OxySure Therapeutics (OXYS) 10-Q 19 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 18, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	OxySure Systems Inc
Entity Central Index Key	1,413,797
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,015
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		32,003,034

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current assets
Cash and cash equivalents	$ 875,941	$ 647,093
Restricted cash	2,000,000
Accounts receivable, net	711,148	$ 369,575
Inventories	422,551	277,346
License fee receivable	448,308	463,308
Prepaid expenses and other current assets	91,747	53,588
Total current assets	4,549,695	1,810,910
Property and equipment, net	88,617	91,537
Intangible assets, net	347,650	362,764
Other assets	296,605	246,237
TOTAL ASSETS	5,282,567	2,511,448
Current liabilities
Accounts payable and accrued expenses	810,784	558,338
Related party payable	$ 200,000	154,850
Capital leases - current		149
Notes payable - current, net of discount	$ 43,723	40,897
Convertible notes payable, net of discount	981,475	606,932
Derivative liability	249,200	31,010
Total current liabilities	$ 2,285,182	1,392,176
Long-term liabilities
Notes payable		44,484
Total long-term liabilities		44,484
TOTAL LIABILITIES	$ 2,285,182	$ 1,436,660
COMMITMENTS AND CONTINGENCY
STOCKHOLDERS' EQUITY
Common stock, par value $0.0004 per share; 100,000,000 shares authorized;31,224,000 shares of voting common stock issued and outstanding as of June 30, 2015 and 28,438,631 shares issued and outstanding as of December 31, 2014	$ 12,492	$ 11,377
Stock subscription receivable	(1,231,666)
Additional Paid-in Capital	24,854,869	$ 19,104,322
Accumulated deficit	(20,639,745)	(18,041,208)
TOTAL STOCKHOLDERS' EQUITY	2,997,385	1,074,788
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	5,282,567	2,511,448
Series A convertible preferred shares
STOCKHOLDERS' EQUITY
Preferred stock value	258	296
Series B convertible preferred shares
STOCKHOLDERS' EQUITY
Preferred stock value	1	$ 1
Series C convertible preferred shares
STOCKHOLDERS' EQUITY
Preferred stock value	385
Series D convertible preferred shares
STOCKHOLDERS' EQUITY
Preferred stock value	525
Series E convertible preferred shares
STOCKHOLDERS' EQUITY
Preferred stock value	$ 266

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Preferred stock, par value	$ 0.0005	$ 0.0005
Preferred stock, shares authorized	25,000,000	25,000,000
Common stock, par value	$ 0.0004	$ 0.0004
Common stock, shares authorized	100,000,000	100,000,000
Voting common stock, shares issued	31,224,000	28,438,631
Voting common stock, shares outstanding	31,224,000	28,438,631
Series A convertible preferred shares
Preferred Stock, shares issued	518,750	593,750
Preferred stock, shares outstanding	518,750	593,750
Series B convertible preferred shares
Preferred Stock, shares issued	900	1,145
Preferred stock, shares outstanding	900	1,145
Series C convertible preferred shares
Preferred Stock, shares issued	770,000	0
Preferred stock, shares outstanding	770,000	0
Series D convertible preferred shares
Preferred Stock, shares issued	1,050,000	0
Preferred stock, shares outstanding	1,050,000	0
Series E convertible preferred shares
Preferred Stock, shares issued	531,666	0
Preferred stock, shares outstanding	531,666	0

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Revenues, net	$ 1,046,019	$ 678,111	$ 1,670,533	$ 1,034,340
Cost of goods sold	409,183	264,856	745,039	470,446
Gross profit	636,836	413,255	925,494	563,894
Operating expenses
Research and development	297,456	275,974	510,801	277,515
Sales and marketing	329,393	154,044	794,139	241,993
Other general and administrative	621,066	259,230	1,243,350	604,987
Total operating expenses	1,247,915	689,248	2,548,290	1,124,495
Loss from operating expenses	(611,079)	(275,993)	(1,622,796)	(560,600)
Other income (expenses)
Interest expense	(561,791)	$ (85,980)	(892,945)	$ (193,587)
Change in value of derivative liabilities	119,933		122,584
Derivative expense	(204,272)		(204,272)
Other income (expense)	(1,225)	$ 42,465	(1,108)	$ 58,360
Total other income (expenses)	(647,355)	(43,515)	(975,741)	(135,227)
Net loss	$ (1,258,434)	$ (319,508)	$ (2,598,537)	$ (695,828)
Basic and diluted net loss per common share	$ (0.04)	$ (0.01)	$ (0.09)	$ (0.03)
Weighted average common shares outstanding:
Basic and diluted	30,215,788	25,996,642	29,587,327	25,956,948

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,598,537)	$ (695,828)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization expense	21,934	24,853
Amortization of debt discount and beneficial conversion features	803,870	$ 121,140
Gain on forgiveness of debt	$ (37,714)
Gain on extinguishment of debt		$ (42,525)
Excess derivative over proceeds	$ 204,272
Derivative liability fair value adjustment	(122,584)
Expenses paid on behalf of related parties	$ 137,150
Expenses paid by related parties		$ 4,374
Warrants issued for services	$ 8,883
Stock based compensation	106,911	$ 17,588
Common stock issued for services	62,670
Changes in operating assets and liabilities:
Accounts receivable	(341,573)	$ (363,543)
Inventories	(145,205)	1,804
License fees receivable	15,000	36,692
Prepaid expenses and other current assets	(38,159)	$ 62,509
Other assets	(50,368)
Accounts payable and accrued liabilities	$ 282,345	$ 304,405
Deferred revenue		(2,976)
NET CASH USED IN OPERATING ACTIVITIES	$ (1,691,105)	(531,507)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	$ (3,900)	(70,651)
Purchase of intangible assets		(198)
NET CASH USED IN INVESTING ACTIVITIES	$ (3,900)	(70,849)
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock subscribed and issued for cash	80,001	$ 10,672
Preferred stock issued for cash and warrants	$ 2,650,001
Cash received from related parties		$ 9,800
Payments made to related parties	$ (92,000)	(108,300)
Cash received from convertible notes payable	1,461,000	247,500
Payments made on convertible notes payable	(175,000)	(192,000)
Payments on capital leases	(149)	(1,008)
NET CASH USED IN FINANCING ACTIVITIES	3,923,853	(33,336)
Net change in cash and cash equivalents	2,228,848	(635,692)
Cash and cash equivalents, at beginning of period	647,093	657,673
Cash and cash equivalents, at end of period	$ 875,941	$ 21,981
Cash paid during the period for:
Interest
Income taxes
Supplemental non-cash investing and financing activities:
Conversion of preferred stock to common	$ 246
Conversion of convertible notes payable	804,138
Beneficial conversion feature	808,532
Initial value of the derivative	$ 165,200

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2015
Summary of Significant Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Other Assets Capitalization of software Amortization expense for websites and URLs was $9,654 and $9,654 for the three month periods ended June 30, 2015 and 2014, respectively. Amortization expense for websites and URLs was $19,309 and $19,309 for the six month periods ended June 30, 2015 and 2014, respectively. Research and Development Costs – Equity Warrants - Stock-Based Compensation – For the three month periods ended June 30, 2015 and 2014, stock based compensation expense was approximately $58,611 and $0, respectively, which consisted primarily of stock-based compensation expense related to stock options issued to the employees and recognized under GAAP. For the six month periods ended June 30, 2015 and 2014, stock based compensation expense was approximately $106,911 and $17,588, respectively. Shipping and Handling Costs Advertising Costs - Net Income (Loss) Per Share - 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	6 Months Ended
	Jun. 30, 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. 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 June 30, 2015 was $8,000, and the net amount of the Frisco Note as at June 30, 2015 was $44,000. Future principal payments of the Frisco Note payable are as follows: 2015 52,000 Total $ 52,000 During the three months ended June 30, 2015 we issued seven convertible notes with a total principal value of $1,147,500 for $966,000 in cash. The notes contained original issuance discounts for a total of $181,000, and interest rates ranging from 10% to 12%. The maturity dates of the notes range from November 25, 2015 to May 4, 2017. The creditors have the option at any time to convert the principal and any accrued interest into common stock of the Company at a weighted average discount rate of approximately thirty percent off the market price of the Company’s common stock, as calculated at June 30, 2015. During the quarter, we issued warrants associated with 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. As a result of issuing the warrants with subordinated convertible promissory notes, beneficial conversion options were recorded as debt discounts reflecting the incremental conversion option intrinsic value benefits totaling $400,196, at the time of issuance provided to the holders of the notes, which we also amortize as interest expense over the life of the notes. We recorded interest expense in the amounts of $638,190 and $0 for the three months ended June 30, 2015 and 2014, respectively in connection with all the notes issued with warrants that contained beneficial conversion features.

Shareholders' Equity

Shareholders' Equity	6 Months Ended
	Jun. 30, 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 June 30, 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 June 30, 2015 and December 31, 2014, respectively. During the three months ended June 30, 2015 the Company did not issue any shares of the Series A Preferred, and no shares of the Series A Preferred have been converted into common stock. Series B Convertible Preferred Stock: As of June 30, 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 900 and 1,145 Series B Preferred shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively. During the three months ended June 30, 2015 the Company did not issue any shares of the Series B Preferred and 75 shares of Series B Preferred were converted into 204,188 shares of our common stock. Series C Convertible Preferred Stock: As of June 30, 2015, we had 770,000 shares of preferred stock designated as Series C Convertible Preferred Stock (“Series C Preferred”). The original issue price of the Series C Preferred is $2.00 per share. There were 770,000 and 0 Series C Preferred shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively. During the three months ended June 30, 2015 the Company issued 770,000 shares of the Series C Preferred and no shares of Series C Preferred were converted into common stock. Series D Convertible Preferred Stock: As of June 30, 2015, we had 1,050,000 shares of preferred stock designated as Series D Convertible Preferred Stock (“Series D Preferred”). The original issue price of the Series D Preferred is $2.00 per share. There were 1,050,000 and 0 shares of the Series D Preferred issued and outstanding as of June 30, 2015 and December 31, 2014, respectively. During the three months ended June 30, 2015 the Company issued 1,050,000 shares of the Series D Preferred and no shares of Series D Preferred were converted into common stock. Series E Convertible Preferred Stock: As of June 30, 2015, we had 531,666 shares of preferred stock designated as Series E Convertible Preferred Stock (“Series E Preferred”). The original issue price of the Series E Preferred is $1.00 per share. There were 531,666 and 0 shares of the Series E Preferred issued and outstanding as of June 30, 2015 and December 31, 2014, respectively. During the three months ended June 30, 2015 the Company issued 531,666 shares of the Series E Preferred and no shares of Series E Preferred were converted into common stock. Common Stock The Company has authorized 100,000,000 shares of $0.0004 par value common stock. During the three months ended June 30, 2015: (1) We issued 133,333 shares of common stock for $80,000 in cash. (2) We issued 204,188 shares of common stock pursuant to the cashless conversion of 75 shares of Series B Preferred; (3) We issued 1,256,453 shares of common stock pursuant to the conversion of convertible notes; (4) We issued 770,000 shares of the Series C Preferred for for which we received $700,000 in cash and recorded a stock subscription receivable for the remaining $700,000; (5) We issued 1,050,000 shares of the Series D Preferred for $2,000,000 in cash held in escrow, to be released upon our uplisting to a national exchange; (6) We recorded $58,611 for the computed fair value of options issued to employees, non-employee directors, and consultants, net of cancellations and forfeitures; and (7) We recorded $400,196 in connection with beneficial conversion features. As of June 30, 2015 we had approximately 31,244,000 shares of common stock issued and outstanding.

Stock Options and Warrants

Stock Options and Warrants	6 Months Ended
	Jun. 30, 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 June 30, 2015: Employee Non-Employee Weighted Weighted Number Average Number Average Combined Of Exercise Of Exercise Total Outstanding at March 31, 2015 2,513,838 $ 0.41 - $ - 2,513,838 Granted - $ - - $ - - Exercised - $ - - $ - - Forfeited/Cancelled - $ - - $ - - Outstanding at June 30, 2015 2,513,838 $ 0.41 - $ - 2,513,838 The number of stock options exercisable at June 30, 2015 was 1,627,296. We used the following assumptions to estimate the fair value of options granted under the Plan for the three and six months ended June 30, 2015 and 2014: Equity Incentive Plans Equity Incentive Plans for the Three Months Ended June 30, for the Six Months Ended June 30, 2015 2014 2015 2014 Expected terms (in years) 5-10 5-10 5-10 5-10 Volatility (weighted ave.) 83.79 % 40.45 % 83.79 % 40.45 % Risk-free interest rate .85% - 1.74% 1.50% - 1.80% .85% - 1.74% 1.44% - 1.80% Expected dividend rate 0 % 0 % 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 June 30, 2015 and 2014, stock based compensation expense was approximately $58,611 and $0, 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 June 30, 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 June 30, 2015, total unrecognized compensation cost related to stock-based awards granted to employees and non-employee directors was $323,715. Warrants. The following table summarizes our warrant activities for the three months ended June 30, 2015: Weighted Number Average Of Exercise Warrants Price Outstanding at March 31, 2015 3,304,260 $ 1.28 Granted 1,659,696 $ 1.11 Exercised - $ - Forfeited/Cancelled - $ - Outstanding at June 30, 2015 4,963,956 $ 1.22 The number of warrants exercisable at June 30, 2015 was 4,963,956.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 5 – RELATED PARTY TRANSACTIONS A summary of the related party financings and notes as at June 30, 2015 is as follows: Related party Julian Ross (1) Amount $ 200,000 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	6 Months Ended
	Jun. 30, 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.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2015
Fair Value Measurements [Abstract]
FAIR VALUE MEASUREMENTS	NOTE 7 – FAIR VALUE MEASUREMENTS Changes related to derivatives for the six months ended June 30, 2015 are as follows: Balance as of December 31, 2014 $ 31,010 Additions related to embedded derivative of convertible notes issued 369,472 Gain on decrease in value of derivative liabilities (122,584 ) Conversions (28,698 ) Balance as of June 30, 2015 $ 249,200 During the six month period the Company recorded derivatives related to convertible notes of $369,472 of which $204,272 exceed the proceeds of the convertible notes and was recorded as a derivative expense. The Company also converted $28,698 and recorded a gain on the change in the fair value of the derivative of $122,584.

Segment Information

Segment Information	6 Months Ended
	Jun. 30, 2015
Segment Information [Abstract]
SEGMENT INFORMATION	NOTE 8 – 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 June 30, 2015 and 2014: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 United States - product sales $ 1,044,066 $ 677,508 $ 1,668,580 $ 979,110 ROW - product sales 1,953 603 1,953 37,730 ROW - license fees/service revenue - - - 17,500 Totals $ 1,046,019 $ 678,111 $ 1,670,533 $ 1,034,340

Going Concern

Going Concern	6 Months Ended
	Jun. 30, 2015
Going Concern [Abstract]
GOING CONCERN	NOTE 9 – 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 $20,639,745 and $18,041,208 at June 30, 2015 and December 31, 2014, respectively, and stockholders’ equity of $2,997,385 and $1,074,787 as of June 30, 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 June 30, 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 Accoun15

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2015
Summary of Significant Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation 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 -
Inventory	Inventory Inventories as at June 30, 2015 and December 31, 2014 consisted of the following: June 30, December 31, 2015 2014 Parts inventory $ 181,863 $ 133,477 Work in process 41,994 41,114 Finished goods 198,694 102,755 Total inventories $ 422,551 $ 277,346
Cash and Cash Equivalents	Cash and Cash Equivalents -
Fair Value of Financial Instruments	Fair Value of Financial Instruments - Level 1 Level 2 Level 3 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
Other Long-Lived Assets	Other Long-Lived Assets Intangible assets with definite useful lives and other long-lived assets are tested for impairment if certain impairment indicators are identified . 5-Year amortization expense for patents and trademarks is as follows: 2015 $ 30,232 2016 30,232 2017 30,232 2018 30,232 Thereafter 226,723 $ 347,650
Other assets	Other Assets Capitalization of software Amortization expense for websites and URLs was $9,654 and $9,654 for the three month periods ended June 30, 2015 and 2014, respectively. Amortization expense for websites and URLs was $19,309 and $19,309 for the six month periods ended June 30, 2015 and 2014, respectively.
Research and Development Costs	Research and Development Costs –
Equity Warrants	Equity Warrants -
Stock-Based Compensation	Stock-Based Compensation – For the three month periods ended June 30, 2015 and 2014, stock based compensation expense was approximately $58,611 and $0, respectively, which consisted primarily of stock-based compensation expense related to stock options issued to the employees and recognized under GAAP. For the six month periods ended June 30, 2015 and 2014, stock based compensation expense was approximately $106,911 and $17,588, respectively.
Shipping and Handling Costs	Shipping and Handling Costs
Advertising Costs	Advertising Costs -
Net Income (Loss) Per Share	Net Income (Loss) Per Share -
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 Accoun16

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2015
Summary of Significant Accounting Policies [Abstract]
Schedule of inventories	June 30, December 31, 2015 2014 Parts inventory $ 181,863 $ 133,477 Work in process 41,994 41,114 Finished goods 198,694 102,755 Total inventories $ 422,551 $ 277,346
Schedule of finite-lived intangible assets amortization expense	2015 $ 30,232 2016 30,232 2017 30,232 2018 30,232 Thereafter 226,723 $ 347,650

Notes Payable (Tables)

Notes Payable (Tables)	6 Months Ended
	Jun. 30, 2015
Frisco EDC [Member]
Debt Instrument [Line Items]
Future principal payments of Frisco note payable	2015 52,000 Total $ 52,000

Stock Options and Warrants (Tab

Stock Options and Warrants (Tables)	6 Months Ended
	Jun. 30, 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 March 31, 2015 2,513,838 $ 0.41 - $ - 2,513,838 Granted - $ - - $ - - Exercised - $ - - $ - - Forfeited/Cancelled - $ - - $ - - Outstanding at June 30, 2015 2,513,838 $ 0.41 - $ - 2,513,838
Summary of assumptions to estimate the fair value of options granted	Equity Incentive Plans Equity Incentive Plans for the Three Months Ended June 30, for the Six Months Ended June 30, 2015 2014 2015 2014 Expected terms (in years) 5-10 5-10 5-10 5-10 Volatility (weighted ave.) 83.79 % 40.45 % 83.79 % 40.45 % Risk-free interest rate .85% - 1.74% 1.50% - 1.80% .85% - 1.74% 1.44% - 1.80% Expected dividend rate 0 % 0 % 0 % 0 %
Summary of warrant activity	Weighted Number Average Of Exercise Warrants Price Outstanding at March 31, 2015 3,304,260 $ 1.28 Granted 1,659,696 $ 1.11 Exercised - $ - Forfeited/Cancelled - $ - Outstanding at June 30, 2015 4,963,956 $ 1.22

Related Party Transactions (Tab

Related Party Transactions (Tables)	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
Summary of the related party financings and notes payable	Related party Julian Ross (1) Amount $ 200,000 Stated interest rate 0 % Maturity n/a

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value Measurements [Abstract]
Schedule of changes related to derivatives	Balance as of December 31, 2014 $ 31,010 Additions related to embedded derivative of convertible notes issued 369,472 Gain on decrease in value of derivative liabilities (122,584 ) Conversions (28,698 ) Balance as of June 30, 2015 $ 249,200

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jun. 30, 2015
Segment Information [Abstract]
Components of revenue by geographic region	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 United States - product sales $ 1,044,066 $ 677,508 $ 1,668,580 $ 979,110 ROW - product sales 1,953 603 1,953 37,730 ROW - license fees/service revenue - - - 17,500 Totals $ 1,046,019 $ 678,111 $ 1,670,533 $ 1,034,340

Summary of Significant Accoun22

Summary of Significant Accounting Policies (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Summary of Inventories
Parts inventory	$ 181,863	$ 133,477
Work in process	41,994	41,114
Finished goods	198,694	102,755
Total inventories	$ 422,551	$ 277,346

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Details 1)	Jun. 30, 2015USD ($)
Summary of Significant Accounting Policies [Abstract]
2,015	$ 30,232
2,016	30,232
2,017	30,232
2,018	30,232
Thereafter	226,723
Total	$ 347,650

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Summary of Significant Accounting Policies (Textual)
Deferred revenue	$ 0		$ 0		$ 0
Depreciation expense	3,478	$ 5,155	6,820	$ 9,786
Impairment charges for patents			0	0
Amortization of intangible assets	7,557	7,558	15,114	15,066
Amortization expense of other assets			42,034	37,562
Research and development	297,456	275,974	510,801	277,515
Stock-based compensation expense related to stock options issued to the employees	58,611	0	106,911	17,588
Advertising and promotion costs	329,393	154,044	$ 794,139	241,993
Effect of dilutive securities			18,268,932
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)
Amortization of intangible assets	$ 9,654	$ 9,654	$ 19,309	$ 19,309
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]	Jun. 30, 2015USD ($)
Summary of future principal payments of Frisco note payable
2,015	$ 52,000
Note payable, Total	$ 52,000

Notes Payable (Details Textual)

Notes Payable (Details Textual) - USD ($)	Mar. 22, 2011	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Notes Payable (Textual)
Unamortized discount, new notes		$ 181,000		$ 181,000
Note payable, net (new notes)		1,147,500		1,147,500
Convertible notes, cash value		966,000		966,000
Interest expense		561,791	$ 85,980	892,945	$ 193,587
Convertible Notes Payable [Member]
Notes Payable (Textual)
Exercise price		0.01		0.01
Conversion option intrinsic value				400,196
Interest expense				638,190	$ 0
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		8,000		8,000
Note payable, net (new notes)		$ 44,000		$ 44,000
Promissory Note [Member] | Maximum [Member]
Notes Payable (Textual)
New debt instrument interest rate		12.00%		12.00%
Promissory Note [Member] | Minimum [Member]
Notes Payable (Textual)
New debt instrument interest rate		10.00%		10.00%

Shareholders' Equity (Details)

Shareholders' Equity (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Shareholders' Equity (Textual)
Preferred stock, shares authorized	25,000,000	25,000,000	25,000,000
Preferred stock, par value	$ 0.0005	$ 0.0005	$ 0.0005
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, par value	$ 0.0004	$ 0.0004	$ 0.0004
Beneficial conversion features		$ 400,196
Common stock issued upon conversion of convertible notes, Shares		1,256,453
Fair value of options issued to employees		$ 58,611
Common stock, Shares issued	31,224,000	31,224,000	28,438,631
Common stock, Shares outstanding	31,224,000	31,224,000	28,438,631
Number of stock issued for cash	133,333
Number of stock issued for cash, value	$ 80,000
Series A Preferred Stock [Member]
Shareholders' Equity (Textual)
Preferred Stock, shares issued	518,750	518,750	593,750
Preferred stock, shares outstanding	518,750	518,750	593,750
Series B Preferred Stock [Member]
Shareholders' Equity (Textual)
Preferred Stock, shares issued	900	900	1,145
Preferred stock converted into common stock		75
Series B preferred authorized		3,500
Common stock issued upon conversion of convertible preferred stock, Shares		204,188
Preferred stock converted to common stock, Shares		75
Preferred stock, shares outstanding	900	900	1,145
Series C Preferred Stock [Member]
Shareholders' Equity (Textual)
Preferred Stock, shares issued	770,000	770,000	0
Preferred stock converted to common stock, Shares	770,000
Preferred stock, value	$ 700,000	$ 700,000
Preferred stock shares issued for notes receivable	$ 700,000	$ 700,000
Preferred stock, shares outstanding	770,000	770,000	0
Series D Preferred Stock [Member]
Shareholders' Equity (Textual)
Preferred Stock, shares issued	1,050,000	1,050,000	0
Preferred stock converted to common stock, Shares	1,050,000
Preferred stock, value	$ 2,000,000	$ 2,000,000
Preferred stock, shares outstanding	1,050,000	1,050,000	0
Series E Preferred Stock [Member]
Shareholders' Equity (Textual)
Preferred Stock, shares issued	531,666	531,666	0
Preferred stock converted to common stock, Shares	531,666
Preferred stock, shares outstanding	531,666	531,666	0
Common stock [Member] | Series A Preferred Stock [Member]
Shareholders' Equity (Textual)
Preferred stock, shares authorized	3,143,237	3,143,237
Preferred stock, par value	$ 1	$ 1
Common stock [Member] | Series B Preferred Stock [Member]
Shareholders' Equity (Textual)
Preferred stock, par value	$ 1,000	$ 1,000

Stock Options and Warrants (Det

Stock Options and Warrants (Details) - 6 months ended Jun. 30, 2015 - Stock Options [Member] - $ / shares	Total
Summary of option activity
Outstanding Options/Warrants, beginning balance	2,513,838
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	2,513,838
Employee [Member]
Summary of option activity
Outstanding Options/Warrants, beginning balance	2,513,838
Outstanding Options/Warrants, Weighted Average Exercise Price, beginning balance	$ 0.41
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	2,513,838
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 (D29

Stock Options and Warrants (Details 1)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Summary of fair value of options granted were estimated at the date of grant using the Black-Scholes model
Volatility (weighted ave.)	83.79%	40.45%	83.79%	40.45%
Expected dividend rate	0.00%	0.00%	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	5 years	5 years
Risk-free interest rate	0.85%	1.50%	0.85%	1.44%
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	10 years	10 years
Risk-free interest rate	1.74%	1.80%	1.74%	1.80%

Stock Options and Warrants (D30

Stock Options and Warrants (Details 2) - 6 months ended Jun. 30, 2015 - Warrant [Member] - $ / shares	Total
Summary of warrants activity
Outstanding Options/Warrants, beginning balance	3,304,260
Outstanding Options/Warrants, Weighted Average Exercise Price, beginning balance	$ 1.28
Granted	1,659,696
Granted, Weighted Average Exercise Price	$ 1.11
Exercised
Exercised, Weighted Average Exercise Price
Forfeited/Cancelled
Forfeited/Cancelled, Weighted Average Exercise Price
Outstanding Options/Warrants, ending balance	4,963,956
Outstanding Options/Warrants, Weighted Average Exercise Price, ending balance	$ 1.22

Stock Options and Warrants (D31

Stock Options and Warrants (Details Textual) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 30, 2004	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 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		$ 58,611	$ 0	$ 106,911	$ 17,588
Number of stock options exercisable		1,627,296		1,627,296
Number of warrants exercisable		4,963,956		4,963,956
Stock Options [Member]
Stock option and warrants (Textual)
Unrecognized compensation costs related to non-vested stock option		$ 323,175		$ 323,175

Related Party Transactions (Det

Related Party Transactions (Details) - Jun. 30, 2015 - Julian Ross [Member] - USD ($)		Total
Summary of related party financings and notes
Amount	[1]	$ 200,000
Stated interest rate	[1]	0.00%
Maturity	[1]	n/a
[1]	(1) Our CEO, Mr. Ross provides us shareholder cash advances and other consideration from time to time to fund working capital.

Fair Value Measurements (Detail

Fair Value Measurements (Details)	6 Months Ended
	Jun. 30, 2015USD ($)
Fair Value Measurements [Abstract]
Balance as of December 31, 2014	$ 31,010
Additions related to embedded derivative of convertible notes issued	369,472
Gain on decrease in value of derivative liabilities	(122,584)
Conversions	(28,698)
Balance as of June 30, 2015	$ 249,200

Fair Value Measurements (Deta34

Fair Value Measurements (Details Textual)	6 Months Ended
	Jun. 30, 2015USD ($)
Fair Value Measurements (Textual)
Additions related to embedded derivative of convertible notes issued	$ 369,472
Excess derivative over proceeds	204,272
Conversions	28,698
Gain on decrease in value of derivative liabilities	$ 122,584

Segment Information (Details)

Segment Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Components of revenue by geographic region
Total revenues	$ 1,046,019	$ 678,111	$ 1,670,533	$ 1,034,340
United States revenues [Member]
Components of revenue by geographic region
Total revenues	1,044,066	677,508	1,668,580	979,110
Row Product Sales [Member]
Components of revenue by geographic region
Total revenues	$ 1,953	$ 603	$ 1,953	37,730
ROW - license fees/service revenue [Member]
Components of revenue by geographic region
Total revenues				$ 17,500

Going Concern (Details)

Going Concern (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Going Concern (Textual)
Accumulated deficit	$ (20,639,745)	$ (18,041,208)
Stockholders' deficit	$ 2,997,385	$ 1,074,788