Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 14, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'MusclePharm Corp | ' |
Entity Central Index Key | '0001415684 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'MSLP | ' |
Entity Common Stock, Shares Outstanding | ' | 8,865,990 |
Document Type | '10-Q | ' |
Amendment Flag | 'true | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Amendment Description | 'The sole purpose of this Amendment No. 2 (this “Amendment”) to MusclePharm Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013, filed with the Securities and Exchange Commission on November 14, 2013 and subsequently amended on November 15, 2013 (the “Form 10-Q”) is to correct an error in the calculation of sales concentration by customer for the nine months ended in Note 2 of the Consolidated Financial Statements. Specifically, Note 2, Subsection “Revenue Recognition” was changed to indicate that the percent of sales for the three largest customers for the three and nine months ended September 30, 2013 were as follows: Three Months Ended September 30, Customer 2013 2012 A 32 % 37 % B 10 % 8 % C 9 % 7 % Nine Months Ended September 30, Customer 2013 2012 A 30 % 39 % B 11 % 8 % C 7 % 10 % The previously disclosed calculation of the three largest customers for the nine months ended was 28%, 9%, and 5%, respectively. The calculations are based on gross customer sales as a percent of gross sales for the applicable period. No other modifications or changes have been made to the Form 10-Q. This Amendment speaks as of the original filing date of 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. | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Cash | $5,683,656 | $0 |
Cash - restricted | 0 | 9,148 |
Debt Securities | 925,574 | 0 |
Accounts receivable - net | 10,911,439 | 3,302,344 |
Derivative instrument | 1,692,351 | 0 |
Inventory | 9,633,164 | 257,975 |
Prepaid giveaways | 592,422 | 358,800 |
Prepaid stock compensation | 3,368,692 | 44,748 |
Prepaid sponsorship fees | 692,536 | 6,249 |
Deferred equity costs | 0 | 698,500 |
Other assets | 907,881 | 272,117 |
Total current assets | 34,407,715 | 4,949,881 |
Property and equipment - net | 1,668,944 | 1,356,364 |
Debt issue costs - net | 0 | 335,433 |
Prepaid stock compensation | 5,171,400 | 0 |
Other assets | 299,404 | 125,049 |
Total Assets | 41,547,463 | 6,766,727 |
Liabilities and Stockholders' Equity | ' | ' |
Accounts payable and accrued liabilities | 16,543,261 | 11,721,205 |
Customer deposits | 356,469 | 336,211 |
Debt - net | 70,456 | 4,463,040 |
Derivative liabilities | 1,895,085 | 0 |
Total current liabilities | 18,865,271 | 16,520,456 |
Long Term Liabilities: | ' | ' |
Debt - net | 0 | 4,523 |
Other | 7,554 | 0 |
Total Liabilities | 18,872,825 | 16,524,979 |
Commitments and Contingencies | ' | ' |
Stockholders' Equity: | ' | ' |
Common Stock, $0.001 par value; 100,000,000 shares authorized, 8,915,911 and 2,778,404 issued and 8,865,990 and 2,747,308 outstanding | 8,916 | 2,778 |
Treasury Stock, at cost; 49,921 and 31,096 shares | -564,515 | -460,978 |
Additional paid-in capital | 101,025,625 | 54,817,341 |
Accumulated deficit | -77,839,103 | -64,109,476 |
Accumulated other comprehensive income (loss) | 43,571 | -7,917 |
Total Stockholders’ Equity | 22,674,638 | -9,758,252 |
Total Liabilities and Stockholders’ Equity | 41,547,463 | 6,766,727 |
Series A Convertible Preferred Stock [Member] | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred Stock | 0 | 0 |
Series B Preferred Stock [Member] | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred Stock | 0 | 0 |
Series C Convertible Preferred Stock [Member] | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred Stock | 0 | 0 |
Series D Convertible Preferred Stock [Member] | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred Stock | $144 | $0 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets [Parenthetical] (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
Series A Convertible Preferred Stock [Member] | Series A Convertible Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series D Convertible Preferred Stock [Member] | Series D Convertible Preferred Stock [Member] | |||
Preferred stock, par value (in dollars per share) | ' | ' | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
Preferred stock, shares authorized | ' | ' | 5,000,000 | 5,000,000 | 0 | 51 | 500 | 500 | 1,600,000 | 1,600,000 |
Preferred stock, shares issued | ' | ' | 0 | 0 | 51 | 51 | 190 | 190 | 1,500,000 | 0 |
Preferred stock, shares outstanding | ' | ' | 0 | 0 | 0 | 51 | 0 | 0 | 144,000 | 0 |
Common Stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, shares authorized | 100,000,000 | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, shares issued | 8,915,911 | 2,778,404 | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, shares outstanding | 8,865,990 | 2,747,308 | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury Stock, shares | 49,921 | 31,096 | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Sales - gross | $31,080,225 | $20,627,691 | $84,519,744 | $58,799,563 |
Discounts and sales allowances | -5,736,257 | -2,053,965 | -11,134,551 | -8,235,817 |
Sales - Net | 25,343,968 | 18,573,726 | 73,385,193 | 50,563,746 |
Cost of sales | 17,937,768 | 14,507,761 | 49,900,891 | 40,345,528 |
Gross profit | 7,406,200 | 4,065,965 | 23,484,302 | 10,218,218 |
Advertising and promotion | 4,043,064 | 2,599,691 | 9,635,642 | 6,576,531 |
General and administrative | 1,936,610 | 1,141,435 | 5,000,831 | 3,146,029 |
Professional and R&D fees | 2,429,361 | 2,881,235 | 10,452,208 | 3,776,033 |
Salaries and benefits | 3,869,945 | 1,254,417 | 6,730,813 | 2,922,072 |
Total operating expenses | 12,278,980 | 7,876,778 | 31,819,494 | 16,420,665 |
Loss from operations | -4,872,780 | -3,810,813 | -8,335,192 | -6,202,447 |
Other income (expense) | ' | ' | ' | ' |
Derivative expense | 0 | -1,922,763 | -96,913 | -4,409,214 |
Change in fair value of derivative liabilities | 305,421 | 4,403,875 | -5,466,542 | 5,900,749 |
Gain (loss) on settlement of accounts payable and debt | 67,489 | -1,510,613 | 392,144 | -4,452,439 |
Gain on derivative instrument | 444,059 | 0 | 444,059 | 0 |
Accretion of note discount | 115,429 | 0 | 115,429 | 0 |
Interest expense | -1,302 | -3,265,053 | -782,747 | -6,812,255 |
Foreign currency transaction (gain) loss | -4,152 | 14,342 | -9,865 | 12,769 |
Other income | 0 | 16,988 | 10,000 | 35,411 |
Total other income (expense) - net | 926,944 | -2,263,224 | -5,394,435 | -9,724,979 |
Net loss | -3,945,836 | -6,074,037 | -13,729,627 | -15,927,426 |
Other comprehensive income | ' | ' | ' | ' |
Net change in foreign currency translation | -13,027 | -33,163 | -6,950 | 7,556 |
Net change in debt securities | 58,438 | 0 | 58,438 | 0 |
Total other comprehensive (loss) income | 45,411 | -33,163 | 51,488 | 7,556 |
Total comprehensive loss | ($3,900,425) | ($6,107,200) | ($13,678,139) | ($15,919,870) |
Net loss per share available to common stockholders - basic and diluted (in dollars per share) | ($0.47) | ($3.21) | ($2.07) | ($9.62) |
Weighted average number of common shares outstanding during the period - basic and diluted (in shares) | 8,475,084 | 1,894,202 | 6,626,125 | 1,656,218 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flows From Operating Activities: | ' | ' |
Net loss | ($13,729,627) | ($15,927,426) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' |
Depreciation | 510,890 | 325,185 |
Bad debt | 158,578 | 9,490 |
Amortization of prepaid stock and deferred compensation | 9,828,760 | 718,173 |
Amortization of debt discount | 0 | 6,086,521 |
Amortization of debt issue costs | 335,433 | 286,523 |
Accretion of note discount | -115,429 | 0 |
Derivative expense | 96,913 | 4,409,214 |
Change in fair value of derivative liabilities | 5,466,542 | -5,900,749 |
Change in fair value of derivative assets | -444,059 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Restricted cash balance | 9,148 | -74,202 |
Accounts receivable | -7,767,673 | -1,478,270 |
Prepaid and other | -3,549,221 | -339,088 |
Inventory | -9,608,811 | -396,873 |
Increase (decrease) in: | ' | ' |
Accounts payable and accrued liabilities | 11,127,500 | 8,384,755 |
Customer deposits | 20,258 | 921,675 |
Other | 7,554 | 0 |
Net Cash (Used In) Provided by Operating Activities | -8,045,389 | 286,825 |
Cash Flows From Investing Activities: | ' | ' |
Purchase of convertible promissory note and warrant | -2,000,000 | 0 |
Purchase of property and equipment | -825,164 | -899,823 |
Proceeds from disposal of property and equipment | 1,694 | 0 |
Purchase of trademark | -104,725 | -35,000 |
Net Cash Used In Investing Activities | -2,928,195 | -934,823 |
Cash Flows From Financing Activities: | ' | ' |
Proceeds from issuance of debt | 0 | 4,823,950 |
Debt issue costs | 0 | -166,950 |
Repayment of debt | -4,397,107 | -5,241,234 |
Repurchase of common stock (treasury stock) | -103,537 | -460,978 |
Proceeds from issuance of preferred stock | 12,000,000 | 0 |
Proceeds from issuance of common stock and warrants | 10,827,501 | 1,660,760 |
Stock issuance costs | -1,662,667 | 0 |
Net Cash Provided Financing Activities | 16,664,190 | 615,548 |
Cash Flows From Equity Activities: | ' | ' |
Effect of exchange rates on cash and cash equivalents | -6,950 | 7,556 |
Net Cash (Used In) Provided by Equity Activities | -6,950 | 7,556 |
Net increase (decrease) in cash | 5,683,656 | -24,894 |
Cash at beginning of period | 0 | 659,764 |
Cash at end of period | 5,683,656 | 634,870 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 410,846 | 423,705 |
Cash paid for taxes | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Stock issued for future services - third parties | 13,879,997 | 1,001,519 |
Warrants issued in conjunction with equity issuances | 8,175,459 | 427,759 |
Debt discount recorded on convertible and unsecured debt accounted for as a derivative liability | 0 | 3,554,672 |
Stock issued to settle accounts payable and accrued expenses - third parties | 5,760,887 | 1,392,143 |
Conversion of convertible debt and accrued interest for common stock | 0 | 1,069,402 |
Stock issued for executive and board compensation | 152,412 | 4,667,764 |
Reclassification of derivative liability to additional paid in capital | 11,688,463 | 9,759,079 |
Stock issued to settle accrued liabilities | 0 | 384,500 |
Change in fair value of debt securities in other comprehensive income | 58,438 | 0 |
Stock issued to settle contracts | 155,365 | 3,932 |
Conversion Of Series C Preferred Stock [Member] | ' | ' |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' |
(Gain) loss on settlement of accounts payable, debt and conversion of Series C preferred stock | ($392,144) | $3,261,897 |
Nature_of_Operations_and_Basis
Nature of Operations and Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Business Description and Basis of Presentation [Text Block] | ' |
Note 1: Nature of Operations and Basis of Presentation | |
Nature of Operations | |
MusclePharm Corporation (the “Company”, “we”, “our”, or “MusclePharm”), was incorporated in the state of Nevada on August 4, 2006 under the name Tone in Twenty for the purpose of engaging in the business of providing personal fitness training using isometric techniques. The Company is headquartered in Denver, Colorado. | |
MusclePharm currently manufactures and markets a wide-ranging variety of high-quality sports nutrition products. | |
Basis of Presentation | |
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), as amended for interim financial information. | |
The financial information as of December 31, 2012 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and filed with the SEC on April 1, 2013. The unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the years ended December 31, 2012 and 2011. | |
Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the nine months ended September 30, 2013 are not necessarily indicative of results for the full fiscal year. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Significant Accounting Policies [Text Block] | ' | |||||||||||||
Note 2: Summary of Significant Accounting Policies | ||||||||||||||
Principles of Consolidation | ||||||||||||||
The consolidated financial statements include the accounts of MusclePharm Corporation and its wholly-owned subsidiary MusclePharm Canada Enterprises Corp (“MusclePharm Canada”). MusclePharm Canada began operations in April of 2012. All intercompany accounts and transactions between MusclePharm Corporation and MusclePharm Canada have been eliminated upon consolidation. | ||||||||||||||
Use of Estimates | ||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. | ||||||||||||||
Making estimates requires management to exercise significant judgment. It is reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, the actual results could differ significantly from estimates. | ||||||||||||||
Risks and Uncertainties | ||||||||||||||
The Company operates in an industry that is subject to rapid change and intense competition. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory, industry adverse publicity and other risks, including the potential risk of business failure. | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid instruments purchased with an original maturity of three months or less and money market accounts to be cash equivalents. At September 30, 2013 and December 31, 2012, respectively, the Company had no cash equivalents. | ||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ||||||||||||||
Accounts receivable represents trade obligations from customers that are subject to normal trade collection terms. Prior to July 1, the accounts receivable were sent directly to the Company’s third party manufacturer and netted with any outstanding liabilities to the manufacturer. Subsequent to July 1, the Company took over the receipt and processing of accounts receivable. The Company periodically evaluates the collectability of its accounts receivable and considers the need to establish an allowance for doubtful accounts based upon historical collection experience and specific customer information. Accordingly, the actual amounts could vary from the recorded allowances. There is also a review of customer discounts at the period end and an accrual made for discounts earned but not yet received by quarter end. | ||||||||||||||
Management reserves for bad debt expense based on the aging of accounts receivable. Bad debt expense is classified under general & administrative expense in the Consolidated Statement of Operations. | ||||||||||||||
The Company does not charge interest on past due receivables. Receivables are determined to be past due based on the payment terms of the original invoices. Accounts receivable consisted of the following at September 30, 2013 and December 31, 2012: | ||||||||||||||
As of | As of | |||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Accounts receivable | $ | 11,833,677 | $ | 4,416,193 | ||||||||||
Less: allowance for discounts | -750,000 | -1,088,720 | ||||||||||||
Less: allowance for doubtful accounts | -172,238 | -25,129 | ||||||||||||
Accounts receivable – net | $ | 10,911,439 | $ | 3,302,344 | ||||||||||
At September 30, 2013 and December 31, 2012, the Company had the following concentrations of accounts receivable with significant customers: | ||||||||||||||
Customer | As of September 30, 2013 | As of December 31, 2012 | ||||||||||||
A | 20 | % | 24 | % | ||||||||||
B | 16 | % | 6 | % | ||||||||||
C | 15 | % | 20 | % | ||||||||||
Inventory | ||||||||||||||
Inventory is valued at the lower of cost or market value. Product-related inventories are primarily maintained using the First-In First-Out method. | ||||||||||||||
Prepaid Giveaways | ||||||||||||||
Prepaid giveaways represent non-inventory sample items, which are given away to aid in promotion of the brand. | ||||||||||||||
Prepaid Sponsorship Fees | ||||||||||||||
Prepaid sponsorship fees represents fees paid in connection with future advertising to be received. | ||||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment are stated at cost and depreciated to their estimated residual value over their estimated useful lives. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are relieved from the accounts and the resulting gains or losses are included in operating income in the Consolidated Statements of Operations. Repairs and maintenance costs are expensed as incurred. Depreciation is provided using the straight-line method for all property and equipment. | ||||||||||||||
Website Development Costs | ||||||||||||||
Costs incurred in the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated useful life of the asset. | ||||||||||||||
Long-Lived Assets | ||||||||||||||
The Company reviews long-lived assets for impairment whenever events or changes in circumstances, such as service discontinuance or technological obsolescence, indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If the comparison indicates that impairment is present, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the asset. During the nine months ended September 30, 2013 and 2012, the Company recorded no impairment expense. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
The Company measures assets and liabilities at fair value based on an expected exit price which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements contains a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. | ||||||||||||||
The following are the hierarchical levels of inputs to measure fair value: | ||||||||||||||
⋅ | Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||||||
⋅ | Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||||||||||||
⋅ | Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. | |||||||||||||
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): | ||||||||||||||
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||
Assets | ||||||||||||||
Debt securities (Level 2) | $ | 925,574 | $ | - | ||||||||||
Derivative instruments – Biozone warrants (Level 2) | 1,692,351 | - | ||||||||||||
2,617,925 | - | |||||||||||||
Liabilities | ||||||||||||||
Derivative liabilities (Level 2) | $ | 1,895,085 | $ | - | ||||||||||
The Company’s financial instruments consisted primarily of marketable securities, accounts receivable, notes receivable, accounts payable and accrued liabilities, and debt. The Company’s debt approximates fair value based upon current borrowing rates available to the Company for debt with similar maturities. The carrying amounts of the Company’s financial instruments generally approximated their fair values as of September 30, 2013 and December 31, 2012, respectively, due to the short-term nature of these instruments. | ||||||||||||||
Due to the thinly traded nature of the underlying stock of the debt securities and derivative instrument above, the Company has classified them as Level 2 inputs, and has employed a lattice pricing model for valuation purposes. Refer to Notes 5 and 6 for further details of the valuation. | ||||||||||||||
Debt Securities | ||||||||||||||
The Company classifies its investment securities as either held-to-maturity, available-for-sale or trading. The Company’s debt securities are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses reported in shareholders’ equity under accumulated other comprehensive income (loss). See Note 5 for further discussion of the Company’s debt securities. | ||||||||||||||
Revenue Recognition | ||||||||||||||
The Company records revenue when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) product has been shipped or delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability is reasonably assured. | ||||||||||||||
Depending on individual customer agreements, sales are recognized either upon shipment of products to customers or upon delivery. For all of our Canadian sales, which represent 3% of total sales, recognition occurs upon shipment. | ||||||||||||||
The Company has determined that advertising related credits that are granted to customers fall within the guidance of ASC No. 605-50-55 (“Revenue Recognition” – Customer Payments and Incentives – Implementation Guidance and Illustrations). The guidance indicates that, absent evidence of benefit to the vendor, appropriate treatment requires netting these types of payments against revenues and not expensing as advertising expense. | ||||||||||||||
The Company records sales allowances and discounts as a direct reduction of sales. | ||||||||||||||
Sales for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Sales | $ | 31,080,225 | $ | 20,627,691 | $ | 84,519,744 | $ | 58,799,563 | ||||||
Discounts | -5,736,257 | -2,053,965 | -11,134,551 | -8,235,817 | ||||||||||
Sales - Net | $ | 25,343,968 | $ | 18,573,726 | $ | 73,385,193 | $ | 50,563,746 | ||||||
The Company has an informal seven day right of return for products. There were nominal returns for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||
For the three and nine months ended September 30, 2013 and 2012, the Company had the following concentrations of revenues with significant customers: | ||||||||||||||
Three Months Ended September 30, | ||||||||||||||
Customer | 2013 | 2012 | ||||||||||||
A | 32 | % | 37 | % | ||||||||||
B | 10 | % | 8 | % | ||||||||||
C | 9 | % | 7 | % | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
Customer | 2013 | 2012 | ||||||||||||
A | 30 | % | 39 | % | ||||||||||
B | 11 | % | 8 | % | ||||||||||
C | 7 | % | 10 | % | ||||||||||
Licensing Income and Royalty Revenue | ||||||||||||||
On May 5, 2011, the Company granted an exclusive indefinite license to market, manufacture, design and sell the Company’s existing apparel line. The licensee paid an initial fee of $250,000 in June 2011, and will pay the Company a 10% net royalty based on its net income at the end of each fiscal year. To date, no royalty revenue has been earned by the Company. | ||||||||||||||
Cost of Sales | ||||||||||||||
Cost of sales represents costs directly related to the production, manufacturing and freight of the Company’s products. | ||||||||||||||
Shipping and Handling | ||||||||||||||
Prior to March 1, 2013 MusclePharm used a manufacturer from Tennessee to ship directly to our customers. After that date, MusclePharm took control of the shipping and began shipping products from a previously leased, 152,000 square foot distribution center in Franklin, Tennessee. | ||||||||||||||
Prior to June 30, 2013, our products were transported from our manufacturer to the MusclePharm distribution center, but title did not pass from the manufacturer until loaded on the truck for shipment to the customer. As a result, MusclePharm did not take title to our products. | ||||||||||||||
On July 1, 2013, the Company terminated a distribution agreement dated November 17, 2010 with one of our key product manufacturers in which the manufacturer received and fulfilled customer sales orders for a majority of our products. In connection with the termination of the agreement, the Company took control of customer order fulfillment through our Franklin, Tennessee warehouse. The facility is operated with the Company’s equipment and employees. | ||||||||||||||
The Company also uses a manufacturer in New York for the manufacture of one of the Company’s products. These orders are typically large and heavy and are drop shipped directly to our customers at the time of order. Costs associated with these shipments are recorded in cost of sales. | ||||||||||||||
For Canadian sales, the product is shipped from our Canadian warehouse to our customers. Costs associated with the shipments are recorded in cost of sales. | ||||||||||||||
Advertising and Promotion Expenses | ||||||||||||||
Advertising and promotion expenses include digital and print advertising, trade show events, athletic endorsements and sponsorships, and promotional giveaways. Advertising expenses are recognized in the month that the advertising appears while costs associated with trade show events are expensed when the event occurs. Costs related to promotional giveaways are expensed when the product is either given out at a promotional event or shipped to the customer. | ||||||||||||||
A significant amount of the Company’s promotional expenses results from payments under endorsement and sponsorship contracts. Accounting treatment for endorsement and sponsorship payments is based upon specific contract provisions. Generally, endorsement payments are expensed straight-line over the term of the contract after giving recognition to periodic performance compliance provisions of the contract. Prepayments made under the contracts are included in either current or long-term prepaid expenses depending on the period to which the prepayment applies. | ||||||||||||||
Some of the contracts provide for contingent payments to endorsers or athletes based upon specific achievement in their sports (e.g. winning a championship). The Company records expense for these payments when the endorser achieves the specific achievement. | ||||||||||||||
Advertising and promotion expense for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Advertising | $ | 4,043,064 | $ | 2,599,691 | $ | 9,635,642 | $ | 6,576,531 | ||||||
Beneficial Conversion Feature | ||||||||||||||
For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount. | ||||||||||||||
When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized to interest expense over the life of the debt. | ||||||||||||||
Accounts payable and Accrued Liabilities | ||||||||||||||
Accounts payable and accrued liabilities consist of the Company’s trade payables as well as amounts estimated by management for future liability payments that relate to the current accounting period. Management reviews these estimates periodically to determine their reasonableness and fair presentation. | ||||||||||||||
Debt | ||||||||||||||
The Company defines short term debt as any debt payment due less than one year from the date of the financial statements. Long term debt is defined as any debt payment due more than one year from the date of the financial statements. Refer to Note 7 for further disclosure of debt liabilities. | ||||||||||||||
Derivative Instruments | ||||||||||||||
Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in equity instruments and warrants granted, and measurement of their fair value. In determining the appropriate fair value, the Company uses Black-Scholes or lattice option-valuation models. In assessing the convertible equity instruments, management determines if the convertible equity instrument is conventional convertible equity and further if the beneficial conversion feature requires separate measurement. | ||||||||||||||
Once derivative instruments are determined, they are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value is recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using a Black-Scholes or lattice option-pricing model. Once a derivative liability ceases to exist any remaining fair value is reclassified to additional paid-in capital if redeemed or through earnings if forfeited or expired. | ||||||||||||||
Deferred Equity Costs | ||||||||||||||
The Company may pay costs related to the underwriting and offering of equity securities. These costs are treated as a reduction to equity capital raised and recorded in equity when the share issuances are recorded. Until the shares are recorded or until offering is aborted, these costs will be held on the balance sheet as a deferred asset. | ||||||||||||||
Debt Issue Costs and Debt Discount | ||||||||||||||
The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of debt. These costs are amortized over the life of the debt to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. | ||||||||||||||
Original Issue Discount | ||||||||||||||
For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount and additional paid-in capital at an amount not to exceed gross proceeds raised, reducing the face amount of the debt, and is amortized to interest expense over the life of the debt. | ||||||||||||||
Share-Based Payments | ||||||||||||||
Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. | ||||||||||||||
Earnings (loss) Per Share | ||||||||||||||
Net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. | ||||||||||||||
The Company uses an “if converted” method to determine whether there is a dilutive effect of outstanding option and warrant contracts. For the three months and nine months ended September 30, 2013 and 2012 the Company reflected net loss and a dilutive net loss, respectively, and the effect of considering any common stock equivalents would have been anti-dilutive for these periods. Therefore, separate computation of diluted earnings (loss) per share is not presented. | ||||||||||||||
The Company has the following common stock equivalents for the nine months ended September 30, 2013 and 2012, respectively: | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Stock options (exercise price - $425/share) | 472 | 1,847 | ||||||||||||
Warrants (exercise price $4 – $1,275/share) | 288,089 | 4,990 | ||||||||||||
Convertible debt (exercise price $17/share) | - | 2,471 | ||||||||||||
Total common stock equivalents | 288,561 | 9,308 | ||||||||||||
In the above table, some of the outstanding instruments from 2013 and 2012 contain ratchet provisions that would cause variability in the exercise price at the balance sheet date. As a result, common stock equivalents could change at each reporting period. | ||||||||||||||
Foreign Currency | ||||||||||||||
MusclePharm began operations in Canada in April of 2012. The Canadian Dollar was determined to be the functional currency as the majority of the transactions related to the day to day operations of the business are exchanged in Canadian Dollars. At the end of the period, the financial results of the Canadian operation are translated into United States Dollars, which is our reporting currency, and added to the U.S. operations for consolidated company financial results. The revenue and expense items are translated using the average rate for the period and the assets and liabilities at the end of period rate. Transactions that have completed the accounting cycle and resulted in a gain or loss related to translation are recorded in realized gain or loss due to foreign currency translation under other income expense on the income statement. Transactions that have not completed their accounting cycle but appear to have gain or loss due to the translation process are recorded as unrealized gain or loss due to translation and held in the equity section on the balance sheet until such date the accounting cycle of the transaction is complete and the actual realized gain or loss is recognized. | ||||||||||||||
Reclassification | ||||||||||||||
The Company has reclassified certain prior period amounts to conform to the current period presentation. These reclassifications had no effect on the financial position, results of operations or cash flows for the periods presented. | ||||||||||||||
Property_and_Equipment
Property and Equipment | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | |||||||||
Note 3: Property and Equipment | ||||||||||
Property and equipment consisted of the following at September 30, 2013 and December 31, 2012: | ||||||||||
As of September 30, 2013 | As of December 31, 2012 | Estimated Useful Life | ||||||||
Furniture, fixtures and gym equipment | $ | 1,666,922 | $ | 1,323,998 | From 36 to 60 months | |||||
Leasehold improvements | 752,968 | 563,204 | From 20 to 66 months | |||||||
Vehicles | 391,365 | 100,584 | 5 years | |||||||
Displays | 32,057 | 32,057 | 5 years | |||||||
Website | 11,462 | 11,462 | 3 years | |||||||
Total | 2,854,774 | 2,031,305 | ||||||||
Less: Accumulated depreciation and amortization | -1,185,830 | -674,941 | ||||||||
$ | 1,668,944 | $ | 1,356,364 | |||||||
Inventory
Inventory | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Inventory Disclosure [Abstract] | ' | |||||
Inventory Disclosure [Text Block] | ' | |||||
Note 4: Inventory | ||||||
On July 1, 2013, the Company terminated a Distribution Agreement dated November 17, 2010 with one of our key product manufacturers in which the manufacturer received and fulfilled customer sales orders for a majority of our products as more fully discussed in the “Shipping and Handling” section of Note 2 above. In connection with the termination of the agreement, we purchased an aggregate $4,664,421 of product inventory, and the Company took over control of customer order fulfillment through our Franklin, Tennessee warehouse. | ||||||
Inventory consisted of the following at September 30, 2013 and December 31, 2012: | ||||||
As of September 30, 2013 | As of December 31, 2012 | |||||
Product Inventory | 9,633,164 | 257,975 | ||||
The Company reserves for obsolete and slow moving inventory based on the age of the product as determined by the expiration date. Products within one year of their expiration dates are considered for reserve purposes. Historically, we have had minimal returns, and any damaged packaging is sent back to the manufacturer for replacement. The Company has determined that an inventory reserve was immaterial as of September 30, 2013. | ||||||
Debt_Securities
Debt Securities | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | ' | ||||
Note 5: Debt Securities | |||||
On August 26, 2013, the Company purchased, for an aggregate $2,000,000, a secured convertible promissory note from Biozone Pharmaceuticals, Inc. (“Biozone”) (OTC:BZNE) that matures one year from the date of issuance, and certain derivative instruments (Note 6), the value of which was recorded as a discount to the note to be accreted over the note’s term. In addition, a change of control put option was identified but is not recorded as a derivative because the value was determined to be deminimus. The promissory note bears interest at a rate of 10% per annum, is convertible at any time prior to the maturity date into 10,000,000 shares of Biozone common stock at the conversion rate of $0.20 per share, and contains certain put and call features. The Company’s ability to convert into Biozone Common Stock is restricted by a beneficial ownership limitation of 4.99% of the number of the common stock outstanding after giving effect to the issuance of common stock issuable upon conversion. This conversion limit can be changed by the Company upon at least 60 days’ notice. | |||||
The Company has classified this note as a Level 2 available-for-sale security and has engaged an independent third party firm to value the note and its embedded conversion features each reporting period. Changes in the reported value of the note will be included as a component of other comprehensive income. The note had a fair value on the purchase date of $1,955,462, which was purchased at a $44,538 premium. The premium has been netted against the discount of $1,248,292 attributable to the derivative instrument and will be accreted to interest income over the stated maturity of the note. The debt security is recorded at fair value net of any recorded discount not yet accreted. As of September 30, 2013, the portion of the discount not yet accreted was $1,132,863. | |||||
The following table summarizes the Company’s marketable securities activity for the nine months ended September 30, 2013: | |||||
Convertible | |||||
Note | |||||
FV of debt security on 8/26/13 | $ | 1,955,462 | |||
Premium on purchase date | 44,538 | ||||
Discount for value of derivative instrument | -1,248,292 | ||||
Accretion of net discount | 115,428 | ||||
Unrealized gain in OCI | 58,438 | ||||
Balance – September 30, 2013 | $ | 925,574 | |||
See Note 15(c) for subsequent event related to this debt security. | |||||
Derivative_Instrument
Derivative Instrument | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | ' | ||||
Note 6: Derivative Instrument | |||||
In conjunction with the purchase of the convertible promissory note discussed in Note 5, the Company received a callable warrant to purchase up to 10,000,000 shares of Biozone at an exercise price of $0.40 with an expiration date of 10 years from the date of issuance. The initial value of the warrant was $1,248,292 and was recorded as a discount against the note. The Company’s ability to exercise the warrant is limited by a beneficial ownership limitation of 4.99% of the number of the common shares outstanding in Biozone after giving effect to the exercise of the warrant. | |||||
The Company has classified the warrant as Level 2 inputs, and engaged an independent third party firm to value the warrant. The warrant was valued using a binomial lattice pricing model where the option value is calculated using a backward induction process. | |||||
This model considers price volatility, time, and dilutive effect of exercising. The pricing model assumes a volatility of 70% at the dates of purchase and period end. | |||||
The following table summarizes the Company’s derivative asset activity for the nine months ended September 30, 2013: | |||||
Balance – December 31, 2012 | $ | - | |||
Purchases | 1,248,292 | ||||
Sales | - | ||||
Realized gain (loss) | - | ||||
Unrealized gain (loss) | 444,059 | ||||
Balance – September 30, 2013 | $ | 1,692,351 | |||
Debt
Debt | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||
Debt Disclosure [Text Block] | ' | ||||||||||
Note 7: Debt | |||||||||||
At September 30, 2013 and December 31, 2012, debt consists of the following: | |||||||||||
As of September 30, 2013 | As of December 31, 2012 | ||||||||||
Auto loan - secured | $ | 5,856 | 15,380 | ||||||||
Unsecured debt | 64,600 | 4,452,183 | |||||||||
Less: debt discount | - | - | |||||||||
Unsecured debt - net | 64,600 | 4,452,183 | |||||||||
Total debt | 70,456 | 4,467,563 | |||||||||
Less: current portion | -70,456 | -4,463,040 | |||||||||
Long term debt | $ | - | $ | 4,523 | |||||||
Debt in default of $64,600 at September 30, 2013 and December 31, 2012 is included as a component of short-term debt. | |||||||||||
Future annual principal payments for the above debt are as follows: | |||||||||||
Years Ending December 31, | |||||||||||
2013 (3 months) | $ | 66,967 | |||||||||
2014 | 3,489 | ||||||||||
Total annual principal payments | $ | 70,456 | |||||||||
Convertible Debt – Secured - Derivative Liabilities | |||||||||||
During the year ended December 31, 2012, the Company issued convertible debt totaling $519,950. The convertible debt includes the following terms: | |||||||||||
Year Ended | |||||||||||
December 31, 2012 | |||||||||||
Amount of | |||||||||||
Principal Raised | |||||||||||
Interest Rate | 8% - 10% | ||||||||||
Default interest rate | 0% - 20% | ||||||||||
Maturity | January 3, 2012 to October 11, 2014 | ||||||||||
Conversion terms 1 | 62% of lowest trade price for the last 7 trading days | 100,000 | |||||||||
Conversion terms 2 | 65% of the lowest trade price in the 30 trading days previous to the conversion | 19,950 | |||||||||
Conversion terms 3 | 35% multiplied by the average of the lowest three (3) trading prices (as defined below) for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. | 400,000 | |||||||||
$ | 519,950 | ||||||||||
The debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at the conversion prices and terms discussed above. The Company classifies embedded conversion features in these notes as a derivative liability due to management’s assessment that the Company may not have sufficient authorized number of shares of common stock required to net-share settle or due to the existence of a ratchet due to an anti-dilution provision. See Note 8 regarding accounting for derivative liabilities. | |||||||||||
(A) Unsecured Debt | |||||||||||
Unsecured debt consisted of the following activity and terms: | |||||||||||
Balance - December 31, 2012 | $ | 4,452,183 | |||||||||
Repayments | -4,387,583 | ||||||||||
Balance – September 30, 2013 | $ | 64,600 | |||||||||
(B) Vehicle Loan | |||||||||||
Vehicle loan debt consisted of the following activity and terms: | |||||||||||
Interest Rate | Maturity | ||||||||||
Balance - December 31, 2012 | $ | 15,380 | 6.99 | % | 26 payments of $1,008 | ||||||
Repayments | -9,524 | ||||||||||
Balance – September 30, 2013 | $ | 5,856 | |||||||||
(C) Debt Issue Costs | |||||||||||
During the nine months ended September 30, 2013 and September 30, 2012, the Company paid debt issue costs totaling $0 and $166,950, respectively. | |||||||||||
For the year ended December 31, 2012, the Company issued 22,633 warrants as cost associated with a debt raise. The initial derivative liability value of $427,759 was recorded as debt issue costs and derivative liability. | |||||||||||
The following is a summary of the Company’s debt issue costs for the nine months ended September 30, 2013 and year ended December 31, 2012 as follows: | |||||||||||
2013 | 2012 | ||||||||||
Debt issue costs | $ | 335,433 | $ | 851,923 | |||||||
Accumulated amortization of debt issue costs | -335,433 | -516,490 | |||||||||
Debt issue costs – net | $ | - | $ | 335,433 | |||||||
During the nine months ended September 30, 2013 and 2012, the Company amortized $335,433 and $286,523, respectively, in debt issue costs. | |||||||||||
Derivative_Liabilities
Derivative Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||
Derivatives and Fair Value [Text Block] | ' | ||||||||
Note 8: Derivative Liabilities | |||||||||
The Company identified conversion features embedded within consulting agreements and Series D Preferred Stock issued in 2013. The Company has determined that the features associated with the embedded conversion option should be accounted for at fair value as a derivative liability as the Company could not determine if a sufficient number of shares would be available to settle all transactions. | |||||||||
The fair value of the conversion feature is summarized as follows: | |||||||||
Derivative liability - December 31, 2012 | $ | - | |||||||
Fair value at the commitment date for equity instruments | 8,175,459 | ||||||||
Fair value at the commitment date for warrants issued | 96,913 | ||||||||
Fair value mark to market adjustment for equity instruments | 5,408,089 | ||||||||
Fair value mark to market adjustment for warrants | 58,453 | ||||||||
Conversion instruments exercised or settled | -11,843,829 | ||||||||
Derivative liability – September 30, 2013 | $ | 1,895,085 | |||||||
The Company recorded the day 1 value of derivative contracts associated with the Series D preferred stock issuance against gross proceeds raised, and expensed immediately the remaining value of the derivative as it exceeded the gross proceeds of the offering. The Company recorded a derivative expense of $96,913 and $4,409,214 for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||
The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions: | |||||||||
Commitment Date | Re-measurement Date | ||||||||
Expected dividends | 0 | % | 0 | % | |||||
Expected volatility | 118% - 123 | % | 72 | % | |||||
Expected term: | 1 year | 1 year | |||||||
Risk free interest rate | 0.14% - 0.15 | % | 0.1 | % | |||||
Restricted_Stock
Restricted Stock | 9 Months Ended |
Sep. 30, 2013 | |
Schedule Of Share Based Compensation Restricted Stock and Restricted Stock Units [Abstract] | ' |
Compensation and Employee Benefit Plans [Text Block] | ' |
Note 9: Restricted Stock | |
In November 2012, the Company granted our former Executive Vice President and Co-Chairman, Mr. John H. Bluher, 70,589 restricted stock units through a restricted stock unit agreement. Each restricted stock unit represents a contingent right to receive one share of the Company’s common stock upon vesting. The value of this award at the grant date was $245,400 and will be amortized over the vesting periods such that each tranche of restricted stock units will be fully amortized at the date of vesting. The restricted stock units vest in one tranche of 23,529 on January 1, 2013 and two tranches of 23,530 shares on January 1, 2014 and December 1, 2014. As of September 30, 2013, 23,529 restricted stock units have vested and the unamortized portion of this award is $102,418. See Note 15(A) for further discussion on Mr. Bluher’s rights to receive restricted stock pursuant to his separation agreement. | |
In November 2012, the Company granted the Chief Financial Officer, Mr. L. Gary Davis, 58,824 restricted stock units through a restricted stock unit agreement. Each restricted stock unit represents a contingent right to receive one share of the Company’s common stock upon vesting. The value of this award at the grant date was $204,500 and will be amortized over the vesting periods such that each tranche of restricted stock units will be fully amortized at the date of vesting. The restricted stock units vest in three tranches of 19,608 shares each on January 1, 2013 and 2014, and December 1, 2014. As of September 30, 2013, 19,608 restricted stock units have vested and the unamortized portion of this award is $85,348. | |
In June 2013, the Company approved a restricted stock award to certain key employees, officers and directors for 1,550,000 cumulative shares. The awarded shares were issued upon the award’s approval with ownership rights to be conveyed upon vesting. The value of this award at the grant date was $17,065,500. Of these shares, the Company estimates that 1,500,200 shares will fully vest for a total value of $16,517,202. This amount will be amortized over the vesting periods such that each tranche’s estimated shares of restricted stock will be fully amortized at the dates of vesting. The Company will periodically review this estimate for reasonableness and make adjustments as appropriate. The award vests in two tranches with 17% vesting December 31, 2013 and the remaining 83% vesting December 31, 2015 with the exception of certain executives under employment agreements that terminate prior to December 31, 2015. These awards will be amortized over the remaining term of their employment agreements. As of September 30, 2013, zero shares have vested, 2,500 shares have been returned and the unamortized portion of this award is $15,066,634. | |
Total compensation expense for these awards recognized during the nine months ended September 30, 2013 was $1,588,068 and is included in General and Administrative expenses. | |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||||||||||||||
Note 10: Stockholders’ Equity | |||||||||||||||||||||
The Company has three and four separate series of authorized preferred stock at September 30, 2013 and December 31, 2012, respectively: | |||||||||||||||||||||
On November 26, 2012, the Company (i) effected a 1-for-850 reverse stock split of our common stock, including a proportionate reduction in the number of authorized shares of our common stock from 2.36 billion shares to 2.8 million shares of common stock, and (ii) amended our articles of incorporation to increase the number of authorized shares of common stock (post reverse stock split) from 2,941,177 to 100 million effective November 27, 2012. All share and per share amounts in this document have been changed to give effect to the reverse stock split. | |||||||||||||||||||||
(A) Series A Convertible Preferred Stock | |||||||||||||||||||||
This class of stock has the following provisions: | |||||||||||||||||||||
· | Non-voting, | ||||||||||||||||||||
· | No rights to dividends, | ||||||||||||||||||||
· | No liquidation value, and | ||||||||||||||||||||
· | Convertible into 200 shares of common stock. | ||||||||||||||||||||
(B) Series B Preferred Stock (Related Parties) | |||||||||||||||||||||
In August 2011, the Company issued an aggregate of 51 shares of Series B Preferred Stock to two of its officers. The Company accounted for the share issuance at par value as there was no future economic value that could be associated with the issuance. In September 2013, the outstanding 51 shares of Series B Preferred Stock were returned to the Company and retired. Pursuant to the certificate of designation, these shares were added back to general preferred stock pool upon their surrender and are not available for reissuance as Series B Preferred Stock without a new designation. | |||||||||||||||||||||
This class of stock has the following provisions: | |||||||||||||||||||||
⋅ | Voting rights entitling the holders to an aggregate 51% voting control, | ||||||||||||||||||||
⋅ | No rights to dividends, | ||||||||||||||||||||
⋅ | Stated value of $0.001 per share, | ||||||||||||||||||||
⋅ | Liquidation rights entitle the receipt of net assets on a pro-rata basis with the holders of our common stock, and | ||||||||||||||||||||
⋅ | Non-convertible. | ||||||||||||||||||||
(C) Series C Convertible Preferred Stock | |||||||||||||||||||||
In October 2011, the Company issued 190 shares of Series C Convertible Preferred Stock, having a fair value of $190,000. Of the total shares issued, 100 shares were issued for $100,000 ($1,000 / share). The remaining 90 shares were issued for services rendered having a fair value of $90,000 ($1,000 / share), based upon the stated value per share. In March 2012, all 190 shares were converted into 22,353 shares of the Company’s common stock at a conversion price of $0.0085 per share and a loss of $614,984. | |||||||||||||||||||||
This class of stock has the following provisions: | |||||||||||||||||||||
⋅ | Stated Value - $1,000 per share, | ||||||||||||||||||||
⋅ | Non-voting, | ||||||||||||||||||||
⋅ | Liquidation rights entitle an amount equal to the stated value, plus any accrued and unpaid dividends, | ||||||||||||||||||||
⋅ | As long as any Series C, Convertible Preferred Stock is outstanding, the Company is prohibited from executing various corporate actions without the majority consent of the holders of Series C, Convertible Preferred Stockholders authorization; and | ||||||||||||||||||||
⋅ | Convertible at the higher of (a) $0.01 or (b) such price that is a 50% discount to market using the average of the low two closing bid prices, five days preceding conversion. | ||||||||||||||||||||
Due to the existence of an option to convert at a variable amount, the Company treated this series of preferred stock as a derivative liability due to the potential for settlement in a variable quantity of shares. Additionally, the Company computed the fair value of the derivative liability at the commitment date and re-measurement date, which was $293 and $175, respectively, using the Black-Scholes assumptions below. This transaction is analogous to a dividend with a direct charge to retained earnings. | |||||||||||||||||||||
(D) Series D Convertible Preferred Stock | |||||||||||||||||||||
In January 2013 the board of directors authorized 1,600,000 shares of Series D convertible preferred stock. Between January 16, 2013 and February 4, 2013, the Company entered into separate subscription agreements with certain investors in connection with the offering, pursuant to which the Company sold an aggregate of 1,500,000 shares of Preferred Stock for aggregate gross proceeds of approximately $12 million. Pursuant to the Certificate of Designation of the Series D Convertible Preferred Stock filed with the Nevada Secretary of State on January 11, 2013 (the “Certificate of Designation”), each share of Preferred Stock is convertible into two shares of common stock, subject to adjustment as set forth in the Certificate of Designation. | |||||||||||||||||||||
The shares of Series D have the following provisions: | |||||||||||||||||||||
⋅ | Voting rights based on number of common shares of conversion option; | ||||||||||||||||||||
⋅ | Initially no rights to dividends; | ||||||||||||||||||||
⋅ | Liquidation rights entitle an amount equal to the stated value, plus any accrued and unpaid dividends; and | ||||||||||||||||||||
⋅ | Convertible into 2 shares of common stock, subject to adjustment. | ||||||||||||||||||||
(E) Common Stock | |||||||||||||||||||||
During the nine months ended September 30, 2013, the Company issued the following common stock: | |||||||||||||||||||||
Transaction Type | Quantity | Valuation | Range of Value | ||||||||||||||||||
(#) | ($) | per Share | |||||||||||||||||||
($) | |||||||||||||||||||||
Conversion of Series D preferred stock to common stock | 2,712,000 | 11,688,642 | 2.80 – 7.54 | ||||||||||||||||||
Cash and warrants | 1,191,332 | 10,559,332 | 8.26 – 10.50 | ||||||||||||||||||
Executive/Board of Director compensation | 71,664 | 302,379 | 3.48 – 6.00 | ||||||||||||||||||
Stock issued for services and to settle liabilities | 2,162,511 | 19,796,250 | 4.02 – 12.99 | ||||||||||||||||||
Total | 6,137,507 | 42,346,603 | 2.80 – 12.99 | ||||||||||||||||||
The fair value of all stock issuances above is based upon either the quoted closing trading price on the date of issuance, the value of derivative instrument at the date of conversion, contract value where the fair value was stated by the contract, or net proceeds from capital raised after giving effect to the cost of capital raised. | |||||||||||||||||||||
(F) Stock Options | |||||||||||||||||||||
The Company applied fair value accounting for all shares based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-valuation model. The Black-Scholes assumptions used when the options were issued in the year ended December 31, 2010 are as follows: | |||||||||||||||||||||
Exercise price | $ | 425 | |||||||||||||||||||
Expected dividends | 0 | % | |||||||||||||||||||
Expected volatility | 74.8 | % | |||||||||||||||||||
Risk fee interest rate | 1.4 | % | |||||||||||||||||||
Expected life of option | 5 years | ||||||||||||||||||||
Expected forfeiture | 0 | % | |||||||||||||||||||
The following is a summary of the Company’s stock option activity: | |||||||||||||||||||||
Options | Weighted Average | Weighted Average | Aggregate Intrinsic | ||||||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||||||
Contractual Life | |||||||||||||||||||||
Balance – December 31, 2012 | 1,847 | $ | 425 | 2.25 years | - | ||||||||||||||||
Granted | - | ||||||||||||||||||||
Exercised | - | ||||||||||||||||||||
Forfeited/Cancelled | -1,375 | $ | 425 | ||||||||||||||||||
Balance – September 30, 2013 – outstanding | 472 | $ | 425 | 1.50 years | - | ||||||||||||||||
Balance – September 30, 2013 – exercisable | 472 | $ | 425 | 1.50 years | - | ||||||||||||||||
Outstanding options held by related parties – 2013 | - | ||||||||||||||||||||
Exercisable options held by related parties – 2013 | - | ||||||||||||||||||||
(G) Stock Warrants | |||||||||||||||||||||
All warrants issued during the nine months ended September 30, 2013 were accounted for as derivative liabilities. See Note 8. | |||||||||||||||||||||
During the nine months ended September 30, 2013, the Company entered into convertible equity agreements. As part of these agreements, the Company issued warrants to convert 1,500,000 shares of Series D preferred stock into 3,000,000 shares of common stock. | |||||||||||||||||||||
A summary of warrant activity for the Company for the nine months ended September 30, 2013 is as follows: | |||||||||||||||||||||
Number of Warrants | Weighted Average Exercise Price | ||||||||||||||||||||
Outstanding – December 31, 2012 | 89 | $ | 1,275 | ||||||||||||||||||
Granted | 3,040,000 | 4.09 | |||||||||||||||||||
Exercised/settled | -2,752,000 | 4.09 | |||||||||||||||||||
Balance as September 30, 2013 | 288,089 | $ | 4.39 | ||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||
Range of | Number | Weighted Average | Weighted Average | Number | Weighted | Intrinsic Value | |||||||||||||||
Exercise Prices | Outstanding | Remaining | Exercise Price | Exercisable | Average | ||||||||||||||||
Contractual Life (in | Exercise Price | ||||||||||||||||||||
years) | |||||||||||||||||||||
$4 - $1,275 | 288,089 | 1 | $ | 4.39 | 288,089 | $ | 4.39 | 1,726,845 | |||||||||||||
(H) Treasury Stock | |||||||||||||||||||||
During the nine months ended September 30, 2013, the Company repurchased 18,825 shares of its common stock for the total sum of $260,000 as part of a settlement. Of this amount, $103,537 or $5.50 per share was considered repurchase of securities and $156,463 was recorded as a loss on settlement. The Company records the value of its common stock held in treasury at cost. The Company has not cancelled or retired these shares, and they remain available for reissuance. The Company has a stock repurchase plan in place but has suspended it indefinitely. | |||||||||||||||||||||
(I) Consulting Agreement | |||||||||||||||||||||
On July 19, 2012, the Company entered into consulting agreements with two outside consulting firms to provide services related to the capital restructuring of the Company. These agreements were subsequently amended in March of 2013and again in April of the same year. During the three and nine month period ended September 30, 2013, the Company recognized expense related to the GRQ and Melechdavid agreements of $423,261 and $7,015,076, respectively which are classified under Professional and R&D fees in the Consolidated Statement of Operations. The Company’s obligations under the GRQ and Melechdavid agreements were completely satisfied as of July 12, 2013 and the agreements have not been renewed or extended. | |||||||||||||||||||||
Commitments_Contingencies_and_
Commitments, Contingencies and Other Matters | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||
Note 11: Commitments, Contingencies and Other Matters | |||||
(A) Operating Lease | |||||
The Company has various non-cancelable leases with terms expiring through 2017. | |||||
Future minimum annual lease payments for the above leases are approximately as follows: | |||||
Years Ending December 31, | |||||
2013 (3 months) | $ | 130,987 | |||
2014 | 569,618 | ||||
2015 | 391,069 | ||||
2016 | 79,860 | ||||
2017 | 19,965 | ||||
Total minimum lease payments | $ | 1,191,499 | |||
Rent expense for the nine months ended September 30, 2013 and 2012, was $446,943 and $231,560, respectively. | |||||
(B) Capital Leases | |||||
In August 2013, Company entered into a lease agreement for the lease of certain equipment to be used by the Company. The agreement stipulates 36 monthly payments of $410.24 and provides for an automatic transfer of ownership at lease end. The interest rate implicit in this lease is 9.5%. | |||||
As of September 30, 2013 and December 31, 2012, the Company had an outstanding balance on capital leases of $11,440, and $0, respectively. Future minimum lease payments are as follows: | |||||
Years Ending December 31, | |||||
2013 (3 months) | $ | 1,231 | |||
2014 | 4,923 | ||||
2015 | 4,923 | ||||
2016 | 3,282 | ||||
Total minimum lease payments | $ | 14,359 | |||
(C) Legal Matters | |||||
From time to time, the Company is or may become involved in various legal proceedings that arise in the ordinary course of business or otherwise. Legal proceedings are subject to inherent uncertainties as to timing, outcomes, costs, expenses and time expenditures by the Company’s management and others on behalf of the Company. Although there can be no assurance, based on information currently available the Company’s management believes that the outcome of legal proceedings that are pending or threatened against the Company will not have a material effect on the Company’s financial condition. However, the outcome of any of these matters is neither probable nor reasonably estimable. | |||||
As of September 30, 2013, the Company was a party defendant in the following legal proceedings, each of which the Company: (a) believes is without merit; and (b) intends to defend vigorously: | |||||
· | The Tawnsaura Group, LLC v MusclePharm Corporation, Case No: 8:12-cv-01476-JVS-RNB in the United States District Court for the Central District of California. Date instituted: September 12, 2012. Plaintiff alleges patent infringement for MusclePharm's use of Citrulline Malate in its products. To date, Plaintiff has filed against over 70 different manufacturers of dietary supplements and sports nutrition products. MusclePharm is part of a joint defense group and believes this case is without merit due to the existence of prior art. The Company reached a settlement with the Tawnsaura Group effective October 1, 2013 for $5,000. This settlement is included in General and administrative expenses in the Consolidated Statement of Operations. | ||||
⋅ | William Bossung and Bishop Equity Partners LLC v. MusclePharm Corporation, Clark County, Nevada District Court. Date instituted: January 17, 2012. Plaintiff alleges that additional monetary payments are due in respect of a settlement for outstanding warrants. The Company reached a settlement with William Bossung and Bishop Equity Partners LLC effective September 30, 2013 for 25,000 shares of fully vested restricted shares of MusclePharm Common Stock. The full value of the settlement of $255,500 is included in General and administrative expense in the Consolidated Statement of Operations. | ||||
· | Nageen Dehesh v MusclePharm Corporation, Case No: SC120793 in the Superior Court of the State of California, County of Los Angeles West District. Date instituted: May 30, 2012. Plaintiff alleges she is owed payment for introducing MusclePharm to investors and/or raising capital. Plaintiff is not a licensed broker dealer and there was no agreement between the parties. | ||||
In July 2013 Harcol sent written correspondence to MusclePharm alleging infringement of a certain patent by MusclePharm and was contemplating legal action against the Company. MusclePharm denies any infringement of the patent in question, and in an effort to avoid the risk and expense of litigation, reached a settlement with Harcol effective October 1, 2013. The settlement provided for a payment of $65,000 in exchange for an exclusive, perpetual, irrevocable, fully-paid up, royalty free license under the patent in question. The payment of $65,000 is included as a component of General and Administrative expenses in the Consolidated Statement of Operations. | |||||
(D) Payroll Taxes | |||||
As of September 30, 2013, accounts payable and accrued expenses included $78,081 pertaining to accrued payroll taxes. The taxes represent employee withholdings that have yet to be remitted to the taxing agencies. | |||||
(E) Product Liability | |||||
As a manufacturer of nutritional supplements and other consumer products that are ingested by consumers, the Company may be subject to various product liability claims. Although we have not had any material claims to date, it is possible that current and future product liability claims could have a material adverse effect on our business or financial condition, results of operations or cash flows. The Company currently maintains product liability insurance with a deductible/retention of $10,000 per claim with an aggregate cap on retained loss of $5,000,000. At September 30, 2013, the Company had not recorded any accruals for product liability claims. | |||||
(F) Other Liabilities and Regulatory Matters | |||||
Subsequent to December 31, 2012, the Company determined that it may have potential liabilities related to the filing of certain informational returns required by governmental authorities. Management has developed a plan to address these matters and does not currently expect a significant adverse impact on its financial position or results of operations. | |||||
(G) W-2 Correction | |||||
In 2012, the Company issued three executives stock as part of their performance based compensation. This compensation was not included in their 2012 earnings and the Company is now preparing to correct this matter by issuing revised Form W-2 earnings statements to each of these executives related to the 2012 stock compensation. No determination can be made as to the impact this will have on the Company, but is believed to be immaterial. | |||||
(H) SEC Investigation | |||||
The Company, following requests for information received by MusclePharm from the Denver Regional Office of the Securities and Exchange Commission (the “Staff”), is reviewing its reports for the 2010 and 2011 fiscal years, which were included in financial statements issued for the 2010 and 2011 fiscal years. The Company and its auditors for the fiscal years 2010 and 2011 have voluntarily provided information to the Staff and are cooperating with Staff requests. The principal areas of the Company’s internal review relate to internal controls, disclosures of related party transactions, settlements of claims including share issuances, executive compensation, and disclosure of perquisites. The Company was recently informed that the Staff has issued a formal order of investigation of the Company. There can be no assurance that these are the only subject matters of concern, what the nature or amounts in question will be, or that these are the only periods under review. | |||||
Defined_Contribution_Plan
Defined Contribution Plan | 9 Months Ended |
Sep. 30, 2013 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Pension and Other Postretirement Benefits Disclosure [Text Block] | ' |
Note 12: Defined Contribution Plan | |
The Company established a 401(k) Plan (the “401(k) Plan”) for eligible employees of the Company. Generally, all employees of the Company who are at least twenty-one years of age and who have completed one year of entry service are eligible to participate in the 401(k) Plan. The 401(k) Plan is a defined contribution plan that provides that participants may make voluntary salary deferral contributions, on a pretax basis, of up to $17,500 for 2013 (subject to make-up contributions) in the form of voluntary payroll deductions. The Company may make discretionary contributions. During the nine months ended September 30, 2013 and 2012 the Company’s matching contribution was $44,940 and $34,313, respectively. | |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
Note 13: Related Party Transactions | |
The Chief Executive Officer of one of our major customers is the brother of our President of Sales and Marketing. Our Chief Financial Officer also indirectly owns 1.75% of the Chief Executive Officer’s equity interest in such customer. We do not offer preferential pricing of our products to this customer based on these relationships. | |
On August 26, 2013, we entered into a Securities Purchase Agreement with BioZone Pharmaceuticals, Inc. (“Biozone”) pursuant to which we bought (i) $2,000,000 of a 10% secured convertible promissory notes (the “Note”) and (ii) a warrant to purchase 10,000,000 shares of the Seller’s common stock, at an exercise price of $0.40 per share, for an aggregate purchase price of $2,000,000. Dr. Phillip Frost, a significant investor in the Company and a member of its scientific advisory board, is the Chairman and CEO of OPKO Health, Inc. (“OPKO”), and is the trustee of Frost Gamma Investments Trust (“Frost Gamma”). Each of Dr. Frost, OPKO, and Frost Gamma are significant shareholders in Biozone. | |
Endorsement_Agreement
Endorsement Agreement | 9 Months Ended |
Sep. 30, 2013 | |
Endorsement Agreement [Abstract] | ' |
Endorsement Agreement [Text Block] | ' |
Note 14: Endorsement Agreement | |
On July 26, 2013, the Company entered into an Endorsement Licensing and Co-Branding Agreement by and among, the Company, Arnold Schwarzenegger, Marine MP, LLC, and Fitness Publications, Inc. Under the terms of the Agreement, Mr. Arnold Schwarzenegger will endorse the Company’s products and a special Arnold Schwarzenegger product line of between 4 and 8 products will be marketed under Mr. Schwarzenegger’s name and likeness. | |
As part of this agreement, the Company is obligated to make minimum royalty payments until sales meet certain pre-determined thresholds at which time the Company will pay a percentage of net sales of the Arnold product line. For the three months and nine month’s ended September 30, 2013, the company recognized $3,680,504 in net sales of the Arnold product line, which did not meet the minimum sales threshold for royalty payments. For the three and nine month’s ended September 30, 2013, the Company recognized $365,591 of expense for minimum royalties under the agreement. Payments for minimum royalty payments are included as a component of Advertising and promotion expense in the Consolidated Statement of Operations. Future payments in excess of the minimum royalty will be recorded as a component of Cost of Goods Sold. | |
In connection with this agreement, the Company also issued Marine MP, LLC 780,000 fully vested restricted shares of common stock. As of September 30, 2013, the amount of unamortized stock compensation expense related to this agreement was $8,018,400. The current and non-current portions of this unamortized stock compensation is included as a component of Prepaid Stock Compensation in the Consolidated Balance Sheet. | |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
Note 15: Subsequent Events | |
(A) Board of Directors and Corporate Officer Changes | |
On October 16, 2013, the Company hired Sydney Rollock as our Chief Marketing Officer. There is no family relationship between Mr. Rollock and any of our other officers and directors. There are no understandings or arrangements between Mr. Rollock and any other person pursuant to which Mr. Rollock was selected as an officer. | |
On October 17, 2013, Mr. John H. Bluher resigned his position as Executive Vice President of the Company. Mr. Bluher will continue to serve on the Company’s Board of Directors until December 31, 2013. | |
Simultaneously with Mr. Bluher’s resignation as an employee of the Company, Mr. Bluher and the Company entered into a Separation and Release of Claims Agreement pursuant to which Mr. Bluher ended his employment with the Company. Pursuant to the Release Agreement, Mr. Bluher shall receive (i) all unpaid base salary plus unused vacation time, (ii) $150,000, (iii) reimbursement for group health insurance for 12 months, and (iv) all unvested restricted stock units owned by Mr. Bluher pursuant to a previously executed RSU Agreement and previously executed Restricted Stock Agreements (as both are defined the Release Agreement) in exchange for releasing and discharging the Company and its affiliates and subsidiaries from any and all claims of any kind arising out of, or related to, his employment and separation from employment with the Company. | |
Mr. Bluher’s resignation was not as a result of any disagreements with the Company’s operations, policies or practices. | |
(B) Related Party Transactions | |
On October 16, 2013, the Company entered into an office lease agreement with Frost Real Estate Holdings, LLC, a Florida limited liability company owned by Dr. Phillip Frost. Pursuant to the lease, the Company will rent 1,437 square feet of office space in Florida for an initial term of three years, with an option to renew for an additional three year term. Total lease commitments under the initial term of the lease are $142,923. | |
(C) Note Conversion | |
On October 24, 2013, the Company converted $1,000,000 of the convertible note (discussed in Note 5) into 5,000,000 shares of Biozone common stock. Additionally, Biozone repaid the remaining principal balance and approximately $32,000 in interest to the Company. | |
(D) Biozone Acquisition | |
On November 12, 2013 the Company’s newly formed wholly-owned subsidiary, Biozone Laboratories, Ltd., entered into an asset purchase agreement (“APA”) with BioZone Pharmacueticals, Inc., pursuant to which the company acquired all assets associated with QuSomes, Intense C Serum PM and EquaSomes drug delivery technology and the name “Biozone”. The closing of the purchase of the Seller’s assets is subject to certain conditions precedent including delivery of a fairness opinion to the Company and the Seller by their respective financial advisors, and the Seller’s shareholders’ approval of the transaction and is expected to occur prior to December 31, 2013. | |
(E) Security Purchases and Sales | |
On November 7, 2013, the Company purchased, from Fuse Science, Inc. (OTCBB:DROP) (“Fuse”): (i) a 10% senior secured convertible promissory note in the principal amount of $200,000 to mature 60 days after issuance, and (ii) warrants to purchase 6,666,000 shares of Fuse common stock at an exercise price of $0.06 per share. | |
In November, the Company sold an aggregate of 5,000,000 shares of common stock in Biozone Laboratories, Ltd. for gross proceeds $1,500,000. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Consolidation, Policy [Policy Text Block] | ' | |||||||||||||
Principles of Consolidation | ||||||||||||||
The consolidated financial statements include the accounts of MusclePharm Corporation and its wholly-owned subsidiary MusclePharm Canada Enterprises Corp (“MusclePharm Canada”). MusclePharm Canada began operations in April of 2012. All intercompany accounts and transactions between MusclePharm Corporation and MusclePharm Canada have been eliminated upon consolidation. | ||||||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | |||||||||||||
Use of Estimates | ||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. | ||||||||||||||
Making estimates requires management to exercise significant judgment. It is reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, the actual results could differ significantly from estimates. | ||||||||||||||
Risks and Uncertainties [Policy Text Block] | ' | |||||||||||||
Risks and Uncertainties | ||||||||||||||
The Company operates in an industry that is subject to rapid change and intense competition. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory, industry adverse publicity and other risks, including the potential risk of business failure. | ||||||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | |||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid instruments purchased with an original maturity of three months or less and money market accounts to be cash equivalents. At September 30, 2013 and December 31, 2012, respectively, the Company had no cash equivalents. | ||||||||||||||
Accounts Receivable and Allowance For Doubtful Accounts [Policy Text Block] | ' | |||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ||||||||||||||
Accounts receivable represents trade obligations from customers that are subject to normal trade collection terms. Prior to July 1, the accounts receivable were sent directly to the Company’s third party manufacturer and netted with any outstanding liabilities to the manufacturer. Subsequent to July 1, the Company took over the receipt and processing of accounts receivable. The Company periodically evaluates the collectability of its accounts receivable and considers the need to establish an allowance for doubtful accounts based upon historical collection experience and specific customer information. Accordingly, the actual amounts could vary from the recorded allowances. There is also a review of customer discounts at the period end and an accrual made for discounts earned but not yet received by quarter end. | ||||||||||||||
Management reserves for bad debt expense based on the aging of accounts receivable. Bad debt expense is classified under general & administrative expense in the Consolidated Statement of Operations. | ||||||||||||||
The Company does not charge interest on past due receivables. Receivables are determined to be past due based on the payment terms of the original invoices. Accounts receivable consisted of the following at September 30, 2013 and December 31, 2012: | ||||||||||||||
As of | As of | |||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Accounts receivable | $ | 11,833,677 | $ | 4,416,193 | ||||||||||
Less: allowance for discounts | -750,000 | -1,088,720 | ||||||||||||
Less: allowance for doubtful accounts | -172,238 | -25,129 | ||||||||||||
Accounts receivable – net | $ | 10,911,439 | $ | 3,302,344 | ||||||||||
At September 30, 2013 and December 31, 2012, the Company had the following concentrations of accounts receivable with significant customers: | ||||||||||||||
Customer | As of September 30, 2013 | As of December 31, 2012 | ||||||||||||
A | 20 | % | 24 | % | ||||||||||
B | 16 | % | 6 | % | ||||||||||
C | 15 | % | 20 | % | ||||||||||
Inventory, Policy [Policy Text Block] | ' | |||||||||||||
Inventory | ||||||||||||||
Inventory is valued at the lower of cost or market value. Product-related inventories are primarily maintained using the First-In First-Out method. | ||||||||||||||
Prepaid Giveways [Policy Text Block] | ' | |||||||||||||
Prepaid Giveaways | ||||||||||||||
Prepaid giveaways represent non-inventory sample items, which are given away to aid in promotion of the brand. | ||||||||||||||
Prepaid Sponsorship Fees [Policy Text Block] | ' | |||||||||||||
Prepaid Sponsorship Fees | ||||||||||||||
Prepaid sponsorship fees represents fees paid in connection with future advertising to be received. | ||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | |||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment are stated at cost and depreciated to their estimated residual value over their estimated useful lives. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are relieved from the accounts and the resulting gains or losses are included in operating income in the Consolidated Statements of Operations. Repairs and maintenance costs are expensed as incurred. Depreciation is provided using the straight-line method for all property and equipment. | ||||||||||||||
Website Development Cost [Policy Text Block] | ' | |||||||||||||
Website Development Costs | ||||||||||||||
Costs incurred in the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated useful life of the asset. | ||||||||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' | |||||||||||||
Long-Lived Assets | ||||||||||||||
The Company reviews long-lived assets for impairment whenever events or changes in circumstances, such as service discontinuance or technological obsolescence, indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If the comparison indicates that impairment is present, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the asset. During the nine months ended September 30, 2013 and 2012, the Company recorded no impairment expense. | ||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | |||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
The Company measures assets and liabilities at fair value based on an expected exit price which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements contains a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. | ||||||||||||||
The following are the hierarchical levels of inputs to measure fair value: | ||||||||||||||
⋅ | Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||||||
⋅ | Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||||||||||||
⋅ | Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. | |||||||||||||
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): | ||||||||||||||
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||
Assets | ||||||||||||||
Debt securities (Level 2) | $ | 925,574 | $ | - | ||||||||||
Derivative instruments – Biozone warrants (Level 2) | 1,692,351 | - | ||||||||||||
2,617,925 | - | |||||||||||||
Liabilities | ||||||||||||||
Derivative liabilities (Level 2) | $ | 1,895,085 | $ | - | ||||||||||
The Company’s financial instruments consisted primarily of marketable securities, accounts receivable, notes receivable, accounts payable and accrued liabilities, and debt. The Company’s debt approximates fair value based upon current borrowing rates available to the Company for debt with similar maturities. The carrying amounts of the Company’s financial instruments generally approximated their fair values as of September 30, 2013 and December 31, 2012, respectively, due to the short-term nature of these instruments. | ||||||||||||||
Due to the thinly traded nature of the underlying stock of the debt securities and derivative instrument above, the Company has classified them as Level 2 inputs, and has employed a lattice pricing model for valuation purposes. Refer to Notes 5 and 6 for further details of the valuation. | ||||||||||||||
Debt Securities [Policy Text Block] | ' | |||||||||||||
Debt Securities | ||||||||||||||
The Company classifies its investment securities as either held-to-maturity, available-for-sale or trading. The Company’s debt securities are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses reported in shareholders’ equity under accumulated other comprehensive income (loss). See Note 5 for further discussion of the Company’s debt securities. | ||||||||||||||
Revenue Recognition Accounting Policy, Gross and Net Revenue Disclosure [Policy Text Block] | ' | |||||||||||||
Revenue Recognition | ||||||||||||||
The Company records revenue when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) product has been shipped or delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability is reasonably assured. | ||||||||||||||
Depending on individual customer agreements, sales are recognized either upon shipment of products to customers or upon delivery. For all of our Canadian sales, which represent 3% of total sales, recognition occurs upon shipment. | ||||||||||||||
The Company has determined that advertising related credits that are granted to customers fall within the guidance of ASC No. 605-50-55 (“Revenue Recognition” – Customer Payments and Incentives – Implementation Guidance and Illustrations). The guidance indicates that, absent evidence of benefit to the vendor, appropriate treatment requires netting these types of payments against revenues and not expensing as advertising expense. | ||||||||||||||
The Company records sales allowances and discounts as a direct reduction of sales. | ||||||||||||||
Sales for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Sales | $ | 31,080,225 | $ | 20,627,691 | $ | 84,519,744 | $ | 58,799,563 | ||||||
Discounts | -5,736,257 | -2,053,965 | -11,134,551 | -8,235,817 | ||||||||||
Sales - Net | $ | 25,343,968 | $ | 18,573,726 | $ | 73,385,193 | $ | 50,563,746 | ||||||
The Company has an informal seven day right of return for products. There were nominal returns for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||
For the three and nine months ended September 30, 2013 and 2012, the Company had the following concentrations of revenues with significant customers: | ||||||||||||||
Three Months Ended September 30, | ||||||||||||||
Customer | 2013 | 2012 | ||||||||||||
A | 32 | % | 37 | % | ||||||||||
B | 10 | % | 8 | % | ||||||||||
C | 9 | % | 7 | % | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
Customer | 2013 | 2012 | ||||||||||||
A | 30 | % | 39 | % | ||||||||||
B | 11 | % | 8 | % | ||||||||||
C | 7 | % | 10 | % | ||||||||||
Licensing Income and Royalty Revenue [Policy Text Block] | ' | |||||||||||||
Licensing Income and Royalty Revenue | ||||||||||||||
On May 5, 2011, the Company granted an exclusive indefinite license to market, manufacture, design and sell the Company’s existing apparel line. The licensee paid an initial fee of $250,000 in June 2011, and will pay the Company a 10% net royalty based on its net income at the end of each fiscal year. To date, no royalty revenue has been earned by the Company. | ||||||||||||||
Cost of Sales, Policy [Policy Text Block] | ' | |||||||||||||
Cost of Sales | ||||||||||||||
Cost of sales represents costs directly related to the production, manufacturing and freight of the Company’s products. | ||||||||||||||
Shipping and Handling Cost, Policy [Policy Text Block] | ' | |||||||||||||
Shipping and Handling | ||||||||||||||
Prior to March 1, 2013 MusclePharm used a manufacturer from Tennessee to ship directly to our customers. After that date, MusclePharm took control of the shipping and began shipping products from a previously leased, 152,000 square foot distribution center in Franklin, Tennessee. | ||||||||||||||
Prior to June 30, 2013, our products were transported from our manufacturer to the MusclePharm distribution center, but title did not pass from the manufacturer until loaded on the truck for shipment to the customer. As a result, MusclePharm did not take title to our products. | ||||||||||||||
On July 1, 2013, the Company terminated a distribution agreement dated November 17, 2010 with one of our key product manufacturers in which the manufacturer received and fulfilled customer sales orders for a majority of our products. In connection with the termination of the agreement, the Company took control of customer order fulfillment through our Franklin, Tennessee warehouse. The facility is operated with the Company’s equipment and employees. | ||||||||||||||
The Company also uses a manufacturer in New York for the manufacture of one of the Company’s products. These orders are typically large and heavy and are drop shipped directly to our customers at the time of order. Costs associated with these shipments are recorded in cost of sales. | ||||||||||||||
For Canadian sales, the product is shipped from our Canadian warehouse to our customers. Costs associated with the shipments are recorded in cost of sales. | ||||||||||||||
Advertising Costs, Policy [Policy Text Block] | ' | |||||||||||||
Advertising and Promotion Expenses | ||||||||||||||
Advertising and promotion expenses include digital and print advertising, trade show events, athletic endorsements and sponsorships, and promotional giveaways. Advertising expenses are recognized in the month that the advertising appears while costs associated with trade show events are expensed when the event occurs. Costs related to promotional giveaways are expensed when the product is either given out at a promotional event or shipped to the customer. | ||||||||||||||
A significant amount of the Company’s promotional expenses results from payments under endorsement and sponsorship contracts. Accounting treatment for endorsement and sponsorship payments is based upon specific contract provisions. Generally, endorsement payments are expensed straight-line over the term of the contract after giving recognition to periodic performance compliance provisions of the contract. Prepayments made under the contracts are included in either current or long-term prepaid expenses depending on the period to which the prepayment applies. | ||||||||||||||
Some of the contracts provide for contingent payments to endorsers or athletes based upon specific achievement in their sports (e.g. winning a championship). The Company records expense for these payments when the endorser achieves the specific achievement. | ||||||||||||||
Advertising and promotion expense for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Advertising | $ | 4,043,064 | $ | 2,599,691 | $ | 9,635,642 | $ | 6,576,531 | ||||||
Beneficial Conversion Feature [Policy Text Block] | ' | |||||||||||||
Beneficial Conversion Feature | ||||||||||||||
For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount. | ||||||||||||||
When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized to interest expense over the life of the debt. | ||||||||||||||
Accounts Payable and Accrued Liabilities [Policy Text Block] | ' | |||||||||||||
Accounts payable and Accrued Liabilities | ||||||||||||||
Accounts payable and accrued liabilities consist of the Company’s trade payables as well as amounts estimated by management for future liability payments that relate to the current accounting period. Management reviews these estimates periodically to determine their reasonableness and fair presentation. | ||||||||||||||
Debt, Policy [Policy Text Block] | ' | |||||||||||||
Debt | ||||||||||||||
The Company defines short term debt as any debt payment due less than one year from the date of the financial statements. Long term debt is defined as any debt payment due more than one year from the date of the financial statements. Refer to Note 7 for further disclosure of debt liabilities. | ||||||||||||||
Derivatives, Policy [Policy Text Block] | ' | |||||||||||||
Derivative Instruments | ||||||||||||||
Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in equity instruments and warrants granted, and measurement of their fair value. In determining the appropriate fair value, the Company uses Black-Scholes or lattice option-valuation models. In assessing the convertible equity instruments, management determines if the convertible equity instrument is conventional convertible equity and further if the beneficial conversion feature requires separate measurement. | ||||||||||||||
Once derivative instruments are determined, they are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value is recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using a Black-Scholes or lattice option-pricing model. Once a derivative liability ceases to exist any remaining fair value is reclassified to additional paid-in capital if redeemed or through earnings if forfeited or expired. | ||||||||||||||
Deferred Equity Costs Policy [Policy Text Block] | ' | |||||||||||||
Deferred Equity Costs | ||||||||||||||
The Company may pay costs related to the underwriting and offering of equity securities. These costs are treated as a reduction to equity capital raised and recorded in equity when the share issuances are recorded. Until the shares are recorded or until offering is aborted, these costs will be held on the balance sheet as a deferred asset. | ||||||||||||||
Debt Issue Costs and Debt Discount [Policy Text Block] | ' | |||||||||||||
Debt Issue Costs and Debt Discount | ||||||||||||||
The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of debt. These costs are amortized over the life of the debt to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. | ||||||||||||||
Original Issue Discount [Policy Text Block] | ' | |||||||||||||
Original Issue Discount | ||||||||||||||
For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount and additional paid-in capital at an amount not to exceed gross proceeds raised, reducing the face amount of the debt, and is amortized to interest expense over the life of the debt. | ||||||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | |||||||||||||
Share-Based Payments | ||||||||||||||
Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. | ||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||||||||
Earnings (loss) Per Share | ||||||||||||||
Net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. | ||||||||||||||
The Company uses an “if converted” method to determine whether there is a dilutive effect of outstanding option and warrant contracts. For the three months and nine months ended September 30, 2013 and 2012 the Company reflected net loss and a dilutive net loss, respectively, and the effect of considering any common stock equivalents would have been anti-dilutive for these periods. Therefore, separate computation of diluted earnings (loss) per share is not presented. | ||||||||||||||
The Company has the following common stock equivalents for the nine months ended September 30, 2013 and 2012, respectively: | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Stock options (exercise price - $425/share) | 472 | 1,847 | ||||||||||||
Warrants (exercise price $4 – $1,275/share) | 288,089 | 4,990 | ||||||||||||
Convertible debt (exercise price $17/share) | - | 2,471 | ||||||||||||
Total common stock equivalents | 288,561 | 9,308 | ||||||||||||
In the above table, some of the outstanding instruments from 2013 and 2012 contain ratchet provisions that would cause variability in the exercise price at the balance sheet date. As a result, common stock equivalents could change at each reporting period. | ||||||||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | |||||||||||||
Foreign Currency | ||||||||||||||
MusclePharm began operations in Canada in April of 2012. The Canadian Dollar was determined to be the functional currency as the majority of the transactions related to the day to day operations of the business are exchanged in Canadian Dollars. At the end of the period, the financial results of the Canadian operation are translated into United States Dollars, which is our reporting currency, and added to the U.S. operations for consolidated company financial results. The revenue and expense items are translated using the average rate for the period and the assets and liabilities at the end of period rate. Transactions that have completed the accounting cycle and resulted in a gain or loss related to translation are recorded in realized gain or loss due to foreign currency translation under other income expense on the income statement. Transactions that have not completed their accounting cycle but appear to have gain or loss due to the translation process are recorded as unrealized gain or loss due to translation and held in the equity section on the balance sheet until such date the accounting cycle of the transaction is complete and the actual realized gain or loss is recognized. | ||||||||||||||
Reclassification, Policy [Policy Text Block] | ' | |||||||||||||
Reclassification | ||||||||||||||
The Company has reclassified certain prior period amounts to conform to the current period presentation. These reclassifications had no effect on the financial position, results of operations or cash flows for the periods presented. | ||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Schedule Of Accounts Receivable [Table Text Block] | ' | |||||||||||||
The Company does not charge interest on past due receivables. Receivables are determined to be past due based on the payment terms of the original invoices. Accounts receivable consisted of the following at September 30, 2013 and December 31, 2012: | ||||||||||||||
As of | As of | |||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||
Accounts receivable | $ | 11,833,677 | $ | 4,416,193 | ||||||||||
Less: allowance for discounts | -750,000 | -1,088,720 | ||||||||||||
Less: allowance for doubtful accounts | -172,238 | -25,129 | ||||||||||||
Accounts receivable – net | $ | 10,911,439 | $ | 3,302,344 | ||||||||||
Concentration Percentage Of Accounts Receivable With Customer [Table Text Block] | ' | |||||||||||||
At September 30, 2013 and December 31, 2012, the Company had the following concentrations of accounts receivable with significant customers: | ||||||||||||||
Customer | As of September 30, 2013 | As of December 31, 2012 | ||||||||||||
A | 20 | % | 24 | % | ||||||||||
B | 16 | % | 6 | % | ||||||||||
C | 15 | % | 20 | % | ||||||||||
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | ' | |||||||||||||
The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): | ||||||||||||||
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||
Assets | ||||||||||||||
Debt securities (Level 2) | $ | 925,574 | $ | - | ||||||||||
Derivative instruments – Biozone warrants (Level 2) | 1,692,351 | - | ||||||||||||
2,617,925 | - | |||||||||||||
Liabilities | ||||||||||||||
Derivative liabilities (Level 2) | $ | 1,895,085 | $ | - | ||||||||||
Schedule Of Sales [Table Text Block] | ' | |||||||||||||
Sales for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Sales | $ | 31,080,225 | $ | 20,627,691 | $ | 84,519,744 | $ | 58,799,563 | ||||||
Discounts | -5,736,257 | -2,053,965 | -11,134,551 | -8,235,817 | ||||||||||
Sales - Net | $ | 25,343,968 | $ | 18,573,726 | $ | 73,385,193 | $ | 50,563,746 | ||||||
Schedule Of Concentrations Of Revenues With Customers [Table Text Block] | ' | |||||||||||||
For the three and nine months ended September 30, 2013 and 2012, the Company had the following concentrations of revenues with significant customers: | ||||||||||||||
Three Months Ended September 30, | ||||||||||||||
Customer | 2013 | 2012 | ||||||||||||
A | 32 | % | 37 | % | ||||||||||
B | 10 | % | 8 | % | ||||||||||
C | 9 | % | 7 | % | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
Customer | 2013 | 2012 | ||||||||||||
A | 30 | % | 39 | % | ||||||||||
B | 11 | % | 8 | % | ||||||||||
C | 7 | % | 10 | % | ||||||||||
Schedule Of Advertising Expense [Table Text Block] | ' | |||||||||||||
Advertising and promotion expense for the three and nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Advertising | $ | 4,043,064 | $ | 2,599,691 | $ | 9,635,642 | $ | 6,576,531 | ||||||
Schedule Of Common Stock Equivalents [Table Text Block] | ' | |||||||||||||
The Company has the following common stock equivalents for the nine months ended September 30, 2013 and 2012, respectively: | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Stock options (exercise price - $425/share) | 472 | 1,847 | ||||||||||||
Warrants (exercise price $4 – $1,275/share) | 288,089 | 4,990 | ||||||||||||
Convertible debt (exercise price $17/share) | - | 2,471 | ||||||||||||
Total common stock equivalents | 288,561 | 9,308 | ||||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||||
Property and equipment consisted of the following at September 30, 2013 and December 31, 2012: | ||||||||||
As of September 30, 2013 | As of December 31, 2012 | Estimated Useful Life | ||||||||
Furniture, fixtures and gym equipment | $ | 1,666,922 | $ | 1,323,998 | From 36 to 60 months | |||||
Leasehold improvements | 752,968 | 563,204 | From 20 to 66 months | |||||||
Vehicles | 391,365 | 100,584 | 5 years | |||||||
Displays | 32,057 | 32,057 | 5 years | |||||||
Website | 11,462 | 11,462 | 3 years | |||||||
Total | 2,854,774 | 2,031,305 | ||||||||
Less: Accumulated depreciation and amortization | -1,185,830 | -674,941 | ||||||||
$ | 1,668,944 | $ | 1,356,364 | |||||||
Inventory_Tables
Inventory (Tables) | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Inventory Disclosure [Abstract] | ' | |||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||
Inventory consisted of the following at September 30, 2013 and December 31, 2012: | ||||||
As of September 30, 2013 | As of December 31, 2012 | |||||
Product Inventory | 9,633,164 | 257,975 | ||||
Debt_Securities_Tables
Debt Securities (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||
Marketable Securities [Table Text Block] | ' | ||||
The following table summarizes the Company’s marketable securities activity for the nine months ended September 30, 2013: | |||||
Convertible | |||||
Note | |||||
FV of debt security on 8/26/13 | $ | 1,955,462 | |||
Premium on purchase date | 44,538 | ||||
Discount for value of derivative instrument | -1,248,292 | ||||
Accretion of net discount | 115,428 | ||||
Unrealized gain in OCI | 58,438 | ||||
Balance – September 30, 2013 | $ | 925,574 | |||
Derivative_Instrument_Tables
Derivative Instrument (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||
Schedule of Derivative Assets at Fair Value [Table Text Block] | ' | ||||
The following table summarizes the Company’s derivative asset activity for the nine months ended September 30, 2013: | |||||
Balance – December 31, 2012 | $ | - | |||
Purchases | 1,248,292 | ||||
Sales | - | ||||
Realized gain (loss) | - | ||||
Unrealized gain (loss) | 444,059 | ||||
Balance – September 30, 2013 | $ | 1,692,351 | |||
Debt_Tables
Debt (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||
Schedule Of Long Term Debt [Table Text Block] | ' | ||||||||||
At September 30, 2013 and December 31, 2012, debt consists of the following: | |||||||||||
As of September 30, 2013 | As of December 31, 2012 | ||||||||||
Auto loan - secured | $ | 5,856 | 15,380 | ||||||||
Unsecured debt | 64,600 | 4,452,183 | |||||||||
Less: debt discount | - | - | |||||||||
Unsecured debt - net | 64,600 | 4,452,183 | |||||||||
Total debt | 70,456 | 4,467,563 | |||||||||
Less: current portion | -70,456 | -4,463,040 | |||||||||
Long term debt | $ | - | $ | 4,523 | |||||||
Schedule Of Future Annual Principal Payments Of Debt [Table Text Block] | ' | ||||||||||
Future annual principal payments for the above debt are as follows: | |||||||||||
Years Ending December 31, | |||||||||||
2013 (3 months) | $ | 66,967 | |||||||||
2014 | 3,489 | ||||||||||
Total annual principal payments | $ | 70,456 | |||||||||
Schedule Of Secured Debt Terms And Activity [Table Text Block] | ' | ||||||||||
During the year ended December 31, 2012, the Company issued convertible debt totaling $519,950. The convertible debt includes the following terms: | |||||||||||
Year Ended | |||||||||||
December 31, 2012 | |||||||||||
Amount of | |||||||||||
Principal Raised | |||||||||||
Interest Rate | 8% - 10% | ||||||||||
Default interest rate | 0% - 20% | ||||||||||
Maturity | January 3, 2012 to October 11, 2014 | ||||||||||
Conversion terms 1 | 62% of lowest trade price for the last 7 trading days | 100,000 | |||||||||
Conversion terms 2 | 65% of the lowest trade price in the 30 trading days previous to the conversion | 19,950 | |||||||||
Conversion terms 3 | 35% multiplied by the average of the lowest three (3) trading prices (as defined below) for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. | 400,000 | |||||||||
$ | 519,950 | ||||||||||
Schedule Of Unsecured Debt Activity and Terms [Table Text Block] | ' | ||||||||||
Unsecured debt consisted of the following activity and terms: | |||||||||||
Balance - December 31, 2012 | $ | 4,452,183 | |||||||||
Repayments | -4,387,583 | ||||||||||
Balance – September 30, 2013 | $ | 64,600 | |||||||||
Schedule Of Auto Loan Activity and Terms [Table Text Block] | ' | ||||||||||
Vehicle loan debt consisted of the following activity and terms: | |||||||||||
Interest Rate | Maturity | ||||||||||
Balance - December 31, 2012 | $ | 15,380 | 6.99 | % | 26 payments of $1,008 | ||||||
Repayments | -9,524 | ||||||||||
Balance – September 30, 2013 | $ | 5,856 | |||||||||
Schedule Of Debt Issue Costs [Table Text Block] | ' | ||||||||||
The following is a summary of the Company’s debt issue costs for the nine months ended September 30, 2013 and year ended December 31, 2012 as follows: | |||||||||||
2013 | 2012 | ||||||||||
Debt issue costs | $ | 335,433 | $ | 851,923 | |||||||
Accumulated amortization of debt issue costs | -335,433 | -516,490 | |||||||||
Debt issue costs – net | $ | - | $ | 335,433 | |||||||
Derivative_Liabilities_Tables
Derivative Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||
Schedule Of Fair Value Of Derivative Instruments Conversion Feature [Table Text Block] | ' | ||||||||
The fair value of the conversion feature is summarized as follows: | |||||||||
Derivative liability - December 31, 2012 | $ | - | |||||||
Fair value at the commitment date for equity instruments | 8,175,459 | ||||||||
Fair value at the commitment date for warrants issued | 96,913 | ||||||||
Fair value mark to market adjustment for equity instruments | 5,408,089 | ||||||||
Fair value mark to market adjustment for warrants | 58,453 | ||||||||
Conversion instruments exercised or settled | -11,843,829 | ||||||||
Derivative liability – September 30, 2013 | $ | 1,895,085 | |||||||
Schedule Of Derivative Liabilities Fair Value Assumptions At Commitment and Re-Measurement Date [Table Text Block] | ' | ||||||||
The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions: | |||||||||
Commitment Date | Re-measurement Date | ||||||||
Expected dividends | 0 | % | 0 | % | |||||
Expected volatility | 118% - 123 | % | 72 | % | |||||
Expected term: | 1 year | 1 year | |||||||
Risk free interest rate | 0.14% - 0.15 | % | 0.1 | % | |||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||||||
Schedule of Stockholders Equity [Table Text Block] | ' | ||||||||||||||||||||
During the nine months ended September 30, 2013, the Company issued the following common stock: | |||||||||||||||||||||
Transaction Type | Quantity | Valuation | Range of Value | ||||||||||||||||||
(#) | ($) | per Share | |||||||||||||||||||
($) | |||||||||||||||||||||
Conversion of Series D preferred stock to common stock | 2,712,000 | 11,688,642 | 2.80 – 7.54 | ||||||||||||||||||
Cash and warrants | 1,191,332 | 10,559,332 | 8.26 – 10.50 | ||||||||||||||||||
Executive/Board of Director compensation | 71,664 | 302,379 | 3.48 – 6.00 | ||||||||||||||||||
Stock issued for services and to settle liabilities | 2,162,511 | 19,796,250 | 4.02 – 12.99 | ||||||||||||||||||
Total | 6,137,507 | 42,346,603 | 2.80 – 12.99 | ||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | ||||||||||||||||||||
The Company applied fair value accounting for all shares based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-valuation model. The Black-Scholes assumptions used when the options were issued in the year ended December 31, 2010 are as follows: | |||||||||||||||||||||
Exercise price | $ | 425 | |||||||||||||||||||
Expected dividends | 0 | % | |||||||||||||||||||
Expected volatility | 74.8 | % | |||||||||||||||||||
Risk fee interest rate | 1.4 | % | |||||||||||||||||||
Expected life of option | 5 years | ||||||||||||||||||||
Expected forfeiture | 0 | % | |||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | ||||||||||||||||||||
The following is a summary of the Company’s stock option activity: | |||||||||||||||||||||
Options | Weighted Average | Weighted Average | Aggregate Intrinsic | ||||||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||||||
Contractual Life | |||||||||||||||||||||
Balance – December 31, 2012 | 1,847 | $ | 425 | 2.25 years | - | ||||||||||||||||
Granted | - | ||||||||||||||||||||
Exercised | - | ||||||||||||||||||||
Forfeited/Cancelled | -1,375 | $ | 425 | ||||||||||||||||||
Balance – September 30, 2013 – outstanding | 472 | $ | 425 | 1.50 years | - | ||||||||||||||||
Balance – September 30, 2013 – exercisable | 472 | $ | 425 | 1.50 years | - | ||||||||||||||||
Outstanding options held by related parties – 2013 | - | ||||||||||||||||||||
Exercisable options held by related parties – 2013 | - | ||||||||||||||||||||
Schedule Of Warrants Activity [Table Text Block] | ' | ||||||||||||||||||||
A summary of warrant activity for the Company for the nine months ended September 30, 2013 is as follows: | |||||||||||||||||||||
Number of Warrants | Weighted Average Exercise Price | ||||||||||||||||||||
Outstanding – December 31, 2012 | 89 | $ | 1,275 | ||||||||||||||||||
Granted | 3,040,000 | 4.09 | |||||||||||||||||||
Exercised/settled | -2,752,000 | 4.09 | |||||||||||||||||||
Balance as September 30, 2013 | 288,089 | $ | 4.39 | ||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||
Range of | Number | Weighted Average | Weighted Average | Number | Weighted | Intrinsic Value | |||||||||||||||
Exercise Prices | Outstanding | Remaining | Exercise Price | Exercisable | Average | ||||||||||||||||
Contractual Life (in | Exercise Price | ||||||||||||||||||||
years) | |||||||||||||||||||||
$4 - $1,275 | 288,089 | 1 | $ | 4.39 | 288,089 | $ | 4.39 | 1,726,845 | |||||||||||||
Committments_Contingencies_and
Committments, Contingencies and Other Matters (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||||
Future minimum annual lease payments for the above leases are approximately as follows: | |||||
Years Ending December 31, | |||||
2013 (3 months) | $ | 130,987 | |||
2014 | 569,618 | ||||
2015 | 391,069 | ||||
2016 | 79,860 | ||||
2017 | 19,965 | ||||
Total minimum lease payments | $ | 1,191,499 | |||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | ' | ||||
Future minimum lease payments are as follows: | |||||
Years Ending December 31, | |||||
2013 (3 months) | $ | 1,231 | |||
2014 | 4,923 | ||||
2015 | 4,923 | ||||
2016 | 3,282 | ||||
Total minimum lease payments | $ | 14,359 | |||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Accounts receivable | $11,833,677 | $4,416,193 |
Less: allowance for discounts | -750,000 | -1,088,720 |
Less: allowance for doubtful accounts | -172,238 | -25,129 |
Accounts receivable - net | $10,911,439 | $3,302,344 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) | Sep. 30, 2013 | Dec. 31, 2012 |
Customer A [Member] | ' | ' |
Concentration Percentage Of Accounts Receivable With Customers | 20.00% | 24.00% |
Customer B [Member] | ' | ' |
Concentration Percentage Of Accounts Receivable With Customers | 16.00% | 6.00% |
Customer C [Member] | ' | ' |
Concentration Percentage Of Accounts Receivable With Customers | 15.00% | 20.00% |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Debt securities (Level 2) | $925,574 | $0 |
Derivative instruments - Biozone warrants (Level 2) | 1,692,351 | 0 |
Assets, Fair Value Disclosure, Total | 2,617,925 | 0 |
Liabilities | ' | ' |
Derivative liabilities (Level 2) | 1,895,085 | 0 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' |
Assets | ' | ' |
Derivative instruments - Biozone warrants (Level 2) | 1,692,351 | 0 |
Liabilities | ' | ' |
Derivative liabilities (Level 2) | $1,895,085 | $0 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Sales | $31,080,225 | $20,627,691 | $84,519,744 | $58,799,563 |
Discounts | -5,736,257 | -2,053,965 | -11,134,551 | -8,235,817 |
Sales - Net | $25,343,968 | $18,573,726 | $73,385,193 | $50,563,746 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 4) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Customer A [Member] | ' | ' | ' | ' |
Concentration percentage of revenue with customers | 32.00% | 37.00% | 30.00% | 39.00% |
Customer B [Member] | ' | ' | ' | ' |
Concentration percentage of revenue with customers | 10.00% | 8.00% | 11.00% | 8.00% |
Customer C [Member] | ' | ' | ' | ' |
Concentration percentage of revenue with customers | 9.00% | 7.00% | 7.00% | 10.00% |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 5) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Advertising | $4,043,064 | $2,599,691 | $9,635,642 | $6,576,531 |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies (Details 6) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Total common stock equivalents | 288,561 | 9,308 |
Employee Stock Option [Member] | ' | ' |
Total common stock equivalents | 472 | 1,847 |
Warrant [Member] | ' | ' |
Total common stock equivalents | 288,089 | 4,990 |
Convertible Debt [Member] | ' | ' |
Total common stock equivalents | 0 | 2,471 |
Recovered_Sheet1
Summary of Significant Accounting Policies (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | |
Shipping and Handling Description | ' | 'Prior to March 1, 2013 MusclePharm used a manufacturer from Tennessee to ship directly to our customers. After that date, MusclePharm took control of the shipping and began shipping products from a previously leased, 152,000 square foot distribution center in Franklin, Tennessee. | ' |
Percentage Of Royalty Based Net Income | 10.00% | ' | ' |
License Costs | $250,000 | ' | ' |
Stock Option Exercised Price Per Share (in dollars per share) | ' | $425 | $425 |
Minimum Warrants Exercised Price Per Share (in dollars per share) | ' | $4 | $4 |
Maximum Warrants Exercised Price Per Share (in dollars per share) | ' | $1,275 | $1,275 |
Maximum Convertible Debt Exercised Price Per Share (in dollars per share) | ' | $17 | $17 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Furniture, fixtures and gym equipment | $1,666,922 | $1,323,998 |
Leasehold improvements | 752,968 | 563,204 |
Total | 2,854,774 | 2,031,305 |
Less: Accumulated depreciation and amortization | -1,185,830 | -674,941 |
Property, Plant and Equipment, Net | 1,668,944 | 1,356,364 |
Furniture and Fixtures [Member] | ' | ' |
Estimated Useful Life | 'From 36 to 60 months | ' |
Leasehold Improvements [Member] | ' | ' |
Estimated Useful Life | 'From 20 to 66 months | ' |
Vehicles [Member] | ' | ' |
Property, Plant and Equipment, Other, Gross | 391,365 | 100,584 |
Property, Plant and Equipment, Useful Life (in years) | '5 years | ' |
Displays [Member] | ' | ' |
Property, Plant and Equipment, Other, Gross | 32,057 | 32,057 |
Property, Plant and Equipment, Useful Life (in years) | '5 years | ' |
Website [Member] | ' | ' |
Property, Plant and Equipment, Other, Gross | $11,462 | $11,462 |
Property, Plant and Equipment, Useful Life (in years) | '3 years | ' |
Inventory_Details
Inventory (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Product Inventory | $9,633,164 | $257,975 |
Inventory_Details_Textual
Inventory (Details Textual) (USD $) | Sep. 30, 2013 |
Other Inventory, Purchased Goods, Gross | $4,664,421 |
Debt_Securities_Details
Debt Securities (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Balance - September 30, 2013 | $925,574 | ' | $925,574 | ' | $0 |
Accretion of net discount | 115,429 | 0 | 115,429 | 0 | ' |
Convertible Debt [Member] | ' | ' | ' | ' | ' |
Balance - September 30, 2013 | 1,955,462 | ' | 1,955,462 | ' | ' |
Premium on purchase date | ' | ' | 44,538 | ' | ' |
Discount for value of derivative instrument | ' | ' | -1,248,292 | ' | ' |
Accretion of net discount | ' | ' | 115,428 | ' | ' |
Unrealized gain in OCI | ' | ' | 58,438 | ' | ' |
Balance - September 30, 2013 | $925,574 | ' | $925,574 | ' | ' |
Debt_Securities_Details_Textua
Debt Securities (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 9 Months Ended | ||||
Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 26, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Aug. 26, 2013 | |
Biozone Pharmaceuticals [Member] | Biozone Pharmaceuticals [Member] | Biozone Pharmaceuticals [Member] | Biozone Pharmaceuticals [Member] | Biozone Pharmaceuticals [Member] | |||
secured convertible promissory note [Member] | secured convertible promissory note [Member] | secured convertible promissory note [Member] | |||||
Notes, Loans and Financing Receivable, Net, Current, Total | ' | ' | ' | ' | ' | ' | $2,000,000 |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | 10.00% |
Debt Conversion, Converted Instrument, Shares Issued | 519,950 | ' | ' | ' | 10,000,000 | 10,000,000 | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | $0.20 |
Equity Method Investment, Ownership Percentage | ' | ' | 4.99% | 4.99% | ' | ' | ' |
Note Discount Not Yet Accreted | ' | $1,132,863 | ' | ' | ' | ' | ' |
Derivative_Instrument_Details
Derivative Instrument (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Balance - December 31, 2012 | $0 |
Purchases | 1,248,292 |
Sales | 0 |
Realized gain (loss) | 0 |
Unrealized gain (loss) | 444,059 |
Balance - September 30, 2013 | $1,692,351 |
Derivative_Instrument_Details_
Derivative Instrument (Details Textual) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 26, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | |
Biozone Pharmaceuticals [Member] | Biozone Pharmaceuticals [Member] | Biozone Pharmaceuticals [Member] | Biozone Pharmaceuticals [Member] | |||
secured convertible promissory note [Member] | secured convertible promissory note [Member] | |||||
Debt Conversion, Converted Instrument, Shares Issued | ' | 519,950 | ' | ' | 10,000,000 | 10,000,000 |
Investment Warrants, Exercise Price | ' | ' | $0.40 | ' | ' | ' |
Warrants Expiration Term | '10 years | ' | ' | ' | ' | ' |
Payments to Acquire Trading Securities Held-for-investment | $1,248,292 | ' | ' | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | 4.99% | 4.99% | ' | ' |
Fair Value Assumptions, Weighted Average Volatility Rate | 70.00% | ' | ' | ' | ' | ' |
Debt_Details
Debt (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Auto loan - secured | $5,856 | $15,380 |
Unsecured debt | 64,600 | 4,452,183 |
Less: debt discount | 0 | 0 |
Unsecured debt - net | 64,600 | 4,452,183 |
Total debt | 70,456 | 4,467,563 |
Less: current portion | -70,456 | -4,463,040 |
Long term debt | $0 | $4,523 |
Debt_Details_1
Debt (Details 1) (USD $) | Sep. 30, 2013 |
2013 (3 months) | $66,967 |
2014 | 3,489 |
Total annual principal payments | $70,456 |
Debt_Details_2
Debt (Details 2) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Maturity | 'January 3, 2012 to October 11, 2014 |
Proceeds from Convertible Debt | $519,950 |
Conversion Terms One [Member] | ' |
Proceeds from Convertible Debt | 100,000 |
Description Of Convertible Debt Secured Derivative Liabilities | '62% of lowest trade price for the last 7 trading days |
Conversion Terms Two [Member] | ' |
Proceeds from Convertible Debt | 19,950 |
Description Of Convertible Debt Secured Derivative Liabilities | '65% of the lowest trade price in the 30 trading days previous to the conversion |
Conversion Terms Three [Member] | ' |
Proceeds from Convertible Debt | $400,000 |
Description Of Convertible Debt Secured Derivative Liabilities | '35% multiplied by the average of the lowest three (3) trading prices (as defined below) for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. |
Maximum [Member] | ' |
Interest Rate | 10.00% |
Default interest rate | 20.00% |
Minimum [Member] | ' |
Interest Rate | 8.00% |
Default interest rate | 0.00% |
Debt_Details_3
Debt (Details 3) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Balance - December 31, 2012 | $4,452,183 |
Repayments | -4,387,583 |
Balance - September 30, 2013 | $64,600 |
Debt_Details_4
Debt (Details 4) (USD $) | 12 Months Ended | 9 Months Ended | |
Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
Vehicle Loan [Member] | |||
Balance - December 31, 2012 | ' | $5,856 | $15,380 |
Repayments | ' | ' | -9,524 |
Balance - September 30, 2013 | $15,380 | $5,856 | $5,856 |
Interest Rate | ' | ' | 6.99% |
Maturity | 'January 3, 2012 to October 11, 2014 | ' | '26 payments of $1,008 |
Debt_Details_5
Debt (Details 5) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Debt issue costs | $335,433 | $851,923 |
Accumulated amortization of debt issue costs | -335,433 | -516,490 |
Debt issue costs - net | $0 | $335,433 |
Debt_Details_Textual
Debt (Details Textual) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Debt Default, Short-term Debt, Amount | $64,600 | ' | $64,600 |
Debt Conversion, Converted Instrument, Shares Issued (in shares) | ' | ' | 519,950 |
Debt issue costs | 0 | 166,950 | ' |
Amortization of debt issue costs | 335,433 | 286,523 | ' |
Warrants Purchase Common Stock | ' | ' | 22,633 |
Warrants issued in conjunction with debt issue costs | ' | ' | $427,759 |
Derivative_Liabilities_Details
Derivative Liabilities (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Derivative liability - December 31, 2012 | $0 |
Fair value at the commitment date for equity instruments | 8,175,459 |
Fair value at the commitment date for warrants issued | 96,913 |
Fair value mark to market adjustment for equity instruments | 5,408,089 |
Fair value mark to market adjustment for warrants | 58,453 |
Conversion instruments exercised or settled | -11,843,829 |
Derivative liability - September 30, 2013 | $1,895,085 |
Derivative_Liabilities_Details1
Derivative Liabilities (Details 1) | 9 Months Ended |
Sep. 30, 2013 | |
Commitment Date [Member] | ' |
Expected dividends | 0.00% |
Expected term: | '1 year |
Commitment Date [Member] | Maximum [Member] | ' |
Expected volatility | 123.00% |
Risk free interest rate | 0.15% |
Commitment Date [Member] | Minimum [Member] | ' |
Expected volatility | 118.00% |
Risk free interest rate | 0.14% |
Re Measurement Date [Member] | ' |
Expected dividends | 0.00% |
Expected volatility | 72.00% |
Expected term: | '1 year |
Risk free interest rate | 0.10% |
Derivative_Liabilities_Details2
Derivative Liabilities (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Derivative expense | $0 | $1,922,763 | $96,913 | $4,409,214 |
Restricted_Stock_Details_Textu
Restricted Stock (Details Textual) (USD $) | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Nov. 30, 2012 | Sep. 30, 2013 | Nov. 30, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | |
December 31, 2013 [Member] | December 31, 2015 [Member] | Chief Operating Officer [Member] | Chief Operating Officer [Member] | Chief Financial Officer [Member] | Chief Financial Officer [Member] | key employees officers and directors [Member] | key employees officers and directors [Member] | key employees officers and directors [Member] | ||
Subsequent Event [Member] | Subsequent Event [Member] | Restricted Stock [Member] | Restricted Stock [Member] | |||||||
Stock Issued During Period, Shares, Issued For Services (in shares) | 2,162,511 | ' | ' | 70,589 | ' | 58,824 | ' | ' | ' | ' |
Stock Issued During Period, Value, Issued For Services | $19,796,250 | ' | ' | $245,400 | ' | $204,500 | ' | ' | ' | ' |
Shares Vesting In Next Twelve Months Number | ' | ' | ' | ' | 23,529 | ' | 19,608 | ' | ' | ' |
Shares Vesting In Year One Number | ' | ' | ' | ' | 23,530 | ' | 19,608 | ' | ' | ' |
Shares Vesting In Year Two Number | ' | ' | ' | ' | 0 | ' | 19,608 | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | ' | ' | ' | ' | 23,529 | ' | ' | ' | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not Yet Recognized | 15,066,634 | ' | ' | ' | 102,418 | ' | 85,348 | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | ' | ' | ' | ' | ' | ' | ' | 1,550,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,200 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | 16,517,202 | ' |
Stock Issued During Period, Value, Restricted Stock Award, Gross | ' | ' | ' | ' | ' | ' | ' | 17,065,500 | ' | ' |
Restricted stock agreement grant vesting percentage | ' | 17.00% | 83.00% | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500 |
Share-based Compensation, Total | $1,588,068 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Conversion of Series D preferred stock to common stock, Quantity | 2,712,000 |
Cash and warrants, Quantity | 1,191,332 |
Executive/Board of Director compensation, Quantity | 71,664 |
Stock issued for services and to settle liabilities, Quantity | 2,162,511 |
Total, Quantity | 6,137,507 |
Conversion of Series D Preferred Stock to common stock, Valuation | $11,688,642 |
Cash and warrants, Valuation | 10,559,332 |
Executive/Board of Director compensation, Valuation | 302,379 |
Stock issued for services and to settle liabilities, Valuation | 19,796,250 |
Total, Valuation | $42,346,603 |
Minimum [Member] | ' |
Conversion of Series D Preferred Stock to common stock, Range of Value per share | $2.80 |
Cash and warrants, Range of Value per share | $8.26 |
Executive/Board of Director compensation, Range of Value per share | $3.48 |
Stock issued for services and to settle liabilities, Range of Value per Share | $4.02 |
Total, Range of Value per Share | $2.80 |
Maximum [Member] | ' |
Conversion of Series D Preferred Stock to common stock, Range of Value per share | $7.54 |
Cash and warrants, Range of Value per share | $10.50 |
Executive/Board of Director compensation, Range of Value per share | $6 |
Stock issued for services and to settle liabilities, Range of Value per Share | $12.99 |
Total, Range of Value per Share | $12.99 |
Stockholders_Equity_Details_1
Stockholders' Equity (Details 1) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Exercise price | $425 |
Expected dividends | 0.00% |
Expected volatility | 74.80% |
Risk fee interest rate | 1.40% |
Expected life of option | '5 years |
Expected forfeiture | 0.00% |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Options Balance (in shares) | 1,847 | ' |
Options Granted (in shares) | 0 | ' |
Options Exercised (in shares) | 0 | ' |
Options Forfeited/Cancelled (in shares) | -1,375 | ' |
Options Balance, outstanding (in shares) | 472 | 1,847 |
Options exercisable, (in shares) | 472 | ' |
Outstanding options held by related parties | 0 | ' |
Exercisable options held by related parties | 0 | ' |
Weighted Average Exercise Price Balance (in dollars per share) | $425 | ' |
Weighted Average Exercise Price Forfeited/Cancelled (in dollars per share) | $425 | ' |
Weighted Average Exercise Price Balance, outstanding (in dollars per share) | $425 | $425 |
Weighted Average Exercise Price exercisable (in dollars per share) | $425 | ' |
Balance, Weighted Average Remaining Contractual Life | '1 year 6 months | '2 years 3 months |
Weighted Average Remaining Contractual Life exercisable (years) | '1 year 6 months | ' |
Aggregate Intrinsic Value, Balance | $0 | $0 |
Aggregate Intrinsic Value exercisable | 0 | ' |
Aggregate Intrinsic Value, Balance, Outstanding | $0 | ' |
Stockholders_Equity_Details_3
Stockholders' Equity (Details 3) (USD $) | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 |
Minimum [Member] | Maximum [Member] | Warrant [Member] | |
Number of Warrants, Outstanding Balance (in shares) | ' | ' | 89 |
Number of Warrants, Granted (in shares) | ' | ' | 3,040,000 |
Number of Warrants, Exercised/settled (in shares) | ' | ' | -2,752,000 |
Number of Warrants, Outstanding Balance (in shares) | ' | ' | 288,089 |
Weighted Average Exercise Price, Balance (in dollars per share) | $4 | $1,275 | $1,275 |
Weighted Average Exercise Price, Granted (in dollars per share) | ' | ' | $4.09 |
Weighted Average Exercise Price, Exercised/settled (in dollars per share) | ' | ' | $4.09 |
Weighted Average Exercise Price, Balance (in dollars per share) | $4 | $1,275 | $4.39 |
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) | ' | ' | '1 year |
Warrants Exercisable, Numbers Exercisable (in shares) | ' | ' | 288,089 |
Warrants Exercisable, Weighted Average Exercise Price (in dollars per share) | ' | ' | $4.39 |
Warrants Exercisable, Intrinsic Value | ' | ' | $1,726,845 |
Warrant Outstanding Weighted Average Exercise Price | ' | ' | $4.39 |
Warrant Outstanding Number Outstanding | ' | ' | 288,089 |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||||||
Feb. 04, 2013 | Nov. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Nov. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Aug. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Aug. 01, 2011 | Oct. 24, 2013 | Oct. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Jan. 31, 2013 | Dec. 31, 2012 | |
Grq [Member] | Melechdavid [Member] | Commitment Date [Member] | Re Measurement Date [Member] | Series A Convertible Preferred Stock [Member] | Series A Convertible Preferred Stock [Member] | Series A Convertible Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series D Convertible Preferred Stock [Member] | Series D Convertible Preferred Stock [Member] | Series D Convertible Preferred Stock [Member] | |||||
Description Of Class Of Stock Provision | ' | ' | ' | ' | ' | ' | ' | ' | 'This class of stock has the following provisions: Non-voting, No rights to dividends, No liquidation value, and Convertible into 200 shares of common stock. | ' | ' | 'This class of stock has the following provisions: ⋅ Voting rights entitling the holders to an aggregate 51% voting control, ⋅ No rights to dividends, ⋅ Stated value of $0.001 per share, ⋅ Liquidation rights entitle the receipt of net assets on a pro-rata basis with the holders of our common stock, and ⋅ Non-convertible. | ' | ' | ' | ' | 'This class of stock has the following provisions: ⋅ Stated Value - $1,000 per share, ⋅ Non-voting, ⋅ Liquidation rights entitle an amount equal to the stated value, plus any accrued and unpaid dividends, ⋅ As long as any Series C, Convertible Preferred Stock is outstanding, the Company is prohibited from executing various corporate actions without the majority consent of the holders of Series C, Convertible Preferred Stockholders authorization; and ⋅ Convertible at the higher of (a) $0.01 or (b) such price that is a 50% discount to market using the average of the low two closing bid prices, five days preceding conversion. | ' | ' | 'The shares of Series D have the following provisions: ⋅ Voting rights based on number of common shares of conversion option; ⋅ Initially no rights to dividends; ⋅ Liquidation rights entitle an amount equal to the stated value, plus any accrued and unpaid dividends; and ⋅ Convertible into 2 shares of common stock, subject to adjustment. | ' | ' |
Stockholders' Equity, Reverse Stock Split | ' | 'On November 26, 2012, the Company (i) effected a 1-for-850 reverse stock split of our common stock, including a proportionate reduction in the number of authorized shares of our common stock from 2.36 billion shares to 2.8 million shares of common stock, and (ii) amended our articles of incorporation to increase the number of authorized shares of common stock (post reverse stock split) from 2,941,177 to 100 million effective November 27, 2012. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued to settle accounts payable and due to factor | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $190,000 | ' | ' | ' | ' | ' |
Stock Issued During Period Shares New Issues For Cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100 | ' | ' | ' | ' | ' |
Stock Issued During Period Value New Issues For Cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' |
Stock Issued During Period Price Per Share For Cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,000 | ' | ' | ' | ' | ' |
Stock Issued During Period Shares New Issues For Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90,000 | 90 | ' | ' | ' | ' | ' |
Stock Issued During Period Value New Issues For Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90,000 | ' | ' | ' | ' | ' |
Stock Issued During Period Price Per Share For Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,000 | ' | ' | ' | ' | ' |
Conversion to common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 190 | ' | ' | ' | ' | ' |
Stock Issued During Period Shares Conversion Of Convertible Securities Price Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' |
Stock Issued During Period Shares Conversion Of Convertible Securities Loss | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 614,984 | ' | ' | ' | ' | ' |
Derivative expense | ' | ' | ' | ' | ' | ' | 293 | 175 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Shares Issuable Upon Conversion Of Warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' |
Conversion Of Warrants To Purchase Shares | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchased During Period, Shares | ' | ' | 18,825 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchased During Period, Value | ' | ' | 260,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments for Repurchase of Common Stock | ' | ' | 103,537 | 460,978 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchased During Period Per Share | ' | ' | $5.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | 5,000,000 | ' | 0 | 51 | 51 | ' | ' | 500 | 500 | 1,600,000 | 1,600,000 | 1,600,000 |
Number Of Shares Sold Under Subscription Agreement | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain Loss On Repurchase Of Common Stock | ' | ' | 156,463 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Preferred Stock and Preference Stock | ' | ' | 12,000,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 190 | ' | ' | ' | ' | ' |
Date Of Agreement | ' | ' | ' | ' | 19-Jul-12 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
General and Administrative Expense | ' | ' | ' | ' | $423,261 | $7,015,076 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Committments_Contingencies_and1
Committments, Contingencies and Other Matters (Details) (USD $) | Sep. 30, 2013 |
Years Ending Dec. 31 | ' |
2013 (3 months) | $130,987 |
2014 | 569,618 |
2015 | 391,069 |
2016 | 79,860 |
2017 | 19,965 |
Total minimum lease payments | $1,191,499 |
Commitments_Contingencies_and_1
Commitments, Contingencies and Other Matters (Details 1) (USD $) | Sep. 30, 2013 |
Years Ending December 31 | ' |
2013 (3 months) | $1,231 |
2014 | 4,923 |
2015 | 4,923 |
2016 | 3,282 |
Total minimum lease payments | $14,359 |
Committments_Contingencies_and2
Committments, Contingencies and Other Matters (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | |
Operating Lease Expire Term | ' | '2017 | ' |
Operating Leases, Rent Expense, Net | ' | $446,943 | $231,560 |
Accrued Payroll Taxes | ' | 78,081 | ' |
Product Liability Insurance Deduction | ' | 10,000 | ' |
Aggregate Product Liability Retained Loss | ' | 5,000,000 | ' |
Capital Leases, Future Minimum Payments, Net Minimum Payments, Total | ' | 410.24 | ' |
Percentage Of Interest Rate Implicit On Lease | 9.50% | ' | ' |
Capital Lease Obligations | ' | 11,440 | 0 |
Litigation Settlement, Expense | ' | 5,000 | ' |
Litigation Settlement, Amount | ' | 65,000 | ' |
William Bossung And Bishop Equity Partners LLC [Member] | ' | ' | ' |
Litigation Settlement, Expense | ' | $255,000 | ' |
Restricted Stock [Member] | William Bossung And Bishop Equity Partners LLC [Member] | ' | ' | ' |
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Vested In Period | ' | 25,000 | ' |
Defined_Contribution_Plan_Deta
Defined Contribution Plan (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Noncash Contribution Expense | $17,500 | ' |
Defined Contribution Plan, Employer Discretionary Contribution Amount | $44,940 | $34,313 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) | 1 Months Ended | 9 Months Ended |
Aug. 26, 2013 | Sep. 30, 2013 | |
Chief Financial Officer [Member] | ||
Percentage Of Equity Interest | ' | 1.75% |
Securities Purchase Under Agreement Description | '(i) $2,000,000 of a 10% secured convertible promissory notes (the “Note”) and (ii) a warrant to purchase 10,000,000 shares of the Seller’s common stock, at an exercise price of $0.40 per share, for an aggregate purchase price of $2,000,000. Dr. Phillip Frost, a significant investor in the Company and a member of its scientific advisory board, is the Chairman and CEO of OPKO Health, Inc. (“OPKO”), and is the trustee of Frost Gamma Investments Trust (“Frost Gamma”). Each of Dr. Frost, OPKO, and Frost Gamma are significant shareholders in Biozone. | ' |
Endorsement_Agreement_Details_
Endorsement Agreement (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Marine MP LLC [Member] | ' | ' |
Prepaid Expense | $8,018,400 | $8,018,400 |
Restricted Stock [Member] | Marine MP LLC [Member] | ' | ' |
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Vested In Period | ' | 780,000 |
Minimum [Member] | ' | ' |
Number Of Products Endorsed | ' | 4 |
Maximum [Member] | ' | ' |
Number Of Products Endorsed | ' | 8 |
Arnold Product Line [Member] | ' | ' |
Sales Revenue, Goods, Net | 3,680,504 | 3,680,504 |
Royalty Expense | $365,591 | $365,591 |
Subsequent_Events_Details_Text
Subsequent Events (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | |||||
Feb. 04, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Oct. 24, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Biozone Laboratories Ltd [Member] | Fuse Science Inc [Member] | Fuse Science Inc [Member] | |||||
acre | John H Bluher [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||
Senior Secured Convertible Promissory note [Member] | ||||||||||
Proceeds from Issuance of Common Stock | ' | ' | ' | ' | ' | ' | ' | $1,500,000 | ' | ' |
Officers Compensation | ' | ' | ' | ' | ' | ' | 150,000 | ' | ' | ' |
Area of Land | ' | ' | ' | ' | ' | 1,437 | ' | ' | ' | ' |
Initial Offering Period | ' | ' | ' | ' | ' | 'three years | ' | ' | ' | ' |
Conversion Of Convertible Debt and Accrued Interest For Common Stock | ' | 0 | 1,069,402 | ' | 1,000,000 | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | 519,950 | 5,000,000 | ' | ' | ' | ' | ' |
Proceeds from Interest Received | ' | ' | ' | ' | ' | 32,000 | ' | ' | ' | ' |
Contractual Obligation, Total | ' | ' | ' | ' | ' | 142,923 | ' | ' | ' | ' |
Number Of Shares Sold Under Subscription Agreement | 1,500,000 | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' |
Common Stock Exercise Price Per Share | ' | ' | ' | ' | ' | ' | ' | ' | $0.06 | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | $200,000 | ' |
Conversion Of Warrants To Purchase Shares | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | 6,666,000 | ' |
Debt Instrument, Maturity Date, Description | ' | ' | ' | 'January 3, 2012 to October 11, 2014 | ' | ' | ' | ' | 'mature 60 days after issuance | ' |