Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 13, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'ORIGINOIL INC | ' |
Entity Central Index Key | '0001419793 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 95,821,319 |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash | $593,549 | $821,448 |
Work in progress | 181,958 | 21,049 |
Prepaid expenses | 26,763 | 34,531 |
TOTAL CURRENT ASSETS | 802,270 | 877,028 |
NET PROPERTY AND EQUIPMENT | 81,245 | 74,204 |
OTHER ASSETS | ' | ' |
Other asset | 37,038 | 40,000 |
Trademark | 4,467 | 4,467 |
Security deposit | 10,247 | 9,650 |
TOTAL OTHER ASSETS | 51,752 | 54,117 |
TOTAL ASSETS | 935,267 | 1,005,349 |
Current Liabilities | ' | ' |
Accounts payable | 74,965 | 114,803 |
Accrued expenses | 183,656 | 262,518 |
Deferred income | ' | 50,000 |
Derivative liabilities | 6,116,754 | 1,031,484 |
Convertible promissory notes, net of discount of $775,818 and $971,964, respectively | 2,340,837 | 953,989 |
Total Current Liabilities | 8,716,212 | 2,412,794 |
Long Term Liabilities | ' | ' |
Obligation to issue common stock | ' | 105,754 |
TOTAL LIABILITIES | 8,716,212 | 2,518,548 |
SHAREHOLDERS' DEFICIT | ' | ' |
Preferred stock, $0.0001 par value, 25,000,000 shares authorized | ' | ' |
Common stock, $0.0001 par value, 1,000,000,000 shares authorized 92,834,572 and 53,664,505 shares issued and outstanding, respectively | 9,283 | 5,366 |
Preferred treasury stock, 1,000 and 0 shares outstanding, respectively | ' | ' |
Additional paid in capital | 39,638,090 | 34,811,538 |
Accumulated deficit | -47,428,318 | -36,330,103 |
TOTAL SHAREHOLDERS' DEFICIT | -7,780,945 | -1,513,199 |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $935,267 | $1,005,349 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parentheticals) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Discount on debt (in dollars) | $775,818 | $971,964 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 92,834,572 | 53,664,505 |
Common stock, shares outstanding | 92,834,572 | 53,664,505 |
Preferred treasury stock shares outstanding | 1,000 | 0 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Sales | $6,785 | $40,500 | $166,195 | $140,500 |
Cost of Goods Sold | 949 | 19,866 | 106,919 | 50,510 |
Gross Profit | 5,836 | 20,634 | 59,276 | 89,990 |
Operating Expenses | ' | ' | ' | ' |
Selling and general and administrative expenses | 894,442 | 1,689,260 | 4,595,518 | 3,349,921 |
Research and development | 276,358 | 318,244 | 755,795 | 755,595 |
Depreciation and amortization expense | 4,550 | 4,508 | 12,520 | 11,263 |
Total Operating Expenses | 1,175,350 | 2,012,012 | 5,363,833 | 4,116,779 |
Loss from Operations | -1,169,514 | -1,991,378 | -5,304,557 | -4,026,789 |
OTHER INCOME/(EXPENSE) | ' | ' | ' | ' |
Realized gain on investment | ' | ' | 6,353 | ' |
Fair value of discounted warrants | ' | -645,398 | ' | -645,398 |
Gain/(Loss) on change in derivative liability | 19,062 | 1,103,300 | -3,932,264 | -1,232,828 |
Commitment fee | -53,715 | -213,229 | -92,255 | -997,893 |
Interest expense | -509,937 | -248,152 | -1,775,492 | -1,036,329 |
TOTAL OTHER INCOME/(EXPENSE) | -544,590 | -3,479 | -5,793,658 | -3,912,448 |
NET LOSS | ($1,714,104) | ($1,994,857) | ($11,098,215) | ($7,939,237) |
BASIC AND DILUTED LOSS PER SHARE | ($0.02) | ($0.05) | ($0.15) | ($0.27) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 88,116,466 | 41,620,654 | 74,966,622 | 29,367,986 |
Condensed_Statement_of_Shareho
Condensed Statement of Shareholders' Deficit (Unaudited) (USD $) | Preferred stock | Common stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2013 | ' | $5,366 | $34,811,538 | ($36,330,103) | ($1,513,199) |
Balance (in shares) at Dec. 31, 2013 | ' | 53,664,505 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Common stock issued at fair value for services | ' | 838 | 1,683,827 | ' | 1,684,665 |
Common stock issued at fair value for services (in shares) | ' | 8,382,018 | ' | ' | ' |
Common stock issued for conversion of debt | ' | 2,463 | 1,763,714 | ' | 1,766,177 |
Common stock issued for conversion of debt (in shares) | ' | 24,633,152 | ' | ' | ' |
Common stock issued upon exercise of warrants for cash | ' | 500 | 749,500 | ' | 750,000 |
Common stock issued upon exercise of warrants for cash (in shares) | ' | 5,000,000 | ' | ' | ' |
Common stock issuance of supplemental shares | ' | 111 | 197,897 | ' | 198,008 |
Common stock issuance of supplemental shares (in shares) | ' | 1,109,531 | ' | ' | ' |
Preferred stock issued | 1,000 | 7,000 | ' | ' | ' |
Preferred treasury stock | -1,000 | ' | ' | ' | ' |
Common stock issued for purchase of asset | ' | 5 | 6,995 | ' | 7,000 |
Common stock issued for purchase of asset, Shares | ' | 45,366 | ' | ' | ' |
Beneficial conversion feature | ' | ' | 277,160 | ' | 277,160 |
Stock and warrant compensation cost | ' | ' | 147,459 | ' | 147,459 |
Net loss for the nine months ended September 30, 2014 | ' | ' | ' | -11,098,215 | -11,098,215 |
Balance at Sep. 30, 2014 | ' | $9,283 | $39,638,090 | ($47,428,318) | ($7,780,945) |
Balance (in shares) at Sep. 30, 2014 | ' | 92,834,572 | ' | ' | ' |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($11,098,215) | ($7,939,237) |
Adjustment to reconcile net loss to net cash used in operating activities | ' | ' |
Depreciation & amortization | 12,520 | 11,263 |
Gain on sale of investment | -6,353 | ' |
Common stock and warrants issued for services | 1,684,665 | 793,751 |
Stock and warrant compensation expense | 147,459 | 223,277 |
Change in valuation of derivative liability | 3,932,264 | 1,232,828 |
Debt discount and original issue discount recognized as interest expense | 1,626,313 | 922,152 |
Non cash commitment fee expense | 92,255 | 997,893 |
Fair value of discounted warrants | ' | 704,575 |
(Increase) Decrease in: | ' | ' |
Accounts receivable | ' | 5,000 |
Prepaid expenses | 7,768 | 65,811 |
Work in progress | -160,909 | -28,934 |
Other asset | 1,903 | 1,200 |
Increase (Decrease) in: | ' | ' |
Accounts payable | 343,693 | -20,245 |
Accrued expenses | 34,485 | 7,718 |
Deferred income | -50,000 | ' |
NET CASH USED IN OPERATING ACTIVITIES | -3,432,152 | -2,989,484 |
CASH FLOWS USED FROM INVESTING ACTIVITIES: | ' | ' |
Purchase of fixed assets | -12,562 | -45,089 |
Patent expenditures | ' | -131,477 |
Proceeds from sale of investment, at cost | 6,815 | ' |
CASH USED IN INVESTING ACTIVITIES | -5,747 | -176,566 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Payments for unsecured debt | ' | -10,000 |
Proceeds from convertible promissory notes | 2,460,000 | 1,580,000 |
Proceeds for issuance of common stock | 750,000 | 2,387,271 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,210,000 | 3,957,271 |
NET INCREASE/(DECREASE) IN CASH | -227,899 | 791,221 |
CASH BEGINNING OF PERIOD | 821,448 | 507,355 |
CASH END OF PERIOD | 593,549 | 1,298,576 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ' | ' |
Interest paid | 1,282 | ' |
Taxes paid | ' | ' |
SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS | ' | ' |
Conversion of accounts payable into a convertible note | 383,531 | 290,560 |
Common stock issued for cashless exercise of warrants | ' | 33 |
Common stock issued for conversion of debt | 1,766,177 | 1,851,786 |
Beneficial conversion feature on convertible note | 277,160 | ' |
Common stock issued for fixed asset | 7,000 | ' |
Fair value of options issued to officer in prior year | ' | $209,000 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2014 | |
Basis of Presentation [Abstract] | ' |
BASIS OF PRESENTATION | ' |
1. Basis of Presentation | |
The accompanying unaudited condensed financial statements of OriginOil, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. For further information refer to the financial statements and footnotes thereto included in the Company's Form 10-K for the year ended December 31, 2013. | |
Going Concern | |
The accompanying condensed financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying condensed financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company has not generated significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. Management believes the existing shareholders, the prospective new investors and future sales will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for the Company’s stockholders, in case of equity financing |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES | |||||||||||||||||
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company recognizes revenue upon delivery of equipment, provided that evidence of an arrangement exists, title, and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. Title to the equipment is transferred to the customer once the last payment is received. The Company records revenue as it is received, and the equipment has been fully accepted by the customer. Generally, the Company extends credit to its customers and does not require collateral. The Company does not ship a product until it has either a purchase agreement or rental agreement signed by the customer with a payment arrangement. | |||||||||||||||||
Loss per Share Calculations | |||||||||||||||||
Basic loss per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the nine months ended September 30, 2014, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. | |||||||||||||||||
For the period ended September 30, 2014, the Company has excluded 2,084,882 exercisable options, 31,013,923 warrants outstanding, and notes convertible into 28,344,776 shares of common stock, because their impact on the loss per share is anti-dilutive. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2014, the balances reported for cash, prepaid expenses, accounts payable, and accrued expenses approximate the fair value because of their short maturities. | |||||||||||||||||
The Company adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: | |||||||||||||||||
· | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | ||||||||||||||||
· | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | ||||||||||||||||
· | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | ||||||||||||||||
The following table presents certain liabilities of the Company’s financial assets measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2014: | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Derivative Liability | $ | 6,116,754 | $ | - | $ | - | $ | 6,116,754 | |||||||||
Total liabilities measured at fair value | $ | 6,116,754 | $ | - | $ | - | $ | 6,116,754 | |||||||||
The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value: | |||||||||||||||||
Beginning balance as of January 1, 2014 | $ | 1,031,484 | |||||||||||||||
Fair value of derivative liabilities issued | 1,153,007 | ||||||||||||||||
Conversion of notes payable | (2,997,359 | ) | |||||||||||||||
Loss on change in derivative liability | 6,929,622 | ||||||||||||||||
Ending balance as of September 30, 2014 | $ | 6,116,754 | |||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of the condensed financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in valuing the Company’s stock options, warrants, convertible notes, derivative liabilities and common stock issued for services, among other items. Actual results could differ from these estimates. | |||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
Management has reviewed recently issued accounting pronouncements and has adopted the following; | |||||||||||||||||
On August 27, 2014, the Company adopted the amendment to ASU 2014-15 on Presentation of Financial Statements Going Concern (Subtopic 205-40). The amendment provides for guidance to reduce diversity in the timing and content of footnote disclosures. The amendment requires management to assess the Company’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The Company has to define the term of substantial doubt, which has to be evaluated every reporting period including interim periods. Management has to provide principles for considering the mitigating effect of its plan, and disclose when substantial doubt is alleviated as well as when it is not alleviated. The Company is required to assess managements plan for a period of one year after the financial statements are issued (or available to be issued). The amendment is effective for annual periods ending after December 15, 2016. Early adoption is permitted. The Company does not believe the accounting standards currently adopted will have a material effect on the accompanying condensed financial statements. |
Capital_Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
CAPITAL STOCK | ' |
3. CAPITAL STOCK | |
On August 13, 2014, the Company filed an amendment to its Articles of Incorporation to increase its authorized shares of common stock to 1,000,000,000 shares. There was no change to the 25,000,000 authorized shares of preferred stock or par value. The total number of authorized shares increased to 1,025,000,000. | |
Preferred Stock | |
During the nine months ended September 30, 2014, the Company issued 1,000 shares of Series A Preferred Stock to the CEO of the Company, which did not have a dividend rate or liquidation preference, and were not convertible into shares of common stock. The preferred stock gave the CEO voting rights of 51%, which remained issued and outstanding until September 1, 2014. The shares were automatically redeemed by the Company at par value, and are presented in the financial statements as preferred treasury stock. | |
Common Stock | |
During the nine months ended September 30, 2014, the Company issued 8,382,018 shares of common stock for services with prices ranging from $0.15 up to $0.21 with a total fair value of $1,684,665. | |
During the nine months ended September 30, 2014, the Company issued 5,000,000 shares of common stock upon exercise of warrants to purchase 5,000,000 shares of common stock for cash in the amount of $750,000. | |
During the nine months ended September 30, 2014, the Company issued 45,366 shares of common stock for the purchase of an asset with a fair value of $7,000. | |
Issuance of supplemental shares | |
During the year ended December 31, 2013, the Company raised aggregate proceeds of $2,267,542 from the sale of 12,274,616 units of common stock and warrants. Subsequent to sale of the common stock units discussed above, the Company entered into a supplemental agreement with the subscribers of the original subscription agreement. Under the terms of the supplemental agreement, if at any time within eighteen (18) months following the issuance of shares (the "Adjustment Period") the market price (as defined below) of the Company's common stock is less than the price per share, then the price per share shall be reduced one time to the market price (the "Adjusted Price") such that the Company shall promptly issue additional shares of the Company's common stock to the subscriber for no additional consideration, in an amount sufficient that the aggregate purchase price, when divided by the total number of shares purchased thereunder plus those shares of common stock issued as a result of the dilutive Issuance will equal the adjusted price. ''Market Price" is defined as the average closing price of the Company's common stock for any ten (10) consecutive trading days during the Adjustment Period. | |
The Company considered the effects of the above and determined that as of December 31, 2013 it should record a provision to reflect its potential obligation to issue such shares. The Company is accounting for this liability as of each reporting period until the defined adjustment period has terminated. Based upon its calculation, the Company recorded an obligation at December 31, 2013, to issue shares with a fair value of $105,754. During the nine months ended September 30, 2014, the Company issued 1,109,531 of these shares, which has reduced its liability. |
Convertible_Promissory_Notes
Convertible Promissory Notes | 9 Months Ended |
Sep. 30, 2014 | |
Convertible Promissory Notes [Abstract] | ' |
CONVERTIBLE PROMISSORY NOTES | ' |
4. CONVERTIBLE PROMISSORY NOTES | |
On various dates the Company entered into unsecured convertible Notes (the “Convertible Promissory Notes” or “Notes”), that mature between six and nine months from the date of issuance and bear interest at 10% per annum. The Notes mature on various dates through March 29, 2015. The Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $0.14 to $0.30 (subject to adjustment for stock splits, dividends, combinations and other similar transactions) or 50% of the lowest trade price on any trade day following issuance of the Notes. The Notes include customary default provisions related to payment of principal and interest and bankruptcy or creditor assignment. In the event of default, the Notes shall become immediately due and payable at the mandatory default amount. The mandatory default amount is 150% of the Note amount and such mandatory default amount shall bear interest at 10% per annum. In addition, for as long as the Notes or other convertible notes in effect between the purchaser and the Company are outstanding, if the Company issues any security with terms more favorable than the terms of the Notes or such other convertible notes or a term was not similarly provided to the purchaser of the Notes or such other convertible notes, then such more favorable or additional term shall, at the purchaser’s option, become part of the Notes and such other convertible notes. The conversion feature of the Notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Notes. As of December 31, 2013, the outstanding principal balance was $1,530,000. During the nine months ended September 30, 2014, the Company issued an additional $2,460,000 of these Notes, and converted $1,530,000 in aggregate principal, plus accrued interest of $90,848 into 23,366,020 shares of common stock. As of September 30, 2014, the Notes aggregate remaining balance is $2,460,000. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $1,562,016 during the nine months ended September 30, 2014. | |
As of September 30, 2014, the Company had original issue discount in the amount of $273,125 outstanding (the OID Notes”). The OID Notes are unsecured convertible promissory notes that includes an original issue discount and one time interest, which has been fully amortized. The OID Notes were extended and matured on various dates through September 19, 2014. On each maturity date, each note was extended one year from its maturity date through September 19, 2015. The OID Notes are convertible into shares of the Company’s common stock at a conversion price initially of $0.4375. In addition, so long as the OID Notes or other convertible note transactions currently in effect between the Company and the holders are outstanding, upon any issuance by the Company of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to the holders in these OID Notes, then such additional or more favorable term shall at the OID Notes holders’ option become a part of any or all of the outstanding OID Notes with the holders. On June 10, 2014, a holder of a note with a more favorable term converted a note at a price of $0.0605, which became part of this note due to the reset provision mentioned above. The conversion feature of the notes was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the notes | |
On June 20, 2012, the Company received an initial advance of $100,000, plus warrants to purchase an aggregate of up to 153,846 shares of the Company’s common stock. The funds were received in consideration of the sale of a 10% unsecured convertible promissory note, with an aggregate sum of up to $400,000, plus warrants to purchase an aggregate of up to 615,385 shares of the Company’s common stock at a purchase price of $0.65 per share. The note originally matured six months from the date of each purchase made under the note, and bore interest at a rate of 10% per annum, which increased to 15% when the note was not repaid by September 18, 2012. The Note was originally convertible into shares of the Company’s common stock at a conversion price of $0.65. The warrants may be exercised at any time for a period of four years from the date of issuance at an exercise price of $0.65. On February 15, 2013, the Company and the lender entered into an amendment to the note providing for, among other things, an extension of the maturity date of the note until July 21, 2013 and the amendment of the conversion price of the note to the lesser of $0.65 or 70% of the average of the three lowest closing prices in the 25 trading days previous to a conversion. During the months of June and December, 2013, the lender advanced another $250,000 under the securities purchase agreement and the Company issued 307,692 warrants to acquire shares of the Company’s common stock, bringing the total principal received under the note to $350,000. During the nine months ended September 30, 2014, the lender converted the notes in full for a principal amount of $122,828, plus accrued interest of $22,500, leaving a remaining principal balance of $0. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $62,764 during the nine months ended September 30, 2014. | |
The Company evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory notes was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the note under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the note in its entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically according to the stock price fluctuations. | |
Beneficial Conversion Feature | |
On September 29, 2014, the Company issued a convertible note in exchange for an accounts payable in the amount of $383,351, which can be converted into shares of the Company’s common stock after March 29, 2015. The note was accounted for under ASC 470, and will be re-evaluated after March 29, 2015. The note has a zero stated interest rate, and the conversion price shall be equal to 75% of the average three lowest last sale prices traded during the 25 trading days immediately prior to conversion. The note did not meet the criteria of a derivative, and was accounted for as a beneficial conversion feature, which will be amortized over the life of the note and recognized as interest expense in the financial statements. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $1,537 during the nine months ended September 30, 2014. |
Derivative_Liabilities
Derivative Liabilities | 9 Months Ended | ||
Sep. 30, 2014 | |||
Derivative Liabilities [Abstract] | ' | ||
DERIVATIVE LIABILITIES | ' | ||
5. DERIVATIVE LIABILITIES | |||
The convertible notes issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not fixed. The conversion features have been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. At December, 31, 2013, the outstanding fair value of the derivative liabilities amounted to $1,031,484. | |||
During the nine months ended September 30, 2014, convertible notes in the amount of $1,652,828 were converted. As a result of the conversion of these notes, the Company recorded a gain of $2,997,359 due to the extinguishment of the corresponding derivative liability. Furthermore, during the nine months ended September 30, 2014, the Company recognized a loss of $6,929,622 to account for the change in fair value of the derivative liabilities. At September 30, 2014, the fair value of the derivative liability was $6,116,754. | |||
For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuation of the derivative are as follows: | |||
Risk free interest rate | .02% - .13 | % | |
Stock volatility factor | 75.25% - 117.67 | % | |
Weighted average expected option life | 6 - 9 months | ||
Expected dividend yield | None | ||
Options_And_Warrants
Options And Warrants | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Options and Warrants [Abstract] | ' | ||||||||||||||
OPTIONS AND WARRANTS | ' | ||||||||||||||
6. OPTIONS AND WARRANTS | |||||||||||||||
Options | |||||||||||||||
The Board of Directors adopted the OriginOil, Inc., 2009 Incentive Stock Option Plan (the “2009 Plan”) for the purposes of granting stock options to its employees and others providing services to the Company, which reserves and sets aside for the granting of options for 500,000 shares of common stock. | |||||||||||||||
On May 25, 2012, the Board of Directors adopted a new OriginOil, Inc., 2012 Incentive Stock Option Plan (the “2012 Plan”) for the purposes of granting stock options to its employees and others providing services to the Company, which reserves and sets aside for the granting of options for 1,000,000 shares of common stock. | |||||||||||||||
On June 14, 2013, the Board of Directors adopted a new OriginOil, Inc., 2013 Incentive Stock Option Plan (the “2013 Plan”) for the purposes of granting stock options to its employees and others providing services to the Company, which reserves and sets aside for the granting of options for 4,000,000 shares of common stock. Options granted under the 2009 Plan, 2012 Plan and 2013 Plan (the “Plans”), may be either incentive stock options or nonqualified options and shall be administered by the Company's Board. Each option shall state the number of shares to which it pertains. The exercise price will be determined by the holders percentage owned as follows: If the holder owns more than 10% of the total combined voting power or value of all classes of stock of the Company, then the exercise price for incentive stock options will be no less than 110% of the fair market value of the stock as of the date of grant; if the person is not a 10% holder, then the exercise price will be no less than 100% of the fair market value of the stock as of the date of grant. Notwithstanding any other provision of the Plans or of any option agreement, each option shall expire on the date specified in the option agreement, which date shall not be later than the tenth (10th) anniversary from the date of grant. If the status of an employee terminates for any reason other than disability or death, then the optionee or their representative shall have the right to exercise the portion of any Options which were exercisable as of the date of such termination, in whole or in part, not less than 30 days nor more than three (3) months after such termination. | |||||||||||||||
During the nine months ended September 30, 2014, the Company did not grant any incentive stock options, but recognized compensation costs of $147,459 based on the fair value of the options vested for the nine months ended September 30, 2014. | |||||||||||||||
A summary of the Company’s stock option activity and related information follows: | |||||||||||||||
30-Sep-14 | |||||||||||||||
Weighted | |||||||||||||||
Number | average | ||||||||||||||
of | exercise | ||||||||||||||
Options | price | ||||||||||||||
Outstanding, beginning of period | 4,684,643 | $ | 0.53 | ||||||||||||
Granted | - | - | |||||||||||||
Exercised | - | - | |||||||||||||
Forfeited/Expired | (1,000,000 | ) | 0.45 | ||||||||||||
Outstanding, end of period | 3,684,643 | $ | 0.49 | ||||||||||||
Exercisable at the end of period | 2,084,882 | $ | 0.47 | ||||||||||||
Weighted average fair value of options granted during the period | $ | - | |||||||||||||
The weighted average remaining contractual life of options outstanding issued under the Plans as of September 30, 2014 was as follows: | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Stock | Stock | Remaining | |||||||||||||
Exercisable | Options | Options | Contractual | ||||||||||||
Prices | Outstanding | Exercisable | Life (years) | ||||||||||||
$ | 0.43 - 7.20 | 1,351,978 | 1,024,674 | 0.98 - 8.96 | |||||||||||
$ | 0.29 - 0.44 | 2,332,665 | 1,060,208 | 8.96 | |||||||||||
3,684,643 | 2,084,882 | ||||||||||||||
The intrinsic value of the outstanding options, as of September 30, 2014 was $0, as they are underwater. | |||||||||||||||
Stock-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. Stock-based compensation expense recognized in the financial statements of operations during the nine months ended September 30, 2014, included compensation expense for the stock-based payment awards granted prior to, but not yet vested, as of September 30, 2014 based on the grant date fair value estimated. | |||||||||||||||
Warrants | |||||||||||||||
During the nine months ended September 30, 2014, the Company did not grant any warrants. | |||||||||||||||
A summary of the Company’s warrant activity and related information follows: | |||||||||||||||
30-Sep-14 | |||||||||||||||
Weighted | |||||||||||||||
average | |||||||||||||||
exercise | |||||||||||||||
Options | price | ||||||||||||||
Outstanding -January 1, 2014 | 42,033,596 | $ | 0.31 | ||||||||||||
Granted | - | - | |||||||||||||
Exercised | (5,000,000 | ) | 0.15 | ||||||||||||
Forfeited | (6,019,673 | ) | 2.4 | ||||||||||||
Outstanding - September 30, 2014 | 31,013,923 | $ | 0.23 | ||||||||||||
At September 30, 2014, the weighted average remaining contractual life of warrants outstanding: | |||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Remaining | |||||||||||||||
Exercisable | Warrants | Warrants | Contractual | ||||||||||||
Prices | Outstanding | Exercisable | Life (years) | ||||||||||||
$ | 0.15 - 0.65 | 29,587,718 | 29,587,718 | 0.25 - 3.70 | |||||||||||
$ | 0.26 - 5.70 | 866,362 | 866,362 | 0.85 - 3.97 | |||||||||||
$ | $0.90 - 9.00 | 559,843 | 559,843 | 0.00 - 8.13 | |||||||||||
31,013,923 | 31,013,923 | ||||||||||||||
The intrinsic value of 24,000,000 of the outstanding warrants, as of September 30, 2014 was $1,680,000, and the remaining 7,023,923 warrants intrinsic value was $0, as they are underwater. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
7. SUBSEQUENT EVENTS | |
Management evaluated subsequent events as of the date of the financial statements pursuant to ASC TOPIC 855, and reported the following events: | |
During the subsequent period through October 22, 2014, in connection with certain one-time make good agreements, the Company issued an aggregate of 217,350 shares of its common stock at a fair value of $36,506 to certain holders of its common stock. | |
On October 30, 2014, holders of convertible notes converted an aggregate outstanding principal amount of $155,000, plus unpaid interest of $11,551 into an aggregate of 2,715,952 shares of the Company’s common stock. | |
During the subsequent period through November 3, 2014, the Company issued 53,445 shares of common stock for services at a fair value of $9,446. | |
On November 13, 2014, the Company’s board of directors adopted a Restricted Stock Award Plan (the “Plan”). The Plan is intended to aid in retaining and recruiting key directors, officers, employees, directors or consultants and to motivate them by providing incentives through the granting of restricted stock based awards. The Company’s board of directors or its compensation committee (when constituted) will administer the Plan. The administrator of the Plan has broad authority under the Plan to, among other things, select grantees and determine the number of shares that are to be subject to awards and the terms and conditions of awards. The Company’s directors, officers, employees and consultants are eligible to participate under the Plan. A total of 70,000,000 shares of common stock have been reserved for awards under the Plan. At the same time that the Plan was adopted, the Company’s board of directors authorized the grant of restricted stock awards providing for the grant of 66,050,000 shares of common stock under the Plan including the grant of 40,000,000 shares of common stock to T. Riggs Eckelberry, 10,000,000 shares of common stock to Nicholas Eckelberry, 5,000,000 shares of common stock to William Charneski, and 5,000,000 shares of common stock to Jean-Louis Kindler. The terms of the grants are set forth in individual restricted stock award agreements which set forth the terms and conditions of the grants including the vesting and issuance criteria. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company recognizes revenue upon delivery of equipment, provided that evidence of an arrangement exists, title, and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. Title to the equipment is transferred to the customer once the last payment is received. The Company records revenue as it is received, and the equipment has been fully accepted by the customer. Generally, the Company extends credit to its customers and does not require collateral. The Company does not ship a product until it has either a purchase agreement or rental agreement signed by the customer with a payment arrangement. | |||||||||||||||||
Loss per Share Calculations | ' | ||||||||||||||||
Loss per Share Calculations | |||||||||||||||||
Basic loss per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the nine months ended September 30, 2014, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. | |||||||||||||||||
For the period ended September 30, 2014, the Company has excluded 2,084,882 exercisable options, 31,013,923 warrants outstanding, and notes convertible into 28,344,776 shares of common stock, because their impact on the loss per share is anti-dilutive. | |||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2014, the balances reported for cash, prepaid expenses, accounts payable, and accrued expenses approximate the fair value because of their short maturities. | |||||||||||||||||
The Company adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: | |||||||||||||||||
· | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | ||||||||||||||||
· | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | ||||||||||||||||
· | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | ||||||||||||||||
The following table presents certain liabilities of the Company’s financial assets measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2014: | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Derivative Liability | $ | 6,116,754 | $ | - | $ | - | $ | 6,116,754 | |||||||||
Total liabilities measured at fair value | $ | 6,116,754 | $ | - | $ | - | $ | 6,116,754 | |||||||||
The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value: | |||||||||||||||||
Beginning balance as of January 1, 2014 | $ | 1,031,484 | |||||||||||||||
Fair value of derivative liabilities issued | 1,153,007 | ||||||||||||||||
Conversion of notes payable | (2,997,359 | ) | |||||||||||||||
Loss on change in derivative liability | 6,929,622 | ||||||||||||||||
Ending balance as of September 30, 2014 | $ | 6,116,754 | |||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of the condensed financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in valuing the Company’s stock options, warrants, convertible notes, derivative liabilities and common stock issued for services, among other items. Actual results could differ from these estimates. | |||||||||||||||||
Recently Issued Accounting Pronouncements | ' | ||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
Management has reviewed recently issued accounting pronouncements and has adopted the following; | |||||||||||||||||
On August 27, 2014, the Company adopted the amendment to ASU 2014-15 on Presentation of Financial Statements Going Concern (Subtopic 205-40). The amendment provides for guidance to reduce diversity in the timing and content of footnote disclosures. The amendment requires management to assess the Company’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The Company has to define the term of substantial doubt, which has to be evaluated every reporting period including interim periods. Management has to provide principles for considering the mitigating effect of its plan, and disclose when substantial doubt is alleviated as well as when it is not alleviated. The Company is required to assess managements plan for a period of one year after the financial statements are issued (or available to be issued). The amendment is effective for annual periods ending after December 15, 2016. Early adoption is permitted. The Company does not believe the accounting standards currently adopted will have a material effect on the accompanying condensed financial statements. | |||||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Schedule of fair value of financial instruments | ' | ||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Derivative Liability | $ | 6,116,754 | $ | - | $ | - | $ | 6,116,754 | |||||||||
Total liabilities measured at fair value | $ | 6,116,754 | $ | - | $ | - | $ | 6,116,754 | |||||||||
Reconciliation of the derivative liability for which Level 3 inputs | ' | ||||||||||||||||
Beginning balance as of January 1, 2014 | $ | 1,031,484 | |||||||||||||||
Fair value of derivative liabilities issued | 1,153,007 | ||||||||||||||||
Conversion of notes payable | (2,997,359 | ) | |||||||||||||||
Loss on change in derivative liability | 6,929,622 | ||||||||||||||||
Ending balance as of September 30, 2014 | $ | 6,116,754 |
Derivative_Liabilities_Tables
Derivative Liabilities (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Derivative Liabilities [Abstract] | ' | ||
Schedule of derivative liabilities at fair value | ' | ||
Risk free interest rate | .02% - .13 | % | |
Stock volatility factor | 75.25% - 117.67 | % | |
Weighted average expected option life | 6 - 9 months | ||
Expected dividend yield | None | ||
Options_and_Warrants_Tables
Options and Warrants (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Options and Warrants [Abstract] | ' | ||||||||||||||
Schedule of company's stock option activity and related information | ' | ||||||||||||||
30-Sep-14 | |||||||||||||||
Weighted | |||||||||||||||
Number | average | ||||||||||||||
of | exercise | ||||||||||||||
Options | price | ||||||||||||||
Outstanding, beginning of period | 4,684,643 | $ | 0.53 | ||||||||||||
Granted | - | - | |||||||||||||
Exercised | - | - | |||||||||||||
Forfeited/Expired | (1,000,000 | ) | 0.45 | ||||||||||||
Outstanding, end of period | 3,684,643 | $ | 0.49 | ||||||||||||
Exercisable at the end of period | 2,084,882 | $ | 0.47 | ||||||||||||
Weighted average fair value of options granted during the period | $ | - | |||||||||||||
Schedule of weighted average remaining contractual life of options outstanding issued under the plan | ' | ||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Stock | Stock | Remaining | |||||||||||||
Exercisable | Options | Options | Contractual | ||||||||||||
Prices | Outstanding | Exercisable | Life (years) | ||||||||||||
$ | 0.43 - 7.20 | 1,351,978 | 1,024,674 | 0.98 - 8.96 | |||||||||||
$ | 0.29 - 0.44 | 2,332,665 | 1,060,208 | 8.96 | |||||||||||
3,684,643 | 2,084,882 | ||||||||||||||
Schedule of company's warrant activity and related information | ' | ||||||||||||||
30-Sep-14 | |||||||||||||||
Weighted | |||||||||||||||
average | |||||||||||||||
exercise | |||||||||||||||
Options | price | ||||||||||||||
Outstanding -January 1, 2014 | 42,033,596 | $ | 0.31 | ||||||||||||
Granted | - | - | |||||||||||||
Exercised | (5,000,000 | ) | 0.15 | ||||||||||||
Forfeited | (6,019,673 | ) | 2.4 | ||||||||||||
Outstanding - September 30, 2014 | 31,013,923 | $ | 0.23 | ||||||||||||
Schedule of weighted average remaining contractual life of warrants outstanding | ' | ||||||||||||||
Weighted | |||||||||||||||
Average | |||||||||||||||
Remaining | |||||||||||||||
Exercisable | Warrants | Warrants | Contractual | ||||||||||||
Prices | Outstanding | Exercisable | Life (years) | ||||||||||||
$ | 0.15 - 0.65 | 29,587,718 | 29,587,718 | 0.25 - 3.70 | |||||||||||
$ | 0.26 - 5.70 | 866,362 | 866,362 | 0.85 - 3.97 | |||||||||||
$ | $0.90 - 9.00 | 559,843 | 559,843 | 0.00 - 8.13 | |||||||||||
31,013,923 | 31,013,923 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Liability | $6,116,754 | ' |
Total liabilities measured at fair value | 6,116,754 | ' |
Fair Value, Measurements, Recurring | (Level 1) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Liability | ' | ' |
Total liabilities measured at fair value | ' | ' |
Fair Value, Measurements, Recurring | (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Liability | ' | ' |
Total liabilities measured at fair value | ' | ' |
Fair Value, Measurements, Recurring | (Level 3) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Liability | 6,116,754 | 1,031,484 |
Total liabilities measured at fair value | $6,116,754 | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | ' |
Loss on change in derivative liability | $6,929,622 |
Ending balance | 6,116,754 |
Level 3 | Fair Value, Measurements, Recurring [Member] | ' |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | ' |
Beginning balance | 1,031,484 |
Fair value of derivative liabilities issued | 1,153,007 |
Conversion of notes payable | -2,997,359 |
Loss on change in derivative liability | 6,929,622 |
Ending balance | $6,116,754 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Detail Textuals) | 9 Months Ended |
Sep. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Antidilutive securities excluded from computation of earnings per share | 28,344,776 |
Stock Option [Member] | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Antidilutive securities excluded from computation of earnings per share | 2,084,882 |
Warrant [Member] | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Antidilutive securities excluded from computation of earnings per share | 31,013,923 |
Capital_Stock_Details
Capital Stock (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Apr. 13, 2014 | |
Capital Stock (Textual) | ' | ' | ' |
Common stock issued at fair value for services | $1,684,665 | ' | ' |
Common stock issued upon exercise of warrants for cash | 750,000 | ' | ' |
Sale of common stock | ' | 2,267,542 | ' |
Sale of common stock, shares | ' | 12,274,616 | ' |
Supplemental agreement terms | ' | 'Under the terms of the supplemental agreement, if at any time within eighteen (18) months following the issuance of shares | ' |
Market price description | ' | 'The average closing price of the Company's common stock for any ten (10) consecutive trading days during the Adjustment Period. | ' |
Obligation to issue common stock | ' | 105,754 | ' |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Shares authorized | ' | ' | 1,025,000,000 |
Purchase of an asset with a fair value | 6,116,754 | ' | ' |
Series A Preferred Stock [Member] | Chief Executive Officer and Director [Member] | ' | ' | ' |
Capital Stock (Textual) | ' | ' | ' |
Stock issued | 1,000 | ' | ' |
Preferred stock, voting rights | 'Voting rights of 51%, which remained issued and outstanding until September 1, 2014 | ' | ' |
Common Stock [Member] | ' | ' | ' |
Capital Stock (Textual) | ' | ' | ' |
Common stock issued for services (in shares) | 8,382,018 | ' | ' |
Common stock issued at fair value for services | 838 | ' | ' |
Common stock issued upon exercise of warrants for cash | 500 | ' | ' |
Common stock issued upon exercise of warrants for cash (in shares) | 5,000,000 | ' | ' |
Common stock issuance of supplemental shares (in shares) | 1,109,531 | ' | ' |
Stock issued | 7,000 | ' | ' |
Purchase of an asset with a fair value | $45,366 | ' | ' |
Common Stock [Member] | Minimum [Member] | ' | ' | ' |
Capital Stock (Textual) | ' | ' | ' |
Issue price of common stock issued for services at fair value (in dollars per share) | $0.15 | ' | ' |
Common Stock [Member] | Maximum [Member] | ' | ' | ' |
Capital Stock (Textual) | ' | ' | ' |
Issue price of common stock issued for services at fair value (in dollars per share) | $0.21 | ' | ' |
Convertible_Promissory_Notes_D
Convertible Promissory Notes (Details) (USD $) | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Feb. 15, 2013 | Jun. 20, 2012 | Sep. 30, 2014 | Feb. 15, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 10, 2014 | Sep. 29, 2014 | |
Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | Minimum | Convertible Promissory Notes [Member] | Convertible Promissory Notes [Member] | Convertible Promissory Notes [Member] | Convertible Promissory Notes [Member] | Convertible Promissory Notes [Member] | OID Notes [Member] | OID Notes [Member] | Beneficial conversion feature (member) | |||
Securities Purchase Agreement [Member] | Minimum | Maximum | ||||||||||||
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount debt | $1,652,828 | ' | ' | $400,000 | ' | ' | $350,000 | ' | $2,460,000 | ' | ' | ' | ' | ' |
Debt instrument interest rate | ' | ' | ' | 10.00% | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' |
Conversion price of debt | ' | ' | ' | $0.65 | ' | $0.65 | ' | ' | ' | $0.14 | $0.30 | $0.44 | $0.06 | ' |
Conversion price per share of debt, Description | ' | ' | ' | ' | ' | ' | ' | ' | '50% of the lowest trade price on any trade day following issuance of the Notes. | ' | ' | ' | ' | ' |
Debt instrument debt default | ' | ' | ' | ' | ' | ' | ' | ' | 'The mandatory default amount is 150% of the Note amount and such mandatory default amount shall bear interest at 10% per annum. | ' | ' | ' | ' | ' |
Sale of common stock price per share | ' | ' | ' | $0.65 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt conversion converted amount | 1,766,177 | 1,851,786 | ' | ' | 122,828 | ' | 1,530,000 | ' | 1,530,000 | ' | ' | ' | ' | ' |
Common stock issued for conversion of debt (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 23,366,020 | ' | ' | ' | ' | ' |
Original issue discount on promissory notes | 273,125 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 273,125 | ' | ' |
Interest and extension fee amount | ' | ' | ' | ' | 22,500 | ' | ' | ' | 90,848 | ' | ' | ' | ' | ' |
Debt instrument maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19-Sep-14 | ' | 29-Mar-15 |
Security purchase agreement | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common stock called by warrants (in shares) | ' | ' | ' | 615,385 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate purchase of warrants | ' | ' | ' | 153,846 | ' | ' | 307,692 | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants (in dollars per share) | ' | ' | ' | $0.65 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increased interest rate | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of average of lowest closing prices | ' | ' | 70.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75.00% |
Number of trading days previous to conversion | ' | ' | '25 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '25 days |
Unsecured convertible promissory issued | ' | ' | ' | ' | ' | ' | 250,000 | 250,000 | ' | ' | ' | ' | ' | ' |
Warrants exercised period | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recognized interest expense | ' | ' | ' | ' | 62,764 | ' | ' | ' | 1,562,016 | ' | ' | ' | ' | 1,537 |
Conversion of accounts payable into a convertible note | $383,531 | $290,560 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $383,351 |
Derivative_Liabilities_Details
Derivative Liabilities (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Significant assumptions used for black scholes valuation of the derivative | ' |
Expected dividend yield | ' |
Minimum [Member] | ' |
Significant assumptions used for black scholes valuation of the derivative | ' |
Risk free interest rate | 0.02% |
Stock volatility factor | 75.25% |
Weighted average expected option life | '6 months |
Maximum [Member] | ' |
Significant assumptions used for black scholes valuation of the derivative | ' |
Risk free interest rate | 0.13% |
Stock volatility factor | 117.67% |
Weighted average expected option life | '9 months |
Derivative_Liabilities_Details1
Derivative Liabilities (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Derivative Liabilities (Textual) | ' | ' |
Fair value of derivative liabilities | $6,116,754 | $1,031,484 |
Aggregate principal amount | 1,652,828 | ' |
Gain on extinguishment of debt | 2,997,359 | ' |
Loss on change in derivative liability | $6,929,622 | ' |
Options_and_Warrants_Details
Options and Warrants (Details) (Stock Options, USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Stock Options | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' |
Number of Options, outstanding, beginning of period | 4,684,643 |
Number of Options, granted | ' |
Number of Options, exercised | ' |
Number of Options, forfeited/expired | -1,000,000 |
Number of Options, outstanding, end of period | 3,684,643 |
Number of Options, exercisable at the end of period | 2,084,882 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' |
Weighted average exercise price, outstanding, beginning of period | $0.53 |
Weighted average exercise price, granted | ' |
Weighted average exercise price, exercised | ' |
Weighted average exercise price, forfeited/expired | $0.45 |
Weighted average exercise price, outstanding, end of period | $0.49 |
Weighted average exercise price, exercisable at the end of period | $0.47 |
Weighted average fair value of options granted during the period | ' |
Options_and_Warrants_Details_1
Options and Warrants (Details 1) (Stock Options, 2009 Plan, 2012 Plan, and 2013 Plan, USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Stock Options Outstanding | 3,684,643 |
Stock Options Exercisable | 2,084,882 |
Range One [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Exercisable Prices Lower limit | $0.43 |
Exercisable Prices Upper limit | $7.20 |
Stock Options Outstanding | 1,351,978 |
Stock Options Exercisable | 1,024,674 |
Range One [Member] | Minimum [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Weighted Average Remaining Contractual Life (years) | '11 months 23 days |
Range One [Member] | Maximum [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Weighted Average Remaining Contractual Life (years) | '8 years 11 months 16 days |
Range Two [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Exercisable Prices Lower limit | $0.29 |
Exercisable Prices Upper limit | $0.44 |
Stock Options Outstanding | 2,332,665 |
Stock Options Exercisable | 1,060,208 |
Weighted Average Remaining Contractual Life (years) | '8 years 11 months 16 days |
Options_and_Warrants_Details_2
Options and Warrants (Details 2) (Warrant, USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Warrant | ' |
Class Of Warrant Or Right [Roll Forward] | ' |
Warrants, outstanding -beginning of period | 42,033,596 |
Warrants, granted | ' |
Warrants, exercised | -5,000,000 |
Warrants, forfeited | -6,019,673 |
Warrants, outstanding - end of period | 31,013,923 |
Class Of Warrant Or Right, Weighted Average Exercise Price [Roll Forward] | ' |
Weighted average exercise price, outstanding - beginning of year | $0.31 |
Weighted average exercise price, granted | ' |
Weighted average exercise price, exercised | $0.15 |
Weighted average exercise price, forfeited | $2.40 |
Weighted average exercise price, outstanding - end of year | $0.23 |
Options_and_Warrants_Details_3
Options and Warrants (Details 3) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Warrants Outstanding | 31,013,923 |
Warrants Exercisable | 31,013,923 |
Warrant [Member] | Range One [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Exercisable Prices Lower limit | $0.15 |
Exercisable Prices Upper limit | $0.65 |
Warrants Outstanding | 29,587,718 |
Warrants Exercisable | 29,587,718 |
Warrant [Member] | Range One [Member] | Minimum [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Weighted Average Remaining Contractual Life (years) | '3 months |
Warrant [Member] | Range One [Member] | Maximum [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Weighted Average Remaining Contractual Life (years) | '3 years 8 months 12 days |
Warrant [Member] | Range Two [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Exercisable Prices Lower limit | $0.26 |
Exercisable Prices Upper limit | $5.70 |
Warrants Outstanding | 866,362 |
Warrants Exercisable | 866,362 |
Warrant [Member] | Range Two [Member] | Minimum [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Weighted Average Remaining Contractual Life (years) | '10 months 6 days |
Warrant [Member] | Range Two [Member] | Maximum [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Weighted Average Remaining Contractual Life (years) | '3 years 11 months 19 days |
Warrant [Member] | Range Three [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Exercisable Prices Lower limit | $0.90 |
Exercisable Prices Upper limit | $9 |
Warrants Outstanding | 559,843 |
Warrants Exercisable | 559,843 |
Warrant [Member] | Range Three [Member] | Minimum [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Weighted Average Remaining Contractual Life (years) | '0 years |
Warrant [Member] | Range Three [Member] | Maximum [Member] | ' |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Weighted Average Remaining Contractual Life (years) | '8 years 1 month 17 days |
Options_and_Warrants_Detail_Te
Options and Warrants (Detail Textuals) (USD $) | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | 25-May-12 | Mar. 31, 2014 | Jun. 14, 2013 | |
2009 Incentive Stock Option Plan | 2013 Incentive Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Common stock shares reserves and sets aside for the granting of options (in shares) | ' | ' | 1,000,000 | 500,000 | 4,000,000 |
Determination of exercise price by holders percentage description | 'If the holder owns more than 10% of the total combined voting power or value of all classes of stock of the Company, then the exercise price for incentive stock options will be no less than 110% of the fair market value of the stock as of the date of grant; if the person is not a 10% holder, then the exercise price will be no less than 100% of the fair market value of the stock as of the date of grant. | ' | ' | ' | ' |
Employee Termination | 'Not less than 30 days nor more than three (3) months after such termination. | ' | ' | ' | ' |
Stock Compensation Expense | $147,459 | $223,277 | ' | ' | ' |
Outstanding warrants | 24,000,000 | ' | ' | ' | ' |
Intrinsic value | 1,680,000 | ' | ' | ' | ' |
Exercised Intrinsic value | $7,023,923 | ' | ' | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 9 Months Ended | 0 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Nov. 13, 2014 | Nov. 03, 2014 | Oct. 22, 2014 | Oct. 30, 2014 | Nov. 13, 2014 | Nov. 13, 2014 | Nov. 13, 2014 | Nov. 13, 2014 | |
Convertible Promissory Notes [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||
Convertible Promissory Notes [Member] | Riggs Eckelberry [Member] | Nicholas Eckelberry [Member] | William Charneski [Member] | Jean Louis Kindler [Member] | ||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock award grant | ' | ' | 66,050,000 | ' | ' | ' | 40,000,000 | 10,000,000 | 5,000,000 | 5,000,000 |
Outstanding principal amount | ' | ' | ' | ' | ' | $155,000 | ' | ' | ' | ' |
Unpaid interest | ' | ' | ' | ' | ' | 11,551 | ' | ' | ' | ' |
Common stock issued for services (in shares) | ' | ' | 70,000,000 | 53,445 | ' | ' | ' | ' | ' | ' |
Aggregate common stock | ' | 23,366,020 | ' | ' | 217,350 | 2,715,952 | ' | ' | ' | ' |
Common stock issued at fair value for services | $1,684,665 | ' | ' | $9,446 | $36,506 | ' | ' | ' | ' | ' |