Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 14-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | OxySure Systems Inc | |
Entity Central Index Key | 1413797 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 29,843,951 |
Balance_Sheets
Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $98,351 | $647,093 |
Accounts receivable, net | 429,610 | 369,575 |
Inventories | 372,121 | 277,346 |
License fee receivable | 448,308 | 463,308 |
Prepaid expenses and other current assets | 86,747 | 53,588 |
Total current assets | 1,435,137 | 1,810,910 |
Property and equipment, net | 92,095 | 91,537 |
Intangible assets, net | 355,207 | 362,764 |
Other assets | 306,893 | 246,237 |
TOTAL ASSETS | 2,189,332 | 2,511,448 |
Current liabilities | ||
Accounts payable and accrued expenses | 557,942 | 558,338 |
Related party payable | 255,000 | 154,850 |
Capital leases - current | 149 | |
Notes payable - current, net of discount | 88,484 | 40,897 |
Convertible notes payable, net of discount | 702,505 | 606,932 |
Derivative liability | 28,359 | 31,010 |
Total current liabilities | 1,632,290 | 1,392,176 |
Long-term liabilities | ||
Notes payable, net of discount | 44,484 | |
Total long-term liabilities | 44,484 | |
TOTAL LIABILITIES | 1,632,290 | 1,436,661 |
COMMITMENTS AND CONTINGENCY (NOTE 9) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.0005 per share; 25,000,000 shares authorized; | ||
Common stock, par value $0.0004 per share; 100,000,000 shares authorized; 29,630,026 shares of voting common stock issued and outstanding as of March 31, 2015 and 28,438,631 shares issued and outstanding as of December 31, 2014 | 11,855 | 11,377 |
Additional Paid-in Capital | 19,926,240 | 19,104,322 |
Accumulated deficit | -19,381,311 | -18,041,208 |
TOTAL STOCKHOLDERS' EQUITY | 557,042 | 1,074,787 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 2,189,332 | 2,511,448 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.0005 per share; 25,000,000 shares authorized; | 258 | 296 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.0005 per share; 25,000,000 shares authorized; |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Voting common stock, shares issued | 29,630,026 | 28,438,631 |
Voting common stock, shares outstanding | 29,630,026 | 28,438,631 |
Series A Preferred Stock [Member] | ||
Preferred Stock, shares issued | 518,750 | 593,750 |
Preferred stock, shares outstanding | 518,750 | 593,750 |
Series B Preferred Stock [Member] | ||
Preferred Stock, shares issued | 975 | 1,145 |
Preferred stock, shares outstanding | 975 | 1,145 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Revenues, net | $624,514 | $356,229 |
Cost of goods sold | 335,856 | 205,590 |
Gross profit | 288,658 | 150,639 |
Operating expenses | ||
Research and development | 213,345 | 1,541 |
Sales and marketing | 464,746 | 87,949 |
Other general and administrative | 622,284 | 345,757 |
Total operating expenses | 1,300,375 | 435,247 |
Loss from operations | -1,011,717 | -284,608 |
Other income (expenses) | ||
Gain on extinguishment of debt | 16,226 | |
Other income (expense) | 117 | -331 |
Change in value of derivative liabilities | 2,651 | |
Interest expense | -331,154 | -107,607 |
Total other expenses | -328,386 | -91,712 |
Net loss | ($1,340,103) | ($376,320) |
Basic and diluted net income (loss) per common share | ($0.05) | ($0.01) |
Weighted average common shares outstanding: | ||
Basic and diluted | 28,951,882 | 25,889,334 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($1,340,103) | ($376,320) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization expense | 10,899 | 12,141 |
Amortization of debt discount and beneficial conversion features | 288,556 | 95,776 |
Expenses paid by related parties | 135,000 | 4,374 |
Stock based compensation | 48,300 | 17,588 |
Forbearance expense | 7,046 | |
Gain on extinguishment of debt | -16,226 | |
(Gain)/Loss on derivative revaluation | -2,651 | |
Stock issued for services | 62,670 | |
Common stock warrants issued for services | 4,433 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | -60,035 | -272,816 |
Inventories | -94,775 | 10,407 |
License fees receivable | 15,000 | 36,692 |
Prepaid expenses and other current assets | -33,159 | 40,173 |
Accounts payable and accrued liabilities | -60,656 | 212,259 |
Other assets | 14,632 | -2,976 |
NET CASH USED IN OPERATING ACTIVITIES | -1,004,843 | -238,928 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | -3,900 | -64,000 |
NET CASH USED IN INVESTING ACTIVITIES | -3,900 | -64,000 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments made to related parties | -34,850 | -93,500 |
Cash received from convertible notes payable | 495,000 | |
Payments made on convertible notes payable | -110,000 | |
Payments on capital leases | -149 | -576 |
Exercising of warrants | ||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 460,001 | -204,076 |
Net change in cash and cash equivalents | -548,742 | -507,004 |
Cash and cash equivalents, at beginning of period | 647,093 | 657,673 |
Cash and cash equivalents, at end of period | 98,351 | 150,669 |
Cash paid during the period for: | ||
Interest | 272 | 7,492 |
Income taxes | ||
Supplemental non-cash investing and financing activities: | ||
Conversion of convertible notes payable | 298,619 | 25,000 |
Conversion of Series A preferred stock to common stock | 38 | 25 |
Conversion of Series B preferred stock to common stock | 127 | |
Beneficial conversion feature | $408,336 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
A summary of significant accounting policies of OxySure® Systems, Inc. (“OxySure” or the “Company”) is presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. These financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. | |||||||||
Basis of Presentation - 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. The interim financial statements include all adjustments which, in the opinion of management, are necessary in order to make the financial statements not misleading. | |||||||||
The accompanying Condensed Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements. The Company's Condensed Financial Statements reflect all adjustments that management believes are necessary for the fair presentation of their financial position, results of operations, comprehensive loss and cash flows for the periods presented. The information at December 31, 2014 in the Company's Condensed Balance Sheet included in this quarterly report was derived from the audited Balance Sheet included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 31, 2015. Where applicable, the Company's 2014 Annual Report on Form 10-K is referred to in this quarterly report as the “2014 Annual Report.” This quarterly report should be read in conjunction with the 2014 Annual Report. | |||||||||
Deferred Revenue and Income - We defer revenue and income when we invoice a customer or a customer makes a payment and the requirements of revenue recognition have not been met (i.e. persuasive evidence of an arrangement exists, shipment from a company warehouse has occurred, the price is fixed or determinable and collectability is reasonably assured). Deferred Revenue was $0 for each of the periods ended March 31, 2015 and December 31, 2014, respectively. | |||||||||
Inventory – Our inventory consists of raw material and components for our portable oxygen systems as well as completed products and accessories. Inventories are computed using the lower of cost or market, which approximates actual cost on a first-in first-out basis. Inventory components are parts, work-in-process and finished goods. Finished goods are reported as inventories until the point of title transfer to the customer. | |||||||||
Inventories as at March 31, 2015 and December 31, 2014 consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Parts inventory | $ | 149,954 | $ | 133,477 | |||||
Work in process | 41,114 | 41,114 | |||||||
Finished goods | 181,053 | 102,755 | |||||||
Total inventories | $ | 372,121 | $ | 277,346 | |||||
Cash and Cash Equivalents - We invest our cash in deposits and money market funds with major financial institutions. We place our cash investments in instruments that meet high credit quality standards, as specified in our investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument. | |||||||||
Fair Value of Financial Instruments - Our financial instruments consist principally of cash and cash equivalents, accounts receivable and accounts payable. We believe that the recorded values of all of our other financial instruments approximate their fair values because of their nature and respective maturity dates or durations. The fair value of our long-term debt is determined by using estimated market prices. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows: | |||||||||
Level 1: Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date. | |||||||||
Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date. | |||||||||
Level 3: Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. | |||||||||
The fair value of the majority of our cash equivalents was determined based on “Level 1” inputs. We do not have any marketable securities in the “Level 2” and “Level 3” category. We believe that the recorded values of all our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. | |||||||||
Property and Equipment – Property and equipment are recorded at cost with depreciation and amortization provided over the shorter of the remaining lease term or the estimated useful life of the improvement ranging from three to seven years. Renewals and betterments that materially extend the life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense when incurred. Furniture and fixtures are depreciated over five years. Machinery and equipments are depreciated over five to seven years. Software is depreciated over three years. Leasehold improvements are computed using the shorter of the estimated useful lives of the assets or the lease terms. Depreciation expense was $3,342 and $4,631 for the three month periods ended March 31, 2015 and 2014, respectively. | |||||||||
Other Long-Lived Assets – We have two types of intangible assets – patents and trademarks. Intangible assets are carried at cost, net of accumulated amortization. Amortization expense for patents and trademarks was $7,557 and $7,508 for the three month periods ended March 31, 2015 and 2014, respectively. | |||||||||
Intangible assets with definite useful lives and other long-lived assets are tested for impairment if certain impairment indicators are identified. Management evaluates the recoverability of its identifiable intangible assets in accordance with applicable accounting guidance, which requires the assessment of these assets for recoverability when events or circumstances indicate a potential impairment exists. If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Impairment charges for patents were $0 for each of the three month periods ended March 31, 2015 and 2014. | |||||||||
5-Year amortization expense for patents and trademarks is as follows: | |||||||||
2015 | $ | 30,232 | |||||||
2016 | 30,232 | ||||||||
2017 | 30,232 | ||||||||
2018 | 30,232 | ||||||||
Thereafter | 234,280 | ||||||||
$ | 355,207 | ||||||||
Other Assets– We record Other Assets net of accumulated amortization. Amortization expense for Other Assets was $19,308 and $27,242 for the three month periods ended March 31, 2015 and 2014, respectively. | |||||||||
Capitalization of software: The Company accounts for internal-use software and website development costs, including the development of its partner marketplaces in accordance with ASC 350-50 (Intangibles – Website cost). The Company capitalizes internal costs consisting of payroll and direct payroll-related costs of employees who devote time to the development of internal-use software, as well as any external direct costs. It amortizes these costs over their estimated useful lives, which typically range between three to five years. The Company’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. The estimated life is based on management’s judgment as to the product life cycle. | |||||||||
Research and Development Costs – Costs associated with the development of our products are charged to expense as incurred. $213,345 and $1,541 were incurred in the three month periods ended March 31, 2015 and 2014, respectively. | |||||||||
Equity Warrants - We issued warrants to purchase shares of our common stock in connection with convertible notes. In accordance with ASC 470-20, Debt with conversions and other options, the proceeds from the notes were allocated based on the relative fair values of the notes without the warrants issued in conjunction with the notes and of the warrants themselves at the time of issuance. We record the fair value of the warrants at the time of issuance as additional paid in capital and as a debt discount to the notes. We amortize this debt discount as interest expense over the life of the note. Additionally, as a result of issuing the warrants with the convertible notes, a beneficial conversion option is recorded as a debt discount reflecting the incremental conversion option intrinsic value of the conversion option provided to the holders of the notes. We also amortize this debt discount as interest expense over the life of the notes. The intrinsic value of each conversion option was calculated as the difference between the effective conversion price and the fair value of the common stock, multiplied by the number of shares into which the note is convertible. | |||||||||
Stock-Based Compensation – We account for share-based payments, including grants of stock options to employees, consultants and non-employees; moreover, we issue warrants to the consultants and related parties. We are required to estimate the fair value of share-based awards and warrants on the date of grant. The value of the award is principally recognized as expense ratably over the requisite service periods. We have estimated the fair value of stock options and warrants as of the date of grant or assumption using the Black-Scholes option pricing model. | |||||||||
For the three month periods ended March 31, 2015 and 2014, stock based compensation expense was approximately $48,300 and $17,588, respectively, which consisted primarily of stock-based compensation expense related to stock options issued to the employees and recognized under GAAP. | |||||||||
Shipping and Handling Costs - Shipping and handling charges to customers are included in net revenues, and the associated costs incurred are recorded in cost of revenues. | |||||||||
Advertising Costs - Advertising costs are charged to operations when incurred. We incurred $464,746 and $87,949 in advertising and promotion costs during the three month periods ended March 31, 2015 and 2014, respectively. | |||||||||
Net Income (Loss) Per Share - Basic earnings (loss) per share is computed based on the weighted average number of common shares outstanding. However, basic loss per share excludes anti-dilutive securities. Diluted earnings per share is computed based on the weighted average number of common shares outstanding, increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued, and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include stock options and other stock-based awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan. As of March 31, 2015 there were 6,460,757 potentially dilutive shares. | |||||||||
Restatements and Reclassifications - Certain financial statement items have been reclassified to conform to the current periods’ presentation. These reclassifications had no impact on previously reported net loss. | |||||||||
Recent Accounting Pronouncements | |||||||||
We have reviewed recent accounting pronouncements and concluded that they are either not applicable to our business or that no material effect is expected on the financial statements as a result of future adoption. |
Notes_Payable
Notes Payable | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Notes Payable [Abstract] | |||||
NOTES PAYABLE | NOTE 2 – NOTES PAYABLE | ||||
We have issued warrants for the purchase of shares of our restricted common stock in connection with raising equity and debt financing and for other professional services. The fair value of warrants issued is determined in accordance with Codification topic 470-20. | |||||
Frisco Promissory Note. On March 22, 2011 we entered into an Amended and Restated Performance Agreement with the Frisco Economic Development Corporation (“FEDC”) pursuant to an economic incentive package. In terms of the Amended and Restated Performance Agreement, the FEDC provided us with economic assistance in the form of the renewal and extension a forgivable loan of $213,000 (the “Frisco Note”) together with performance credits over 5 years, commencing on March 22, 2011 and ending on the earlier to occur of: (i) the full payment of the economic incentives; or (ii) March 31, 2016. | |||||
The Frisco Note requires varying annual principal payments through December 2015. The Frisco Note is non-interest bearing; however, interest has been imputed at 12.34% per annum. The unamortized discount at March 31, 2015 was $15,516, and the net amount of the Frisco Note as at March 31, 2015 was $88,484. | |||||
Future principal payments of the Frisco Note payable are as follows: | |||||
2015 | 52,000 | ||||
2016 | 52,000 | ||||
$ | 104,000 | ||||
During the three months ended March 31, 2015 we issued three convertible notes with a total principal value of $536,000 for $495,000 in cash. The notes contained original issuance discounts for a total of $41,000, and interest rates ranging from 8% to 12%. The maturity dates of the notes range from September 25, 2015 to February 19, 2016. The creditors have the option at any time to convert the principal and any accrued interest into common stock of the Company at an average discount rate of approximately thirty six percent off the market price of the Company’s common stock. | |||||
Shareholders_Equity
Shareholders' Equity | 3 Months Ended | ||
Mar. 31, 2015 | |||
Shareholders' Equity [Abstract] | |||
SHAREHOLDERS' EQUITY | NOTE 3 - SHAREHOLDERS’ EQUITY | ||
Preferred Shares Rights | |||
We have 25,000,000 shares of preferred stock authorized, par value $0.0005 per share. | |||
Series A Convertible Preferred Stock: As of March 31, 2015, the Company had authorized the issuance of 3,143,237 shares of preferred stock designated as Series A Convertible Preferred Stock (“Series A Preferred”). The original issue price of the Series A Preferred is $1.00 per share. There were 518,750 and 593,750 Series A Preferred shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively. | |||
During the three months ended March 31, 2015 the Company did not issue any shares of the Series A Preferred, and 75,000 shares of the Series A Preferred have been converted into approximately 91,500 shares of our common stock in a cashless conversion at a conversion ratio of 1.22:1. | |||
Series B Convertible Preferred Stock: As of March 31, 2015, we had 3,500 shares of preferred stock designated as Series B Convertible Preferred Stock (“Series B Preferred”). The original issue price of the Series B Preferred is $1,000 per share. There were 975 and 1,145 Series B Preferred shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively. | |||
During the three months ended March 31, 2015 the Company did not issue any shares of the Series B Preferred and 170 shares of Series B Preferred were converted into 318,349 shares of our common stock. | |||
Common Stock | |||
The Company has authorized 100,000,000 shares of $0.0004 par value common stock. | |||
During the three months ended March 31, 2015: | |||
-1 | We issued 91,500 shares of common stock pursuant to the cashless conversion of 75,000 shares of Series A Preferred; | ||
-2 | We issued 318,349 shares of common stock pursuant to the cashless conversion of 170 shares of Series B Preferred; | ||
-3 | We issued 695,247 shares of common stock pursuant to the cashless, partial conversion of convertible notes payable and accrued interest, valued at $289,619; | ||
-4 | We issued 88,000 shares of common stock for services valued at $62,670; | ||
-5 | We recorded $48,300 for the computed fair value of options issued to employees, non-employee directors, and consultants, net of cancellations and forfeitures; | ||
-6 | We recorded $4,433 for the computed fair value of warrants issued for services; and | ||
-7 | We recorded $408,336 in connection with beneficial conversion features. | ||
As of March 31, 2015 we had approximately 29,630,026 shares of common stock issued and outstanding. |
Stock_Options_and_Warrants
Stock Options and Warrants | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Stock Options and Warrants [Abstract] | |||||||||||||||||||||
STOCK OPTIONS AND WARRANTS | NOTE 4 - STOCK OPTIONS AND WARRANTS | ||||||||||||||||||||
Equity Incentive Plans | |||||||||||||||||||||
In April 2004, our Board of Directors and the stockholders at that time approved the adoption of a Voting Stock Option Plan (“the Plan”), which provides for the issuance of stock options to eligible employees, consultants, Board members and Advisory Board members of the Company to acquire up to a maximum of 5,000,000 shares of common stock. | |||||||||||||||||||||
Our Board of Directors, which determines the number of options that will be granted, the effective dates of the grants, the option process and the vesting schedules, administers the Plan. In the absence of an established market for the common stock of the Company, the Board of Directors determines the fair market value of our common stock. Options generally expire between five and ten years from the date of grant and automatically terminate 90 days after such optionee ceases to be an eligible individual under the Plan other than by reason of death or disability. | |||||||||||||||||||||
The portion of options granted that is not exercisable on the date the optionee ceases to be an eligible individual under the Plan by reason other than death, shall terminate and be forfeited to the Company on the date of such cessation. An optionee has no right as a stockholder with respect to any shares covered by the options granted to him until a certificate representing such shares is issued to them. | |||||||||||||||||||||
Stock Options | |||||||||||||||||||||
The following table summarizes information about the number and weighted average of the options that were forfeited or expired under the Plan as at March 31, 2015: | |||||||||||||||||||||
Employee | Non-Employee | ||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||
Number | Average | Number | Average | Combined | |||||||||||||||||
Of | Exercise | Of | Exercise | Total | |||||||||||||||||
Outstanding at December 31, 2014 | 1,707,488 | $ | 0.31 | - | $ | - | 1,707,488 | ||||||||||||||
Granted | 312,500 | $ | 0.96 | - | $ | - | 312,500 | ||||||||||||||
Exercised | - | $ | - | - | $ | - | - | ||||||||||||||
Forfeited/Cancelled | - | $ | - | - | $ | - | - | ||||||||||||||
Outstanding at March 31, 2015 | 2,019,988 | $ | 0.41 | - | $ | - | 2,019,988 | ||||||||||||||
The number of stock options exercisable at March 31, 2015 was 1,474,988. | |||||||||||||||||||||
We used the following assumptions to estimate the fair value of options granted under the Plan for the three months ended March 31, 2015 and 2014: | |||||||||||||||||||||
Equity Incentive Plans for | |||||||||||||||||||||
Quarter | |||||||||||||||||||||
Ended March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Expected terms (in years) | 10-May | 10-May | |||||||||||||||||||
Volatility (weighted ave.) | 83.79 | % | 40.45 | % | |||||||||||||||||
Risk-free interest rate (weighted ave.) | 0.91%-1.07 | % | 1.05%-1.74 | % | |||||||||||||||||
Expected dividend rate | 0 | % | 0 | % | |||||||||||||||||
The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. The expected term is based on the observed and expected time to exercise and post-vesting cancellations of options by optionees. We use historical volatility in deriving our expected volatility assumption because it believes that future volatility over the expected term of the stock options is not likely to differ from the past. | |||||||||||||||||||||
The expected dividend assumption is based on our history and expectation of dividend payouts. The fair value of the shares of common stock underlying the stock options has historically been determined by the board of directors. On or before February 2012, when our common stock commenced trading on the over the counter bulletin board (OTCQB), there has been no public market for our common stock. Consequently, the board of directors has historically determined the fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors including valuation of comparable companies, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook, amongst other factors. | |||||||||||||||||||||
FASB ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company only records stock-based compensation expense for awards that are expected to vest. While we generally consider historical forfeitures in its estimates, judgment is also required in estimating the amount of stock-based awards that are expected to be forfeited. The Company’s estimates for forfeitures may differ from actual forfeitures. If actual results differ significantly from these estimates, stock-based compensation expense and its results of operations could be materially impacted when the Company records a true-up for the difference in the period that the awards vest. We adjust stock-based compensation expense based on our actual forfeitures on an annual basis, if necessary. | |||||||||||||||||||||
Stock compensation cost, using the graded vesting attribute method in accordance with Codification topic 718, is recognized over the requisite service period, generally 5 years, during which each tranche of shares is earned (zero, one, two, three, and four years). The value of each tranche is generally amortized on a straight-line basis. For the three months ended March 31, 2015 and 2014, stock based compensation expense was approximately $48,300 and $17,588, respectively, which consisted primarily of stock-based compensation expense related to stock options recognized under GAAP issued to employees. For each of the three months ended March 31, 2015 and 2014, the number of options exercised was 0. | |||||||||||||||||||||
Compensation expense is recognized only for the portion of stock options that are expected to vest, assuming an expected forfeiture rate in determining stock-based compensation expense, which could affect the stock-based compensation expense recorded if there is a significant difference between actual and estimated forfeiture rates. As of March 31, 2015, total unrecognized compensation cost related to stock-based awards granted to employees and non-employee directors was $84,328. | |||||||||||||||||||||
Warrants. | |||||||||||||||||||||
The following table summarizes our warrant activities for the three months ended March 31, 2015: | |||||||||||||||||||||
Weighted | |||||||||||||||||||||
Number | Average | ||||||||||||||||||||
Of | Exercise | ||||||||||||||||||||
Warrants | Price | ||||||||||||||||||||
Outstanding at December 31, 2014 | 3,569,260 | $ | 1.37 | ||||||||||||||||||
Granted | 15,000 | $ | 1.2 | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Forfeited/Cancelled | (270,000 | ) | $ | 2.5 | |||||||||||||||||
Outstanding at March 31, 2015 | 3,314,260 | $ | 1.28 | ||||||||||||||||||
The number of warrants exercisable at March 31, 2015 was 3,314,260. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Related Party Transactions [Abstract] | |||||
RELATED PARTY TRANSACTIONS | NOTE 5 – RELATED PARTY TRANSACTIONS | ||||
A summary of the related party financings and notes as at March 31, 2015 is as follows: | |||||
Related party | Julian Ross (1) | ||||
Amount | $ | 255,000 | |||
Stated interest rate | 0 | % | |||
Maturity | n/a | ||||
(1) Our CEO, Mr. Ross provides us shareholder cash advances and other consideration from time to time to fund working capital. | |||||
Off_Balance_Sheet_Arrangements
Off Balance Sheet Arrangements and Contractual Obligations | 3 Months Ended |
Mar. 31, 2015 | |
Off Balance Sheet Arrangements and Contractual Obligations [Abstract] | |
OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS | NOTE 6 – OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS |
We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us. | |
Segment_Information
Segment Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Information [Abstract] | |||||||||
SEGMENT INFORMATION | NOTE 7 – SEGMENT INFORMATION | ||||||||
We are organized as, and operate in, one reportable segment: the development, distribution and sale of specialty respiratory products and related medical products, accessories, and services. Our chief operating decision-maker is our Chief Executive Officer. Our Chief Executive Officer reviews financial information presented for purposes of evaluating financial performance and allocating resources, accompanied by information about revenue by geographic regions. Our assets are primarily located in the United States of America and not allocated to any specific region and we do not measure the performance of our geographic regions based upon asset-based metrics. Therefore, geographic information is presented only for revenue. Revenue by geographic region is based on the ship to address on our customer orders. | |||||||||
The following presents total revenue by geographic region for the three month periods ended March 31, 2015 and 2014: | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Product Revenue: | |||||||||
United States - product sales | $ | 624,514 | $ | 301,603 | |||||
ROW - product sales | - | 37,126 | |||||||
ROW - license fees/service revenue | - | 17,500 | |||||||
Totals | $ | 624,514 | $ | 356,229 |
Going_Concern
Going Concern | 3 Months Ended |
Mar. 31, 2014 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 8 – GOING CONCERN |
Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Historically we have been suffering from recurring loss from operations. We have an accumulated deficit of $19,381,311 and $18,041,208 at March 31, 2015 and December 31, 2014, respectively, and stockholders’ equity of $557,042 and $1,074,787 as of March 31, 2015 and December 31, 2014, respectively. We require substantial additional funds to manufacture and commercialize our products. Our management is actively seeking additional sources of equity and/or debt financing; however, there is no assurance that any additional funding will be available. | |
In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying March 31, 2015 balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, to maintain present financing, and to generate cash from future operations. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation - 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. The interim financial statements include all adjustments which, in the opinion of management, are necessary in order to make the financial statements not misleading. | ||||||||
The accompanying Condensed Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements. The Company's Condensed Financial Statements reflect all adjustments that management believes are necessary for the fair presentation of their financial position, results of operations, comprehensive loss and cash flows for the periods presented. The information at December 31, 2014 in the Company's Condensed Balance Sheet included in this quarterly report was derived from the audited Balance Sheet included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 31, 2015. Where applicable, the Company's 2014 Annual Report on Form 10-K is referred to in this quarterly report as the “2014 Annual Report.” This quarterly report should be read in conjunction with the 2014 Annual Report. | |||||||||
Deferred Revenue and Income | |||||||||
Deferred Revenue and Income - We defer revenue and income when we invoice a customer or a customer makes a payment and the requirements of revenue recognition have not been met (i.e. persuasive evidence of an arrangement exists, shipment from a company warehouse has occurred, the price is fixed or determinable and collectability is reasonably assured). Deferred Revenue was $0 for each of the periods ended March 31, 2015 and December 31, 2014, respectively. | |||||||||
Inventory | Inventory – Our inventory consists of raw material and components for our portable oxygen systems as well as completed products and accessories. Inventories are computed using the lower of cost or market, which approximates actual cost on a first-in first-out basis. Inventory components are parts, work-in-process and finished goods. Finished goods are reported as inventories until the point of title transfer to the customer. | ||||||||
Inventories as at March 31, 2015 and December 31, 2014 consisted of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Parts inventory | $ | 149,954 | $ | 133,477 | |||||
Work in process | 41,114 | 41,114 | |||||||
Finished goods | 181,053 | 102,755 | |||||||
Total inventories | $ | 372,121 | $ | 277,346 | |||||
Cash and Cash Equivalents | |||||||||
Cash and Cash Equivalents - We invest our cash in deposits and money market funds with major financial institutions. We place our cash investments in instruments that meet high credit quality standards, as specified in our investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument. | |||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments - Our financial instruments consist principally of cash and cash equivalents, accounts receivable and accounts payable. We believe that the recorded values of all of our other financial instruments approximate their fair values because of their nature and respective maturity dates or durations. The fair value of our long-term debt is determined by using estimated market prices. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows: | ||||||||
Level 1: Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date. | |||||||||
Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date. | |||||||||
Level 3: Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. | |||||||||
The fair value of the majority of our cash equivalents was determined based on “Level 1” inputs. We do not have any marketable securities in the “Level 2” and “Level 3” category. We believe that the recorded values of all our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. | |||||||||
Property and Equipment | |||||||||
Property and Equipment – Property and equipment are recorded at cost with depreciation and amortization provided over the shorter of the remaining lease term or the estimated useful life of the improvement ranging from three to seven years. Renewals and betterments that materially extend the life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense when incurred. Furniture and fixtures are depreciated over five years. Machinery and equipments are depreciated over five to seven years. Software is depreciated over three years. Leasehold improvements are computed using the shorter of the estimated useful lives of the assets or the lease terms. Depreciation expense was $3,342 and $4,631 for the three month periods ended March 31, 2015 and 2014, respectively. | |||||||||
Other Long-Lived Assets | Other Long-Lived Assets – We have two types of intangible assets – patents and trademarks. Intangible assets are carried at cost, net of accumulated amortization. Amortization expense for patents and trademarks was $7,557 and $7,508 for the three month periods ended March 31, 2015 and 2014, respectively. | ||||||||
Intangible assets with definite useful lives and other long-lived assets are tested for impairment if certain impairment indicators are identified. Management evaluates the recoverability of its identifiable intangible assets in accordance with applicable accounting guidance, which requires the assessment of these assets for recoverability when events or circumstances indicate a potential impairment exists. If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Impairment charges for patents were $0 for each of the three month periods ended March 31, 2015 and 2014. | |||||||||
5-Year amortization expense for patents and trademarks is as follows: | |||||||||
2015 | $ | 30,232 | |||||||
2016 | 30,232 | ||||||||
2017 | 30,232 | ||||||||
2018 | 30,232 | ||||||||
Thereafter | 234,280 | ||||||||
$ | 355,207 | ||||||||
Other assets | Other Assets– We record Other Assets net of accumulated amortization. Amortization expense for Other Assets was $19,308 and $27,242 for the three month periods ended March 31, 2015 and 2014, respectively. | ||||||||
Capitalization of software: The Company accounts for internal-use software and website development costs, including the development of its partner marketplaces in accordance with ASC 350-50 (Intangibles – Website cost). The Company capitalizes internal costs consisting of payroll and direct payroll-related costs of employees who devote time to the development of internal-use software, as well as any external direct costs. It amortizes these costs over their estimated useful lives, which typically range between three to five years. The Company’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. The estimated life is based on management’s judgment as to the product life cycle. | |||||||||
Research and Development Costs | Research and Development Costs – Costs associated with the development of our products are charged to expense as incurred. $213,345 and $1,541 were incurred in the three month periods ended March 31, 2015 and 2014, respectively. | ||||||||
Equity Warrants | |||||||||
Equity Warrants - We issued warrants to purchase shares of our common stock in connection with convertible notes. In accordance with ASC 470-20, Debt with conversions and other options, the proceeds from the notes were allocated based on the relative fair values of the notes without the warrants issued in conjunction with the notes and of the warrants themselves at the time of issuance. We record the fair value of the warrants at the time of issuance as additional paid in capital and as a debt discount to the notes. We amortize this debt discount as interest expense over the life of the note. Additionally, as a result of issuing the warrants with the convertible notes, a beneficial conversion option is recorded as a debt discount reflecting the incremental conversion option intrinsic value of the conversion option provided to the holders of the notes. We also amortize this debt discount as interest expense over the life of the notes. The intrinsic value of each conversion option was calculated as the difference between the effective conversion price and the fair value of the common stock, multiplied by the number of shares into which the note is convertible. | |||||||||
Stock-Based Compensation | Stock-Based Compensation – We account for share-based payments, including grants of stock options to employees, consultants and non-employees; moreover, we issue warrants to the consultants and related parties. We are required to estimate the fair value of share-based awards and warrants on the date of grant. The value of the award is principally recognized as expense ratably over the requisite service periods. We have estimated the fair value of stock options and warrants as of the date of grant or assumption using the Black-Scholes option pricing model. | ||||||||
For the three month periods ended March 31, 2015 and 2014, stock based compensation expense was approximately $48,300 and $17,588, respectively, which consisted primarily of stock-based compensation expense related to stock options issued to the employees and recognized under GAAP. | |||||||||
Shipping and Handling Costs | |||||||||
Shipping and Handling Costs - Shipping and handling charges to customers are included in net revenues, and the associated costs incurred are recorded in cost of revenues. | |||||||||
Advertising Costs | |||||||||
Advertising Costs - Advertising costs are charged to operations when incurred. We incurred $464,746 and $87,949 in advertising and promotion costs during the three month periods ended March 31, 2015 and 2014, respectively. | |||||||||
Net Income (Loss) Per Share | |||||||||
Net Income (Loss) Per Share - Basic earnings (loss) per share is computed based on the weighted average number of common shares outstanding. However, basic loss per share excludes anti-dilutive securities. Diluted earnings per share is computed based on the weighted average number of common shares outstanding, increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued, and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include stock options and other stock-based awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan. As of March 31, 2015 there were 6,460,757 potentially dilutive shares. | |||||||||
Restatements and Reclassifications | |||||||||
Restatements and Reclassifications - Certain financial statement items have been reclassified to conform to the current periods’ presentation. These reclassifications had no impact on previously reported net loss. | |||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||
We have reviewed recent accounting pronouncements and concluded that they are either not applicable to our business or that no material effect is expected on the financial statements as a result of future adoption. | |||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||
Schedule of inventories | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Parts inventory | $ | 149,954 | $ | 133,477 | |||||
Work in process | 41,114 | 41,114 | |||||||
Finished goods | 181,053 | 102,755 | |||||||
Total inventories | $ | 372,121 | $ | 277,346 | |||||
Schedule of finite-lived intangible assets amortization expense | 2015 | $ | 30,232 | ||||||
2016 | 30,232 | ||||||||
2017 | 30,232 | ||||||||
2018 | 30,232 | ||||||||
Thereafter | 234,279 | ||||||||
$ | 355,206 |
Notes_Payable_Tables
Notes Payable (Tables) (Frisco EDC [Member]) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Frisco EDC [Member] | |||||
Debt Instrument [Line Items] | |||||
Future principal payments of Frisco note payable | 2015 | 52,000 | |||
2016 | 52,000 | ||||
$ | 104,000 |
Stock_Options_and_Warrants_Tab
Stock Options and Warrants (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Stock Options and Warrants [Abstract] | |||||||||||||||||||||
Summary of option activity | Employee | Non-Employee | |||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||
Number | Average | Number | Average | Combined | |||||||||||||||||
Of | Exercise | Of | Exercise | Total | |||||||||||||||||
Outstanding at December 31, 2014 | 1,707,488 | $ | 0.31 | - | $ | - | 1,707,488 | ||||||||||||||
Granted | 312,500 | $ | 0.96 | - | $ | - | 312,500 | ||||||||||||||
Exercised | - | $ | - | - | $ | - | - | ||||||||||||||
Forfeited/Cancelled | - | $ | - | - | $ | - | - | ||||||||||||||
Outstanding at March 31, 2015 | 2,019,988 | $ | 0.41 | - | $ | - | 2,019,988 | ||||||||||||||
Summary of assumptions to estimate the fair value of options granted | Equity Incentive Plans for | ||||||||||||||||||||
Quarter | |||||||||||||||||||||
Ended March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Expected terms (in years) | 10-May | 10-May | |||||||||||||||||||
Volatility (weighted ave.) | 83.79 | % | 40.45 | % | |||||||||||||||||
Risk-free interest rate (weighted ave.) | 0.91%-1.07 | % | 1.05%-1.74 | % | |||||||||||||||||
Expected dividend rate | 0 | % | 0 | % | |||||||||||||||||
Summary of warrant activity | Weighted | ||||||||||||||||||||
Number | Average | ||||||||||||||||||||
Of | Exercise | ||||||||||||||||||||
Warrants | Price | ||||||||||||||||||||
Outstanding at December 31, 2014 | 3,569,260 | $ | 1.37 | ||||||||||||||||||
Granted | 15,000 | $ | 1.2 | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Forfeited/Cancelled | (270,000 | ) | $ | 2.5 | |||||||||||||||||
Outstanding at March 31, 2015 | 3,314,260 | $ | 1.28 |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Related Party Transactions [Abstract] | |||||
Summary of the related party financings and notes payable | |||||
Related party | Julian Ross (1) | ||||
Amount | $ | 255,000 | |||
Stated interest rate | 0 | % | |||
Maturity | n/a | ||||
(1) Our CEO, Mr. Ross provides us shareholder cash advances and other consideration from time to time to fund working capital. | |||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Information [Abstract] | |||||||||
Components of revenue by geographic region | Three months ended | ||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Product Revenue: | |||||||||
United States - product sales | $ | 624,514 | $ | 301,603 | |||||
ROW - product sales | - | 37,126 | |||||||
ROW - license fees/service revenue | - | 17,500 | |||||||
Totals | $ | 624,514 | $ | 356,229 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Summary of Inventories | ||
Parts inventory | $149,954 | $133,477 |
Work in process | 41,114 | 41,114 |
Finished goods | 181,053 | 102,755 |
Total inventories | $372,121 | $277,346 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | Mar. 31, 2015 |
Summary of Significant Accounting Policies [Abstract] | |
2015 | $30,232 |
2016 | 30,232 |
2017 | 30,232 |
2018 | 30,232 |
Thereafter | 234,280 |
Total | $355,207 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies (Textual) | |||
Deferred revenue | $0 | $0 | |
Depreciation expense | 3,342 | 4,631 | |
Impairment charges for patents | 0 | 0 | |
Amortization of intangible assets | 7,557 | 7,508 | |
Amortization expense of other assets | 19,308 | 27,242 | |
Research and development | 213,345 | 1,541 | |
Stock-based compensation expense related to stock options issued to the employees | 48,300 | 17,588 | |
Advertising and promotion costs | $464,746 | $87,949 | |
Effect of dilutive securities | 6,460,757 | ||
Furniture and Fixtures [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 5 years | ||
Computer Software, Intangible Asset [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 3 years | ||
Computer Software, Intangible Asset [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 3 years | ||
Computer Software, Intangible Asset [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 5 years | ||
Machinery and Equipment [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 5 years | ||
Machinery and Equipment [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 7 years | ||
Leasehold Improvements [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 3 years | ||
Leasehold Improvements [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 7 years |
Notes_Payable_Details
Notes Payable (Details) (Frisco Note payable [Member], USD $) | Mar. 31, 2015 |
Frisco Note payable [Member] | |
Summary of future principal payments of Frisco note payable | |
2015 | $52,000 |
2016 | 52,000 |
Note payable, Total | $104,000 |
Notes_Payable_Details_Textual
Notes Payable (Details Textual) (USD $) | 0 Months Ended | |
Mar. 22, 2011 | Mar. 31, 2015 | |
Notes Payable (Textual) | ||
Unamortized discount, new notes | $41,000 | |
Note payable, net (new notes) | 536,000 | |
Convertible notes, cash value | 495,000 | |
Promissory Note [Member] | ||
Notes Payable (Textual) | ||
Amount of renewal and extension forgivable loan | 213,000 | |
Debt instrument, payment terms | (i) the full payment of the economic incentives; or (ii) March 31, 2016. | |
Period of performance for debt | 5 years | |
New debt instrument interest rate | 12.34% | |
Unamortized discount, new notes | 15,516 | |
Note payable, net (new notes) | $88,484 | |
Promissory Note [Member] | Maximum [Member] | ||
Notes Payable (Textual) | ||
New debt instrument interest rate | 12.00% | |
Promissory Note [Member] | Minimum [Member] | ||
Notes Payable (Textual) | ||
New debt instrument interest rate | 8.00% |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Shareholders' Equity (Textual) | |||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |
Preferred stock, par value | $0.00 | $0.00 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, par value | $0.00 | $0.00 | |
Preferred stock converted to common stock, Shares | |||
Common stock issued for services, Shares | 88,000 | ||
Common stock issued for services | $62,670 | ||
Beneficial conversion features | 408,336 | ||
Common stock issued upon conversion of convertible notes | |||
Common stock issued upon conversion of convertible notes, Shares | 695,247 | ||
Common stock issued for cash and warrants | |||
Warrant fair value | 4,433 | ||
Fair value of options issued to employees | 48,300 | ||
Common stock, Shares issued | 29,630,026 | 28,438,631 | |
Common stock, Shares outstanding | 29,630,026 | 28,438,631 | |
Series A Preferred Stock [Member] | |||
Shareholders' Equity (Textual) | |||
Preferred Stock, shares issued | 518,750 | 593,750 | |
Preferred stock, shares outstanding | 518,750 | 593,750 | |
Series A preferred shares converted to common stock | 75,000 | ||
Preferred stock converted into common stock | 91,500 | ||
Conversion ratio | 1.22 | ||
Preferred stock converted to common stock, Shares | 75,000 | ||
Series B Preferred Stock [Member] | |||
Shareholders' Equity (Textual) | |||
Preferred Stock, shares issued | 975 | 1,145 | |
Preferred stock, shares outstanding | 975 | 1,145 | |
Preferred stock converted into common stock | 170 | ||
Series B preferred authorized | 3,500 | ||
Common stock issued upon conversion of convertible preferred stock, Shares | 318,349 | ||
Preferred stock converted to common stock, Shares | 170 | ||
Common stock [Member] | |||
Shareholders' Equity (Textual) | |||
Common stock issued upon conversion of convertible notes | $289,619 | ||
Common stock [Member] | Series A Preferred Stock [Member] | |||
Shareholders' Equity (Textual) | |||
Preferred stock, shares authorized | 3,143,237 | ||
Preferred stock, par value | $1 | ||
Common stock [Member] | Series B Preferred Stock [Member] | |||
Shareholders' Equity (Textual) | |||
Preferred stock, par value | $1,000 |
Stock_Options_and_Warrants_Det
Stock Options and Warrants (Details) (Stock Options [Member], USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Summary of option activity | |
Outstanding Options/Warrants, beginning balance | 1,707,488 |
Granted | 312,500 |
Granted, Weighted Average Exercise Price | $0.96 |
Exercised | |
Exercised, Weighted Average Exercise Price | |
Forfeited/Cancelled, Weighted Average Exercise Price | |
Outstanding Options/Warrants, ending balance | 2,019,988 |
Employee [Member] | |
Summary of option activity | |
Outstanding Options/Warrants, beginning balance | 1,707,488 |
Outstanding Options/Warrants, Weighted Average Exercise Price, beginning balance | $0.31 |
Granted | 312,500 |
Granted, Weighted Average Exercise Price | $0.96 |
Exercised | |
Exercised, Weighted Average Exercise Price | |
Forfeited/Cancelled | |
Forfeited/Cancelled, Weighted Average Exercise Price | |
Outstanding Options/Warrants, ending balance | 2,019,988 |
Outstanding Options/Warrants, Weighted Average Exercise Price, ending balance | $0.41 |
Non-Employee [Member] | |
Summary of option activity | |
Outstanding Options/Warrants, beginning balance | |
Outstanding Options/Warrants, Weighted Average Exercise Price, beginning balance | |
Granted | |
Granted, Weighted Average Exercise Price | |
Exercised | |
Exercised, Weighted Average Exercise Price | |
Forfeited/Cancelled | |
Forfeited/Cancelled, Weighted Average Exercise Price | |
Outstanding Options/Warrants, ending balance | |
Outstanding Options/Warrants, Weighted Average Exercise Price, ending balance |
Stock_Options_and_Warrants_Det1
Stock Options and Warrants (Details 1) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Summary of fair value of options granted were estimated at the date of grant using the Black-Scholes model | ||
Volatility | 83.79% | 40.45% |
Expected dividend rate | 0.00% | 0.00% |
Minimum [Member] | ||
Summary of fair value of options granted were estimated at the date of grant using the Black-Scholes model | ||
Expected terms (in years) | 5 years | 5 years |
Risk-free interest rate | 0.91% | 1.05% |
Maximum [Member] | ||
Summary of fair value of options granted were estimated at the date of grant using the Black-Scholes model | ||
Expected terms (in years) | 10 years | 10 years |
Risk-free interest rate | 1.07% | 1.74% |
Stock_Options_and_Warrants_Det2
Stock Options and Warrants (Details 2) (Warrant [Member], USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Warrant [Member] | |
Summary of warrants activity | |
Outstanding Options/Warrants, beginning balance | 3,569,260 |
Outstanding Options/Warrants, Weighted Average Exercise Price, beginning balance | $1.37 |
Granted | 15,000 |
Granted, Weighted Average Exercise Price | $1.20 |
Exercised | |
Exercised, Weighted Average Exercise Price | |
Forfeited/Cancelled | -270,000 |
Forfeited/Cancelled, Weighted Average Exercise Price | $2.50 |
Outstanding Options/Warrants, ending balance | 3,314,260 |
Outstanding Options/Warrants, Weighted Average Exercise Price, ending balance | $1.28 |
Stock_Options_and_Warrants_Det3
Stock Options and Warrants (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2004 | Mar. 31, 2015 | Mar. 31, 2014 | |
Stock option and warrants (Textual) | |||
Maximum number of shares acquired under voting stock option plan | 5,000,000 | ||
Expiration period of option, Maximum | 10 years | ||
Expiration period of option, Minimum | 5 years | ||
Termination period of option for ineligible individual | 90 days | ||
Stock compensation expense recognition requisite service period | 5 years | ||
Stock based compensation expense | $48,300 | $17,588 | |
Number of stock options exercisable | 1,474,988 | ||
Number of warrants exercisable | 3,314,260 | ||
Employee Stock Option [Member] | |||
Stock option and warrants (Textual) | |||
Unrecognized compensation costs related to non-vested stock option | $84,328 | ||
Stock option/warrant exercised |
Related_Party_Transactions_Det
Related Party Transactions (Details) (Julian Ross [Member], USD $) | 3 Months Ended | |
Mar. 31, 2015 | ||
Julian Ross [Member] | ||
Summary of related party financings and notes | ||
Amount | $255,000 | [1] |
Stated interest rate | 0.00% | [1] |
Maturity | n/a | [1] |
[1] | (1) Our CEO, Mr. Ross provides us shareholder cash advances and other consideration from time to time to fund working capital. |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Components of revenue by geographic region | ||
Total revenues | $624,514 | $356,229 |
United States revenues [Member] | ||
Components of revenue by geographic region | ||
Total revenues | 624,514 | 301,603 |
Row Product Sales [Member] | ||
Components of revenue by geographic region | ||
Total revenues | 37,126 | |
ROW - license fees/service revenue [Member] | ||
Components of revenue by geographic region | ||
Total revenues | $17,500 |
Going_Concern_Details
Going Concern (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Going Concern (Textual) | ||
Accumulated deficit | ($19,381,311) | ($18,041,208) |
Stockholders' deficit | $557,042 | $1,074,787 |