Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 19, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Vanity Events Holding, Inc. | ' |
Entity Central Index Key | '0001393935 | ' |
Trading Symbol | 'vaev | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 4,019,694 |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $27,202 | $85,580 |
Total current assets | 27,202 | 85,580 |
Prepaid consulting fee | 162,500 | 406,250 |
Intangible assets | 57,200 | 55,400 |
Total assets | 246,902 | 547,230 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 604,301 | 452,488 |
Notes payable, net of discount of $252,100 and $263,613, respectively | 921,500 | 861,446 |
Accrued payroll liabilities and sales tax liabilities | 281,595 | 296,566 |
Other liabilities | 37,169 | 37,169 |
Derivative liabilities | 9,518,660 | 15,069,135 |
Total current liabilities | 11,363,225 | 16,716,804 |
Stockholders' deficit | ' | ' |
Common stock authorized 500,000,000 shares, $0.001 par value, 4,019,694 and 2,970,864 shares issued and outstanding, respectively | 4,020 | 2,971 |
Additional paid in capital | 4,750,741 | 1,624,767 |
Accumulated deficit | -15,871,159 | -17,797,387 |
Total stockholders' deficit | -11,116,323 | -16,169,574 |
Total liabilities and stockholders' deficit | 246,902 | 547,230 |
Preferred Stock, Undesignated | ' | ' |
Stockholders' deficit | ' | ' |
Preferred stock value | ' | ' |
Preferred Stock, Series B | ' | ' |
Stockholders' deficit | ' | ' |
Preferred stock value | $75 | $75 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Discount on notes payable (in dollars) | $252,100 | $263,613 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 4,019,694 | 2,970,864 |
Common stock, shares outstanding | 4,019,694 | 2,970,864 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Undesignated | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 49,925,000 | 49,925,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Preferred Stock, Series B | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 75,000 | 75,000 |
Preferred stock, shares issued | 75,000 | 75,000 |
Preferred stock, shares outstanding | 75,000 | 75,000 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenues | ' | ' | ' | $424 |
General and administrative expense | 611,847 | 429,768 | 1,795,290 | 702,349 |
Loss from operations | -611,847 | -429,768 | -1,795,290 | -701,925 |
Gain (loss) on change in fair value of derivative liability | 5,116 | 5,514,096 | 5,989,840 | -2,891,193 |
Gain on conversion of debt | ' | ' | 8,643 | 9,981 |
Interest expense | -1,197,228 | -2,444,600 | -2,276,965 | -10,272,528 |
Income (loss) before provision for income taxes | -1,803,959 | 2,639,728 | 1,926,228 | -13,855,665 |
Provision for income taxes | ' | ' | ' | ' |
Net income (loss) | -1,803,959 | 2,639,728 | 1,926,228 | -13,855,665 |
Preferred dividend | -1,875 | -1,875 | -5,625 | -9,150 |
Net income (loss) attributable to common shareholders | ($1,805,834) | $2,637,853 | $1,920,603 | ($13,864,815) |
Basic and diluted income (loss) per share | ($0.45) | $1.48 | $0.52 | ($11.27) |
Weighted average shares outstanding, Basic and diluted (in shares) | 4,019,694 | 1,781,038 | 3,674,206 | 1,229,093 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income (loss) | $1,926,228 | ($13,855,665) |
Adjustments to reconcile net income (loss) to net | ' | ' |
Stock based compensation | 1,481,250 | 465,000 |
Gain on debt conversion | -8,643 | -9,981 |
Change in fair value of derivative liability | -5,989,840 | 2,891,193 |
Amortization of debt discount | 2,206,210 | 10,219,464 |
Changes in operating assets and liabilities: | ' | ' |
Accounts payable and other current liabilities | 131,217 | 51,798 |
Net cash used in operating activities | -253,578 | -238,191 |
Cash flows from investing activities: | ' | ' |
Cash paid for fixed and intangible assets | -1,800 | -22,650 |
Net cash used in investing activities | -1,800 | -22,650 |
Cash flows from financing activities: | ' | ' |
Proceeds from notes payable | 197,000 | 250,000 |
Net cash provided by financing activities | 197,000 | 250,000 |
Net (decrease) increase in cash | -58,378 | -10,841 |
Cash, beginning of period | 85,580 | 16,324 |
Cash, end of period | 27,202 | 5,483 |
Supplemental Schedule of Cash Flow Information: | ' | ' |
Cash paid for interest | ' | ' |
Non-cash investing and financing activities: | ' | ' |
Fair value of common stock issued upon conversion of notes | 1,895,148 | 153,842 |
Note payable converted to common stock | 148,459 | 10,000 |
Derivative liability reclassified to equity upon conversion of debt | 1,759,467 | 153,826 |
Derivative liability of conversion feature of debt | 1,798,179 | 3,960,468 |
Common stock issued for purchase of assets | ' | 2,600,000 |
Common stock issued as payment of prepaid consulting fees | ' | 650,000 |
Common stock issued as payment of accounts payable | ' | 19,774 |
Increase in derivative liability resulting from modifications | ' | $6,276,372 |
ORGANIZATION_AND_LINE_OF_BUSIN
ORGANIZATION AND LINE OF BUSINESS | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ' |
ORGANIZATION AND LINE OF BUSINESS | ' |
NOTE 1 - ORGANIZATION AND LINE OF BUSINESS | |
COMPANY OVERVIEW | |
Nature of Operations | |
VANITY EVENTS HOLDING, INC. (the “Company” or “Vanity” or “we” or “our”), was organized as a Delaware Corporation on August 25, 2004, and is a holding company. The primary focus of the company is the development of e-commerce sites in the collaborative consumption market place. Management is also active in reviewing potential acquisitions that they believe will enhance the value of the company. | |
At September 30, 2013, the Company’s wholly-owned subsidiaries include Vanity Events, Inc.; America’s Cleaning Company; and Vanity Licensing, Inc. | |
Beginning in 2012, management decided to evolve its business strategy from a licensing and marketing company to an e-commerce transactional business where the Company’s management felt it had the relevant core competency and experience to successfully build value for the Company’s shareholders. | |
On February 29, 2012, the Company entered into a domain name assignment agreement with Greg Pippo, the Company’s former chief financial officer ( “Pippo”), pursuant to which Pippo assigned all of his rights, title and interest and goodwill in or associated with the domain names www.buyborroworsell.com and www.buyborroworsell.net (the “Domain Names”), together with any unregistered or registered trademarks, service marks, copyrights or other intellectual property or property rights based on or in any way related to the Domain Names. | |
On April 4, 2012, the Company entered into an asset purchase agreement (the “Aegis Agreement”) with Aegis Worldwide, LLC, an entity controlled by Pippo ( “Aegis”), pursuant to which Aegis agreed to sell, transfer, convey, and deliver to the Company, all of Aegis’s right, title and interest and goodwill in or associated with certain domain names (the “Aegis Domain Names”) along with any information or materials proprietary to Aegis that relate to the business or affairs associated with the Aegis Domain Names which is of a confidential nature, including, but not limited to, trade secrets, information or materials relating to existing or proposed products (in all and various stages of development), “know-how”, marketing techniques and materials, marketing and development plans and pricing policies (the “Assets"). | |
Simultaneously with the execution of the Aegis Agreement, on April 4, 2012, the parties entered into an option agreement, pursuant to which Aegis shall have the option to purchase the Assets and all enhancements to the Assets from the Company in consideration for (i) an amount in cash equal to the net proceeds used by the Company for the enhancement of the Assets on or after April 4, 2012 and (ii) the cancellation of the shares issued to Aegis in connection with the Aegis Agreement. The option is exercisable beginning on the twelve month anniversary of the Closing Date and terminating on the 24 month anniversary of the Closing Date. | |
At this time the company is focusing on the development of e-commerce sites in the collaborative consumption marketplace. In these challenging economic times, we believe that consumers need access to many different types of goods leveraging the economies that come with shared consumption, along with a convenient and user friendly way to sell or monetize the goods that they currently own. | |
Our web properties will house several stand-alone sites specifically addressing areas management has identified as attractive in the world of collaborative consumption. What that in turn means is that the consumer will not own the goods unless they are purchased outright, instead they will enjoy the use of them through the access that their membership fees allow. The Company plans to offer strong mobile applications to support these sites, as well as leveraging both social and traditional media to build consumer awareness. | |
Management plans on developing an engaging community experience filled with user feedback and industry specific content that will further enhance the attractiveness of each stand-alone site. At this time these sites are in the planning and development stages. It is currently planned that the first site to be launched will be watchlender.com. This site will offer the consumer a range of luxury watches for rent or for purchase. Using this experience it is planned to launch additional sites utilizing the website domains that the Company has purchased including ToysLender.com, SneakerLender.com , FineArtLender.com , Shoelender.com , ElectronicsLender.com and CoutureLender.com . Management plans to utilize existing relationships with various suppliers to source product to be offered on the sites. The company is working closely with outsourced third party developers to launch the first of these web and mobile platforms. | |
Going Concern | |
We have reported net income of $1,926,228 for the nine months ended September 30, 2013; of this income, $5,998,483 was the result of a net, non-cash gain from the change in value of derivative instruments non-cash gain on conversion of debt, and $2,206,210 was the result of a non-cash expense for debt discount and financing expense related to the issuance of derivative instruments. Before these non-cash financing items, we incurred a loss of $1,866,045. As of September 30, 2013 we have negative working capital of $11,336,023 and a stockholders’ deficit of $11,116,323. As a result, there is substantial doubt about the Company’s ability to continue as a going concern at September 30, 2013. | |
Management has implemented business plans as described above. Our ability to implement our current business plan and continue as a going concern ultimately is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and to achieve profitable operations. | |
There can be no assurances that funds will be available to the Company when needed or, if available, that such funds would be available under favorable terms. In the event that the Company is unable to generate adequate revenues to cover expenses and cannot obtain additional funds in the near future, the Company may seek protection under bankruptcy laws. To date, management has not considered this alternative, nor does management view it as a likely occurrence, since the Company is progressing with various potential sources of new capital and we anticipate a successful outcome from these activities. However, capital markets remain difficult and there can be no certainty of a successful outcome from these activities. | |
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
General | |||||||||||||||||
The unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012. The results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year ending December 31, 2013. | |||||||||||||||||
The condensed consolidated balance sheet as at December 31, 2012 has been derived from the audited financial statements at that date but does not include all disclosures required by the accounting principles generally accepted in the United States of America. | |||||||||||||||||
USE OF ESTIMATES | |||||||||||||||||
The preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
REVENUE RECOGNITION | |||||||||||||||||
We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605 “Revenue Recognition”. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has transferred or services have been rendered, the price is fixed and determinable and collectability is reasonably assured. Revenue is not recognized on product sales transacted on a test or pilot basis. Instead, receipts from these types of transactions offset marketing expenses. | |||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
Our short-term financial instruments, including cash, accounts receivable and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their current maturity. | |||||||||||||||||
Fair value measurements | |||||||||||||||||
ASC 820 “Fair Value Measurements and Disclosure” establishes a framework for measuring fair value and expands disclosure about fair value measurements. | |||||||||||||||||
ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used: | |||||||||||||||||
Level 1 – Quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||||||||||||||||
In accordance with ASC 820, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2013: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 27,202 | $ | - | $ | - | $ | 27,202 | |||||||||
Total Assets | $ | 27,202 | $ | - | $ | - | $ | 27,202 | |||||||||
Liabilities | |||||||||||||||||
Notes payable | $ | - | $ | - | $ | 921,500 | $ | 921,500 | |||||||||
Conversion derivative liabilities | - | - | 9,518,660 | 9,518,660 | |||||||||||||
Total Liabilities | $ | - | $ | - | $ | 10,440,160 | $ | 10,440,160 | |||||||||
.The following is a description of the valuation methodologies used for these items: | |||||||||||||||||
Conversion derivative liability — these instruments consist of certain of our notes which are convertible based on a discount to the market value of our common stock. These instruments were valued using pricing models which incorporate the Company’s stock price, volatility, U.S. risk free rate, dividend rate and estimated life. | |||||||||||||||||
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (warrant derivative liability and conversion derivative liability) for the nine months ended September 30, 2013. | |||||||||||||||||
Balance at beginning of year | $ | 15,069,135 | |||||||||||||||
Additions to derivative instruments | 2,198,832 | ||||||||||||||||
Change in fair value of derivative liabilities | (5,989,840 | ) | |||||||||||||||
Reclassification upon conversion of debt | (1,759,467 | ) | |||||||||||||||
Balance at end of period | $ | 9,518,660 | |||||||||||||||
LOSS PER SHARE | |||||||||||||||||
We utilize ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive. | |||||||||||||||||
Dilutive common stock equivalents consist of shares issuable upon conversion of debt and the exercise of our stock warrants. In accordance with ASC 260-45-20, common stock equivalents derived from shares issuable through the exercise of our debt and warrants subject to derivative accounting are not considered in the calculation of the weighted average number of common shares outstanding because the adjustments in computing income available to common stockholders would result in a loss. Net income of $2,639,728 reported for the three months ended September 30, 2012 and net income of $1,926,228 reported for the nine months ended September 30, 2013 resulted solely from gains and losses attributable to our derivative instruments. Accordingly, the diluted EPS would be computed in the same manner as basic earnings per share since the inclusion of the common stock equivalents derived from shares issuable through the exercise of our debt and warrants subject to derivative accounting would be anti-dilutive. | |||||||||||||||||
There were 148,124,250 common share equivalents at September 30, 2013 and 120,515,854 at September 30, 2012, which have been excluded from the computation of the weighted average diluted shares. | |||||||||||||||||
INCOME TAXES | |||||||||||||||||
We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. | |||||||||||||||||
The Company made a comprehensive review of its portfolio of uncertain tax positions in accordance with recognition standards established by the guidance. As a result of this review, the Company concluded that at this time there are no uncertain tax positions that would result in tax liability to the Company. There was no cumulative effect on retained earnings as a result of applying the provisions of this guidance. | |||||||||||||||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||||||||||||||
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. | |||||||||||||||||
In July 2012, the Financial Accounting Standards Board issued Accounting Standards Update 2012-02 (“ASU 2012-02”), Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The purpose of ASU 2012-02, which amends the guidance to Topic 350, Intangibles — Goodwill and Other, is to simplify the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. ASU 2012-02 allows an entity to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the qualitative goodwill impairment test. The amendments in ASU 2012-02 permit an entity to first assess qualitatively whether it is more likely than not (more than 50%) that an indefinite-lived intangible asset is impaired, thus necessitating that it perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 and early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s financial statements. |
CONVERTIBLE_DEBENTURES_AND_DER
CONVERTIBLE DEBENTURES AND DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2013 | |
Debt Disclosure [Abstract] | ' |
CONVERTIBLE DEBENTURES AND DERIVATIVE LIABILITIES | ' |
NOTE 3 – CONVERTIBLE DEBENTURES AND DERIVATIVE LIABILITIES | |
The Company has identified the embedded derivatives related to its convertible notes, consisting of the conversion feature, its preferred stock, consisting of the conversion feature, and its warrants. Since certain of the notes are convertible into a variable number of shares, the conversion features of those debentures are recorded as derivative liabilities. Since the warrants and the conversion feature of the preferred stock have a price reset feature, they are recorded as derivative liabilities. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to adjust to fair value as of each subsequent balance sheet date. | |
Greystone $52K Financing | |
On April 2, 2013, the Company entered into a Securities Purchase Agreement with Greystone Capital Partners, Inc. (Greystone), an accredited investor, providing for the sale by the Company to Greystone of an 8% convertible debenture in the aggregate principal amount of $52,000 (the “Greystone Debenture”). The Greystone Debenture matures on the first anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable on the Maturity Date. Greystone may convert, at any time, the outstanding principal and accrued interest on the Greystone Debenture into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price that is the lesser of (i) ninety percent (90%) discount of the average of the closing bid price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date as quoted by Bloomberg, LP or (ii) the average of the closing bid price per share during the five (5) trading days prior to the date of any such conversion (“Conversion Price”). The Conversion Price may be adjusted pursuant to the other terms of this Debenture. | |
With the exception of the shares the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the Conversion Price of the Debenture shall be subject to adjustment for issuances of Common Stock or securities convertible into common stock or exercisable for shares of Common Stock at a purchase price of less than the then-effective Conversion Price, on any unconverted amounts, such that the then applicable Conversion Price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants. | |
The conversion feature of the April 2013 Greystone debenture contains a variable conversion rate. As a result, we have classified the conversion feature as a derivative liability in the financial statements. At issue, we have recorded a conversion feature liability of $494,723. The value of the conversion feature liability was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.14%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 140%; and (4) an expected life of 1 year. The Company has allocated $52,000 to debt discount, to be amortized over the life of the debt, with the balance of $442,723 being charged to expense at issue. | |
IBC Funds $25K Financing | |
On June 7, 2013, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (IBC), an accredited investor, providing for the sale by the Company to IBC of an 8% convertible debenture in the aggregate principal amount of $25,000 (the “June 2013 Debenture”). The June 2013 Debenture matures on the first anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable on the Maturity Date. The Investor may convert, at any time, the outstanding principal and accrued interest on the June 2013 Debenture into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price that is the lesser of (i) ninety percent (90%) discount of the average of the closing bid price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date as quoted by Bloomberg, LP or (ii) the average of the closing bid price per share during the five (5) trading days prior to the date of any such conversion (“Conversion Price”). The Conversion Price may be adjusted pursuant to the other terms of this Debenture. | |
With the exception of the shares the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the Conversion Price of the Debenture shall be subject to adjustment for issuances of Common Stock or securities convertible into common stock or exercisable for shares of Common Stock at a purchase price of less than the then-effective Conversion Price, on any unconverted amounts, such that the then applicable Conversion Price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants. | |
The conversion feature of the June 2013 IBC debenture contains a variable conversion rate. As a result, we have classified the conversion feature as a derivative liability in the financial statements. At issue, we have recorded a conversion feature liability of $211,876. The value of the conversion feature liability was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.135%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 147%; and (4) an expected life of 1 year. The Company has allocated $25,000 to debt discount, to be amortized over the life of the debt, with the balance of $186,876 being charged to expense at issue. | |
IBC Funds $20K Financing | |
On July 2, 2013, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (IBC), an accredited investor, providing for the sale by the Company to IBC of an 8% convertible debenture in the aggregate principal amount of $20,000 (the “July 2013 Debenture”). The July 2013 Debenture matures on the first anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable on the Maturity Date. The Investor may convert, at any time, the outstanding principal and accrued interest on the July 2013 Debenture into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price that is the lesser of (i) ninety percent (90%) discount of the average of the closing bid price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date as quoted by Bloomberg, LP or (ii) the average of the closing bid price per share during the five (5) trading days prior to the date of any such conversion (“Conversion Price”). The Conversion Price may be adjusted pursuant to the other terms of this Debenture. | |
With the exception of the shares the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the Conversion Price of the Debenture shall be subject to adjustment for issuances of Common Stock or securities convertible into common stock or exercisable for shares of Common Stock at a purchase price of less than the then-effective Conversion Price, on any unconverted amounts, such that the then applicable Conversion Price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants. | |
The conversion feature of the July 2013 IBC debenture contains a variable conversion rate. As a result, we have classified the conversion feature as a derivative liability in the financial statements. At issue, we have recorded a conversion feature liability of $184,294. The value of the conversion feature liability was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.16%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 156%; and (4) an expected life of 1 year. The Company has allocated $20,000 to debt discount, to be amortized over the life of the debt, with the balance of $164,294 being charged to expense at issue. | |
IBC Funds $50K Financing | |
On August 14, 2013, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (IBC), an accredited investor, providing for the sale by the Company to IBC of an 8% convertible debenture in the aggregate principal amount of $50,000 (the “IBC August 2013 Debenture”). The IBC August 2013 Debenture matures on the first anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable on the Maturity Date. The Investor may convert, at any time, the outstanding principal and accrued interest on the IBC August 2013 Debenture into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price that is the lesser of (i) ninety percent (90%) discount of the average of the closing bid price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date as quoted by Bloomberg, LP or (ii) the average of the closing bid price per share during the five (5) trading days prior to the date of any such conversion (“Conversion Price”). The Conversion Price may be adjusted pursuant to the other terms of this Debenture. | |
With the exception of the shares the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the Conversion Price of the Debenture shall be subject to adjustment for issuances of Common Stock or securities convertible into common stock or exercisable for shares of Common Stock at a purchase price of less than the then-effective Conversion Price, on any unconverted amounts, such that the then applicable Conversion Price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants. | |
The conversion feature of the IBC August 2013 IBC debenture contains a variable conversion rate. As a result, we have classified the conversion feature as a derivative liability in the financial statements. At issue, we have recorded a conversion feature liability of $453,643. The value of the conversion feature liability was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.135%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 234%; and (4) an expected life of 1 year. The Company has allocated $50,000 to debt discount, to be amortized over the life of the debt, with the balance of $403,643 being charged to expense at issue. | |
CP US Income Group $50K Financing | |
On August 14, 2013, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (IBC), an accredited investor, providing for the sale by the Company to IBC of an 8% convertible debenture in the aggregate principal amount of $50,000 (the “CP US August 2013 Debenture”). The CP US August 2013 Debenture matures on the first anniversary of the date of issuance (the “Maturity Date”) and bears interest a rate of 8% per annum, payable on the Maturity Date. The Investor may convert, at any time, the outstanding principal and accrued interest on the CP US August 2013 Debenture into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price that is the lesser of (i) ninety percent (90%) discount of the average of the closing bid price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date as quoted by Bloomberg, LP or (ii) the average of the closing bid price per share during the five (5) trading days prior to the date of any such conversion (“Conversion Price”). The Conversion Price may be adjusted pursuant to the other terms of this Debenture. | |
With the exception of the shares the Company is obligated to issue to previous investors, for as long as the Debenture is outstanding, the Conversion Price of the Debenture shall be subject to adjustment for issuances of Common Stock or securities convertible into common stock or exercisable for shares of Common Stock at a purchase price of less than the then-effective Conversion Price, on any unconverted amounts, such that the then applicable Conversion Price shall be adjusted using full-ratchet anti-dilution on such new issuances subject, to customary carve outs, including restricted shares granted to officers, and directors and consultants. | |
The conversion feature of the CP US August 2013 debenture contains a variable conversion rate. As a result, we have classified the conversion feature as a derivative liability in the financial statements. At issue, we have recorded a conversion feature liability of $453,643. The value of the conversion feature liability was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.135%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 234%; and (4) an expected life of 1 year. The Company has allocated $50,000 to debt discount, to be amortized over the life of the debt, with the balance of $403,643 being charged to expense at issue. | |
During the nine months ended September 30, 2013 we recorded additions to our derivative conversion liabilities related to the conversion feature attributable to interest accrued during the period. These additions aggregated $138,844 and $400,653 for the three and nine months ended September 30, 2013, respectively, which has been charged to interest expense. | |
During the nine months ended September 30, 2013, $148,459 of principal was converted into 1,048,830 shares of common stock. The Company has recorded expense of $208,125 for the nine months ended September 30, 2013 related to the change in fair value of the conversion feature through the dates of conversion. | |
At September 30, 2013, we recalculated the fair value of our embedded conversion features and warrants subject to derivative accounting and have determined that their fair value at September 30, 2013 was $9,518,660. The value of the conversion liabilities and warrant liabilities was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.12% - 0.625%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 222% - 295%; and (4) an expected life of 0.50 – 2.75 years. We recorded gain of $5,116 and $6,197,965 for the three and nine months ended September 30, 2013, respectively. | |
The Company is in default on eleven of its convertible notes, aggregating $641,825 of unpaid principal and $163,172 of unpaid accrued interest. The Company has not repaid principal or accrued but unpaid interest that has become due and payable under the notes. The Company is currently working with the note holders on making arrangements to honor its obligations under the notes, however, there can be no assurance that any such arrangements will ever materialize or be permissible or sufficient to cover any or all of the obligations under the notes. | |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders Equity Note [Abstract] | ' |
STOCKHOLDERS' EQUITY | ' |
NOTE 4 – STOCKHOLDERS’ EQUITY | |
Preferred Stock | |
The Company is authorized to issue 50,000,000 shares of preferred stock, with par value of $0.001 per share, of which 75,000 shares have been designated as Series B 10% Convertible preferred stock, with par value of $0.001 per share. There were 75,000 Series B shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively. | |
Common Stock | |
The Company is authorized to issue 500,000,000 shares of common stock, with par value of $0.001 per share. As of September 30, 2013 and December 31, 2012, there were 4,019,694 and 2,970,864 shares of common stock issued and outstanding, respectively. | |
During the nine months ended September 30, 2013 we issued 1,048,830 shares of common stock upon conversion of notes payable in the amount of $148,459. The shares had a value of $1,895,148 at the dates of conversion. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 5 – SUBSEQUENT EVENTS | |
On November 1, 2013 the Company entered into a six month lease agreement for approximately 71 square feet of space at a rate of $525 per month. The corporate offices will be relocating to 12555 Orange Drive, #216 Davie, FL 33330. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
USE OF ESTIMATES | ' | ||||||||||||||||
USE OF ESTIMATES | |||||||||||||||||
The preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
REVENUE RECOGNITION | ' | ||||||||||||||||
REVENUE RECOGNITION | |||||||||||||||||
We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605 “Revenue Recognition”. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has transferred or services have been rendered, the price is fixed and determinable and collectability is reasonably assured. Revenue is not recognized on product sales transacted on a test or pilot basis. Instead, receipts from these types of transactions offset marketing expenses. | |||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | ||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
Our short-term financial instruments, including cash, accounts receivable and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their current maturity. | |||||||||||||||||
Fair value measurements | |||||||||||||||||
ASC 820 “Fair Value Measurements and Disclosure” establishes a framework for measuring fair value and expands disclosure about fair value measurements. | |||||||||||||||||
ASC 820 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes the following three levels of inputs that may be used: | |||||||||||||||||
Level 1 – Quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||||||||||||||||
In accordance with ASC 820, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2013: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 27,202 | $ | - | $ | - | $ | 27,202 | |||||||||
Total Assets | $ | 27,202 | $ | - | $ | - | $ | 27,202 | |||||||||
Liabilities | |||||||||||||||||
Notes payable | $ | - | $ | - | $ | 921,500 | $ | 921,500 | |||||||||
Conversion derivative liabilities | - | - | 9,518,660 | 9,518,660 | |||||||||||||
Total Liabilities | $ | - | $ | - | $ | 10,440,160 | $ | 10,440,160 | |||||||||
.The following is a description of the valuation methodologies used for these items: | |||||||||||||||||
Conversion derivative liability — these instruments consist of certain of our notes which are convertible based on a discount to the market value of our common stock. These instruments were valued using pricing models which incorporate the Company’s stock price, volatility, U.S. risk free rate, dividend rate and estimated life. | |||||||||||||||||
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (warrant derivative liability and conversion derivative liability) for the nine months ended September 30, 2013. | |||||||||||||||||
Balance at beginning of year | $ | 15,069,135 | |||||||||||||||
Additions to derivative instruments | 2,198,832 | ||||||||||||||||
Change in fair value of derivative liabilities | (5,989,840 | ) | |||||||||||||||
Reclassification upon conversion of debt | (1,759,467 | ) | |||||||||||||||
Balance at end of period | $ | 9,518,660 | |||||||||||||||
LOSS PER SHARE | ' | ||||||||||||||||
LOSS PER SHARE | |||||||||||||||||
We utilize ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Common equivalent shares are excluded from the computation if their effect is anti-dilutive. | |||||||||||||||||
Dilutive common stock equivalents consist of shares issuable upon conversion of debt and the exercise of our stock warrants. In accordance with ASC 260-45-20, common stock equivalents derived from shares issuable through the exercise of our debt and warrants subject to derivative accounting are not considered in the calculation of the weighted average number of common shares outstanding because the adjustments in computing income available to common stockholders would result in a loss. Net income of $2,639,728 reported for the three months ended September 30, 2012 and net income of $1,926,228 reported for the nine months ended September 30, 2013 resulted solely from gains and losses attributable to our derivative instruments. Accordingly, the diluted EPS would be computed in the same manner as basic earnings per share since the inclusion of the common stock equivalents derived from shares issuable through the exercise of our debt and warrants subject to derivative accounting would be anti-dilutive. | |||||||||||||||||
There were 148,124,250 common share equivalents at September 30, 2013 and 120,515,854 at September 30, 2012, which have been excluded from the computation of the weighted average diluted shares. | |||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
INCOME TAXES | |||||||||||||||||
We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. | |||||||||||||||||
The Company made a comprehensive review of its portfolio of uncertain tax positions in accordance with recognition standards established by the guidance. As a result of this review, the Company concluded that at this time there are no uncertain tax positions that would result in tax liability to the Company. There was no cumulative effect on retained earnings as a result of applying the provisions of this guidance. | |||||||||||||||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ' | ||||||||||||||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||||||||||||||
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. | |||||||||||||||||
In July 2012, the Financial Accounting Standards Board issued Accounting Standards Update 2012-02 (“ASU 2012-02”), Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The purpose of ASU 2012-02, which amends the guidance to Topic 350, Intangibles — Goodwill and Other, is to simplify the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. ASU 2012-02 allows an entity to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the qualitative goodwill impairment test. The amendments in ASU 2012-02 permit an entity to first assess qualitatively whether it is more likely than not (more than 50%) that an indefinite-lived intangible asset is impaired, thus necessitating that it perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 and early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Schedule of financial assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 27,202 | $ | - | $ | - | $ | 27,202 | |||||||||
Total Assets | $ | 27,202 | $ | - | $ | - | $ | 27,202 | |||||||||
Liabilities | |||||||||||||||||
Notes payable | $ | - | $ | - | $ | 921,500 | $ | 921,500 | |||||||||
Conversion derivative liabilities | - | - | 9,518,660 | 9,518,660 | |||||||||||||
Total Liabilities | $ | - | $ | - | $ | 10,440,160 | $ | 10,440,160 | |||||||||
Schedule of a summary of changes in the fair value of the Company's Level 3 financial liabilities - Warrant derivative liability and Conversion derivative liability | ' | ||||||||||||||||
Balance at beginning of year | $ | 15,069,135 | |||||||||||||||
Additions to derivative instruments | 2,198,832 | ||||||||||||||||
Change in fair value of derivative liabilities | (5,989,840 | ) | |||||||||||||||
Reclassification upon conversion of debt | (1,759,467 | ) | |||||||||||||||
Balance at end of period | $ | 9,518,660 | |||||||||||||||
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent Event [Member], USD $) | 1 Months Ended | |
Nov. 30, 2013 | Nov. 01, 2013 | |
sqft | ||
Subsequent Event [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Office space | ' | 71 |
Lease agreement rent per month | $525 | ' |
ORGANIZATION_AND_LINE_OF_BUSIN1
ORGANIZATION AND LINE OF BUSINESS (Detail Textuals) (Asset Purchase Agreement with Aegis Worldwide, LLC) | 0 Months Ended |
Apr. 04, 2012 | |
Asset Purchase Agreement with Aegis Worldwide, LLC | ' |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' |
Period for exercise of option | '12 months |
Period for termination of option | '24 months |
ORGANIZATION_AND_LINE_OF_BUSIN2
ORGANIZATION AND LINE OF BUSINESS (Detail Textuals 1) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ' | ' | ' | ' | ' |
Net income (loss) | ($1,803,959) | $2,639,728 | $1,926,228 | ($13,855,665) | ' |
Non-cash expense due to change in value of derivative instruments | 5,116 | 5,514,096 | 5,989,840 | -2,891,193 | ' |
Non-cash expense for debt discount and financing expense related to the issuance and modification of derivative instruments | ' | ' | 2,206,210 | 10,219,464 | ' |
Loss before non-cash financing items | ' | ' | 1,866,045 | ' | ' |
Negative working capital | 11,336,023 | ' | 11,336,023 | ' | ' |
Stockholders' deficit | ($11,116,323) | ' | ($11,116,323) | ' | ($16,169,574) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis (Details) (Fair Value, Measurements, Recurring, USD $) | Sep. 30, 2013 |
Level 1 | ' |
Assets | ' |
Cash and cash equivalents | $27,202 |
Total Assets | 27,202 |
Liabilities | ' |
Notes payable | ' |
Conversion derivative liabilities | ' |
Total Liabilities | ' |
Level 2 | ' |
Assets | ' |
Cash and cash equivalents | ' |
Total Assets | ' |
Liabilities | ' |
Notes payable | ' |
Conversion derivative liabilities | ' |
Total Liabilities | ' |
Level 3 | ' |
Assets | ' |
Cash and cash equivalents | ' |
Total Assets | ' |
Liabilities | ' |
Notes payable | 921,500 |
Conversion derivative liabilities | 9,518,660 |
Total Liabilities | 10,440,160 |
Total | ' |
Assets | ' |
Cash and cash equivalents | 27,202 |
Total Assets | 27,202 |
Liabilities | ' |
Notes payable | 921,500 |
Conversion derivative liabilities | 9,518,660 |
Total Liabilities | $10,440,160 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of changes in the fair value of the company's Level 3 financial liabilities (Details 1) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' |
Balance at beginning of year | $15,069,135 |
Additions to derivative instruments | 2,198,832 |
Change in fair value of derivative liabilities | -5,989,840 |
Reclassification upon conversion of debt | -1,759,467 |
Balance at end of period | $9,518,660 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) (USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Accounting Policies [Abstract] | ' | ' | ' |
Common share equivalents excluded from the computation of the weighted average diluted shares | ' | 148,124,250 | 120,515,854 |
Net income | $2,639,728 | $1,926,228 | ' |
CONVERTIBLE_DEBENTURES_AND_DER1
CONVERTIBLE DEBENTURES AND DERIVATIVE LIABILITIES (Detail Textuals) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
Convertible Debt | Convertible Debt | |||
Debt Instrument [Line Items] | ' | ' | ' | ' |
Derivative conversion liabilities, interest accrued during the period | ' | ' | $138,844 | $400,653 |
Debt conversion, original debt, amount | 148,459 | 10,000 | ' | ' |
Number of common stock shares issued upon conversion of principle debt | ' | ' | ' | 1,048,830 |
Expense related to change in the fair value of conversion feature of common stock | ' | ' | ' | $208,125 |
CONVERTIBLE_DEBENTURES_AND_DER2
CONVERTIBLE DEBENTURES AND DERIVATIVE LIABILITIES (Detail Textuals 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 02, 2013 | Jun. 07, 2013 | Jul. 02, 2013 | Aug. 14, 2013 | Aug. 14, 2013 |
Convertible Debt | Warrant [Member] | Warrant [Member] | Minimum | Maximum | Greystone $52K Financing [Member] | IBC Funds $25K Financing [Member] | IBC Funds $20K Financing [Member] | IBC Funds $50K Financing [Member] | CP US Income Group $50K Financing [Member] | |||
Promissory_note | Convertible Debt | Convertible Debt | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | |||
Convertible Debt | Convertible Debt | Convertible Debt | Convertible Debt | Convertible Debt | Convertible Debt | Convertible Debt | ||||||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible debenture aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | $52,000 | $25,000 | $20,000 | $50,000 | $50,000 |
Percentage of convertible debentures | ' | ' | ' | 8.00% | 8.00% | ' | ' | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | ' | ' | ' | ' | ' | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
Percentage of discount of the average of the closing bid price of the common stock | ' | ' | ' | ' | 90.00% | ' | ' | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% |
Conversion feature liability | ' | ' | ' | 9,518,660 | 9,518,660 | ' | ' | 494,723 | 211,876 | 184,294 | 453,643 | 453,643 |
Number Of Trading Days | ' | ' | ' | ' | '5 days | ' | ' | '5 days | '5 days | '5 days | '5 days | '5 days |
Fair value assumptions, method used | ' | ' | ' | ' | 'Black-Scholes | ' | ' | 'Black-Scholes | 'Black-Scholes | 'Black-Scholes | 'Black-Scholes | 'Black-Scholes |
Fair value assumptions, risk free interest rate | ' | ' | ' | ' | ' | 0.12% | 0.63% | 0.14% | 0.14% | 0.16% | 0.14% | 0.14% |
Fair value assumptions, dividend yield | ' | ' | ' | ' | 0.00% | ' | ' | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Fair value assumptions, expected volatility rate | ' | ' | ' | ' | ' | 222.00% | 295.00% | 140.00% | 147.00% | 156.00% | 234.00% | 234.00% |
Fair value assumptions, expected life (in years) | ' | ' | ' | ' | ' | '6 months | '2 years 9 months | '1 year | '1 year | '1 year | '1 year | '1 year |
Discount Allowed On New Debt | ' | ' | ' | ' | ' | ' | ' | 52,000 | 25,000 | 20,000 | 50,000 | 50,000 |
Debt issuing expense | ' | ' | ' | ' | ' | ' | ' | 442,723 | 186,876 | 164,294 | 403,643 | 403,643 |
Change in fair value of derivative | ' | ' | ' | 5,116 | 6,197,965 | ' | ' | ' | ' | ' | ' | ' |
Number of notes defaulted | ' | ' | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unpaid principal amount of defaulted notes | ' | ' | 641,825 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unpaid accrued interest of defaulted notes | ' | ' | $163,172 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_Detail_Tex
STOCKHOLDERS' EQUITY (Detail Textuals) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Class of Stock [Line Items] | ' | ' |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Series B convertible preferred stock | ' | ' |
Class of Stock [Line Items] | ' | ' |
Preferred stock, shares authorized | 75,000 | 75,000 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Percentage of convertible preferred stock | 10.00% | ' |
Preferred stock, shares issued | 75,000 | 75,000 |
Preferred stock, shares outstanding | 75,000 | 75,000 |
STOCKHOLDERS_EQUITY_Detail_Tex1
STOCKHOLDERS' EQUITY (Detail Textuals 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Stockholders Equity Note [Abstract] | ' | ' |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares issued | 4,019,694 | 2,970,864 |
Common stock, shares outstanding | 4,019,694 | 2,970,864 |
STOCKHOLDERS_EQUITY_Detail_Tex2
STOCKHOLDERS' EQUITY (Detail Textuals 2) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Debt Conversion [Line Items] | ' | ' |
Debt conversion, original debt, amount | $148,459 | $10,000 |
Conversion of notes payable | ' | ' |
Debt Conversion [Line Items] | ' | ' |
Debt conversion original number of shares issued in conversion | 1,048,830 | ' |
Debt conversion, original debt, amount | 148,459 | ' |
Value of common stock shares issued upon conversion of principle debt | $1,895,148 | ' |