Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 13, 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 | Sep. 30, 2015 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 36,220,761 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 6,312 | $ 647,093 |
Restricted cash | 2,000,000 | |
Accounts receivable, net | 830,596 | $ 369,575 |
Inventories | 390,028 | 277,346 |
License fee receivable | 403,478 | 463,308 |
Prepaid expenses and other current assets | 91,747 | 53,588 |
Total current assets | 3,722,161 | 1,810,910 |
Property and equipment, net | 89,544 | 91,537 |
Intangible assets, net | 340,142 | 362,764 |
Other assets | 276,692 | 246,237 |
TOTAL ASSETS | 4,428,538 | 2,511,448 |
Current liabilities | ||
Accounts payable and accrued expenses | 768,674 | 558,338 |
Related party payable | $ 222,417 | 154,850 |
Capital leases - current | 149 | |
Notes payable - current, net of discount | $ 47,103 | 40,897 |
Convertible notes payable, net of discount | 1,132,808 | 606,932 |
Derivative liability | 76,618 | 416,563 |
Total current liabilities | $ 2,247,620 | 1,392,176 |
Long-term liabilities | ||
Notes payable | 44,484 | |
Total long-term liabilities | 44,484 | |
TOTAL LIABILITIES | $ 2,247,620 | $ 1,436,660 |
COMMITMENTS AND CONTINGENCY | ||
STOCKHOLDERS' EQUITY | ||
Common stock, par value $0.0004 per share; 100,000,000 shares authorized; 33,488,420 shares of voting common stock issued and outstanding as of September 30, 2015 and 28,436,930 shares issued and outstanding as of December 31, 2014 | $ 13,398 | $ 11,377 |
Other stockholder equity | (1,231,666) | |
Additional Paid-in Capital | 25,418,546 | $ 19,104,322 |
Accumulated deficit | (22,020,795) | (18,041,208) |
TOTAL STOCKHOLDERS' EQUITY | 2,180,918 | 1,074,788 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 4,428,538 | 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 | Sep. 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 | 33,488,420 | 28,436,930 |
Voting common stock, shares outstanding | 33,488,420 | 28,436,930 |
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 | 750 | 1,145 |
Preferred stock, shares outstanding | 750 | 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 | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 1,138,380 | $ 818,456 | $ 2,809,553 | $ 1,852,796 |
Cost of goods sold | 580,126 | 321,932 | 1,325,165 | 792,378 |
Gross profit | 558,254 | 496,524 | 1,484,388 | 1,060,418 |
Operating expenses | ||||
Research and development | 362,599 | 155,869 | 873,450 | 433,384 |
Sales and marketing | 437,442 | 202,825 | 1,231,581 | 444,818 |
Other general and administrative | 686,828 | 527,289 | 1,930,425 | 1,132,276 |
Total operating expenses | 1,486,869 | 885,983 | 4,035,456 | 2,010,478 |
Loss from operations | (928,615) | (389,459) | (2,551,067) | (950,060) |
Other income (expenses) | ||||
Interest expense | (626,127) | $ (169,051) | (1,519,071) | $ (362,638) |
Change in value of derivative liabilities | 219,673 | 342,257 | ||
Derivative expense | (47,091) | (251,363) | ||
Other income (expense) | 1,407 | $ 96,161 | (342) | $ 154,521 |
Total other income (expenses) | (452,138) | (72,890) | (1,428,519) | (208,117) |
Net loss | $ (1,380,753) | $ (462,349) | $ (3,979,587) | $ (1,158,177) |
Basic net loss per common share | $ (0.04) | $ (0.02) | $ (0.13) | $ (0.04) |
Weighted average common shares outstanding: | ||||
Basic and Diluted | 32,425,195 | 26,120,974 | 30,543,678 | 26,042,971 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,979,587) | $ (1,158,177) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization expense | 33,239 | 35,462 |
Amortization of debt discount and beneficial conversion features | 1,315,271 | $ 254,944 |
Gain on forgiveness of debt | (44,954) | |
Excess derivative over proceeds | 251,363 | |
Derivative liability fair value adjustment | (342,257) | |
Expenses paid by related parties | 137,150 | $ 4,374 |
Warrants issued for services | 11,025 | |
Stock based compensation | 119,083 | $ 62,137 |
Common stock issued for services | $ 147,363 | |
Gain on extinguishment of debt | $ (123,667) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | $ (461,020) | (444,915) |
Inventories | (112,682) | (11,618) |
License fees receivable | 59,830 | 36,692 |
Prepaid expenses and other current assets | (38,159) | $ 87,070 |
Other assets | (30,455) | |
Accounts payable and accrued liabilities | $ 266,363 | $ 476,772 |
Deferred revenue | (2,976) | |
NET CASH USED IN OPERATING ACTIVITIES | $ (2,668,427) | (783,900) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | $ (8,624) | (70,651) |
Purchase of intangible assets | (198) | |
NET CASH USED IN INVESTING ACTIVITIES | $ (8,624) | (70,849) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Common stock subscribed and issued for cash | 80,001 | $ 29,672 |
Preferred stock issued for cash and warrants | 2,650,001 | |
Cash received from related parties | 43,917 | $ 9,800 |
Payments made to related parties | (113,500) | (115,300) |
Cash received from convertible notes payable | 1,551,000 | 475,000 |
Payments made on convertible notes payable | (175,000) | (192,000) |
Payments on capital leases | (149) | (1,440) |
NET CASH PRODUCED BY FINANCING ACTIVITIES | 4,036,270 | 205,732 |
Net change in cash and cash equivalents | 1,359,219 | (649,019) |
Cash and cash equivalents, at beginning of period | 647,093 | 657,673 |
Cash and cash equivalents, at end of period | $ 2,006,312 | 8,654 |
Cash paid during the period for: | ||
Interest | $ 12,996 | |
Income taxes | ||
Supplemental non-cash investing and financing activities: | ||
Conversion of preferred stock to common stock | $ 371 | |
Common stock issued for prepaid services | $ 25,000 | |
Conversion of convertible notes payable | $ 1,234,730 | $ 188,358 |
Beneficial conversion feature | 843,515 | |
Initial value of the derivative | $ 165,200 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 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 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 - Inventory Inventories as at September 30, 2015 and December 31, 2014 consisted of the following: September 30, December 31, 2015 2014 Parts inventory $ 207,605 $ 133,477 Work in process 45,120 41,114 Finished goods 137,303 102,755 Total inventories $ 390,028 $ 277,346 Cash and Cash Equivalents - 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 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 188,982 $ 340,142 Other Assets Capitalization of software Amortization expense for websites and URLs was $9,654 and $9,654 for the three month periods ended September 30, 2015 and 2014, respectively. Amortization expense for websites and URLs was $28,962 and $28,962 for the nine month periods ended September 30, 2015 and 2014, respectively. Research and Development Costs – Equity Warrants - Stock-Based Compensation – For the three month periods ended September 30, 2015 and 2014, stock based compensation expense was approximately $25,740 and $42,437, respectively, which consisted primarily of stock-based compensation expense related to stock options issued to the employees and recognized under GAAP. For the nine month periods ended September 30, 2015 and 2014, stock based compensation expense was approximately $132,651 and $60,025, 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 | 9 Months Ended |
Sep. 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 September 30, 2015 was $4,897 and the net amount of the Frisco Note as at September 30, 2015 was $47,103. Future principal payments of the Frisco Note payable are as follows: 2015 52,000 Total $ 52,000 During the nine months ended September 30, 2015 we issued ten convertible notes with a total principal value of $1,683,500 for $1,461,500 in cash. The notes contained original issuance discounts for a total of $222,500, and interest rates ranging between 8% and 12%. The maturity dates of the notes range from January 7, 2016 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 an aggregate discount rate of approximately 7% off the market price of the Company’s common stock. During the nine months ended September 30, 2014 we repaid two notes with principal values totaling $175,000 for $237,298 in cash and the two notes were extinguished in their entirety pursuant to these transactions. During the nine months ended September 30, 2014 we issued eight convertible notes with a total principal value of $475,000 for $412,500 in cash. The notes contained original issuance discounts for a total of $62,500, and interest rates of 12%. The maturity dates of the notes range from January 28, 2015 to September 10, 2015. The creditors have the option at any time to convert the principal and any accrued interest into common stock of the Company at a an aggregate discount rate of approximately thirty eight percent off the market price of the Company’s common stock. During the nine months ended September 30, 2014 we repaid two notes with principal values totaling $167,500 for $207,000 in cash and the two notes were extinguished in their entirety pursuant to these transactions. During the nine months ended September 30, 2014 we exchanged a lease with an outstanding amount of $307,662 for a convertible note with a principal value of $150,000 and 75,000 shares of our common stock. The lease was extinguished in its entirety pursuant to the exchange transaction. During the nine months ended September 30, 2015, 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. We recorded the relative fair value of the warrants issued with the notes in the amount of $251,363 as debt discounts upon issuance, and amortized these debt discounts as interest expense over the life of the notes. Additionally, as a result of issuing the warrants with the subordinated convertible promissory notes, a beneficial conversion option for each note was recorded as a debt discount reflecting the incremental conversion option intrinsic value benefit totaling $133,637 at the time of issuance provided to the holders of the notes, which was also amortized as interest expense over the life of the notes. We recorded interest expense in the amounts of $270,361 and $0 for the three months ended September 30, 2015 and 2014, respectively in connection with the notes (issued with warrants) that contained beneficial conversion features. We recorded interest expense in the amounts of $355,101 and $0 for the nine months ended September 30, 2015 and 2014, respectively in connection with all the notes (issued with warrants) that contained beneficial conversion features. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 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 September 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 September 30, 2015 and December 31, 2014, respectively. During the three months ended September 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 September 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 750 and 1,145 Series B Preferred shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively. During the three months ended September 30, 2015 the Company did not issue any shares of the Series B Preferred and 150 shares of Series B Preferred were converted into 313,296 shares of our common stock. Series C Convertible Preferred Stock: As of September 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 September 30, 2015 and December 31, 2014, respectively. During the three months ended September 30, 2015 the Company issued no 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 September 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 September 30, 2015 and December 31, 2014, respectively. During the three months ended September 30, 2015 the Company issued no 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 September 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 September 30, 2015 and December 31, 2014, respectively. During the three months ended September 30, 2015 the Company issued no 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 September 30, 2015: (1) We issued 313,296 shares of common stock pursuant to the cashless conversion of 150 shares of Series B Preferred; (2) We issued 1,767,650 shares of common stock pursuant to the conversion of convertible notes; (3) We issued 90,000 shares of common stock for services; (4) We issued 93,474 shares of common stock for compensation; (5) We recorded $2,380 in expenses in connection warrants issued for services; (6) We recorded $219,673 in connection with derivative revaluation; (7) We recorded $26,740 for the computed fair value of options issued to employees, non-employee directors, and consultants, net of cancellations and forfeitures; and (8) We recorded $434,983 in connection with beneficial conversion features. During the nine months ended September 30, 2015: 1. We issued 133,333 shares of common stock for $80,001 in cash; 2. We issued 91,500 shares of common stock pursuant to the cashless conversion of 75,000 shares of Series A Preferred; 3. We issued 835,833 shares of common stock pursuant to the cashless conversion of 395 shares of Series B Preferred; 4. We issued 770,000 shares of the Series C Preferred 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 issued 3,719,350 shares of common stock pursuant to the conversion of convertible notes; 7. We issued 178,000 shares of common stock for services; 8. We issued 93,474 shares of common stock for compensation; 9. We recorded $11,025 in expenses in connection warrants issued for services; 10. We recorded $342,257 in connection with derivative revaluation; 11. We recorded $132,651 for the computed fair value of options issued to employees, non-employee directors, and consultants, net of cancellations and forfeitures; and 12. We recorded $1,315,271 in connection with beneficial conversion features. During the three months ended September 30, 2014: (1) We issued 26,580 shares of common stock for $19,000 in cash; and (2) We issued 360,781 shares of common stock pursuant to cashless conversions of convertible notes payable and accrued interest, valued at $150,858. During the nine months ended September 30, 2014: (1) We issued 41,580 shares of common stock for $29,700 in cash; (2) We issued 444,072 shares of common stock pursuant to cashless conversions of convertible notes payable and accrued interest, valued at $188,358; and (3) We issued 122,000 shares of common stock pursuant to the cashless conversion of 100,000 shares of Series A Preferred. As of September 30, 2015 we had approximately 33,488,420 shares of common stock issued and outstanding. |
Stock Options and Warrants
Stock Options and Warrants | 9 Months Ended |
Sep. 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 September 30, 2015: Employee Non-Employee Weighted Weighted Number Average Number Average Combined Of Exercise Of Exercise Total Outstanding at June 30, 2015 2,513,838 $ 0.41 - $ - 2,513,838 Granted - $ - - $ - - Exercised - $ - - $ - - Forfeited/Cancelled (62,500 ) $ - - $ - - Outstanding at September 30, 2015 2,451,338 $ 0.39 - $ - 2,451,338 The number of stock options exercisable at September 30, 2015 was 1,886,721. We used the following assumptions to estimate the fair value of options granted under the Plan for the three and nine months ended September 30, 2015 and 2014: Equity Incentive Plans Equity Incentive Plans for the Three Months Ended September 30, for the Nine Months Ended September 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 September 30, 2015 and 2014, stock based compensation expense was approximately $26,736 and $42,437 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 September 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 September 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 September 30, 2015: Weighted Number Average Of Exercise Warrants Price Outstanding at June 30, 2015 4,863,956 $ 1.22 Granted 15,000 $ 1.23 Exercised - $ - Forfeited/Cancelled - $ - Outstanding at September 30, 2015 4,878,956 $ 1.23 The number of warrants exercisable at September 30, 2015 was 4,878,956. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 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 September 30, 2015 is as follows: Related party Julian Ross (1) Amount $ 222,417 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 | 9 Months Ended |
Sep. 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 | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 7 – FAIR VALUE MEASUREMENTS Changes related to derivatives for the nine months ended September 30, 2015 are as follows: Balance as of December 31, 2014 $ 31,010 Additions related to embedded derivative of convertible notes issued 416,563 Gain on decrease in value of derivative liabilities (342,257 ) Conversions (28,698 ) Balance as of September 30, 2015 $ 76,618 During the nine month period the Company recorded derivatives related to convertible notes of $416,563 of which $251,363 exceed the proceeds of the convertible notes and was recorded as a derivative expense. The Company also converted $28,698 and recorded gains on the change in the fair values of the derivatives of $342,257. Assets Measured at Fair Value on a Recurring Basis Fair value measurements at Total Level 1 Level 2 Level 3 Cash (1) $ 2,006,312 $ 2,006,312 - - Derivatives (76,618 ) - (76,618 ) - Total assets at fair value as of September 30, 2015 $ 1,929,694 $ 2,006,312 $ (76,618 ) $ - (1) Included in Cash and cash equivalents on the Company's Balance Sheet. Total Level 1 Level 2 Level 3 Cash (1) $ 647,093 $ 647,093 - - Total assets at fair value as of December 31, 2014 $ 647,093 $ 647,093 - - (1) Included in Cash and cash equivalents on the Company's Balance Sheet. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 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 September 30, 2015 and 2014: Three Months Ended 2015 2014 United States - product sales $ 1,138,380 $ 814,619 ROW - product sales - 3,837 Totals $ 1,138,380 $ 818,456 T he following presents total revenue by geographic region for the nine month periods ended September 30, 2015 and 2014: Nine Months Ended September 30, 2015 2014 United States - product sales $ 2,807,600 $ 1,793,729 ROW - product sales 1,953 41,567 ROW - license fees/service revenue - 17,500 Totals $ 2,809,553 $ 1,852,796 |
Going Concern
Going Concern | 9 Months Ended |
Sep. 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 $22,020,795 and $18,041,208 at September 30, 2015 and December 31, 2014, respectively, and stockholders’ equity of $2,180,918 and $1,074,787 as of September 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 September 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) | 9 Months Ended |
Sep. 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 September 30, 2015 and December 31, 2014 consisted of the following: September 30, December 31, 2015 2014 Parts inventory $ 207,605 $ 133,477 Work in process 45,120 41,114 Finished goods 137,303 102,755 Total inventories $ 390,028 $ 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 188,982 $ 340,142 |
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 September 30, 2015 and 2014, respectively. Amortization expense for websites and URLs was $28,962 and $28,962 for the nine month periods ended September 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 September 30, 2015 and 2014, stock based compensation expense was approximately $25,740 and $42,437, respectively, which consisted primarily of stock-based compensation expense related to stock options issued to the employees and recognized under GAAP. For the nine month periods ended September 30, 2015 and 2014, stock based compensation expense was approximately $132,651 and $60,025, 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) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of inventories | September 30, December 31, 2015 2014 Parts inventory $ 207,605 $ 133,477 Work in process 45,120 41,114 Finished goods 137,303 102,755 Total inventories $ 390,028 $ 277,346 |
Schedule of finite-lived intangible assets amortization expense | 2015 $ 30,232 2016 30,232 2017 30,232 2018 30,232 Thereafter 188,982 $ 340,142 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Frisco EDC [Member] | |
Debt Instrument [Line Items] | |
Summary of future principal payments of Frisco note payable | 2015 52,000 Total $ 52,000 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 9 Months Ended |
Sep. 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 June 30, 2015 2,513,838 $ 0.41 - $ - 2,513,838 Granted - $ - - $ - - Exercised - $ - - $ - - Forfeited/Cancelled (62,500 ) $ - - $ - - Outstanding at September 30, 2015 2,451,338 $ 0.39 - $ - 2,451,338 |
Summary of assumptions to estimate the fair value of options granted | Equity Incentive Plans Equity Incentive Plans for the Three Months Ended September 30, for the Nine Months Ended September 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 June 30, 2015 4,963,956 $ 1.22 Granted 15,000 $ 1.20 Exercised - $ - Forfeited/Cancelled - $ - Outstanding at September 30, 2015 4,963,956 $ 1.22 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Summary of the related party financings and notes payable | Related party Julian Ross (1) Amount $ 222,417 Stated interest rate 0 % Maturity n/a |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 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 416,563 Gain on decrease in value of derivative liabilities (342,257 ) Conversions (28,698 ) Balance as of September 30, 2015 $ 76,618 |
Schedule of assets measured at fair value on a recurring basis | Fair value measurements at Total Level 1 Level 2 Level 3 Cash (1) $ 2,006,312 $ 2,006,312 - - Derivatives (76,618 ) - (76,618 ) - Total assets at fair value as of September 30, 2015 $ 1,929,694 $ 2,006,312 $ (76,618 ) $ - (1) Included in Cash and cash equivalents on the Company's Balance Sheet. Total Level 1 Level 2 Level 3 Cash (1) $ 647,093 $ 647,093 - - Total assets at fair value as of December 31, 2014 $ 647,093 $ 647,093 - - (1) Included in Cash and cash equivalents on the Company's Balance Sheet. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Summary of revenue by geographic region | Three Months Ended 2015 2014 United States - product sales $ 1,138,380 $ 814,619 ROW - product sales - 3,837 Totals $ 1,138,380 $ 818,456 Nine Months Ended September 30, 2015 2014 United States - product sales $ 2,807,600 $ 1,793,729 ROW - product sales 1,953 41,567 ROW - license fees/service revenue - 17,500 Totals $ 2,809,553 $ 1,852,796 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Summary of Inventories | ||
Parts inventory | $ 207,605 | $ 133,477 |
Work in process | 45,120 | 41,114 |
Finished goods | 137,303 | 102,755 |
Total inventories | $ 390,028 | $ 277,346 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details 1) | Sep. 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 | 188,982 |
Total | $ 340,142 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies (Textual) | |||||
Deferred revenue | $ 0 | $ 0 | $ 0 | ||
Depreciation expense | 3,797 | $ 3,052 | 10,617 | $ 12,838 | |
Impairment charges for patents | 0 | 0 | |||
Amortization of intangible assets | 7,508 | 7,557 | 22,616 | 22,623 | |
Amortization expense of other assets | 9,654 | 9,654 | 28,962 | 47,216 | |
Research and development | 362,599 | 155,869 | 873,450 | 433,384 | |
Stock-based compensation expense related to stock options issued to the employees | 25,740 | 42,437 | 132,651 | 60,025 | |
Advertising and promotion costs | 437,442 | 202,825 | $ 1,231,581 | 444,818 | |
Potentially dilutive shares | 21,865,386 | ||||
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 | $ 28,962 | $ 28,962 | |
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] | Sep. 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) | Mar. 22, 2011USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)ConvertibleNotes | Sep. 30, 2014USD ($)ConvertibleNotesshares |
Notes Payable (Textual) | |||||
Repayment of notes | $ 175,000 | $ 192,000 | |||
Interest expense | $ 626,127 | $ 169,051 | 1,519,071 | 362,638 | |
Convertible Notes Payable [Member] | |||||
Notes Payable (Textual) | |||||
Fair value of warrants issued | 251,363 | ||||
Conversion option intrinsic value | 133,637 | ||||
Interest expense | 270,361 | 0 | $ 355,101 | 0 | |
Ten Convertible Notes [Member] | |||||
Notes Payable (Textual) | |||||
Number of convertible notes | ConvertibleNotes | 2 | ||||
Unamortized discount, new notes | 222,500 | $ 222,500 | |||
Note payable, net (new notes) | 1,683,500 | 1,683,500 | |||
Convertible notes, cash value | $ 1,461,500 | $ 1,461,500 | |||
Maturity date of notes, description | Maturity dates of the notes range from January 7, 2016 to May 4, 2017. | ||||
Market price discount rate | 7.00% | ||||
Ten Convertible Notes [Member] | Note One [Member] | |||||
Notes Payable (Textual) | |||||
Repayment of notes | 175,000 | ||||
Ten Convertible Notes [Member] | Notes Two [Member] | |||||
Notes Payable (Textual) | |||||
Repayment of notes | $ 237,298 | ||||
Ten Convertible Notes [Member] | Minimum [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 8.00% | 8.00% | |||
Ten Convertible Notes [Member] | Maximum [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 12.00% | 12.00% | |||
Eight Convertible Notes [Member] | |||||
Notes Payable (Textual) | |||||
Number of convertible notes | ConvertibleNotes | 2 | ||||
Unamortized discount, new notes | 62,500 | $ 62,500 | |||
Note payable, net (new notes) | 475,000 | 475,000 | |||
Convertible notes, cash value | $ 412,500 | $ 412,500 | |||
Interest rate | 12.00% | 12.00% | |||
Maturity date of notes, description | Maturity dates of the notes range from January 28, 2015 to September 10, 2015. | ||||
Market price discount rate | 38.00% | ||||
Lease outstanding amount | $ 307,662 | $ 307,662 | |||
Convertible note principal value | $ 150,000 | $ 150,000 | |||
Convertible note issuance of common shares | shares | 75,000 | ||||
Eight Convertible Notes [Member] | Note One [Member] | |||||
Notes Payable (Textual) | |||||
Repayment of notes | $ 167,500 | ||||
Eight Convertible Notes [Member] | Notes Two [Member] | |||||
Notes Payable (Textual) | |||||
Repayment of notes | $ 207,000 | ||||
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 | ||||
Unamortized discount, new notes | $ 4,897 | $ 4,897 | |||
Note payable, net (new notes) | $ 47,103 | $ 47,103 | |||
New debt instrument interest rate | 12.34% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | 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 issued for cash | $ 19,000 | $ 80,001 | $ 29,700 | ||
Common stock issued for cash, shares | 26,580 | 133,333 | 41,580 | ||
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 | $ 434,983 | $ 1,315,271 | |||
Common stock issued upon conversion of convertible notes, Shares | 1,767,650 | 360,781 | 3,719,350 | 444,072 | |
Fair value of options issued to employees | $ 26,740 | $ 132,651 | |||
Common stock, Shares issued | 33,488,420 | 33,488,420 | 28,436,930 | ||
Common stock, Shares outstanding | 33,488,420 | 33,488,420 | 28,436,930 | ||
Change in value of derivative liabilities | $ 219,673 | $ 342,257 | |||
Common stock issued for services | 90,000 | 178,000 | |||
Common stock issued for compensation | 93,474 | 93,474 | |||
Accrued interest | $ 150,858 | $ 188,358 | |||
Series A Preferred Stock [Member] | |||||
Shareholders' Equity (Textual) | |||||
Preferred Stock, shares issued | 518,750 | 518,750 | 593,750 | ||
Preferred stock converted into common stock | 91,500 | 100,000 | |||
Common stock issued upon conversion of convertible preferred stock, Shares | 75,000 | 122,000 | |||
Preferred stock, shares outstanding | 518,750 | 518,750 | 593,750 | ||
Series B Preferred Stock [Member] | |||||
Shareholders' Equity (Textual) | |||||
Preferred Stock, shares issued | 750 | 750 | 1,145 | ||
Preferred stock converted into common stock | 150 | 835,833 | |||
Series B preferred authorized | 3,500 | ||||
Common stock issued upon conversion of convertible preferred stock, Shares | 313,296 | 395 | |||
Preferred stock, shares outstanding | 750 | 750 | 1,145 | ||
Series C Preferred Stock [Member] | |||||
Shareholders' Equity (Textual) | |||||
Preferred Stock, shares issued | 770,000 | 770,000 | 0 | ||
Common stock issued for cash | $ 700,000 | ||||
Common stock issued for cash, shares | 770,000 | ||||
Preferred stock converted to common stock, Shares | |||||
Preferred stock subscription 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 | ||
Common stock issued for cash, shares | 1,050,000 | ||||
Preferred stock converted to common stock, Shares | |||||
Preferred stock, shares outstanding | 1,050,000 | 1,050,000 | 0 | ||
Cash held in escrow | $ 2,000,000 | $ 2,000,000 | |||
Series E Preferred Stock [Member] | |||||
Shareholders' Equity (Textual) | |||||
Preferred Stock, shares issued | 531,666 | 531,666 | 0 | ||
Preferred stock converted to common stock, Shares | |||||
Preferred stock, shares outstanding | 531,666 | 531,666 | 0 | ||
Warrant [Member] | |||||
Shareholders' Equity (Textual) | |||||
Warrants issued for services | $ 2,380 | $ 11,025 | |||
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) - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Summary of option activity | |
Outstanding Options/Warrants, beginning balance | 2,513,838 |
Granted | |
Granted, Weighted Average Exercise Price | $ / shares | |
Exercised | |
Exercised, Weighted Average Exercise Price | $ / shares | |
Forfeited/Cancelled | |
Forfeited/Cancelled, Weighted Average Exercise Price | $ / shares | |
Outstanding Options/Warrants, ending balance | 2,451,338 |
Employee [Member] | |
Summary of option activity | |
Outstanding Options/Warrants, beginning balance | 2,513,838 |
Outstanding Options/Warrants, Weighted Average Exercise Price, beginning balance | $ / shares | $ 0.41 |
Granted | |
Granted, Weighted Average Exercise Price | $ / shares | |
Exercised | |
Exercised, Weighted Average Exercise Price | $ / shares | |
Forfeited/Cancelled | (62,500) |
Forfeited/Cancelled, Weighted Average Exercise Price | $ / shares | |
Outstanding Options/Warrants, ending balance | 2,451,338 |
Outstanding Options/Warrants, Weighted Average Exercise Price, ending balance | $ / shares | $ 0.39 |
Non-Employee [Member] | |
Summary of option activity | |
Outstanding Options/Warrants, beginning balance | |
Outstanding Options/Warrants, Weighted Average Exercise Price, beginning balance | $ / shares | |
Granted | |
Granted, Weighted Average Exercise Price | $ / shares | |
Exercised | |
Exercised, Weighted Average Exercise Price | $ / shares | |
Forfeited/Cancelled | |
Forfeited/Cancelled, Weighted Average Exercise Price | $ / shares | |
Outstanding Options/Warrants, ending balance | |
Outstanding Options/Warrants, Weighted Average Exercise Price, ending balance | $ / shares |
Stock Options and Warrants (D29
Stock Options and Warrants (Details 1) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 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) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Summary of warrants activity | |
Outstanding Options/Warrants, beginning balance | 4,863,956 |
Outstanding Options/Warrants, Weighted Average Exercise Price, beginning balance | $ / shares | $ 1.22 |
Granted | 15,000 |
Granted, Weighted Average Exercise Price | $ / shares | $ 1.23 |
Exercised | |
Exercised, Weighted Average Exercise Price | $ / shares | |
Forfeited/Cancelled | |
Forfeited/Cancelled, Weighted Average Exercise Price | $ / shares | |
Outstanding Options/Warrants, ending balance | 4,878,956 |
Outstanding Options/Warrants, Weighted Average Exercise Price, ending balance | $ / shares | $ 1.23 |
Stock Options and Warrants (D31
Stock Options and Warrants (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2004 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 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 | $ 26,736 | $ 42,437 | $ 119,083 | $ 62,137 | |
Number of stock options exercisable | 1,886,721 | 1,886,721 | |||
Number of warrants exercisable | 4,878,956 | 4,878,956 | |||
Stock Options [Member] | |||||
Stock option and warrants (Textual) | |||||
Unrecognized compensation costs related to non-vested stock option | $ 323,715 | $ 323,715 |
Related Party Transactions (Det
Related Party Transactions (Details) - Julian Ross [Member] | Sep. 30, 2015USD ($) | [1] |
Summary of related party financings and notes | ||
Amount | $ 222,417 | |
Stated interest rate | 0.00% | |
[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) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Schedule of changes related to derivative | |
Balance as of December 31, 2014 | $ 416,563 |
Additions related to embedded derivative of convertible notes issued | 416,563 |
Gain on decrease in value of derivative liabilities | (342,257) |
Conversions | (28,698) |
Balance as of September 30, 2015 | $ 76,618 |
Fair Value Measurements (Deta34
Fair Value Measurements (Details 1) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash (1) | [1] | $ 2,006,312 | $ 647,093 |
Derivatives | (76,618) | ||
Total assets at fair value | 1,929,694 | 647,093 | |
Fair value measurements Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash (1) | [1] | $ 2,006,312 | 647,093 |
Derivatives | |||
Total assets at fair value | $ 2,006,312 | $ 647,093 | |
Fair value measurements Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash (1) | [1] | ||
Derivatives | $ (76,618) | ||
Total assets at fair value | $ (76,618) | ||
Fair value measurements Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash (1) | [1] | ||
Derivatives | |||
Total assets at fair value | |||
[1] | Included in Cash and cash equivalents on the Company's Balance Sheet. |
Fair Value Measurements (Deta35
Fair Value Measurements (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value Measurements (Textual) | ||
Additions related to embedded derivative of convertible notes issued | $ 416,563 | |
Excess derivative over proceeds | 251,363 | |
Conversions | 28,698 | |
Gain on decrease in value of derivative liabilities | $ 342,257 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Components of revenue by geographic region | ||||
Total revenues | $ 1,138,380 | $ 818,456 | $ 2,809,553 | $ 1,852,796 |
United States revenues [Member] | ||||
Components of revenue by geographic region | ||||
Total revenues | $ 1,138,380 | 814,619 | 2,807,600 | 1,793,729 |
Row Product Sales [Member] | ||||
Components of revenue by geographic region | ||||
Total revenues | $ 3,837 | $ 1,953 | 41,567 | |
ROW - license fees/service revenue [Member] | ||||
Components of revenue by geographic region | ||||
Total revenues | $ 17,500 |
Going Concern (Details)
Going Concern (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Going Concern (Textual) | ||
Accumulated deficit | $ 22,020,795 | $ 18,041,208 |
Stockholders' deficit | $ 2,180,918 | $ 1,074,788 |