Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2015 | May. 04, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Mojo Organics, Inc. | |
Entity Central Index Key | 1,414,953 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2015 | |
Amendment Flag | true | |
Amendment Description | Purpose of This Amendment The purpose of this Amendment No. 1 to MOJO Organics, Inc.s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, filed with the Securities and Exchange Commission on May 07, 2015, is to reclassify presentation of License Fee expense on the Statements of Operations. No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q. | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 16,907,396 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,015 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 159,259 | $ 345,616 |
Accounts Receivable, net | 36,558 | 43,890 |
Inventory | $ 192,892 | 445,328 |
Supplier deposits | 1,782 | |
Prepaid expenses | $ 9,795 | 37,887 |
Total Current Assets | 398,504 | 874,503 |
Property and Equipment, net of accumulated depreciation | 1,939 | 2,603 |
Other Assets | ||
Security deposit | 2,294 | 2,294 |
Total Assets | 402,737 | 879,400 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,308,180 | 542,157 |
Accrued payroll to related parties | 255,532 | 220,677 |
Total Current Liabilities | $ 2,563,712 | $ 762,834 |
Stockholders Equity/ (Deficit) | ||
Preferred stock, 10,000,000 shares authorized at $0.001 par value, no shares issued and outstanding | ||
Common stock, 190,000,000 shares authorized at $0.001 par value, 16,907,396 and 16,907,396 shares issued and outstanding, respectively | $ 16,907 | $ 16,907 |
Additional paid in capital | 18,830,646 | 18,436,503 |
Accumulated deficit | (21,008,528) | (18,336,844) |
Total Stockholders Equity/ Deficit | (2,160,975) | 116,566 |
Total Liabilities and Stockholders Equity/ Deficit | $ 402,737 | $ 879,400 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 190,000,000 | 190,000,000 |
Common stock, issued | 16,907,396 | 16,907,396 |
Common stock, outstanding | 16,907,396 | 16,907,396 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Revenues | $ 68,885 | $ 85,478 |
Cost of Revenues | 109,739 | 80,631 |
Gross Profit (Loss) | (40,854) | 4,847 |
Operating Expenses | ||
Selling, general and administrative | 848,371 | 1,367,916 |
License fee | 1,775,862 | 92,120 |
Total Operating Expenses | 2,624,233 | 1,460,036 |
Loss from Operations | (2,665,087) | $ (1,455,189) |
Other Income/ (Expense) | ||
Interest income | 907 | |
Interest (expense) | (7,504) | |
Total Other (Expense) | (6,597) | |
Loss Before Provision for Income Taxes | $ (2,671,684) | $ (1,455,189) |
Provision for Income Taxes | ||
Net Loss | $ (2,671,684) | $ (1,455,189) |
Net Loss available to common stockholders, basic and fully diluted | $ (0.16) | $ (0.11) |
Basic and diluted weighted average number of common shares outstanding | 16,907,396 | 13,020,804 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities | ||
Net Loss | $ (2,671,684) | $ (1,455,189) |
Adjustments to reconcile net loss to cash used by operating activitites: | ||
Depreciation | 664 | 422 |
Share-based compensation - stock options | 19,165 | 25,358 |
Stock and warrants issued to directors and employees | $ 374,978 | 849,077 |
Stock issued to employees in lieu of salary | 37,000 | |
Stock and warrants issued to advisors and consultants | 280,235 | |
Change in assets and liabilites: | ||
Decrease (increase) in accounts receivable | $ 7,332 | (59,991) |
Decrease (increase) in inventory | 252,436 | (188,512) |
Decrease in supplier deposits | 1,782 | 27,594 |
Decrease in prepaid expenses | 28,092 | 11,733 |
Increase (decrease) in accounts payable and accrued expenses | 1,800,878 | (146,016) |
Net cash used in operating activities | $ (186,357) | (618,289) |
Net cash from investing activities: | ||
Purchases of property and equipment | (586) | |
Net cash used in investing activities | (586) | |
Net cash from financing activities: | ||
Notes payable to related parties | ||
Sale of common stock, net | 1,835,000 | |
Net cash provided by financing activities | 1,811,000 | |
Net increase (decrease) in cash and cash equivalents | $ (186,357) | 1,192,125 |
Cash and cash equivalents at beginning of period | 345,616 | 8,080 |
Cash and cash equivalents at end of period | $ 159,259 | $ 1,200,205 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | ||
Taxes paid | ||
NON CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accrued compensation converted to notes payable to related parties | $ 37,000 | |
Common stock issued for the conversion of notes payable to related parties | $ 37,000 |
Condensed Statement of Stockhol
Condensed Statement of Stockholders' Equity / (Deficit) (Unaudited) - 3 months ended Mar. 31, 2015 - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, Shares at Dec. 31, 2014 | 16,907,396 | |||
Beginning balance, Amount at Dec. 31, 2014 | $ 16,907 | $ 18,436,503 | $ (18,336,844) | $ 116,566 |
Issuance of restricted Common Stock and Warrants: | ||||
Directors and Employees, net of forfeitures | 374,978 | 374,978 | ||
Stock based compensation-stock options | 19,165 | 19,165 | ||
Net loss | $ (2,671,684) | (2,671,684) | ||
Ending balance, Shares at Mar. 31, 2015 | 16,907,396 | |||
Ending balance, Amount at Mar. 31, 2015 | $ 16,907 | $ 18,830,646 | $ (21,008,528) | $ (2,160,975) |
Business
Business | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | NOTE 1 BUSINESS Overview MOJO Organics, Inc. (MOJO or the Company) was incorporated in the State of Delaware on August 2, 2007. Headquartered in Jersey City, NJ, the Company is a developer of emerging beverage brands that are natural, USDA Organic, non-genetically modified (Non GMO) and certified by the Rainforest Alliance. The Company has developed a line of Coconut Water beverages which are tropically flavored as well as natural, organic and Non GMO. The Company expects to launch these beverages during 2015. Since July 2013, the Company has produced 100% tropical fruit juices, produced under a license agreement (the License Agreement) from Chiquita Brands L.L.C. (CBLLC), a wholly owned subsidiary of Chiquita Brands International, Inc. Pursuant to the License Agreement, CBLLC granted to the Company an exclusive license to use its marks in the manufacture, sale, promotion, marketing, advertising and distribution of certain fruit juice products in select containers in Connecticut, New Jersey and New York and a non-exclusive license for the other states. If the Company failed to attain the minimum sales volume and/or minimum royalty payments required pursuant to the License Agreement in the exclusive territory for certain periods of time, CBLLC had the right to terminate the License Agreement by written notice. On March 27, 2015, pursuant to the terms of the License Agreement, CBLLC provided the Company with a letter: (i) providing written notice of termination effective September 27, 2015 for failure by the Company to achieve the minimum sales volume in the exclusive territory; (ii) providing the Company with a right of sell off of any existing inventory of the licensed products; (iii) demanding payment by the Company of liquidated damages in the amount of $1,515,076; (iv) demanding a minimum royalty payment for contract period three in the amount of $507,223; and (v) demanding payment of additional royalties earned in the non-exclusive territories in the aggregate amount of $7,174.88. CBLLC also informed the Company that if all royalties due are not received by April 30, 2015, CBLLC will exercise its right to immediate termination for nonpayment of royalties under the License Agreement. As of the filing date, no payment has been made by the Company to CBLLC. Accordingly, CBLLC may immediately terminate the License Agreement at any time. Interim Financial Statements The accompanying unaudited interim condensed financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q and article 10 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures included in these financial statements are adequate to make the information presented not misleading. The unaudited interim condensed financial statements included in this document have been prepared on the same basis as the annual financial statements, and in the Companys opinion, reflect all adjustments necessary for a fair presentation in accordance with GAAP and SEC regulations for interim financial statements. The results for the three months ended March 31, 2015 are not necessarily indicative of the results that the Company will have for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes to those statements for the year ended December 31, 2014 included in the Companys Annual Report on Form 10-K. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The financial statements are prepared in conformity with GAAP. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents include investment instruments and time deposits purchased with a maturity of three months or less. Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company provides for probable uncollectible amounts based upon its assessment of the current status of the individual receivables and after using reasonable collection efforts. The allowance for doubtful accounts as of March 31, 2015 and December 31, 2014 was $8,803 and zero, respectively. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or market. When necessary, the Company provides allowances to adjust the carrying value of its inventories to the lower of cost or net realizable value. Supplier Deposits Supplier Deposits consist of prepaid inventory for which the Company has not yet taken delivery. Property and Equipment and Depreciation Property and equipment are stated at cost. Depreciation is computed using the straight line method over the estimated useful life of the respective assets. Computer equipment is depreciated over a period of 3 -5 years. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. At March 31, 2015 and December 31, 2014, accumulated depreciation related to property and equipment was $2,866 and $5,539, respectively. Revenue Recognition Revenues from sales of products are recognized at the time of delivery when title and risk of loss passes to the customer. Recognition of revenue also requires reasonable assurance of collection of sales proceeds. Deductions from Revenue Costs incurred for sales incentives and discounts are accounted for as a reduction in revenue. These costs include payments to customers for performing merchandising activities on our behalf, including in-store displays, promotions for new items and obtaining optimum shelf space. Shipping and Handling Costs Shipping and Handling Costs incurred to move finished goods from our sales distribution centers to customer locations are included in the line Selling, General and Administrative Expenses in our Statements of Operations. Net Loss Per Common Share The Company computes per share amounts in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 260, Earnings per Share The following potentially dilutive securities have been excluded from the computation of weighted average shares outstanding for the three months ended March 31, 2015 and 2014, as they would have had an anti-dilutive impact on the Companys net loss per common share: 2015 2014 Shares underlying options outstanding 830,000 210,000 Shares underlying warrants outstanding 1,114,776 1,114,776 Total 1,944,776 1,324,776 Start-Up Costs In accordance with ASC topic 720-15, Start-Up Costs Income Taxes The Company provides for income taxes under ASC topic 740, Income Taxes Stock-Based Compensation ASC Topic 718, Accounting for Stock-Based Compensation Fair value of financial instruments The carrying amounts of financial instruments, which include accounts payable, accrued expenses and debt obligations approximate their fair values due to their short-term nature and/or variable interest rates. The Companys debt obligations bear interest at rates which approximate prevailing market rates for instruments with similar characteristics and, accordingly, the carrying values for these instruments approximate fair value. The Company adopted ASC Topic 820, Fair Value Measurement · Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical,, unrestricted assets or liabilities; · Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; · Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company did not have any assets or liabilities measured at fair value on a recurring basis at March 31, 2015 or December 31, 2014. The Company did not have any fair value adjustments for assets and liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2015 or 2014. New Accounting Pronouncements In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, which creates ASC Topic 606, Revenue from Contracts with Customers Revenue Recognition Revenue RecognitionConstruction-Type and Production-Type Contracts Other Assets and Deferred CostsContracts with Customers In June 2014, FASB issued ASU No. 2014-12, Compensation Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. In August 2014, FASB issued ASU 2014-15, Presentation of Financial Statements Going Concern Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern substantial doubt, Management does not believe that any other recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying financial statements. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3 - GOING CONCERN The Company's financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. For the three months ended March 31, 2015, the Company incurred a net loss from continuing operations of $2,671,684. At March 31, 2015, the Company had accumulated losses of $21,008,528, which includes accumulated losses from discontinued operations of $8,576,094. As discussed in Note 1, CBLLC has provided the Company with a letter terminating the License Agreement effective September 27, 2015. As of March 31, 2015, the Company owed CBLLC minimum royalty payments of $507,223, additional royalty payments of $7,175 and interest of $7,504. These payments were due April 30, 2015. In addition, the Company has accrued $253,611 for royalty payments not payable until August 2015 and liquidating damages pursuant to the License Agreement equal to $1,515,076. The Companys business is largely predicated on its relationship with CBLLC and this adverse change in the relationship could have a material adverse impact on its business. As of the filing date, no payment has been made by the Company to CBLLC. Accordingly, CBLLC may immediately terminate the License Agreement at anytime. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 4 INVENTORY As of March 31, 2015, inventory consisted of finished goods of $156,928 and raw materials of $35,964. As of December 31, 2014, inventory consisted of finished goods of $308,708 and raw materials of $136,620. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 5 COMMITMENTS AND CONTINGENCIES Lease Commitment The Company maintains office space in Jersey City, New Jersey. The Company leases the space from a third-party pursuant to a lease agreement dated February 11, 2014 at a rate of $1,147 per month. This agreement terminated on April 30, 2015. Licensing Agreement See Note 1 and Note 3 for a discussion of the termination of the License Agreement. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 6 STOCKHOLDERS EQUITY (DEFICIT) The Company has authorized 10,000,000 shares of preferred stock (Preferred Stock) and 190,000,000 shares of common stock (Common Stock), each having a par value of $0.001. In March 2013, the Company approved the 2012 Long-Term Incentive Equity Plan (the 2012 Plan), which provides the Company with the ability to issue stock options, stock appreciation rights, restricted stock and/or stock based awards for up to an aggregate of 2,050,000 shares of Common Stock. Private Placement Offering In March 2014, the Company consummated two concurrent private placement offerings (the 2014 Offerings), receiving an aggregate of $1,819,832, net of expenses, from accredited investors. In one of the offerings, the Company sold an aggregate of 917,582 shares of Common Stock for $0.91 per share for a total of $835,000. For each share purchased in this offering, investors received an immediately exercisable, five year warrant to purchase one share of Common Stock at a price of $0.91 per share. In the concurrent offering, the Company sold 1,098,901 shares of Common Stock for $0.91 per share for a total of $1,000,000. The investor in the concurrent offering did not receive warrants. Treasury Stock In April 2014, the Company approved a repurchase of 12,497 shares of Common Stock for $11,372. The shares were subsequently cancelled. Restricted Stock Compensation The Company issued shares of restricted Common Stock to certain of its directors, executive officers and employees. Unvested restricted shares are subject to forfeiture. With the exception of 2,665,251 shares which vest based upon achieving certain milestones, the Company records compensation expense over the vesting period based upon the fair market value on the date of grant for each share, adjusted for forfeitures. In August 2014, the Company issued 1,500,000 shares of Common Stock to an executive officer. The shares are subject to a restricted stock agreement, and the vesting is conditional upon the Company reaching certain performance goals. Should the executive officers employment with the Company end, any unvested shares are forfeited. In March 2014, the Company issued 465,000 shares of Common Stock under the 2012 Plan to certain of its directors, executive officers and employees. The shares are subject to a restricted stock agreement, pursuant to which the shares will vest one year from the date of such agreement if the grantee is a director or employee (as applicable) of the Company at the time. A summary of the restricted stock issuances to directors, executive officers and employees is as follows: Number of Shares Weighted Average Grant Date Fair Value Unvested share balance, January 1, 2014 4,790,408 $ 1.45 Granted 1,965,000 0.49 Vested (633,416 ) 2.09 Forfeited - - Unvested share balance, December 31, 2014 6,091,992 $ 1.07 Granted - Vested (1,415,596 ) 1.31 Forfeited - - Unvested share balance, March 31, 2015 4,676,396 $ 0.99 -10- In connection with the issuance of restricted stock, the Company recorded share-based compensation expense of $374,978 and $602,597 for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, there was $3,991,704 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation. That cost is expected to be recognized during the years 2015 and 2016. Stock Warrants In March 2014, the Company issued warrants to purchase 1,114,776 shares of Common Stock at a price of $0.91 per share. The warrants are exercisable for five years from the date of issuance. Advisory Services In March 2014, the Company entered into two agreements pursuant to which the Company was to receive advisory services related to strategy, distributorship, sales and sales channels and investor relations. The Company granted to each advisor 100,000 shares of restricted Common Stock, subject to forfeiture if the advisor terminated or materially breached the agreement before the six-month anniversary thereof. The aggregate value of the advisory fees of $260,000 was calculated based upon the closing price of the Companys Common Stock on the date of the agreement. Advisory fees of $21,667 were charged to income during the three months ended March 31, 2014. Also in March 2014, the Company issued 82,418 and 1,234 shares of Common Stock for advisory work and consulting work, respectively. The number of shares issued was calculated based upon the fair market value of the stock. On October 3, 2013, the Company entered into an advisor agreement whereby the Company would receive strategic business advisory services, distributorship advisory services, sales and sales channel advisory services and investor relation advisory services in exchange for the issuance of 50,000 shares of restricted Common Stock. The Common Stock vested on April 3, 2014. In connection with this issuance, the Company recorded $75,000 in consulting fees during the three months ended March 31, 2014. On October 3, 2013, the Company entered into an agreement for strategic business advisory services, public relations services and investor relations services with Mr. Ian Thompson. In connection with this agreement, the Company issued 167,204 shares of restricted Common Stock and recorded consulting fees of $501,612 during 2013, which was the fair market value of the stock on the date of issue; there was no cash payment to Mr. Thompson by the Company. The stock is fully vested; however it is restricted from trading. The advisor was also issued an additional 200,000 shares of restricted Common Stock, which was to vest quarterly based upon the Company reaching certain market capitalization and revenue goals, in addition to providing the above services, with the last tranche vesting scheduled to vest on June 30, 2014. Consulting fees amounting to $72,500 were recorded during the three months ended March 31, 2014 related to the additional shares of Common Stock issued. Throughout the term of the agreement, the Company requested the advisor to render performance under the agreement and to provide evidence of same. The Company believes, however, that Mr. Thompson failed to perform in all material respects under the terms of the agreement. On June 27, 2014, the Company terminated the agreement. Accordingly, the final tranche of 50,000 shares did not vest. Further, the Company is taking all necessary steps for the cancellation of the other shares totaling 317,204 shares, due to lack of delivery of consideration and breach of the agreement. |
Stock Options
Stock Options | 3 Months Ended |
Mar. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Stock Options | NOTE 7 STOCK OPTIONS In August 2014, the Company granted certain directors and employees of the Company stock options to purchase 620,000 shares of Common Stock pursuant to the 2012 Plan. The exercise price is $0.255 per share and the options become exercisable in four equal tranches in February 2015, August 2015, February 2016 and August 2016. They expire in August 2019. In July 2013, the Company granted certain directors and employees of the Company stock options pursuant to purchase 210,000 shares of Common Stock at an exercise price of $2.07 per share, which was 115% of the last sale price of the Common Stock on the date of grant. The options were granted pursuant to the 2012 Plan and became exercisable in July 2014. They expire in July 2015. During the three months ended March 31, 2015 and 2014, compensation expense of $19,165 and $25,358, respectively, was recorded. As of March 31, 2015, there was $111,797 of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized during 2015 and 2016 in conjunction with the vesting period. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 8 RELATED PARTY TRANSACTIONS As of March 31, 2015 and December 31, 2014, accrued payroll amounted to $255,532 and $220,677, respectively. This amount includes unpaid salary due to the Chief Executive Officer of the Company of $212,500 pursuant to his employment agreement with the Company and unpaid salary of $43,032 payable to the Controller (and Principal Accounting Officer) of the Company. During the three months ended March 31, 2014, the Company issued 23,272 shares of Common Stock to an officer of the Company as payment of salary in lieu of cash, equivalent to $37,000. The shares were valued by the Company at the closing price of the Companys Common Stock on the last trading day of the applicable month for which payment was due. In December 2013, the Company received $24,000 in non-interest bearing, demand loans from certain related parties. The loans were repaid in full by February 2014. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 SUBSEQUENT EVENTS In accordance with ASC Topic 855, Subsequent Events, |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The financial statements are prepared in conformity with GAAP. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include investment instruments and time deposits purchased with a maturity of three months or less. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company provides for probable uncollectible amounts based upon its assessment of the current status of the individual receivables and after using reasonable collection efforts. The allowance for doubtful accounts as of March 31, 2015 and December 31, 2014 was $8,803 and zero, respectively. |
Inventories | Inventories Inventories are stated at the lower of cost (first-in, first-out method) or market. When necessary, the Company provides allowances to adjust the carrying value of its inventories to the lower of cost or net realizable value. |
Supplier Deposits | Supplier Deposits Supplier Deposits consist of prepaid inventory for which the Company has not yet taken delivery. |
Property and Equipment and Depreciation | Property and Equipment and Depreciation Property and equipment are stated at cost. Depreciation is computed using the straight line method over the estimated useful life of the respective assets. Computer equipment is depreciated over a period of 3 -5 years. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. At March 31, 2015 and December 31, 2014, accumulated depreciation related to property and equipment was $2,866 and $5,539, respectively. |
Revenue Recognition | Revenue Recognition Revenues from sales of products are recognized at the time of delivery when title and risk of loss passes to the customer. Recognition of revenue also requires reasonable assurance of collection of sales proceeds. |
Deductions from Revenue | Deductions from Revenue Costs incurred for sales incentives and discounts are accounted for as a reduction in revenue. These costs include payments to customers for performing merchandising activities on our behalf, including in-store displays, promotions for new items and obtaining optimum shelf space. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and Handling Costs incurred to move finished goods from our sales distribution centers to customer locations are included in the line selling, general and administrative expenses in our Statements of Operations. |
Net Loss Per Common Share | Net Loss Per Common Share The Company computes per share amounts in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 260, Earnings per Share The following potentially dilutive securities have been excluded from the computation of weighted average shares outstanding for the three months ended March 31, 2015 and 2014, as they would have had an anti-dilutive impact on the Companys net loss per common share: 2015 2014 Shares underlying options outstanding 830,000 210,000 Shares underlying warrants outstanding 1,114,776 1,114,776 Total 1,944,776 1,324,776 |
Start-Up Costs | Start-Up Costs In accordance with ASC topic 720-15, Start-Up Costs |
Income Taxes | Income Taxes The Company provides for income taxes under ASC topic 740, Income Taxes |
Stock-Based Compensation | Stock-Based Compensation ASC Topic 718, Accounting for Stock-Based Compensation ASC Topic 718 requires employee compensation expense to be recorded using the fair value method. The Company accounts for employee stock based compensation in accordance with the provisions of ASC Topic 718. For non-employee options and warrants, the company uses the fair value method as prescribed in ASC Topic 718. |
Derivative Instruments | Derivative Instruments The Companys derivative liabilities are related to embedded conversion features issued in connection with the Series A Preferred Stock. For derivative instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in fair value recognized in earnings each reporting period. The Company uses the Black-Scholes model to value the derivative instruments at inception and subsequent valuation dates and the value is re-assessed at the end of each reporting period, in accordance with ASC Topic 815, Derivatives and Hedging |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts of financial instruments, which include accounts payable, accrued expenses and debt obligations approximate their fair values due to their short-term nature and/or variable interest rates. The Companys debt obligations bear interest at rates which approximate prevailing market rates for instruments with similar characteristics and, accordingly, the carrying values for these instruments approximate fair value. The Company adopted ASC Topic 820, Fair Value Measurement · Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical,, unrestricted assets or liabilities; · Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; · Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company did not have any assets or liabilities measured at fair value on a recurring basis at September 30, 2014 or December 31, 2013. The Company did not have any fair value adjustments for assets and liabilities measured at fair value on a nonrecurring basis during the periods ended September 30, 2014 or December 31, 2013. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, which creates ASC Topic 606, Revenue from Contracts with Customers Revenue Recognition Revenue RecognitionConstruction-Type and Production-Type Contracts Other Assets and Deferred CostsContracts with Customers In June 2014, FASB issued ASU No. 2014-12, Compensation Stock Compensation (Topic 718); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. In August 2014, FASB issued ASU 2014-15, Presentation of Financial Statements Going Concern Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern substantial doubt, Management does not believe that any other recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying financial statements. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Net loss per common share | 2015 2014 Shares underlying options outstanding 830,000 210,000 Shares underlying warrants outstanding 1,114,776 1,114,776 Total 1,944,776 1,324,776 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Number of Shares Weighted Average Grant Date Fair Value Unvested share balance, January 1, 2014 4,790,408 $ 1.45 Granted 1,965,000 0.49 Vested (633,416 ) 2.09 Forfeited - - Unvested share balance, December 31, 2014 6,091,992 $ 1.07 Granted - Vested (1,415,596 ) 1.31 Forfeited - - Unvested share balance, March 31, 2015 4,676,396 $ 0.99 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies - Net loss per common share (Details) - shares | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Accounting Policies [Abstract] | ||
Shares underlying options outstanding | 830,000 | 210,000 |
Shares underlying warrants outstanding | 1,114,776 | 1,114,776 |
Total | 1,944,776 | 1,324,776 |
Stockholders' Equity (Deficit20
Stockholders' Equity (Deficit) (Details) - Schedule of Share-based Compensation, Restricted Stock Activity - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Schedule of Share-based Compensation, Restricted Stock Activity [Abstract] | ||
Unvested share balance | 4,676,396 | 4,790,408 |
Weighted Average Grant Date Fair Value, balance | $ .99 | $ 1.45 |
Number of Shares, Granted | 1,965,000 | |
Weighted Average Grant Date Fair Value, Granted | $ 0.49 | |
Number of Shares, Vested | (1,415,596) | (633,416) |
Weighted Average Grant Date Fair Value, Vested | $ 1.31 | $ 2.09 |
Number of Shares, Forfeited | ||
Weighted Average Grant Date Fair Value, Forfeited |
Business (Details Narrative)
Business (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Aug. 31, 2015 | Mar. 31, 2015 | Mar. 27, 2015 | |
Accounting Policies [Abstract] | |||
Liquidated damages | $ 1,515,076 | $ 1,515,076 | |
Minimum Royalty payment | 507,223 | ||
Additional royalties | $ 253,611 | $ 7,174 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Accumulated depreciation | $ 2,866 | $ 5,539 |
Allowance for doubtful accounts | $ 8,803 | $ 0 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Aug. 31, 2015 | Mar. 31, 2015 | Mar. 27, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net loss from continuing operations | $ (2,671,684) | |||
Accumulated losses | (21,008,528) | $ (18,336,844) | ||
Accumulated losses from discontinued operations | (8,576,094) | |||
Liquidated damages | 1,515,076 | $ 1,515,076 | ||
Minimum Royalty payment | 507,223 | |||
Additional royalties | $ 253,611 | 7,174 | ||
Royalty interest | $ 7,504 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished goods inventory | $ 156,928 | $ 308,708 |
Raw materials inventory | $ 35,964 | $ 136,620 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Feb. 11, 2014USD ($) |
Commitments and Contingencies | |
Monthly office fee | $ 1,147 |
Stockholders' Equity (Deficit26
Stockholders' Equity (Deficit) (Details) - USD ($) | Oct. 03, 2013 | Apr. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Oct. 03, 2014 | Aug. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Common Stock, Shares Authorized | 190,000,000 | 190,000,000 | ||||||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | ||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | ||||||||
Stock Repurchased During Period, Shares | 12,497 | |||||||||
Stock Repurchased During Period, Value (in Dollars) | $ 11,372 | |||||||||
Share-Based Compensation Arrangement By Share Based Payment Award Award Shares Which Vest Based Upon Certain Milestones | 2,665,251 | |||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | $ 3,991,704 | |||||||||
Compensation expense for advisory fees | $ 21,667 | |||||||||
Consulting fees | $ 75,000 | |||||||||
Shares that did not vest | 4,676,396 | 4,790,408 | ||||||||
Private Placement | ||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Proceeds from Issuance of Private Placement (in Dollars) | $ 1,819,832 | |||||||||
Stock Issued During Period, Shares, New Issues | 917,582 | |||||||||
Sale of Stock, Price Per Share (in Dollars per share) | $ .91 | $ .91 | ||||||||
Stock Issued During Period, Value, New Issues (in Dollars) | $ 835,000 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ .91 | .91 | ||||||||
Private Placement 2 | ||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Stock Issued During Period, Shares, New Issues | 1,098,091 | |||||||||
Sale of Stock, Price Per Share (in Dollars per share) | $ .91 | $ .91 | ||||||||
Stock Issued During Period, Value, New Issues (in Dollars) | $ 1,000,000 | |||||||||
Advisory Services | ||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Restricted Common Stock Granted to Advisors | 100,000 | |||||||||
Compensation expense for advisory fees | $ 260,000 | |||||||||
Warrants issued in connection with advisory fees | $ 82,418 | |||||||||
Shares issued for consulting work | 1,234 | |||||||||
Strategic Business Distributorship Investor Relation And Sales And Sales Channel Advisory Services [Member] | ||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Restricted Common Stock Granted to Advisors | 50,000 | |||||||||
Agreement with Mr. Ian Thompson | ||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Share-Based Compensation Arrangement By Share Based Payment Award Award Shares Which Vest Based Upon Certain Milestones | 200,000 | |||||||||
Shares issued for consulting work | 167,204 | |||||||||
Consulting fees | $ 501,612 | $ 72,500 | ||||||||
Shares that did not vest | 50,000 | |||||||||
Shares pending cancellation due to lack of delivery of consideration and break of the agreement | 317,204 | |||||||||
Employee Stock Option | Long Term Incentive Equity Plan 2012 | ||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Common Stock, Shares Authorized | 465,000 | 465,000 | 465,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,050,000 | |||||||||
Restricted Stock | ||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Common Stock, Shares Authorized | 1,500,000 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ .91 | |||||||||
Allocated Share-based Compensation Expense (in Dollars) | $ 374,978 | $ 602,597 | ||||||||
Stock Warrants | ||||||||||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,114,776 | 1,114,776 | ||||||||
Sale of Stock, Price Per Share (in Dollars per share) | $ .91 | $ .91 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | Mar. 31, 2015 | Aug. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2013 |
Compensation expense, recorded | $ 19,165 | $ 25,358 | ||
Total unrecognized compensation cost related to non-vested stock options | $ 111,797 | |||
Long Term Incentive Equity Plan 2012 | ||||
Stock Options granted | 620,000 | 210,000 | ||
Exercise price per share | $ 0.255 | $ 2.07 | ||
Last sale price, percentage | 115.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | |
Related Party Transactions [Abstract] | ||||
Common stock issued to CEO | 23,272 | |||
Cash salaries | $ 212,500 | $ 43,032 | ||
Accrued salaries | $ 255,532 | $ 220,677 | ||
Amount of accrued salaries converted to stock | $ 37,000 | |||
Accrued interest paid | $ 24,000 |