Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2014 |
Accounting Policies [Abstract] | ' |
Use of Estimates, Policy [Policy Text Block] | ' |
Use of Estimates |
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In preparing these condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in the Company’s condensed consolidated financial statements relate to the valuation of long-lived assets, accrued other liabilities, and valuation assumptions related to share based payments and derivative liability. |
Liquidity Disclosure [Policy Text Block] | ' |
Going Concern |
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The accompanying condensed consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any revenues from operations to date, and does not expect to do so in the foreseeable future. The Company has incurred operating losses and negative operating cash flows since inception and has financed its working capital requirements through recurring sales of its convertible notes and equity securities. As reflected in the accompanying condensed consolidated financial statements, the Company had a net loss of $5,602,647 and negative cash flow from operations of $1,850,790 for the period ended June 30, 2014 and stockholders’ deficiency of $4,678,829 at June 30, 2014. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. As a result, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2013 financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. |
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Management is currently in the process of exploring equity placements of securities by the Company to accredited investors, funds and institutional investors. The Company received $1,906,500 through the sale of its 6% Secured Convertible Notes as of February 2014. Management believes that current funds will be sufficient to fund operations through August 2014. Significant additional capital will be needed to advance the Company’s research and development and clinical trials as well as providing general working capital. There can be no assurances that sufficient subsequent funding, if any at all, will be raised by this or future offerings or that the cost of such funding will be reasonable. |
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In light of the foregoing, management will continue to seek funding through short-term and long-term loans, grants and other such funds available from private and public sources established to further research in health care and advancement of science. Additionally, the Company has filed a registration statement on form S-1 for a possible sale of equity to generate sufficient funds to continue operations for the next 12 to 15 months. Management continues to meet with representatives of private and public sources of funding to continue the ongoing process of capital development sufficient enough to cover negative cash flows expected in future periods and will continue to do so in the coming months. |
Consolidation, Policy [Policy Text Block] | ' |
Principles of Consolidation |
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The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiary. Intercompany transactions and balances have been eliminated in consolidation. |
Research and Development Expense, Policy [Policy Text Block] | ' |
Accounting for Share based Research and Development Costs |
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Under its research and development (R&D) agreements, the Company is obligated to issue shares of common stock if milestones are met by the R&D vendor. It is the Company’s policy to recognize expense for these shares when it is estimated that there is a high probability of meeting the milestone. The Company accrues the share based expense based upon the estimated percentage of completion of the milestone. The shares are valued at the market price at the end of the period and revalued at each period until issued. At June 30, 2014, approximately 83,824 shares of common stock were expected to be issued pursuant to the agreement with a fair value of $155,074. Accordingly, a liability was recorded as part of “Research and development costs-payable in stock” in the accompanying balance sheet below long term liabilities as such liability is only payable in shares of common stock. |
Reclassification, Policy [Policy Text Block] | ' |
Reclassifications |
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The condensed consolidated financial statements include a reclassification of consulting fees in prior periods to properly compare to current period presentation. Such reclassification did not change the reported net loss during that period. |
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In presenting the Company’s statement of operations for the three and six month periods ended June 30, 2013, the Company reclassified consulting fees of $140,076 and $251,911, respectively, that were previously reflected as operating expenses to research and development expenses. |
Earnings Per Share, Policy [Policy Text Block] | ' |
Earnings and Loss per Share |
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The Company’s computation of earnings per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) available to common stockholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., warrants and options) as if they had been converted at the beginning of the periods presented, or issuance date, if later, determined using the treasury stock method. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. |
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Income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the respective periods. Basic and diluted (loss) per common share is the same for periods in which the Company reported an operating loss because all warrants and stock options outstanding are anti-dilutive. |
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A reconciliation of basic and diluted shares for the three months ended June 30, 2014 and 2013 follows: |
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| | June 30, | | | June 30, | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | |
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Average common shares outstanding-basic | | | 4,618,409 | | | | 4,003,358 | | | | | | | | | |
Effect of dilutive securities- | | | | | | | | | | | | | | | | |
Warrants | | | 516,797 | | | | -- | | | | | | | | | |
Employee and director stock options | | | 21,750 | | | | -- | | | | | | | | | |
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Average diluted shares | | | 5,156,956 | | | | 4,003,358 | | | | | | | | | |
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There were no adjustments to net loss required for purposes of computing diluted earnings per share. |
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Warrants, options and other potentially dilutive securities that are antidilutive have been excluded from the dilutive calculations when their exercise or conversion price exceeds the average stock market price during the period or the effect would be anti-dilutive when applied to a net loss during the period(s) presented. The following tables set forth the shares excluded from the diluted calculation for the periods presented as follows: |
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| | Three months ended | | | Three months ended | | | | | | | | | |
| | June 30, | | | June 30, | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | |
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Senior secured Convertible notes | | | 1,236,212 | | | | 550,977 | | | | | | | | | |
Warrants | | | 711,467 | | | | 835,544 | | | | | | | | | |
Employee and director stock options | | | 527,200 | | | | 520,950 | | | | | | | | | |
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Total potentially dilutive shares | | | 2,474,879 | | | | 1,907,471 | | | | | | | | | |
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| | Six months ended | | | Six months ended | | | | | | | | | |
June 30, | June 30, | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | |
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Senior secured Convertible notes | | | 1,236,212 | | | | 550,977 | | | | | | | | | |
Warrants | | | 1,228,264 | | | | 835,544 | | | | | | | | | |
Employee and director stock options | | | 548,950 | | | | 520,950 | | | | | | | | | |
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Total potentially dilutive shares | | | 3,013,426 | | | | 1,907,471 | | | | | | | | | |
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Such securities could potentially dilute earnings per share in the future |
Derivatives, Policy [Policy Text Block] | ' |
Derivative FinancialInstruments |
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The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a probability based weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
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The Company has derivative liabilities relating to conversion price adjustments on convertible notes and warrants issued in February 2014. Accordingly, the Company has calculated the value of the derivative liabilities as of the date of issuance of the notes and warrants and has revalued them as of the period ending June 30, 2014. |
Fair Value Measurement, Policy [Policy Text Block] | ' |
Fair Value of Financial Instruments |
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Effective January 1, 2008, fair value measurements are determined by the Company’s adoption of authoritative guidance issued by the Financial Accounting Standards Board (FASB), with the exception of the application of the statement to non-recurring, non-financial assets and liabilities as permitted. The adoption of the authoritative guidance did not have a material impact on the Company’s fair value measurements. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: |
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Level 1—Quoted prices in active markets for identical assets or liabilities. |
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Level 2—Inputs, other than the quoted prices in active markets, are observable either directly or indirectly. |
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Level 3—Unobservable inputs based on the Company’s assumptions. |
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The Company is required to use observable market data if such data is available without undue cost and effort. |
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The following table presents certain liabilities of the Company measured and recorded at fair value on the Company’s condensed consolidated balance sheets on a recurring basis and their level within the fair value hierarchy as of June 30, 2014. |
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| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Fair Value of Derivative Liability | | $ | -- | | | $ | 2,348,484 | | | $ | -- | | | $ | 2,348,484 | |
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There was no corresponding derivative liability as of December 31, 2013. |
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At June 30, 2014 and December 31, 2013, the fair values of cash and cash equivalents, and accounts payable approximate their carrying values. |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recently Issued Accounting Standards |
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As discussed in Note 1, on June 10, 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. ASU 2014-10 eliminates the requirement to present inception-to-date information about income statement line items, cash flows, and equity transactions, and clarifies how entities should disclose the risks and uncertainties related to their activities. ASU 2014-10 also eliminates an exception provided to development stage entities in Consolidations (ASC Topic 810) for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The presentation and disclosure requirements in Topic 915 are no longer required for interim and annual reporting periods beginning after December 15, 2014. The revised consolidation standards will take effect in annual periods beginning after December 15, 2015, however, early adoption is permitted. The Company adopted the provisions of ASU 2014-10 for this quarterly report on Form 10-Q for the period ended June 30, 2014 |
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In April 2014, the FASB issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360)." ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014. The Company is currently evaluating the impact of adopting ASU 2014-08 on the Company's results of operations or financial condition. |
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On May 28, 2014, the FASB issued ASU 2014-09 , “Revenue from Contracts with Customers”. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management has not yet determined the effect of adopting ASU 2014-09 on our ongoing financial reporting. |
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Other recent accounting pronouncements did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. |