Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 08, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'COPsync, Inc. | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 175,014,501 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001383154 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $166,546 | $174,444 |
Accounts receivable, net of allowance of $0 at September 30, 2013 and December 31, 2012 | 167,669 | 110,069 |
Inventories | 380,528 | 337,420 |
Prepaid expenses and other current assets | 28,877 | 48,836 |
Total Current Assets | 743,620 | 670,769 |
PROPERTY AND EQUIPMENT | ' | ' |
Computer hardware | 64,796 | 64,796 |
Computer software | 20,713 | 20,713 |
Fleet vehicles | 136,975 | 168,663 |
Furniture and fixtures | 7,872 | 7,872 |
Total Property and Equipment | 230,356 | 262,044 |
Less: Accumulated Depreciation | -103,842 | -102,702 |
Net Property and Equipment | 126,514 | 159,342 |
OTHER ASSETS | ' | ' |
Software development costs, net | 545,589 | 872,936 |
Total Other Assets | 545,589 | 872,936 |
TOTAL ASSETS | 1,415,723 | 1,703,047 |
CURRENT LIABILITIES | ' | ' |
Accounts payable and accrued expenses | 1,364,313 | 1,227,839 |
Deferred revenues | 1,855,796 | 1,213,911 |
Convertible notes payable, current portion | 514,163 | 0 |
Notes payable, current portion | 120,312 | 180,305 |
Total Current Liabilities | 3,854,584 | 2,622,055 |
LONG-TERM LIABILITIES | ' | ' |
Deferred revenues | 1,408,658 | 622,737 |
Convertible notes payable | 40,000 | 372,731 |
Notes payable, non-current portion | 62,858 | 69,263 |
Total Long-Term Liabilities | 1,511,516 | 1,064,731 |
Total Liabilities | 5,366,100 | 3,686,786 |
COMMITMENTS AND CONTINGENCIES | ' | ' |
STOCKHOLDERS' DEFICIT | ' | ' |
Common stock, par value $0.0001 per share, 500,000,000 shares authorized; 175,014,501 and 171,284,201 issued and outstanding, respectively | 17,433 | 17,129 |
Common stock to be issued, 15,000 and 70,000 shares, respectively | 1,500 | 7,000 |
Additional paid-in-capital | 13,652,850 | 12,765,749 |
Accumulated deficit | -17,622,207 | -14,773,664 |
Total Stockholders' Deficit | -3,950,377 | -1,983,739 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 1,415,723 | 1,703,047 |
Series A Preferred Stock [Member] | ' | ' |
STOCKHOLDERS' DEFICIT | ' | ' |
Preferred stock, value issued | 10 | 10 |
Series B Preferred Stock [Member] | ' | ' |
STOCKHOLDERS' DEFICIT | ' | ' |
Preferred stock, value issued | $37 | $37 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Accounts receivable allowance (in Dollars) | $0 | $0 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in Shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in Shares) | 175,014,501 | 171,284,201 |
Common stock, shares outstanding (in Shares) | 175,014,501 | 171,284,201 |
Common stock to be issued (in Shares) | 15,000 | 70,000 |
Series A Preferred Stock [Member] | ' | ' |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in Shares) | 100,000 | 100,000 |
Preferred stock, shares issued (in Shares) | 100,000 | 100,000 |
Preferred stock, shares outstanding (in Shares) | 100,000 | 100,000 |
Series B Preferred Stock [Member] | ' | ' |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in Shares) | 375,000 | 375,000 |
Preferred stock, shares issued (in Shares) | 375,000 | 375,000 |
Preferred stock, shares outstanding (in Shares) | 375,000 | 375,000 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
REVENUES | ' | ' | ' | ' |
Hardware, installation and other revenues | $724,728 | $268,005 | $1,931,748 | $1,017,112 |
Software license/subscription revenues | 487,413 | 373,172 | 1,301,369 | 1,074,640 |
Total Revenues | 1,212,141 | 641,177 | 3,233,117 | 2,091,752 |
COST OF REVENUES | ' | ' | ' | ' |
Hardware and other costs | 655,491 | 234,647 | 1,572,427 | 983,328 |
Software license/subscriptions | 307,383 | 152,657 | 762,058 | 531,902 |
Total Cost of Revenues | 962,874 | 387,304 | 2,334,485 | 1,515,230 |
GROSS PROFIT | 249,267 | 253,873 | 898,632 | 576,522 |
OPERATING EXPENSES | ' | ' | ' | ' |
Research and development | 515,533 | 656,337 | 1,544,682 | 1,603,280 |
Sales and marketing | 303,191 | 330,337 | 901,471 | 1,076,017 |
General and administrative | 308,069 | 407,486 | 1,033,832 | 1,027,787 |
Total Operating Expenses | 1,126,793 | 1,394,160 | 3,479,985 | 3,707,084 |
LOSS FROM OPERATIONS | -877,526 | -1,140,287 | -2,581,353 | -3,130,562 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Interest income | 0 | 8 | 6 | 22 |
Interest expense | -5,244 | -6,579 | -14,825 | -19,970 |
Gain/(Loss) on asset disposals | 0 | -5,024 | 1,791 | -3,234 |
Total Other Income (Expense) | -5,244 | -11,595 | -13,028 | -23,182 |
NET LOSS BEFORE INCOME TAXES | -882,770 | -1,151,882 | -2,594,381 | -3,153,744 |
INCOME TAXES | 0 | 0 | 0 | 0 |
NET LOSS | -882,770 | -1,151,882 | -2,594,381 | -3,153,744 |
Series B preferred stock dividend | -26,466 | -20,128 | -78,822 | -60,026 |
Accretion of beneficial conversion feature on preferred shares dividends issued in kind | 0 | -6,338 | 0 | -18,796 |
Cost of Series B warrants extension | -177,000 | 0 | -177,000 | 0 |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | ($1,086,236) | ($1,178,348) | ($2,850,203) | ($3,232,566) |
LOSS PER COMMON SHARE - BASIC & DILUTED (in Dollars per share) | ($0.01) | ($0.01) | ($0.02) | ($0.02) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED (in Shares) | 174,772,596 | 160,567,933 | 173,390,024 | 153,787,329 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net loss | ($2,594,381) | ($3,153,744) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 353,635 | 355,123 |
Employee and non-employee stock compensation | 154,591 | 125,011 |
Common stock issued for services rendered | 0 | 2,489 |
Amortization of restricted stock grants | 45,000 | 45,000 |
Capital contributed/co-founders' forfeiture of contractual compensation | 59,250 | 59,250 |
Stock issued for cash received in prior year | 0 | 15,000 |
Gain on asset disposals | -1,791 | 3,234 |
Change in operating assets and liabilities: | ' | ' |
Accounts receivable | -55,200 | -102,164 |
Inventories | -43,108 | -7,367 |
Prepaid expenses and other current assets | 19,959 | 34,477 |
Deferred revenues | 1,427,806 | -140,223 |
Accounts payable and accrued expenses | 138,379 | 305,173 |
Net Cash Used in Operating Activities | -495,860 | -2,458,741 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Proceeds from asset disposals | 105,400 | 0 |
Purchases of property and equipment | -99,470 | -10,171 |
Net Cash Provided by Investing Activities | 5,930 | -10,171 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from notes payable | 163,075 | 66,341 |
Payments on notes payable | -229,473 | -92,750 |
Proceeds from convertible notes | 200,000 | 0 |
Proceeds from common stock to be issued | 1,500 | 212,685 |
Proceeds from issuance of common stock for cash | 346,930 | 1,573,000 |
Net Cash Provided by Financing Activities | 482,032 | 1,759,276 |
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | -7,898 | -709,636 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 174,444 | 1,074,317 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 166,546 | 364,681 |
SUPPLEMENTAL DISCLOSURES: | ' | ' |
Cash paid for interest | 10,971 | 26,039 |
Cash paid for income tax | 5,765 | 5,945 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Purchased a fleet vehicle involving a trade-in and collaterial swap on existing notes payable | 0 | 92,337 |
Conversion of convertible notes, plus accrued interest into 191,000 and 401,134 shares of common stock, respectively | 19,100 | 40,113 |
Series B Preferred stock dividends | 78,822 | 60,026 |
Cost of Series B warrants extension | 177,000 | 0 |
Issuance of common stock for prior year stock subscriptions | 7,000 | 0 |
Common stock issued for services rendered by their party service provider | 0 | 2,489 |
Accretion of beneficial conversion feature on preferred shares dividends issued in kind | $0 | $18,796 |
Condensed_Statements_of_Cash_F1
Condensed Statements of Cash Flows (Unaudited) (Parentheticals) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Conversion of convertible notes, shares (in Shares) | 191,000 | 401,134 |
NOTE_1_BASIS_OF_FINANCIAL_STAT
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION | 9 Months Ended |
Sep. 30, 2013 | |
Disclosure Text Block [Abstract] | ' |
Business Description and Basis of Presentation [Text Block] | ' |
NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION | |
These interim condensed financial statements of COPsync, Inc. ("COPsync," the "Company," "we," "our," "us") are unaudited but reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly the financial position of the Company as of September 30, 2013, and its results of operations and cash flows for the three month and nine month periods ended September 30, 2013. Certain information and footnote disclosures normally included in the audited financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Because all the disclosures required by accounting principles generally accepted in the United States are not included, these interim condensed financial statements should be read in conjunction with the audited financial statements and notes thereto in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2012. The results for the three month and nine month periods ended September 30, 2013 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2013, or any other period. The year-end condensed balance sheet data as of December 31, 2012, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. | |
NOTE_2_NATURE_OF_ORGANIZATION_
NOTE 2 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS | 9 Months Ended | |
Sep. 30, 2013 | ||
Disclosure Text Block [Abstract] | ' | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' | |
NOTE 2 – NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS | ||
The Company sells the COPsync service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies. The COPsync service enables patrol officers to collect, report and share critical data in real-time at the point of incident and obtain instant access to various local, state and federal law enforcement databases. The COPsync service also eliminates manual processes and increases officer productivity by enabling officers to electronically write tickets, process DUI and other arrests and document accidents and other incidents. The Company believes that the service saves lives, reduces unsolved crimes and assists in apprehending criminals through such features as a nationwide officer safety alert system, GPS/auto vehicle location and distance-based alerts for crimes in progress, such as child abductions, bank robberies and police pursuits. The Company has designed its system to be “vendor neutral,” meaning it can be used with products and services offered by other law enforcement technology vendors. Additionally, the Company’s system architecture is designed to scale nationwide. | ||
The Company also sells VidTac, an in-vehicle video camera system for law enforcement. The VidTac system is a software-driven video system for law enforcement. Traditional in-vehicle video systems are typically “hardware centric” DVR-based systems. The capture, compression and encryption of the video stream for these systems typically is performed by the DVR. The price of these high-end, digital DVR-based systems range from an estimated $5,100 to $11,000 per system. These DVR-based systems are typically replaced, at the same expensive price point, every three to four years as new patrol vehicles are placed into service. | ||
The Company’s VidTac system is price advantageous vis-a-vis other high-end video systems. The Company is offering its system for sale at a much lower price than the average price of DVR-based video systems. Furthermore, for those agencies that already have in-vehicle computers, the VidTac system eliminates the need to purchase a second computer, i.e., the DVR, and eliminates the need to replace this second (DVR) computer every three to four years. The Company believes that the VidTac system will accelerate the Company’s revenue growth and help it achieve profitability. | ||
At September 30, 2013, the Company had cash and cash equivalents of $166,546, a working capital deficit of $3,110,964 and an accumulated deficit of $17,622,207. The Company has taken the following steps to manage its liquidity, to avoid default on any third-party obligations and to continue growing its business towards cash-flow break-even and profitability: | ||
1) The Company increased the volume of its new orders. For the nine month period ended September 30, 2013, the Company signed service agreements representing approximately $4,454,000 in new orders, compared to approximately $1,754,000 in new orders for the comparable period in fiscal 2012, an increase of 154%. | ||
2) The accelerated pace of new service agreements through the first half of 2013 softened in June, July and August, but recovered in September and October. New orders from service agreements signed in September and October were $464,000 and $700,000, respectively. The Company believes the increased pace of new service agreements will continue through the remainder of 2013 because of added headcount to the Company’s sales organization, changes made to increase the effectiveness of the Company’s sales organization and the Company’s April 2013 release of a new product release, COPsync911, a real-time threat alert service. | ||
3) The COPsync911 real-time threat alert service, which the Company believes is the only service of its kind in the United States enables a person (such as a schoolteacher in a school) to instantaneously and silently send emergency alerts directly to local law enforcement officers in their patrol units and the local emergency dispatch center with just the click of a computer mouse. The Company expects the COPsync911 service to reduce school emergency response times by five to seven minutes, since the communication directly to the patrol car is instantaneous. The service also enables the patrol officer to communicate in real-time with the person(s) sending the alert. The alert is also sent to the cell phones of others (such as teachers and administrators at the school), alerting them of imminent danger. The Company is currently offering the COPsync911 service in the State of Texas, and began offering it in other selected regions of the United States in the third quarter of this year. | ||
4) As of October 31, 2013, the Company had booked sales of approximately $266,000 for the COPsync911 service, after less than 180 days of sales activity. The Company expects the pace of COPsync911 sales to accelerate as its sales team becomes familiar with the service and the strategies for selling it and as newly engaged resellers begin to sell the service. The Company expects COPsync911 sales from its direct and channel sales efforts to range between $1.2 million and $2.0 million for the ensuing twelve months. | ||
5) The Company expects to realize gross cash receipts of $1.8 million within the next three to four months from contracts including COPsync911 contracts currently “in hand”, but not yet performed. | ||
6) The Company’s procurement processes for third party hardware employs “just in time” principles, meaning the Company attempts to schedule delivery to the customer of the third party hardware it sells immediately after it receives the hardware. The Company also continues its attempts to collect customer prepayments for the third party hardware it sells at or about the time the Company orders the hardware. This change in the processing of third party hardware has helped the Company significantly in managing its working capital. | ||
7) The Company’s key vendors continue to be cooperative regarding extended payment terms for the Company’s outstanding payables balances. | ||
8) The Company is currently pursuing an initiative to raise up to $1,500,000 in new capital. Thus far in 2013, the Company raised $348,000 pursuant to that initiative. | ||
9) Additionally, the Company believes it has the capability to reduce operating expenses, should circumstances warrant. | ||
The Company can give no assurances that these steps will generate sufficient cash flow from operations or that the Company will be able to obtain sufficient financing necessary to support the Company’s working capital requirements. The Company can also give no assurance that additional capital financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not be able to continue its operations or execute its business plan. | ||
NOTE_3_SUMMARY_OF_SIGNIFICANT_
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICES | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICES | |
a. Basis of Presentation | |
The accompanying condensed financial statements include the accounts of the Company, are prepared in accordance with accounting principles generally accepted in the United States and are prepared on the accrual method of accounting. | |
b. Reclassifications | |
Certain prior year items have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s financial statements. | |
c. Concentrations of Credit Risk | |
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. The Company deposits cash and cash equivalents in demand and money market accounts in two financial institutions in the United States. Accounts at financial institutions in the United States are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. At times, the Company’s deposits or investments in financial institutions may exceed these federally insured limits. At September 30, 2013, the Company had approximately $1,000 in excess of FDIC insured limits at the two financial institutions. The Company has not experienced any losses in such accounts. | |
To date, the Company’s accounts receivable have been derived principally from revenue earned from end users of its products, which are local and state governmental agencies. The Company performs periodic credit evaluations of its customers and does not require collateral. | |
Accounts receivable are recorded net of the allowance for doubtful accounts. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information and existing economic conditions. The Company writes off delinquent receivables based on individual credit evaluation and the specific circumstances of the customer. The Company had not recorded an allowance for doubtful accounts at September 30, 2013 or December 31, 2012. | |
d. Use of Estimates | |
The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States requires the Company’s management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. The Company’s significant estimates include primarily those required in the valuation or impairment analysis of capitalization of labor under software development costs, property and equipment, revenue recognition, allowances for doubtful accounts, stock-based compensation, warrants, litigation accruals and valuation allowances for deferred tax assets. Although the Company believes that adequate accruals have been made for unsettled issues, additional gains or losses could occur in future years from resolutions of outstanding matters. Actual results could differ materially from original estimates. | |
e. Inventory | |
Inventory is stated at the lower of cost (determined using the first-in, first-out method) or market value. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolescence or impaired balances. | |
f. Software Development Costs | |
Certain software development costs incurred subsequent to the establishment of technological feasibility may be capitalized and amortized over the estimated lives of the related products. | |
Through the middle of 2010, the Company capitalized certain software development costs related to its COPsync service. The Company determined technological feasibility to be established upon completion of (1) product design, (2) detail program design, (3) consistency between product and program design and (4) review of detail program design to ensure that high risk development issues had been resolved. Upon the general release of the COPsync service offering to customers, development costs for that product were amortized over fifteen years based on management’s then estimated economic life of the product. See Note 4 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2012 for a discussion involving impairments of software development costs recorded by the Company in the years ended December 31, 2011 and December 31, 2010, and the respective financial impact therein. | |
The Company has not capitalized any of the software development costs associated with its most recently introduced product offerings, VidTac and COPsync911, because the time period between achieving technological feasibility and product release for these product offerings was very short. Consequently, the incurred development costs have been recorded as research and development costs in the statement of operations. | |
g. Revenue Recognition | |
The Company’s primary business is to sell subscriptions to the COPsync service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies. The agencies subscribe to that service for a specified period of time (usually for twelve to forty-eight months), for a specified number of officers per agency, and at a fixed subscription fee per officer. | |
The Company also sells computers and computer-related hardware (“hardware”) used to provide the Company’s in-car service should the customer not already own the necessary hardware, and hardware installation services, agency and officer set-up and training services and, from time-to-time, software integration services for enhanced service offerings. | |
The Company’s most common sales are: | |
(1) for new customers – a multiple-element arrangement involving (a) the subscription fee, (b) integration of the COPsync software and a hardware appliance (in which the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training and (c) if applicable, software integration services for enhanced service offerings; and | |
(2) for existing customers – the subscription fees for the annual renewal of an agency’s COPsync subscription service, upon the completion of the agency’s initial subscription period. | |
The Company recognizes revenue when all of the following have occurred: (1) the Company has entered into a legally binding arrangement with a customer resulting in the existence of persuasive evidence of an arrangement; (2) delivery has occurred, as evidenced by transfer of title to the customer; (3) customer payment is deemed fixed or determinable and free of contingencies and significant uncertainties; and (4) collection is probable. | |
The sales of the hardware and related services for hardware installation and agency and officer set-up and training are reported as “Hardware, installation and other revenues” in the Company’s Statement of Operations. The sale of the Company’s new VidTac product offering is considered a hardware sale and is reported in this revenue classification. Shipping charges are billed to customers and are included in operating expenses as an offset to the related shipping costs. | |
The subscription fees and software integration services are reported as “software license/subscriptions revenues” in the Company’s Statement of Operations. The subscription fees include termed licenses for the contracted officers to have access to the service and the right to receive telephonic customer and technical support, as well as software updates, during the subscription period. Support for the hardware is normally provided by the hardware manufacturer. | |
The receipt and acceptance of an executed customer’s service agreement, which outlines all of the particulars of the sale event, is the primary method of determining that persuasive evidence of an arrangement exists. | |
Delivery generally occurs for the different elements of revenue as follows: | |
(1) For multiple-element arrangements involving new customers – contractually, the lesser period of time of sixty days from contract date or the date officer training services are completed. The Company generally requests the customer to complete a written customer acceptance at the time training is completed, which overrides the contracted criteria. | |
(2) The subscription fee – the date the officer training is completed and written customer acceptance is received. | |
(3) Software integration services for enhanced service offerings – upon the Company’s completion of the integration efforts and verification that the enhanced service offering is available for use by the customer. | |
Fees are typically considered to be fixed or determinable at the inception of an arrangement, generally based on specific services and products to be delivered pursuant to the executed service agreement. Substantially all of the Company’s service agreements do not include rights of return or acceptance provisions. To the extent that agreements contain such terms, the Company recognizes revenue once the acceptance provisions or right of return lapses. Payment terms offered to customers generally range from net “upon receipt of invoice” to “net 30 days from invoice date.” | |
The Company assesses the ability to collect from its customers based on a number of factors, including credit worthiness of the customer and past transaction history of the customer. If the customer is not deemed credit worthy, the Company defers all revenue from the arrangement until payment is received and all other revenue recognition criteria have been met. | |
As indicated above, some customer orders contain multiple elements. The Company allocates revenue to each element in an arrangement based on relative selling price. The selling price for a deliverable is based on its vendor specific objective evidence (“VSOE”), if available, third party evidence ("TPE"), if VSOE is not available, or the Company’s best estimate of selling price ("ESP"), if neither VSOE nor TPE is available. The maximum revenue recognized on a delivered element is limited to the amount that is not contingent upon the delivery of additional items. Additionally, many of the Company’s service agreements executed in fiscal 2012 and 2011 contained grants (or discounts) provided to the contracting customer. These grants or discounts have been allocated across all of the different elements based upon the respective, relative selling price. | |
The Company determines VSOE for subscription fees for the initial contract period based on the rate charged to customers for a stand-alone sale price for the subscription service. VSOE for renewal pricing is based upon the stated rate for the renewed subscription service, which is stated in the applicable service agreement or contract. The renewal rate is generally equal to the stated rate in the original contract. The Company has a history of such renewals, the vast majority of which are at the stated renewal rate, on a customer by customer basis. Subscription fee revenue is recognized ratably over the life of the service agreement. | |
The Company’s hardware products include the related services for hardware installation and customer and officer set-up and training, as well as integration services for enhanced service offerings that are sold separately. The Company has VSOE for these products, including all such services. | |
For almost all of the Company’s new service agreements, as well as renewal agreements, billing and payment terms are agreed to upfront or in advance of performance milestones. These payments are initially recorded as deferred revenue and subsequently recognized as revenue as follows: | |
(1) Integration of the COPsync software and a hardware appliance (in which the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and customer and officer set-up and training – immediately upon delivery. | |
(2) The subscription fee – ratably over the contracted subscription period commencing on the delivery date. | |
(3) Software integration services for enhanced service offerings – immediately upon the Company’s completion of the integration and verification that the enhanced service is available for the customer’s use. | |
(4) Renewals – ratably over the renewed subscription or service period, commencing on the completion of the previous subscription or service period. | |
h. Share-based Compensation | |
The Company accounts for all share-based payment transactions using a fair-value based measurement method. The Company calculates stock option-based compensation by estimating the fair value of each option as of its date of grant using the Black-Scholes option pricing model. These amounts are expensed over the respective vesting periods of each award using the straight-line attribution method. The Company has historically issued stock options and vested and non-vested stock grants to employees and, beginning in 2011, to outside directors whose only condition for vesting has been continued employment or service during the related vesting or restriction period. | |
NOTE_4_RECENT_ACCOUNTING_STAND
NOTE 4 - RECENT ACCOUNTING STANDARDS AND PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2013 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | ' |
NOTE 4 – RECENT ACCOUNTING STANDARDS AND PRONOUNCEMENTS | |
The Company has implemented all new accounting pronouncements that are in effect and that may impact our unaudited consolidated financial statements. The Company does not believe that there are any new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. | |
NOTE_5_INVENTORY
NOTE 5 - INVENTORY | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory Disclosure [Text Block] | ' | ||||||||
NOTE 5 – INVENTORY | |||||||||
Inventory consisted of the following at September 30, 2013, and December 31, 2012, respectively: | |||||||||
Category | September 30, | December 31, | |||||||
2013 | 2012 | ||||||||
Raw materials | $ | 81,295 | $ | 168,511 | |||||
Work-in-process | - | - | |||||||
Finished goods | 299,233 | 168,909 | |||||||
Total Inventory | $ | 380,528 | $ | 337,420 | |||||
During the nine months period ended September 30, 2013, the Company’s total inventories increased by $43,108. The increase was due principally to the procurement and delivery of third-party hardware to be installed in the fourth quarter of 2013. Also, included in inventories at September 30, 2013 was $99,000 in VidTac systems and components. | |||||||||
In 2012, the Company selected and entered into a manufacturing agreement with a contract manufacturer to build its VidTac in-vehicle law enforcement video system, at a contracted price, to the Company’s specifications. This increased the Company’s inventory investment significantly. See Note 3 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2012 for a discussion of the Company’s inventory investment recorded in the years ended December 31, 2012 and December 31, 2011. | |||||||||
The manufacturing agreement calls for the Company to periodically place purchase orders for its VidTac systems. In 2012, the Company placed a purchase order for 500 systems. As of September 30, 2013, the Company had taken delivery of almost all of those units. | |||||||||
The Company’s purchase orders placed with the contract manufacturer are non-cancellable. However, the Company is permitted to change the original requested delivery dates if the Company gives sufficient advance notice to the contract manufacturer. Should the Company elect to cancel a purchase order in total or in part, generally it is financially responsible only for materials that the contract manufacturer cannot return to its source suppliers. | |||||||||
In December 2012, the Company placed another purchase order with the contract manufacturer for finished units aggregating $1,400,000, with stated delivery dates for products to be delivered ratably and throughout the twelve month period ending December 31, 2013 (See Note 14). However, the contract manufacturer is not currently offering the Company any credit line and the Company is operating on a “pay as you go” basis with the manufacturer. Therefore, the timing of equipment deliveries under this purchase order is not defined at this time. As of November 7, 2013, the Company has an account balance with the contract manufacturer of approximately $38,000. | |||||||||
Raw materials inventory represents certain completed, top-level component assemblies not yet incorporated into finished units located at the facility of the Company’s contract manufacturer. In conjunction with the Company delaying the initial release date of the product from the original estimated September 2012 date, the Company agreed that the contract manufacturer could invoice the Company for the raw materials inventory on hand with the contract manufacturer. This resulted in the relatively high level of raw materials inventory as of December 31, 2012. As these sub-assemblies are incorporated into finished units, the contract manufacturer invoices the Company for the finished units, with a credit for the previously invoiced raw materials. During the nine months period ended September 30, 2013, most of the originally-procured raw materials inventory was converted into finished goods inventory. | |||||||||
During the nine months period ended September 30, 2013, the Company procured selected components to serve as replacement or spares parts inventory, as well as for the upgrade or retrofit of previously delivered components. The costs of these components are reported as raw materials inventory. | |||||||||
The Company’s inventories are reported at the lower of cost or market value. | |||||||||
NOTE_6_NOTES_PAYABLE
NOTE 6 - NOTES PAYABLE | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt Disclosure [Text Block] | ' | ||||||||
NOTE 6 – NOTES PAYABLE | |||||||||
The Company’s total notes payable at September 30, 2013 was $183,170 representing a net decrease of $66,398 for the nine months ended September 30, 2013. The following table shows the components of notes payable at September 30, 2013 and December 31, 2012: | |||||||||
September 30, | December 31, | ||||||||
Loan Type | 2013 | 2012 | |||||||
Bank | $ | 77,437 | $ | 98,148 | |||||
Insurance | 5,733 | 31,420 | |||||||
Promissory notes payable | 100,000 | 120,000 | |||||||
Total notes payable | 183,170 | 249,568 | |||||||
Less: Current portion | (120,312 | ) | (180,305 | ) | |||||
Long-term portion | $ | 62,858 | $ | 69,263 | |||||
In December 2012, the Company’s chief executive officer loaned the Company $120,000, which was evidenced by a demand promissory note, bearing 3% interest. The principal amount of the note was repaid in the first quarter of 2013 with the proceeds from another loan from the chief executive officer, which was evidenced by a convertible promissory note, also bearing 3% interest, due on March 31, 2014. | |||||||||
During the nine months period ended September 30, 2013, the Company made total payments of $229,473 on its notes payable, consisting of total monthly payments of $40,179 on existing notes payable involving the short-term financing of the Company’s business insurance policies and automobile loans, repayment of the $120,000 demand note referred to above, and $69,294 involving the payoff of automobile loans in connection with the Company’s efforts to replace the vehicles used by its sales force with more fuel efficient vehicles. Accordingly, the Company sold four vehicles, which were being financed with bank notes. A portion of the proceeds of the sales were used to pay-off the balances of the related bank notes totaling $69,294, and the balance of the proceeds were used to purchase new vehicles. Additionally, the Company financed the remaining acquisition costs of the new automobiles by executing a new bank note for $51,880, with terms of ratable, monthly payments, a five year life and a 6.5% annual interest rate. Also during the third quarter of 2013, the Company financed the acquisition of a single vehicle by executing a new bank note for $11,195, with terms of ratable, monthly payments, a five year life and a 6.5% annual interest rate. With the sale of the previously owned vehicles and the purchase of the new vehicles, the Company’s outside sales force is now driving more fuel efficient vehicles, resulting in cost savings to the Company. | |||||||||
Additionally, two individuals loaned the Company $50,000 each to procure third-party hardware for a specific, new contract. Both of the notes are short-term in nature and have an interest rate of 10%. Interest is to be paid at the time the principal amount is repaid to the note holder. One of two notes requires repayment following the Company’s receipt of payment from its customer. The other note calls for basically the same repayment schedule, except that the Company must make monthly principal payments beginning in the fourth quarter of 2013 and continuing until the balance is repaid by the Company. | |||||||||
NOTE_7_CONVERTIBLE_NOTES_PAYAB
NOTE 7 - CONVERTIBLE NOTES PAYABLE | 9 Months Ended | |
Sep. 30, 2013 | ||
Convertible Note Payable [Abstract] | ' | |
Convertible Note Payable [Text Block] | ' | |
NOTE 7 – CONVERTIBLE NOTES PAYABLE | ||
During the nine months ended September 30, 2013, the following occurred: | ||
· | The holder of one convertible note elected to convert the note into shares of the Company’s common stock. The total amount of the converted note on the date of conversion was $19,100 in principal. The Company issued a total of 191,000 shares of its common stock at the conversion price of $0.10 per share as stated in the note. | |
· | The Company issued a $120,532 convertible note to its chief executive officer following the receipt of $120,000 in cash, which the Company used for the repayment of the principal amount of a $120,000 demand note, representing a loan made to the Company by its chief executive officer in December 2012. The demand note had accrued $532 of interest, which was included in the principal amount of the convertible note. The convertible note bears 3% interest per annum and is due on March 31, 2014. The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. | |
· | During the second quarter of 2013, the Company issued two convertible notes to individual investors in exchange for an aggregate investment of $40,000. The convertible notes bear 3% interest per annum with one $20,000 convertible note due on May 6, 2015 and the other $20,000 note due on June 16, 2016. The convertible notes may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. | |
During the third quarter of 2013, the Company issued a $40,000 convertible note to its chief executive officer following the receipt of $40,000 in cash. The convertible note bears 3% interest per annum and is due in the first quarter of 2014. The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. | ||
In the first and second quarters of 2014, $482,517 and $31,646, respectively, of the Company’s convertible promissory notes are scheduled to mature. The Company believes that most of the holders of these notes will either elect to convert the notes into shares of the Company’s common stock prior to maturity or agree to extend the maturity dates of the notes. | ||
NOTE_8_PREFERRED_STOCK
NOTE 8 - PREFERRED STOCK | 9 Months Ended |
Sep. 30, 2013 | |
Disclosure Text Block Supplement [Abstract] | ' |
Preferred Stock [Text Block] | ' |
NOTE 8 – PREFERRED STOCK | |
Series A Preferred Stock | |
The Company issued a total of 100,000 shares of its Series A Preferred Stock in April 2008 as partial consideration for its acquisition of a 100% ownership interest in PostInk Technology, LP (“PostInk”). Each share of Series A Preferred Stock is convertible into one share of the Company’s common stock, but votes with the common stock on a basis of 750 votes per share. These shares are held by the former general partner of PostInk, which is owned by the co-founders of the Company. | |
Series B Preferred Stock | |
During 2009 and the first quarter of 2010, the Company issued a total of 375,000 shares of its Series B Preferred Stock in a private placement in which the Company raised $1,500,000 in gross proceeds. The 375,000 shares of the Company’s Series B Convertible Preferred Stock are convertible into a total of 15,000,000 shares of the Company’s common stock. | |
The shares of the Company’s Series B Preferred Stock i) accrue dividends at a rate of 7.0% per annum, payable in preference to the common stock or any other capital stock of the Company, ii) have a preference in liquidation, or deemed liquidation, to receive the initial investment in the Series B Preferred Stock, plus accrued and unpaid dividends, prior to the common stock, iii) are convertible into 40 shares of common stock per share, subject to adjustment for issuances by the Company of common stock at less than $0.10 per share, and iv) have the right to elect one member of the Company’s Board of Directors. The Company has recorded accrued dividends on the Series B Preferred Stock for the nine-month periods ended September 30, 2013 and 2012, of $78,822 and $60,026, respectively. The Company booked a $18,796 accretion amount for the beneficial conversion feature on the Series B Preferred Stock during the nine months period ended September 30, 2012. | |
NOTE_9_COMMON_STOCK
NOTE 9 - COMMON STOCK | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
NOTE 9 – COMMON STOCK | |
During the nine months period ended September 30, 2013, the Company issued a total of 3,539,300 shares of common stock, along with associated warrants, valued at $353,930, or $0.10 per share. These shares consisted of 3,469,300 shares, valued at $346,930, for investments made during the nine months period, and 70,000 shares, valued at $7,000, resulting from an investment made in the prior year. | |
Also during the first quarter of 2013, the Company issued 191,000 shares of its common stock, valued at $19,100, upon the conversion of an outstanding convertible note. | |
NOTE_10_COMMON_STOCK_TO_BE_ISS
NOTE 10 - COMMON STOCK TO BE ISSUED | 9 Months Ended |
Sep. 30, 2013 | |
Common Stock To Be Isssued [Abstract] | ' |
Common Stock To Be Isssued [Text Block] | ' |
NOTE 10 – COMMON STOCK TO BE ISSUED | |
During the nine months period ended September 30, 2013, the Company received investments of $1,500 from individual investors for the purchase of 15,000 shares of common stock and associated warrants, which shares and warrants will be issued later in 2013. | |
NOTE_11_BASIC_AND_FULLY_DILUTE
NOTE 11 - BASIC AND FULLY DILUTED LOSS PER SHARE | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share [Text Block] | ' | ||||||||
NOTE 11 – BASIC AND FULLY DILUTED LOSS PER SHARE | |||||||||
The computations of basic and fully diluted loss per share of common stock are based upon the weighted average number of shares of common stock outstanding during the period covered by the financial statements, plus the common stock equivalents that would arise from issuance of shares of common stock to be issued under subscriptions and other obligations of the Company, the exercise of stock options and warrants, conversion of convertible preferred stock and dividends on those shares of preferred stock or the conversion of convertible promissory notes outstanding during the period. | |||||||||
The Company's common stock equivalents, at September 30, 2013 and 2012, which are not included in the calculation of fully diluted loss per share because they are anti-dilutive, consisted of the following: | |||||||||
2013 | 2012 | ||||||||
Convertible promissory notes outstanding | 5,194,061 | 5,777,460 | |||||||
Warrants outstanding | 11,049,842 | 8,822,582 | |||||||
Stock options outstanding | 8,885,833 | 7,877,084 | |||||||
Preferred stock outstanding | 15,100,000 | 15,100,000 | |||||||
Common stock to be issued | 15,000 | 3,165,909 | |||||||
Dividends on preferred stock outstanding | 4,749,754 | 3,108,797 | |||||||
Total Common Stock Equivalents | 44,994,490 | 43,851,832 | |||||||
NOTE_12_OUTSTANDING_WARRANTS
NOTE 12 - OUTSTANDING WARRANTS | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Disclosure Text Block Supplement [Abstract] | ' | |||||||||||||||||||||||
Shareholders' Equity and Share-based Payments [Text Block] | ' | |||||||||||||||||||||||
NOTE 12 – OUTSTANDING WARRANTS | ||||||||||||||||||||||||
A summary of the status of the Company’s outstanding warrants, and the changes during the nine-month period ended September 30, 2013, is as follows: | ||||||||||||||||||||||||
2013 | ||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Description | Shares | Exercise Price | ||||||||||||||||||||||
Outstanding, January 1, 2013 | 10,341,982 | $ | 0.2 | |||||||||||||||||||||
Granted | 707,860 | $ | 0.1 | |||||||||||||||||||||
Cancelled | - | - | ||||||||||||||||||||||
Expired | - | - | ||||||||||||||||||||||
Outstanding, September 30, 2013 | 11,049,842 | $ | 0.19 | |||||||||||||||||||||
Exercisable, September 30, 2013 | 11,049,842 | $ | 0.19 | |||||||||||||||||||||
The total number of warrants issued during the nine months ended September 30, 2013 consisted of warrants to purchase an aggregate of 707,860 shares of the Company’s common stock, which were associated with the issuance of 3,539,300 shares of common stock during the period resulting from new capital investments of $353,930. These warrants have a four year term and are exercisable at $.10 per share. | ||||||||||||||||||||||||
During 2009 and 2010, the Company completed a private placement of its equity securities in which the Company raised $1,500,000 in gross proceeds. Pursuant to this private placement, the Company issued 375,000 shares of the Company’s newly designated Series B Convertible Preferred Stock. The Series B Preferred Stock is convertible into a total of 15,000,000 shares of the Company’s common stock. In addition, as part of the private placement, the Company granted warrants to purchase an aggregate of 3,000,000 shares of common stock. These warrants were scheduled to expire on October 14, 2011. | ||||||||||||||||||||||||
During 2011, the Company agreed to extend the life of the warrants by two years, extending the expiration date to October 14, 2013. As a result, in 2011 the Company recorded other expense of $113,984 representing the fair value of the warrant extension utilizing Black-Scholes valuation techniques. | ||||||||||||||||||||||||
In the third quarter of 2013, the Company elected to extend the life of the warrants a second time, for four additional years; thus, the expiration date became October 14, 2017. As a result, the Company recorded in the third quarter of 2013 other expense of $177,000 representing the fair value of this second extension, utilizing Black-Scholes valuation techniques, and in accordance with accounting guidelines contained in ASC 718-35-3, and involving modification of an award. | ||||||||||||||||||||||||
A summary of the status of the Company’s outstanding warrants, and the changes during the twelve month period ended December 31, 2012, is as follows: | ||||||||||||||||||||||||
Year 2012 | ||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Description | Shares | Exercise Price | ||||||||||||||||||||||
Outstanding, January 1, 2012 | 7,130,582 | $ | 0.1 | |||||||||||||||||||||
Granted | 3,611,400 | $ | 0.2 | |||||||||||||||||||||
Cancelled | - | - | ||||||||||||||||||||||
Expired | (400,000 | ) | $ | 0.2 | ||||||||||||||||||||
Outstanding, December 31, 2012 | 10,341,982 | $ | 0.2 | |||||||||||||||||||||
Exercisable, December 31, 2012 | 10,341,982 | $ | 0.2 | |||||||||||||||||||||
The following is a summary of the Company’s outstanding and exercisable warrants at September 30, 2013: | ||||||||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||||||||
Exercise Prices | Weighted Average Number | Remaining | Weighted Average | Number Exercisable | Weighted Average | |||||||||||||||||||
Outstanding at 9/30/13 | Life (in yrs.) | Exercise Price | at 9/30/13 | Exercise Price | ||||||||||||||||||||
$ | 0.1 | 50,000 | 0.68 | $ | 0.1 | 50,000 | $ | 0.1 | ||||||||||||||||
0.2 | 10,999,842 | 2.1 | 0.2 | 10,999,842 | 0.2 | |||||||||||||||||||
$ | 0.1 | - | 0.20 | 11,049,842 | 2.78 | $ | 0.2 | 11,049,842 | $ | 0.2 | ||||||||||||||
NOTE_13_EMPLOYEE_OPTIONS
NOTE 13 - EMPLOYEE OPTIONS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||||||||||||||||||
NOTE 13 – EMPLOYEE OPTIONS | |||||||||||||||||||||||||
As of September 30, 2013, the Company has a stock-based compensation plan, the 2009 Long Term Incentive Plan. | |||||||||||||||||||||||||
The 2009 Long Term Incentive Plan was adopted by the Board of Directors on September 2, 2009. Under the 2009 Long Term Incentive Plan, the Company can grant nonqualified options to employees, officers, outside directors and consultants of the Company or incentive stock options to employees of the Company. There are 10,000,000 shares of common stock authorized for issuance under the 2009 Long Term Incentive Plan. The outstanding options have a term of ten years and vest monthly over five years, quarterly over five years, quarterly over three years or over three years with 33.3% vesting on the one year anniversary date, and the remaining 66.7% vesting quarterly over the remaining two years. As of September 30, 2013, options to purchase 8,885,833 shares of the Company’s common stock were outstanding under the plan, of which options to purchase 5,989,170 shares were exercisable, with a weighted average exercise price of $0.09 per share. | |||||||||||||||||||||||||
Share-based compensation expense is based upon the estimated grant date fair value of the portion of share-based payment awards that are ultimately expected to vest during the period. The grant date fair value of stock-based awards to employees and directors is calculated using the Black-Scholes option pricing model. Forfeitures of share-based payment awards are reported when actual forfeiture occurs. | |||||||||||||||||||||||||
For the nine months ended September 30, 2013 and 2012, the Company recorded share-based compensation expense of $154,591 and $125,011, respectively. | |||||||||||||||||||||||||
For the nine months ended September 30, 2013, the Company granted options to purchase 450,000 shares of its common stock with an exercise price of $0.10 per share. These options consisted of grants issued to two outside directors who received options as part of their annual compensation for serving on the Company’s Board of Directors. The total value of these stock options, utilizing the Black Scholes valuation method, was $4,500. The term of the stock options was ten years and vesting of the stock options was for a three-year period, with 33% vesting on one-year anniversary of the grant date, and the remainder vesting ratably over the next eight quarters. | |||||||||||||||||||||||||
The summary activity for the three months ended September 30, 2013 under the Company’s 2009 Long Term Incentive Plan is as follows: | |||||||||||||||||||||||||
30-Sep-13 | |||||||||||||||||||||||||
Shares | Weighted Average | Aggregate | Weighted Average | ||||||||||||||||||||||
Exercise Price | Intrinsic Value | Remaining Value | |||||||||||||||||||||||
Outstanding at beginning of period | 8,815,000 | $ | 0.09 | $ | – | ||||||||||||||||||||
Granted | 450,000 | $ | 0.1 | $ | – | ||||||||||||||||||||
Exercised | – | $ | 0 | $ | – | ||||||||||||||||||||
Forfeited/ Cancelled | (379,167 | ) | $ | 0.09 | $ | – | |||||||||||||||||||
Outstanding at period end | 8,885,833 | $ | 0.09 | $ | – | 1.23 | |||||||||||||||||||
Options vested and exercisable at period end | 5,989,170 | $ | 0.09 | $ | – | ||||||||||||||||||||
Weighted average grant-date fair value of options granted during the period | $ | 0.1 | |||||||||||||||||||||||
The following table summarizes significant ranges of the Company’s outstanding and exercisable options as of September 30, 2013: | |||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||
Range of Exercise Prices | Options Outstanding | Weighted Average | Weighted Average | Number Outstanding | Weighted Average | ||||||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||||||
Life (in years) | |||||||||||||||||||||||||
$ | 0 | – | $ | 0.08 | 2,760,000 | 1.17 | $ | 0.08 | 2,260,004 | $ | 0.08 | ||||||||||||||
$ | 0.09 | – | $ | 0.10 | 6,125,833 | 1.05 | $ | 0.1 | 3,729,166 | $ | 0.1 | ||||||||||||||
8,885,833 | 5,989,170 | ||||||||||||||||||||||||
A summary of the status of the Company’s non-vested option shares as of September 30, 2013 is as follows: | |||||||||||||||||||||||||
Non-vested Shares | Shares | Weighted Average | |||||||||||||||||||||||
Grant-Date Fair Value | |||||||||||||||||||||||||
Non-vested at January 1, 2013 | 4,652,924 | $ | 0.09 | ||||||||||||||||||||||
Granted | 450,000 | $ | 0.1 | ||||||||||||||||||||||
Forfeited | (262,500 | ) | $ | 0.09 | |||||||||||||||||||||
Vested | (1,943,761 | ) | $ | 0.08 | |||||||||||||||||||||
Non-vested | 2,896,663 | $ | 0.09 | ||||||||||||||||||||||
As of September 30, 2013, there was approximately $255,808 of total unrecognized compensation cost related to non-vested share-based compensation arrangements. The Company expects to recognize the unrecognized compensation cost over a weighted average period of 1.17 years. | |||||||||||||||||||||||||
NOTE_14_COMMITMENTS_AND_CONTIN
NOTE 14 - COMMITMENTS AND CONTINGENCIES | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||||||||||||||||||
NOTE 14 – COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||||
The following table summarizes the Company’s obligations to make future payments pursuant to certain contracts or arrangements as of September 30, 2013, as well as an estimate of the timing in which these obligations are expected to be satisfied: | |||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||
Contractual Obligations | Total | 2013 | 2014-2015 | 2016-2017 | After 2017 | ||||||||||||||||
Long-Term Debt Obligations | $ | 183,170 | $ | 110,980 | $ | 35,497 | $ | 29,991 | $ | 6,702 | |||||||||||
Operating Lease Obligations | $ | 187,280 | $ | 26,124 | $ | 161,156 | $ | - | $ | - | |||||||||||
Purchase Obligations | $ | 1,200,000 | $ | 125,100 | $ | 1,074,900 | $ | - | $ | - | |||||||||||
Convertible promissory notes | $ | 554,163 | $ | - | $ | 534,163 | $ | 20,000 | $ | - | |||||||||||
Total Contractual Obligations | $ | 2,124,613 | $ | 262,204 | $ | 1,805,716 | $ | 49,991 | $ | 6,702 | |||||||||||
In December 2012, the Company placed a purchase order aggregating $1,400,000 with its VidTac contract manufacturer for 1,000 finished units, with stated delivery dates for the units to be delivered ratably and throughout the twelve month period ending December 31, 2013. However, since the contract manufacturer is not currently offering the Company any credit line and the Company is operating on a “pay as you go” basis with the manufacturer, the timing of equipment deliveries under this purchase order is not defined at this time. As of November 7, 2013, the Company has an account balance with the contract manufacturer of approximately $38,000. | |||||||||||||||||||||
The Company’s purchase orders placed with the VidTac contract manufacturer are non-cancellable. However, the Company is permitted to change the original requested delivery dates if the Company gives sufficient advance notice to the contract manufacturer. Should the Company elect to cancel the purchase order in total or in part, generally it is financially responsible only for materials that could not be returned by the contract manufacturer to its source suppliers for refund. | |||||||||||||||||||||
In the first quarter of 2014, $514,163 in principal amount of the Company’s convertible promissory notes is scheduled to mature. The Company believes that most of the holders of these notes will elect to convert the notes into shares of the Company’s common stock prior to maturity or agree to extend the maturity dates of the notes. Of these promissory notes, $160,532 in principal amount are held by the Company’s chief executive officer, who has advised the Company that he currently intends to extend the maturity of the notes held by him or convert them into shares of the Company’s common stock prior to maturity. | |||||||||||||||||||||
Contingent Liability | |||||||||||||||||||||
None | |||||||||||||||||||||
Compensation | |||||||||||||||||||||
See ITEM 11, “Executive Compensation”, “Employment Contracts, Termination of Employment and Change in Control”, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, which discusses the employment agreements involving Messrs. Chaney and Rapp, co-founders of the Company. One element contained in those discussions involves the voluntary elections by each of them to forego certain specified salary increases until the Company becomes profitable or the Company secures sufficient funding to sustain operations. The value of the foregone salary for each of the nine month periods ended September 30, 2013 and September 30, 2012 totaled $30,000 for Mr. Chaney and $29,250 for Mr. Rapp, which was recorded as contributed capital in Additional Paid-in Capital on the Company’s Balance Sheet. | |||||||||||||||||||||
See Note 10, “Common Stock to be Issued”, to the Financial Statements, contained in Company’s Annual Report on Form 10-K for the year ended December 31, 2012, which discusses the 2,000,000 shares of restricted common stock the Company granted to Ronald A. Woessner, the Company’s Chief Executive Officer, valued at $180,000. The Company is amortizing the $180,000 value ratably over a thirty-six month period, which began in December 2010. During each of the nine-month periods ended September 30, 2013 and 2012, amortization of the restricted stock grant was $45,000. | |||||||||||||||||||||
Litigation | |||||||||||||||||||||
The Company is not currently involved in any material legal proceedings. From time-to-time the Company anticipates it will be involved in legal proceedings, claims, and litigation arising in the ordinary course of business and otherwise. The ultimate costs to resolve any such matters could have a material adverse effect on the Company’s financial statements. The Company could be forced to incur material expenses with respect to these legal proceedings, and in the event there is an outcome in any that is adverse to it, the Company’s financial position and prospects could be harmed. | |||||||||||||||||||||
NOTE_15_SUBSEQUENT_EVENTS
NOTE 15 - SUBSEQUENT EVENTS | 9 Months Ended | |
Sep. 30, 2013 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events [Text Block] | ' | |
NOTE 15 – SUBSEQUENT EVENTS | ||
The Company has evaluated subsequent events through the date that the financial statements were available to be issued and found no significant subsequent events that required additional disclosure, other than the following: | ||
· | In October 2013, the Company issued a $60,000 convertible note to its chief executive officer for $60,000 in cash received. The convertible note bears 3% interest per annum and is due on January 1, 2014. The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Basis of Accounting [Text Block] | ' |
a. Basis of Presentation | |
The accompanying condensed financial statements include the accounts of the Company, are prepared in accordance with accounting principles generally accepted in the United States and are prepared on the accrual method of accounting. | |
Reclassifications [Text Block] | ' |
b. Reclassifications | |
Certain prior year items have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s financial statements. | |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' |
c. Concentrations of Credit Risk | |
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. The Company deposits cash and cash equivalents in demand and money market accounts in two financial institutions in the United States. Accounts at financial institutions in the United States are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. At times, the Company’s deposits or investments in financial institutions may exceed these federally insured limits. At September 30, 2013, the Company had approximately $1,000 in excess of FDIC insured limits at the two financial institutions. The Company has not experienced any losses in such accounts. | |
To date, the Company’s accounts receivable have been derived principally from revenue earned from end users of its products, which are local and state governmental agencies. The Company performs periodic credit evaluations of its customers and does not require collateral. | |
Accounts receivable are recorded net of the allowance for doubtful accounts. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information and existing economic conditions. The Company writes off delinquent receivables based on individual credit evaluation and the specific circumstances of the customer. The Company had not recorded an allowance for doubtful accounts at September 30, 2013 or December 31, 2012. | |
Use of Estimates, Policy [Policy Text Block] | ' |
d. Use of Estimates | |
The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States requires the Company’s management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. The Company’s significant estimates include primarily those required in the valuation or impairment analysis of capitalization of labor under software development costs, property and equipment, revenue recognition, allowances for doubtful accounts, stock-based compensation, warrants, litigation accruals and valuation allowances for deferred tax assets. Although the Company believes that adequate accruals have been made for unsettled issues, additional gains or losses could occur in future years from resolutions of outstanding matters. Actual results could differ materially from original estimates. | |
Inventory, Policy [Policy Text Block] | ' |
e. Inventory | |
Inventory is stated at the lower of cost (determined using the first-in, first-out method) or market value. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolescence or impaired balances. | |
Research, Development, and Computer Software, Policy [Policy Text Block] | ' |
. Software Development Costs | |
Certain software development costs incurred subsequent to the establishment of technological feasibility may be capitalized and amortized over the estimated lives of the related products. | |
Through the middle of 2010, the Company capitalized certain software development costs related to its COPsync service. The Company determined technological feasibility to be established upon completion of (1) product design, (2) detail program design, (3) consistency between product and program design and (4) review of detail program design to ensure that high risk development issues had been resolved. Upon the general release of the COPsync service offering to customers, development costs for that product were amortized over fifteen years based on management’s then estimated economic life of the product. See Note 4 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2012 for a discussion involving impairments of software development costs recorded by the Company in the years ended December 31, 2011 and December 31, 2010, and the respective financial impact therein. | |
The Company has not capitalized any of the software development costs associated with its most recently introduced product offerings, VidTac and COPsync911, because the time period between achieving technological feasibility and product release for these product offerings was very short. Consequently, the incurred development costs have been recorded as research and development costs in the statement of operations. | |
Revenue Recognition, Policy [Policy Text Block] | ' |
g. Revenue Recognition | |
The Company’s primary business is to sell subscriptions to the COPsync service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies. The agencies subscribe to that service for a specified period of time (usually for twelve to forty-eight months), for a specified number of officers per agency, and at a fixed subscription fee per officer. | |
The Company also sells computers and computer-related hardware (“hardware”) used to provide the Company’s in-car service should the customer not already own the necessary hardware, and hardware installation services, agency and officer set-up and training services and, from time-to-time, software integration services for enhanced service offerings. | |
The Company’s most common sales are: | |
(1) for new customers – a multiple-element arrangement involving (a) the subscription fee, (b) integration of the COPsync software and a hardware appliance (in which the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training and (c) if applicable, software integration services for enhanced service offerings; and | |
(2) for existing customers – the subscription fees for the annual renewal of an agency’s COPsync subscription service, upon the completion of the agency’s initial subscription period. | |
The Company recognizes revenue when all of the following have occurred: (1) the Company has entered into a legally binding arrangement with a customer resulting in the existence of persuasive evidence of an arrangement; (2) delivery has occurred, as evidenced by transfer of title to the customer; (3) customer payment is deemed fixed or determinable and free of contingencies and significant uncertainties; and (4) collection is probable. | |
The sales of the hardware and related services for hardware installation and agency and officer set-up and training are reported as “Hardware, installation and other revenues” in the Company’s Statement of Operations. The sale of the Company’s new VidTac product offering is considered a hardware sale and is reported in this revenue classification. Shipping charges are billed to customers and are included in operating expenses as an offset to the related shipping costs. | |
The subscription fees and software integration services are reported as “software license/subscriptions revenues” in the Company’s Statement of Operations. The subscription fees include termed licenses for the contracted officers to have access to the service and the right to receive telephonic customer and technical support, as well as software updates, during the subscription period. Support for the hardware is normally provided by the hardware manufacturer. | |
The receipt and acceptance of an executed customer’s service agreement, which outlines all of the particulars of the sale event, is the primary method of determining that persuasive evidence of an arrangement exists. | |
Delivery generally occurs for the different elements of revenue as follows: | |
(1) For multiple-element arrangements involving new customers – contractually, the lesser period of time of sixty days from contract date or the date officer training services are completed. The Company generally requests the customer to complete a written customer acceptance at the time training is completed, which overrides the contracted criteria. | |
(2) The subscription fee – the date the officer training is completed and written customer acceptance is received. | |
(3) Software integration services for enhanced service offerings – upon the Company’s completion of the integration efforts and verification that the enhanced service offering is available for use by the customer. | |
Fees are typically considered to be fixed or determinable at the inception of an arrangement, generally based on specific services and products to be delivered pursuant to the executed service agreement. Substantially all of the Company’s service agreements do not include rights of return or acceptance provisions. To the extent that agreements contain such terms, the Company recognizes revenue once the acceptance provisions or right of return lapses. Payment terms offered to customers generally range from net “upon receipt of invoice” to “net 30 days from invoice date.” | |
The Company assesses the ability to collect from its customers based on a number of factors, including credit worthiness of the customer and past transaction history of the customer. If the customer is not deemed credit worthy, the Company defers all revenue from the arrangement until payment is received and all other revenue recognition criteria have been met. | |
As indicated above, some customer orders contain multiple elements. The Company allocates revenue to each element in an arrangement based on relative selling price. The selling price for a deliverable is based on its vendor specific objective evidence (“VSOE”), if available, third party evidence ("TPE"), if VSOE is not available, or the Company’s best estimate of selling price ("ESP"), if neither VSOE nor TPE is available. The maximum revenue recognized on a delivered element is limited to the amount that is not contingent upon the delivery of additional items. Additionally, many of the Company’s service agreements executed in fiscal 2012 and 2011 contained grants (or discounts) provided to the contracting customer. These grants or discounts have been allocated across all of the different elements based upon the respective, relative selling price. | |
The Company determines VSOE for subscription fees for the initial contract period based on the rate charged to customers for a stand-alone sale price for the subscription service. VSOE for renewal pricing is based upon the stated rate for the renewed subscription service, which is stated in the applicable service agreement or contract. The renewal rate is generally equal to the stated rate in the original contract. The Company has a history of such renewals, the vast majority of which are at the stated renewal rate, on a customer by customer basis. Subscription fee revenue is recognized ratably over the life of the service agreement. | |
The Company’s hardware products include the related services for hardware installation and customer and officer set-up and training, as well as integration services for enhanced service offerings that are sold separately. The Company has VSOE for these products, including all such services. | |
For almost all of the Company’s new service agreements, as well as renewal agreements, billing and payment terms are agreed to upfront or in advance of performance milestones. These payments are initially recorded as deferred revenue and subsequently recognized as revenue as follows: | |
(1) Integration of the COPsync software and a hardware appliance (in which the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and customer and officer set-up and training – immediately upon delivery. | |
(2) The subscription fee – ratably over the contracted subscription period commencing on the delivery date. | |
(3) Software integration services for enhanced service offerings – immediately upon the Company’s completion of the integration and verification that the enhanced service is available for the customer’s use. | |
(4) Renewals – ratably over the renewed subscription or service period, commencing on the completion of the previous subscription or service period. | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' |
h. Share-based Compensation | |
The Company accounts for all share-based payment transactions using a fair-value based measurement method. The Company calculates stock option-based compensation by estimating the fair value of each option as of its date of grant using the Black-Scholes option pricing model. These amounts are expensed over the respective vesting periods of each award using the straight-line attribution method. The Company has historically issued stock options and vested and non-vested stock grants to employees and, beginning in 2011, to outside directors whose only condition for vesting has been continued employment or service during the related vesting or restriction period. |
NOTE_5_INVENTORY_Tables
NOTE 5 - INVENTORY (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory, Current [Table Text Block] | 'Inventory consisted of the following at September 30, 2013, and December 31, 2012, respectively: | ||||||||
Category | September 30, | December 31, | |||||||
2013 | 2012 | ||||||||
Raw materials | $ | 81,295 | $ | 168,511 | |||||
Work-in-process | - | - | |||||||
Finished goods | 299,233 | 168,909 | |||||||
Total Inventory | $ | 380,528 | $ | 337,420 |
NOTE_6_NOTES_PAYABLE_Tables
NOTE 6 - NOTES PAYABLE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Debt [Table Text Block] | 'The Company’s total notes payable at September 30, 2013 was $183,170 representing a net decrease of $66,398 for the nine months ended September 30, 2013. The following table shows the components of notes payable at September 30, 2013 and December 31, 2012: | ||||||||
September 30, | December 31, | ||||||||
Loan Type | 2013 | 2012 | |||||||
Bank | $ | 77,437 | $ | 98,148 | |||||
Insurance | 5,733 | 31,420 | |||||||
Promissory notes payable | 100,000 | 120,000 | |||||||
Total notes payable | 183,170 | 249,568 | |||||||
Less: Current portion | (120,312 | ) | (180,305 | ) | |||||
Long-term portion | $ | 62,858 | $ | 69,263 |
NOTE_11_BASIC_AND_FULLY_DILUTE1
NOTE 11 - BASIC AND FULLY DILUTED LOSS PER SHARE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | 'The Company's common stock equivalents, at September 30, 2013 and 2012, which are not included in the calculation of fully diluted loss per share because they are anti-dilutive, consisted of the following: | ||||||||
2013 | 2012 | ||||||||
Convertible promissory notes outstanding | 5,194,061 | 5,777,460 | |||||||
Warrants outstanding | 11,049,842 | 8,822,582 | |||||||
Stock options outstanding | 8,885,833 | 7,877,084 | |||||||
Preferred stock outstanding | 15,100,000 | 15,100,000 | |||||||
Common stock to be issued | 15,000 | 3,165,909 | |||||||
Dividends on preferred stock outstanding | 4,749,754 | 3,108,797 | |||||||
Total Common Stock Equivalents | 44,994,490 | 43,851,832 |
NOTE_12_OUTSTANDING_WARRANTS_T
NOTE 12 - OUTSTANDING WARRANTS (Tables) | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Disclosure Text Block Supplement [Abstract] | ' | |||||||||||||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | 'A summary of the status of the Company’s outstanding warrants, and the changes during the nine-month period ended September 30, 2013, is as follows: | |||||||||||||||||||||||
2013 | ||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Description | Shares | Exercise Price | ||||||||||||||||||||||
Outstanding, January 1, 2013 | 10,341,982 | $ | 0.2 | |||||||||||||||||||||
Granted | 707,860 | $ | 0.1 | |||||||||||||||||||||
Cancelled | - | - | ||||||||||||||||||||||
Expired | - | - | ||||||||||||||||||||||
Outstanding, September 30, 2013 | 11,049,842 | $ | 0.19 | |||||||||||||||||||||
Exercisable, September 30, 2013 | 11,049,842 | $ | 0.19 | |||||||||||||||||||||
Year 2012 | ||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Description | Shares | Exercise Price | ||||||||||||||||||||||
Outstanding, January 1, 2012 | 7,130,582 | $ | 0.1 | |||||||||||||||||||||
Granted | 3,611,400 | $ | 0.2 | |||||||||||||||||||||
Cancelled | - | - | ||||||||||||||||||||||
Expired | (400,000 | ) | $ | 0.2 | ||||||||||||||||||||
Outstanding, December 31, 2012 | 10,341,982 | $ | 0.2 | |||||||||||||||||||||
Exercisable, December 31, 2012 | 10,341,982 | $ | 0.2 | |||||||||||||||||||||
Schedule of Stockholders Equity [Table Text Block] | 'The following is a summary of the Company’s outstanding and exercisable warrants at September 30, 2013: | |||||||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||||||||
Exercise Prices | Weighted Average Number | Remaining | Weighted Average | Number Exercisable | Weighted Average | |||||||||||||||||||
Outstanding at 9/30/13 | Life (in yrs.) | Exercise Price | at 9/30/13 | Exercise Price | ||||||||||||||||||||
$ | 0.1 | 50,000 | 0.68 | $ | 0.1 | 50,000 | $ | 0.1 | ||||||||||||||||
0.2 | 10,999,842 | 2.1 | 0.2 | 10,999,842 | 0.2 | |||||||||||||||||||
$ | 0.1 | - | 0.20 | 11,049,842 | 2.78 | $ | 0.2 | 11,049,842 | $ | 0.2 |
NOTE_13_EMPLOYEE_OPTIONS_Table
NOTE 13 - EMPLOYEE OPTIONS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | 'The summary activity for the three months ended September 30, 2013 under the Company’s 2009 Long Term Incentive Plan is as follows: | ||||||||||||||||||||||||
30-Sep-13 | |||||||||||||||||||||||||
Shares | Weighted Average | Aggregate | Weighted Average | ||||||||||||||||||||||
Exercise Price | Intrinsic Value | Remaining Value | |||||||||||||||||||||||
Outstanding at beginning of period | 8,815,000 | $ | 0.09 | $ | – | ||||||||||||||||||||
Granted | 450,000 | $ | 0.1 | $ | – | ||||||||||||||||||||
Exercised | – | $ | 0 | $ | – | ||||||||||||||||||||
Forfeited/ Cancelled | (379,167 | ) | $ | 0.09 | $ | – | |||||||||||||||||||
Outstanding at period end | 8,885,833 | $ | 0.09 | $ | – | 1.23 | |||||||||||||||||||
Options vested and exercisable at period end | 5,989,170 | $ | 0.09 | $ | – | ||||||||||||||||||||
Weighted average grant-date fair value of options granted during the period | $ | 0.1 | |||||||||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | 'The following table summarizes significant ranges of the Company’s outstanding and exercisable options as of September 30, 2013: | ||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||
Range of Exercise Prices | Options Outstanding | Weighted Average | Weighted Average | Number Outstanding | Weighted Average | ||||||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||||||
Life (in years) | |||||||||||||||||||||||||
$ | 0 | – | $ | 0.08 | 2,760,000 | 1.17 | $ | 0.08 | 2,260,004 | $ | 0.08 | ||||||||||||||
$ | 0.09 | – | $ | 0.10 | 6,125,833 | 1.05 | $ | 0.1 | 3,729,166 | $ | 0.1 | ||||||||||||||
8,885,833 | 5,989,170 | ||||||||||||||||||||||||
Schedule of Nonvested Share Activity [Table Text Block] | 'A summary of the status of the Company’s non-vested option shares as of September 30, 2013 is as follows: | ||||||||||||||||||||||||
Non-vested Shares | Shares | Weighted Average | |||||||||||||||||||||||
Grant-Date Fair Value | |||||||||||||||||||||||||
Non-vested at January 1, 2013 | 4,652,924 | $ | 0.09 | ||||||||||||||||||||||
Granted | 450,000 | $ | 0.1 | ||||||||||||||||||||||
Forfeited | (262,500 | ) | $ | 0.09 | |||||||||||||||||||||
Vested | (1,943,761 | ) | $ | 0.08 | |||||||||||||||||||||
Non-vested | 2,896,663 | $ | 0.09 |
NOTE_14_COMMITMENTS_AND_CONTIN1
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 'The following table summarizes the Company’s obligations to make future payments pursuant to certain contracts or arrangements as of September 30, 2013, as well as an estimate of the timing in which these obligations are expected to be satisfied: | ||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||
Contractual Obligations | Total | 2013 | 2014-2015 | 2016-2017 | After 2017 | ||||||||||||||||
Long-Term Debt Obligations | $ | 183,170 | $ | 110,980 | $ | 35,497 | $ | 29,991 | $ | 6,702 | |||||||||||
Operating Lease Obligations | $ | 187,280 | $ | 26,124 | $ | 161,156 | $ | - | $ | - | |||||||||||
Purchase Obligations | $ | 1,200,000 | $ | 125,100 | $ | 1,074,900 | $ | - | $ | - | |||||||||||
Convertible promissory notes | $ | 554,163 | $ | - | $ | 534,163 | $ | 20,000 | $ | - | |||||||||||
Total Contractual Obligations | $ | 2,124,613 | $ | 262,204 | $ | 1,805,716 | $ | 49,991 | $ | 6,702 |
NOTE_2_NATURE_OF_ORGANIZATION_1
NOTE 2 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) (USD $) | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Subsequent Event [Member] | Service Agreement [Member] | Service Agreement [Member] | Service Agreement [Member] | |||||
Service Agreement [Member] | ||||||||
NOTE 2 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Product Description | 'The VidTac system is a software-driven video system for law enforcement. Traditional in-vehicle video systems are typically "hardware centric" DVR-based systems.The capture, compression and encryption of the video stream for these systems typically is performed by the DVR.The price of these high-end, digital DVR-based systems range from an estimated $5,100 to $11,000 per system.These DVR-based systems are typically replaced, at the same expensive price point, every three to four years as new patrol vehicles are placed into service.The Company's VidTac system is price advantageous vis-a-vis other high-end video systems.The Company is offering its system for sale at a much lower price than the average price of DVR-based video systems.Furthermore, for those agencies that already have in-vehicle computers, the VidTac system eliminates the need to purchase a second computer, i.e., the DVR, and eliminates the need to replace this second (DVR) computer every three to four years. | ' | ' | ' | ' | ' | ' | ' |
Cash and Cash Equivalents, at Carrying Value | $166,546 | $174,444 | $364,681 | $1,074,317 | ' | ' | ' | ' |
Working Capital (Deficit) | -3,110,964 | ' | ' | ' | ' | ' | ' | ' |
Retained Earnings (Accumulated Deficit) | -17,622,207 | -14,773,664 | ' | ' | ' | ' | ' | ' |
Organization, Liquidity and Management Plans, Description | '1)The Company increased the volume of its new orders.For the nine month period ended September 30, 2013, the Company signed service agreements representing approximately $4,454,000 in new orders, compared to approximately $1,754,000 in new orders for the comparable period in fiscal 2012, an increase of 154%.2)The accelerated pace of new service agreements through the first half of 2013 softened in June, July and August,but recovered in September and October.New orders from service agreements signed in September and October were $464,000 and$700,000, respectively.The Company believes the increased pace of new service agreements will continue through the remainder of 2013 because of added headcount to the Company's sales organization, changes made to increase the effectiveness of the Company's sales organization and the Company's April 2013 release of a new product release, COPsync911, a real-time threat alert service.3)The COPsync911 real-time threat alert service, which the Company believes is the only service of its kind in the United States enables a person (such as a schoolteacher in a school) to instantaneously and silently send emergency alerts directly to local law enforcement officers in their patrol units and the local emergency dispatch center with just the click of a computer mouse. The Company expects the COPsync911 service to reduce school emergency response times by five to seven minutes, since the communication directly to the patrol car is instantaneous. The service also enables the patrol officer to communicate in real-time with the person(s) sending the alert. The alert is also sent to the cell phones of others (such as teachers and administrators at the school), alerting them of imminent danger. The Company is currently offering the COPsync911 service in the State of Texas, and began offering it in other selected regions of the United States in the third quarter of this year.4)As of October 31, 2013, the Company had booked sales of approximately $266,000 for the COPsync911 service, after less than 180 days of sales activity.The Company expects the pace of COPsync911 sales to accelerate as its sales team becomes familiar with the service and the strategies for selling it and as newly engaged resellers begin to sell the service.The Company expects COPsync911 sales from its direct and channel sales efforts to range between $1.2 million and $2.0 million for the ensuing twelve months.5) The Company expects to realize gross cash receipts of $1.8 million within the next three to four months from contracts including COPsync911 contracts currently "in hand", but not yet performed.6)The Company's procurement processes for third party hardware employs "just in time" principles, meaning the Company attempts to schedule delivery to the customer of the third party hardware it sells immediately after it receives the hardware.The Company also continues its attempts to collect customer prepayments for the third party hardware it sells at or about the time the Company orders the hardware.This change in the processing of third party hardware has helped the Company significantly in managing its working capital.7) The Company's key vendors continue to be cooperative regarding extended payment terms for the Company'soutstanding payables balances.8)The Company is currently pursuing an initiative to raise up to $1,500,000 in new capital.Thus far in 2013, the Company raised $348,000 pursuant to that initiative.9)Additionally, the Company believes it has the capability to reduce operating expenses, should circumstances warrant. | ' | ' | ' | ' | ' | ' | ' |
Executed contracts yet to be commenced | ' | ' | ' | ' | 700,000 | 464,000 | 4,454,000 | 1,754,000 |
Increase (Decrease) in Executed Contracts, Percentage | ' | ' | ' | ' | ' | ' | 154.00% | ' |
Gross Cash Receipts to be Realilzed in Next Three to Four Months | 1,800,000 | ' | ' | ' | ' | ' | ' | ' |
Initiative to Raise New Equity Capital, Amount | $1,500,000 | ' | ' | ' | ' | ' | ' | ' |
NOTE_3_SUMMARY_OF_SIGNIFICANT_1
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (Details) (USD $) | Sep. 30, 2013 |
Accounting Policies [Abstract] | ' |
Number of financial institutions, funds in excess of FDIC limits | 2 |
Cash, Uninsured Amount (in Dollars) | $1,000 |
NOTE_5_INVENTORY_Details
NOTE 5 - INVENTORY (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | |
VidTac Systems and Components [Member] | Purchase 1 [Member] | Purchase 2 [Member] | ||||
NOTE 5 - INVENTORY (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Inventories (in Dollars) | $43,108 | $7,367 | ' | ' | ' | ' |
Inventory, Gross (in Dollars) | $380,528 | ' | $337,420 | $99,000 | ' | ' |
Inventory Related Text | ' | ' | ' | ' | 'The manufacturing agreement calls for the Company to periodically place purchase orders for its VidTac systems.In 2012, the Company placed a purchase order for 500 systems. | 'In December 2012, the Company placed another purchase order with the contract manufacturer for finished units aggregating $1,400,000, with stated delivery dates for products to be delivered ratably and throughout the twelve month period ending December 31, 2013 (See Note 14). However, the contract manufacturer is not currently offering the Company any credit line and the Company is operating on a "pay as you go" basis with the manufacturer. Therefore, the timing of equipment deliveries under this purchase order is not defined at this time. As of November 7, 2013, the Company has an account balance with the contract manufacturer of approximately $38,000. |
NOTE_5_INVENTORY_Details_Sched
NOTE 5 - INVENTORY (Details) - Schedule of Inventory (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of Inventory [Abstract] | ' | ' |
Raw materials | $81,295 | $168,511 |
Work-in-process | 0 | 0 |
Finished goods | 299,233 | 168,909 |
Total Inventory | $380,528 | $337,420 |
NOTE_6_NOTES_PAYABLE_Details
NOTE 6 - NOTES PAYABLE (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Increase (Decrease) in Notes Payable, Current | $66,398 | ' |
Repayments of Notes Payable | 229,473 | 92,750 |
Number of Vehicles Sold | 4 | ' |
Chief Executive Officer [Member] | Demand Note [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Face Amount (in Dollars) | 120,000 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ' |
Debt Instrument, Maturity Date | 31-Mar-14 | ' |
Demand Note [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Repayments of Notes Payable | 120,000 | ' |
Short-term Debt Financing [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Repayments of Notes Payable | 40,179 | ' |
Vehicle Loan [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Repayments of Notes Payable | 69,294 | ' |
New Automobiles Bank Note [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Face Amount (in Dollars) | 51,880 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ' |
Debt Instrument, Payment Terms | 'ratable, monthly payments | ' |
Debt Instrument, Maturity Date, Description | 'five year life | ' |
New Automobiles Bank Note 2 [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Face Amount (in Dollars) | 11,195 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ' |
Debt Instrument, Payment Terms | 'ratable, monthly payments | ' |
Debt Instrument, Maturity Date, Description | 'five year life | ' |
Individual #1 [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Face Amount (in Dollars) | 50,000 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ' |
Debt Instrument, Payment Terms | 'requires repayment following the Company's receipt of payment from its customer | ' |
Individual #2 [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Face Amount (in Dollars) | $50,000 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ' |
Debt Instrument, Payment Terms | 'calls for basically the same repayment schedule, except that the Company must make monthly principal payments beginning in the fourth quarter of 2013 and continuing until the balance is repaid by the Company. | ' |
NOTE_6_NOTES_PAYABLE_Details_S
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ' | ' |
Loan Type | $183,170 | $249,568 |
Less: Current portion | -120,312 | -180,305 |
Long-term portion | 62,858 | 69,263 |
Bank [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ' | ' |
Loan Type | 77,437 | 98,148 |
Insurance [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ' | ' |
Loan Type | 5,733 | 31,420 |
Demand Note [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ' | ' |
Loan Type | $100,000 | $120,000 |
NOTE_7_CONVERTIBLE_NOTES_PAYAB1
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Conversion, Original Debt, Amount | $19,100 | $40,113 |
Proceeds from Convertible Debt (in Dollars) | 200,000 | 0 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 514,163 | ' |
Chief Executive Officer [Member] | Convertible Note #2 [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.10 | ' |
Debt Instrument, Face Amount (in Dollars) | 120,532 | ' |
Proceeds from Related Party Debt | 120,000 | ' |
Interest Payable | 532 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ' |
Debt Instrument, Maturity Date, Description | 'March 31, 2014 | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | 'The convertible note may be converted at the holder's option into shares of the Company's common stock | ' |
Chief Executive Officer [Member] | Demand Note [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Face Amount (in Dollars) | 120,000 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ' |
Debt Instrument, Maturity Date | 31-Mar-14 | ' |
Chief Executive Officer [Member] | Convertible Note #3 [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.10 | ' |
Debt Instrument, Face Amount (in Dollars) | 40,000 | ' |
Proceeds from Related Party Debt | 40,000 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | 'The convertible note may be converted at the holder's option into shares of the Company's common stock | ' |
Chief Executive Officer [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 160,532 | ' |
Convertible Note #1 [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Conversion, Original Debt, Amount | 19,100 | ' |
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 191,000 | ' |
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.10 | ' |
Demand Note [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Repayments of Related Party Debt | 120,000 | ' |
Two Convertible Notes to Investors [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Proceeds from Convertible Debt (in Dollars) | 40,000 | ' |
Convertible note due on May 6, 2015 [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.10 | ' |
Debt Instrument, Face Amount (in Dollars) | 20,000 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ' |
Debt Instrument, Maturity Date | 6-May-15 | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | 'The convertible notes may be converted at the holder's option into shares of the Company's common stock | ' |
Convertible note due on June 16, 2016 [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $0.10 | ' |
Debt Instrument, Face Amount (in Dollars) | 20,000 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ' |
Debt Instrument, Maturity Date | 16-Jun-16 | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | 'The convertible notes may be converted at the holder's option into shares of the Company's common stock | ' |
Debt Maturing First Quarter of 2014 [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 482,517 | ' |
Debt Maturing Second Quarter of 2014 [Member] | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | $31,646 | ' |
NOTE_8_PREFERRED_STOCK_Details
NOTE 8 - PREFERRED STOCK (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2008 | Dec. 31, 2010 | Dec. 31, 2009 | Sep. 30, 2013 | Sep. 30, 2012 | |
Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | ||||||
Private Placement [Member] | Private Placement [Member] | |||||||||
NOTE 8 - PREFERRED STOCK (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Acquisitions (in Shares) | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' |
Noncash or Part Noncash Acquisition, Interest Acquired | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' |
Convertible Preferred Stock, Shares Issued upon Conversion (in Shares) | ' | ' | ' | ' | ' | 1 | ' | ' | 40 | ' |
Preferred Stock, Voting Rights | ' | ' | ' | ' | ' | '750 votes per share | ' | ' | 'iv) have the right to elect one member of the Company's Board of Directors | ' |
Stock Issued During Period, Shares, New Issues (in Shares) | ' | ' | 3,469,300 | ' | 70,000 | ' | 375,000 | 375,000 | ' | ' |
Proceeds from Issuance of Private Placement (in Dollars) | ' | ' | ' | ' | ' | ' | $1,500,000 | ' | ' | ' |
Convertible Preferred Stock, Terms of Conversion | ' | ' | ' | ' | ' | ' | '15,000,000 shares of the Company's common stock | ' | 'iii) are convertible into 40 shares of common stock per share, subject to adjustment for issuances by the Company of common stock at less than $0.10 per share, and iv) have the right to elect one member of the Company's Board of Directors | ' |
Preferred Stock, Dividend Payment Terms | ' | ' | ' | ' | ' | ' | ' | ' | 'i) accrue dividends at a rate of 7.0% per annum, payable in preference to the common stock or any other capital stock of the Company, ii) have a preference in liquidation, or deemed liquidation, to receive the initial investment in the Series B Preferred Stock, plus accrued and unpaid dividends, prior to the common stock, iii) are convertible into 40 shares of common stock per share, subject to adjustment for issuances by the Company of common stock at less than $0.10 per share, and iv) have the right to elect one member of the Company | ' |
Preferred Stock, Redemption Terms | ' | ' | ' | ' | ' | ' | ' | ' | 'ii) have a preference in liquidation, or deemed liquidation, to receive the initial investment in the Series B Preferred Stock, plus accrued and unpaid dividends, prior to the common stock, iii) are convertible into 40 shares of common stock per share, subject to adjustment for issuances by the Company of common stock | ' |
Dividends Payable (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | 78,822 | 60,026 |
Preferred Stock Accretion of Beneficial Conversion Feature on Dividends Issued in Kind (in Dollars) | $0 | $6,338 | $0 | $18,796 | ' | ' | ' | ' | ' | ' |
NOTE_9_COMMON_STOCK_Details
NOTE 9 - COMMON STOCK (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
NOTE 9 - COMMON STOCK (Details) [Line Items] | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | 3,469,300 | ' | 70,000 |
Stock Issued During Period, Value, New Issues (in Dollars) | $346,930 | ' | $7,000 |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 191,000 | 401,134 | ' |
Stock Issued During Period, Value, Conversion of Convertible Securities (in Dollars) | 19,100 | ' | ' |
Stock Issued for Cash at $0.10 Per Share [Member] | ' | ' | ' |
NOTE 9 - COMMON STOCK (Details) [Line Items] | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | 3,539,300 | ' | ' |
Shares Issued, Price Per Share (in Dollars per share) | $0.10 | ' | ' |
Stock Issued for Cash at $0.10 Per Share [Member] | ' | ' | ' |
NOTE 9 - COMMON STOCK (Details) [Line Items] | ' | ' | ' |
Stock Issued During Period, Value, New Issues (in Dollars) | $353,930 | ' | ' |
NOTE_10_COMMON_STOCK_TO_BE_ISS1
NOTE 10 - COMMON STOCK TO BE ISSUED (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Common Stock To Be Isssued [Abstract] | ' | ' | ' |
Proceeds from Issuance or Sale of Equity (in Dollars) | $1,500 | $212,685 | ' |
Common stock to be issued, shares | 15,000 | ' | 70,000 |
NOTE_11_BASIC_AND_FULLY_DILUTE2
NOTE 11 - BASIC AND FULLY DILUTED LOSS PER SHARE (Details) - Schedule of Anti-Dilutive Common Stock Equivalents | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 44,994,490 | 43,851,832 |
Convertible Debt Securities [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 5,194,061 | 5,777,460 |
Warrant [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 11,049,842 | 8,822,582 |
Equity Option [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 8,885,833 | 7,877,084 |
Preferred Stock Outstanding [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 15,100,000 | 15,100,000 |
Common stock to be issued [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 15,000 | 3,165,909 |
Preferred Stock Dividends [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 4,749,754 | 3,108,797 |
NOTE_12_OUTSTANDING_WARRANTS_D
NOTE 12 - OUTSTANDING WARRANTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Private Placement [Member] | ||||||
NOTE 12 - OUTSTANDING WARRANTS (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Warrants, Term of Warrants | ' | ' | '4 years | ' | ' | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | 0.1 | ' | 0.1 | ' | ' | ' |
Class of Warrant or Rights, Granted (in Shares) | ' | ' | ' | ' | ' | 3,000,000 |
Warrants, Term of Warrants, Extension | ' | ' | 'elected to extend the life of the warrants a second time, for four additional years | ' | 'agreed to extend the life of the warrants by two years | ' |
Warrants, Cost of Warrants Extension (in Dollars) | $177,000 | $0 | $177,000 | $0 | $113,984 | ' |
NOTE_12_OUTSTANDING_WARRANTS_D1
NOTE 12 - OUTSTANDING WARRANTS (Details) - Schedule of Changes in Warrants (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Number of Shares [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Outstanding | 10,341,982 | 7,130,582 |
Granted | 707,860 | 3,611,400 |
Cancelled | 0 | 0 |
Expired | 0 | -400,000 |
Outstanding | 11,049,842 | 10,341,982 |
Exercisable | 11,049,842 | 10,341,982 |
Weighted average exercise price [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Outstanding (in Dollars per share) | 0.2 | 0.1 |
Granted (in Dollars) | 0.1 | 0.2 |
Cancelled (in Dollars per share) | 0 | 0 |
Expired (in Dollars per share) | 0 | 0.2 |
Outstanding (in Dollars per share) | 0.19 | 0.2 |
Exercisable (in Dollars per share) | 0.19 | 0.2 |
NOTE_12_OUTSTANDING_WARRANTS_D2
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants (USD $) | Sep. 30, 2013 |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Exercise prices (in Dollars per Item) | 0.1 |
Warrant exercise price 0.10 [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Warrants outstanding (in Dollars per share) | $0.10 |
Warrants outstanding, weighted average remaining contractual life | 50,000 |
Weighted oustanding, weighted average exercise price (in Dollars per share) | $0.10 |
Warrants exercisable | 50,000 |
Warrants exercisable, weighted average exercise price | '248 days |
Warrant exercise price 0.10 [Member] | Maximum [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Exercise prices (in Dollars per Item) | 0.1 |
Warrant exercise price 0.20 [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Warrants outstanding (in Dollars per share) | $0.20 |
Warrants outstanding, weighted average remaining contractual life | 10,999,842 |
Weighted oustanding, weighted average exercise price (in Dollars per share) | $0.20 |
Warrants exercisable | 10,999,842 |
Warrants exercisable, weighted average exercise price | '2 years 36 days |
Warrant exercise price 0.20 [Member] | Maximum [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Exercise prices (in Dollars per Item) | 0.2 |
Warrant Exercise Price 0.10 - 0.20 [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Warrants outstanding (in Dollars per share) | $0.20 |
Warrants outstanding, weighted average remaining contractual life | 11,049,842 |
Weighted oustanding, weighted average exercise price (in Dollars per share) | $0.20 |
Warrants exercisable | 11,049,842 |
Warrants exercisable, weighted average exercise price | '2 years 284 days |
Warrant Exercise Price 0.10 - 0.20 [Member] | Minimum [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Exercise prices (in Dollars per Item) | 0.1 |
Warrant Exercise Price 0.10 - 0.20 [Member] | Maximum [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Exercise prices (in Dollars per Item) | 0.2 |
NOTE_13_EMPLOYEE_OPTIONS_Detai
NOTE 13 - EMPLOYEE OPTIONS (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
NOTE 13 - EMPLOYEE OPTIONS (Details) [Line Items] | ' | ' |
Share-based Compensation | $154,591 | $125,011 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | ' | 255,808 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | '1 year 62 days | ' |
2009 Long Term Incentive Plan [Member] | ' | ' |
NOTE 13 - EMPLOYEE OPTIONS (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 10,000,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 'The outstanding options have a term of ten years and vest monthly over five years, quarterly over five years, quarterly over three years or over three years with 33.3% vesting on the one year anniversary date, and the remaining 66.7% vesting quarterly over the remaining two years. | ' |
Shares issued, two outside directors [Member] | ' | ' |
NOTE 13 - EMPLOYEE OPTIONS (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | ' | 'ten years and vesting of the stock options was for a three-year period, with 33% vesting on one-year anniversary of the grant date, and the remainder vesting ratably over the next eight quarters. |
Number of Directors | ' | 2 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Fair Value, Grants in Period | ' | $4,500 |
NOTE_13_EMPLOYEE_OPTIONS_Detai1
NOTE 13 - EMPLOYEE OPTIONS (Details) - Summary of Stock Option Activity (USD $) | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
Number of Shares [Member] | Weighted average exercise price [Member] | Aggregate Intrinsic Value [Member] | Aggregate Intrinsic Value [Member] | Weighted Average Remaining Contractual Life [Member] | ||
NOTE 13 - EMPLOYEE OPTIONS (Details) - Summary of Stock Option Activity [Line Items] | ' | ' | ' | ' | ' | ' |
Outstanding at beginning of period (in Shares) | 8,885,833 | 8,815,000 | ' | ' | ' | ' |
Outstanding at beginning of period | ' | ' | $0.09 | ' | ' | ' |
Outstanding at beginning of period (in Dollars) | ' | ' | ' | $0 | $0 | ' |
Granted (in Shares) | ' | 450,000 | ' | ' | ' | ' |
Granted | ' | ' | $0.10 | ' | ' | ' |
Exercised | ' | ' | $0 | ' | ' | ' |
Exercised (in Shares) | ' | 0 | ' | ' | ' | ' |
Forfeited/ Cancelled (in Shares) | ' | -379,167 | ' | ' | ' | ' |
Forfeited/ Cancelled | ' | ' | $0.09 | ' | ' | ' |
Outstanding at period end (in Shares) | 8,885,833 | 8,885,833 | ' | ' | ' | ' |
Outstanding at period end | ' | ' | $0.09 | ' | ' | ' |
Outstanding at period end | ' | ' | ' | ' | ' | '1 year 83 days |
Outstanding at period end (in Dollars) | ' | ' | ' | $0 | $0 | ' |
Options vested and exercisable at period end (in Shares) | 5,989,170 | 5,989,170 | ' | ' | ' | ' |
Options vested and exercisable at period end | ' | ' | $0.09 | ' | ' | ' |
Weighted average grant-date fair value of options granted during the period | ' | ' | $0.10 | ' | ' | ' |
NOTE_13_EMPLOYEE_OPTIONS_Detai2
NOTE 13 - EMPLOYEE OPTIONS (Details) - Summary of Outstanding and Exercisable Options (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding, Weighed Average Remaining Contracual Life (in Shares) | 5,989,170 |
Options Exercisable (in Shares) | 8,885,833 |
Options, range of exercise prices $0.00-0.08 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding | $0.08 |
Options Outstanding, Weighed Average Remaining Contracual Life (in Shares) | 2,260,004 |
Options Outstanding, Weighted Average Exercise Price | $0.08 |
Options Exercisable (in Shares) | 2,760,000 |
Options Exercisable, Weighted Average Exercise Price | '1 year 62 days |
Options, range of exercise prices $0.00-0.08 [Member] | Minimum [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Exercise Prices | $0 |
Options, range of exercise prices $0.00-0.08 [Member] | Maximum [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Exercise Prices | $0.08 |
Options, range of exercise prices $0.09-0.10 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding | $0.10 |
Options Outstanding, Weighed Average Remaining Contracual Life (in Shares) | 3,729,166 |
Options Outstanding, Weighted Average Exercise Price | $0.10 |
Options Exercisable (in Shares) | 6,125,833 |
Options Exercisable, Weighted Average Exercise Price | '1 year 18 days |
Options, range of exercise prices $0.09-0.10 [Member] | Minimum [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Exercise Prices | $0.09 |
Options, range of exercise prices $0.09-0.10 [Member] | Maximum [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Exercise Prices | $0.10 |
NOTE_13_EMPLOYEE_OPTIONS_Detai3
NOTE 13 - EMPLOYEE OPTIONS (Details) - Summary of Non-vested Shares (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Number of non-vested shares [Member] | ' |
NOTE 13 - EMPLOYEE OPTIONS (Details) - Summary of Non-vested Shares [Line Items] | ' |
Non-vested at January 1, 2013 | 4,652,924 |
Granted | 450,000 |
Forfeited | -262,500 |
Vested | -1,943,761 |
Non-vested | 2,896,663 |
Non-vested weighted average grant-date fair value [Member] | ' |
NOTE 13 - EMPLOYEE OPTIONS (Details) - Summary of Non-vested Shares [Line Items] | ' |
Non-vested at January 1, 2013 (in Dollars per share) | 0.09 |
Granted (in Dollars per share) | 0.1 |
Forfeited (in Dollars per share) | 0.09 |
Vested (in Dollars per share) | 0.08 |
Non-vested (in Dollars per share) | 0.09 |
NOTE_14_COMMITMENTS_AND_CONTIN2
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 9 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2013 | Sep. 30, 2012 | Nov. 07, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | |
Subsequent Event [Member] | Co-founder #1 [Member] | Co-founder #1 [Member] | Co-founder #2 [Member] | Co-founder #2 [Member] | Chief Executive Officer [Member] | CEO Equity Compensation [Member] | VidTac Contract Manufacturer [Member] | |||
VidTac Contract Manufacturer [Member] | ||||||||||
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase Obligation | $1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | $1,400,000 |
Purchase Commitment, Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'contract manufacturer for 1,000 finished units, with stated delivery dates for the units to be delivered ratably and throughout the twelve month period ending December 31, 2013. |
Accounts Payable, Current | ' | ' | 38,000 | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 514,163 | ' | ' | ' | ' | ' | ' | 160,532 | ' | ' |
Capital contributed through forfeiture of conractual compensation | 59,250 | 59,250 | ' | 30,000 | 30,000 | 29,250 | 29,250 | ' | ' | ' |
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' |
Stock Issued During Period, Value, Restricted Stock Award, Gross | ' | ' | ' | ' | ' | ' | ' | ' | 180,000 | ' |
Other Noncash Expense | $45,000 | $45,000 | ' | ' | ' | ' | ' | ' | ' | ' |
NOTE_14_COMMITMENTS_AND_CONTIN3
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) - Summary of Fixed Contractual Obligations and Commitments (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) - Summary of Fixed Contractual Obligations and Commitments [Line Items] | ' | ' |
Long-Term Debt Obligations | $183,170 | $249,568 |
Operating Lease Obligations | 187,280 | ' |
Purchase Obligations | 1,200,000 | ' |
Convertible promissory notes | 554,163 | ' |
Total Contractual Obligations | 2,124,613 | ' |
Due in Remaining Fiscal Year [Member] | ' | ' |
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) - Summary of Fixed Contractual Obligations and Commitments [Line Items] | ' | ' |
Long-Term Debt Obligations | 110,980 | ' |
Operating Lease Obligations | 26,124 | ' |
Purchase Obligations | 125,100 | ' |
Convertible promissory notes | 0 | ' |
Total Contractual Obligations | 262,204 | ' |
Due in Second and Third Year [Member] | ' | ' |
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) - Summary of Fixed Contractual Obligations and Commitments [Line Items] | ' | ' |
Long-Term Debt Obligations | 35,497 | ' |
Operating Lease Obligations | 161,156 | ' |
Purchase Obligations | 1,074,900 | ' |
Convertible promissory notes | 534,163 | ' |
Total Contractual Obligations | 1,805,716 | ' |
Due in Fourth and Fifth Year [Member] | ' | ' |
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) - Summary of Fixed Contractual Obligations and Commitments [Line Items] | ' | ' |
Long-Term Debt Obligations | 29,991 | ' |
Operating Lease Obligations | 0 | ' |
Purchase Obligations | 0 | ' |
Convertible promissory notes | 20,000 | ' |
Total Contractual Obligations | 49,991 | ' |
Due After Fifth Year [Member] | ' | ' |
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) - Summary of Fixed Contractual Obligations and Commitments [Line Items] | ' | ' |
Long-Term Debt Obligations | 6,702 | ' |
Operating Lease Obligations | 0 | ' |
Purchase Obligations | 0 | ' |
Convertible promissory notes | 0 | ' |
Total Contractual Obligations | $6,702 | ' |
NOTE_15_SUBSEQUENT_EVENTS_Deta
NOTE 15 - SUBSEQUENT EVENTS (Details) (USD $) | 9 Months Ended | 1 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Oct. 31, 2013 | |
Subsequent Event [Member] | |||
Chief Executive Officer [Member] | |||
Convertible Note #4 [Member] | |||
NOTE 15 - SUBSEQUENT EVENTS (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Face Amount (in Dollars) | ' | ' | $60,000 |
Proceeds from Convertible Debt (in Dollars) | $200,000 | $0 | $60,000 |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | 3.00% |
Debt Instrument, Maturity Date | ' | ' | 1-Jan-14 |
Debt Instrument, Convertible, Terms of Conversion Feature | ' | ' | 'The convertible note may be converted at the holder's option into shares of the Company's common stock |
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | ' | ' | $0.10 |