Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 23, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Thinspace Technology, Inc. | ||
Entity Central Index Key | 1393935 | ||
Amendment Flag | FALSE | ||
Trading Symbol | thns | ||
Current Fiscal Year End Date | -19 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $4,326,985 | ||
Entity Common Stock, Shares Outstanding | 98,381,445 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash and cash equivalents | $135,965 | $341,031 |
Receivable from sale of preferred stock | 472,000 | |
Accounts receivable | 158,329 | 291,728 |
Inventory | 100,637 | 4,634 |
Prepaid expenses and other current assets | 17,058 | 36,263 |
Total current assets | 411,989 | 1,145,656 |
Fixed assets, net of accumulated depreciation of $73,396 and $60,312, respectively | 31,272 | 31,325 |
Intangible assets, net of accumulated amortization of $489,221 and $454,416, respectively | 142,799 | 194,743 |
Other assets | 104,683 | 98,600 |
Total assets | 690,743 | 1,470,324 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,627,641 | 1,610,753 |
Income taxes payable | 29,000 | |
Deferred revenue | 773,163 | 1,482,504 |
Loans and notes payable, current portion | 469,400 | 74,800 |
Loans payable - related parties | 117,348 | |
Derivative liabilities | 12,173,986 | 11,268,087 |
Total current liabilities | 15,073,190 | 14,553,492 |
Deferred revenue, long term | 202,826 | 73,897 |
Convertible notes payable, net of discount of $1,247,035 and $311,806, respectively | 849,396 | 862,019 |
Loans payable | 13,953 | 25,266 |
Total liabilities | 16,139,365 | 15,514,674 |
Stockholders' deficit | ||
Common stock authorized 500,000,000 shares, $0.001 par value, 98,381,445 and 82,819,694 shares issued and outstanding, respectively | 98,381 | 82,820 |
Additional paid in capital | 6,890,970 | |
Accumulated deficit | -22,414,873 | -14,093,652 |
Accumulated other comprehensive income (loss) | -23,847 | -34,265 |
Total stockholders' deficit | -15,448,622 | -14,044,350 |
Total liabilities and stockholders' deficit | 690,743 | 1,470,324 |
Preferred Stock, Undesignated | ||
Stockholders' deficit | ||
Preferred stock, value | ||
Preferred Stock, Series B | ||
Stockholders' deficit | ||
Preferred stock, value | 75 | 75 |
Preferred Stock,Series C | ||
Stockholders' deficit | ||
Preferred stock, value | $672 | $672 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accumulated depreciation (in dollars) | $73,396 | $60,312 |
Accumulated amortization (in dollars) | 489,221 | 454,416 |
Discount on convertible notes payable (in dollars) | $1,247,035 | $311,806 |
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 | 98,381,445 | 82,819,694 |
Common stock, shares outstanding | 98,381,445 | 82,819,694 |
Preferred stock, par value (in dollars per share) | $0.00 | |
Preferred stock, shares authorized | 50,000,000 | |
Preferred Stock, Undesignated | ||
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 49,253,000 | 49,253,000 |
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 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 672,000 | 672,000 |
Preferred stock, shares issued | 672,000 | 672,000 |
Preferred stock, shares outstanding | 672,000 | 672,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Loss (USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Revenues | $1,509,286 | $6,266,895 |
Cost of goods sold | 695,105 | 3,491,670 |
Gross profit | 814,181 | 2,775,225 |
Operating expense: | ||
Selling, general and administrative | 1,931,873 | 6,071,016 |
Depreciation and amortization | 75,066 | 81,929 |
Total operating expense | 2,006,939 | 6,152,945 |
Loss from operations | -1,192,758 | -3,377,720 |
Gain on change in fair value of derivative liability | 3,084,115 | |
Gain on conversion of debt | 328,186 | |
Interest (Expense) income | -306,340 | -8,326,802 |
Loss before provision for income taxes | -1,499,098 | -8,292,221 |
Provision for income taxes | 29,000 | |
Net loss | -1,499,098 | -8,321,221 |
Preferred dividend | -2,363,797 | -7,500 |
Net loss attributable to common shareholders | -3,862,895 | -8,328,721 |
Basic and diluted loss per share | ($0.05) | ($0.09) |
Weighted average shares outstanding, Basic and diluted | 80,207,843 | 94,339,117 |
Comprehensive income (loss): | ||
Net loss | -1,499,098 | -8,321,221 |
Foreign currency translation adjustments | -33,223 | 10,418 |
Comprehensive loss | ($1,532,321) | ($8,310,803) |
Consolidated_Statement_of_Defi
Consolidated Statement of Deficiency in Stockholders' Equity (USD $) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2012 | ($455,376) | $80,200 | ($79,566) | ($1,042) | ($454,968) | |
Balance (in shares) at Dec. 31, 2012 | 80,200,000 | |||||
Shares retained by Vanity shareholders and effect of recapitalization | -10,461,894 | 75 | 2,620 | -10,464,589 | ||
Shares retained by Vanity shareholders and effect of recapitalization, shares | 75,000 | 2,619,694 | ||||
Sale of preferred stock | 672,000 | 672 | 671,328 | |||
Sale of preferred stock, shares | 672,000 | |||||
Contribution of inventory by related party | 97,038 | 97,038 | ||||
Deemed dividend - value of preferred derivative | -2,363,797 | -688,800 | -1,674,997 | |||
Net loss | -1,532,321 | -33,223 | -1,499,098 | |||
Balance at Dec. 31, 2013 | -14,044,350 | 747 | 82,820 | -34,265 | -14,093,652 | |
Balance (in shares) at Dec. 31, 2013 | 747,000 | 82,819,694 | ||||
Shares issued for services | 1,728,102 | 7,374 | 1,720,728 | |||
Shares issued for services, shares | 7,374,618 | |||||
Stock based compensation | 238,255 | 238,255 | ||||
Shares issued upon conversion of debt | 2,500,892 | 12,935 | 2,487,957 | |||
Shares issued upon conversion of debt, shares | 12,934,779 | |||||
Restricted stock grant | 200 | -200 | ||||
Restricted stock grant, shares | 200,000 | |||||
Shares issued for domain name | 20,500 | 25 | 20,475 | |||
Shares issued for domain name, shares | 25,000 | |||||
Shares issued for payment of accrued salaries | 76,891 | 277 | 76,614 | |||
Shares issued for payment of accrued salaries, shares | 277,354 | |||||
Contribution to capital | 17,391 | 17,391 | ||||
Shares cancelled | -5,250 | 5,250 | ||||
Shares cancelled, shares | -5,250,000 | |||||
Derivative liability reclassified to equity | 2,332,000 | 2,332,000 | ||||
Preferred stock dividend | -7,500 | -7,500 | ||||
Net loss | -8,321,221 | 10,418 | -8,321,221 | |||
Balance at Dec. 31, 2014 | ($15,448,622) | $747 | $98,381 | $6,890,970 | ($23,847) | ($22,414,873) |
Balance (in shares) at Dec. 31, 2014 | 747,000 | 98,381,445 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | ($1,499,098) | ($8,321,221) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 75,066 | 81,929 |
Amortization of prepaid stock based compensation | 1,250,000 | |
Stock based compensation | 774,287 | |
Gain on conversion of debt | -328,186 | |
Change in fair value of derivative liability | -3,084,115 | |
Amortization of debt discount | 299,964 | 7,733,769 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -198,710 | 126,234 |
Inventory | 92,404 | -96,003 |
Prepaid expenses and other current assets | -32,916 | 17,194 |
Other assets | -33,948 | -12,129 |
Accounts payable and accrued expenses | 275,922 | 81,058 |
Income taxes payable | 29,000 | |
Deferred revenue | 991,802 | -559,393 |
Net cash (used in) provided by operating activities | -29,514 | -2,307,576 |
Cash flows from investing activities: | ||
Cash paid for fixed assets | -36,540 | -18,217 |
Net cash used in investing activities | -36,540 | -18,217 |
Cash flows from financing activities: | ||
Proceeds from sale of preferred stock | 200,000 | 472,000 |
Proceeds from notes payable | 100,000 | 1,841,000 |
Cash acquired in recapitalization | 9,848 | |
Repayment of note | -75,000 | |
Repayment of loan | -12,748 | -15,263 |
Advances from related parties | 121,058 | 21,000 |
Repayments to related parties | -9,367 | -117,270 |
Net cash provided by financing activities | 408,791 | 2,126,467 |
Effect of exchange rate changes on cash | -9,305 | -5,740 |
Net (decrease) increase in cash | 333,432 | -205,066 |
Cash, beginning of period | 7,599 | 341,031 |
Cash, end of period | 341,031 | 135,965 |
Supplemental Schedule of Cash Flow Information: | ||
Cash paid for interest | 1,111 | 281,301 |
Non-cash investing and financing activities: | ||
Fair value of common stock issued upon conversion of notes | 2,500,892 | |
Note payable converted to common stock | 443,394 | |
Accrued interest converted to common stock | 38,708 | |
Derivative liability reclassified to equity upon conversion of debt | 2,437,999 | |
Derivative liability reclassified to equity upon expiration of warrants | 2,332,000 | |
Derivative liability of debt issued | 399,967 | 6,793,742 |
Derivative liability of conversion feature of preferred stock | 2,363,797 | |
Common stock issued as payment of prepaid consulting fees | 1,250,000 | |
Contribution of inventory | $97,038 |
Organization_and_Line_of_Busin
Organization and Line of Business | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Organization and Line of Business [Abstract] | |||||
ORGANIZATION AND LINE OF BUSINESS | NOTE 1 - ORGANIZATION AND LINE OF BUSINESS | ||||
COMPANY OVERVIEW | |||||
Nature of Operations | |||||
THINSPACE TECHNOLOGY, INC. (formerly Vanity Events Holding, Inc.) (the “Company”, “Thinspace” “we”, “us” or “our”), was organized as a Delaware corporation on August 25, 2004, and is a holding company. We are a cloud computing company that develops software productivity solutions that allow our customers secure access to centrally managed desktop or software applications and to work and collaborate from anywhere, accessing enterprise apps and data on any of the latest devices, as easily as they would in their own office- simply and securely. | |||||
The Company’s principal activity is the development and sale of network software. The company has a desktop virtualization solution suite, named skySpace, offering 5 key products: | |||||
• | skyDesk - a simple management software solution for Microsoft remote desktop users. | ||||
• | skyGate – software solution that allows secure remote access to applications and data from outside of the corporate network. | ||||
• | skyView – provides access to applications or Windows desktops from a browser on any device, including iPad, iPhone or Android tablet or Smartphone. | ||||
• | skyDirect – a virtual desktop infrastructure (VDI) software solution that allows secure fast access to hosted virtual desktops. | ||||
• | skyPoint – A branded hardware thin client endpoint aimed for the enterprise and corporate market. | ||||
We sell directly to independent software vendors and Application Service Providers (ASPs) and to end users through a chain of distributors and resellers. Our larger customers are predominantly large businesses based around the world, with a concentration in North America, the Far East and India. | |||||
Our operating subsidiaries are Thinspace Technology Ltd (“Thinspace UK”), organized and operating in the United Kingdom, and Thinspace Technology Ltd. (“Thinspace USA”), a Nevada corporation formed on August 24, 2010 and operating in the states of California, Colorado and Florida. | |||||
Pursuant to an Agreement of Merger and Reorganization dated December 31, 2013 between the Company, VAEV Merger Sub, Inc., and Thinspace UK, VAEV Merger Sub merged with Thinspace UK and all of the issued and outstanding shares of Thinspace UK were exchanged for 80,200,000 shares of common stock of the Company. The transaction has been accounted for as a reverse acquisition of Vanity by Thinspace UK but in substance as a capital transaction, rather than a business combination since Vanity had minimal operations and assets as of the closing of the transaction. The stockholders of Thinspace UK owned a majority of the Company’s voting power immediately following the transaction and Thinspace UK’s management assumed operational, management and governance control of the Company. The transaction is deemed as reverse recapitalization and the accounting is similar to that resulting from a reverse acquisition, except that no goodwill or other intangible assets should be recorded. Thinspace UK is treated as the surviving and continuing entity. The Company did not recognize goodwill or any intangible assets in connection with this transaction. Accordingly, the Company’s historical financial statements are those of Thinspace UK and its subsidiary, Thinspace USA. | |||||
Vanity assets and liabilities retained subsequent to the transaction are as follows: | |||||
Cash | $ | 9,848 | |||
Other assets | 1,349 | ||||
Accounts payable and accrued expenses | (1,032,603 | ) | |||
Notes payable | (922,019 | ) | |||
Derivative liabilities | (8,504,326 | ) | |||
Net liabilities retained | $ | (10,447,751 | ) | ||
We changed the fiscal year end of Thinspace UK and Thinspace USA to December 31 to match that of Vanity prior to the reverse acquisition. | |||||
References herein to “Vanity” refer to the Company prior to the reverse acquisition. | |||||
BASIS OF PRESENTATION AND GOING CONCERN | |||||
Basis of Presentation | |||||
We have incurred a net loss of $8,321,221 for the year ended December 31, 2014. As of December 31, 2014 we have negative working capital of $14,661,201 and a stockholders’ deficit of $15,448,622. As a result, there is substantial doubt about the Company’s ability to continue as a going concern at December 31, 2014. | |||||
Management has implemented its business plan to add new products, increase marketing activities and, as a result, increase revenue. Our ability to continue 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 will 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 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 | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
PRINCIPLES OF CONSOLIDATION | |||||||||||||||||
The consolidated financial statements include the accounts of Thinspace Technology, Inc. and its wholly-owned subsidiaries, Thinspace UK and Thinspace USA. All material inter-company accounts and transactions have been eliminated. | |||||||||||||||||
USE OF ESTIMATES | |||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||||||
For the purpose of the statements of cash flows, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. | |||||||||||||||||
ACCOUNTS RECEIVABLE | |||||||||||||||||
Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve. The accounts receivable balances of $158,329 and $291,728 as of December 31, 2014 and 2013, respectively, do not included an allowance for doubtful accounts as the Company anticipates payment on all accounts within the next fiscal year. The Company routinely evaluates accounts receivable for uncollectible amounts. | |||||||||||||||||
REVENUE RECOGNITION | |||||||||||||||||
Certain volume licensing arrangements include a perpetual license for current products combined with rights to receive unspecified future versions of software products, which the Company has determined are additional software products and are therefore accounted for as subscriptions, with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period. Arrangements that include term based licenses for current products with the right to use unspecified future versions of the software during the coverage period are also accounted for as subscriptions, with revenue recognized ratably over the coverage period. | |||||||||||||||||
Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service over a contractually determined period of time without taking possession of software are accounted for as subscriptions with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period beginning on the date the service is made available to customers. | |||||||||||||||||
Some volume licensing arrangements include time-based subscriptions for cloud-based services and software offerings that are accounted for as subscriptions. These arrangements are considered multiple element arrangements. However, because all elements are accounted for as subscriptions and have the same coverage period and delivery pattern, they have the same revenue recognition timing. | |||||||||||||||||
DEFERRED REVENUE | |||||||||||||||||
Deferred revenue related to support and maintenance is recorded in a manner consistent with the Company’s revenue recognition policy. The Company typically enters into one-year upgrade and maintenance contracts with its customers. The upgrade and maintenance contracts are generally paid in advance but can be billed monthly or quarterly. The Company defers such payment and recognizes revenue ratably over the contract period. | |||||||||||||||||
LONG-LIVED ASSETS | |||||||||||||||||
We assess the carrying value of long-lived assets in accordance with ASC 360, "Property, Plant and Equipment". We assess the impairment of identifiable intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that could trigger an impairment review include, but are not limited to, the following: a significant underperformance to expected historical or projected future operating results, a significant change in the manner of the use of the acquired asset or the strategy for the overall business, or a significant negative industry or economic trend. | |||||||||||||||||
PROPERTY AND EQUIPMENT | |||||||||||||||||
Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations. | |||||||||||||||||
The Company depreciates its property and equipment on a straight-line basis with estimated useful lives of three to four years. | |||||||||||||||||
INTANGIBLE ASSETS | |||||||||||||||||
The intangible assets of the Company are subject to amortization and are amortized using the straight-line method over their estimated period of benefit of 10 years. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. | |||||||||||||||||
INVENTORY | |||||||||||||||||
The Company values its inventory at the lower of cost (first-in, first-out) or market. The Company uses estimates and judgments regarding the valuation of inventory to properly value inventory. Inventory adjustments are made for the difference between the cost of the inventory and the estimated realizable value and charged to cost of goods sold in the period in which the facts that give rise to the adjustments become known. | |||||||||||||||||
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 terms. | |||||||||||||||||
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 Company's fair value hierarchy for its financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2014: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Liabilities | |||||||||||||||||
Conversion and warrant derivative liabilities | - | - | 12,173,986 | 12,173,986 | |||||||||||||
Total Liabilities | $ | - | $ | - | $ | 12,173,986 | $ | 12,173,986 | |||||||||
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (conversion and warrant derivative liabilities) for the year ended December 31, 2014. | |||||||||||||||||
2014 | |||||||||||||||||
Balance at beginning of year | $ | 11,268,087 | |||||||||||||||
Additions to derivative instruments | 8,760,013 | ||||||||||||||||
Change in fair value of derivative liabilities | (3,084,115 | ) | |||||||||||||||
Reclassification upon expiration of warrants | (2,332,000 | ) | |||||||||||||||
Reclassification upon conversion of debt | (2,437,999 | ) | |||||||||||||||
Balance at end of period | $ | 12,173,986 | |||||||||||||||
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. | |||||||||||||||||
CONCENTRATIONS OF CREDIT RISK | |||||||||||||||||
The Company performs ongoing credit evaluations of its customers. At December 31, 2014, two customers accounted for 36% or more of accounts receivable. At December 31, 2013, two customers accounted for 35% or more of accounts receivable. | |||||||||||||||||
The Company maintains cash and cash equivalents with major financial institutions. Cash held in US bank accounts is insured up to $250,000 at each institution. Cash held in UK bank accounts is insured up to £85,000 at December 31, 2014 (approximately $132,000 at December 31, 2014) at each institution for each entity. At times, cash balances may exceed the insured limits. The Company has not experienced any loss on these accounts. The balances are maintained in demand accounts to minimize risk. | |||||||||||||||||
RESEARCH AND DEVELOPMENT | |||||||||||||||||
Expenses related to present and future products are expensed as incurred. | |||||||||||||||||
FOREIGN CURRENCY TRANSLATION | |||||||||||||||||
The financial statements of the Company’s U.K. subsidiary, Thinspace UK, are measured using the British Pound as the functional currency. Assets, liabilities and equity accounts of the company are translated at exchange rates as of the balance sheet date or historical acquisition date, depending on the nature of the account. Revenues and expenses are translated at average rates of exchange in effect throughout the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders' equity. The financial statements are presented in United States of America dollars. | |||||||||||||||||
LOSS PER SHARE | |||||||||||||||||
We use ASC 260, “Earnings Per Share” for calculating the basic and diluted income (loss) per share. We compute basic income (loss) per share by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding. | |||||||||||||||||
Dilutive common stock equivalents consist of shares issuable upon conversion of debt and preferred stock and the exercise of our stock warrants. There were 220,479,871 common share equivalents at December 31, 2014 and 165,140,070 at December 31, 2013, 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 records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. | |||||||||||||||||
The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. | |||||||||||||||||
The Company has 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. | |||||||||||||||||
RECLASSIFICATIONS | |||||||||||||||||
Certain reclassifications have been made to the 2013 consolidated financial statements to conform to the current period presentation. | |||||||||||||||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||||||||||||||
Recent accounting pronouncements issued by the FASB 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. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Property and Equipment [Abstract] | ||||||||||||||||
PROPERTY AND EQUIPMENT | NOTE 3 – PROPERTY AND EQUIPMENT | |||||||||||||||
Property and equipment consists of the following at December 31, 2014 and 2013: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Office equipment and furniture | $ | 104,668 | $ | 91,637 | ||||||||||||
Accumulated depreciation | (73,396 | ) | (60,312 | ) | ||||||||||||
Carrying value | $ | 31,272 | $ | 31,325 | ||||||||||||
Depreciation expense for the year ended December 31, 2014 and the eleven months ended December 31, 2013 was $17,060 and $13,602, respectively. |
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Intangible Assets [Abstract] | |||||||||
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS | ||||||||
Intangible assets consisted of the following at December 31, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Developed technology | $ | 611,520 | $ | 649,159 | |||||
Domain name | 20,500 | - | |||||||
632,020 | 649,159 | ||||||||
Accumulated amortization | (489,221 | ) | (454,416 | ) | |||||
Carrying value | $ | 142,799 | $ | 194,743 | |||||
Technology-based intangible assets included software to be sold, leased, or otherwise marketed. | |||||||||
Amortization expense for the year ended December 31, 2014 and the eleven months ended December 31, 2013 was $64,869 and $61,464, respectively. The Company estimates that they have no significant residual value related to the intangible assets subject to amortization. No material impairments of intangible assets were identified during any of the periods presented. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2014 | |
Inventory [Abstract] | |
INVENTORY | NOTE 5 – INVENTORY |
Inventory at December 31, 2014 and 2013 consists of finish goods purchased hardware that is sold in connection with our software products. | |
During the eleven months ended December 31, 2013 we acquired inventory from a related party. We have valued this inventory at $97,038 and have recorded this amount as a contribution to capital. | |
Convertible_Notes_Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2014 | |
Convertible Notes Payable [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 6 – CONVERTIBLE NOTES PAYABLE |
2014 Transactions | |
IBC Funds February 21, 2014 Financing | |
On February 21, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds, LLC (“IBC Funds”) pursuant to which the Company sold to IBC Funds an 8% convertible debenture in the principal amount of $150,000. The debenture matures on the third anniversary of the date of issuance and bears interest at a rate of 8% per annum, payable semi-annually and on the maturity date. IBC Funds may convert, at any time, the outstanding principal and accrued interest on the debenture into shares of the Company’s common stock, at a conversion per share at 25% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days. | |
IBC Funds March 21, 2014 Financing | |
On March 21, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds pursuant to which the Company sold to IBC Funds an 8% convertible debenture in the principal amount of $50,000. The debenture matures on the third anniversary of the date of issuance and has terms substantially the same as the February 21, 2014 debenture. | |
Greystone March 21, 2014 Financing | |
On March 21, 2014, the Company entered into a Securities Purchase Agreement with Greystone Capital Partners, Inc. (“Greystone”) pursuant to which the Company sold to Greystone an 8% convertible debenture in the principal amount of $50,000.The debenture matures on the third anniversary of the date of issuance and has terms substantially the same as the February 21, 2014 debenture. | |
Greystone March 26, 2014 Financing | |
On March 26, 2014, the Company entered into a Securities Purchase Agreement with Greystone pursuant to which the Company sold to Greystone an 8% convertible debenture in the principal amount of $50,000. The debenture matures on the third anniversary of the date of issuance and has terms substantially the same as the February 21, 2014 note. | |
Greystone April 17, 2014 Financing | |
On April 17, 2014, the Company entered into a Securities Purchase Agreement with Greystone pursuant to which the Company sold to Greystone an 8% convertible debenture in the principal amount of $65,000. The debenture matures on the third anniversary of the date of issuance and bears interest a rate of 8% per annum, payable semi-annually and on the maturity date. Greystone may convert, at any time, the outstanding principal and accrued interest on the Debenture into shares of the Company’s common stock, at a conversion price per share at 40% of the lowest closing bid price for the Company’s common stock during the previous 20 trading days. The conversion price is subject to adjustment in the event of sales by the Company of common stock or securities convertible into common stock at a price per share lower than the then-effective conversion price, to such lower price, subject to certain exceptions. | |
IBC Funds April 17, 2014 Financing | |
On April 17, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds pursuant to which the Company sold to IBC Funds an 8% convertible debenture in the principal amount of $100,000. The debenture matures on the third anniversary of the date of issuance and has terms substantially the same as the Greystone April 17, 2014 note. | |
Greystone May 29, 2014 Financing | |
On May 29, 2014, the Company entered into a Securities Purchase Agreement with Greystone pursuant to which the Company sold to Greystone an 8% convertible debenture in the principal amount of up to $617,500. The debenture matures on the third anniversary of the date of issuance and has terms substantially the same as the Greystone April 17, 2014 note. We have received $56,000 pursuant to this debenture. | |
IBC Funds May 29, 2014 Financing | |
On May 29, 2014, the Company entered into a Securities Purchase Agreement with IBC Funds pursuant to which the Company sold to IBC Funds an 8% convertible debenture in the principal amount of up to $617,500. The debenture matures on the third anniversary of the date of issuance and has terms substantially the same as the Greystone April 17, 2014 note. We have received a total of $450,000 pursuant to this debenture. | |
CP US May 29, 2014 Financing | |
On May 29, 2014, the Company entered into a Securities Purchase Agreement with CP US Income Group LLC (“CP US”) pursuant to which the Company sold to CP US an 8% convertible debenture in the principal amount of $265,000. The debenture matures on the third anniversary of the date of issuance and has terms substantially the same as Greystone April 17, 2014 note. | |
IBC Funds August 29, 2014 Financing | |
On August 29, 2014, the Company sold to IBC Funds a 10% promissory note in the principal amount of $130,000. On September 30, 2014, the Company issued an 8% convertible debenture in exchange for the promissory note. The debenture matures on September 30, 2015 and has terms substantially the same as the Greystone April 17, 2014 note. | |
The conversion features of the debentures described above contain a variable conversion rate. As a result, we have classified the conversion features as derivative liabilities in the financial statements. Upon issuance, we have recorded conversion feature liabilities of $6,793,742. The value of the conversion feature liabilities was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rates of between 0.625 - 0.875%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of between 203% - 419%; and (4) expected lives of 1 - 3 years. The Company has allocated $1,366,000 to debt discount, to be amortized over the life of the debt, with the balance of $5,427,742 being charged to expense at issue. | |
During the year ended December 31, 2014, $443,394 of principal and $38,700 of accrued interest was converted into 12,934,779 shares of common stock. The Company has recorded income of $1,044,806 for the year ended December 31, 2014 related to the change in fair value of the conversion feature through the dates of conversion. | |
2013 Transactions | |
We were a party to a total of eighteen convertible notes aggregating an outstanding principal balance of $1,173,825 at December 31, 2013, with related accrued and unpaid interest of $209,972. Of these notes, sixteen notes, aggregating $1,073,825 of principal, are convertible at discounts to the market price of our common stock of 75% - 90%. Two notes, aggregating $100,000 principal balance, are convertible at a fixed conversion rate of $0.001 per share. The convertible notes, as amended, bear interest at a weighted average rate of 9% per year and mature in December of 2016. Debt discount of $311,806 will be amortized over the remaining lives of the related notes. | |
CP US Income Group LLC $100,000 Debenture | |
On December 31, 2013, the Company entered into a Securities Purchase Agreement with CP US Income Group, LLC (CP US), an accredited investor, providing for the sale by the Company to CP US of an 8% convertible debenture in the aggregate principal amount of $100,000 (such balance being included in the balance noted in the preceding paragraph). The CP US debenture matures on December 31, 2016 and bears interest a rate of 8% per annum, payable annually. The Investor may convert, at any time, the outstanding principal and accrued interest on the CP debenture into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price that is seventy five percent (75%) discount of the low closing bid price of the Common Stock during the twenty (20) trading days immediately preceding the conversion date. The Conversion Price may be adjusted pursuant to the other terms of this Debenture. | |
The conversion feature of the CP US 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 $399,964. 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 0.625%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 432%; and (4) an expected life of 3 years. The Company has allocated $100,000 to debt discount, to be amortized over the life of the debt, with the balance of $299,964 being charged to expense at issue. |
Derivative_Liabilities
Derivative Liabilities | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Derivative Liabilities [Abstract] | |||||||||||||||||||||||||||||
DERIVATIVE LIABILITIES | NOTE 7 –DERIVATIVE LIABILITIES | ||||||||||||||||||||||||||||
The Company has identified certain embedded derivatives related to its convertible debentures, convertible preferred stock, common stock purchase warrants and a debt purchase agreement. Since certain of the debentures, the preferred stock and the debt settlement agreement are convertible into a variable number of shares, the conversion features of those debentures are recorded as derivative liabilities. Since the warrants 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. | |||||||||||||||||||||||||||||
December 31, 2014: | |||||||||||||||||||||||||||||
Convertible Debentures and Debt Settlement Agreement | |||||||||||||||||||||||||||||
At December 31, 2014, we recalculated the fair value of the embedded conversion feature of our notes and debt settlement agreement subject to derivative accounting and have determined that their fair value at December 31, 2014 was $9,471,074. The value of the conversion liabilities was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.183% - 0.75%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of between 188% - 211% and (4) an expected life of 1 - 2.41 years. We recorded income of $2,492,643 during the year ended December 31, 2014 related to the change in fair value. | |||||||||||||||||||||||||||||
During the year ended December 31, 2014 we recorded additions to our derivative conversion liabilities related to the conversion feature attributable to interest accrued during the year. These additions aggregated $932,907 for the year ended December 31, 2014, which has been charged to interest expense. | |||||||||||||||||||||||||||||
Convertible Preferred Stock | |||||||||||||||||||||||||||||
The conversion feature of our Series B preferred stock has been adjusted due to the subsequent issuance of debt. As a result, the conversion price is now $0.05 per share or an aggregate of 1,500,000 shares of the Company’s common stock. The Company has recorded income of $98 for the year ended December 31, 2014, related to the change in fair value of the conversion feature of the preferred stock through the date of adjustment. The Company has also recorded an expense of $74,976 for the year ended December 31, 2014 due to the increase in the fair value of the conversion feature as a result of the modification. | |||||||||||||||||||||||||||||
At December 31, 2014, we recalculated the fair value of the embedded conversion feature of our Series B and Series C preferred stock subject to derivative accounting and have determined that the fair value at December 31, 2014 was $2,702,912. The value of the conversion liabilities was determined using the Black-Scholes method based on the following weighted average assumptions: (1) risk free interest rate of 0.273%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 203% and (4) an expected life of 1.05 years. We recorded income of $35,653 during the year ended December 31, 2014 related to the change in fair value. | |||||||||||||||||||||||||||||
Warrant Liabilities | |||||||||||||||||||||||||||||
The warrants with price reset features have been adjusted due to the subsequent issuance of convertible debt. As a result, those warrants totaled 8,700,000 with an exercise price of $0.05. The Company has recorded income of $21,915 for the year ended December 31, 2014 related to the change in fair value of the warrants through the date of adjustment. The Company has also recorded an expense of $958,388 for the year ended December 31, 2014 due to the increase in the fair value of the warrants as a result of the modifications. | |||||||||||||||||||||||||||||
During the year ended December 31, 2014 the 8,700,000 warrants expired. The Company has recorded expense of $511,000 for year ended December 31, 2014 related to the change in fair value of the warrants through the dates of expiration. At expiration the Company has reclassified an aggregate of $2,332,000 of derivative liability to equity. | |||||||||||||||||||||||||||||
Derivative liability activity for the year ended December 31, 2014 is summarized as follows: | |||||||||||||||||||||||||||||
Balance at December 31, 2013 | Additions | Modifications | Conversions | Reclassifications | Change in Value | Balance at December 31, 2014 | |||||||||||||||||||||||
Convertible notes, interest and debt settlement | $ | 7,719,873 | $ | 7,726,649 | $ | - | $ | (2,437,999 | ) | $ | - | $ | (3,537,449 | ) | $ | 9,471,074 | |||||||||||||
Convertible preferred stock | 2,663,687 | 74,976 | (35,751 | ) | 2,702,912 | ||||||||||||||||||||||||
Warrant liabilities | 884,527 | 958,388 | (2,332,000 | ) | 489,085 | - | |||||||||||||||||||||||
$ | 11,268,087 | $ | 7,726,649 | $ | 1,033,364 | $ | (2,437,999 | ) | $ | (2,332,000 | ) | $ | (3,084,115 | ) | $ | 12,173,986 | |||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||
Convertible Notes and Debt Settlement Agreement | |||||||||||||||||||||||||||||
At December 31, 2013, we recalculated the fair value of the embedded conversion feature of our notes and debt settlement agreement subject to derivative accounting and have determined that their fair value at December 31, 2013 was $7,719,873. The value of the conversion liabilities was determined using the Black-Scholes method based on the following assumptions: (1) risk free interest rate of 0.69%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 432% and (4) an expected life of 3 years. | |||||||||||||||||||||||||||||
Convertible Preferred Stock | |||||||||||||||||||||||||||||
At December 31, 2013, we recalculated the fair value of the embedded conversion feature of our preferred stock subject to derivative accounting and have determined that their fair value at December 31, 2013 was $2,663,687. The value of the conversion liabilities was determined using the Black-Scholes method based on the following weighted average assumptions: (1) risk free interest rate of 0.19%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 242% and (4) an expected life of 1.15 years. | |||||||||||||||||||||||||||||
Warrant Liabilities | |||||||||||||||||||||||||||||
At December 31, 2013, we recalculated the fair value of the warrants containing a price reset feature subject to derivative accounting and have determined that the fair value at December 31, 2013 was $884,527. The value of the warrant liabilities was determined using the Black-Scholes method based on the following weighted average assumptions: (1) risk free interest rate of 0.09%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 195% and (4) an expected life of 0.53 years. |
Loans_and_Notes_Payable
Loans and Notes Payable | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
LOANS AND NOTES PAYABLE | NOTE 8 – LOANS AND NOTES PAYABLE | ||||||||
Loan payable consisted of the following at December 31, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Bank loan payable | $ | 23,353 | $ | 40,066 | |||||
Demand loans payable | 60,000 | 60,000 | |||||||
Notes payable | 400,000 | - | |||||||
483,353 | 100,066 | ||||||||
Current portion | (469,400 | ) | (74,800 | ) | |||||
Long term portion | $ | 13,953 | $ | 25,266 | |||||
The Company is obligated under a bank loan bearing interest at a rate of 2.2% over the bank’s base rate, maturing in 2016. | |||||||||
The Company is obligated under a note payable in the amount of $10,000. The note bears interest at 10% per year and matured on December 31, 2013. This note remains outstanding at December 31, 2014. | |||||||||
The Company has received funds from an accredited investor, as a non-interest-bearing loan, without formal loan agreements and terms. The amounts received were $50,000, and were loaned as an accommodation to the Company. These advances remain outstanding at December 31, 2014. | |||||||||
IBC Holdings Secured Notes | |||||||||
On October 8, 2014, we entered into and closed a note purchase agreement (the “Firmware NPA”) with IBC Equity Holdings, Inc. (“IBC Holdings”), pursuant to which the Company sold to IBC Holdings a secured promissory note (the “Firmware Note”) in the principal amount of $300,000, for a purchase price of $300,000. IBC Holdings is an existing shareholder of and lender to the Company. The Firmware Note matures on October 8, 2015 and does not bear interest. | |||||||||
Pursuant to the Firmware NPA, the Company agreed to pay to IBC Holdings, commencing on October 8, 2014 and continuing in perpetuity thereafter, a variable per unit amount with respect to the sale of individual hardware devices (“Revenue Sharing Units”) containing our proprietary persistent memory, program code and resident data thereon which together provide the control program for the Company’s hardware devices (the “Firmware”). The Company also granted to IBC Holdings, for a period commencing October 8, 2014 until the Firmware Note is no longer outstanding, an option to purchase the Firmware for a purchase price of $1 (the “Firmware Purchase Option”). Any exercise by IBC Holdings of the Firmware Purchase Option will act as repayment of the Firmware Note. | |||||||||
Pursuant to a security agreement entered into between the Company and IBC Holdings (the “Firmware Security Agreement”), the Company’s obligations under the Firmware NPA and the Firmware Note are secured by a security interest in the Firmware. | |||||||||
On October 8, 2014, the Company entered into and closed an additional note purchase agreement (the “VAR NPA”) with IBC Holdings, pursuant to which the Company sold to IBC Holdings a secured promissory note (the “VAR Note”) in the principal amount of $100,000, for a purchase price of $100,000. The VAR Note matures on October 8, 2015 and does not bear interest. | |||||||||
Pursuant to the VAR NPA, the Company agreed to pay to IBC Holdings, commencing on October 8, 2014 and continuing in perpetuity thereafter, 20% of the gross margin proceeds of the sales of third party products (the “VAR Business”). The Company also granted to IBC Holdings, for a period commencing October 8, 2014 until the VAR Note is no longer outstanding, an option to purchase the assets used in the VAR Business for a purchase price of $1 (the “VAR Purchase Option”). Any exercise by IBC Holdings of the VAR Purchase Option will act as repayment of the VAR Note. | |||||||||
Pursuant to a security agreement entered into between the Company and IBC Holdings (the “VAR Security Agreement”), the Company’s obligations under the VAR NPA and the VAR Note are secured by a security interest in the Company’s assets used in the VAR Business. | |||||||||
Pursuant to a rider to the Firmware Security Agreement and the VAR Security Agreement (the “Security Agreement Rider”), any UCC-1 financing statements filed pursuant to the Firmware Security Agreement or VAR Security Agreement will be terminated at such time as the payments made to IBC pursuant to the above agreements aggregate $1,000,000. | |||||||||
Long_Term_Debt
Long Term Debt | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Debt Disclosure [Abstract] | |||||
LONG TERM DEBT | NOTE 9 – LONG TERM DEBT | ||||
Long term debt at December 31, 2014 matures as follows: | |||||
Year ending December 31, 2016 | $ | 730,431 | |||
Year ending December 31, 2017 | 1,366,000 | ||||
$ | 2,096,431 | ||||
Loans_Payable_Related_Party
Loans Payable - Related Party | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE - RELATED PARTY | NOTE 10 – LOANS PAYABLE – RELATED PARTY |
Entities controlled by certain shareholders have provided short term working capital loans to the Company aggregating approximately $21,000 during 2014 which were settled in May 2014. The Company repaid approximately $119,000 of loans during the year ended December 31, 2014. | |
During May 2014 the Company settled all related party and related accrued interest through a lump sum payment. The excess of the liabilities over the payment, totaling $17,391, has been credited to paid in capital. | |
Short term working capital loans to the Company aggregated approximately $121,000 during the eleven months ended December 31, 2013. The loans bear a weighted average effective interest rate of 13.5%. The Company repaid approximately $9,000 in 2013. | |
Interest expense related to these loans of $4,062 and $5,264 has been recorded for the year ended December 31, 2014 and the eleven months ended December 31, 2013, respectively. |
Deferred_Revenue
Deferred Revenue | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Revenue [Abstract] | |||||||||
DEFERRED REVENUE | NOTE 11 – DEFERRED REVENUE | ||||||||
Deferred revenue consists of funds received in advance of services being performed. At December 31, 2014 and 2013 the deferred revenue balance consisted of the following: | |||||||||
2014 | 2013 | ||||||||
Deferred revenue due within one year | $ | 773,163 | $ | 1,482,504 | |||||
Deferred revenue due after one year | 202,826 | 73,897 | |||||||
Carrying value | $ | 975,989 | $ | 1,556,401 | |||||
Unearned revenue comprises mainly unearned revenue from sales and licensing of software programs, and payments for products and services for which the Company has been paid in advance and we earn the revenue as we provide the service or software or otherwise meet the revenue recognition criteria. | |||||||||
Unearned revenue from sales and licensing of software programs represents customer billings for multi-year licensing arrangements paid either at inception of the agreement or annually at the beginning of each coverage period and accounted for as subscriptions with revenue recognized ratably over the coverage period. | |||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12– RELATED PARTY TRANSACTIONS |
An entity owned by certain of our shareholders provided management services to the Company. Fees incurred for the year ended December 31, 2014 and the eleven months ended December 31, 2013 were $0 and $277,940, respectively. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 13 – 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, and 672,000 shares have been designated as Series C Convertible preferred stock. There were 75,000 Series B shares and 672,000 Series C shares issued and outstanding as of December 31, 2013. | |
Each share of Series B Preferred Stock has a stated value equal to $1.00 per share and is initially convertible at any time into shares of the Company’s common stock at a conversion price equal to $0.60 per share or an aggregate of 125,000 shares of the Company’s common stock. The conversion price of the Series B Preferred Stock is subject to full ratchet and anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like. | |
Each holder of Series C Preferred Stock shall have the right to convert all (but not part) of such holder’s shares of Series C Convertible Preferred Stock such that each share of Series C Convertible Preferred Stock shall convert into that number of fully paid and non-assessable shares of Common Stock equal to the of the number of preferred shares divided by the lowest closing bid price during the twenty trading days prior to the notice of conversion multiplied by .25 (one-fourth). | |
We sold 672,000 shares of Series C Preferred Stock on December 31, 2013 and received proceeds of $672,000 (of which $200,000 was received on December 31, 2013 and $472,000 was received in January 2014). Because the shares are convertible at a discount to market value of our common shares, we have recorded a derivative liability for the conversion feature in the amount of $2,363,797. This amount is reflected as a deemed dividend to the preferred shareholders. | |
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 December 31, 2014 and 2013, there were 98,381,445 and 82,819,694 shares of common stock issued and outstanding, respectively, after giving effect to the recapitalization. | |
During January 2014 we issued 5,000,000 shares of common stock, valued at $1,250,000, pursuant to a consulting agreement with a one year term. We have expensed the value of the shares during 2014. During December the consultant voluntarily had the shares cancelled. | |
During January 2014 we cancelled 250,000 shares of common stock which had been issued in July of 2012 as payment for consulting services, pursuant to the request of the consultant. | |
During the year ended December 31, 2014, we issued 12,934,779 shares of common stock upon the conversion of $443,394 of note principal and $38,700 of accrued interest. | |
Effective April 15, 2014 and April 30, 2014 we issued an aggregate of 277,354 shares of common stock to our former President as payment of accrued salary in the amount of $30,000. Such shares were issued pursuant to terms contained in his employment agreement. The shares had a value of $76,891. | |
During the year ended December 31, 2014 we issued an aggregate of 2,374,618 shares of common stock, valued at $478,103, for services. | |
During the year ended December 31, 2014 we issued 25,000 shares of common stock, valued at $20,500, as payment for a domain name. | |
During May 2014 we issued a stock grant to an employee in the amount of 200,000 shares of common stock, valued at $34,000. The grant vests upon the two year anniversary, on May 29, 2016. The expense will be recorded over that two year period. We have recorded an expense of $9,917 for the year ended December 31, 2014. We have estimated that $17,000 will be recognized during 2015 and $7,083 during 2016. | |
Options Outstanding | |
During May 2014 we granted an aggregate of 5,000,000 common stock options to an employee. The options will vest ratably over three years commencing on the grant date and vesting on each one year anniversary, 1,000,000 on May 29, 2015 and 2,000,000 on May 29, 2016 and 2017. The options have an exercise price of $0.17 per share and a term of five years. These options have a weighted average grant date fair value of $0.15 per option, determined using the Black-Scholes method based on the following weighted average assumptions: (1) risk free interest rate of 0.52%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 293%; and (4) an expected life of the options of 2.2 years. We have recorded an expense for the employee options of $228,338 for the year ended December 31, 2014. | |
At December 31, 2014 employee options outstanding totaled 5,000,000 with an exercise price of $0.17. At December 31, 2014 these options had an intrinsic value of $0 and a remaining contractual term of 4.4 years. None are exercisable at December 31, 2014. Compensation cost related to the unvested employee options not yet recognized is $533,717 at December 31, 2014. We have estimated that $313,211 will be recognized during 2015, $173,306 during 2016 and $47,201 during 2017. | |
Warrants Outstanding | |
At December 31, 2013 we had an aggregate of 4,306,932 common stock purchase warrants outstanding and exercisable. The warrants expired on various dates between April 5, 2014 and November 10, 2014. The warrants contained a price reset feature and were accounted for as derivative liabilities. |
Provision_for_Income_Taxes
Provision for Income Taxes | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||
PROVISION FOR INCOME TAXES | NOTE 14 - PROVISION FOR INCOME TAXES | |||||||||||||
The Company utilizes ASC 740 “Income Taxes”, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. | ||||||||||||||
At December 31, 2014 and 2013, the Company had available for U.S federal income tax purposes net operating loss carryovers of approximately $1,945,000 and $529,000, respectively, which expire beginning in 2033. The net operating loss carryovers may be subject to limitations under Internal Revenue Code due to significant changes in the Company’s ownership. The Company has provided a full valuation allowance against the full amount of the net operating loss benefit, since, in the opinion of management, based upon the earnings history of the Company it is more likely than not that the benefits will not be realized. | ||||||||||||||
At December 31, 2014 and 2013, the Company had available for UK income tax purposes net operating loss carryovers of approximately $1,768,000 and $1,125,000, respectively, which can be carried forward indefinitely. The Company has provided a full valuation allowance against the amount of UK unused net operating loss benefit, since management believes that, based upon the earnings history of the Company, it is more likely than not that the benefits will not be realized. | ||||||||||||||
The income tax provision (benefit) consists of the following at December 31, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Federal: | ||||||||||||||
Current | $ | 25,000 | $ | - | ||||||||||
Deferred | (691,000 | ) | (368,000 | ) | ||||||||||
(666,000 | ) | (368,000 | ) | |||||||||||
State and local: | ||||||||||||||
Current | 4,000 | - | ||||||||||||
Deferred | (61,000 | ) | (21,000 | ) | ||||||||||
(57,000 | ) | (21,000 | ) | |||||||||||
Change in valuation allowance | 723,000 | 389,000 | ||||||||||||
Income tax provision (benefit) | $ | - | $ | - | ||||||||||
The provision for income taxes differ from the amount of income tax determined by applying the applicable U.S statutory rate to losses before income tax expense for the year ended December 31, 2014 and the eleven months ended December 31, 2013 as follows: | ||||||||||||||
2014 | 2013 | |||||||||||||
Statutory federal income tax rate | (34.0 | %) | (34.0 | %) | ||||||||||
Statutory state and local income tax rate (6%), net of federal benefit | (4.0 | %) | (4.0 | %) | ||||||||||
Foreign tax rate differentials | 0.8 | % | 4.5 | % | ||||||||||
Derivative liabilities adjustments | 19.7 | % | 7.6 | % | ||||||||||
Stock compensation adjustments | 9.2 | % | - | % | ||||||||||
Change in valuation allowance | 8.4 | % | 25.9 | % | ||||||||||
Effective tax rate | 0.01 | % | 0 | % | ||||||||||
Deferred income taxes result from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following at December 31, 2014 and 2013: | ||||||||||||||
2014 | 2013 | |||||||||||||
Deferred tax assets: | ||||||||||||||
Net operating loss carry forward | $ | 1,239,000 | $ | 516,000 | ||||||||||
Less: valuation allowance | (1,239,000 | ) | (516,000 | ) | ||||||||||
Net deferred tax asset | $ | - | $ | - | ||||||||||
The Company has filed its tax returns for periods through January 31, 2013. | ||||||||||||||
The provisions of ASC 740 require companies to recognize in their financial statements the impact of a tax position if that position is more likely than not to be sustained upon audit, based upon the technical merits of the position. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. | ||||||||||||||
Management does not believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC 740. Accordingly, the adoption of these provisions of ASC 740 did not have a material effect on the Company’s financial statements. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense. | ||||||||||||||
All tax years for the Company remain subject to future examinations by the applicable taxing authorities. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 - COMMITMENTS AND CONTINGENCIES |
LEASE | |
We currently occupy office space pursuant to various short term leases expiring in 2015. | |
Rent expense for the year ended December 31, 2014 and the eleven months ended December 31, 2013 was $98,843 and $153,507, respectively. | |
LITIGATION | |
From time to time, The Company and its subsidiaries may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company and its subsidiaries are currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 - SUBSEQUENT EVENTS |
LG CAPITAL $137.5K FINANCING | |
On March 20, 2015, The “Company entered into and closed a securities purchase agreement with LG Capital Funding, LLC (“LG Capital”), pursuant to which the Company issued and sold to LG Capital an 8% convertible redeemable note in the principal amount of $137,500 (the “LG Note”) for a purchase price of $131,250. The LG Note is convertible into the Company’s common stock at a conversion price equal to 70% of the average of the 5 lowest closing prices of the common stock for the twenty prior trading days including the day upon which a notice of conversion is received by the Company. Repayment of the LG Note is due one year from the date of issuance. | |
ICONIC HOLDINGS $50K FINANCING | |
On March 23, 2015, the Company entered into and closed a securities purchase agreement with Iconic Holdings, LLC (“Iconic”), pursuant to which the Company issued and sold to Iconic a 6% convertible debenture in the principal amount of $50,000 (the “Iconic Debenture”) for a purchase price of $50,000. The Iconic Debenture is convertible into the Company’s common stock at a conversion price equal to 70% of the average of the five lowest trading prices for the common stock during the twenty trading day period ending on the last complete trading day prior to the conversion date. Repayment of the Iconic Debenture is due one year from the date of issuance. | |
BLACK MOUNTAIN $105K FINANCING | |
On March 23, 2015, the Company entered into, and on March 25, 2015, the Company closed a securities purchase agreement with Black Mountain Equities, Inc. (“Black Mountain”), pursuant to which the Company sold to Black Mountain a 10% convertible note in the principal amount of $105,000 (the “Black Mountain Note”) for a purchase price of $100,000. The Black Mountain Note is convertible into the Company’s common stock at a conversion price equal to the lesser of (a) $0.17 or (b) 70% of the average of the three lowest closing bids occurring during the twenty consecutive trading days immediately preceding the applicable conversion date. Repayment of the Black Mountain Note is due two years from the date of issuance. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION | ||||||||||||||||
The consolidated financial statements include the accounts of Thinspace Technology, Inc. and its wholly-owned subsidiaries, Thinspace UK and Thinspace USA. All material inter-company accounts and transactions have been eliminated. | |||||||||||||||||
USE OF ESTIMATES | USE OF ESTIMATES | ||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS | ||||||||||||||||
For the purpose of the statements of cash flows, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. | |||||||||||||||||
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE | ||||||||||||||||
Accounts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve. The accounts receivable balances of $158,329 and $291,728 as of December 31, 2014 and 2013, respectively, do not included an allowance for doubtful accounts as the Company anticipates payment on all accounts within the next fiscal year. The Company routinely evaluates accounts receivable for uncollectible amounts. | |||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION | ||||||||||||||||
Certain volume licensing arrangements include a perpetual license for current products combined with rights to receive unspecified future versions of software products, which the Company has determined are additional software products and are therefore accounted for as subscriptions, with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period. Arrangements that include term based licenses for current products with the right to use unspecified future versions of the software during the coverage period are also accounted for as subscriptions, with revenue recognized ratably over the coverage period. | |||||||||||||||||
Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service over a contractually determined period of time without taking possession of software are accounted for as subscriptions with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period beginning on the date the service is made available to customers. | |||||||||||||||||
Some volume licensing arrangements include time-based subscriptions for cloud-based services and software offerings that are accounted for as subscriptions. These arrangements are considered multiple element arrangements. However, because all elements are accounted for as subscriptions and have the same coverage period and delivery pattern, they have the same revenue recognition timing. | |||||||||||||||||
DEFERRED REVENUE | DEFERRED REVENUE | ||||||||||||||||
Deferred revenue related to support and maintenance is recorded in a manner consistent with the Company’s revenue recognition policy. The Company typically enters into one-year upgrade and maintenance contracts with its customers. The upgrade and maintenance contracts are generally paid in advance but can be billed monthly or quarterly. The Company defers such payment and recognizes revenue ratably over the contract period. | |||||||||||||||||
LONG-LIVED ASSETS | LONG-LIVED ASSETS | ||||||||||||||||
We assess the carrying value of long-lived assets in accordance with ASC 360, "Property, Plant and Equipment". We assess the impairment of identifiable intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that could trigger an impairment review include, but are not limited to, the following: a significant underperformance to expected historical or projected future operating results, a significant change in the manner of the use of the acquired asset or the strategy for the overall business, or a significant negative industry or economic trend. | |||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT | ||||||||||||||||
Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations. | |||||||||||||||||
The Company depreciates its property and equipment on a straight-line basis with estimated useful lives of three to four years. | |||||||||||||||||
INTANGIBLE ASSETS | INTANGIBLE ASSETS | ||||||||||||||||
The intangible assets of the Company are subject to amortization and are amortized using the straight-line method over their estimated period of benefit of 10 years. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. | |||||||||||||||||
INVENTORY | INVENTORY | ||||||||||||||||
The Company values its inventory at the lower of cost (first-in, first-out) or market. The Company uses estimates and judgments regarding the valuation of inventory to properly value inventory. Inventory adjustments are made for the difference between the cost of the inventory and the estimated realizable value and charged to cost of goods sold in the period in which the facts that give rise to the adjustments become known. | |||||||||||||||||
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 terms. | |||||||||||||||||
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 Company's fair value hierarchy for its financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2014: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Liabilities | |||||||||||||||||
Conversion and warrant derivative liabilities | - | - | 12,173,986 | 12,173,986 | |||||||||||||
Total Liabilities | $ | - | $ | - | $ | 12,173,986 | $ | 12,173,986 | |||||||||
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities (conversion and warrant derivative liabilities) for the year ended December 31, 2014. | |||||||||||||||||
2014 | |||||||||||||||||
Balance at beginning of year | $ | 11,268,087 | |||||||||||||||
Additions to derivative instruments | 8,760,013 | ||||||||||||||||
Change in fair value of derivative liabilities | (3,084,115 | ) | |||||||||||||||
Reclassification upon expiration of warrants | (2,332,000 | ) | |||||||||||||||
Reclassification upon conversion of debt | (2,437,999 | ) | |||||||||||||||
Balance at end of period | $ | 12,173,986 | |||||||||||||||
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. | |||||||||||||||||
CONCENTRATIONS OF CREDIT RISK | CONCENTRATIONS OF CREDIT RISK | ||||||||||||||||
The Company performs ongoing credit evaluations of its customers. At December 31, 2014, two customers accounted for 36% or more of accounts receivable. At December 31, 2013, two customers accounted for 35% or more of accounts receivable. | |||||||||||||||||
The Company maintains cash and cash equivalents with major financial institutions. Cash held in US bank accounts is insured up to $250,000 at each institution. Cash held in UK bank accounts is insured up to £85,000 at December 31, 2014 (approximately $132,000 at December 31, 2014) at each institution for each entity. At times, cash balances may exceed the insured limits. The Company has not experienced any loss on these accounts. The balances are maintained in demand accounts to minimize risk. | |||||||||||||||||
RESEARCH AND DEVELOPMENT | RESEARCH AND DEVELOPMENT | ||||||||||||||||
Expenses related to present and future products are expensed as incurred. | |||||||||||||||||
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION | ||||||||||||||||
The financial statements of the Company’s U.K. subsidiary, Thinspace UK, are measured using the British Pound as the functional currency. Assets, liabilities and equity accounts of the company are translated at exchange rates as of the balance sheet date or historical acquisition date, depending on the nature of the account. Revenues and expenses are translated at average rates of exchange in effect throughout the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders' equity. The financial statements are presented in United States of America dollars. | |||||||||||||||||
LOSS PER SHARE | LOSS PER SHARE | ||||||||||||||||
We use ASC 260, “Earnings Per Share” for calculating the basic and diluted income (loss) per share. We compute basic income (loss) per share by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding. | |||||||||||||||||
Dilutive common stock equivalents consist of shares issuable upon conversion of debt and preferred stock and the exercise of our stock warrants. There were 220,479,871 common share equivalents at December 31, 2014 and 165,140,070 at December 31, 2013, 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 records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. | |||||||||||||||||
The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. | |||||||||||||||||
The Company has 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. | |||||||||||||||||
RECLASSIFICATIONS | RECLASSIFICATIONS | ||||||||||||||||
Certain reclassifications have been made to the 2013 consolidated financial statements to conform to the current period presentation. | |||||||||||||||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ||||||||||||||||
Recent accounting pronouncements issued by the FASB 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. |
Organization_and_Line_of_Busin1
Organization and Line of Business (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Organization and Line of Business [Abstract] | |||||
Schedule of assets and liabilities of retained subsequent | |||||
Cash | $ | 9,848 | |||
Other assets | 1,349 | ||||
Accounts payable and accrued expenses | (1,032,603 | ) | |||
Notes payable | (922,019 | ) | |||
Derivative liabilities | (8,504,326 | ) | |||
Net liabilities retained | $ | (10,447,751 | ) |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||
Schedule of financial assets and liabilities measured at fair value on recurring basis | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Liabilities | |||||||||||||||||
Conversion and warrant derivative liabilities | - | - | 12,173,986 | 12,173,986 | |||||||||||||
Total Liabilities | $ | - | $ | - | $ | 12,173,986 | $ | 12,173,986 | |||||||||
Schedule of changes in fair value of Company's Level 3 financial liabilities (conversion and warrant derivative liabilities) | 2014 | ||||||||||||||||
Balance at beginning of year | $ | 11,268,087 | |||||||||||||||
Additions to derivative instruments | 8,760,013 | ||||||||||||||||
Change in fair value of derivative liabilities | (3,084,115 | ) | |||||||||||||||
Reclassification upon expiration of warrants | (2,332,000 | ) | |||||||||||||||
Reclassification upon conversion of debt | (2,437,999 | ) | |||||||||||||||
Balance at end of period | $ | 12,173,986 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Property and Equipment [Abstract] | ||||||||||||||||
Summary of property and equipment | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Office equipment and furniture | $ | 104,668 | $ | 91,637 | ||||||||||||
Accumulated depreciation | (73,396 | ) | (60,312 | ) | ||||||||||||
Carrying value | $ | 31,272 | $ | 31,325 | ||||||||||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Intangible Assets [Abstract] | |||||||||
Summary of Intangible assets | |||||||||
2014 | 2013 | ||||||||
Developed technology | $ | 611,520 | $ | 649,159 | |||||
Domain name | 20,500 | - | |||||||
632,020 | 649,159 | ||||||||
Accumulated amortization | (489,221 | ) | (454,416 | ) | |||||
Carrying value | $ | 142,799 | $ | 194,743 | |||||
Derivative_Liabilities_Tables
Derivative Liabilities (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Derivative Liabilities [Abstract] | |||||||||||||||||||||||||||||
Schedule of Derivative liability activity | Balance at December 31, 2013 | Additions | Modifications | Conversions | Reclassifications | Change in Value | Balance at December 31, 2014 | ||||||||||||||||||||||
Convertible notes, interest and debt settlement | $ | 7,719,873 | $ | 7,726,649 | $ | - | $ | (2,437,999 | ) | $ | - | $ | (3,537,449 | ) | $ | 9,471,074 | |||||||||||||
Convertible preferred stock | 2,663,687 | 74,976 | (35,751 | ) | 2,702,912 | ||||||||||||||||||||||||
Warrant liabilities | 884,527 | 958,388 | (2,332,000 | ) | 489,085 | - | |||||||||||||||||||||||
$ | 11,268,087 | $ | 7,726,649 | $ | 1,033,364 | $ | (2,437,999 | ) | $ | (2,332,000 | ) | $ | (3,084,115 | ) | $ | 12,173,986 | |||||||||||||
Loans_and_Notes_Payable_Tables
Loans and Notes Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of loans and notes payable | |||||||||
2014 | 2013 | ||||||||
Bank loan payable | $ | 23,353 | $ | 40,066 | |||||
Demand loans payable | 60,000 | 60,000 | |||||||
Notes payable | 400,000 | - | |||||||
483,353 | 100,066 | ||||||||
Current portion | (469,400 | ) | (74,800 | ) | |||||
Long term portion | $ | 13,953 | $ | 25,266 | |||||
Long_Term_Debt_Tables
Long Term Debt (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Debt Disclosure [Abstract] | |||||
Schedule of long-term debt | |||||
Year ending December 31, 2016 | $ | 730,431 | |||
Year ending December 31, 2017 | 1,366,000 | ||||
$ | 2,096,431 | ||||
Deferred_Revenue_Tables
Deferred Revenue (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Revenue [Abstract] | |||||||||
Summary of deferred revenue balance | |||||||||
2014 | 2013 | ||||||||
Deferred revenue due within one year | $ | 773,163 | $ | 1,482,504 | |||||
Deferred revenue due after one year | 202,826 | 73,897 | |||||||
Carrying value | $ | 975,989 | $ | 1,556,401 | |||||
Provision_for_Income_Taxes_Tab
Provision for Income Taxes (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||
Summary of income tax provision (benefit) | ||||||||||||||
2014 | 2013 | |||||||||||||
Federal: | ||||||||||||||
Current | $ | 25,000 | $ | - | ||||||||||
Deferred | (691,000 | ) | (368,000 | ) | ||||||||||
(666,000 | ) | (368,000 | ) | |||||||||||
State and local: | ||||||||||||||
Current | 4,000 | - | ||||||||||||
Deferred | (61,000 | ) | (21,000 | ) | ||||||||||
(57,000 | ) | (21,000 | ) | |||||||||||
Change in valuation allowance | 723,000 | 389,000 | ||||||||||||
Income tax provision (benefit) | $ | - | $ | - | ||||||||||
Summary of provision for income taxes differ from amount of income tax determined | ||||||||||||||
2014 | 2013 | |||||||||||||
Statutory federal income tax rate | (34.0 | %) | (34.0 | %) | ||||||||||
Statutory state and local income tax rate (6%), net of federal benefit | (4.0 | %) | (4.0 | %) | ||||||||||
Foreign tax rate differentials | 0.8 | % | 4.5 | % | ||||||||||
Derivative liabilities adjustments | 19.7 | % | 7.6 | % | ||||||||||
Stock compensation adjustments | 9.2 | % | - | % | ||||||||||
Change in valuation allowance | 8.4 | % | 25.9 | % | ||||||||||
Effective tax rate | 0.01 | % | 0 | % | ||||||||||
Summary of deferred tax asset and liabilities | ||||||||||||||
2014 | 2013 | |||||||||||||
Deferred tax assets: | ||||||||||||||
Net operating loss carry forward | $ | 1,239,000 | $ | 516,000 | ||||||||||
Less: valuation allowance | (1,239,000 | ) | (516,000 | ) | ||||||||||
Net deferred tax asset | $ | - | $ | - | ||||||||||
Organization_and_Line_of_Busin2
Organization and Line of Business (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Notes payable | $400,000 | |
Retained subsequent [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Cash | 9,848 | |
Other assets | 1,349 | |
Accounts payable and accrued expenses | -1,032,603 | |
Notes payable | -922,019 | |
Derivative liabilities | -8,504,326 | |
Net liabilities retained | ($10,447,751) |
Organization_and_Line_of_Busin3
Organization and Line of Business (Detail Textuals) | 1 Months Ended |
Dec. 31, 2013 | |
Organization and Line of Business (Textual) | |
Common stock shares exchanged | 80,200,000 |
Organization_and_Line_of_Busin4
Organization and Line of Business (Detail Textuals 1) (USD $) | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Organization and Line of Business (Textual) | ||||
Net Income (Loss) Attributable to Parent | ($1,499,098) | ($8,321,221) | ($1,532,321) | |
Negative working capital | 14,661,201 | |||
Stockholders' deficit | ($14,044,350) | ($15,448,622) | ($14,044,350) | ($455,376) |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Liabilities | ||
Conversion and warrant derivative liabilities | $12,173,986 | $11,268,087 |
Fair Value, Measurements, Recurring | Level 1 | ||
Liabilities | ||
Conversion and warrant derivative liabilities | ||
Total Liabilities | ||
Fair Value, Measurements, Recurring | Level 2 | ||
Liabilities | ||
Conversion and warrant derivative liabilities | ||
Total Liabilities | ||
Fair Value, Measurements, Recurring | Level 3 | ||
Liabilities | ||
Conversion and warrant derivative liabilities | 12,173,986 | |
Total Liabilities | 12,173,986 | |
Fair Value, Measurements, Recurring | Total | ||
Liabilities | ||
Conversion and warrant derivative liabilities | 12,173,986 | |
Total Liabilities | $12,173,986 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of year | $11,268,087 |
Additions to derivative instruments | 8,760,013 |
Change in fair value of derivative liabilities | 3,084,115 |
Reclassification upon expiration of warrants | -2,332,000 |
Reclassification upon conversion of debt | -2,437,999 |
Balance at end of period | $12,173,986 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Detail Textual) | 12 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | Two Customer [Member] | Two Customer [Member] | US Bank [Member] | UK Bank [Member] | UK Bank [Member] | |
Accounts Receivable [Member] | Accounts Receivable [Member] | USD ($) | USD ($) | GBP (£) | |||
Summary of Significant Accounting Policies (Textual) | |||||||
Accounts receivable | $158,329 | $291,728 | |||||
Concentration risk, percentage | 36.00% | 35.00% | |||||
Cash | $250,000 | $132,000 | £ 85,000 | ||||
Common share equivalents excluded from the computation of the weighted average diluted shares | 220,479,871 | 165,140,070 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of property and equipment | ||
Office equipment and furniture | $104,668 | $91,637 |
Accumulated depreciation | -73,396 | -60,312 |
Carrying value | $31,272 | $31,325 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Property and Equipment (Textual) | ||
Depreciation | $13,602 | $17,060 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $632,020 | $649,159 |
Accumulated amortization | -489,221 | -454,416 |
Carrying value | 142,799 | 194,743 |
Developed technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | 611,520 | 649,159 |
Domain name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $20,500 |
Intangible_Assets_Details_Text
Intangible Assets (Details Textual) (USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Intangible Assets (Textual ) | ||
Amortization expense | $61,464 | $64,869 |
Inventory_Details
Inventory (Details) (USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2013 | |
Inventory (Textual) | ||
Contribution of inventory by related party | $97,038 | $97,038 |
Convertible_Notes_Payable_Deta
Convertible Notes Payable (Details) (USD $) | 0 Months Ended | 11 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||||
Oct. 08, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 29, 2014 | 29-May-14 | Feb. 21, 2014 | Apr. 17, 2014 | Mar. 21, 2014 | Sep. 30, 2013 | Mar. 26, 2014 | |
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Principal amount | $100,000 | $100,000 | |||||||||
Debt discount | 311,806 | 1,195,341 | 311,806 | ||||||||
Maturity date | 8-Oct-15 | 31-Dec-16 | |||||||||
Income related to change in fair value of debt converted | 1,044,806 | ||||||||||
Debt conversion original number of shares issued in conversion | 12,934,779 | ||||||||||
Note payable converted to common stock | 443,394 | ||||||||||
Accrued interest converted to common stock | 38,700 | ||||||||||
Income / expense related to change in fair value | 958,388 | ||||||||||
Conversion price per share | $0.00 | $0.00 | |||||||||
Weighted average rate | 9.00% | 9.00% | |||||||||
Amortization of debt discount | 299,964 | 7,733,769 | |||||||||
IBC Funds, LLC (IBC) [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maturity date | 8-Oct-15 | ||||||||||
Convertible debentures | IBC Funds, LLC (IBC) [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Principal amount | 130,000 | 617,500 | 150,000 | 100,000 | 50,000 | ||||||
Percentage of discounts to market price of common stock | 25.00% | ||||||||||
Debt discount | 1,366,000 | ||||||||||
Interest rate | 10.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |||||
Maturity date | 30-Sep-15 | ||||||||||
Number of trading days of conversion | 20 days | ||||||||||
Conversion feature liability | 6,793,742 | ||||||||||
Fair value assumptions, dividend yield | 0.00% | ||||||||||
Expense related to debt issuance | 5,427,742 | ||||||||||
Proceeds from convertible debt | 100,000 | 450,000 | |||||||||
Convertible debentures | Greystone Capital Partners Inc [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Principal amount | 617,500 | 65,000 | 50,000 | 50,000 | |||||||
Percentage of discounts to market price of common stock | 40.00% | ||||||||||
Interest rate | 8.00% | 8.00% | 8.00% | 8.00% | |||||||
Number of trading days of conversion | 20 days | ||||||||||
Proceeds from convertible debt | 56,000 | ||||||||||
Convertible debentures | Cp Us Income Group Llc [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Principal amount | 100,000 | 100,000 | 265,000 | ||||||||
Percentage of discounts to market price of common stock | 75.00% | ||||||||||
Debt discount | 100,000 | 100,000 | |||||||||
Interest rate | 8.00% | 8.00% | 8.00% | ||||||||
Maturity date | 31-Dec-16 | ||||||||||
Number of trading days of conversion | 20 days | ||||||||||
Conversion feature liability | 399,964 | 399,964 | |||||||||
Fair value assumptions, risk free interest rate | 0.63% | ||||||||||
Fair value assumptions, dividend yield | 0.00% | ||||||||||
Fair value assumptions, expected volatility rate | 432.00% | ||||||||||
Fair value assumptions, expected life (in years) | 3 years | ||||||||||
Amortization of debt discount | 299,964 | ||||||||||
Convertible debentures | Minimum [Member] | IBC Funds, LLC (IBC) [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fair value assumptions, risk free interest rate | 0.63% | ||||||||||
Fair value assumptions, expected volatility rate | 203.00% | ||||||||||
Fair value assumptions, expected life (in years) | 1 year | ||||||||||
Convertible debentures | Maximum [Member] | IBC Funds, LLC (IBC) [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fair value assumptions, risk free interest rate | 0.88% | ||||||||||
Fair value assumptions, expected volatility rate | 419.00% | ||||||||||
Fair value assumptions, expected life (in years) | 3 years | ||||||||||
Convertible debentures | Sixteen convertible notes [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Principal amount | 1,073,825 | 1,073,825 | |||||||||
Convertible debentures | Sixteen convertible notes [Member] | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of discounts to market price of common stock | 75.00% | ||||||||||
Convertible debentures | Sixteen convertible notes [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of discounts to market price of common stock | 90.00% | ||||||||||
Convertible debentures | Eighteen convertible notes [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Principal amount | 1,173,825 | 1,173,825 | |||||||||
Unpaid interest | $209,972 |
Derivative_Liabilities_Details
Derivative Liabilities (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Begining Balance | $11,268,087 |
Additions | 7,726,649 |
Modifications | 1,033,364 |
Conversions | -2,437,999 |
Reclassifications | -2,332,000 |
Change in fair value of derivative liability | -3,084,115 |
Ending Balance | 12,173,986 |
Convertible Preferred Stock [Member] | |
Begining Balance | 2,663,687 |
Modifications | 74,976 |
Change in fair value of derivative liability | -35,751 |
Ending Balance | 2,702,912 |
Convertible notes, interest and debt settlement [Member] | |
Begining Balance | 7,719,873 |
Additions | 7,726,649 |
Modifications | |
Conversions | -2,437,999 |
Reclassifications | |
Change in fair value of derivative liability | -3,537,449 |
Ending Balance | 9,471,074 |
Warrant Liabilities [Member] | |
Begining Balance | 884,527 |
Modifications | 958,388 |
Reclassifications | -2,332,000 |
Change in fair value of derivative liability | 489,085 |
Ending Balance |
Derivative_Liabilities_Detail_
Derivative Liabilities (Detail Textual) (USD $) | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative Liabilities (Textual) | |||
Debt conversion original number of shares issued in conversion | 12,934,779 | ||
Conversion price per share | $0.00 | $0.00 | |
Income related to change in fair value of debt converted | $1,044,806 | ||
Income / expense related to change in fair value | 958,388 | ||
Derivative liability reclassified to equity upon expiration of warrants | 2,332,000 | ||
Convertible Notes and Debt Settlement Agreement [Member] | |||
Derivative Liabilities (Textual) | |||
Conversion feature liability | 7,719,873 | 9,471,074 | 7,719,873 |
Fair value assumptions, risk free interest rate | 0.69% | ||
Fair value assumptions, dividend yield | 0.00% | 0.00% | |
Fair value assumptions, expected volatility rate | 432.00% | ||
Fair value assumptions, expected life (in years) | 3 years | ||
Additions to interest expense | 932,907 | ||
Income / expense related to change in fair value | 2,492,643 | ||
Warrant Liabilities [Member] | |||
Derivative Liabilities (Textual) | |||
Conversion feature liability | 884,527 | 884,527 | |
Fair value assumptions, risk free interest rate | 0.09% | ||
Fair value assumptions, dividend yield | 0.00% | ||
Fair value assumptions, expected volatility rate | 195.00% | ||
Fair value assumptions, expected life (in years) | 6 months 11 days | ||
Income related to change in fair value of debt converted | 21,915 | ||
Number of common stock purchase warrants outstanding | 8,700,000 | ||
Warrants exercise price | $0.05 | ||
Income / expense related to change in fair value | 511,000 | ||
Derivative liability reclassified to equity upon expiration of warrants | 2,332,000 | ||
Number of warrants expired | 8,700,000 | ||
Minimum [Member] | Convertible Notes and Debt Settlement Agreement [Member] | |||
Derivative Liabilities (Textual) | |||
Fair value assumptions, risk free interest rate | 0.18% | ||
Fair value assumptions, expected volatility rate | 188.00% | ||
Fair value assumptions, expected life (in years) | 1 year | ||
Maximum [Member] | Convertible Notes and Debt Settlement Agreement [Member] | |||
Derivative Liabilities (Textual) | |||
Fair value assumptions, risk free interest rate | 0.75% | ||
Fair value assumptions, expected volatility rate | 211.00% | ||
Fair value assumptions, expected life (in years) | 2 years 4 months 28 days | ||
Convertible Preferred Stock [Member] | |||
Derivative Liabilities (Textual) | |||
Conversion feature liability | 2,663,687 | 2,663,687 | |
Fair value assumptions, risk free interest rate | 0.19% | ||
Fair value assumptions, dividend yield | 0.00% | ||
Fair value assumptions, expected volatility rate | 242.00% | ||
Fair value assumptions, expected life (in years) | 1 year 1 month 24 days | ||
Income related to change in fair value of debt converted | 98 | ||
Income / expense related to change in fair value | 74,976 | ||
Series B Preferred Stock [Member] | |||
Derivative Liabilities (Textual) | |||
Debt conversion original number of shares issued in conversion | 1,500,000 | ||
Conversion price per share | $0.05 | ||
Series B And Series C Preferred Stock [Member] | |||
Derivative Liabilities (Textual) | |||
Conversion feature liability | 2,702,912 | ||
Fair value assumptions, risk free interest rate | 0.27% | ||
Fair value assumptions, dividend yield | 0.00% | ||
Fair value assumptions, expected volatility rate | 203.00% | ||
Fair value assumptions, expected life (in years) | 1 year 18 days | ||
Income / expense related to change in fair value | $35,653 |
Loans_and_Notes_Payable_Detail
Loans and Notes Payable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ||
Bank loan payable | $23,353 | $40,066 |
Demand loans payable | 60,000 | 60,000 |
Notes payable | 400,000 | |
Loans payable | 483,353 | 100,066 |
Current portion | -469,400 | -74,800 |
Long term portion | $13,953 | $25,266 |
Loans_and_Notes_Payable_Detail1
Loans and Notes Payable (Details Textual) (USD $) | 0 Months Ended | 12 Months Ended | |
Oct. 08, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Loans and Notes Payable (Textual) | |||
Notes payable | 400,000 | ||
Maturity date | 31-Dec-16 | ||
Loans payable | 100,066 | 483,353 | |
Secured promissory note | 100,000 | ||
Maturity date | 8-Oct-15 | 31-Dec-16 | |
Aggregate payments related to agreement terminated | 1,000,000 | ||
Firmware NPA [Member] | |||
Loans and Notes Payable (Textual) | |||
Secured promissory note | 300,000 | ||
Purchase price | 300,000 | ||
Maturity date | 8-Oct-15 | ||
Option to purchase the assets | 1 | ||
VAR Security Agreement [Member] | |||
Loans and Notes Payable (Textual) | |||
Secured promissory note | 100,000 | ||
Purchase price | 100,000 | ||
Maturity date | 8-Oct-15 | ||
Option to purchase the assets | 1 | ||
Percentage of gross margin proceeds of the sales of third party products | 20.00% | ||
Loans payable [Member] | |||
Loans and Notes Payable (Textual) | |||
Interest rates on loans | 2.20% | ||
Maturity date | 31-Dec-16 | ||
Notes Payable [Member] | |||
Loans and Notes Payable (Textual) | |||
Interest rates on loans | 10.00% | ||
Notes payable | 10,000 | ||
Maturity date | 31-Dec-13 | ||
Non Interest Bearing Loans [Member] | |||
Loans and Notes Payable (Textual) | |||
Loans payable | 50,000 |
Long_Term_Debt_Details
Long Term Debt (Details) (USD $) | Dec. 31, 2014 |
Debt Disclosure [Abstract] | |
Year ending December 31, 2016 | $730,431 |
Year ending December 31, 2017 | 1,366,000 |
Total | $2,096,431 |
Loans_Payable_Related_Party_De
Loans Payable - Related Party (Details) (USD $) | 11 Months Ended | 12 Months Ended | 1 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | 31-May-14 | |
Loans Payable Related Party (Textual) | |||
Short term working capital loans | $121,000 | ||
Repayment of loan | 9,000 | ||
Weighted average effective interest rate | 13.50% | ||
Interest expense related to loans | 5,264 | 4,062 | |
Shareholders [Member] | |||
Loans Payable Related Party (Textual) | |||
Short term working capital loans | 21,000 | ||
Repayment of loan | 119,000 | ||
Amount credited to paid in capital | $17,391 |
Deferred_Revenue_Details
Deferred Revenue (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of deferred revenue balance | ||
Deferred revenue due within one year | $773,163 | $1,482,504 |
Deferred revenue due after one year | 202,826 | 73,897 |
Carrying value | $975,989 | $1,556,401 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Related Party Transactions (Textual) | ||
Fees incurred from related party transaction | $277,940 | $0 |
Stockholders_Equity_Detail_Tex
Stockholders' Equity (Detail Textual) (USD $) | 12 Months Ended | 1 Months Ended | 11 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | Jan. 30, 2014 | Dec. 31, 2013 | |
Stockholders' Equity (Textual) | ||||
Preferred stock, shares authorized | 50,000,000 | |||
Preferred stock, par value (in dollars per share) | $0.00 | |||
Derivative liability of conversion feature of preferred stock | ($2,363,797) | |||
Series B convertible preferred stock | ||||
Stockholders' Equity (Textual) | ||||
Preferred stock, shares authorized | 75,000 | 75,000 | 75,000 | |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 | $0.00 | |
Percentage of convertible preferred stock | 10.00% | |||
Preferred stock, shares issued | 75,000 | 75,000 | 75,000 | |
Preferred stock, shares outstanding | 75,000 | 75,000 | 75,000 | |
Conversion price | $0.60 | |||
Common stock issued upon conversion of convertible preferred stock | 125,000 | |||
Series C convertible preferred stock | ||||
Stockholders' Equity (Textual) | ||||
Preferred stock, shares authorized | 672,000 | 672,000 | 672,000 | |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 | $0.00 | |
Preferred stock, shares issued | 672,000 | 672,000 | 672,000 | |
Preferred stock, shares outstanding | 672,000 | 672,000 | 672,000 | |
Convertible preferred stock, Description | Each holder of Series C Preferred Stock shall have the right to convert all (but not part) of such holder's shares of Series C Convertible Preferred Stock such that each share of Series C Convertible Preferred Stock shall convert into that number of fully paid and non-assessable shares of Common Stock equal to the of the number of preferred shares divided by the lowest closing bid price during the twenty trading days prior to the notice of conversion multiplied by .25 (one-fourth). | |||
Number of shares sold | 672,000 | |||
Proceeds received from sale of stock | 472,000 | 200,000 | ||
Derivative liability of conversion feature of preferred stock | $2,363,797 |
Stockholders_Equity_Detail_Tex1
Stockholders' Equity (Detail Textual 1) (USD $) | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2014 | Apr. 30, 2014 | Jan. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stockholders' Equity (Textual) | |||||
Common stock, par value | $0.00 | $0.00 | |||
Common stock, shares issued | 98,381,445 | 82,819,694 | |||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |||
Common stock, shares outstanding | 98,381,445 | 82,819,694 | |||
Shares issued pursuant to consulting agreement | 14,594 | 277,354 | 5,000,000 | ||
Shares issued pursuant to consulting agreement, value | $2,189 | $76,891 | $1,250,000 | $1,728,102 | |
Common stock cancelled which was issued for consulting services as compensation | 250,000 | ||||
Debt conversion original number of shares issued in conversion | 12,934,779 | ||||
Note payable converted to common stock | 443,394 | ||||
Accrued interest converted to common stock | 38,700 | ||||
Shares issued as payment for a domain name | 25,000 | ||||
Shares issued as payment for a domain name, Value | 20,500 | ||||
Stock issued for services | 2,374,618 | ||||
Stock issued for services, value | 478,103 | ||||
President [Member] | |||||
Stockholders' Equity (Textual) | |||||
Shares issued pursuant to consulting agreement | 277,354 | ||||
Shares issued pursuant to consulting agreement, value | 76,891 | ||||
Accrued Salaries | $30,000 |
Stockholders_Equity_Detail_Tex2
Stockholders' Equity (Detail Textual 2) (USD $) | 11 Months Ended | 12 Months Ended | 1 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | 31-May-14 | |
Stockholders' Equity (Textual) | |||
Stock granted to an employee, Value | $774,287 | ||
Stock options vesting description | We have estimated that $313,211 will be recognized during 2015, $173,306 during 2016 and $47,201 during 2017. | ||
Compensation expense | 9,917 | ||
Employee Stock Option [Member] | |||
Stockholders' Equity (Textual) | |||
Stock granted to an employee | 200,000 | ||
Stock granted to an employee, Value | 34,000 | ||
Vesting period | 2 years | ||
Stock options vesting description | We have estimated that $17,000 will be recognized during 2015 and $7,083 during 2016. | The options will vest ratably over three years commencing on the grant date and vesting on each one year anniversary, 1,000,000 on May 29, 2015 and 2,000,000 on May 29, 2016 and 2017. | |
Compensation expense | 228,338 | ||
Fair value assumptions, expected volatility rate | 293.00% | ||
Fair value assumptions, expected life (in years) | 2 years 2 months 12 days | ||
Fair value assumptions, risk free interest rate | 0.52% | ||
Fair value assumptions, dividend yield | 0.00% | ||
Stock options granted during period | 5,000,000 | 5,000,000 | |
Stock option granted during period, grant date fair value per option | $0.15 | ||
Stock option granted during period, exercise price | $0.17 | $0.17 | |
Aggregate intrinsic value | 0 | ||
Stock option granted during period, Contractual term | 4 years 4 months 24 days | ||
Unrecognized compensation cost related to nonvested share-based compensation arrangements | $533,717 |
Stockholders_Equity_Detail_Tex3
Stockholders' Equity (Detail Textual 3) | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity (Textual) | |
Number of common stock purchase warrants exercisable | 4,306,932 |
Warrant expiration | The warrants expired on various dates between April 5, 2014 and November 10, 2014. |
Provision_for_Income_Taxes_Det
Provision for Income Taxes (Details) (USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Federal: | ||
Current | $25,000 | |
Deferred | -368,000 | -691,000 |
Federal, total | -368,000 | -666,000 |
State and local: | ||
Current | 4,000 | |
Deferred | -21,000 | -61,000 |
State and local, total | -21,000 | -57,000 |
Change in valuation allowance | 389,000 | 723,000 |
Income tax provision (benefit) | $29,000 |
Provision_for_Income_Taxes_Det1
Provision for Income Taxes (Details 1) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Summary of provision for income taxes differs from amount of income tax determined | ||
Statutory federal income tax rate | -34.00% | -34.00% |
Statutory state and local income tax rate (6%), net of federal benefit | -4.00% | -4.00% |
Foreign tax rate differentials | 4.50% | 0.80% |
Derivative liabilities adjustments | 7.60% | 19.70% |
Stock compensation adjustments | 9.20% | |
Change in valuation allowance | 25.90% | 8.40% |
Effective tax rate | 0.00% | 0.01% |
Provision_for_Income_Taxes_Det2
Provision for Income Taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Net operating loss carry forward | $1,239,000 | $516,000 |
Less: valuation allowance | 1,239,000 | 516,000 |
Net deferred tax asset |
Provision_for_Income_Taxes_Det3
Provision for Income Taxes (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||
Net federal benefit percent | 6.00% | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $1,945,000 | $529,000 |
Operating loss carryforwards, expiration date | 31-Dec-33 | |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $1,768,000 | $1,125,000 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2013 | Dec. 31, 2014 | |
Commitments and Contingencies [Abstract] | ||
Short term lease on office space, expiration date | 31-Dec-15 | |
Rent expense | $153,507 | $98,843 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 0 Months Ended | ||
Mar. 20, 2015 | Mar. 23, 2015 | Dec. 31, 2013 | |
Subsequent Event [Line Items] | |||
Debt Instrument, Principal amount | $100,000 | ||
Subsequent Event [Member] | LG CAPITAL $137.5K FINANCING [Member] | |||
Subsequent Event [Line Items] | |||
Annual interest rate on convertible debentures | 8.00% | ||
Debt Instrument, Principal amount | 137,500 | ||
Purchase price of convertible note | 131,250 | ||
Description of Convertible note | The LG Note is convertible into the Company's common stock at a conversion price equal to 70% of the average of the 5 lowest closing prices of the common stock for the twenty prior trading days including the day upon which a notice of conversion is received by the Company. Repayment of the LG Note is due one year from the date of issuance. | ||
Number of trading days of conversion | 20 days | ||
Subsequent Event [Member] | ICONIC HOLDINGS $50K FINANCING [Member] | |||
Subsequent Event [Line Items] | |||
Annual interest rate on convertible debentures | 6.00% | ||
Debt Instrument, Principal amount | 50,000 | ||
Purchase price of convertible note | 50,000 | ||
Description of Convertible note | The Iconic Debenture is convertible into the Company's common stock at a conversion price equal to 70% of the average of the five lowest trading prices for the common stock during the twenty trading day period ending on the last complete trading day prior to the conversion date. Repayment of the Iconic Debenture is due one year from the date of issuance. | ||
Number of trading days of conversion | 20 days | ||
Subsequent Event [Member] | BLACK MOUNTAIN $105K FINANCING [Member] | |||
Subsequent Event [Line Items] | |||
Annual interest rate on convertible debentures | 10.00% | ||
Debt Instrument, Principal amount | 105,000 | ||
Purchase price of convertible note | $100,000 | ||
Description of Convertible note | The Black Mountain Note is convertible into the Company's common stock at a conversion price equal to the lesser of (a) $0.17 or (b) 70% of the average of the three lowest closing bids occurring during the twenty consecutive trading days immediately preceding the applicable conversion date. Repayment of the Black Mountain Note is due two years from the date of issuance. | ||
Number of trading days of conversion | 20 days |