory notes, payments | $ 509 | |
Promissory notes, payment frequency | Daily | |
Promissory notes, balance | $ 145,719 | |
Promissory Note #3 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Jun. 16, 2015 | |
Promissory note, maturity date | Mar. 2, 2016 | |
Promissory note, interest rate | 50.95% | |
Promissory notes, payments | $ 765 | |
Promissory notes, payment frequency | Daily | |
Promissory notes, balance | $ 72,365 | |
Promissory Note #4 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Aug. 4, 2015 | |
Promissory note, maturity date | Jan. 5, 2016 | |
Promissory note, interest rate | 20.00% | |
Promissory notes, payments | $ 13,000 | |
Promissory notes, payment frequency | Weekly | |
Promissory notes, balance | $ 13,000 | |
Promissory Note #5 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Sep. 22, 2015 | |
Promissory note, maturity date | Feb. 29, 2016 | |
Promissory note, interest rate | 20.00% | |
Promissory notes, payments | $ 13,000 | |
Promissory notes, payment frequency | Weekly | |
Promissory notes, balance | $ 169,000 | |
Promissory Note #6 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Dec. 22, 2015 | |
Promissory note, maturity date | Feb. 29, 2016 | |
Promissory note, interest rate | 20.00% | |
Promissory notes, payments | $ 13,000 | |
Promissory notes, payment frequency | Weekly | |
Promissory notes, balance | $ 130,000 | |
Promissory Note #7 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Feb. 16, 2016 | |
Promissory note, maturity date | Feb. 23, 2017 | |
Promissory note, interest rate | 12.00% | |
Promissory notes, payments | $ 1,000 | |
Promissory notes, payment frequency | Monthly | |
Promissory notes, balance | $ 100,000 | |
Promissory Note #8 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Feb. 22, 2016 | |
Promissory note, maturity date | Aug. 31, 2017 | |
Promissory note, interest rate | 25.00% | |
Promissory notes, payments | $ 10,417 | |
Promissory notes, payment frequency | Monthly | |
Promissory notes, balance | $ 500,000 | |
Promissory Note #9 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Mar. 22, 2016 | |
Promissory note, maturity date | Mar. 22, 2017 | |
Promissory note, interest rate | 12.00% | |
Promissory notes, payments | $ 700 | |
Promissory notes, payment frequency | Monthly | |
Promissory notes, balance | $ 70,000 | |
Promissory Note #10 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Jul. 1, 2016 | |
Promissory note, maturity date | Aug. 1, 2017 | |
Promissory note, interest rate | 20.00% | |
Promissory notes, payments | $ 20,000 | |
Promissory notes, payment frequency | Monthly | |
Promissory notes, balance | $ 400,000 | |
Promissory Note #11 | ||
Short-term Debt [Line Items] | ||
Promissory note, issuance date | Oct. 3, 2016 | |
Promissory note, maturity date | Dec. 27, 2017 | |
Promissory note, interest rate | 42.09% | |
Promissory notes, payments | $ 2,255 | |
Promissory notes, payment frequency | Weekly | |
Promissory notes, balance | $ 117,261 |
Convertible Notes - Schedule of
Convertible Notes - Schedule of Convertible Debt (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Convertible note, monthly payment | $ 80,000 | $ 60,000 |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Convertible note, balance | $ 2,366,063 | $ 2,424,000 |
Convertible Notes | Note #8 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 15,000 | $ 15,000 |
Convertible note, balance | $ 1,500,000 | $ 1,500,000 |
Convertible Notes | Note #7 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 250 | $ 250 |
Convertible note, balance | $ 25,000 | $ 25,000 |
Convertible Notes | Note #6 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 250 | $ 250 |
Convertible note, balance | $ 25,000 | $ 25,000 |
Convertible Notes | Note #5 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 250 | $ 250 |
Convertible note, balance | $ 25,000 | $ 25,000 |
Convertible Notes | Note #4 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 500 | $ 500 |
Convertible note, balance | $ 50,000 | $ 50,000 |
Convertible Notes | Note #3 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Mar. 27, 2013 | Mar. 27, 2013 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 500 | $ 500 |
Convertible note, balance | $ 50,000 | $ 50,000 |
Convertible Notes | Note #2 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 750 | $ 750 |
Convertible note, balance | $ 75,000 | $ 75,000 |
Convertible Notes | Note #1 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 250 | $ 250 |
Convertible note, balance | $ 25,000 | $ 25,000 |
Convertible Notes - Schedule 35
Convertible Notes - Schedule of Convertible Debt, Continued #2 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Convertible note, monthly payment | $ 80,000 | $ 60,000 |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Convertible note, balance | $ 2,375,000 | $ 2,455,000 |
Convertible Notes | Note #16 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | May 22, 2014 | May 22, 2014 |
Convertible note, maturity date | May 31, 2017 | May 31, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.15% | 0.15% |
Convertible note, monthly payment | $ 500 | $ 500 |
Convertible note, balance | $ 50,000 | $ 50,000 |
Convertible Notes | Note #15 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Mar. 27, 2013 | Mar. 27, 2013 |
Convertible note, maturity date | Sep. 30, 2019 | Sep. 30, 2019 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 250 | $ 250 |
Convertible note, balance | $ 25,000 | $ 25,000 |
Convertible Notes | Note #14 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Mar. 27, 2013 | Mar. 27, 2013 |
Convertible note, maturity date | Sep. 30, 2017 | Sep. 30, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 250 | $ 250 |
Convertible note, balance | $ 25,000 | $ 25,000 |
Convertible Notes | Note #13 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Mar. 27, 2013 | Mar. 27, 2013 |
Convertible note, maturity date | Sep. 30, 2017 | Sep. 30, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 250 | $ 250 |
Convertible note, balance | $ 25,000 | $ 25,000 |
Convertible Notes | Note #12 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Mar. 31, 2016 | Mar. 31, 2016 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 0 | |
Convertible note, balance | $ 0 | $ 25,000 |
Convertible Notes | Note #11 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2018 | Jul. 1, 2018 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 5,750 | $ 5,750 |
Convertible note, balance | $ 75,000 | $ 75,000 |
Convertible Notes | Note #10 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 150 | $ 150 |
Convertible note, balance | $ 15,000 | $ 15,000 |
Convertible Notes | Note #9 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Dec. 3, 2012 | Dec. 3, 2012 |
Convertible note, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.10% | 0.10% |
Convertible note, monthly payment | $ 500 | $ 500 |
Convertible note, balance | $ 50,000 | $ 50,000 |
Convertible Notes - Schedule 36
Convertible Notes - Schedule of Convertible Debt, Continued #3 (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Convertible note, monthly payment | $ 80,000 | $ 60,000 |
Convertible note, unamortized debt discount | (143,419) | (128,047) |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Convertible note, balance | 2,375,000 | 2,455,000 |
Convertible note, unamortized debt discount | (8,937) | (31,000) |
Convertible note, total | $ 2,366,063 | $ 2,424,000 |
Convertible Notes | Note #23 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Mar. 26, 2014 | Mar. 26, 2014 |
Convertible note, maturity date | Feb. 28, 2018 | Feb. 28, 2018 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.15% | 0.15% |
Convertible note, monthly payment | $ 6,450 | $ 6,450 |
Convertible note, balance | $ 145,000 | $ 145,000 |
Convertible Notes | Note #22 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Feb. 17, 2015 | Feb. 17, 2015 |
Convertible note, maturity date | Feb. 28, 2018 | Feb. 28, 2018 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.15% | 0.15% |
Convertible note, monthly payment | $ 200 | $ 200 |
Convertible note, balance | $ 20,000 | $ 20,000 |
Convertible Notes | Note #21 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Oct. 31, 2014 | Oct. 31, 2014 |
Convertible note, maturity date | Oct. 31, 2017 | Oct. 31, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.15% | 0.15% |
Convertible note, monthly payment | $ 500 | $ 500 |
Convertible note, balance | $ 50,000 | $ 50,000 |
Convertible Notes | Note #20 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Aug. 25, 2014 | Aug. 25, 2014 |
Convertible note, maturity date | Jul. 31, 2017 | Jul. 31, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.15% | 0.15% |
Convertible note, monthly payment | $ 250 | $ 250 |
Convertible note, balance | $ 25,000 | $ 25,000 |
Convertible Notes | Note #19 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | Aug. 25, 2014 | Aug. 25, 2014 |
Convertible note, maturity date | Jul. 31, 2017 | Jul. 31, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.15% | 0.15% |
Convertible note, monthly payment | $ 500 | $ 500 |
Convertible note, balance | $ 50,000 | $ 50,000 |
Convertible Notes | Note #18 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | May 22, 2017 | May 22, 2017 |
Convertible note, maturity date | May 31, 2017 | May 31, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.15% | 0.15% |
Convertible note, monthly payment | $ 225 | $ 225 |
Convertible note, balance | $ 22,500 | $ 22,500 |
Convertible Notes | Note #17 | ||
Debt Instrument [Line Items] | ||
Convertible note, issuance date | May 22, 2014 | May 22, 2014 |
Convertible note, maturity date | May 31, 2017 | May 31, 2017 |
Convertible note, interest rate | 12.00% | 12.00% |
Convertible note, conversion rate | 0.15% | 0.15% |
Convertible note, monthly payment | $ 225 | $ 225 |
Convertible note, balance | $ 22,500 | $ 22,500 |
Convertible Notes - Schedule 37
Convertible Notes - Schedule of Long-Term Debt Maturities (Details) | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
Principal payments, 2017 | $ 2,230,000 |
Principal payments, 2018 | 120,000 |
Principal payments, 2019 | 25,000 |
Total principal payments | $ 2,375,000 |
Convertible Notes (Details Narr
Convertible Notes (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Amortization of debt discount | $ 495,361 | $ 613,121 | |||
Unamortized debt discount | (143,419) | (128,047) | |||
Convertible Notes | |||||
Additional paid in capital and discount | 282,470 | ||||
Amortization of debt discount | $ 15,156 | 89,706 | |||
Exercise price | $ 0.0058 | ||||
Unamortized debt discount | $ (8,937) | (31,000) | |||
Convertible notes payable | 2,375,000 | 2,455,000 | |||
Convertible Notes | Individually Issued | |||||
Convertible notes, sold | $ 300,000 | ||||
Convertible notes, payment terms | The note pays interest at a rate of 12% per annum, payable to the holder at 1% per month. The Company is making monthly payments of $5,000 towards the principal balance beginning June 1, 2014 until the note due date of February 27, 2018. | ||||
Convertible notes, price per share for conversion of shares of common stock | $ 0.15 | ||||
Convertible notes, interest rate | 12.00% | ||||
Maturity date | Feb. 27, 2017 | ||||
Common stock issued | 300,000 | ||||
Convertible notes payable | $ 145,000 | ||||
Convertible Notes | Series C Notes | |||||
Convertible notes, payment terms | Series C Notes bear interest at a rate of 12% per annum, payable to the holder at 1% per month, with principal amount due May 31, 2017. | ||||
Convertible notes, price per share for conversion of shares of common stock | $ 0.15 | ||||
Convertible notes, interest rate | 12.00% | ||||
Private placement, 12% convertible notes, principal amount | $ 20,000 | $ 95,000 | |||
Maturity date | May 31, 2017 | ||||
Common stock issued | 240,000 | ||||
Convertible Notes | Series B Notes | |||||
Convertible notes, payment terms | Series B Notes pay interest at a rate of 12% per annum, payable to the holder at 1% per month. | ||||
Convertible notes, price per share for conversion of shares of common stock | $ 0.10 | ||||
Convertible notes, interest rate | 12.00% | ||||
Private placement, 12% convertible notes, principal amount | $ 2,230,000 | ||||
Maturity date, description | The holders of $1,840,000 Series B Notes have agreed to extend the maturity date of the debt outstanding to July 1, 2017 from its original maturity date of December 31, 2015. The holders of $50,000 Series B Notes have agreed to extend the maturity date of the debt outstanding to September 1, 2017. The holder of $25,000 Series B Notes has agreed to extend the maturity date of the debt outstanding to September 1, 2019. | ||||
Maturity date | Jul. 1, 2017 | ||||
Common stock issued | 5,315,000 | ||||
Warrants issued, shares | 75,000 | [1],[2] | 1,840,000 | ||
Warrants issued, value per share | $ 0.07 | $ 0.07 | |||
Exercise price | $ 0.0058 | ||||
Unamortized debt discount | $ 285 | $ 10,672 | |||
[1] | The 25,000 warrants issued are valued at $0.00583 per issued share. | ||||
[2] | The 50,000 warrants issued are valued at $0.00278 per issued share. |
Royalty Financing (Details Narr
Royalty Financing (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Royalty Financing | |||
Royalty purchase agreement, amount | $ 2,000,000 | ||
Royalty purchase agreement | On October 31, 2014, the Company entered into a royalty purchase agreement with Grenville Strategic Royalty Corp. for the amount of $2,000,000. The agreement calls for a monthly payment to the seller based on a percentage of the total of certain revenue items and subject to a minimum payment amount until $8,000,000 has been paid. | ||
Royalty payments | $ 240,119 | $ 410,189 | |
Discounted amortization expense | 315,827 | 340,372 | |
Accrued royalties | 181,096 | ||
Royalty purchase agreement, balance | 2,007,424 | 1,935,101 | |
Royalty financing, unamortized discount | $ 5,302,853 | $ 5,618,680 |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset | $ 1,515,712 | $ 1,062,352 |
Less valuation allowance | (1,515,712) | (1,062,352) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Expected Provision (based on statutory rate) | $ (453,360) | $ (551,219) |
Increase to deferred tax valuation allowance for net operating loss carry forward | 453,360 | 551,219 |
Net provision | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Income Tax Disclosure [Abstract] | |
Operating loss carryforward | $ 1,839,366 |
Operating loss carryforward, expiration | Dec. 31, 2017 |
Income taxes at statutory tax rates | 34.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Common stock issued for services, value | $ 14,000 | $ 65,465 |
Major Shareholder | ||
Consulting services, description | January 2015, the Company entered into an agreement with a company that is owned and controlled by a major shareholder, to provide consulting services. Fees payable for performance of the consulting services are $10,000 per month. | |
Stock options, granted | 4,200,000 | |
Stock options, exercise price | $ 0.15 | |
Stock options, contractual term | 5 years | |
Common stock issued for services | 450,000 | |
Common stock issued for services, value | $ 20,250 | |
Balance for services rendered | $ 120,000 | $ 120,000 |
Common Stock Transactions (Deta
Common Stock Transactions (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Shares issued for services, value | $ 14,000 | $ 65,465 | ||
Bridge Convertible Promissory Notes | ||||
Shares issued, inducement | [1] | 200,000 | ||
Shares issued, inducement, value | [2] | $ 9,030 | ||
Convertible Notes | ||||
Exercise price | $ 0.0058 | |||
Convertible Notes | Series C Notes | ||||
Shares issued, convertible notes, shares | 20,000 | |||
Shares issued, convertible notes, value | $ 1,040 | |||
Convertible Notes | Series B Notes | ||||
Warrants issued, shares | 75,000 | [3],[4] | 1,840,000 | |
Warrants issued, value per share | $ 0.07 | $ 0.07 | ||
Exercise price | $ 0.0058 | |||
Common Stock | ||||
Shares issued for services, shares | 150,000 | 1,425,000 | ||
Shares issued for services, value | $ 150 | $ 1,425 | ||
Value of services provided | $ 14,000 | |||
Major Shareholder | ||||
Stock options, granted | 4,200,000 | |||
Stock options, exercise price | $ 0.15 | |||
Stock options, contractual term | 5 years | |||
Stock price at grant date | $ 0.0517 | |||
Expected volatility rate | 70.00% | |||
Expected term | 2 years 6 months | |||
Risk free interest rate | 0.03% | |||
Value of stock options at grant date | $ 34,683 | |||
Shares issued for services, shares | 450,000 | |||
Shares issued for services, value | $ 20,250 | |||
Chief Executive Officer | ||||
Stock options, granted | 4,200,000 | |||
Stock options, exercise price | $ 0.15 | |||
Stock options, contractual term | 5 years | |||
Stock price at grant date | $ 0.0517 | |||
Expected volatility rate | 70.00% | |||
Expected term | 2 years 6 months | |||
Risk free interest rate | 0.03% | |||
Value of stock options at grant date | $ 34,683 | |||
Chief Financial Officer | ||||
Stock options, granted | 1,600,000 | |||
Stock options, exercise price | $ 0.15 | |||
Stock options, contractual term | 5 years | |||
Stock price at grant date | $ 0.0517 | |||
Expected volatility rate | 70.00% | |||
Expected term | 2 years 6 months | |||
Risk free interest rate | 0.03% | |||
Value of stock options at grant date | $ 13,213 | |||
[1] | 30,000, 70,000 and 100,000 shares issued on June 16, 2016, March 22, 2016 and February 18, 2016 as part of a bridge convertible note to a private investor. | |||
[2] | Shares valued at $609, $1,421 and $7,000 as part of a bridge convertible note to a private investor. | |||
[3] | The 25,000 warrants issued are valued at $0.00583 per issued share. | |||
[4] | The 50,000 warrants issued are valued at $0.00278 per issued share. |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Total Comprehensive Income (Loss) | $ (1,333,411) | $ (1,621,233) |
Working capital deficit | $ 5,276,282 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Subsequent Event [Line Items] | |||
Shares issued for Services, value | $ 14,000 | $ 65,465 | |
Common Stock | |||
Subsequent Event [Line Items] | |||
Shares issued for Services, value | $ 150 | $ 1,425 | |
Shares issued for Services, shares | 150,000 | 1,425,000 | |
Subsequent Event | Common Stock | |||
Subsequent Event [Line Items] | |||
Shares issued for Services, value | $ 30,600 | ||
Shares issued for Services, shares | 765,000 |