Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 7-May-14 | |
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 | ' | 175,514,501 |
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 | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $261,354 | $414,051 |
Accounts receivable, net | 78,754 | 101,807 |
Inventories | 222,454 | 357,933 |
Prepaid expenses and other current assets | 141,780 | 116,573 |
Total Current Assets | 704,342 | 990,364 |
PROPERTY AND EQUIPMENT | ' | ' |
Computer hardware | 68,847 | 68,847 |
Computer software | 36,936 | 36,936 |
Fleet vehicles | 167,296 | 134,987 |
Furniture and fixtures | 7,872 | 7,872 |
Total Property and Equipment | 280,951 | 248,642 |
Less: Accumulated Depreciation | -122,074 | -113,489 |
Net Property and Equipment | 158,877 | 135,153 |
OTHER ASSETS | ' | ' |
Software development costs, net | 327,354 | 436,471 |
Total Other Assets | 327,354 | 436,471 |
TOTAL ASSETS | 1,190,573 | 1,561,988 |
CURRENT LIABILITIES | ' | ' |
Accounts payable and accrued expenses | 1,354,734 | 1,419,170 |
Deferred revenues | 2,636,870 | 2,878,264 |
Convertible notes payable, current portion | 0 | 20,000 |
Notes payable, current portion | 452,209 | 412,405 |
Total Current Liabilities | 4,443,813 | 4,729,839 |
LONG-TERM LIABILITIES | ' | ' |
Deferred revenues | 1,120,391 | 1,052,749 |
Convertible notes payable | 594,163 | 594,163 |
Notes payable, non-current portion | 603,140 | 107,329 |
Total Long-Term Liabilities | 2,317,694 | 1,754,241 |
Total Liabilities | 6,761,507 | 6,484,080 |
COMMITMENTS AND CONTINGENCIES | ' | ' |
STOCKHOLDERS' DEFICIT | ' | ' |
Common stock, par value $0.0001 per share, 500,000,000 shares authorized; 175,514,501 and 175,014,501 issued and outstanding, respectively | 17,551 | 17,501 |
Common stock to be issued, 15,000 shares, respectively | 1,500 | 1,500 |
Additional paid-in-capital | 13,833,744 | 13,709,972 |
Accumulated deficit | -19,423,776 | -18,651,112 |
Total Stockholders' Deficit | -5,570,934 | -4,922,092 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 1,190,573 | 1,561,988 |
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 $) | Mar. 31, 2014 | Dec. 31, 2013 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 175,514,501 | 175,014,501 |
Common stock, shares outstanding | 175,514,501 | 175,014,501 |
Common stock to be issued | 15,000 | 15,000 |
Series A Preferred Stock [Member] | ' | ' |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 100,000 | 100,000 |
Preferred stock, shares outstanding | 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 | 375,000 | 375,000 |
Preferred stock, shares issued | 375,000 | 375,000 |
Preferred stock, shares outstanding | 375,000 | 375,000 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
REVENUES | ' | ' |
Hardware, installation and other revenues | $904,931 | $753,862 |
Software license/subscription revenues | 582,889 | 397,267 |
Total Revenues | 1,487,820 | 1,151,129 |
COST OF REVENUES | ' | ' |
Hardware and other costs | 697,907 | 519,629 |
Software license/subscriptions | 222,506 | 222,597 |
Total Cost of Revenues | 920,413 | 742,226 |
GROSS PROFIT | 567,407 | 408,903 |
OPERATING EXPENSES | ' | ' |
Research and development | 553,004 | 449,597 |
Sales and marketing | 316,957 | 320,720 |
General and administrative | 433,173 | 363,140 |
Total Operating Expenses | 1,303,134 | 1,133,457 |
LOSS FROM OPERATIONS | -735,727 | -724,554 |
OTHER INCOME (EXPENSE) | ' | ' |
Interest expense | -10,702 | -4,729 |
Gain/(Loss) on asset disposals | -345 | 0 |
Total Other Income (Expense) | -11,047 | -4,729 |
NET LOSS BEFORE INCOME TAXES | -746,774 | -729,283 |
INCOME TAXES | 0 | 0 |
NET LOSS | -746,774 | -729,283 |
Series B preferred stock dividend | -25,890 | -25,890 |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | ($772,664) | ($755,173) |
LOSS PER COMMON SHARE - BASIC & DILUTED (in Dollars per share) | $0 | $0 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED (in Shares) | 175,181,168 | 171,815,723 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net loss | ($746,774) | ($729,283) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 119,369 | 119,507 |
Employee and non-employee stock compensation | 28,182 | 50,700 |
Amortization of restricted stock grants | 0 | 15,000 |
Capital contributed/co-founders' forfeiture of contractual compensation | 19,750 | 19,750 |
Loss on asset disposals | 345 | 0 |
Change in operating assets and liabilities: | ' | ' |
Accounts receivable | 23,053 | -123,107 |
Inventories | 135,479 | -35,341 |
Prepaid expenses and other current assets | 2,756 | 4,066 |
Deferred revenues | -173,752 | 664,227 |
Accounts payable and accrued expenses | -64,436 | -13,245 |
Net Cash Used in Operating Activities | -656,028 | -27,726 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Proceeds from asset disposals | 2,500 | 0 |
Purchases of property and equipment | -6,118 | 0 |
Net Cash Used by Investing Activities | -3,618 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from notes payable | 500,000 | -136,288 |
Payments on notes payable | -23,051 | 120,000 |
Proceeds from stock deposit for common stock to be issued | 0 | 31,930 |
Proceeds from issuance of common stock for cash | 30,000 | 70,000 |
Net Cash Provided by Financing Activities | 506,949 | 85,642 |
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | -152,697 | 57,916 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 414,051 | 174,444 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 261,354 | 232,360 |
SUPPLEMENTAL DISCLOSURES: | ' | ' |
Cash paid for interest | 6,650 | 6,716 |
Cash paid for income tax | 1,953 | 1,800 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Partial financing associated with the purchase of two fleet vehicles | 30,703 | 0 |
Conversion of convertible notes, plus accrued interest into 200,000 and 191,000 shares of common stock, respectively | 20,000 | 19,100 |
Issuance of common stock for prior year stock subscriptions | 0 | 7,000 |
Financing of prepaid insurance policy | 27,963 | 0 |
Series B Preferred stock dividends | $25,890 | $25,890 |
Condensed_Statements_of_Cash_F1
Condensed Statements of Cash Flows (Unaudited) (Parentheticals) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Conversion of convertible notes, shares | 200,000 | 191,000 |
NOTE_1_BASIS_OF_FINANCIAL_STAT
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION | 3 Months Ended |
Mar. 31, 2014 | |
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. (the "Company") 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 March 31, 2014, and its results of operations and cash flows for the three month periods ended March 31, 2014. 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, 2013. The results for the three month period ended March 31, 2014 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2014, or any other period. The year-end condensed balance sheet data as of December 31, 2013, 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 | 3 Months Ended |
Mar. 31, 2014 | |
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. | |
In addition to the Company’s core COPsync information sharing, data interoperability and communication network service, in 2012 it released two complementary service/product offerings. These new product offerings were WARRANTsync, a statewide misdemeanor warrant clearing database, and VidTac, an in-vehicle video camera system for law enforcement. | |
WARRANTsync is designed to be a statewide misdemeanor warrant clearing database. It enables law enforcement officers in the field to receive notice of outstanding warrants in real-time at the point of a traffic stop. The WARRANTsync system enables the offender to pay the outstanding warrant fees and costs using a credit card or debit card. Following payment, the offender is given a receipt and the transaction is complete. This product represents a very small portion of our revenues and could be viewed as an enhancement feature to our core COPsync service. | |
VidTac is a software-driven video system for law enforcement. Traditional in-vehicle video systems are “hardware centric” DVR-based systems. The video capture, compression and encryption of the video stream is performed by the DVR. The estimated price of these high-end, digital DVR-based systems range from $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 VidTac system is price advantageous vis-a-vis other high-end video systems. The Company is offering it 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 for the agency 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. | |
The Company also offers the COPsync911 threat alert, first introduced in the second quarter of 2013, for use in schools, hospitals, day care facilities, governmental office buildings, energy infrastructure and other facilities with a high level of concern about security. When used in schools, the COPsync911 service enables school personnel to instantly and silently send emergency alerts directly to the closest law enforcement officers in their patrol vehicles, and to the local 911 dispatch center, with the mere click of an icon located on every computer within the facility. The alert is also sent to the cell phones of all law enforcement officers in the area and to all teachers, administrators, and other staff at the school, alerting them of imminent danger. The Company expects its COPsync911 service to reduce emergency law enforcement response times by five to seven minutes. | |
At March 31, 2014, the Company had cash and cash equivalents of $261,354, a working capital deficit of $3,739,471 and an accumulated deficit of $19,423,776. In the first quarter of 2014, the Company continued the efforts it began in fiscal year 2013 to manage its liquidity, to avoid default on any third-party obligations and to continue growing its business towards cash-flow break-even, and ultimately profitability, including the following: | |
1) The Company anticipates that the number of orders for its products and services will increase in 2014 over 2013 as a result of changes it has made in its sales organization, including hiring a new sales executive and the hiring of new, more seasoned, sales representatives. | |
2) In 2013, the Company introduced the COPsync911 real-time threat alert service, which the Company believes is the only threat alert service of its kind in the United States. The service 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 vehicles and the local emergency dispatch center with just the click of a computer mouse or screen icon. The Company is primarily offering the COPsync911 service in the State of Texas and other selected regions of the United States. The Company expects the pace of COPsync911 sales to accelerate as its sales team and resellers becomes familiar with the service and the strategies for selling it. | |
3) The Company’s procurement processes for third party hardware employs “just in time” principles, meaning that 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 it orders the hardware. This change in the processing of third party hardware has helped the Company significantly in managing its working capital. | |
4) The Company’s key vendors continue to accommodate the Company through extended payment terms or practices for its outstanding payables balances, but the Company is uncertain how long these accommodations will continue. | |
5) In the first quarter of 2014, the Company received a $475,000 loan from the City of Pharr, Texas, and it expects to receive an additional loan of $375,000 from that city in May or June of 2014. | |
6) In April 2014, the Company’s Board of Directors authorized management to raise up to $1,000,000 in new capital in 2014, of which 80,000 has been raised as of the date of this report. Additionally, the Company has borrowed $400,000 (see Note 15) and is currently in discussions with potential investors to raise at least $500,000 of the target capital amount. The Company is also seeking a working capital line of credit to fund third party and proprietary equipment purchases from the manufacturers. | |
7) The Company is attempting to secure up to $1.5 million in funding pursuant to an EB-5 program, which the Company hopes to close in 2014. The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs. Following the job creation, the foreign lenders receive U.S. “green cards.” The Company currently has a letter of intent with a financier for the EB-5 program. The financier has already completed the required economic impact analysis for the project, which will be located in Pharr, Texas. The Company will use a portion of any proceeds from this EB-5 program to repay the bridge loans from the City of Pharr. Any remaining funds will be used for general working capital purposes, including the Company’s anticipated hiring of at least 30 employees in the Pharr area over the 24 month period after receiving the proceeds, who will office in a recently refurbished leased facility owned by the City of Pharr. | |
8) The Company plans to reduce its research and development expenses in 2014 by approximately $650,000 from the amount it spent in 2013, even though those expenses increased from 2013 in the first quarter. The Company believes that it has the capability to reduce further operating expenses, should circumstances warrant. | |
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has accumulated significant losses as it has been developing its current and recently added offerings. The Company has had recurring losses and expects to report losses for fiscal 2014. The Company believes that cash flow from operations, together with the potential sources of debt and equity and revenue-based financing outlined above will be sufficient to fund the Company’s anticipated operations for the next twelve months. | |
NOTE_3_SUMMARY_OF_SIGNIFICANT_
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICES | 3 Months Ended |
Mar. 31, 2014 | |
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. | |
There have been no significant changes to the summary of significant accounting policies disclosed in Note 2 to the financial statements as of December 31, 2013 included in the Form 10-K filed on March 31, 2014. | |
NOTE_4_RECENT_ACCOUNTING_STAND
NOTE 4 - RECENT ACCOUNTING STANDARDS AND PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2014 | |
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 | |
We have implemented all new accounting pronouncements that are in effect and that may impact our unaudited consolidated financial statements. We do 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 | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory Disclosure [Text Block] | ' | ||||||||
NOTE 5 – INVENTORY | |||||||||
Inventory consisted of the following at March 31, 2014, and December 31, 2013, respectively: | |||||||||
Category | March 31, 2014 | 31-Dec-13 | |||||||
Raw materials | $ | 28,055 | $ | - | |||||
Work-in-process | - | - | |||||||
Finished goods | 194,399 | 357,933 | |||||||
Total Inventory | $ | 222,454 | $ | 357,933 | |||||
The Company’s inventory includes third-party hardware which consists of computer laptops, printers and ancillary parts, such as electronic components, connectors, adapters and cables, as well as, our propriety product, VidTac. The third-party hardware is purchased from a few select vendors, whereas, the VidTac product is manufactured by a contract manufacturer. | |||||||||
During the three months period ended March 31, 2014, the Company’s inventories decreased significantly, particularly in finished goods inventory. The decrease resulted from the installation in the first quarter of previously procured and inventoried third-party hardware. The various components of third-party hardware are all considered finished goods because the individual items may be, and are, sold in a package arrangement, or on an individual basis, normally at the same pricing structure. | |||||||||
See Note 3 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion involving the Company’s inventory investment recorded in the years ended December 31, 2013 and 2012. | |||||||||
Relative to the VidTac propriety product, the Company, in 2012, selected and entered into a manufacturing agreement with a contract manufacturer to build the new VidTac unit at a contracted price and to the Company’s specifications. The manufacturing agreement calls for the Company to periodically place a demand purchase order for finished units to be manufactured and delivered as finished goods. Recently, the Company has been placing small quantity purchase orders with the contract manufacturer and with payment terms consisting of a prepayment arrangement or “pay as you go” basis, requiring approximately 50% in prepayments. | |||||||||
The Company’s purchase orders placed with the contract manufacturer are non-cancellable. However, (1) the Company may change the original requested delivery dates if the Company gives sufficient advance notice to the contract manufacturer, and (2) should the Company elect to cancel the purchase order in total or in part, it would be financially responsible only for any materials that could not be returned by the contract manufacturer to its source suppliers. | |||||||||
At December 31, 2013, the Company reported no raw materials inventory, pertaining to the propriety VidTac product and representing certain completed, top-level component assemblies not yet incorporated into finished VidTac units. At March 31, 2014, the Company inventoried $28,055 of these top-level component assemblies. These items will continue to be used in future manufactured VidTac units; thus, there is no risk of obsolescence. The reclassification of these assemblies from finished goods to raw materials at March 31, 2014, is viewed by management as immaterial to the Company’s reported financial results. | |||||||||
NOTE_6_NOTES_PAYABLE
NOTE 6 - NOTES PAYABLE | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt Disclosure [Text Block] | ' | ||||||||
NOTE 6 – NOTES PAYABLE | |||||||||
The Company’s total notes payable at March 31, 2014 was $1,055,349, representing a net increase of $535,615 for the three month period ended March 31, 2014. The following table shows the components of notes payable at March 31, 2014 and December 31, 2013: | |||||||||
March 31, | December 31, | ||||||||
Loan Type | 2014 | 2013 | |||||||
Bank | $ | 100,285 | $ | 73,542 | |||||
Insurance | 44,272 | 34,069 | |||||||
Demand Note | 910,792 | 412,123 | |||||||
Total notes payable | 1,055,349 | 519,734 | |||||||
Less: Current portion | (452,209 | ) | (412,405 | ) | |||||
Long-term portion | $ | 603,140 | $ | 107,329 | |||||
During the three month period ended March 31, 2014, the Company incurred the following increases in notes payable: | |||||||||
1) | A five-year bank note in the principal amount of $30,703, with an interest rate of 4.0% per annum, for two automobiles to be used by the Company’s sales organization. | ||||||||
2) | The Company received a $475,000 loan from the City of Pharr, Texas, and it expects to receive an additional $375,000 loan from the City in May or June of 2014, for an aggregate amount of $850,000. The loan documents are still being finalized at the date of this report; the note is expected to bear interest at 8.0% per annum. The loan principal amount is expected to be due in full on the earlier to occur of the 18th month anniversary of the loan or the receipt by the Company of an expected $1.5 million in proceeds from an EB-5 funding arrangement the Company is pursuing. The loan is expected to be secured by a first priority security interest in the Company’s accounts receivable. The city will also receive a modest revenue share, payable quarterly, with respect to contracts for the Company’s products and services with customers located in a specified territory in the southern portion of Texas for a specified period of time. | ||||||||
3) | The Company executed a $27,963, eleven-month note payable pertaining to the Company’s business insurance coverage for inland marine, general and product liability risk exposures. The note calls for monthly payments of principal and has an interest rate of 7.5% per annum. | ||||||||
4) | On February 28, 2014, the Company executed a $25,000, sixty-day promissory note payable to its Chief Executive Officer. Interest at 3.0% per annum is due upon maturity of the promissory note. The Company’s Chief Executive Officer has elected to extend the maturity date of this note to June 30, 2014. | ||||||||
During the first quarter of 2014, the Company made total principal payments of $23,051, principally through scheduled monthly payments, on notes payable financing the Company’s business insurance policies and bank notes for automobile loans. | |||||||||
NOTE_7_CONVERTIBLE_NOTES_PAYAB
NOTE 7 - CONVERTIBLE NOTES PAYABLE | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Convertible Note Payable [Abstract] | ' | ||||||||
Convertible Note Payable [Text Block] | ' | ||||||||
NOTE 7 - CONVERTIBLE NOTES PAYABLE | |||||||||
During the first quarter of 2014, fifteen of the eighteen holders of the Company’s convertible promissory notes, representing $554,163 in aggregate principal amount, elected to execute either a one-year or two-year extension of their original notes. As a result of these elections, and the fact that they took place prior to the Company reporting its financial results for twelve month period ended December 31, 2013, the Company classified the aggregate principal value of $554,163 as Noncurrent Liabilities on the Company’s Balance Sheet at December 31, 2013. | |||||||||
During the first quarter of 2014, the holder of one convertible note elected to convert the note into shares of the Company’s common stock. The total principal amount of the converted note on the date of conversion was $20,000. The Company issued a total of 200,000 shares of its common stock at the conversion price of $0.10 per share pursuant to the terms of the note. | |||||||||
Convertible notes payable at March 31, 2014 and December 31, 2013 are summarized as follows: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Total convertible notes payable | $ | 873,263 | $ | 873,263 | |||||
Less: note conversions | $ | 279,100 | $ | 259,100 | |||||
Convertible notes payable, net | $ | 594,163 | $ | 614,163 | |||||
Less: current portion | $ | - | $ | 20,000 | |||||
Convertible notes payable, net, long-term portion | $ | 594,163 | $ | 594,163 | |||||
NOTE_8_PREFERRED_STOCK
NOTE 8 - PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2014 | |
Disclosure Text Block Supplement [Abstract] | ' |
Preferred Stock [Text Block] | ' |
NOTE 8 – PREFERRED STOCK | |
Preferred Stock Series A | |
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 common stock, but has voting rights 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. | |
Each share of Series A Preferred Stock shall automatically be converted into fully-paid non-assessable shares of common stock at the then effective conversion rate for such share. The events that may trigger this automatic conversion event are as follows: 1) immediately prior to the closing of firm commitment involving an initial public offering, or 2) upon the receipt of the Company of a written request for such conversion from the holders of at least a majority of the Series A Preferred stock then outstanding, or if later, the effective date for conversion specified in such requests. | |
Preferred Stock Series B | |
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 $25,890 in accrued dividends on the Series B Preferred Stock for the three-month periods ended March 31, 2014 and 2013, respectively. | |
NOTE_9_COMMON_STOCK
NOTE 9 - COMMON STOCK | 3 Months Ended |
Mar. 31, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
NOTE 9 – COMMON STOCK | |
During the three month period ended March 31, 2014, the Company issued a total of 300,000 shares of common stock, along with associated warrants, valued at $30,000, or $0.10 per share, pursuant to two individual cash investments made in the first quarter of 2014. | |
The Company also issued 200,000 shares of its common stock upon the conversion of $20,000 in principal amount of an outstanding convertible note during the period (Note 7). | |
NOTE_10_COMMON_STOCK_TO_BE_ISS
NOTE 10 - COMMON STOCK TO BE ISSUED | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Common Stock To Be Isssued [Abstract] | ' | ||||||||||||||||
Common Stock To Be Isssued [Text Block] | ' | ||||||||||||||||
NOTE 10 – COMMON STOCK TO BE ISSUED | |||||||||||||||||
During 2013, the Company received a series of small deposits from a single investor totaling $1,500 for the purchase of shares of common stock and associated warrants, which the Company anticipates will be issued later in 2014. | |||||||||||||||||
The following table provides a reconciliation of the transactions, number of shares and associated common stock values for the common stock to be issued at March 31, 2014 and December 31, 2013. | |||||||||||||||||
At March 31, 2014 | At December 31, 2013 | ||||||||||||||||
Common stock to be issued per: | # of Shares | $ Value | # of Shares | $ Value | |||||||||||||
A stock deposit received for common stock to be issued at $0.10 per share | 15,000 | 1,500 | 15,000 | 1,500 | |||||||||||||
Total number of shares and value | 15,000 | $ | 1,500 | 15,000 | $ | 1,500 | |||||||||||
NOTE_11_BASIC_AND_FULLY_DILUTE
NOTE 11 - BASIC AND FULLY DILUTED LOSS PER SHARE | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share [Text Block] | ' | ||||||||
NOTE 11 – BASIC AND FULLY DILUTED LOSS PER SHARE | |||||||||
The computations of basic 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. 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 were excluded from the loss per share attributable to common stockholders as their value is anti-dilutive. | |||||||||
The Company's common stock equivalents, at March 31, 2014 and 2013, which are not included in the calculation of fully diluted loss per share because they are anti-dilutive, consisted of the following: | |||||||||
2014 | 2013 | ||||||||
Convertible promissory notes outstanding | 6,033,631 | 4,774,351 | |||||||
Warrants outstanding | 10,684,842 | 10,495,982 | |||||||
Stock options outstanding | 8,450,000 | 8,748,333 | |||||||
Preferred stock outstanding | 15,100,000 | 15,100,000 | |||||||
Common stock to be issued | 15,000 | 319,300 | |||||||
Dividends on preferred stock outstanding | 5,447,043 | 4,076,243 | |||||||
Total Common Stock Equivalents | 45,730,516 | 43,514,209 | |||||||
NOTE_12_OUTSTANDING_WARRANTS
NOTE 12 - OUTSTANDING WARRANTS | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
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 three-month period ended March 31, 2014, is as follows: | |||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Description | Shares | Exercise Price | |||||||||||||||||||||||
Outstanding, January 1, 2014 | 11,049,842 | $ | 0.16 | ||||||||||||||||||||||
Granted | 60,000 | 0.1 | |||||||||||||||||||||||
Cancelled | - | - | |||||||||||||||||||||||
Expired | (425,000 | ) | 0.2 | ||||||||||||||||||||||
Outstanding, March 31, 2014 | 10,684,842 | $ | 0.16 | ||||||||||||||||||||||
Exercisable, March 31, 2014 | 10,684,842 | $ | 0.16 | ||||||||||||||||||||||
The total number of warrants issued during the three month period ended March 31, 2014 consisted of 60,000 warrants associated with the issuance of 300,000 shares of the Company’s common stock pursuant to new capital investments of $30,000 during the period. | |||||||||||||||||||||||||
A summary of the status of the Company’s outstanding warrants, and the changes during the twelve month period ended December 31, 2013, is as follows: | |||||||||||||||||||||||||
Year 2013 | |||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Description | Shares | Exercise Price | |||||||||||||||||||||||
Outstanding, January 1, 2013 | 10,341,982 | $ | 0.17 | ||||||||||||||||||||||
Granted | 707,860 | $ | 0.1 | ||||||||||||||||||||||
Cancelled | - | - | |||||||||||||||||||||||
Expired | - | - | |||||||||||||||||||||||
Outstanding, December 31, 2013 | 11,049,842 | $ | 0.16 | ||||||||||||||||||||||
Exercisable, December 31, 2013 | 11,049,842 | $ | 0.16 | ||||||||||||||||||||||
The following is a summary of the Company’s outstanding and exercisable warrants at March 31, 2014: | |||||||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||||||
Exercise Prices | Weighted Average Number | Remaining | Weighted Average | Number Exercisable | Weighted Average | ||||||||||||||||||||
Outstanding at 3/31/14 | Life (in yrs.) | Exercise Price | at 3/31/14 | Exercise Price | |||||||||||||||||||||
$ | 0.1 | 4,309,260 | 2.27 | $ | 0.1 | 4,309,260 | $ | 0.1 | |||||||||||||||||
0.2 | 6,375,582 | 2.4 | 0.2 | 6,375,582 | 0.2 | ||||||||||||||||||||
$ | 0.1 | - | 0.20 | 10,684,842 | 2.39 | $ | 0.16 | 10,684,842 | $ | 0.16 | |||||||||||||||
NOTE_13_EMPLOYEE_OPTIONS
NOTE 13 - EMPLOYEE OPTIONS | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
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 March 31, 2014, 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 March 31, 2014, options to purchase 8,450,000 shares of the Company’s common stock were outstanding under the plan, of which options to purchase 6,415,825 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 three months ended March 31, 2014 and 2013, the Company recorded share-based compensation expense of $28,182 and $50,700, respectively. | |||||||||||||||||||||||||||||
For the three months ended March 31, 2014, the Company granted options to purchase 75,000 shares of its common stock with an exercise price of $0.10 per share. These options consisted of grants issued to three 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 $5,520. 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 the 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 March 31, 2014 under the Company’s 2009 Long Term Incentive Plan is as follows: | |||||||||||||||||||||||||||||
31-Mar-14 | |||||||||||||||||||||||||||||
Shares | Weighted Average | Aggregate | Weighted Average | ||||||||||||||||||||||||||
Exercise Price | Intrinsic Value | Remaining | |||||||||||||||||||||||||||
Contractual Life | |||||||||||||||||||||||||||||
Outstanding at beginning of period | 8,375,000 | $ | 0.09 | $ | – | ||||||||||||||||||||||||
Granted | 75,000 | $ | 0.1 | $ | – | ||||||||||||||||||||||||
Exercised | – | $ | 0 | $ | – | ||||||||||||||||||||||||
Forfeited/ Cancelled | – | $ | 0 | $ | – | ||||||||||||||||||||||||
Outstanding at period end | 8,450,000 | $ | 0.09 | $ | – | 7.22 | |||||||||||||||||||||||
Options vested and exercisable at period end | 6,415,825 | $ | 0.09 | $ | – | 6.94 | |||||||||||||||||||||||
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 March 31, 2014: | |||||||||||||||||||||||||||||
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 | 2,500,000 | 0.75 | $ | 0.08 | 2,125,000 | $ | 0.08 | ||||||||||||||||||
$ | 0.09 | – | $ | 0.1 | 5,950,000 | 0.76 | $ | 0.1 | 4,290,825 | $ | 0.1 | ||||||||||||||||||
8,450,000 | 6,415,825 | ||||||||||||||||||||||||||||
A summary of the status of the Company’s non-vested option shares as of March 31, 2014 is as follows: | |||||||||||||||||||||||||||||
Non-vested Shares | Shares | Weighted Average | |||||||||||||||||||||||||||
Grant-Date Fair Value | |||||||||||||||||||||||||||||
Non-vested at January 1, 2014 | 2,317,506 | $ | 0.09 | ||||||||||||||||||||||||||
Granted | 75,000 | $ | 0.1 | ||||||||||||||||||||||||||
Forfeited | - | $ | 0.09 | ||||||||||||||||||||||||||
Vested | (358,331 | ) | $ | 0.08 | |||||||||||||||||||||||||
Non-vested | 2,034,175 | $ | 0.09 | ||||||||||||||||||||||||||
As of March 31, 2014, there was approximately $178,611 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 0.79 years. | |||||||||||||||||||||||||||||
NOTE_14_COMMITMENTS_AND_CONTIN
NOTE 14 - COMMITMENTS AND CONTINGENCIES | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
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 March 31, 2014, as well as an estimate of the timing in which these obligations are expected to be satisfied: | |||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||
Contractual Obligations | Total | 2014 | 2015-2016 | 2017-2018 | After 2018 | ||||||||||||||||
Long-Term Debt Obligations | $ | 1,649,512 | $ | 452,209 | $ | 1,197,303 | $ | - | $ | - | |||||||||||
Operating Lease Obligations | $ | 135,032 | $ | 75,017 | $ | 60,015 | $ | - | $ | - | |||||||||||
Total Contractual Obligations | $ | 1,784,544 | $ | 527,226 | $ | 1,257,318 | $ | - | $ | - | |||||||||||
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, 2013, which discusses the employment agreements involving Mr. Russell Chaney and Mr. Shane Rapp, co-founders of the Company. One element contained in those discussions involves the voluntary elections by Mr. Chaney and Mr. Rapp to forego certain specified salary increases until the Company becomes profitable or the Company secures sufficient funding to sustain operations. The value of each person’s foregone salary for each of the three month periods ended March 31, 2014 and 2013 totaled $10,000 for Mr. Chaney and $9,750 for Mr. Rapp and was recorded as contributed capital in Additional Paid-in Capital on the Company’s Balance Sheet. | |||||||||||||||||||||
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 | 3 Months Ended |
Mar. 31, 2014 | |
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: | |
During the second quarter of 2014, as of May 9, 2014, the Company had raised an additional $50,000 in new capital investments from a single individual investor. | |
In November 2013, the Company executed two short-term notes payable in the aggregate amount of $313,477 with an equipment financing company to finance the purchase of certain third-party equipment to be sold by the Company to its contracted customers. Both notes were scheduled to mature in May 2014, bear interest at 16% per annum, are payable upon maturity, and are collateralized by the third-party equipment being procured. The equipment financing company is owned by one of the Company’s outside directors. During the second quarter of 2014, the equipment financing company extended the maturity date of the note by six months, making the notes due in November 2014. The equipment financing company required the Company to pay the accumulated interest for the original six-month period as a condition to the extension of the maturity date. | |
In August 2013, two individuals loaned the Company $50,000 each to procure third-party hardware for a specific contract pursuant to two promissory notes bearing interest at a rate of 9.9% per annum. Both of the notes matured in March 2014. One of the notes called for the Company to make monthly principal payments beginning in the fourth quarter of 2013 and continuing until the note matured. The outstanding balance for that note was fully paid in April 2014. The other note required payment of principal and interest upon maturity. In April 2014, the holder of the other note extended the maturity of his note to April 2015, and increased the principal amount of the note to a total of $250,000 by providing the Company with an additional $200,000 loan. Payment of the total principal is due on the maturity date, and the interest rate continues to be 9.9% per annum. Additionally, the Company paid the note holder the accumulated interest for the original note through March 31, 2014. | |
In May 2014, the Company borrowed $200,000 pursuant to a three-year promissory note. The repayment amount is 150% of the amount borrowed, which is to be paid over three years. The note calls for payments of $15,000, $60,000, $135,000 and $90,000 in years 2014, 2015, 2016 and 2017, respectively. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
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. |
NOTE_5_INVENTORY_Tables
NOTE 5 - INVENTORY (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory, Current [Table Text Block] | 'Inventory consisted of the following at March 31, 2014, and December 31, 2013, respectively: | ||||||||
Category | March 31, 2014 | 31-Dec-13 | |||||||
Raw materials | $ | 28,055 | $ | - | |||||
Work-in-process | - | - | |||||||
Finished goods | 194,399 | 357,933 | |||||||
Total Inventory | $ | 222,454 | $ | 357,933 |
NOTE_6_NOTES_PAYABLE_Tables
NOTE 6 - NOTES PAYABLE (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Debt [Table Text Block] | 'The following table shows the components of notes payable at March 31, 2014 and December 31, 2013: | ||||||||
March 31, | December 31, | ||||||||
Loan Type | 2014 | 2013 | |||||||
Bank | $ | 100,285 | $ | 73,542 | |||||
Insurance | 44,272 | 34,069 | |||||||
Demand Note | 910,792 | 412,123 | |||||||
Total notes payable | 1,055,349 | 519,734 | |||||||
Less: Current portion | (452,209 | ) | (412,405 | ) | |||||
Long-term portion | $ | 603,140 | $ | 107,329 |
NOTE_7_CONVERTIBLE_NOTES_PAYAB1
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Convertible Note Payable [Abstract] | ' | ||||||||
Schedule of Convertible Debt [Table Text Block] | 'Convertible notes payable at March 31, 2014 and December 31, 2013 are summarized as follows: | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Total convertible notes payable | $ | 873,263 | $ | 873,263 | |||||
Less: note conversions | $ | 279,100 | $ | 259,100 | |||||
Convertible notes payable, net | $ | 594,163 | $ | 614,163 | |||||
Less: current portion | $ | - | $ | 20,000 | |||||
Convertible notes payable, net, long-term portion | $ | 594,163 | $ | 594,163 |
NOTE_10_COMMON_STOCK_TO_BE_ISS1
NOTE 10 - COMMON STOCK TO BE ISSUED (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Common Stock To Be Isssued [Abstract] | ' | ||||||||||||||||
Schedule of Common Stock to Be Issued [Table Text Block] | 'The following table provides a reconciliation of the transactions, number of shares and associated common stock values for the common stock to be issued at March 31, 2014 and December 31, 2013. | ||||||||||||||||
At March 31, 2014 | At December 31, 2013 | ||||||||||||||||
Common stock to be issued per: | # of Shares | $ Value | # of Shares | $ Value | |||||||||||||
A stock deposit received for common stock to be issued at $0.10 per share | 15,000 | 1,500 | 15,000 | 1,500 | |||||||||||||
Total number of shares and value | 15,000 | $ | 1,500 | 15,000 | $ | 1,500 |
NOTE_11_BASIC_AND_FULLY_DILUTE1
NOTE 11 - BASIC AND FULLY DILUTED LOSS PER SHARE (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
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 March 31, 2014 and 2013, which are not included in the calculation of fully diluted loss per share because they are anti-dilutive, consisted of the following: | ||||||||
2014 | 2013 | ||||||||
Convertible promissory notes outstanding | 6,033,631 | 4,774,351 | |||||||
Warrants outstanding | 10,684,842 | 10,495,982 | |||||||
Stock options outstanding | 8,450,000 | 8,748,333 | |||||||
Preferred stock outstanding | 15,100,000 | 15,100,000 | |||||||
Common stock to be issued | 15,000 | 319,300 | |||||||
Dividends on preferred stock outstanding | 5,447,043 | 4,076,243 | |||||||
Total Common Stock Equivalents | 45,730,516 | 43,514,209 |
NOTE_12_OUTSTANDING_WARRANTS_T
NOTE 12 - OUTSTANDING WARRANTS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
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 three-month period ended March 31, 2014, is as follows: | ||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Description | Shares | Exercise Price | |||||||||||||||||||||||
Outstanding, January 1, 2014 | 11,049,842 | $ | 0.16 | ||||||||||||||||||||||
Granted | 60,000 | 0.1 | |||||||||||||||||||||||
Cancelled | - | - | |||||||||||||||||||||||
Expired | (425,000 | ) | 0.2 | ||||||||||||||||||||||
Outstanding, March 31, 2014 | 10,684,842 | $ | 0.16 | ||||||||||||||||||||||
Exercisable, March 31, 2014 | 10,684,842 | $ | 0.16 | ||||||||||||||||||||||
Year 2013 | |||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||
Average | |||||||||||||||||||||||||
Description | Shares | Exercise Price | |||||||||||||||||||||||
Outstanding, January 1, 2013 | 10,341,982 | $ | 0.17 | ||||||||||||||||||||||
Granted | 707,860 | $ | 0.1 | ||||||||||||||||||||||
Cancelled | - | - | |||||||||||||||||||||||
Expired | - | - | |||||||||||||||||||||||
Outstanding, December 31, 2013 | 11,049,842 | $ | 0.16 | ||||||||||||||||||||||
Exercisable, December 31, 2013 | 11,049,842 | $ | 0.16 | ||||||||||||||||||||||
Schedule of Outstanding and Exercisable Warrants [Table Text Block] | 'The following is a summary of the Company’s outstanding and exercisable warrants at March 31, 2014: | ||||||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||||||
Exercise Prices | Weighted Average Number | Remaining | Weighted Average | Number Exercisable | Weighted Average | ||||||||||||||||||||
Outstanding at 3/31/14 | Life (in yrs.) | Exercise Price | at 3/31/14 | Exercise Price | |||||||||||||||||||||
$ | 0.1 | 4,309,260 | 2.27 | $ | 0.1 | 4,309,260 | $ | 0.1 | |||||||||||||||||
0.2 | 6,375,582 | 2.4 | 0.2 | 6,375,582 | 0.2 | ||||||||||||||||||||
$ | 0.1 | - | 0.20 | 10,684,842 | 2.39 | $ | 0.16 | 10,684,842 | $ | 0.16 |
NOTE_13_EMPLOYEE_OPTIONS_Table
NOTE 13 - EMPLOYEE OPTIONS (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||||||
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 March 31, 2014 under the Company’s 2009 Long Term Incentive Plan is as follows: | ||||||||||||||||||||||||||||
31-Mar-14 | |||||||||||||||||||||||||||||
Shares | Weighted Average | Aggregate | Weighted Average | ||||||||||||||||||||||||||
Exercise Price | Intrinsic Value | Remaining | |||||||||||||||||||||||||||
Contractual Life | |||||||||||||||||||||||||||||
Outstanding at beginning of period | 8,375,000 | $ | 0.09 | $ | – | ||||||||||||||||||||||||
Granted | 75,000 | $ | 0.1 | $ | – | ||||||||||||||||||||||||
Exercised | – | $ | 0 | $ | – | ||||||||||||||||||||||||
Forfeited/ Cancelled | – | $ | 0 | $ | – | ||||||||||||||||||||||||
Outstanding at period end | 8,450,000 | $ | 0.09 | $ | – | 7.22 | |||||||||||||||||||||||
Options vested and exercisable at period end | 6,415,825 | $ | 0.09 | $ | – | 6.94 | |||||||||||||||||||||||
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 March 31, 2014: | ||||||||||||||||||||||||||||
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 | 2,500,000 | 0.75 | $ | 0.08 | 2,125,000 | $ | 0.08 | ||||||||||||||||||
$ | 0.09 | – | $ | 0.1 | 5,950,000 | 0.76 | $ | 0.1 | 4,290,825 | $ | 0.1 | ||||||||||||||||||
8,450,000 | 6,415,825 | ||||||||||||||||||||||||||||
Schedule of Nonvested Share Activity [Table Text Block] | 'A summary of the status of the Company’s non-vested option shares as of March 31, 2014 is as follows: | ||||||||||||||||||||||||||||
Non-vested Shares | Shares | Weighted Average | |||||||||||||||||||||||||||
Grant-Date Fair Value | |||||||||||||||||||||||||||||
Non-vested at January 1, 2014 | 2,317,506 | $ | 0.09 | ||||||||||||||||||||||||||
Granted | 75,000 | $ | 0.1 | ||||||||||||||||||||||||||
Forfeited | - | $ | 0.09 | ||||||||||||||||||||||||||
Vested | (358,331 | ) | $ | 0.08 | |||||||||||||||||||||||||
Non-vested | 2,034,175 | $ | 0.09 |
NOTE_14_COMMITMENTS_AND_CONTIN1
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||
Schedule of Future Minimum Payments for Contractual Obligations [Table Text Block] | 'The following table summarizes the Company’s obligations to make future payments pursuant to certain contracts or arrangements as of March 31, 2014, as well as an estimate of the timing in which these obligations are expected to be satisfied: | ||||||||||||||||||||
Payments Due by Period | |||||||||||||||||||||
Contractual Obligations | Total | 2014 | 2015-2016 | 2017-2018 | After 2018 | ||||||||||||||||
Long-Term Debt Obligations | $ | 1,649,512 | $ | 452,209 | $ | 1,197,303 | $ | - | $ | - | |||||||||||
Operating Lease Obligations | $ | 135,032 | $ | 75,017 | $ | 60,015 | $ | - | $ | - | |||||||||||
Total Contractual Obligations | $ | 1,784,544 | $ | 527,226 | $ | 1,257,318 | $ | - | $ | - |
NOTE_2_NATURE_OF_ORGANIZATION_1
NOTE 2 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | |
Subsequent Event [Member] | VidTac Systems and Components [Member] | COPSync911 [Member] | EB-5 Visa Program [Member] | |||||
NOTE 2 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Product Description | ' | ' | ' | ' | ' | 'VidTac is a software-driven video system for law enforcement. Traditional in-vehicle video systems are "hardware centric" DVR-based systems. The video capture, compression and encryption of the video stream is performed by the DVR. The estimated price of these high-end, digital DVR-based systems range from $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 VidTac system is price advantageous vis-a-vis other high-end video systems. The Company is offering it 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 for the agency 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 also offers the COPsync911 threat alert, first introduced in the second quarter of 2013, for use in schools, hospitals, day care facilities, governmental office buildings, energy infrastructure and other facilities with a high level of concern about security. When used in schools, the COPsync911 service enables school personnel to instantly and silently send emergency alerts directly to the closest law enforcement officers in their patrol vehicles, and to the local 911 dispatch center, with the mere click of an icon located on every computer within the facility. The alert is also sent to the cell phones of all law enforcement officers in the area and to all teachers, administrators, and other staff at the school, alerting them of imminent danger. The Company expects its COPsync911 service to reduce emergency law enforcement response times by five to seven minutes. | ' |
Cash and Cash Equivalents, at Carrying Value | $261,354 | $414,051 | $232,360 | $174,444 | ' | ' | ' | ' |
Working Capital (Deficit) | -3,739,471 | ' | ' | ' | ' | ' | ' | ' |
Retained Earnings (Accumulated Deficit) | -19,423,776 | -18,651,112 | ' | ' | ' | ' | ' | ' |
Organization, Liquidity and Management Plans, Description | '1) The Company anticipates that the number of orders for its products and services will increase in 2014 over 2013 as a result of changes it has made in its sales organization, including hiring a new sales executive and the hiring of new, more seasoned, sales representatives.2) In 2013, the Company introduced the COPsync911 real-time threat alert service, which the Company believes is the only threat alert service of its kind in the United States. The service 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 vehicles and the local emergency dispatch center with just the click of a computer mouse or screen icon. The Company is primarily offering the COPsync911 service in the State of Texas and other selected regions of the United States. The Company expects the pace of COPsync911 sales to accelerate as its sales team and resellers becomes familiar with the service and the strategies for selling it.3) The Company's procurement processes for third party hardware employs "just in time" principles, meaning that 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 it orders the hardware. This change in the processing of third party hardware has helped the Company significantly in managing its working capital.4) The Company's key vendors continue to accommodate the Company through extended payment terms or practices for its outstanding payables balances, but the Company is uncertain how long these accommodations will continue.5) In the first quarter of 2014, the Company received a $475,000 loan from the City of Pharr, Texas, and it expects to receive an additional loan of $375,000 from that city in May or June of 2014.6) In April 2014, the Company's Board of Directors authorized management to raise up to $1,000,000 in new capital in 2014, of which 80,000 has been raised as of the date of this report. Additionally, the Company has borrowed $400,000 (see Note 15) and is currently in discussions with potential investors to raise at least $500,000 of the target capital amount. The Company is also seeking a working capital line of credit to fund third party and proprietary equipment purchases from the manufacturers.7) The Company is attempting to secure up to $1.5 million in funding pursuant to an EB-5 program, which the Company hopes to close in 2014. The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs. Following the job creation, the foreign lenders receive U.S. "green cards." The Company currently has a letter of intent with a financier for the EB-5 program. The financier has already completed the required economic impact analysis for the project, which will be located in Pharr, Texas. The Company will use a portion of any proceeds from this EB-5 program to repay the bridge loans from the City of Pharr. Any remaining funds will be used for general working capital purposes, including the Company's anticipated hiring of at least 30 employees in the Pharr area over the 24 month period after receiving the proceeds, who will office in a recently refurbished leased facility owned by the City of Pharr.8) The Company plans to reduce its research and development expenses in 2014 by approximately $650,000 from the amount it spent in 2013, even though those expenses increased from 2013 in the first quarter. The Company believes that it has the capability to reduce further operating expenses, should circumstances warrant. | ' | ' | ' | ' | ' | ' | ' |
Capital to be Raised | ' | ' | ' | ' | 1,000,000 | ' | ' | 1,500,000 |
Proceeds from Capital Funds Raised | ' | ' | ' | ' | $80,000 | ' | ' | ' |
NOTE_5_INVENTORY_Details
NOTE 5 - INVENTORY (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
NOTE 5 - INVENTORY (Details) [Line Items] | ' | ' |
Inventory, Raw Materials, Gross | $28,055 | $0 |
VidTac Systems and Components [Member] | ' | ' |
NOTE 5 - INVENTORY (Details) [Line Items] | ' | ' |
Inventory Related Text | 'Recently, the Company has been placing small quantity purchase orders with the contract manufacturer and with payment terms consisting of a prepayment arrangement or "pay as you go" basis, requiring approximately 50% in prepayments. | ' |
Inventory, Raw Materials, Gross | $28,055 | $0 |
NOTE_5_INVENTORY_Details_Sched
NOTE 5 - INVENTORY (Details) - Schedule of Inventory (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Schedule of Inventory [Abstract] | ' | ' |
Raw materials | $28,055 | $0 |
Work-in-process | 0 | 0 |
Finished goods | 194,399 | 357,933 |
Total Inventory | $222,454 | $357,933 |
NOTE_6_NOTES_PAYABLE_Details
NOTE 6 - NOTES PAYABLE (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' | ' |
Notes Payable | $1,055,349 | ' | $519,734 |
Proceeds from Issuance of Debt | 535,615 | ' | ' |
Repayments of Notes Payable | 23,051 | -120,000 | ' |
Chief Executive Officer [Member] | Related Party Note Payable [Member] | ' | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Term | '60 days | ' | ' |
Debt Instrument, Face Amount | 25,000 | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ' | ' |
Debt Instrument, Maturity Date | 30-Jun-14 | ' | ' |
Rocket City Enterprises, Inc. [Member] | Insurance Policies and Automobile Loans [Member] | ' | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' | ' |
Repayments of Notes Payable | 23,051 | ' | ' |
New Automobiles Bank Note [Member] | ' | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Term | '5 years | ' | ' |
Debt Instrument, Face Amount | 30,703 | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ' | ' |
Number of Automobiles Financed | 2 | ' | ' |
Loan from City of Pharr, Texas [Member] | ' | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Face Amount | 475,000 | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ' | ' |
Debt Instrument, Increase (Decrease) for Period, Description | 'expects to receive an additional $375,000 loan from the City in May or June of 2014, for an aggregate amount of $850, | ' | ' |
Debt Instrument, Description | 'The loan principal amount is expected to be due in full on the earlier to occur of the 18 th month anniversary of the loan or the receipt by the Company of an expected $1.5 million in proceeds from an EB-5 funding arrangement the Company is pursuing. The loan is expected to be secured by a first priority security interest in the Company's accounts receivable. The city will also receive a modest revenue share, payable quarterly, with respect to contracts for the Company's products and services with customers located in a specified territory in the southern portion of Texas for a specified period of time. | ' | ' |
Insurance [Member] | ' | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) [Line Items] | ' | ' | ' |
Notes Payable | 44,272 | ' | 34,069 |
Debt Instrument, Term | '11 months | ' | ' |
Debt Instrument, Face Amount | $27,963 | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | 7.50% | ' | ' |
NOTE_6_NOTES_PAYABLE_Details_S
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ' | ' |
Notes payable | $1,055,349 | $519,734 |
Less: Current portion | -452,209 | -412,405 |
Long-term portion | 603,140 | 107,329 |
Bank Notes [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ' | ' |
Notes payable | 100,285 | 73,542 |
Insurance [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ' | ' |
Notes payable | 44,272 | 34,069 |
Demand Notes [Member] | ' | ' |
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ' | ' |
Notes payable | $910,792 | $412,123 |
NOTE_7_CONVERTIBLE_NOTES_PAYAB2
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' | ' |
Liabilities, Current | $4,443,813 | ' | $4,729,839 |
Number of Notes Payable | 1 | ' | ' |
Debt Conversion, Original Debt, Amount | 20,000 | 19,100 | ' |
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 200,000 | 191,000 | ' |
Shares Issued, Price Per Share (in Dollars per share) | $0.10 | ' | ' |
Debt Holders Executing One or Two Year Extensions of Original Notes [Member] | ' | ' | ' |
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Face Amount | 554,163 | ' | ' |
Liabilities, Current | ' | ' | $554,163 |
NOTE_7_CONVERTIBLE_NOTES_PAYAB3
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) - Schedule of Convertible Notes Payable (USD $) | 3 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |
Principal [Member] | Principal [Member] | ||||
NOTE 7 - CONVERTIBLE NOTES PAYABLE (Details) - Schedule of Convertible Notes Payable [Line Items] | ' | ' | ' | ' | ' |
Total convertible notes payable | $873,263 | ' | $873,263 | ' | ' |
Less: note conversions | 20,000 | 19,100 | ' | 279,100 | 259,100 |
Convertible notes payable, net | 594,163 | ' | 614,163 | ' | ' |
Less: current portion | 0 | ' | 20,000 | ' | ' |
Convertible notes payable, net, long-term portion | $594,163 | ' | $594,163 | ' | ' |
NOTE_8_PREFERRED_STOCK_Details
NOTE 8 - PREFERRED STOCK (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2008 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2009 | |
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] | ||
NOTE 8 - PREFERRED STOCK (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Acquisitions | ' | 100,000 | ' | ' | ' | ' |
Noncash or Part Noncash Acquisition, Interest Acquired | ' | 100.00% | ' | ' | ' | ' |
Convertible Preferred Stock, Shares Issued upon Conversion | ' | 1 | ' | ' | ' | ' |
Preferred Stock, Voting Rights | ' | 'basis of 750 votes per share | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | 300,000 | ' | ' | ' | ' | 375,000 |
Proceeds from Issuance of Private Placement | ' | ' | ' | ' | ' | $1,500,000 |
Convertible Preferred Stock, Terms of Conversion | ' | ' | ' | ' | ' | '15,000,000 shares of the Company's common stock |
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's Board of Directors. | ' |
Dividends, Preferred Stock | ' | ' | $25,890 | $25,890 | ' | ' |
NOTE_9_COMMON_STOCK_Details
NOTE 9 - COMMON STOCK (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Stockholders' Equity Note [Abstract] | ' | ' |
Stock Issued During Period, Shares, New Issues | 300,000 | ' |
Stock Issued During Period, Value, New Issues | $30,000 | ' |
Shares Issued, Price Per Share | $0.10 | ' |
Debt Conversion, Converted Instrument, Shares Issued | 200,000 | 191,000 |
Debt Conversion, Original Debt, Amount | $20,000 | $19,100 |
NOTE_10_COMMON_STOCK_TO_BE_ISS2
NOTE 10 - COMMON STOCK TO BE ISSUED (Details) (2013 Private Placements [Member], USD $) | 12 Months Ended |
Dec. 31, 2013 | |
2013 Private Placements [Member] | ' |
NOTE 10 - COMMON STOCK TO BE ISSUED (Details) [Line Items] | ' |
Proceeds from Issuance of Private Placement | $1,500 |
NOTE_10_COMMON_STOCK_TO_BE_ISS3
NOTE 10 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
NOTE 10 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued [Line Items] | ' | ' |
Number of shares to be issued | 15,000 | 15,000 |
Value of shares to be issued | $1,500 | $1,500 |
Stock Issued for Previous Deposits [Member] | ' | ' |
NOTE 10 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued [Line Items] | ' | ' |
Number of shares to be issued | 15,000 | 15,000 |
Value of shares to be issued | $1,500 | $1,500 |
NOTE_10_COMMON_STOCK_TO_BE_ISS4
NOTE 10 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued (Parentheticals) (Stock Issued for Previous Deposits [Member], USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Stock Issued for Previous Deposits [Member] | ' | ' |
NOTE 10 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued (Parentheticals) [Line Items] | ' | ' |
Per share | $0.10 | $0.10 |
NOTE_11_BASIC_AND_FULLY_DILUTE2
NOTE 11 - BASIC AND FULLY DILUTED LOSS PER SHARE (Details) - Schedule of Anti-Dilutive Common Stock Equivalents | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 45,730,516 | 43,514,209 |
Convertible Debt Securities [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 6,033,631 | 4,774,351 |
Warrant [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 10,684,842 | 10,495,982 |
Equity Option [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 8,450,000 | 8,748,333 |
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 | 319,300 |
Preferred Stock Dividends [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Stock Equivalents Outstanding | 5,447,043 | 4,076,243 |
NOTE_12_OUTSTANDING_WARRANTS_D
NOTE 12 - OUTSTANDING WARRANTS (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Disclosure Text Block Supplement [Abstract] | ' |
Class of Warrant or Rights, Granted | 60,000 |
Stock Issued During Period, Shares, New Issues | 300,000 |
Proceeds from Issuance or Sale of Equity (in Dollars) | $30,000 |
NOTE_12_OUTSTANDING_WARRANTS_D1
NOTE 12 - OUTSTANDING WARRANTS (Details) - Schedule of Changes in Warrants (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
Class of Warrant or Right [Line Items] | ' | ' |
Warrants Granted | 60,000 | ' |
Number of Shares [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Warrants Outstanding at begining of period | 11,049,842 | 10,341,982 |
Warrants Granted | 60,000 | 707,860 |
Cancelled | 0 | 0 |
Warrants Expired | -425,000 | 0 |
Warrants Outstanding at end of period | 10,684,842 | 11,049,842 |
Warrants Exercisable | 10,684,842 | 11,049,842 |
Weighted average exercise price [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Warrants Outstanding at begining of period | 0.16 | ' |
Warrants Outstanding at begining of period (in Dollars per share) | 0.16 | 0.17 |
Warrants Granted (in Dollars) | 0.1 | 0.1 |
Cancelled (in Dollars per share) | 0 | 0 |
Warrants Expired (in Dollars per share) | 0.2 | 0 |
Warrants Outstanding at end of period | 0.16 | 0.16 |
Warrants Exercisable (in Dollars per share) | 0.16 | 0.16 |
NOTE_12_OUTSTANDING_WARRANTS_D2
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants (USD $) | Mar. 31, 2014 |
Warrant exercise price 0.10 [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Warrants outstanding | $0.10 |
Warrants outstanding, weighted average remaining contractual life | 4,309,260 |
Weighted oustanding, weighted average exercise price | $0.10 |
Warrants exercisable | 4,309,260 |
Warrants exercisable, weighted average exercise price | '2 years 98 days |
Warrant exercise price 0.10 [Member] | Minimum [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Exercise prices | 0.1 |
Warrant exercise price 0.20 [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Warrants outstanding | $0.20 |
Warrants outstanding, weighted average remaining contractual life | 6,375,582 |
Weighted oustanding, weighted average exercise price | $0.20 |
Warrants exercisable | 6,375,582 |
Warrants exercisable, weighted average exercise price | '2 years 146 days |
Warrant exercise price 0.20 [Member] | Minimum [Member] | ' |
NOTE 12 - OUTSTANDING WARRANTS (Details) - Summary of Outstanding and Exercisable Warrants [Line Items] | ' |
Exercise prices | 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 | $0.16 |
Warrants outstanding, weighted average remaining contractual life | 10,684,842 |
Weighted oustanding, weighted average exercise price | $0.16 |
Warrants exercisable | 10,684,842 |
Warrants exercisable, weighted average exercise price | '2 years 142 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 | 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 | 0.2 |
NOTE_13_EMPLOYEE_OPTIONS_Detai
NOTE 13 - EMPLOYEE OPTIONS (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
NOTE 13 - EMPLOYEE OPTIONS (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 8,450,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 6,415,825 | ' |
Share-based Compensation (in Dollars) | $28,182 | $50,700 |
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 | 10,000,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | '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. | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 8,450,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 6,415,825 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in Dollars per share) | $0.09 | ' |
Share-based Compensation (in Dollars) | 28,182 | 50,700 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 75,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $0.10 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | $5,520 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Granted in Period, Term | '10 years | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 'three-year period, with 33% vesting on the one-year anniversary of the grant date, and the remainder vesting ratably over the next eight quarters | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars) | $178,611 | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | '288 days | ' |
NOTE_13_EMPLOYEE_OPTIONS_Detai1
NOTE 13 - EMPLOYEE OPTIONS (Details) - Summary of Stock Option Activity (USD $) | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
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) | 8,450,000 | 8,375,000 | ' | ' | ' | ' |
Outstanding at beginning of period | ' | ' | $0.09 | ' | ' | ' |
Outstanding at beginning of period (in Dollars) | ' | ' | ' | $0 | $0 | ' |
Granted (in Shares) | ' | 75,000 | ' | ' | ' | ' |
Granted | ' | ' | $0.10 | ' | ' | ' |
Exercised | ' | ' | $0 | ' | ' | ' |
Exercised (in Shares) | ' | 0 | ' | ' | ' | ' |
Forfeited/ Cancelled (in Shares) | ' | 0 | ' | ' | ' | ' |
Forfeited/ Cancelled | ' | ' | $0 | ' | ' | ' |
Outstanding at period end (in Shares) | 8,450,000 | 8,450,000 | ' | ' | ' | ' |
Outstanding at period end | ' | ' | $0.09 | ' | ' | ' |
Outstanding at period end (in Dollars) | ' | ' | ' | 0 | 0 | ' |
Outstanding at period end | ' | ' | ' | ' | ' | '7 years 80 days |
Options vested and exercisable at period end (in Shares) | 6,415,825 | 6,415,825 | ' | ' | ' | ' |
Options vested and exercisable at period end | ' | ' | $0.09 | ' | ' | ' |
Options vested and exercisable at period end (in Dollars) | ' | ' | ' | $0 | ' | ' |
Options vested and exercisable at period end | ' | ' | ' | ' | ' | '6 years 343 days |
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 $) | 3 Months Ended |
Mar. 31, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding (in Shares) | 8,450,000 |
Options Exercisable (in Shares) | 6,415,825 |
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 (in Shares) | 2,500,000 |
Options Outstanding - Weighted Average Remaining Contractual Life | '9 months |
Options Outstanding - Weighted Average Exercise Price | $0.08 |
Options Exercisable (in Shares) | 2,125,000 |
Options Exercisable - Weighted Average Exercise Price | $0.08 |
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 (in Shares) | 5,950,000 |
Options Outstanding - Weighted Average Remaining Contractual Life | '277 days |
Options Outstanding - Weighted Average Exercise Price | $0.10 |
Options Exercisable (in Shares) | 4,290,825 |
Options Exercisable - Weighted Average Exercise Price | $0.10 |
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 $) | 3 Months Ended |
Mar. 31, 2014 | |
Number of non-vested shares [Member] | ' |
NOTE 13 - EMPLOYEE OPTIONS (Details) - Summary of Non-vested Shares [Line Items] | ' |
Non-vested at January 1, 2014 | 2,317,506 |
Granted | 75,000 |
Forfeited | 0 |
Vested | -358,331 |
Non-vested | 2,034,175 |
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, 2014 | 0.09 |
Granted | 0.1 |
Forfeited | 0.09 |
Vested | 0.08 |
Non-vested | 0.09 |
NOTE_14_COMMITMENTS_AND_CONTIN2
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) (Foregone Salary [Member], USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Mr. Chaney [Member] | ' | ' |
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | ' | ' |
Deferral of Contractual Compensation, Contributed Capital | $10,000 | $10,000 |
Mr. Rapp [Member] | ' | ' |
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | ' | ' |
Deferral of Contractual Compensation, Contributed Capital | $9,750 | $9,750 |
NOTE_14_COMMITMENTS_AND_CONTIN3
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Future Minimum Payments for Contractual Obligations (USD $) | Mar. 31, 2014 |
Schedule of Future Minimum Payments for Contractual Obligations [Abstract] | ' |
Long-Term Debt Obligations | $1,649,512 |
Long-Term Debt Obligations | 452,209 |
Long-Term Debt Obligations | 1,197,303 |
Long-Term Debt Obligations | 0 |
Long-Term Debt Obligations | 0 |
Operating Lease Obligations | 135,032 |
Operating Lease Obligations | 75,017 |
Operating Lease Obligations | 60,015 |
Operating Lease Obligations | 0 |
Operating Lease Obligations | 0 |
Total Contractual Obligations | 1,784,544 |
Total Contractual Obligations | 527,226 |
Total Contractual Obligations | 1,257,318 |
Total Contractual Obligations | 0 |
Total Contractual Obligations | $0 |
NOTE_15_SUBSEQUENT_EVENTS_Deta
NOTE 15 - SUBSEQUENT EVENTS (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | 15-May-14 | 15-May-14 | 15-May-14 | 9-May-14 | Dec. 31, 2013 | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Notes Payable to Two Individuals [Member] | |||
Notes with Equipment Financing Company [Member] | Notes Payable to Two Individuals [Member] | May 2014 Promissory Note [Member] | |||||
NOTE 15 - SUBSEQUENT EVENTS (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance or Sale of Equity | $30,000 | ' | ' | ' | ' | $50,000 | ' |
Number of Notes Payable | 1 | ' | 2 | ' | ' | ' | 2 |
Debt Instrument, Face Amount | ' | ' | 313,477 | 250,000 | 200,000 | ' | 50,000 |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | 16.00% | 9.90% | ' | ' | ' |
Subsequent Event, Description | ' | ' | 'During the second quarter of 2014, the equipment financing company extended the maturity date of the note by six months, making the notes due in November 2014. The equipment financing company required the Company to pay the accumulated interest for the original six-month period as a condition to the extension of the maturity date. | ' | ' | ' | ' |
Proceeds from Notes Payable | $500,000 | ($136,288) | ' | $200,000 | ' | ' | ' |
Debt Instrument, Term | ' | ' | ' | ' | '3 years | ' | ' |
Debt Instrument, Payment Terms | ' | ' | ' | ' | 'The repayment amount is 150% of the amount borrowed, which is to be paid over three years. The note calls for payments of $15,000, $60,000, $135,000 and $90,000 in years 2014, 2015, 2016 and 2017, respectively. | ' | ' |