Document_And_Entity_Informatio
Document And Entity Information | 6 Months Ended | |
Feb. 28, 2015 | Apr. 13, 2015 | |
Entity Registrant Name | Location Based Technologies, Inc. | |
Entity Central Index Key | 1383196 | |
Current Fiscal Year End Date | -23 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 277,530,645 | |
Document Type | 10-Q | |
Document Period End Date | 28-Feb-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | FALSE |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $237,099 | $146,200 |
Accounts receivable, net of allowances | 97,243 | 78,422 |
Inventories, current | 749,805 | 793,332 |
Prepaid expenses and other assets | 21,272 | 45,062 |
Deferred financing costs | 5,506 | |
Total current assets | 1,105,420 | 1,068,522 |
Property and equipment, net of accumulated depreciation | 38,377 | 65,817 |
OTHER ASSETS | ||
Intangible assets, net of accumulated amortization | 562,441 | 596,977 |
Inventory, Noncurrent | 513,084 | 565,146 |
Deposits | 30,000 | 30,000 |
Total other assets | 1,105,525 | 1,192,123 |
TOTAL ASSETS | 2,249,322 | 2,326,462 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 1,812,367 | 1,865,282 |
Deferred compensation | 281,844 | 261,814 |
Deferred revenue | 8,127 | 29,691 |
Advances from officer and accrued interest | 111,038 | 106,872 |
Current portion of term loans and accrued interest | 1,155,918 | 1,618,462 |
Derivative liabilities | 601,627 | |
Total current liabilities | 13,085,108 | 8,311,818 |
Convertible term notes payable | 843,787 | |
Related party convertible term notes payable and accrued interest, net of unamortized discounts | 1,068,711 | 2,820,106 |
Term loans | 125,000 | 333,333 |
TOTAL LIABILITIES | 14,278,819 | 12,309,044 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 300,000,000 shares authorized; 277,530,645 and 241,095,488 shares issued and outstanding at February 28, 2015 and August 31, 2014, respectively | 277,531 | 241,096 |
Additional paid-in capital | 50,921,523 | 51,036,456 |
Prepaid services paid in common stock | -48,225 | |
Accumulated deficit | -63,228,551 | -61,211,909 |
Total stockholders' equity (deficit) | -12,029,497 | -9,982,582 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 2,249,322 | 2,326,462 |
Convertible Demand Notes Payable and Accrued Interest [Member] | ||
CURRENT LIABILITIES | ||
Convertible demand notes payable and accrued interest | 28,960 | 30,163 |
Convertible Term Notes Payable and Accrued Interest [Member] | ||
CURRENT LIABILITIES | ||
Convertible demand notes payable and accrued interest | 5,103,916 | 3,100,361 |
Related Party Convertible Demand Notes Payable and Accrued Interest [Member] | ||
CURRENT LIABILITIES | ||
Related party convertible demand notes payable and accrued interest | 1,245,316 | 1,192,187 |
Related Party Convertible Term Notes Payable and Accrued Interest [Member] | ||
CURRENT LIABILITIES | ||
Related party convertible demand notes payable and accrued interest | $2,735,995 | $106,986 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, issued (in shares) | 277,530,645 | 241,095,488 |
Common stock, outstanding (in shares) | 277,530,645 | 241,095,488 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Net revenue | ||||
Devices | $149,295 | $107,582 | $362,330 | $350,973 |
Services | 280,631 | 233,509 | 593,598 | 398,922 |
Total net revenue | 429,926 | 341,091 | 955,928 | 749,895 |
Cost of revenue | ||||
Devices | 106,122 | 92,152 | 256,515 | 235,969 |
Services | 134,888 | 255,253 | 316,561 | 493,243 |
Total cost of revenue | 241,010 | 347,405 | 573,076 | 729,212 |
Gross profit (loss) | 188,916 | -6,314 | 382,852 | 20,683 |
Operating expenses | ||||
General and administrative | 258,595 | 290,576 | 536,458 | 1,019,210 |
Officer compensation | 112,500 | 233,059 | 225,000 | 479,746 |
Professional fees | 130,313 | 174,465 | 364,120 | 548,958 |
Rent | 5,003 | 19,202 | 24,743 | 38,405 |
Research and development | 9,790 | 125,000 | 99,548 | |
Salaries and wages | 208,860 | 61,243 | 298,300 | 109,822 |
Total operating expenses | 715,271 | 788,335 | 1,573,621 | 2,295,689 |
Net operating loss | -526,355 | -794,649 | -1,190,769 | -2,275,006 |
Other income (expense) | ||||
Financing costs | -50,585 | -105,000 | -181,085 | -253,880 |
Amortization of beneficial conversion feature | -28,301 | -60,948 | ||
Amortization of deferred financing costs | -90,523 | -5,506 | -108,350 | |
Amortization of debt discount | -51,609 | -106,264 | -103,217 | -205,170 |
Interest expense, net | -276,773 | -168,146 | -536,024 | -321,436 |
Gain on debt settlement | 886,548 | |||
Loss on asset disposals | -49,000 | -48,431 | ||
Foreign currency gain (loss), net | 3 | -470 | -41 | -470 |
Total other income (expense) | -378,964 | -547,704 | -825,873 | -112,137 |
Net loss before income taxes | -905,319 | -1,342,353 | -2,016,642 | -2,387,143 |
Provision for income taxes | 0 | 800 | ||
Net Loss | ($905,319) | ($1,342,353) | ($2,016,642) | ($2,387,943) |
Basic and Diluted - Earnings (loss) Per Share (in dollars per share) | ($0.01) | ($0.01) | ($0.01) | ($0.01) |
Basic and Diluted - Weighted Average Number of Shares Outstanding (in shares) | 265,330,116 | 216,584,974 | 257,266,813 | 214,133,373 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Cash Flows from Operating Activities | ||
Net loss | ($2,016,642) | ($2,387,943) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Loss on asset disposal | 48,431 | |
Gain on debt settlement | -886,548 | |
Provision for doubtful accounts and sales returns | -16,500 | 1,000 |
Provision for inventory reserve | -129,609 | -330 |
Depreciation and amortization | 65,059 | 61,306 |
Amortization of beneficial conversion feature | 60,948 | |
Amortization of deferred financing costs | 5,506 | 108,350 |
Amortization of prepaid services paid in common stock | 48,225 | 239,169 |
Amortization of debt discount | 103,217 | 205,170 |
Common stock issued for services and financing costs | 44,281 | 88,670 |
Stock options issued for services | 81,576 | 33,132 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | -2,321 | 41,501 |
(Increase) decrease in inventory | 225,197 | 6,986 |
(Increase) decrease in prepaid expenses and other assets | 23,790 | -17,099 |
Increase (decrease) in accounts payable and accrued expenses | 81,557 | 317,643 |
Increase (decrease) in accrued officer compensation | 20,030 | 21,691 |
Increase (decrease) in deferred revenue | -21,564 | -8,298 |
Increase (decrease) in accrued interest | 382,182 | 267,351 |
Net cash used in operating activities | -1,106,016 | -1,798,870 |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | -3,083 | -49,467 |
Net cash used in investing activities | -3,083 | -41,967 |
Cash Flows from Financing Activities | ||
Advances / (repayments) from officers, net | -3,825 | |
Payment on term loans | -397,502 | |
Proceeds from convertible notes payable | 950,000 | 150,000 |
Proceeds from related party convertible notes payable | 650,000 | 1,100,000 |
Repayments of related party convertible notes payable | -2,500 | |
Net cash provided by financing activities | 1,199,998 | 1,246,175 |
Net increase (decrease) in cash and cash equivalents | 90,899 | -594,662 |
Cash and cash equivalents, beginning of period | 146,200 | 680,914 |
Cash and cash equivalents, end of period | 237,099 | 86,252 |
Non-Cash Financing Activities: | ||
Issuance of common stock for conversion of debt | 262,800 | |
Issuance of common stock for services and financing costs | 134,472 | 312,500 |
Conversion of accrued compensation into convertible notes payable | 55,500 | |
Conversion of accounts payable into common stock | 315,000 | |
Issuance of warrants for financing costs classified as debt discount | 201,978 | |
Derivative liability for insufficient number of authorized shares | 601,627 | |
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 |
Note_1_Nature_of_Operations_an
Note 1 - Nature of Operations and Summary of Significant Accounting Policies | 6 Months Ended | |
Feb. 28, 2015 | ||
Notes to Financial Statements | ||
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 have 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, 2014. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended February 28, 2015, 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, 2014, 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 February 28 | ||
, | ||
2015, had an accumulated deficit of $63,228,551 and negative working capital of $11,979,688. 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. | ||
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 February 28, 2015 | ||
and August 31, 2014, the allowance for doubtful accounts amounted to $32,000 and $27,000, 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 February 28, 2015 and August 31, 2014, the allowance for sales returns amounted to $5,500 and $27,000, 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. Management estimates the current selling price of $58.00 as the realizable value of the inventory. 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, a portion of the components inventory, net of the LCM valuation reserve, totaling $513,084 is classified as a noncurrent asset at February 28, 2015 (see Note 3). | ||
D | ||
eferred Revenue | ||
Deferred revenue is a liability related to revenue producing activity for which revenue has not yet been recognized. As of February 28, 2015 and August 31, 2014, deferred revenue amounted to $8,127 and $29,961, respectively, and consisted of prepaid service revenue from subscribers. | ||
Advertising Costs | ||
Advertising costs are expensed as incurred. For the three months ended February 28, 2015 and 2014, the Company incurred $4,590 and $0 of advertising costs, respectively. For the six months ended February 28, 2015 and 2014, the Company incurred $18,682 and $466,612 of advertising costs, respectively. | ||
Derivative Liabilities | ||
During the six months ended February 28, 2015, the Company issued additional convertible notes and common stock for the conversion of debt. The Company has determined that there are no longer sufficient authorized shares to satisfy outstanding warrants, option agreements and convertible notes if all such agreements were to be exercised or noteholders elected to convert. Accordingly, the Company recognized this as a derivative liability and recorded such liability $601,627 and a reduction to additional paid-in-capital using the Black-Scholes valuation method to estimate the fair value of the derivative liability as of February 28, 2015. The Company used a weighted average risk free interest rate of 2.0%, an expected life of .88 years, an annual volatility of 727% and no dividends to determine the value of the derivative liability. |
Note_2_Earnings_Loss_Per_Share
Note 2 - Earnings Loss Per Share | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Earnings Per Share [Text Block] | 2 | 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. | |||||||||
28-Feb | August 31, | ||||||||
, | |||||||||
201 | 201 | ||||||||
5 | 4 | ||||||||
Warrants | 17,684,022 | 17,956,715 | |||||||
Stock options | 3,495,163 | 3,025,000 | |||||||
Convertible notes payable | 58,568,438 | 40,564,550 | |||||||
Dilutive potential common shares | 79,747,623 | 61,546,265 |
Note_3_Inventory
Note 3 - Inventory | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Inventory Disclosure [Text Block] | 3 | INVENTORY | |||||||
. | |||||||||
Inventory at February 28, 2015 and August 31, 2014 consisted of the following: | |||||||||
28-Feb | 31-Aug | ||||||||
, | , | ||||||||
201 | 201 | ||||||||
5 | 4 | ||||||||
Current: | |||||||||
Finished goods | $ | 792,823 | $ | 1,016,876 | |||||
Device Components | 515,423 | 419,681 | |||||||
Inventory valuation reserve | (558,441 | ) | (643,225 | ) | |||||
Inventories, current | $ | 749,805 | $ | 793,332 | |||||
Noncurrent: | |||||||||
Device components | $ | 954,837 | $ | 1,051,722 | |||||
Inventory valuation reserve for components | (441,753 | ) | (486,576 | ) | |||||
Inventories, noncurrent | $ | 513,084 | $ | 565,146 | |||||
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 recently signed a new distribution agreement to sell product in Mexico and now expects that it will take approximately four months to sell finished goods inventory on hand at February 28, 2015. 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 1 and 2. Inventories totaling $954,837 which may not be realized within a 12-month period have been reclassified as long-term as of February 28, 2015. |
Note_4_Related_Party_Transacti
Note 4 - Related Party Transactions | 6 Months Ended | |
Feb. 28, 2015 | ||
Notes to Financial Statements | ||
Related Party Transactions Disclosure [Text Block] | 4 | RELATED PARTY TRANSACTIONS |
. | ||
Advances from Officer | ||
During the six months ended February 28, 2015 and 2014, there were advances from our Chief Development Officer totaling $0 and $151,000, respectively; and repayments totaling $0 and $154,824, respectively. As of February 28, 2015, there was $105,000 of outstanding advances and $6,038 of related accrued interest. | ||
SkyBell Technologies, Inc. | ||
The Company occupies office space at a facility leased by SkyBell Technologies, Inc. (“SkyBell”). In addition, the Company outsources its customer service to SkyBell under a month to month contract that commenced in February 2014. SkyBell is owned and operated by Joseph Scalisi, Chief Development Officer, and Desiree Mejia, Chief Operating Officer. During the three months ended February 28, 2015, the Company | ||
incurred $15,355 in costs related to these services. During the six months ended February 28, 2015, the Company incurred $65,162 in costs related to these services. | ||
Accounts Payable and Accrued Expenses | ||
Amounts payable to related parties totaled $696,883 and $471,979 as of February 28, 2015 and August 31, 2014, respectively. |
Note_5_Debt
Note 5 - Debt | 6 Months Ended | ||||
Feb. 28, 2015 | |||||
Notes to Financial Statements | |||||
Convertible Notes Payable [Text Block] | 5 | DEBT | |||
. | |||||
New Debt Issuances | |||||
The following debt was issued during the six months ended February 28, 2015: | |||||
On September 5, 2014, the Company entered into a convertible promissory note for $450,000. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on September 5, 2015 and is secured by certain intellectual property owned by the Company. | |||||
On September 11, 2014, the Company entered into a convertible promissory note for $150,000 with a board member. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on September 11, 2016 and is secured by all assets of the Company. | |||||
On October 14, 2014, the Company entered into a convertible promissory note for $100,000 with a board member. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on October 14, 2016 and is secured by all assets of the Company. | |||||
On November 21, 2014, the Company entered into a convertible promissory note for $500,000. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on December 1, 2015 and is secured by all assets of the Company. | |||||
On November 26, 2014, the Company entered into a convertible promissory note for $216,000 with a board member. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the | |||||
Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on November 26, 2016 and is secured by all assets of the Company. | |||||
On December 3, 2014, the Company entered into a convertible promissory note for $84,000 with a board member. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on December 3, 2016 and is secured by all assets of the Company. | |||||
On January 7, 2015, the Company entered into a convertible promissory note for $50,000 with a board member. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on January 7, 2017 and is secured by all assets of the Company. | |||||
On February 3, 2015, the Company entered into a convertible promissory note for $50,000 with a board member. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on February 3, 2017 and is secured by all assets of the Company. | |||||
Debt | |||||
Amendments | |||||
The following debt amendments were executed during the six months ended February 28, 2015: | |||||
On September 5, 2014, the Company amended the secured promissory note payable totaling $1,000,000 to extend the maturity date to September 5, 2015 and to allow the Lender at the Maturity Date, or during any time after April 15, 2015, the right, but not the obligation, to convert this Note into shares of the Company’s common stock at a price equal to the lower of $0.20 per share or 50% of the closing stock price on the day after the Company is given notice of the conversion by the Lender (the “Conversion Price”). | |||||
On November 28, 2014, the Company amended one convertible demand note payable totaling $28,500 to eliminate the extension fee and increase the interest rate to Ten Percent (10%) per annum. | |||||
On November 28, 2014, the Company amended five convertible notes payable to related parties totaling $1,114,487 to eliminate the extension fee and increase the interest rate to ten Percent (10%) per annum. | |||||
15 | |||||
On February 27, 2015, the Company amended two secured promissory note payable with a board member totaling $1,400,000 to allow the Lender at the Maturity Date, or during any time after April 15, 2015, the right, but not the obligation, to convert these Notes into shares of the Company’s common stock at a price equal to the lower of $0.20 per share or 50% of the closing stock price on the day after the Company is given notice of the conversion by the Lender (the “Conversion Price”). | |||||
Principal Repayments | |||||
As of February 28, 2015, the principal maturities of the convertible notes payable and related party convertible notes payable are as follows: | |||||
For the Years Ending: | |||||
28-Feb-16 | $ | 8,066,939 | |||
February 29, 2017 | 1,026,500 | ||||
Total | $ | 9,093,439 |
Note_6_Line_of_Credit_and_Term
Note 6 - Line of Credit and Term Loans | 6 Months Ended | |
Feb. 28, 2015 | ||
Notes to Financial Statements | ||
Debt Disclosure [Text Block] | 6 | 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 (“SVB”) 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. | ||
In connection with the Loan Agreement, the Company entered into a Financing Agreement and Loan Guarantor Agreement with a board member to personally guarantee the Loan Agreement. As compensation for the guarantee under the Financing Agreement, the guarantor is entitled to payment of $5,000 per month, plus Two Percent (2%) of the outstanding balance of the SVB loan balance (“guarantee fee”), payable in cash or shares of the Company’s common stock at the guarantor’s option. As of February 28, 2015, the Company’s accounts payable and accrued expenses included $528,000 in guarantee fees owed to the board member. | ||
As of February 28, 2015, the outstanding balance on the line of credit and accrued interest totaled $625,000 and $7,508, respectively. Of the total amount of principal and interest due on the line of credit, $507,508 has been included in the current portion of term loans and accrued interest on the balance sheet as of February 28, 2015 and the balance of $125,000 in the non-current portion of term loans. | ||
JMJ Notes Payable | ||
As of February 28, 2015, the outstanding balance on the notes payable and accrued interest totaled $648,412 and $0, respectively. The total amount has been included in the current portion of term loans and accrued interest on the balance sheet as of February 28, 2015. |
Note_7_Equity
Note 7 - Equity | 6 Months Ended | |
Feb. 28, 2015 | ||
Notes to Financial Statements | ||
Stockholders' Equity Note Disclosure [Text Block] | 7 | EQUITY |
. | ||
Common Stock | ||
The Company issued 375,000 shares of common stock to three members of the board of directors in exchange for six months of service during the six months ended February 28, 2015. The shares were valued at $3,338, which represents the fair market value of the shares provided on the award date. | ||
The Company issued 1,359,254 shares of common stock in connection with note payable maturity date extensions during the six months ended February 28, 2015. The shares were valued at $81,555, which represents the fair market value of the shares issued on the award date of March 2014. | ||
The Company issued 30,750,903 shares of common stock for the conversion of debt amounting to $262,800 during the six months ended February 28, 2015. | ||
The Company issued 3,950,000 shares of common stock to consultants in exchange for various advisory services during the six months February 28, 2015. The shares were valued at $40,943, which represents the fair market value of the shares provided on the award date. |
Note_8_Provision_for_Income_Ta
Note 8 - Provision for Income Taxes | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Income Tax Disclosure [Text Block] | 8 | PROVISION FOR INCOME TAXES | |||||||
. | |||||||||
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 February 28, 2015 and August 31, 2014 | |||||||||
are as follows: | |||||||||
28-Feb | 31-Aug | ||||||||
, | , | ||||||||
201 | 2014 | ||||||||
5 | |||||||||
Net operating loss carry forward and deductible temporary differences | $ | 21,649,179 | $ | 20,880,437 | |||||
Valuation allowance | (21,649,179 | ) | (20,880,437 | ) | |||||
Net deferred tax asset | $ | - | $ | - | |||||
As of February 28, 2015, the Company had federal and state net operating loss carryforwards of approximately $54,353,953 which can be used to offset future federal income tax. The federal and state net operating loss carryforwards expire at various dates through 2033. | |||||||||
As of February 28 | |||||||||
, 2015 | |||||||||
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 2012 and by state taxing authorities for tax years prior to 2012. |
Note_9_Subsequent_Events
Note 9 - Subsequent Events | 6 Months Ended | |
Feb. 28, 2015 | ||
Notes to Financial Statements | ||
Subsequent Events [Text Block] | 9 | SUBSEQUENT EVENTS |
On March 9, 2015, the Company entered into a convertible promissory note for $300,000 with a board member. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on March 9, 2017 and is secured by all assets of the Company. | ||
On April 6, 2015, the Company entered into a convertible promissory note for $50,000 with a board member. The note bears interest at 10% per annum, may be converted into common stock of the Company at $0.10 per share, or 50% of the Company’s closing stock price at any time after April 15, 2015, upon written notice. The note is due on April 6, 2017 and is secured by all assets of the Company. |
Significant_Accounting_Policie
Significant Accounting Policies (Policies) | 6 Months Ended |
Feb. 28, 2015 | |
Accounting Policies [Abstract] | |
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 have 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, 2014. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended February 28, 2015, 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, 2014, 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 February 28 | |
, | |
2015, had an accumulated deficit of $63,228,551 and negative working capital of $11,979,688. 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. | |
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 February 28, 2015 | |
and August 31, 2014, the allowance for doubtful accounts amounted to $32,000 and $27,000, 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 February 28, 2015 and August 31, 2014, the allowance for sales returns amounted to $5,500 and $27,000, 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. Management estimates the current selling price of $58.00 as the realizable value of the inventory. 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, a portion of the components inventory, net of the LCM valuation reserve, totaling $513,084 is classified as a noncurrent asset at February 28, 2015 (see Note 3). | |
Revenue Recognition, Deferred Revenue [Policy Text Block] | D |
eferred Revenue | |
Deferred revenue is a liability related to revenue producing activity for which revenue has not yet been recognized. As of February 28, 2015 and August 31, 2014, deferred revenue amounted to $8,127 and $29,961, respectively, and consisted of prepaid service revenue from subscribers. | |
Advertising Costs, Policy [Policy Text Block] | Advertising Costs |
Advertising costs are expensed as incurred. For the three months ended February 28, 2015 and 2014, the Company incurred $4,590 and $0 of advertising costs, respectively. For the six months ended February 28, 2015 and 2014, the Company incurred $18,682 and $466,612 of advertising costs, respectively. | |
Derivatives, Policy [Policy Text Block] | Derivative Liabilities |
During the six months ended February 28, 2015, the Company issued additional convertible notes and common stock for the conversion of debt. The Company has determined that there are no longer sufficient authorized shares to satisfy outstanding warrants, option agreements and convertible notes if all such agreements were to be exercised or noteholders elected to convert. Accordingly, the Company recognized this as a derivative liability and recorded such liability $601,627 and a reduction to additional paid-in-capital using the Black-Scholes valuation method to estimate the fair value of the derivative liability as of February 28, 2015. The Company used a weighted average risk free interest rate of 2.0%, an expected life of .88 years, an annual volatility of 727% and no dividends to determine the value of the derivative liability. |
Note_2_Earnings_Loss_Per_Share1
Note 2 - Earnings Loss Per Share (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Notes Tables | |||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | 28-Feb | August 31, | |||||||
, | |||||||||
201 | 201 | ||||||||
5 | 4 | ||||||||
Warrants | 17,684,022 | 17,956,715 | |||||||
Stock options | 3,495,163 | 3,025,000 | |||||||
Convertible notes payable | 58,568,438 | 40,564,550 | |||||||
Dilutive potential common shares | 79,747,623 | 61,546,265 |
Note_3_Inventory_Tables
Note 3 - Inventory (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Notes Tables | |||||||||
Schedule of Inventory, Current [Table Text Block] | 28-Feb | 31-Aug | |||||||
, | , | ||||||||
201 | 201 | ||||||||
5 | 4 | ||||||||
Current: | |||||||||
Finished goods | $ | 792,823 | $ | 1,016,876 | |||||
Device Components | 515,423 | 419,681 | |||||||
Inventory valuation reserve | (558,441 | ) | (643,225 | ) | |||||
Inventories, current | $ | 749,805 | $ | 793,332 | |||||
Noncurrent: | |||||||||
Device components | $ | 954,837 | $ | 1,051,722 | |||||
Inventory valuation reserve for components | (441,753 | ) | (486,576 | ) | |||||
Inventories, noncurrent | $ | 513,084 | $ | 565,146 |
Note_5_Debt_Tables
Note 5 - Debt (Tables) | 6 Months Ended | ||||
Feb. 28, 2015 | |||||
Notes Tables | |||||
Schedule of Maturities of Long-term Debt [Table Text Block] | 28-Feb-16 | $ | 8,066,939 | ||
February 29, 2017 | 1,026,500 | ||||
Total | $ | 9,093,439 |
Note_8_Provision_for_Income_Ta1
Note 8 - Provision for Income Taxes (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2015 | |||||||||
Notes Tables | |||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 28-Feb | 31-Aug | |||||||
, | , | ||||||||
201 | 2014 | ||||||||
5 | |||||||||
Net operating loss carry forward and deductible temporary differences | $ | 21,649,179 | $ | 20,880,437 | |||||
Valuation allowance | (21,649,179 | ) | (20,880,437 | ) | |||||
Net deferred tax asset | $ | - | $ | - |
Note_1_Nature_of_Operations_an1
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 | |
Entity Information [Line Items] | |||||
Retained Earnings (Accumulated Deficit) | ($63,228,551) | ($63,228,551) | ($61,211,909) | ||
Working Capital | -11,979,688 | -11,979,688 | |||
Allowance for Doubtful Accounts Receivable | 32,000 | 32,000 | 27,000 | ||
Inventory Realizable Value | 58 | 58 | |||
Sale of Inventory, Expected Period | 2 years | ||||
Inventory, Noncurrent | 513,084 | 513,084 | 565,146 | ||
Deferred Revenue | 8,127 | 8,127 | 29,961 | ||
Marketing and Advertising Expense | 4,590 | 0 | 18,682 | 466,612 | |
Derivative, Loss on Derivative | 601,627 | ||||
Allowance for Sales Returns [Member] | |||||
Entity Information [Line Items] | |||||
Valuation Allowances and Reserves, Balance | $5,500 | $5,500 | $27,000 | ||
Derivative Financial Instruments, Liabilities [Member] | |||||
Entity Information [Line Items] | |||||
Fair Value Assumptions, Expected Dividend Payments | $0 | ||||
Fair Value Assumptions, Risk Free Interest Rate | 2.00% | ||||
Fair Value Assumptions, Expected Term | 321 days | ||||
Fair Value Assumptions, Expected Volatility Rate | 727.00% |
Note_2_Earnings_Per_Share_Anti
Note 2 - Earnings Per Share - Antidilutive Securities Excluded from Earnings Per Share (Details) | 6 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Aug. 31, 2014 | |
Warrants (in shares) | 79,747,623 | 61,546,265 |
Convertible Debt Securities [Member] | ||
Warrants (in shares) | 58,568,438 | 40,564,550 |
Equity Option [Member] | ||
Warrants (in shares) | 3,495,163 | 3,025,000 |
Warrant [Member] | ||
Warrants (in shares) | 17,684,022 | 17,956,715 |
Note_3_Inventory_Details_Textu
Note 3 - Inventory (Details Textual) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Inventory [Line Items] | ||
Inventory, Noncurrent | $513,084 | $565,146 |
Noncurrent [Member] | Device Components [Member] | ||
Inventory [Line Items] | ||
Inventory, Noncurrent | $954,837 |
Note_3_Inventory_Components_of
Note 3 - Inventory - Components of Inventory (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Inventories, current | $749,805 | $793,332 |
Inventory, Noncurrent | 513,084 | 565,146 |
Current [Member] | ||
Inventory valuation reserve | -558,441 | -643,225 |
Current [Member] | Device Components [Member] | ||
Device Components | 515,423 | 419,681 |
Current [Member] | Finished Goods [Member] | ||
Finished goods | 792,823 | 1,016,876 |
Noncurrent [Member] | ||
Inventory valuation reserve | -441,753 | -486,576 |
Noncurrent [Member] | Device Components [Member] | ||
Device Components | $954,837 | $1,051,722 |
Note_4_Related_Party_Transacti1
Note 4 - Related Party Transactions (Details Textual) (USD $) | 6 Months Ended | 3 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Aug. 31, 2014 | |
Related Party Transaction [Line Items] | ||||
Proceeds from Related Party Debt | $650,000 | $1,100,000 | ||
Repayments of Related Party Debt | 2,500 | |||
Due to Related Parties, Current | 111,038 | 111,038 | 106,872 | |
Accounts Payable, Related Parties | 696,883 | 696,883 | 471,979 | |
Chief Development Officer [Member] | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from Related Party Debt | 0 | 151,000 | ||
Repayments of Related Party Debt | 0 | 154,824 | ||
Due to Related Parties, Current | 105,000 | 105,000 | ||
Chief Development Officer [Member] | Accrued Interest [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties, Current | 6,038 | 6,038 | ||
SkyBell Technologies Inc [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $65,162 | $15,355 |
Note_5_Debt_Details_Textual
Note 5 - Debt (Details Textual) (USD $) | Nov. 28, 2014 | Nov. 21, 2014 | Sep. 05, 2014 | Feb. 03, 2015 | Jan. 07, 2015 | Dec. 03, 2014 | Nov. 26, 2014 | Oct. 14, 2014 | Sep. 11, 2014 | Feb. 27, 2015 |
Rate | Rate | Rate | Rate | Rate | Rate | Rate | Rate | Rate | Rate | |
Debt Instrument [Line Items] | ||||||||||
Convertible Notes Payable | $500,000 | $450,000 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 10.00% | 10.00% | |||||||
Debt Instrument, Convertible, Conversion Price | $0.10 | $0.10 | ||||||||
Debt Instrument Convertible Conversion Price Percentage of Stock Price | 50.00% | 50.00% | ||||||||
Debt Instrument, Face Amount | 28,500 | |||||||||
Board Member [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Notes Payable | 50,000 | 50,000 | 84,000 | 216,000 | 100,000 | 150,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ||||
Debt Instrument, Convertible, Conversion Price | $0.10 | $0.10 | $0.10 | $0.10 | $0.10 | $0.10 | ||||
Debt Instrument Convertible Conversion Price Percentage of Stock Price | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | ||||
In Connection With Conversion of Notes Payable [Member] | Board Member [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Convertible, Conversion Price | $0.20 | |||||||||
Debt Instrument Convertible Conversion Price Percentage of Stock Price | 50.00% | |||||||||
Debt Instrument, Face Amount | 1,400,000 | |||||||||
In Connection with Note Payable Extension [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Convertible, Conversion Price | $0.20 | |||||||||
Debt Instrument Convertible Conversion Price Percentage of Stock Price | 50.00% | |||||||||
Debt Instrument, Face Amount | 1,000,000 | |||||||||
Five Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||
Debt Instrument, Face Amount | $1,114,487 |
Note_5_Principal_Maturities_of
Note 5 - Principal Maturities of Convertible Notes Payable (Details) (Convertible Note Payable [Member], USD $) | Feb. 28, 2015 |
Convertible Note Payable [Member] | |
28-Feb-16 | $8,066,939 |
February 29, 2017 | 1,026,500 |
Total | $9,093,439 |
Note_6_Line_of_Credit_and_Term1
Note 6 - Line of Credit and Term Loans (Details Textual) (USD $) | 0 Months Ended | ||||
Jan. 05, 2011 | Nov. 28, 2014 | Nov. 21, 2014 | Sep. 05, 2014 | Feb. 28, 2015 | |
Rate | Rate | Rate | Rate | Rate | |
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 10.00% | 10.00% | ||
Loan Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,000,000 | ||||
Guarantee Fee | 5,000 | ||||
Percentage of Loan Balance, Guarantee Fee | 2.00% | ||||
Long-term Line of Credit | 625,000 | ||||
Interest Payable | 7,508 | ||||
Line of Credit, Current | 507,508 | ||||
Long-term Line of Credit, Noncurrent | 125,000 | ||||
Loan Agreement [Member] | Prime Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | ||||
Loan Agreement [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ||||
Loan Agreement [Member] | Guarantee Fee [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Accounts Payable and Other Accrued Liabilities | 528,000 | ||||
Settlement Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest Payable | 0 | ||||
Notes Payable | $648,412 |
Note_7_Equity_Details_Textual
Note 7 - Equity (Details Textual) (USD $) | 6 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Class of Stock [Line Items] | ||
Stock Issued During Period, Value, Issued for Services | $134,472 | $312,500 |
Advisory Services [Member] | ||
Class of Stock [Line Items] | ||
Stock Issued During Period, Shares, Issued for Services | 3,950,000 | |
Stock Issued During Period, Value, Issued for Services | 40,943 | |
Conversion of Debt [Member] | ||
Class of Stock [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 30,750,903 | |
Stock Issued During Period, Value, New Issues | 262,800 | |
In Connection with Note Payable Extension [Member] | ||
Class of Stock [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 1,359,254 | |
Stock Issued During Period, Value, New Issues | 81,555 | |
Six Months of Service [Member] | ||
Class of Stock [Line Items] | ||
Stock Issued During Period, Shares, Issued for Services | 375,000 | |
Stock Issued During Period, Value, Issued for Services | $3,338 |
Note_8_Provision_for_Income_Ta2
Note 8 - Provision for Income Taxes (Details Textual) (USD $) | 6 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Income Tax Contingency [Line Items] | ||
Income Tax Examination, Penalties and Interest Accrued | $0 | |
Income Tax Expense (Benefit) | 0 | 800 |
Operating Loss Carryforwards | $54,353,953 | |
Domestic Tax Authority [Member] | Earliest Tax Year [Member] | ||
Income Tax Contingency [Line Items] | ||
Open Tax Year | 2012 | |
State and Local Jurisdiction [Member] | Earliest Tax Year [Member] | ||
Income Tax Contingency [Line Items] | ||
Open Tax Year | 2012 |
Note_8_Provision_for_Income_Ta3
Note 8 - Provision for Income Taxes - Components of Deferred Tax Assets (Details) (USD $) | Feb. 28, 2015 | Aug. 31, 2014 |
Net operating loss carry forward and deductible temporary differences | $21,649,179 | $20,880,437 |
Valuation allowance | -21,649,179 | -20,880,437 |
Net deferred tax asset | $0 | $0 |
Note_9_Subsequent_Events_Detai
Note 9 - Subsequent Events (Details Textual) (USD $) | Nov. 28, 2014 | Nov. 21, 2014 | Sep. 05, 2014 | Feb. 03, 2015 | Jan. 07, 2015 | Dec. 03, 2014 | Nov. 26, 2014 | Oct. 14, 2014 | Sep. 11, 2014 | Apr. 06, 2015 | Mar. 09, 2015 |
Rate | Rate | Rate | Rate | Rate | Rate | Rate | Rate | Rate | Rate | Rate | |
Subsequent Event [Line Items] | |||||||||||
Convertible Notes Payable | $500,000 | $450,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 10.00% | 10.00% | ||||||||
Debt Instrument, Convertible, Conversion Price | $0.10 | $0.10 | |||||||||
Debt Instrument Convertible Conversion Price Percentage of Stock Price | 50.00% | 50.00% | |||||||||
Board Member [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Convertible Notes Payable | 50,000 | 50,000 | 84,000 | 216,000 | 100,000 | 150,000 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |||||
Debt Instrument, Convertible, Conversion Price | $0.10 | $0.10 | $0.10 | $0.10 | $0.10 | $0.10 | |||||
Debt Instrument Convertible Conversion Price Percentage of Stock Price | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | |||||
Subsequent Event [Member] | Board Member [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Convertible Notes Payable | $50,000 | $300,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 10.00% | |||||||||
Debt Instrument, Convertible, Conversion Price | $0.10 | $0.10 | |||||||||
Debt Instrument Convertible Conversion Price Percentage of Stock Price | 50.00% | 50.00% |