Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
31-May-14 | Jul. 09, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Location Based Technologies, Inc. | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--08-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 229,583,162 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001383196 | ' |
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-May-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | 31-May-14 | Aug. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $150,802 | $680,914 |
Accounts receivable, net of allowances | 97,793 | 77,584 |
Inventory, net of reserves | 629,235 | 788,470 |
Prepaid expenses and other assets | 35,468 | 47,976 |
Deferred financing costs | 94,150 | 25,827 |
Total current assets | 1,007,448 | 1,620,771 |
Property and equipment, net of accumulated depreciation | 96,430 | 110,813 |
OTHER ASSETS | ' | ' |
Intangible assets, net of accumulated amortization | 658,590 | 715,732 |
Inventory, net of reserves | 892,434 | 893,401 |
Deposits | 30,000 | 30,000 |
Total other assets | 1,581,024 | 1,639,133 |
TOTAL ASSETS | 2,684,902 | 3,370,717 |
CURRENT LIABILITIES | ' | ' |
Current portion of term loans and accrued interest | 1,165,159 | ' |
Derivative liabilities | ' | 745,148 |
Total current liabilities | 7,727,234 | 8,410,439 |
Convertible term notes payable | 806,615 | ' |
Related party convertible term notes payable and accrued interest, net of unamortized discounts | 2,543,911 | 1,719,036 |
Term loans | 842,083 | ' |
TOTAL LIABILITIES | 11,919,843 | 10,129,475 |
Accounts payable and accrued expenses | 2,011,951 | 1,699,114 |
Deferred compensation | 141,410 | 267,730 |
Deferred revenue | 21,464 | 25,371 |
Line of credit and accrued interest | ' | 1,009,042 |
Advances from officer and accrued interest | 26,188 | 29,219 |
STOCKHOLDERS' DEFICIT | ' | ' |
Common stock, $0.001 par value; 300,000,000 shares authorized; 228,160,821 and 211,917,511 shares issued and outstanding at May 31, 2014 and August 31, 2013, respectively | 228,161 | 211,917 |
Additional paid-in capital | 50,639,692 | 49,388,375 |
Prepaid services paid in common stock | -105,924 | -294,585 |
Accumulated deficit | -59,996,870 | -56,064,465 |
Total stockholders' deficit | -9,234,941 | -6,758,758 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 2,684,902 | 3,370,717 |
Convertible Demand Notes Payable and Accrued Interest [Member] | ' | ' |
CURRENT LIABILITIES | ' | ' |
Convertible notes payable and accrued interest | 29,803 | ' |
Related Party Convertible Demand Notes Payable and Accrued Interest [Member] | ' | ' |
CURRENT LIABILITIES | ' | ' |
Related party convertible notes payable and accrued interest | 1,178,140 | ' |
Convertible Term Notes Payable and Accrued Interest [Member] | ' | ' |
CURRENT LIABILITIES | ' | ' |
Convertible notes payable and accrued interest | 3,048,653 | 3,585,225 |
Related Party Convertible Term Notes Payable and Accrued Interest [Member] | ' | ' |
CURRENT LIABILITIES | ' | ' |
Related party convertible notes payable and accrued interest | $104,466 | $1,049,590 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) | 31-May-14 | Aug. 31, 2013 |
Preferred stock par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock,shares issued | 228,160,821 | 211,917,511 |
Common stock,shares outstanding | 228,160,821 | 211,917,511 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-14 | 31-May-13 | |
Net revenue | ' | ' | ' | ' |
Devices | $216,223 | $643,696 | $567,196 | $1,260,828 |
Services | 238,916 | 111,483 | 637,837 | 294,063 |
Total net revenue | 455,139 | 755,179 | 1,205,034 | 1,554,891 |
Cost of revenue | ' | ' | ' | ' |
Devices | 182,960 | 923,560 | 418,929 | 1,583,849 |
Services | 234,122 | 205,025 | 727,365 | 571,748 |
Total cost of revenue | 417,082 | 1,128,585 | 1,146,294 | 2,155,597 |
Gross profit (loss) | 38,057 | -373,406 | 58,740 | -600,706 |
Operating expenses | ' | ' | ' | ' |
General and administrative | 341,138 | 486,947 | 1,360,347 | 1,539,038 |
Officer compensation | 142,000 | 253,835 | 621,746 | 798,465 |
Professional fees | 285,717 | 1,004,725 | 834,674 | 1,861,706 |
Rent | 19,202 | 19,202 | 57,607 | 57,931 |
Research and development | ' | 112,511 | 99,548 | 257,797 |
Salaries and wages | 85,763 | 73,252 | 195,585 | 224,453 |
Loss on asset impairment | ' | ' | ' | 455,916 |
Total operating expenses | 873,819 | 1,950,472 | 3,169,507 | 5,195,307 |
Net operating loss | -835,762 | -2,323,878 | -3,110,767 | -5,796,013 |
Other income (expense) | ' | ' | ' | ' |
Financing costs | -105,875 | -96,634 | -359,755 | -456,734 |
Amortization of beneficial conversion feature | -440 | -85,530 | -61,388 | -219,669 |
Amortization of deferred financing costs | -343,805 | -39,749 | -452,155 | -172,257 |
Amortization of debt discount | -55,026 | -53,757 | -260,196 | -53,757 |
Gain (Loss) on change in fair value of derivative liabilities | ' | 123,460 | ' | -517,055 |
Interest expense, net | -203,554 | -107,734 | -524,991 | -220,611 |
Gain on debt settlement | ' | -521,820 | 886,548 | -521,820 |
Loss on debt extinguishment | ' | -521,820 | 886,548 | -521,820 |
Gain (Loss) on asset disposals | ' | 631 | -48,431 | 631 |
Foreign currency gain (loss), net | ' | -400 | -470 | 41 |
Total other income (expense) | -708,700 | -781,533 | -820,838 | -2,161,231 |
Net loss before income taxes | -1,544,462 | -3,105,411 | -3,931,605 | -7,957,244 |
Provision for income taxes | ' | ' | 800 | 800 |
Net Loss | ($1,544,462) | ($3,105,411) | ($3,932,405) | ($7,958,044) |
Basic and Diluted - Earnings (loss) Per Share (in Dollars per share) | ($0.01) | ($0.01) | ($0.02) | ($0.04) |
Basic and Diluted - Weighted Average Number of Shares Outstanding (in Shares) | 226,146,263 | 207,493,355 | 218,181,673 | 203,331,478 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (unaudited) (USD $) | 9 Months Ended | |
31-May-14 | 31-May-13 | |
Cash Flows from Operating Activities | ' | ' |
Net loss | ($3,932,405) | ($7,958,044) |
Adjustment to reconcile net loss to net cash used in operating activities: | ' | ' |
Loss on change in fair value of derivative liabilities | ' | 517,055 |
Loss (Gain) on asset disposal | 48,431 | -631 |
Gain on debt settlement | -886,548 | 521,820 |
Loss on asset impairment | ' | 455,916 |
Provision for doubtful accounts and sales returns | 13,931 | -31,343 |
Provision for inventory reserve | -86,605 | 206,120 |
Depreciation and amortization | 92,336 | 85,619 |
Amortization of beneficial conversion feature | 61,388 | 219,669 |
Amortization of deferred financing costs | 452,155 | 172,257 |
Amortization of prepaid services paid in common stock | 389,111 | 877,706 |
Amortization of debt discount | 260,196 | 53,757 |
Warrants issued for services and financing costs | ' | 99,873 |
Stock options issued for services | 36,575 | 131,341 |
Changes in operating assets and liabilities: | ' | ' |
(Increase) decrease in accounts receivable | -34,140 | 65,045 |
(Increase) decrease in inventory | 246,807 | 336,690 |
(Increase) decrease in prepaid expenses and other assets | 12,508 | 80,829 |
Increase (decrease) in accounts payable and accrued expenses | 368,239 | 467,546 |
Increase (decrease) in accrued officer compensation | -9,070 | 212,849 |
Increase (decrease) in deferred revenue | -3,907 | 39,207 |
Increase (decrease) in accrued interest | 420,783 | 156,581 |
Net cash used in operating activities | -2,389,045 | -2,547,470 |
Cash Flows from Investing Activities | ' | ' |
Purchase of property and equipment | -76,742 | -146,098 |
Cash Flows from Financing Activities | ' | ' |
Advances / (repayments) from officers, net | -3,825 | ' |
Payments for deferred financing costs | ' | -6,000 |
Payments on term loans | -18,000 | ' |
Proceeds from convertible term notes payable | 500,000 | 1,791,000 |
Proceeds from related party convertible term notes payable | 1,450,000 | 800,000 |
Repayments of related party convertible term notes payable | ' | -100,000 |
Net cash provided by financing activities | 1,928,175 | 2,485,000 |
Net decrease in cash and cash equivalents | -530,112 | -208,568 |
Cash and cash equivalents, beginning of year | 680,914 | 376,554 |
Cash and cash equivalents, end of year | 150,802 | 167,986 |
Non-Cash Financing Activities: | ' | ' |
Conversion of accrued compensation into convertible notes payable | 117,250 | 996,987 |
Conversion of accounts payable into common stock | 315,000 | ' |
Issuance of warrants for financing costs classified as debt discount | 213,486 | ' |
Trademarks [Member] | ' | ' |
Adjustment to reconcile net loss to net cash used in operating activities: | ' | ' |
Gain on sale of trademark | -569 | ' |
Cash Flows from Investing Activities | ' | ' |
Proceeds from sale of trademark | 7,500 | ' |
Net cash used in investing activities | -69,242 | -146,098 |
Stock Issued for Services/Financing Costs [Member] | ' | ' |
Adjustment to reconcile net loss to net cash used in operating activities: | ' | ' |
Stock Issued for Services/Financing Costs | 161,170 | 742,667 |
Stock Issued for Services/Financing Costs [Member] | ' | ' |
Adjustment to reconcile net loss to net cash used in operating activities: | ' | ' |
Stock Issued for Services/Financing Costs | 357,330 | ' |
Stock Issued for Payment on Term Loan [Member] | ' | ' |
Non-Cash Financing Activities: | ' | ' |
Issuance of common stock for payment on term loan | $80,000 | ' |
Note_1_Nature_of_Operations_an
Note 1 - Nature of Operations and Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||
31-May-14 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | ' | ||||||||||
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Nature of Business | |||||||||||
The Company designs, develops, and sells personal, pet, and vehicle locator devices and services including PocketFinder® People, PocketFinder® Pets and PocketFinder® Vehicles. The PocketFinder® is a small, completely wireless, location device that enables a user to locate a person, pet, vehicle or valuable item at any time from almost anywhere using Global Positioning System (“GPS”) and General Packet Radio Service (“GPRS”) technologies. The Company is located in Irvine, California. | |||||||||||
Organization | |||||||||||
Location Based Technologies, Inc. (formerly known as Springbank Resources, Inc.) (the “Company,” “our,” “we” or “LBT”) was incorporated under the laws of the State of Nevada on April 10, 2006. | |||||||||||
Location Based Technologies, Corp. (formerly known as PocketFinder, Inc.) was incorporated under the laws of the State of California on September 16, 2005. On July 7, 2006, it established PocketFinder, LLC (“LLC”), a California Limited Liability Company. On May 29, 2007, PocketFinder, Inc. filed amended articles with the Secretary of State to change its name to Location Based Technologies, Corp., and in October 2007 was merged into LBT. | |||||||||||
On September 30, 2009, the Company formed Location Based Technologies, Ltd. (“LBT, Ltd.”), an England and Wales private limited company, to establish a presence in Europe. LBT, Ltd. is a wholly owned subsidiary of the Company. | |||||||||||
Consolidation Policy | |||||||||||
The accompanying consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiary, Location Based Technologies, Ltd. Intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
Basis of Presentation | |||||||||||
The unaudited consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 8-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to financial statements included in the annual report on Form 10-K of Location Based Technologies, Inc. for the year ended August 31, 2013. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended May 31, 2014, are not necessarily indicative of the results that may be expected for any other interim period or the entire year. For further information, these unaudited consolidated financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended August 31, 2013, included in the Company’s report on Form 10-K. | |||||||||||
Going Concern | |||||||||||
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred net losses since inception, and as of May 31, 2014, had an accumulated deficit of $59,996,870 and negative working capital of $6,719,787. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | |||||||||||
Management recognizes that the Company must generate additional resources to enable it to continue operations. Management intends to raise additional financing through debt and equity financing or through other means that it deems necessary, with a view to moving forward and sustaining prolonged growth in its strategy phases. However, no assurance can be given that the Company will be successful in raising additional capital. Further, even if the Company raises additional capital, there can be no assurance that the Company will achieve profitability or positive cash flow. If management is unable to raise additional capital and expected significant revenues do not result in positive cash flow, the Company will not be able to meet its obligations and may have to cease operations. | |||||||||||
Use of Estimates | |||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could materially differ from those estimates. | |||||||||||
Reclassifications | |||||||||||
Certain reclassifications have been made to prior period amounts or balances to conform to the presentation adopted in the current period. | |||||||||||
Cash and Cash Equivalents | |||||||||||
For purposes of the balance sheets and statements of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents. | |||||||||||
Concentration of Credit Risk | |||||||||||
Cash and Cash Equivalents – The cash and cash equivalent balances at May 31, 2014 and August 31, 2013 were principally held by two institutions which insured our aggregated accounts with the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 per insured banking institution. At times, the Company has maintained bank balances which have exceeded FDIC limits. The Company has not experienced any losses with respect to its cash balances. | |||||||||||
Revenue and Accounts Receivable – For the nine months ended May 31, 2014, revenue from the Company’s largest customer amounted to $187,621 or 27% of total net revenue. Accounts receivable from this customer amounted to $54,275 or 56% of total accounts receivable at May 31, 2014. | |||||||||||
For the nine months ended May 31, 2013, revenue from the Company’s largest customer amounted to $882,569 or 57% of total net revenue. Accounts receivable from this customer amounted to $1,517 or 2% of total accounts receivable at May 31, 2013. | |||||||||||
Allowance for Doubtful Accounts | |||||||||||
The allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and the current status of accounts receivable. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. As of May 31, 2014 and August 31, 2013, the allowance for doubtful accounts amounted to $9,000 and $3,000, respectively. | |||||||||||
Allowance for Sales returns | |||||||||||
An allowance for sales returns is recorded as a reduction to revenue and based on management’s judgment using historical experience and expectation of future conditions. As of May 31, 2014 and August 31, 2013, the allowance for sales returns amounted to $16,431 and $8,500, respectively. | |||||||||||
Inventory | |||||||||||
Inventories are valued at the lower of cost (first-in, first-out) or market and primarily consisted of components and finished goods for the Company’s PocketFinder® products. Packaging costs are expensed as incurred. The Company provides for a lower-of-cost-or-market ("LCM") adjustment against gross inventory values. An inventory valuation reserve approximating $989,881 was recorded to reduce the value of the inventory to the current selling price. Management estimates the current selling price as the realizable value of the inventory. No inventory obsolescence reserve was recorded during the nine months ended May 31, 2013. Management estimated sales for the next 24 month period based on historical sales data and prospective sales trends and determined that all inventory is expected to be sold in the next two years. Management analyzed and tested certain components that could possibly become obsolete and determined that the useful life exceeded the two year estimate to sell the inventory. In addition, the components inventory, net of the LCM valuation reserve, totaling $892,434 is classified as a noncurrent asset at May 31, 2014 (see Note 2). | |||||||||||
Fair Value of Financial Instruments | |||||||||||
Pursuant to FASB ASC 820 – Fair Value Measurement and Disclosures, the Company is required to estimate the fair value of all financial instruments included on its balance sheet. The carrying value of cash, accounts receivable, inventory, accounts payable and notes payable approximate their fair value due to the short period to maturity of these instruments. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method and with useful lives used in computing depreciation ranging from 1 to 5 years. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Expenditures for maintenance and repairs are charged to operations as incurred; additions, renewals and betterments are capitalized. | |||||||||||
Long-Lived Assets | |||||||||||
The Company accounts for its long-lived assets in accordance with FASB ASC 360 – Impairment or Disposal of Long-Lived Assets that requires long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value. During the nine months ended May 31, 2013, the Company recorded an impairment of certain patents amounting to $455,916. There was no such impairment recognized during the nine months ended May 31, 2014. | |||||||||||
Intangible Assets – Patents and Trademarks | |||||||||||
The Company capitalizes internally developed assets related to certain costs associated with patents and trademarks. These costs include legal and registration fees needed to apply for and secure patents. The intangible assets acquired from other enterprises or individuals in an “arms-length” transaction are recorded at cost. As of May 31, 2014 and August 31, 2013, the Company capitalized $742,945 for patent related expenditures. As of May 31, 2014 and August 31, 2013, the Company capitalized $52,539 and $59,470 for trademark related expenditures, respectively. Accumulated amortization of intangible assets was $136,894 and $86,683 at May 31, 2014 and August 31, 2013, respectively. | |||||||||||
Patents are subject to amortization upon issuance by the United States Patent and Trademark Office. Intangible assets are amortized in accordance with FASB ASC 350 – Intangibles – Goodwill and Other, using the straight-line method over the shorter of their estimated useful lives or remaining legal life. | |||||||||||
Deferred Revenue | |||||||||||
Deferred revenue is a liability related to revenue producing activity for which revenue has not yet been recognized. As of May 31, 2014 and August 31, 2013, deferred revenue amounted to $21,464 and $25,371, respectively, and consisted of prepaid service revenue from subscribers. | |||||||||||
Beneficial Conversion Feature of Convertible Notes Payable | |||||||||||
The Company accounts for the beneficial conversion feature of convertible notes payable when the conversion rate is below market value. Pursuant to FASB ASC 470-20 – Debt With Conversion and Other Options, the estimated fair value of the beneficial conversion feature is recorded in the financial statements as a discount from the face amount of the notes. Such discounts are amortized over the term of the notes or conversion of the notes, if sooner. The Company recognized amortization expense related to the beneficial conversion features on convertible notes payable totaling $440 and $85,530 during the three months ended May 31, 2014 and 2013, respectively. The Company recognized amortization expense related to the beneficial conversion features on convertible notes payable totaling $50,693 and $219,669 during the nine months ended May 31, 2014 and 2013, respectively. | |||||||||||
Derivative Liabilities | |||||||||||
The Company accounts for its warrants and embedded conversion features in its convertible debentures in accordance FASB ASC 815-10 – Derivatives and Hedging, which requires a periodic valuation of their fair value and a corresponding recognition of liabilities associated with such derivatives, and FASB ASC 815-40 – Contracts in Entity’s Own Equity. The recognition of derivative liabilities related to the issuance of convertible debt is applied first to the proceeds of such issuance as a debt discount, at the date of issuance, and the excess of derivative liabilities over the proceeds is recognized as “Loss on Valuation of Derivative” in other expense. Any subsequent increase or decrease in the fair value of the derivative liabilities is recognized as “Gain (Loss) on Change in Fair Value of Derivative Liability” in other income (expense). | |||||||||||
The Company determined that the conversion feature of two promissory notes met the criteria of an embedded derivative, and therefore the conversion feature of these notes needed to be bifurcated and accounted for as a derivative. The fair value of the embedded conversion feature was estimated at the default date when the notes became convertible using the Black-Scholes model. In connection with the JMJ debt settlement, the derivative liabilities were eliminated and included in the gain on debt settlement. | |||||||||||
Revenue Recognition | |||||||||||
Revenues are recognized in accordance with FASB ASC 605 – Revenue Recognition, when (a) persuasive evidence of an arrangement exists, (b) the products or services have been provided to the customer, (c) the fee is fixed or determinable, and (d) collectability is reasonably assured. In instances where the customer, at its discretion, has the right to reject the product or services prior to final acceptance, revenue is deferred until such acceptance occurs. | |||||||||||
Device Sales Revenue – Revenue from the sales of PocketFinder® products is recognized upon shipment to website customers and upon delivery to distributors net of an allowance for estimated returns. The allowance for sales returns is estimated based on management’s judgment using historical experience and expectation of future conditions. | |||||||||||
Service Revenue – Service revenue consists of monthly service fees initiated by the customer upon activation of a PocketFinder® device. Services fees are billed and collected in the month the service is provided. Service revenue is recognized upon collecting the monthly service fee from the customer. | |||||||||||
Shipping Costs | |||||||||||
Amounts billed to customers related to shipping and handling are classified as revenue, and the Company’s shipping and handling costs are included in cost of sales. | |||||||||||
Advertising Costs | |||||||||||
Advertising costs are expensed as incurred. For the three months ended May 31, 2014 and 2013, the Company incurred $19,807 and $51,327 of advertising costs, respectively. For the nine months ended May 31, 2014 and 2013, the Company incurred $486,269 and $420,023 of advertising costs, respectively. | |||||||||||
Research and Development | |||||||||||
Research and development costs are clearly identified and are expensed as incurred in accordance with FASB ASC 730 – Research and Development. | |||||||||||
Stock Based Compensation | |||||||||||
The Company measures and recognizes compensation expense associated with its grant of equity-based awards in accordance with FASB ASC 718, Compensation – Stock Compensation. ASC 718 requires that companies measure and recognize compensation expense at an amount equal to the fair value of share-based payments granted under compensation arrangements over the vesting period. | |||||||||||
In accordance with ASC 718, the Company estimates the grant-date fair value of its stock options using the Black-Scholes option-pricing model, which takes into account assumptions regarding an expected dividend yield, a risk-free interest rate, an expected volatility factor for the market price of the Company’s common stock and an expected term of the stock options. The fair value of stock options granted is amortized on a straight-line basis over the vesting periods. For the three months ended May 31, 2014 and 2013, stock-based compensation expense associated with stock options totaled $3,443 and $30,122, respectively. For the nine months ended May 31, 2014 and 2013, stock-based compensation expense associated with stock options totaled $36,575 and $131,341 respectively. | |||||||||||
Income Taxes | |||||||||||
The Company accounts for income taxes under FASB ASC 740 – Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements’ carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. The Company has included its $800 minimum California state income tax in its provision for income taxes for the nine months ended May 31, 2014 and 2013. | |||||||||||
Earnings/ Loss Per Share | |||||||||||
The Company computes basic earnings (loss) per share using the weighted average number of common shares outstanding during the period in accordance with FASB ASC 260 – Earnings Per Share, which specifies the compilation, presentation, and disclosure requirements for income per share for entities with publicly held common stock or instruments which are potentially common stock. | |||||||||||
Diluted earnings (loss) per share are computed using the weighted average number of common shares outstanding and the dilutive potential common shares outstanding during the period. The following potential common shares are excluded from diluted loss per share as their effect would be anti-dilutive. | |||||||||||
May 31, | August 31, | ||||||||||
2014 | 2013 | ||||||||||
Warrants | 17,956,715 | 15,456,715 | |||||||||
Stock options | 2,925,000 | 3,475,000 | |||||||||
Convertible notes payable | 39,853,796 | 25,300,352 | |||||||||
Dilutive potential common shares | 60,735,511 | 44,232,067 | |||||||||
Note_2_Inventory
Note 2 - Inventory | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory Disclosure [Text Block] | ' | ||||||||
2. INVENTORY | |||||||||
Inventory at May 31, 2014 and August 31, 2013 consisted of the following: | |||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Current: | |||||||||
Finished goods | $ | 1,041,739 | $ | 1,286,953 | |||||
Inventory valuation reserve for finished goods | (412,504 | ) | (498,483 | ) | |||||
Inventories, current | $ | 629,235 | $ | 788,470 | |||||
Noncurrent: | |||||||||
Device components | $ | 1,469,811 | $ | 1,471,404 | |||||
Inventory valuation reserve for components | (577,377 | ) | (578,003 | ) | |||||
Inventories, noncurrent | $ | 892,434 | $ | 893,401 | |||||
In the first quarter of 2012, the Company purchased a substantial amount of inventory components to produce PocketFinder® devices. Management analyzed its inventories based on existing purchase orders and current potential orders for future delivery and determined we may not realize all of the inventory components within the next year. The Company expects that it will take approximately one year to sell finished goods inventory on hand at May 31, 2014. Following the sale of all finished goods inventory, components inventory will be utilized to manufacture additional devices that are expected to be sold in year 2. Inventories totaling $892,434 and $893,401 which may not be realized within a 12-month period have been reclassified as long-term as of May 31, 2014 and August 31, 2013, respectively. |
Note_3_Property_and_Equipment
Note 3 - Property and Equipment | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | ||||||||
3. PROPERTY AND EQUIPMENT | |||||||||
Property and equipment at May 31, 2014 and August 31, 2013 consisted of the following: | |||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Machinery and equipment | $ | 139,821 | $ | 106,354 | |||||
Computer software (mobile apps) | 82,999 | 66,999 | |||||||
Computer software (internal) | 29,537 | 51,263 | |||||||
Computer and video equipment | 19,756 | 19,756 | |||||||
Office furniture | $ | 24,526 | $ | 24,526 | |||||
296,640 | 268,898 | ||||||||
Less: accumulated depreciation | (200,210 | ) | (158,085 | ) | |||||
Total property and equipment | $ | 96,430 | $ | 110,813 | |||||
Depreciation expense for the three months ended May 31, 2014 and 2013 amounted to $10,076 and $13,476, respectively. Depreciation expense for the nine months ended May 31, 2014 and 2013 amounted to $42,125 and $35,519, respectively. |
Note_4_Intangible_Assets
Note 4 - Intangible Assets | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||
4. INTANGIBLE ASSETS | |||||||||
Intangible assets at May 31, 2014 and August 31, 2013 consisted of the following: | |||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Patents | $ | 742,945 | $ | 742,945 | |||||
Trademarks | 52,539 | 59,470 | |||||||
795,484 | 802,415 | ||||||||
Less: accumulated amortization | (136,894 | ) | (86,683 | ) | |||||
Total intangible assets | $ | 658,590 | $ | 715,732 | |||||
Amortization expense totaled $16,921 and $16,938 for the three months ended May 31, 2014 and 2013, respectively. Amortization expense totaled $50,211 and $50,100 for the nine months ended May 31, 2014 and 2013, respectively. | |||||||||
As of May 31, 2014, Company estimates amortization expense approximating $67,000 each year for the next five years and $324,000 thereafter. |
Note_5_Related_Party_Transacti
Note 5 - Related Party Transactions | 9 Months Ended |
31-May-14 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
5. RELATED PARTY TRANSACTIONS | |
Advances from Officer | |
From time to time, the Company’s officers advance funding to the Company to cover operating expenses. Cash advances from officers accrue interest at the rate of 8% per annum and have no formal repayment terms. | |
During the nine months ended May 31, 2014, there were advances from our Co-President totaling $151,000 and $154,825 of repayments. As of May 31, 2014, there was $25,000 of outstanding advances and $1,188 of related accrued interest. | |
Accounts Payable | |
Amounts payable to related parties totaled $328,000 and $105,000 as of May 31, 2014 and August 31, 2013, respectively. |
Note_6_Convertible_Notes_Payab
Note 6 - Convertible Notes Payable | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Convertible Notes Payable [Abstract] | ' | ||||||||
Convertible Notes Payable [Text Block] | ' | ||||||||
6. CONVERTIBLE NOTES PAYABLE | |||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Convertible Demand Notes Payable | |||||||||
Note payable in the amount of $28,500 due on demand at an interest rate of 5% per annum and convertible into shares of the Company’s common stock at $0.10 per share. In connection with the extension of the due date and consolidation of notes on March 14, 2014, 51,000 shares of the Company’s stock valued at $3,060 were awarded. | $ | 28,500 | $ | - | |||||
Total convertible demand notes payable | 28,500 | - | |||||||
Accrued interest | 1,303 | - | |||||||
Total convertible demand notes payable and accrued interest | $ | 29,803 | $ | - | |||||
Convertible Term Notes Payable | |||||||||
Note payable to JMJ Financial in the amount of $555,000 due on September 16, 2012. “V warrants” to purchase 869,565 shares of the Company’s common stock valued at $200,000 were issued in connection with the note. The note was converted into a term loan. See Note 7. | $ | - | $ | 555,000 | |||||
Note payable to JMJ Financial in the amount of $550,000 due on November 1, 2012. “W warrants” to purchase 1,086,957 shares of the Company’s common stock and valued at $250,000 were issued in connection with the note. The note was converted into a term loan. See Note 7. | - | 550,000 | |||||||
Note payable in the amount of $500,000 due on March 25, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “Z warrants” to purchase 1,000,000 shares of the Company’s common stock valued at $164,022 were issued in connection with the note. As of May 31, 2014 the note was not renewed and is due on demand. | 500,000 | 500,000 | |||||||
Note payable in the amount of $25,000 due on April 10, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. As of May 31, 2014, the note was not renewed and is due on demand. | 25,000 | 25,000 | |||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Convertible Term Notes Payable | |||||||||
Two notes payable in the amount of $75,000 due on July 9, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.30 per share. In connection with the extension of the due date, 150,000 shares of the Company’s stock valued at $15,000 were awarded in January 2014. | $ | 75,000 | $ | 75,000 | |||||
Two notes payable in the amount of $150,000 due on July 13, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.30 per share. In connection with the extension of the due date, 300,000 shares of the Company’s stock valued at $30,000 were awarded in January 2014. | 150,000 | 150,000 | |||||||
Note payable in the amount of $300,000 due on July 13, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.30 per share. In connection with the extension of the due date on January 22, 2014, 600,000 shares of the Company’s stock valued at $60,000 were awarded. | 300,000 | 300,000 | |||||||
Two notes payable in the amount of $68,500, plus accrued interest of $7,952, were combined into a new note due on August 9, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. In connection with the combination of the notes and the extension of due dates, 137,000 shares of the Company’s stock valued at $12,330 were awarded in January 2014. | 76,452 | 68,500 | |||||||
Note payable in the amount of $500,000 due on September 21, 2014 at an interest rate of 36% per annum. The note is collateralized by 20,000,000 shares of common stock. | 500,000 | - | |||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Convertible Term Notes Payable (Continued) | |||||||||
Note payable in the amount of $25,000 due on October 10, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. In connection with the extension of the due date, 50,000 shares of the Company’s stock valued at $2,450 were awarded in April 2014. | $ | 25,000 | $ | 25,000 | |||||
Note payable in the amount of $100,000 due on October 15, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “Z warrants” to purchase 200,000 shares of the Company’s common stock valued at $30,731 were issued in connection with the note. In connection with the extension of the due date, 200,000 shares of the Company’s stock valued at $7,340 were awarded in April 2014. | 100,000 | 100,000 | |||||||
Note payable in the amount of $1,000,000 due on December 30, 2014 at an interest rate of 8% per annum and convertible into shares of the Company’s common stock at $0.20 per share. In connection with the extension of the due date on December 10, 2013, 4,000,000 shares of the Company’s stock valued at $240,000 were awarded. | 1,000,000 | 1,000,000 | |||||||
Two notes payable in the amount of $600,000 due on September 30, 2015 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “BB warrants” to purchase 1,000,000 shares of the Company’s common stock valued at $133,001 were issued in connection with the extension of the notes during 2013. | 600,000 | - | |||||||
Note payable in the amount of $75,000 due on January 21, 2016 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “Z warrants” to purchase 150,000 shares of the Company’s common stock valued at $24,617 were issued in connection with the note. | 75,000 | 75,000 | |||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Convertible Term Notes Payable (Continued) | |||||||||
Note payable in the amount of $150,000 due on January 21, 2016 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.15 per share. “DD warrants” to purchase 300,000 shares of the Company’s common stock valued at $25,971 were issued in connection with the note. | $ | 150,000 | $ | - | |||||
Total convertible notes payable | 3,576,452 | 3,423,500 | |||||||
Unamortized debt and beneficial conversion feature discounts | (86,221 | ) | (126,102 | ) | |||||
Accrued interest | 365,037 | 287,827 | |||||||
Total convertible notes payable, net and accrued interest | 3,855,268 | 3,585,225 | |||||||
Less current portion | (3,048,653 | ) | (3,585,225 | ) | |||||
Long-term convertible notes payable, net and accrued interest | $ | 806,615 | $ | - | |||||
Related Party Convertible Demand Notes Payable | |||||||||
Five notes payable in the amount of $1,114,587 due on demand at an interest rate of 5% per annum and convertible into shares of the Company’s common stock at $0.10 per share. | $ | 1,114,487 | $ | - | |||||
Total related party convertible demand notes payable | 1,114,487 | - | |||||||
Accrued interest | 63,653 | - | |||||||
Total related party convertible demand notes payable and accrued interest | $ | 1,178,140 | $ | - | |||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Related Party Convertible Term Notes Payable | |||||||||
Note payable in the amount of $100,000 due on June 30, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.15 per share. In connection with the note, 100,000 shares of the Company’s stock valued at $6,000 were awarded in January 2014. In connection with the extension of the due date on March 31, 2014, 200,000 shares of the Company’s stock valued at $20,000 were awarded. | $ | 100,000 | $ | - | |||||
Seven notes payable in the amount of $1,900,000 due on September 30, 2015 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “Z warrants” to purchase 400,000 and “BB warrants” to purchase 2,000,000 shares of the Company’s common stock valued at $324,585 were issued in connection with the extension of the notes during 2013. | 1,900,000 | 1,900,000 | |||||||
Note payable in the amount of $300,000 due on November 6, 2015 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “CC warrants” to purchase 600,000 shares of the Company’s common stock valued at $118,757 were issued in connection with the note. | 300,000 | - | |||||||
Note payable in the amount of $100,000 due on December 20, 2015 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.15 per share. “DD warrants” to purchase 200,000 shares of the Company’s common stock valued at $10,085 were issued in connection with the note. | 100,000 | - | |||||||
Note payable in the amount of $200,000 due on March 5, 2016 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “EE warrants” to purchase 200,000 shares of the Company’s common stock valued at $11,508 were issued in connection with the note. | 200,000 | - | |||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Related Party Convertible Notes Payable (Continued) | |||||||||
Six notes payable in the amount of $996,987 due on March 13, 2014 at an interest rate of 5% per annum and convertible into shares of the Company’s common stock at $0.20 per share. | $ | - | $ | 996,987 | |||||
Four notes payable in the amount of $28,750 due on demand at an interest rate of 5% per annum and convertible into shares of the Company’s common stock at $0.17 per share. | - | 28,750 | |||||||
Total related party convertible notes payable | 2,600,000 | 2,925,737 | |||||||
Unamortized debt and beneficial conversion feature discounts | (186,609 | ) | (254,827 | ) | |||||
Accrued interest | 234,986 | 97,716 | |||||||
Total related party convertible notes payable, net and accrued interest | 2,648,377 | 2,768,626 | |||||||
Less current portion | (104,466 | ) | (1,049,590 | ) | |||||
Long-term related party convertible notes payable, net and accrued interest | $ | 2,543,911 | $ | 1,719,036 | |||||
As of May 31, 2014, the principal maturities of the convertible notes payable and related party convertible notes payable are as follows: | |||||||||
For the Years Ending: | |||||||||
31-May-15 | $ | 3,994,439 | |||||||
31-May-16 | 3,325,000 | ||||||||
Total | $ | 7,319,439 | |||||||
Note_7_Line_of_Credit_and_Term
Note 7 - Line of Credit and Term Loans | 9 Months Ended | ||||
31-May-14 | |||||
Debt Disclosure [Abstract] | ' | ||||
Debt Disclosure [Text Block] | ' | ||||
7. LINE OF CREDIT AND TERM LOANS | |||||
SVB Line of Credit | |||||
On January 5, 2011, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with Silicon Valley Bank for a $1,000,000 non-formula line of credit. The principal amount outstanding under the credit line accrues interest at a floating per annum rate equal to the greater of (i) the Prime Rate, plus 2.5% or (ii) 6.5% and is to be paid monthly. The Company must maintain certain financial covenants under the Loan Agreement. The personal guarantor for the credit line is a director and stockholder of the Company. | |||||
On November 20, 2013, the Company entered into a Fifth Amendment to Loan and Security Agreement with Silicon Valley Bank to convert the line of credit into a term loan to be repaid by April 1, 2016 with interest only payments from December 2013 to April 2014, followed by twenty-four equal installments of principal plus monthly accrued interest. | |||||
On May 30, 2014, the Company entered into a Sixth Amendment to the Loan and Security Agreement with Silicon Valley Bank to defer the principal payments due on the first day of May, June and July until August 1, 2014. The deferred payments will be due in full on August 1, 2014. | |||||
As of May 31, 2014, the outstanding balance on the term loan and accrued interest totaled $1,000,000 and $9,042, respectively. As of August 31, 2013, the outstanding balance on the line of credit and accrued interest totaled $1,000,000 and $9,042, respectively. | |||||
JMJ Notes Payable | |||||
On December 12, 2013 the Company and JMJ executed a comprehensive Release and Settlement Agreement (“Settlement”) which pertains to all claims and counter-claims previously filed by both Parties. The Settlement will require the Company to repay $1,096,200 principal and interest on the outstanding notes to be $324,000 in cash payments and $772,200 in common stock over a period of 16 months. Under the payment terms of the Settlement, $1,105,000 previously classified as convertible notes were reclassified as a term loan on the settlement date. As a result, the Company recorded a gain on debt settlement consisting of $132,600 of abated interest, $8,800 in principal reduction and $745,148 from the elimination of derivative liabilities associated with the conversion features. | |||||
JMJ Notes Payable (Continued) | |||||
As of May 31, 2014, the principal maturities of the SVB and JMJ term loans are as follows: | |||||
For the Years Ending: | |||||
31-May-15 | $ | 1,156,117 | |||
31-May-16 | 758,750 | ||||
31-May-17 | 83,333 | ||||
Total term loans | 1,998,200 | ||||
Less current portion of term loans | (1,156,117 | ) | |||
Long-term term loans | $ | 842,083 | |||
Note_8_Commitments_and_Conting
Note 8 - Commitments and Contingencies | 9 Months Ended | ||||
31-May-14 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||
8. COMMITMENTS AND CONTINGENCIES | |||||
Operating Leases | |||||
On May 11, 2011, the Company entered into a lease agreement to lease approximately 4,700 square feet of general office space in Irvine, California, for base rent ranging from $6,199 to $7,193 per month over the 48 month lease term. The lease term is from July 1, 2011 through June 30, 2015. | |||||
Total rental expense on operating leases for each of the three months ended May 31, 2014 and 2013 totaled $19,202. Total rental expense on operating leases for the nine months ended May 31, 2014 and 2013 totaled $57,607 and $57,931, respectively. | |||||
As of May 31, 2014, the future minimum lease payments are as follows: | |||||
For the Years Ending: | |||||
31-May-15 | $ | 93,130 | |||
31-May-16 | 7,193 | ||||
Total | $ | 100,323 | |||
Note_9_Equity
Note 9 - Equity | 9 Months Ended | |||||||||
31-May-14 | ||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | |||||||||
9. EQUITY | ||||||||||
Common Stock | ||||||||||
The Company issued 3,192,709 shares of common stock to consultants in exchange for various advisory services during the nine months ended May 31, 2014. The shares were valued at $192,670, which represents the fair market value of the shares provided on the award date. | ||||||||||
The Company issued 5,203,667 shares of common stock in connection with note payable extensions during the nine months ended May 31, 2014. The shares were valued at $364,830, which represents the fair market value of the note payable extension costs on the award date. | ||||||||||
The Company issued 5,250,000 shares of common stock for the conversion of $315,000 in accounts payable. The shares were valued at $315,000, which represents the fair market value of the conversion costs on the award date. | ||||||||||
The Company issued 1,913,601 shares of common stock for the payment pursuant the JMJ Settlement during the nine months ended May 31, 2014. The shares were valued at $80,000, which represents the fair market value of the principal payments on the award date. | ||||||||||
The Company issued 20,000,000 shares of common stock as collateral for a $500,000 prommissory note, during the nine months ended May 31, 2014. | ||||||||||
Warrants | ||||||||||
Warrants to purchase up to 17,956,715 shares of the Company’s common stock are outstanding at May 31, 2014. | ||||||||||
Number of | Exercise | Expiration | ||||||||
Shares | Price | |||||||||
Outstanding warrants as of August 31, 2013 | 15,456,715 | |||||||||
Warrants granted: | ||||||||||
BB warrants | 1,200,000 | $ | 0.2 | 29-Aug-16 | ||||||
CC warrants | 600,000 | $ | 0.2 | 6-Nov-16 | ||||||
DD warrants | 500,000 | $ | 0.15 | 21-Jan-17 | ||||||
EE warrants | 200,000 | $ | 0.15 | 4-Mar-17 | ||||||
Outstanding warrants as of May 31, 2014 | 17,956,715 | |||||||||
The weighted average exercise price of outstanding warrants was $0.20 at May 31, 2014, with expiration dates ranging from December 16, 2014 to March 4, 2017. | ||||||||||
Stock Options | ||||||||||
On January 12, 2012, the board of directors adopted the Amended and Restated 2007 Stock Incentive Plan (the “2007 Plan”). The aggregate number of shares of common stock that may be issued under the 2007 Plan is 20,000,000 and such shares are reserved for issuance out of the authorized but previously unissued shares. Employees, service providers and non-employee directors of the Company and its affiliates are eligible to receive non-statutory stock options, incentive stock options, restricted stock and stock appreciation rights. The 2007 Plan will continue until the earlier of the termination of the 2007 Plan by the board of directors or ten years after the effective date. There were 18,500,000 incentive stock options granted under the 2007 Plan as of May 31, 2014. | ||||||||||
On August 30, 2007, the Company granted options outside of the 2007 Plan to three of the Company’s officers to purchase 6,000,000 common shares each for a total of 18,000,000 common shares at $0.33 per share that vest upon the achievement of certain milestones. The options expire 10 years from the vested date. As of May 31, 2014, there were no options that were vested and presently exercisable. | ||||||||||
On January 12, 2012, the Company granted options under the 2007 Plan to three of the Company’s officers to purchase 4,000,000 common shares each for a total of 12,000,000 common shares at $0.31 per share that vest upon the achievement of certain milestones. The options expire on January 12, 2017. As of May 31, 2014, there were 1,500,000 options that were vested and presently exercisable. No options were exercised as of May 31, 2014. | ||||||||||
On March 15, 2012, the Company granted options under the 2007 Plan to three officers and one employee of the Company to purchase 6,500,000 common shares at $0.31 per share per share that vest upon the achievement of certain milestones. The options expire on March 15, 2017. As of May 31, 2014, there were 1,425,000 options that were vested and presently exercisable. No options were exercised as of May 31, 2014. |
Note_10_Provision_for_Income_T
Note 10 - Provision for Income Taxes | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||
10. PROVISION FOR INCOME TAXES | |||||||||
Deferred income taxes are reported using the liability method. Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences arise from the difference between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and tax rates on the date of enactment. | |||||||||
The Company did not provide any current or deferred U.S. federal income taxes or benefits for any of the periods presented because the Company has experienced operating losses since inception. The Company provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn sufficient income to realize the deferred tax assets during the carry forward period. | |||||||||
The components of the Company’s deferred tax asset as of May 31, 2014and August 31, 2013 are as follows: | |||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Net operating loss carry forward and deductible temporary differences | 20,674,563 | 19,904,000 | |||||||
Valuation allowance | $ | (20,674,563 | ) | $ | (19,904,000 | ) | |||
Net deferred tax asset | $ | - | $ | - | |||||
A reconciliation of the combined federal and state statutory income taxes rate and the effective rate is as follows: | |||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Federal tax at statutory rate | 34 | % | 34 | % | |||||
State income tax net of federal benefit | 5.83 | % | 5.83 | % | |||||
Valuation allowance | (39.83% | ) | (39.83% | ) | |||||
- | - | ||||||||
As of May 31, 2014 and August 31, 2013, the Company had federal and state net operating loss carryforwards of approximately $51,934,091 and $48,074,000, respectively, which can be used to offset future federal income tax. The federal and state net operating loss carryforwards expire at various dates through 2032. Deferred tax assets resulting from the net operating losses are reduced by a valuation allowance, when, in the opinion of management, utilization is not reasonably assured. These carryforwards may be limited upon a change in ownership or consummation of a business combination under IRC Sections 381 and 382. | |||||||||
As of May 31, 2014 and 2013, no accrued interest and penalties are recorded relating to uncertain tax positions. Any such interest and penalties would be included in interest expense as a component of pre-tax net income or loss. The Company's tax filings are no longer open to examination by the Internal Revenue Service for tax years prior to 2009 and by state taxing authorities for tax years prior to 2008. |
Note_11_Recent_Accounting_Pron
Note 11 - Recent Accounting Pronouncement | 9 Months Ended |
31-May-14 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | ' |
11. RECENT ACCOUNTING PRONOUNCEMENT | |
In May 2014, the FASB, jointly with the International Accounting Standards Board, issued a comprehensive new standard on revenue recognition from contracts with customers. The standard's core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this new guidance to contracts within its scope, an entity will: (1) identify the contract(s) with a customer, (2) identify the performance obligation in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Additionally, this new guidance would require significantly expanded disclosures about revenue recognition. Provisions of this new standard are effective for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2016. Early application is not permitted. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. The Company is currently evaluating the potential effect on its consolidated financial position, results of operations and cash flows from adoption of this standard. |
Note_12_Subsequent_Events
Note 12 - Subsequent Events | 9 Months Ended |
31-May-14 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
12. SUBSEQUENT EVENTS | |
On June 4, 2014, the Company issued 702,341 shares of common stock in connection with the conversion of notes payable valued at $21,000 on the award date. | |
On June 18, 2014, the Company issued 720,000 shares of common stock in connection with the conversion of notes payable valued at $18,000 on the award date. A total of 360,000 common shares were issued in satisfaction of the May 15, 2014 principal payment. As of June 18, 2014, the Company was in full compliance on the JMJ notes payable. |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended | ||||||||||
31-May-14 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | ' | ||||||||||
Nature of Business | |||||||||||
The Company designs, develops, and sells personal, pet, and vehicle locator devices and services including PocketFinder® People, PocketFinder® Pets and PocketFinder® Vehicles. The PocketFinder® is a small, completely wireless, location device that enables a user to locate a person, pet, vehicle or valuable item at any time from almost anywhere using Global Positioning System (“GPS”) and General Packet Radio Service (“GPRS”) technologies. The Company is located in Irvine, California. | |||||||||||
Organization | |||||||||||
Location Based Technologies, Inc. (formerly known as Springbank Resources, Inc.) (the “Company,” “our,” “we” or “LBT”) was incorporated under the laws of the State of Nevada on April 10, 2006. | |||||||||||
Location Based Technologies, Corp. (formerly known as PocketFinder, Inc.) was incorporated under the laws of the State of California on September 16, 2005. On July 7, 2006, it established PocketFinder, LLC (“LLC”), a California Limited Liability Company. On May 29, 2007, PocketFinder, Inc. filed amended articles with the Secretary of State to change its name to Location Based Technologies, Corp., and in October 2007 was merged into LBT. | |||||||||||
On September 30, 2009, the Company formed Location Based Technologies, Ltd. (“LBT, Ltd.”), an England and Wales private limited company, to establish a presence in Europe. LBT, Ltd. is a wholly owned subsidiary of the Company. | |||||||||||
Consolidation, Policy [Policy Text Block] | ' | ||||||||||
Consolidation Policy | |||||||||||
The accompanying consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiary, Location Based Technologies, Ltd. Intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
Basis of Accounting, Policy [Policy Text Block] | ' | ||||||||||
Basis of Presentation | |||||||||||
The unaudited consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 8-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to financial statements included in the annual report on Form 10-K of Location Based Technologies, Inc. for the year ended August 31, 2013. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended May 31, 2014, are not necessarily indicative of the results that may be expected for any other interim period or the entire year. For further information, these unaudited consolidated financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended August 31, 2013, included in the Company’s report on Form 10-K. | |||||||||||
Liquidity Disclosure [Policy Text Block] | ' | ||||||||||
Going Concern | |||||||||||
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred net losses since inception, and as of May 31, 2014, had an accumulated deficit of $59,996,870 and negative working capital of $6,719,787. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | |||||||||||
Management recognizes that the Company must generate additional resources to enable it to continue operations. Management intends to raise additional financing through debt and equity financing or through other means that it deems necessary, with a view to moving forward and sustaining prolonged growth in its strategy phases. However, no assurance can be given that the Company will be successful in raising additional capital. Further, even if the Company raises additional capital, there can be no assurance that the Company will achieve profitability or positive cash flow. If management is unable to raise additional capital and expected significant revenues do not result in positive cash flow, the Company will not be able to meet its obligations and may have to cease operations. | |||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | ||||||||||
Use of Estimates | |||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could materially differ from those estimates. | |||||||||||
Reclassification, Policy [Policy Text Block] | ' | ||||||||||
Reclassifications | |||||||||||
Certain reclassifications have been made to prior period amounts or balances to conform to the presentation adopted in the current period. | |||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ||||||||||
Cash and Cash Equivalents | |||||||||||
For purposes of the balance sheets and statements of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents. | |||||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | ||||||||||
Concentration of Credit Risk | |||||||||||
Cash and Cash Equivalents – The cash and cash equivalent balances at May 31, 2014 and August 31, 2013 were principally held by two institutions which insured our aggregated accounts with the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 per insured banking institution. At times, the Company has maintained bank balances which have exceeded FDIC limits. The Company has not experienced any losses with respect to its cash balances. | |||||||||||
Revenue and Accounts Receivable – For the nine months ended May 31, 2014, revenue from the Company’s largest customer amounted to $187,621 or 27% of total net revenue. Accounts receivable from this customer amounted to $54,275 or 56% of total accounts receivable at May 31, 2014. | |||||||||||
For the nine months ended May 31, 2013, revenue from the Company’s largest customer amounted to $882,569 or 57% of total net revenue. Accounts receivable from this customer amounted to $1,517 or 2% of total accounts receivable at May 31, 2013. | |||||||||||
Trade and Other Accounts Receivable, Policy [Policy Text Block] | ' | ||||||||||
Allowance for Doubtful Accounts | |||||||||||
The allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and the current status of accounts receivable. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. As of May 31, 2014 and August 31, 2013, the allowance for doubtful accounts amounted to $9,000 and $3,000, respectively. | |||||||||||
Revenue Recognition, Sales Returns [Policy Text Block] | ' | ||||||||||
Allowance for Sales returns | |||||||||||
An allowance for sales returns is recorded as a reduction to revenue and based on management’s judgment using historical experience and expectation of future conditions. As of May 31, 2014 and August 31, 2013, the allowance for sales returns amounted to $16,431 and $8,500, respectively. | |||||||||||
Inventory, Policy [Policy Text Block] | ' | ||||||||||
Inventory | |||||||||||
Inventories are valued at the lower of cost (first-in, first-out) or market and primarily consisted of components and finished goods for the Company’s PocketFinder® products. Packaging costs are expensed as incurred. The Company provides for a lower-of-cost-or-market ("LCM") adjustment against gross inventory values. An inventory valuation reserve approximating $989,881 was recorded to reduce the value of the inventory to the current selling price. Management estimates the current selling price as the realizable value of the inventory. No inventory obsolescence reserve was recorded during the nine months ended May 31, 2013. Management estimated sales for the next 24 month period based on historical sales data and prospective sales trends and determined that all inventory is expected to be sold in the next two years. Management analyzed and tested certain components that could possibly become obsolete and determined that the useful life exceeded the two year estimate to sell the inventory. In addition, the components inventory, net of the LCM valuation reserve, totaling $892,434 is classified as a noncurrent asset at May 31, 2014 (see Note 2). | |||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | ||||||||||
Fair Value of Financial Instruments | |||||||||||
Pursuant to FASB ASC 820 – Fair Value Measurement and Disclosures, the Company is required to estimate the fair value of all financial instruments included on its balance sheet. The carrying value of cash, accounts receivable, inventory, accounts payable and notes payable approximate their fair value due to the short period to maturity of these instruments. | |||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | ||||||||||
Property and Equipment | |||||||||||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method and with useful lives used in computing depreciation ranging from 1 to 5 years. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Expenditures for maintenance and repairs are charged to operations as incurred; additions, renewals and betterments are capitalized. | |||||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' | ||||||||||
Long-Lived Assets | |||||||||||
The Company accounts for its long-lived assets in accordance with FASB ASC 360 – Impairment or Disposal of Long-Lived Assets that requires long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value. During the nine months ended May 31, 2013, the Company recorded an impairment of certain patents amounting to $455,916. There was no such impairment recognized during the nine months ended May 31, 2014. | |||||||||||
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | ' | ||||||||||
Intangible Assets – Patents and Trademarks | |||||||||||
The Company capitalizes internally developed assets related to certain costs associated with patents and trademarks. These costs include legal and registration fees needed to apply for and secure patents. The intangible assets acquired from other enterprises or individuals in an “arms-length” transaction are recorded at cost. As of May 31, 2014 and August 31, 2013, the Company capitalized $742,945 for patent related expenditures. As of May 31, 2014 and August 31, 2013, the Company capitalized $52,539 and $59,470 for trademark related expenditures, respectively. Accumulated amortization of intangible assets was $136,894 and $86,683 at May 31, 2014 and August 31, 2013, respectively. | |||||||||||
Patents are subject to amortization upon issuance by the United States Patent and Trademark Office. Intangible assets are amortized in accordance with FASB ASC 350 – Intangibles – Goodwill and Other, using the straight-line method over the shorter of their estimated useful lives or remaining legal life. | |||||||||||
Revenue Recognition, Deferred Revenue [Policy Text Block] | ' | ||||||||||
Deferred Revenue | |||||||||||
Deferred revenue is a liability related to revenue producing activity for which revenue has not yet been recognized. As of May 31, 2014 and August 31, 2013, deferred revenue amounted to $21,464 and $25,371, respectively, and consisted of prepaid service revenue from subscribers. | |||||||||||
Beneficial Conversion Feature of Convertible Notes Payable [Policy Text Block] | ' | ||||||||||
Beneficial Conversion Feature of Convertible Notes Payable | |||||||||||
The Company accounts for the beneficial conversion feature of convertible notes payable when the conversion rate is below market value. Pursuant to FASB ASC 470-20 – Debt With Conversion and Other Options, the estimated fair value of the beneficial conversion feature is recorded in the financial statements as a discount from the face amount of the notes. Such discounts are amortized over the term of the notes or conversion of the notes, if sooner. The Company recognized amortization expense related to the beneficial conversion features on convertible notes payable totaling $440 and $85,530 during the three months ended May 31, 2014 and 2013, respectively. The Company recognized amortization expense related to the beneficial conversion features on convertible notes payable totaling $50,693 and $219,669 during the nine months ended May 31, 2014 and 2013, respectively | |||||||||||
Derivatives, Policy [Policy Text Block] | ' | ||||||||||
Derivative Liabilities | |||||||||||
The Company accounts for its warrants and embedded conversion features in its convertible debentures in accordance FASB ASC 815-10 – Derivatives and Hedging, which requires a periodic valuation of their fair value and a corresponding recognition of liabilities associated with such derivatives, and FASB ASC 815-40 – Contracts in Entity’s Own Equity. The recognition of derivative liabilities related to the issuance of convertible debt is applied first to the proceeds of such issuance as a debt discount, at the date of issuance, and the excess of derivative liabilities over the proceeds is recognized as “Loss on Valuation of Derivative” in other expense. Any subsequent increase or decrease in the fair value of the derivative liabilities is recognized as “Gain (Loss) on Change in Fair Value of Derivative Liability” in other income (expense). | |||||||||||
The Company determined that the conversion feature of two promissory notes met the criteria of an embedded derivative, and therefore the conversion feature of these notes needed to be bifurcated and accounted for as a derivative. The fair value of the embedded conversion feature was estimated at the default date when the notes became convertible using the Black-Scholes model. In connection with the JMJ debt settlement, the derivative liabilities were eliminated and included in the gain on debt settlement. | |||||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | ||||||||||
Revenue Recognition | |||||||||||
Revenues are recognized in accordance with FASB ASC 605 – Revenue Recognition, when (a) persuasive evidence of an arrangement exists, (b) the products or services have been provided to the customer, (c) the fee is fixed or determinable, and (d) collectability is reasonably assured. In instances where the customer, at its discretion, has the right to reject the product or services prior to final acceptance, revenue is deferred until such acceptance occurs. | |||||||||||
Device Sales Revenue – Revenue from the sales of PocketFinder® products is recognized upon shipment to website customers and upon delivery to distributors net of an allowance for estimated returns. The allowance for sales returns is estimated based on management’s judgment using historical experience and expectation of future conditions. | |||||||||||
Service Revenue – Service revenue consists of monthly service fees initiated by the customer upon activation of a PocketFinder® device. Services fees are billed and collected in the month the service is provided. Service revenue is recognized upon collecting the monthly service fee from the customer. | |||||||||||
Shipping and Handling Cost, Policy [Policy Text Block] | ' | ||||||||||
Shipping Costs | |||||||||||
Amounts billed to customers related to shipping and handling are classified as revenue, and the Company’s shipping and handling costs are included in cost of sales. | |||||||||||
Advertising Costs, Policy [Policy Text Block] | ' | ||||||||||
Advertising Costs | |||||||||||
Advertising costs are expensed as incurred. For the three months ended May 31, 2014 and 2013, the Company incurred $19,807 and $51,327 of advertising costs, respectively. For the nine months ended May 31, 2014 and 2013, the Company incurred $486,269 and $420,023 of advertising costs, respectively. | |||||||||||
Research and Development Expense, Policy [Policy Text Block] | ' | ||||||||||
Research and Development | |||||||||||
Research and development costs are clearly identified and are expensed as incurred in accordance with FASB ASC 730 – Research and Development. | |||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | ||||||||||
Stock Based Compensation | |||||||||||
The Company measures and recognizes compensation expense associated with its grant of equity-based awards in accordance with FASB ASC 718, Compensation – Stock Compensation. ASC 718 requires that companies measure and recognize compensation expense at an amount equal to the fair value of share-based payments granted under compensation arrangements over the vesting period. | |||||||||||
In accordance with ASC 718, the Company estimates the grant-date fair value of its stock options using the Black-Scholes option-pricing model, which takes into account assumptions regarding an expected dividend yield, a risk-free interest rate, an expected volatility factor for the market price of the Company’s common stock and an expected term of the stock options. The fair value of stock options granted is amortized on a straight-line basis over the vesting periods. For the three months ended May 31, 2014 and 2013, stock-based compensation expense associated with stock options totaled $3,443 and $30,122, respectively. For the nine months ended May 31, 2014 and 2013, stock-based compensation expense associated with stock options totaled $36,575 and $131,341 respectively. | |||||||||||
Income Tax, Policy [Policy Text Block] | ' | ||||||||||
Income Taxes | |||||||||||
The Company accounts for income taxes under FASB ASC 740 – Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements’ carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. The Company has included its $800 minimum California state income tax in its provision for income taxes for the nine months ended May 31, 2014 and 2013. | |||||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | ||||||||||
Earnings/ Loss Per Share | |||||||||||
The Company computes basic earnings (loss) per share using the weighted average number of common shares outstanding during the period in accordance with FASB ASC 260 – Earnings Per Share, which specifies the compilation, presentation, and disclosure requirements for income per share for entities with publicly held common stock or instruments which are potentially common stock. | |||||||||||
Diluted earnings (loss) per share are computed using the weighted average number of common shares outstanding and the dilutive potential common shares outstanding during the period. The following potential common shares are excluded from diluted loss per share as their effect would be anti-dilutive. | |||||||||||
May 31, | August 31, | ||||||||||
2014 | 2013 | ||||||||||
Warrants | 17,956,715 | 15,456,715 | |||||||||
Stock options | 2,925,000 | 3,475,000 | |||||||||
Convertible notes payable | 39,853,796 | 25,300,352 | |||||||||
Dilutive potential common shares | 60,735,511 | 44,232,067 |
Note_1_Nature_of_Operations_an1
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||
31-May-14 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | ||||||||||
May 31, | August 31, | ||||||||||
2014 | 2013 | ||||||||||
Warrants | 17,956,715 | 15,456,715 | |||||||||
Stock options | 2,925,000 | 3,475,000 | |||||||||
Convertible notes payable | 39,853,796 | 25,300,352 | |||||||||
Dilutive potential common shares | 60,735,511 | 44,232,067 |
Note_2_Inventory_Tables
Note 2 - Inventory (Tables) | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory, Current [Table Text Block] | ' | ||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Current: | |||||||||
Finished goods | $ | 1,041,739 | $ | 1,286,953 | |||||
Inventory valuation reserve for finished goods | (412,504 | ) | (498,483 | ) | |||||
Inventories, current | $ | 629,235 | $ | 788,470 | |||||
Noncurrent: | |||||||||
Device components | $ | 1,469,811 | $ | 1,471,404 | |||||
Inventory valuation reserve for components | (577,377 | ) | (578,003 | ) | |||||
Inventories, noncurrent | $ | 892,434 | $ | 893,401 |
Note_3_Property_and_Equipment_
Note 3 - Property and Equipment (Tables) | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment [Table Text Block] | ' | ||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Machinery and equipment | $ | 139,821 | $ | 106,354 | |||||
Computer software (mobile apps) | 82,999 | 66,999 | |||||||
Computer software (internal) | 29,537 | 51,263 | |||||||
Computer and video equipment | 19,756 | 19,756 | |||||||
Office furniture | $ | 24,526 | $ | 24,526 | |||||
296,640 | 268,898 | ||||||||
Less: accumulated depreciation | (200,210 | ) | (158,085 | ) | |||||
Total property and equipment | $ | 96,430 | $ | 110,813 |
Note_4_Intangible_Assets_Table
Note 4 - Intangible Assets (Tables) | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | ' | ||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Patents | $ | 742,945 | $ | 742,945 | |||||
Trademarks | 52,539 | 59,470 | |||||||
795,484 | 802,415 | ||||||||
Less: accumulated amortization | (136,894 | ) | (86,683 | ) | |||||
Total intangible assets | $ | 658,590 | $ | 715,732 |
Note_6_Convertible_Notes_Payab1
Note 6 - Convertible Notes Payable (Tables) | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Convertible Notes Payable [Abstract] | ' | ||||||||
Convertible Debt [Table Text Block] | ' | ||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Convertible Demand Notes Payable | |||||||||
Note payable in the amount of $28,500 due on demand at an interest rate of 5% per annum and convertible into shares of the Company’s common stock at $0.10 per share. In connection with the extension of the due date and consolidation of notes on March 14, 2014, 51,000 shares of the Company’s stock valued at $3,060 were awarded. | $ | 28,500 | $ | - | |||||
Total convertible demand notes payable | 28,500 | - | |||||||
Accrued interest | 1,303 | - | |||||||
Total convertible demand notes payable and accrued interest | $ | 29,803 | $ | - | |||||
Convertible Term Notes Payable | |||||||||
Note payable to JMJ Financial in the amount of $555,000 due on September 16, 2012. “V warrants” to purchase 869,565 shares of the Company’s common stock valued at $200,000 were issued in connection with the note. The note was converted into a term loan. See Note 7. | $ | - | $ | 555,000 | |||||
Note payable to JMJ Financial in the amount of $550,000 due on November 1, 2012. “W warrants” to purchase 1,086,957 shares of the Company’s common stock and valued at $250,000 were issued in connection with the note. The note was converted into a term loan. See Note 7. | - | 550,000 | |||||||
Note payable in the amount of $500,000 due on March 25, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “Z warrants” to purchase 1,000,000 shares of the Company’s common stock valued at $164,022 were issued in connection with the note. As of May 31, 2014 the note was not renewed and is due on demand. | 500,000 | 500,000 | |||||||
Note payable in the amount of $25,000 due on April 10, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. As of May 31, 2014, the note was not renewed and is due on demand. | 25,000 | 25,000 | |||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Convertible Term Notes Payable | |||||||||
Two notes payable in the amount of $75,000 due on July 9, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.30 per share. In connection with the extension of the due date, 150,000 shares of the Company’s stock valued at $15,000 were awarded in January 2014. | $ | 75,000 | $ | 75,000 | |||||
Two notes payable in the amount of $150,000 due on July 13, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.30 per share. In connection with the extension of the due date, 300,000 shares of the Company’s stock valued at $30,000 were awarded in January 2014. | 150,000 | 150,000 | |||||||
Note payable in the amount of $300,000 due on July 13, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.30 per share. In connection with the extension of the due date on January 22, 2014, 600,000 shares of the Company’s stock valued at $60,000 were awarded. | 300,000 | 300,000 | |||||||
Two notes payable in the amount of $68,500, plus accrued interest of $7,952, were combined into a new note due on August 9, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. In connection with the combination of the notes and the extension of due dates, 137,000 shares of the Company’s stock valued at $12,330 were awarded in January 2014. | 76,452 | 68,500 | |||||||
Note payable in the amount of $500,000 due on September 21, 2014 at an interest rate of 36% per annum. The note is collateralized by 20,000,000 shares of common stock. | 500,000 | - | |||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Convertible Term Notes Payable (Continued) | |||||||||
Note payable in the amount of $25,000 due on October 10, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. In connection with the extension of the due date, 50,000 shares of the Company’s stock valued at $2,450 were awarded in April 2014. | $ | 25,000 | $ | 25,000 | |||||
Note payable in the amount of $100,000 due on October 15, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “Z warrants” to purchase 200,000 shares of the Company’s common stock valued at $30,731 were issued in connection with the note. In connection with the extension of the due date, 200,000 shares of the Company’s stock valued at $7,340 were awarded in April 2014. | 100,000 | 100,000 | |||||||
Note payable in the amount of $1,000,000 due on December 30, 2014 at an interest rate of 8% per annum and convertible into shares of the Company’s common stock at $0.20 per share. In connection with the extension of the due date on December 10, 2013, 4,000,000 shares of the Company’s stock valued at $240,000 were awarded. | 1,000,000 | 1,000,000 | |||||||
Two notes payable in the amount of $600,000 due on September 30, 2015 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “BB warrants” to purchase 1,000,000 shares of the Company’s common stock valued at $133,001 were issued in connection with the extension of the notes during 2013. | 600,000 | - | |||||||
Note payable in the amount of $75,000 due on January 21, 2016 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “Z warrants” to purchase 150,000 shares of the Company’s common stock valued at $24,617 were issued in connection with the note. | 75,000 | 75,000 | |||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Convertible Term Notes Payable (Continued) | |||||||||
Note payable in the amount of $150,000 due on January 21, 2016 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.15 per share. “DD warrants” to purchase 300,000 shares of the Company’s common stock valued at $25,971 were issued in connection with the note. | $ | 150,000 | $ | - | |||||
Total convertible notes payable | 3,576,452 | 3,423,500 | |||||||
Unamortized debt and beneficial conversion feature discounts | (86,221 | ) | (126,102 | ) | |||||
Accrued interest | 365,037 | 287,827 | |||||||
Total convertible notes payable, net and accrued interest | 3,855,268 | 3,585,225 | |||||||
Less current portion | (3,048,653 | ) | (3,585,225 | ) | |||||
Long-term convertible notes payable, net and accrued interest | $ | 806,615 | $ | - | |||||
Related Party Convertible Demand Notes Payable | |||||||||
Five notes payable in the amount of $1,114,587 due on demand at an interest rate of 5% per annum and convertible into shares of the Company’s common stock at $0.10 per share. | $ | 1,114,487 | $ | - | |||||
Total related party convertible demand notes payable | 1,114,487 | - | |||||||
Accrued interest | 63,653 | - | |||||||
Total related party convertible demand notes payable and accrued interest | $ | 1,178,140 | $ | - | |||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Related Party Convertible Term Notes Payable | |||||||||
Note payable in the amount of $100,000 due on June 30, 2014 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.15 per share. In connection with the note, 100,000 shares of the Company’s stock valued at $6,000 were awarded in January 2014. In connection with the extension of the due date on March 31, 2014, 200,000 shares of the Company’s stock valued at $20,000 were awarded. | $ | 100,000 | $ | - | |||||
Seven notes payable in the amount of $1,900,000 due on September 30, 2015 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “Z warrants” to purchase 400,000 and “BB warrants” to purchase 2,000,000 shares of the Company’s common stock valued at $324,585 were issued in connection with the extension of the notes during 2013. | 1,900,000 | 1,900,000 | |||||||
Note payable in the amount of $300,000 due on November 6, 2015 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “CC warrants” to purchase 600,000 shares of the Company’s common stock valued at $118,757 were issued in connection with the note. | 300,000 | - | |||||||
Note payable in the amount of $100,000 due on December 20, 2015 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.15 per share. “DD warrants” to purchase 200,000 shares of the Company’s common stock valued at $10,085 were issued in connection with the note. | 100,000 | - | |||||||
Note payable in the amount of $200,000 due on March 5, 2016 at an interest rate of 10% per annum and convertible into shares of the Company’s common stock at $0.20 per share. “EE warrants” to purchase 200,000 shares of the Company’s common stock valued at $11,508 were issued in connection with the note. | 200,000 | - | |||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Related Party Convertible Notes Payable (Continued) | |||||||||
Six notes payable in the amount of $996,987 due on March 13, 2014 at an interest rate of 5% per annum and convertible into shares of the Company’s common stock at $0.20 per share. | $ | - | $ | 996,987 | |||||
Four notes payable in the amount of $28,750 due on demand at an interest rate of 5% per annum and convertible into shares of the Company’s common stock at $0.17 per share. | - | 28,750 | |||||||
Total related party convertible notes payable | 2,600,000 | 2,925,737 | |||||||
Unamortized debt and beneficial conversion feature discounts | (186,609 | ) | (254,827 | ) | |||||
Accrued interest | 234,986 | 97,716 | |||||||
Total related party convertible notes payable, net and accrued interest | 2,648,377 | 2,768,626 | |||||||
Less current portion | (104,466 | ) | (1,049,590 | ) | |||||
Long-term related party convertible notes payable, net and accrued interest | $ | 2,543,911 | $ | 1,719,036 | |||||
Schedule of Maturities of Long-term Debt [Table Text Block] | ' | ||||||||
For the Years Ending: | |||||||||
31-May-15 | $ | 3,994,439 | |||||||
31-May-16 | 3,325,000 | ||||||||
Total | $ | 7,319,439 |
Note_7_Line_of_Credit_and_Term1
Note 7 - Line of Credit and Term Loans (Tables) | 9 Months Ended | ||||
31-May-14 | |||||
Note 7 - Line of Credit and Term Loans (Tables) [Line Items] | ' | ||||
Schedule of Maturities of Long-term Debt [Table Text Block] | ' | ||||
For the Years Ending: | |||||
31-May-15 | $ | 3,994,439 | |||
31-May-16 | 3,325,000 | ||||
Total | $ | 7,319,439 | |||
Term Loan [Member] | ' | ||||
Note 7 - Line of Credit and Term Loans (Tables) [Line Items] | ' | ||||
Schedule of Maturities of Long-term Debt [Table Text Block] | ' | ||||
For the Years Ending: | |||||
31-May-15 | $ | 1,156,117 | |||
31-May-16 | 758,750 | ||||
31-May-17 | 83,333 | ||||
Total term loans | 1,998,200 | ||||
Less current portion of term loans | (1,156,117 | ) | |||
Long-term term loans | $ | 842,083 |
Note_8_Commitments_and_Conting1
Note 8 - Commitments and Contingencies (Tables) | 9 Months Ended | ||||
31-May-14 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||||
For the Years Ending: | |||||
31-May-15 | $ | 93,130 | |||
31-May-16 | 7,193 | ||||
Total | $ | 100,323 |
Note_9_Equity_Tables
Note 9 - Equity (Tables) | 9 Months Ended | |||||||||
31-May-14 | ||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | ' | |||||||||
Number of | Exercise | Expiration | ||||||||
Shares | Price | |||||||||
Outstanding warrants as of August 31, 2013 | 15,456,715 | |||||||||
Warrants granted: | ||||||||||
BB warrants | 1,200,000 | $ | 0.2 | 29-Aug-16 | ||||||
CC warrants | 600,000 | $ | 0.2 | 6-Nov-16 | ||||||
DD warrants | 500,000 | $ | 0.15 | 21-Jan-17 | ||||||
EE warrants | 200,000 | $ | 0.15 | 4-Mar-17 | ||||||
Outstanding warrants as of May 31, 2014 | 17,956,715 |
Note_10_Provision_for_Income_T1
Note 10 - Provision for Income Taxes (Tables) | 9 Months Ended | ||||||||
31-May-14 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | ||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Net operating loss carry forward and deductible temporary differences | 20,674,563 | 19,904,000 | |||||||
Valuation allowance | $ | (20,674,563 | ) | $ | (19,904,000 | ) | |||
Net deferred tax asset | $ | - | $ | - | |||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | ||||||||
May 31, | August 31, | ||||||||
2014 | 2013 | ||||||||
Federal tax at statutory rate | 34 | % | 34 | % | |||||
State income tax net of federal benefit | 5.83 | % | 5.83 | % | |||||
Valuation allowance | (39.83% | ) | (39.83% | ) | |||||
- | - |
Note_1_Nature_of_Operations_an2
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
31-May-14 | 31-May-13 | 31-May-14 | 31-May-13 | Aug. 31, 2013 | |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Retained Earnings (Accumulated Deficit) | ($59,996,870) | ' | ($59,996,870) | ' | ($56,064,465) |
Working Capital | -6,719,787 | ' | -6,719,787 | ' | ' |
Cash, FDIC Insured Amount | 250,000 | ' | 250,000 | ' | ' |
Allowance for Doubtful Accounts Receivable | 9,000 | ' | 9,000 | ' | 3,000 |
Inventory Adjustments | 989,881 | ' | 989,881 | ' | ' |
Inventory Write-down | ' | ' | -86,605 | 206,120 | ' |
Inventory, Noncurrent | 892,434 | ' | 892,434 | ' | 893,401 |
Asset Impairment Charges | ' | ' | ' | 455,916 | ' |
Finite-Lived Patents, Gross | 742,945 | ' | 742,945 | ' | ' |
Finite-Lived Trademarks, Gross | 52,539 | ' | 52,539 | ' | 59,470 |
Finite-Lived Intangible Assets, Accumulated Amortization | 136,894 | ' | 136,894 | ' | 86,683 |
Deferred Revenue | 21,464 | ' | 21,464 | ' | 25,371 |
Beneficial Conversion Feature, Accumulated Amortization | 440 | 85,530 | 50,693 | 219,669 | ' |
Marketing and Advertising Expense | 19,807 | 51,327 | 486,269 | 420,023 | ' |
State and Local Income Tax Expense (Benefit), Continuing Operations | ' | ' | 800 | 800 | ' |
Employee Stock Option [Member] | ' | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | 3,443 | 30,122 | 36,575 | 131,341 | ' |
Recognized Amount [Member] | ' | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Asset Impairment Charges | ' | ' | 0 | ' | ' |
Largest Customer [Member] | Sales Revenue, Net [Member] | ' | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Revenues | ' | ' | 187,621 | 882,569 | ' |
Concentration Risk, Percentage | ' | ' | 27.00% | 57.00% | ' |
Largest Customer [Member] | Accounts Receivable [Member] | ' | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Concentration Risk, Percentage | ' | ' | 56.00% | 2.00% | ' |
Largest Customer [Member] | ' | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Net | 54,275 | 1,517 | 54,275 | 1,517 | ' |
Allowance for Sales Returns [Member] | ' | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Valuation Allowances and Reserves, Balance | $16,431 | ' | $16,431 | ' | $8,500 |
Minimum [Member] | ' | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | ' | '1 year | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' |
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | ' | '5 years | ' | ' |
Note_1_Nature_of_Operations_an3
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Antidilutive Securities Excluded from Earnings Per Share | 9 Months Ended | 12 Months Ended |
31-May-14 | Aug. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Dilutive Potential Common Shares | 60,735,511 | 44,232,067 |
Warrant [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Dilutive Potential Common Shares | 17,956,715 | 15,456,715 |
Equity Option [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Dilutive Potential Common Shares | 2,925,000 | 3,475,000 |
Convertible Debt Securities [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Dilutive Potential Common Shares | 39,853,796 | 25,300,352 |
Note_2_Inventory_Details
Note 2 - Inventory (Details) (USD $) | 31-May-14 | Aug. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Inventory, Noncurrent | $892,434 | $893,401 |
Note_2_Inventory_Details_Inven
Note 2 - Inventory (Details) - Inventory (USD $) | 31-May-14 | Aug. 31, 2013 |
Current: | ' | ' |
Inventories, noncurrent | $892,434 | $893,401 |
Inventories, current | 629,235 | 788,470 |
Finished Goods [Member] | Current [Member] | ' | ' |
Current: | ' | ' |
Inventory Valuation Reserve | -412,504 | -498,483 |
Device Components [Member] | Noncurrent [Member] | ' | ' |
Current: | ' | ' |
Device components | 1,469,811 | 1,471,404 |
Inventory Valuation Reserve | -577,377 | -578,003 |
Current [Member] | ' | ' |
Current: | ' | ' |
Finished goods | 1,041,739 | 1,286,953 |
Inventories, current | $629,235 | $788,470 |
Note_3_Property_and_Equipment_1
Note 3 - Property and Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-14 | 31-May-13 | |
Property, Plant and Equipment [Abstract] | ' | ' | ' | ' |
Depreciation | $10,076 | $13,476 | $42,125 | $35,519 |
Note_3_Property_and_Equipment_2
Note 3 - Property and Equipment (Details) - Property and Equipment (USD $) | 31-May-14 | Aug. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Equipment | $296,640 | $268,898 |
Less: accumulated depreciation | -200,210 | -158,085 |
Total property and equipment | 96,430 | 110,813 |
Machinery and Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Equipment | 139,821 | 106,354 |
Computer Software Mobile Apps [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Equipment | 82,999 | 66,999 |
Internal [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Equipment | 29,537 | 51,263 |
Computer and Video Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Equipment | 19,756 | 19,756 |
Office Furniture [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Equipment | $24,526 | $24,526 |
Note_4_Intangible_Assets_Detai
Note 4 - Intangible Assets (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-14 | 31-May-13 | |
Disclosure Text Block [Abstract] | ' | ' | ' | ' |
Amortization of Intangible Assets | $16,921 | $16,938 | $50,211 | $50,100 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 67,000 | ' | 67,000 | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 67,000 | ' | 67,000 | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 67,000 | ' | 67,000 | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 67,000 | ' | 67,000 | ' |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 67,000 | ' | 67,000 | ' |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | $324,000 | ' | $324,000 | ' |
Note_4_Intangible_Assets_Detai1
Note 4 - Intangible Assets (Details) - Intangible Assets (USD $) | 31-May-14 | Aug. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible Assets | $795,484 | $802,415 |
Less: accumulated amortization | -136,894 | -86,683 |
Total intangible assets | 658,590 | 715,732 |
Patents [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible Assets | 742,945 | 742,945 |
Trademarks [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible Assets | $52,539 | $59,470 |
Note_5_Related_Party_Transacti1
Note 5 - Related Party Transactions (Details) (USD $) | 9 Months Ended | ||
31-May-14 | 31-May-13 | Aug. 31, 2013 | |
Note 5 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Proceeds from Related Party Debt | $1,450,000 | $800,000 | ' |
Repayments of Related Party Debt | ' | 100,000 | ' |
Due to Related Parties, Current | 26,188 | ' | 29,219 |
Accounts Payable, Related Parties | 328,000 | ' | 105,000 |
Officer [Member] | ' | ' | ' |
Note 5 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ' | ' |
Co-President [Member] | Accrued Interest [Member] | ' | ' | ' |
Note 5 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Due to Related Parties | 1,188 | ' | ' |
Co-President [Member] | ' | ' | ' |
Note 5 - Related Party Transactions (Details) [Line Items] | ' | ' | ' |
Proceeds from Related Party Debt | 151,000 | ' | ' |
Repayments of Related Party Debt | 154,825 | ' | ' |
Due to Related Parties, Current | $25,000 | ' | ' |
Note_6_Convertible_Notes_Payab2
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (USD $) | 31-May-14 | Aug. 31, 2013 |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Long-term Convertible Notes Payable, Net and Accrued Interest | $806,615 | ' |
JMJ Financial [Member] | V Warrants [Member] | Due On September 16, 2012 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | ' | 555,000 |
JMJ Financial [Member] | W Warrants [Member] | Due On November 1, 2012 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | ' | 550,000 |
Related Party [Member] | DD Warrants [Member] | Due On December 20, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 100,000 | ' |
Related Party [Member] | Price Per Share - $0.10 [Member] | Related Party [Member] | Due On Demand [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 1,114,487 | ' |
Related Party [Member] | Due on June 30, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 100,000 | ' |
Z Warrants [Member] | Due On March 25, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 500,000 | 500,000 |
Z Warrants [Member] | Due on October 15, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 100,000 | 100,000 |
Z Warrants [Member] | Due On January 21, 2016 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 75,000 | 75,000 |
BB Warrants [Member] | Price per Share - $0.20 [Member] | Due On September 30, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 600,000 | ' |
DD Warrants [Member] | Due On January 21, 2016 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 150,000 | ' |
Accrued Interest | 365,037 | 287,827 |
Total Convertible Notes Payable, Net | 3,855,268 | 3,585,225 |
DD Warrants [Member] | Total Convertible Notes Payable [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 3,576,452 | 3,423,500 |
Unamortized Debt and Beneficial Conversion Feature Discounts | -86,221 | -126,102 |
Less Current Portion | -3,048,653 | -3,585,225 |
Long-term Convertible Notes Payable, Net and Accrued Interest | 806,615 | ' |
CC Warrants [Member] | Related Party [Member] | Due On November 6, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 300,000 | ' |
Warrant Series EE [Member] | Related Party [Member] | Due on March 5, 2016 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 200,000 | ' |
Price Per Share - $0.10 [Member] | Related Party [Member] | Due On Demand [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 1,114,487 | ' |
Accrued Interest | 63,653 | ' |
Price Per Share - $0.10 [Member] | Related Party [Member] | Related Party Convertible Demand Notes Payable and Accrued Interest [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 1,178,140 | ' |
Related Party [Member] | Due On September 30, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 1,900,000 | 1,900,000 |
Related Party [Member] | Total Convertible Notes Payable [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 2,600,000 | 2,925,737 |
Related Party [Member] | Due On Demand [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | ' | 28,750 |
Unamortized Debt and Beneficial Conversion Feature Discounts | -186,609 | -254,827 |
Accrued Interest | 234,986 | 97,716 |
Total Convertible Notes Payable, Net | 2,648,377 | 2,768,626 |
Less Current Portion | -104,466 | -1,049,590 |
Long-term Convertible Notes Payable, Net and Accrued Interest | 2,543,911 | 1,719,036 |
Related Party [Member] | Due On March 13, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | ' | 996,987 |
Two Notes [Member] | Due On July 13, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 150,000 | 150,000 |
Convertible Demand Notes Payable [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 28,500 | ' |
Accrued Interest | 1,303 | ' |
Convertible Demand Notes Payable and Accrued Interest [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 29,803 | ' |
Less Current Portion | -29,803 | ' |
Due On April 10, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 25,000 | 25,000 |
Due On July 9, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 75,000 | 75,000 |
Due On July 13, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 300,000 | 300,000 |
Due On August 9, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 76,452 | 68,500 |
Accrued Interest | 7,952 | ' |
Due on September 21, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 500,000 | ' |
Due on October 10, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | 25,000 | 25,000 |
Due On December 30,2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable [Line Items] | ' | ' |
Convertible Notes Payable Description | $1,000,000 | $1,000,000 |
Note_6_Convertible_Notes_Payab3
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) (USD $) | 9 Months Ended | 12 Months Ended |
31-May-14 | Aug. 31, 2013 | |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 17,956,715 | ' |
JMJ Financial [Member] | V Warrants [Member] | Due On September 16, 2012 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Due Date | 16-Sep-12 | 16-Sep-12 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 869,565 | 869,565 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | $200,000 | $200,000 |
JMJ Financial [Member] | W Warrants [Member] | Due On November 1, 2012 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Due Date | 1-Nov-12 | 1-Nov-12 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 1,086,957 | 1,086,957 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 250,000 | 250,000 |
Related Party [Member] | DD Warrants [Member] | Due On December 20, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.15 | $0.15 |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 200,000 | 200,000 |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 10,085 | 10,085 |
Convertible Notes Payable, Due Date | 20-Dec-15 | 20-Dec-15 |
Related Party [Member] | Awarded January 2014 [Member] | Due on June 30, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 100,000 | 100,000 |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 6,000 | 6,000 |
Related Party [Member] | Awarded in Connection with Extension of Due Date [Member] | Due on June 30, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 200,000 | ' |
Related Party [Member] | Due on June 30, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.15 | $0.15 |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 20,000 | ' |
Convertible Notes Payable, Due Date | 30-Jun-14 | 30-Jun-14 |
Z Warrants [Member] | Related Party [Member] | Due On September 30, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Convertible Notes Payable, Due Date | 30-Sep-15 | 30-Sep-15 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 400,000 | 400,000 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 324,585 | 324,585 |
Z Warrants [Member] | Due On March 25, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Convertible Notes Payable, Due Date | 25-Mar-14 | 25-Mar-14 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 1,000,000 | 1,000,000 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 164,022 | 164,022 |
Z Warrants [Member] | Due on October 15, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 200,000 | ' |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 7,340 | ' |
Convertible Notes Payable, Due Date | 15-Oct-14 | 15-Oct-14 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 200,000 | 200,000 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 30,731 | 30,731 |
Z Warrants [Member] | Due On January 21, 2016 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Convertible Notes Payable, Due Date | 21-Jan-16 | 21-Jan-16 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 150,000 | 150,000 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 24,617 | 24,617 |
BB Warrants [Member] | Price per Share - $0.20 [Member] | Due On September 30, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 1,000,000 | ' |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 133,001 | ' |
BB Warrants [Member] | Related Party [Member] | Due On September 30, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 2,000,000 | 2,000,000 |
DD Warrants [Member] | Due On January 21, 2016 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.15 | $0.15 |
Convertible Notes Payable, Due Date | 21-Jan-16 | 21-Jan-16 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 300,000 | 300,000 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 25,971 | 25,971 |
Accrued Interest (in Dollars) | 365,037 | 287,827 |
CC Warrants [Member] | Related Party [Member] | Due On November 6, 2015 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Convertible Notes Payable, Due Date | 6-Nov-15 | 6-Nov-15 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 600,000 | 600,000 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 118,757 | 118,757 |
Warrant Series EE [Member] | Related Party [Member] | Due on March 5, 2016 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Convertible Notes Payable, Due Date | 5-Mar-16 | 5-Mar-16 |
Number of Shares Called by Warrants in Connection with Convertible Notes Payable (in Shares) | 200,000 | 200,000 |
Warrant Issued in Connection with Convertible Notes Payable (in Dollars) | 11,508 | 11,508 |
Price Per Share - $0.10 [Member] | Related Party [Member] | Due On Demand [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 5.00% | 5.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.10 | $0.10 |
Accrued Interest (in Dollars) | 63,653 | ' |
Related Party [Member] | Due On Demand [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 5.00% | 5.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.17 | $0.17 |
Accrued Interest (in Dollars) | 234,986 | 97,716 |
Related Party [Member] | Due On March 13, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 5.00% | 5.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Convertible Notes Payable, Due Date | 13-Mar-14 | 13-Mar-14 |
Two Notes [Member] | Due On July 13, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.30 | $0.30 |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 300,000 | ' |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 30,000 | ' |
Convertible Notes Payable, Due Date | 13-Jul-14 | 13-Jul-14 |
Convertible Demand Notes Payable [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 5.00% | ' |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.10 | ' |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 51,000 | ' |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 3,060 | ' |
Accrued Interest (in Dollars) | 1,303 | ' |
Due On April 10, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Convertible Notes Payable, Due Date | 10-Apr-14 | 10-Apr-14 |
Due On July 9, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.30 | $0.30 |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 150,000 | 150,000 |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 15,000 | 15,000 |
Convertible Notes Payable, Due Date | 9-Jul-14 | 9-Jul-14 |
Due On July 13, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.30 | $0.30 |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 600,000 | 600,000 |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 60,000 | 60,000 |
Convertible Notes Payable, Due Date | 13-Jul-14 | 13-Jul-14 |
Due On August 9, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 137,000 | 137,000 |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 12,330 | 12,330 |
Convertible Notes Payable, Due Date | 9-Aug-14 | 9-Aug-14 |
Accrued Interest (in Dollars) | 7,952 | ' |
Due on September 21, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 36.00% | ' |
Convertible Notes Payable, Due Date | 21-Sep-14 | ' |
Shares Held as Collateral (in Shares) | 20,000,000 | ' |
Due on October 10, 2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 10.00% | 10.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 50,000 | ' |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | 2,450 | ' |
Convertible Notes Payable, Due Date | 10-Oct-14 | 10-Oct-14 |
Due On December 30,2014 [Member] | ' | ' |
Note 6 - Convertible Notes Payable (Details) - Convertible Notes Payable (Parentheticals) [Line Items] | ' | ' |
Convertible Notes Payable, Interest Rate | 8.00% | 8.00% |
ConvP5rtiblP5 NotP5s PayablP5, ConvP5rsion PricP5 (in Dollars per share) | $0.20 | $0.20 |
Common Stock Issued in Connection With Extension Date, Shares (in Shares) | 4,000,000 | 4,000,000 |
Common Stock Issued in Connection With Extension Date, Value (in Dollars) | $240,000 | $240,000 |
Convertible Notes Payable, Due Date | 30-Dec-14 | 30-Dec-14 |
Note_6_Convertible_Notes_Payab4
Note 6 - Convertible Notes Payable (Details) - Principal Maturities of Convertible Notes Payable (Convertible Note Payable [Member], USD $) | 31-May-14 |
Convertible Note Payable [Member] | ' |
Note 6 - Convertible Notes Payable (Details) - Principal Maturities of Convertible Notes Payable [Line Items] | ' |
31-May-15 | $3,994,439 |
31-May-16 | 3,325,000 |
Total | $7,319,439 |
Note_7_Line_of_Credit_and_Term2
Note 7 - Line of Credit and Term Loans (Details) (USD $) | 31-May-14 | Aug. 31, 2013 | Jan. 05, 2011 | Jan. 05, 2011 | Jan. 05, 2011 | Dec. 12, 2013 |
Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Loan Agreement [Member] | Settlement Agreement [Member] | |
Minimum [Member] | Maximum [Member] | |||||
Note 7 - Line of Credit and Term Loans (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | $1,000,000 | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | 2.50% | 6.50% | ' |
Long-term Line of Credit | 1,000,000 | 1,000,000 | ' | ' | ' | ' |
Interest Payable | 9,042 | 9,042 | ' | ' | ' | ' |
Litigation Settlement, Amount | ' | ' | ' | ' | ' | 1,096,200 |
Payments for Legal Settlements | ' | ' | ' | ' | ' | 324,000 |
Common Stock Payment for Legal Settlement | ' | ' | ' | ' | ' | 772,200 |
Notes Payable | ' | ' | ' | ' | ' | 1,105,000 |
Gain on Debt Settlement, Abated Interest | ' | ' | ' | ' | ' | 132,600 |
Gain on Debt Settlement, Principal Reduction | ' | ' | ' | ' | ' | 8,800 |
Gain on Debt Settlement, Elimination of Derivative Liabilities Associated with Conversion Features | ' | ' | ' | ' | ' | $745,148 |
Note_7_Line_of_Credit_and_Term3
Note 7 - Line of Credit and Term Loans (Details) - Principal Maturities of the Term Loan (USD $) | 31-May-14 |
Note 7 - Line of Credit and Term Loans (Details) - Principal Maturities of the Term Loan [Line Items] | ' |
Less current portion of term loans | ($1,165,159) |
Long-term term loans | 842,083 |
Term Loan [Member] | ' |
Note 7 - Line of Credit and Term Loans (Details) - Principal Maturities of the Term Loan [Line Items] | ' |
31-May-15 | 1,156,117 |
31-May-16 | 758,750 |
31-May-17 | 83,333 |
Total term loans | 1,998,200 |
Less current portion of term loans | -1,156,117 |
Long-term term loans | $842,083 |
Note_8_Commitments_and_Conting2
Note 8 - Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
31-May-14 | 31-May-13 | 31-May-14 | 31-May-13 | 11-May-11 | |
sqft | |||||
Note 8 - Commitments and Contingencies (Details) [Line Items] | ' | ' | ' | ' | ' |
Area of Real Estate Property (in Square Feet) | ' | ' | ' | ' | 4,700 |
Operating Leases, Rent Expense | $19,202 | $19,202 | $57,607 | $57,931 | ' |
Minimum [Member] | ' | ' | ' | ' | ' |
Note 8 - Commitments and Contingencies (Details) [Line Items] | ' | ' | ' | ' | ' |
Base Rent Expense Per Month, Operating Lease | ' | ' | 6,199 | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' |
Note 8 - Commitments and Contingencies (Details) [Line Items] | ' | ' | ' | ' | ' |
Base Rent Expense Per Month, Operating Lease | ' | ' | $7,193 | ' | ' |
Note_8_Commitments_and_Conting3
Note 8 - Commitments and Contingencies (Details) - Future Minimum Operating Lease Payments (USD $) | Feb. 28, 2014 |
Future Minimum Operating Lease Payments [Abstract] | ' |
31-May-15 | $93,130 |
31-May-16 | 7,193 |
Total | $100,323 |
Note_9_Equity_Details
Note 9 - Equity (Details) (USD $) | 31-May-14 | Jan. 12, 2012 | Aug. 30, 2007 | Jan. 12, 2012 | 31-May-14 | Aug. 30, 2007 | Mar. 15, 2012 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | Jan. 12, 2012 |
Options Granted to Each of Three Officers [Member] | Options Granted to Each of Three Officers [Member] | Options Granted to Three Officers [Member] | Options Granted to Three Officers [Member] | Options Granted to Three Officers [Member] | Options Granted to Three Officers and One Employee [Member] | Options Granted to Three Officers and One Employee [Member] | Advisory Services [Member] | Note Payable Issuance [Member] | Conversion of Accrued Finder's Fees and Accounts Payable [Member] | In Connection with Note Payable Extension [Member] | In Connection With Board Members [Member] | As Collateral For Note Payable [Member] | Stock Incentive Plan 2007 [Member] | Stock Incentive Plan 2007 [Member] | ||
Stock Incentive Plan 2007 [Member] | Outside of 2007 Plan [Member] | Stock Incentive Plan 2007 [Member] | Stock Incentive Plan 2007 [Member] | Outside of 2007 Plan [Member] | Stock Incentive Plan 2007 [Member] | Stock Incentive Plan 2007 [Member] | ||||||||||
Note 9 - Equity (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Issued for Services | ' | ' | ' | ' | ' | ' | ' | ' | 3,192,709 | ' | 5,250,000 | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, Issued for Services (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | $192,670 | ' | $315,000 | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,203,667 | ' | 1,913,601 | ' | 20,000,000 | ' | ' |
Stock Issued During Period, Value, New Issues (in Dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $364,830 | ' | ' | $80,000 | $500,000 | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 17,956,715 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $0.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | 4,000,000 | 6,000,000 | 12,000,000 | ' | 18,000,000 | 6,500,000 | ' | ' | ' | ' | ' | ' | ' | 18,500,000 | ' |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | ' | ' | ' | $0.31 | ' | $0.33 | $0.31 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | ' | ' | ' | ' | 1,500,000 | ' | ' | 1,425,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Note_9_Equity_Details_Warrants
Note 9 - Equity (Details) - Warrants (USD $) | 31-May-14 | Aug. 31, 2013 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 |
Warrant Series BB [Member] | Warrant Series CC [Member] | Warrant Series DD [Member] | Warrant Series EE [Member] | |||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' |
Outstanding warrants | 17,956,715 | 15,456,715 | ' | ' | ' | ' |
Warrants granted: | ' | ' | ' | ' | ' | ' |
Warrants Granted - Number of Shares | ' | ' | 1,200,000 | 600,000 | 500,000 | 200,000 |
Warrants Granted - Exercise Price Per Share (in Dollars per share) | $0.20 | ' | $0.20 | $0.20 | $0.15 | $0.15 |
Warrants Granted - Expiration | ' | ' | 29-Aug-16 | 6-Nov-16 | 21-Jan-17 | 4-Mar-17 |
Note_10_Provision_for_Income_T2
Note 10 - Provision for Income Taxes (Details) (USD $) | 31-May-14 | Aug. 31, 2013 | Feb. 28, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Operating Loss Carryforwards | $51,934,091 | $48,074,000 | ' |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $0 | ' | $0 |
Note_10_Provision_for_Income_T3
Note 10 - Provision for Income Taxes (Details) - Components of Deferred Tax Assets (USD $) | 31-May-14 | Aug. 31, 2013 |
Components of Deferred Tax Assets [Abstract] | ' | ' |
Net operating loss carry forward and deductible temporary differences | $20,674,563 | $19,904,000 |
Valuation allowance | -20,674,563 | -19,904,000 |
Net deferred tax asset | $0 | $0 |
Note_10_Provision_for_Income_T4
Note 10 - Provision for Income Taxes (Details) - Reconciliation of Combined Federal and State Statutory Income Taxes Rate and the Effective Rate | 9 Months Ended | 12 Months Ended |
31-May-14 | Aug. 31, 2013 | |
Reconciliation of Combined Federal and State Statutory Income Taxes Rate and the Effective Rate [Abstract] | ' | ' |
Federal tax at statutory rate | 34.00% | 34.00% |
State income tax net of federal benefit | 5.83% | 5.83% |
Valuation allowance | -39.83% | -39.83% |
0.00% | 0.00% |
Note_12_Subsequent_Events_Deta
Note 12 - Subsequent Events (Details) (Subsequent Event [Member], USD $) | 0 Months Ended | 1 Months Ended |
Jun. 04, 2014 | Jun. 18, 2014 | |
Note 12 - Subsequent Events (Details) [Line Items] | ' | ' |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 702,341 | 720,000 |
Stock Issued During Period, Value, Conversion of Convertible Securities (in Dollars) | $21,000 | $18,000 |
Due on May 15, 2014 [Member] | ' | ' |
Note 12 - Subsequent Events (Details) [Line Items] | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | 360,000 |