Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 14-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ORIGINCLEAR, INC. | |
Entity Central Index Key | 1419793 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 132,435,773 |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash | $478,528 | $198,384 |
Accounts receivable | 25,955 | |
Work in progress | 124,561 | 87,123 |
Prepaid expenses | 184,549 | 46,482 |
TOTAL CURRENT ASSETS | 813,593 | 331,989 |
NET PROPERTY AND EQUIPMENT | 82,718 | 78,888 |
OTHER ASSETS | ||
Other asset | 37,038 | 37,038 |
Trademark | 4,467 | 4,467 |
Security deposit | 10,247 | 10,247 |
TOTAL OTHER ASSETS | 51,752 | 51,752 |
TOTAL ASSETS | 948,063 | 462,629 |
Current Liabilities | ||
Accounts payable | 341,869 | 203,082 |
Accrued expenses | 318,920 | 272,291 |
Deferred income | 129,976 | 47,570 |
Derivative liabilities | 4,211,960 | 4,052,401 |
Convertible promissory notes, net of discount of $417,497 and $454,053, respectively | 3,704,158 | 3,087,602 |
Total Current Liabilities | 8,706,883 | 7,662,946 |
TOTAL LIABILITIES | 8,706,883 | 7,662,946 |
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 117,792,485 and 99,748,172 shares issued and outstanding, respectively | 11,780 | 9,975 |
Preferred treasury stock,1000 and 0 shares outstanding, respectively | ||
Additional paid in capital | 41,387,173 | 40,258,419 |
Accumulated deficit | -49,157,773 | -47,468,711 |
TOTAL SHAREHOLDERS' DEFICIT | -7,758,820 | -7,200,317 |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $948,063 | $462,629 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Discount on debt | $417,497 | $454,053 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 117,792,485 | 99,748,172 |
Common stock, shares outstanding | 117,792,485 | 99,748,172 |
Preferred treasury stock shares outstanding | 1,000 | 0 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Sales | $47,570 | $159,410 |
Cost of Goods Sold | 28,164 | 105,970 |
Gross Profit | 19,406 | 53,440 |
Operating Expenses | ||
Selling and general and administrative expenses | 971,138 | 1,265,851 |
Research and development | 259,355 | 246,847 |
Depreciation and amortization expense | 4,471 | 3,856 |
Total Operating Expenses | 1,234,964 | 1,516,554 |
Loss from Operations | -1,215,558 | -1,463,114 |
OTHER INCOME/(EXPENSE) | ||
Realized gain on investment | 6,353 | |
Fair value of discounted warrants | -149,807 | |
Gain/(Loss) on change in derivative liability | 174,957 | -2,133,717 |
Commitment fee | -51,696 | |
Interest expense | -446,957 | -641,766 |
TOTAL OTHER INCOME/(EXPENSE) | -473,504 | -2,769,130 |
NET LOSS | ($1,689,062) | ($4,232,244) |
BASIC AND DILUTED LOSS PER SHARE | ($0.02) | ($0.07) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 106,642,676 | 59,021,011 |
Condensed_Statement_of_Shareho
Condensed Statement of Shareholders' Equity Deficit (Unaudited) (USD $) | Total | Preferred stock | Common stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2014 | ($7,200,317) | $9,974 | $40,258,419 | ($47,468,711) | |
Balance (in shares) at Dec. 31, 2014 | 99,748,172 | ||||
Common stock issued for exercise of warrants for cash | 146,181 | 293 | 145,888 | ||
Common stock issued for exercise of warrants for cash, (in shares) | 2,923,624 | ||||
Common stock issued for conversion of debt | 400,607 | 1,020 | 399,587 | ||
Common stock issued for conversion of debt (in shares) | 10,195,172 | ||||
Common stock issuance of supplemental shares | 51,696 | 57 | 51,639 | ||
Common stock issuance of supplemental shares (in shares) | 574,796 | ||||
Common stock issued at fair value for services | 337,395 | 435 | 336,960 | ||
Common stock issued at fair value for services (in shares) | 4,350,721 | ||||
Fair value of re-priced warrants | 149,807 | 149,807 | |||
Stock compensation cost | 44,873 | 44,873 | |||
Net loss for the three months ended March 31, 2015 | -1,689,062 | -1,689,062 | |||
Balance at Mar. 31, 2015 | ($7,758,820) | $11,780 | $41,387,173 | ($49,157,773) | |
Balance (in shares) at Mar. 31, 2015 | 117,792,485 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($1,689,062) | ($4,232,244) |
Adjustment to reconcile net loss to net cash used in operating activities | ||
Depreciation & amortization | 4,471 | 3,856 |
Gain on sale of investment | -6,353 | |
Common stock and warrants issued for services | 337,395 | 320,389 |
Stock and warrant compensation expense | 44,873 | 59,897 |
Change in valuation of derivative liability | -174,957 | 2,182,790 |
Debt discount and original issue discount recognized as interest expense | 371,073 | 595,917 |
Non cash commitment fee expense | 51,696 | |
Fair value of re-priced warrants | 149,807 | |
(Increase) Decrease in: | ||
Accounts receivable | -25,955 | -22,962 |
Prepaid expenses | -138,067 | 1,870 |
Work in progress | -37,438 | -9,797 |
Other asset | 2,500 | |
Increase (Decrease) in: | ||
Accounts payable | 138,787 | 108,616 |
Accrued expenses | 82,235 | -114,375 |
Deferred income | 82,406 | -50,000 |
NET CASH USED IN OPERATING ACTIVITIES | -802,736 | -1,159,896 |
CASH FLOWS USED FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of investment, at cost | 6,815 | |
Purchase of fixed assets | -8,301 | -8,685 |
CASH USED IN INVESTING ACTIVITIES | -8,301 | -1,870 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible promissory notes | 945,000 | 885,000 |
Proceeds for issuance of common stock | 146,181 | 450,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,091,181 | 1,335,000 |
NET INCREASE IN CASH | 280,144 | 173,234 |
CASH BEGINNING OF PERIOD | 198,384 | 821,448 |
CASH END OF PERIOD | 478,528 | 994,682 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | 133 | |
Taxes paid | ||
SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS | ||
Common stock issued for supplemental shares | 51,697 | 58,448 |
Common stock issued for conversion of debt | 400,607 | 786,902 |
Beneficial conversion feature on convertible note | ||
Fair value of derivative issued | $656,756 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended | |
Mar. 31, 2015 | ||
Basis of Presentation [Abstract] | ||
BASIS OF PRESENTATION | 1. | Basis of Presentation |
The accompanying unaudited condensed financial statements of OriginClear, Inc. (the “Company”) (formerly OriginOil, Inc.) 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 three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. 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, 2014. | ||
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 our stockholders, in case of equity financing. | ||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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 | |||||||||||||||||
We recognize 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. We record revenue as it is received, and the equipment has been fully accepted by the customer. Generally, we extend credit to our customers and do not require collateral. We do not ship a product until we have 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 three months ended March 31, 2015, 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 March 31, 2015, the Company has excluded 3,954,644 options, 28,022,272 warrants outstanding, and notes convertible into 110,111,623 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 March 31, 2015, the balances reported for cash, prepaid expenses, accounts payable, and accrued expenses approximate the fair value because of their short maturities. | |||||||||||||||||
We 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 1 measurements) 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 March 31, 2015: | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Derivative Liability | $ | 4,211,960 | $ | - | $ | - | $ | 4,211,960 | |||||||||
Total liabilities measured at fair value | $ | 4,211,960 | $ | - | $ | - | $ | 4,211,960 | |||||||||
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, 2015 | $ | 4,052,401 | |||||||||||||||
Fair value of derivative liabilities issued | 334,516 | ||||||||||||||||
Conversion of notes payable | (475,491 | ) | |||||||||||||||
Loss on change in derivative liability | 300,534 | ||||||||||||||||
Ending balance as of March 31, 2015 | $ | 4,211,960 | |||||||||||||||
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 our stock options, warrants, convertible notes, and common stock issued for services, among other items. Actual results could differ from these estimates. | |||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs” this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The Board received feedback that having different balance sheet presentation requirements for debt issuance costs and debt discount and premium creates unnecessary complexity. Recognizing debt issuance costs as a deferred charge (that is, an asset) also is different from the guidance in International Financial Reporting Standards (IFRS), which requires that transaction costs be deducted from the carrying value of the financial liability and not recorded as separate assets. Additionally, the requirement to recognize debt issuance costs as deferred charges conflicts with the guidance in FASB Concepts Statement No. 6, Elements of Financial Statements, which states that debt issuance costs are similar to debt discounts and in effect reduce the proceeds of borrowing, thereby increasing the effective interest rate. Concepts Statement 6 further states that debt issuance costs cannot be an asset because they provide no future economic benefit. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. The Company is currently evaluating the effects of adopting this ASU, if it is deemed to be applicable. | |||||||||||||||||
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. | |||||||||||||||||
Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. |
Capital_Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2015 | |
Capital Stock [Abstract] | |
CAPITAL STOCK | 3. CAPITAL STOCK |
During the three months ended March 31, 2015, the Company issued 2,923,624 shares of common stock for exercise of the purchase warrants in the amount of 2,923,624 for a price of $0.05 per share for cash in the amount of $146,181. | |
During the three months ended March 31, 2015, the Company issued 10,195,172 shares of common stock for the settlement of convertible promissory notes in an aggregate principal in the amount of $365,000, plus interest in the amount of $35,607, based upon conversion prices of $0.044 and $0.046. | |
During the three months ended March 31, 2015, the Company issued 4,350,721 shares of common stock for services at fair value of $334,395. | |
During the three months ended March 31, 2015, the Company issued 574,796 shares of common stock for supplemental shares based on an agreement entered into 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 to the subscriber (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. For the purposes hereof: the ''Market Price" shall mean the average closing price of the Company's common stock for any ten (10) consecutive trading days during the Adjustment Period. | |
Convertible_Promissory_Notes
Convertible Promissory Notes | 3 Months Ended |
Mar. 31, 2015 | |
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 December 26, 2015. The Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $0.07 to $0.14 (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, 2014, the outstanding principal balance was $2,885,000. During the three months ended March 31, 2015, the Company issued an additional $525,000 of these Notes, and converted $365,000 in aggregate principal, plus accrued interest of $35,607 into 10,195,172 shares of common stock. As of March 31, 2015, the Notes had an aggregate remaining balance of $3,045,000. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $224,974 during the three months ended March 31, 2015. | |
As of March 31, 2015, the remaining balance of the OID Notes was $273,125. The Notes are unsecured convertible promissory notes (the “OID 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 March 9, 2015, a holder of a note with a more favorable term converted a note at a price of $0.035, 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 February 27, 2015 and March 31, 2015, the Company entered into unsecured convertible Notes (the “Convertible Promissory Notes” or “Notes”), for an aggregate amount of $420,000. The notes mature nine months from the date of issuance and bear interest at 10% per annum. The Notes mature on November 24, 2015 and December 26, 2015. The Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $0.07 to $0.08 (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. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $11,347 during the three months ended March 31, 2015. | |
We 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. | |
On September 29, 2014, the Company issued a convertible note in exchange for an accounts payable in the amount of $383,351, which could be converted into shares of the Company’s common stock after March 29, 2015. The note was accounted for under ASC 470, whereby, a beneficial conversion feature was recorded at time of issuance. 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 $134,752 during the three months ended March 31, 2015. | |
Derivative_Liabilities
Derivative Liabilities | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Derivative Liabilities [Abstract] | |||||
DERIVATIVE LIABILITIES | 5. DERIVATIVE LIABILITIES | ||||
We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note 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 derivative liability is adjusted periodically according to the stock price fluctuations. | |||||
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 | .03% - .26% | ||||
Stock volatility factor | 55.59% - 102.69% | ||||
Weighted average expected option life | 6 - 9 months | ||||
Expected dividend yield | None | ||||
The derivative liability recognized in the financial statements as of March 31, 2015 was $4,211,960. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
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: | |
Between April 2, 2015 and April 21, 2015, holders of convertible notes, known in our filings as “Convertible Promissory Notes” converted an aggregate outstanding principal amount of $180,000, plus unpaid interest of $18,489 into an aggregate of 6,687,866 shares of the Company’s common stock. | |
Between April 9, 2015 and May 12, 2015, the Company issued 3,500,000 shares of common stock for services at a fair value of $200,900. | |
On May 12, 2015, a holder of a convertible note issued in exchange for an accounts payable, known in our filings as “Convertible Promissory Notes” converted an aggregate outstanding principal amount of $230,000 into an aggregate of 4,455,422 shares of the Company’s common stock. | |
On May 13, 2015, the Company’s board of directors authorized the issuance of up to 4,200,000 shares of common stock and $2,500 of shares of the Company’s common stock per month in lieu of cash consideration. Of these shares, 2,000,000 shares plus the $2,500 monthly shares are subject to one-time make good anti-dilution agreements. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||
We recognize 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. We record revenue as it is received, and the equipment has been fully accepted by the customer. Generally, we extend credit to our customers and do not require collateral. We do not ship a product until we have 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 three months ended March 31, 2015, 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 March 31, 2015, the Company has excluded 3,954,644 options, 28,022,272 warrants outstanding, and notes convertible into 110,111,623 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 March 31, 2015, the balances reported for cash, prepaid expenses, accounts payable, and accrued expenses approximate the fair value because of their short maturities. | |||||||||||||||||
We 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 1 measurements) 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 March 31, 2015: | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Derivative Liability | $ | 4,211,960 | $ | - | $ | - | $ | 4,211,960 | |||||||||
Total liabilities measured at fair value | $ | 4,211,960 | $ | - | $ | - | $ | 4,211,960 | |||||||||
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, 2015 | $ | 4,052,401 | |||||||||||||||
Fair value of derivative liabilities issued | 334,516 | ||||||||||||||||
Conversion of notes payable | (475,491 | ) | |||||||||||||||
Loss on change in derivative liability | 300,534 | ||||||||||||||||
Ending balance as of March 31, 2015 | $ | 4,211,960 | |||||||||||||||
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 our stock options, warrants, convertible notes, and common stock issued for services, among other items. Actual results could differ from these estimates. | |||||||||||||||||
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements | ||||||||||||||||
In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs” this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The Board received feedback that having different balance sheet presentation requirements for debt issuance costs and debt discount and premium creates unnecessary complexity. Recognizing debt issuance costs as a deferred charge (that is, an asset) also is different from the guidance in International Financial Reporting Standards (IFRS), which requires that transaction costs be deducted from the carrying value of the financial liability and not recorded as separate assets. Additionally, the requirement to recognize debt issuance costs as deferred charges conflicts with the guidance in FASB Concepts Statement No. 6, Elements of Financial Statements, which states that debt issuance costs are similar to debt discounts and in effect reduce the proceeds of borrowing, thereby increasing the effective interest rate. Concepts Statement 6 further states that debt issuance costs cannot be an asset because they provide no future economic benefit. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. The Company is currently evaluating the effects of adopting this ASU, if it is deemed to be applicable. | |||||||||||||||||
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. | |||||||||||||||||
Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||
Schedule of fair value of financial instruments | Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Derivative Liability | $ | 4,211,960 | $ | - | $ | - | $ | 4,211,960 | |||||||||
Total liabilities measured at fair value | $ | 4,211,960 | $ | - | $ | - | $ | 4,211,960 | |||||||||
Reconciliation of the derivative liability for which Level 3 inputs | Beginning balance as of January 1, 2015 | $ | 4,052,401 | ||||||||||||||
Fair value of derivative liabilities issued | 334,516 | ||||||||||||||||
Conversion of notes payable | (475,491 | ) | |||||||||||||||
Loss on change in derivative liability | 300,534 | ||||||||||||||||
Ending balance as of March 31, 2015 | $ | 4,211,960 |
Derivative_Liabilities_Tables
Derivative Liabilities (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Derivative Liabilities [Abstract] | |||||
Schedule of derivative liabilities at fair value | |||||
Risk free interest rate | .03% - .26% | ||||
Stock volatility factor | 55.59% - 102.69% | ||||
Weighted average expected option life | 6 - 9 months | ||||
Expected dividend yield | None |
Options_and_Warrants_Tables
Options and Warrants (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Options and Warrants [Abstract] | |||||||||||||||
Schedule of company's stock option activity and related information | |||||||||||||||
31-Mar-15 | |||||||||||||||
Weighted | |||||||||||||||
Number | average | ||||||||||||||
of | exercise | ||||||||||||||
Options | price | ||||||||||||||
Outstanding, beginning of period | 4,404,643 | $ | 0.43 | ||||||||||||
Granted | - | - | |||||||||||||
Exercised | - | ||||||||||||||
Forfeited/Expired | (449,999 | ) | 0.44 | ||||||||||||
Outstanding, end of period | 3,954,644 | $ | 0.43 | ||||||||||||
Exercisable at the end of period | 2,282,140 | $ | 0.38 | ||||||||||||
Weighted average fair value of | |||||||||||||||
options granted during the period | $ | - | |||||||||||||
Schedule of weighted average remaining contractual life of options outstanding issued under the plan | |||||||||||||||
Average | |||||||||||||||
Stock | Stock | Remaining | |||||||||||||
Exercisable | Options | Options | Contractual | ||||||||||||
Prices | Outstanding | Exercisable | Life (years) | ||||||||||||
$ 0.43 - 4.20 | 1,321,978 | 1,083,474 | 1.30 - 8.96 | ||||||||||||
$ | 0.29 | 500,000 | 500,000 | 8.26 | |||||||||||
$ 0.41 - 0.44 | 1,382,666 | 604,916 | 8.96 | ||||||||||||
$ | 0.19 | 750,000 | 93,750 | 9.52 | |||||||||||
3,954,644 | 2,282,140 | ||||||||||||||
The intrinsic value of the outstanding options, as of March 31, 2015 was $0, as they are underwater. | |||||||||||||||
Schedule of company's warrant activity and related information | |||||||||||||||
31-Mar-15 | |||||||||||||||
Weighted | |||||||||||||||
average | |||||||||||||||
exercise | |||||||||||||||
Options | price | ||||||||||||||
Outstanding -January 1, 2015 | 30,946,563 | $ | 0.27 | ||||||||||||
Granted | - | - | |||||||||||||
Exercised | (2,923,624 | ) | 0.25 | ||||||||||||
Forfeited | (667 | ) | 8.4 | ||||||||||||
Outstanding - March 31, 2015 | 28,022,272 | $ | 0.29 | ||||||||||||
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 | 26,609,236 | 26,609,236 | 0.25 - 3.20 | ||||||||||||
$ 0.26 - 5.70 | 866,362 | 866,362 | 0.35 - 3.47 | ||||||||||||
$ 0.90 - 8.70 | 546,674 | 546,674 | 0.90 - 7.64 | ||||||||||||
28,022,272 | 28,022,272 | ||||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability | $4,211,960 | |
Total liabilities measured at fair value | 4,211,960 | |
(Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability | ||
Total liabilities measured at fair value | ||
(Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability | ||
Total liabilities measured at fair value | ||
(Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability | 4,211,960 | 4,052,401 |
Total liabilities measured at fair value | $4,211,960 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | |
Ending balance | $4,211,960 |
Level 3 | |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | |
Beginning balance | 4,052,401 |
Fair value of derivative liabilities issued | 334,516 |
Conversion of notes payable | -475,491 |
Loss on change in derivative liability | 300,534 |
Ending balance | $4,211,960 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Detail Textuals) | 3 Months Ended |
Mar. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 110,111,623 |
Stock Option [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 3,954,644 |
Warrant [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 28,022,272 |
Capital_Stock_Details
Capital Stock (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Capital Stock (Textual) | ||
Common stock issued for exercise of warrants for cash | $146,181 | |
Common stock issued at fair value for services | 337,395 | |
Debt conversion converted amount | 400,607 | 786,902 |
Aggregate principal amount | 365,000 | |
Supplemental agreement terms | Under the terms of the supplemental agreement, if at any time within eighteen (18) months following the issuance of shares | |
Interest amount | 35,607 | |
Maximum [Member] | ||
Capital Stock (Textual) | ||
Debt Instrument, Convertible, Conversion Price | $0.05 | |
Minimum [Member] | ||
Capital Stock (Textual) | ||
Debt Instrument, Convertible, Conversion Price | $0.04 | |
Common Stock [Member] | ||
Capital Stock (Textual) | ||
Common stock issued for exercise of warrants for cash | 293 | |
Common stock issued for exercise of warrants for cash, (in shares) | 2,923,624 | |
Common stock issued at fair value for services (in shares) | 4,350,721 | |
Common stock issued at fair value for services | 435 | |
Debt conversion converted amount | $1,020 | |
Common stock issued for conversion of debt (in shares) | 10,195,172 | |
Issue price of common stock issued for services at fair value (in dollars per share) | $0.05 | |
Common stock issuance of supplemental shares (in shares) | 574,796 |
Convertible_Promissory_Notes_D
Convertible Promissory Notes (Details) (USD $) | 3 Months Ended | 1 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Sep. 29, 2014 | Feb. 27, 2015 | Dec. 31, 2014 | Jun. 20, 2012 | Mar. 09, 2015 | |
Short-term Debt [Line Items] | |||||||
Debt instrument, Maturity date | 26-Dec-15 | ||||||
Debt instrument outstanding amount | $2,885,000 | ||||||
Converted an aggregate principal amount | 400,607 | 786,902 | |||||
Aggregate remaining amount | 400,000 | ||||||
Maximum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Conversion price of debt | $0.05 | ||||||
Minimum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Conversion price of debt | $0.04 | ||||||
Convertible Promissory Notes [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt instrument interest rate | 10.00% | ||||||
Debt instrument, Maturity date | 26-Dec-15 | ||||||
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. | ||||||
Additional notes issuance | 525,000 | ||||||
Converted an aggregate principal amount | 365,000 | ||||||
Interest and extension fee amount | 35,607 | ||||||
Aggregate common stock | 10,195,172 | ||||||
Aggregate remaining amount | 3,045,000 | ||||||
Recognized interest expense | 224,974 | ||||||
Convertible Promissory Notes [Member] | Maximum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Conversion price of debt | $0.14 | ||||||
Convertible Promissory Notes [Member] | Minimum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Conversion price of debt | $0.07 | ||||||
OID Notes [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt instrument, Maturity date | 19-Sep-14 | ||||||
Conversion price of debt | $0.44 | $0.04 | |||||
Original issue discount on promissory notes | 273,125 | ||||||
Maturity note extended, Description | On each maturity date, each note was extended one year from its maturity date through September 19, 2015. | ||||||
Beneficial conversion feature [member] | |||||||
Short-term Debt [Line Items] | |||||||
Recognized interest expense | 134,752 | ||||||
Conversion of accounts payable into a convertible note | 383,351 | ||||||
Percentage of average of lowest closing prices | 75.00% | ||||||
Number of trading days previous to conversion | 25 days | ||||||
Unsecured Convertible Notes One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt instrument interest rate | 10.00% | ||||||
Debt instrument, Maturity date | 24-Nov-15 | ||||||
Converted an aggregate principal amount | 420,000 | ||||||
Unsecured Convertible Notes Two [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt instrument interest rate | 10.00% | ||||||
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. | ||||||
Converted an aggregate principal amount | 420,000 | ||||||
Recognized interest expense | $11,347 | ||||||
Unsecured Convertible Notes Two [Member] | Maximum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Conversion price of debt | $0.08 | ||||||
Unsecured Convertible Notes Two [Member] | Minimum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Conversion price of debt | $0.07 |
Derivative_Liabilities_Details
Derivative Liabilities (Details) | 3 Months Ended |
Mar. 31, 2015 | |
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 | 0.03% |
Stock volatility factor | 55.59% |
Weighted average expected option life | 6 months |
Maximum [Member] | |
Significant assumptions used for black scholes valuation of the derivative | |
Risk free interest rate | 0.26% |
Stock volatility factor | 102.69% |
Weighted average expected option life | 9 months |
Derivative_Liabilities_Details1
Derivative Liabilities (Details Textual) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Derivative Liabilities (Textual) | ||
Fair value of derivative liabilities | $4,211,960 | $4,052,401 |
Options_and_Warrants_Details
Options and Warrants (Details) (Stock Options, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of Options, outstanding, beginning of period | 4,404,643 |
Number of Options, granted | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | |
Number of Options, forfeited/expired | -449,999 |
Number of Options, outstanding, end of period | 3,954,644 |
Number of Options, exercisable at the end of period | 2,282,140 |
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 | $0.43 |
Weighted average exercise price, granted | |
Weighted average exercise price, exercised | |
Weighted average exercise price, forfeited/expired | $0.44 |
Weighted average exercise price, outstanding, end of period | $0.43 |
Weighted average exercise price, exercisable at the end of period | $0.38 |
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 $) | 3 Months Ended |
Mar. 31, 2015 | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding | 3,954,644 |
Stock Options Exercisable | 2,282,140 |
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 | $4.20 |
Stock Options Outstanding | 1,321,978 |
Stock Options Exercisable | 1,083,474 |
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) | 1 year 3 months 18 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 | $0.29 |
Stock Options Outstanding | 500,000 |
Stock Options Exercisable | 500,000 |
Weighted Average Remaining Contractual Life (years) | 8 years 3 months 4 days |
Range Three [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices Lower limit | $0.41 |
Exercisable Prices Upper limit | $0.44 |
Stock Options Outstanding | 1,382,666 |
Stock Options Exercisable | 604,916 |
Weighted Average Remaining Contractual Life (years) | 8 years 11 months 16 days |
Range Four [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercisable Prices | $0.19 |
Stock Options Outstanding | 750,000 |
Stock Options Exercisable | 93,750 |
Weighted Average Remaining Contractual Life (years) | 9 years 6 months 7 days |
Options_and_Warrants_Details_2
Options and Warrants (Details 2) (Warrant, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Warrant | |
Class Of Warrant Or Right [Roll Forward] | |
Warrants, outstanding -beginning of period | 30,946,563 |
Warrants, granted | |
Warrants, exercised | -2,923,624 |
Warrants, forfeited | -667 |
Warrants, outstanding - end of period | 28,022,272 |
Class Of Warrant Or Right, Weighted Average Exercise Price [Roll Forward] | |
Weighted average exercise price, outstanding - beginning of year | $0.27 |
Weighted average exercise price, granted | |
Weighted average exercise price, exercised | $0.25 |
Weighted average exercise price, forfeited | $8.40 |
Weighted average exercise price, outstanding - end of year | $0.29 |
Options_and_Warrants_Details_3
Options and Warrants (Details 3) (Warrant [Member], USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Warrants Outstanding | 28,022,272 |
Warrants Exercisable | 28,022,272 |
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 | 26,609,236 |
Warrants Exercisable | 26,609,236 |
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 |
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 2 months 12 days |
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 |
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) | 4 months 6 days |
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 5 months 19 days |
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 | $8.70 |
Warrants Outstanding | 546,674 |
Warrants Exercisable | 546,674 |
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) | 10 months 24 days |
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) | 7 years 7 months 21 days |
Options_and_Warrants_Detail_Te
Options and Warrants (Detail Textuals) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Jan. 21, 2015 | Nov. 13, 2014 | 25-May-12 | Jun. 14, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Employee Termination | Not less than thirty (30) days nor more than three (3) months after such termination. | |||||
Stock Compensation Expense | $44,873 | $59,897 | ||||
Intrinsic value | 0 | |||||
Stock issued exercise of warrants for cash | 146,181 | |||||
Fair value discount on warrants | 149,807 | |||||
Common Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued upon exercise purchase warrants | 2,923,624 | |||||
Stock issued exercise of warrants for cash | 293 | |||||
Fair value discount on warrants | ||||||
Investors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock price per share | $0.05 | |||||
Exercise price of warrants | $0.25 | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock award grant | 26,050,000 | |||||
Market price description | a) If the Company's consolidated gross revenue, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $2,500,000 for the trailing twelve month period as reported in the Company's quarterly or annual financial statements, the Company will issue up to 10,420,000 shares of its common stock; b) If the Company's consolidated net profit, calculated in accordance with generally accepted accounting principles, consistently applied, equals or exceeds $500,000 for the trailing twelve month period as reported in the Company's quarterly or annual financial statements, the Company will issue up to 15,630,000 shares of its common stock. | |||||
Chief Executive Officer [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock award grant | 40,000,000 | |||||
Market price description | a) If the Company's Market Capitalization (the market capitalization shall mean the total number of shares of issued and outstanding common stock, multiplied by the average closing trade price of the Company's common stock on the 10 trading days immediately prior to the date of determination) exceeds $15,000,000, the Company will issue up to 16,000,000 shares of its common stock; b) If the Company's Market Capitalization exceeds $20,000,000, the Company will issue up to 24,000,000 shares of its common stock. | |||||
2009 Incentive Stock Option Plan [Member] | ||||||
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) | 500,000 | |||||
2012 Incentive Stock Option Plan [Member] | ||||||
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 | |||||
2013 Incentive Stock Option Plan [Member] | ||||||
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) | 4,000,000 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | |
Mar. 31, 2015 | 13-May-15 | 12-May-15 | Apr. 21, 2015 | |
Subsequent Event [Line Items] | ||||
Common stock value of shares issued for services | $337,395 | |||
Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock issued for conversion of debt (in shares) | 10,195,172 | |||
Common stock issued at fair value for services (in shares) | 4,350,721 | |||
Common stock value of shares issued for services | 435 | |||
Convertible Promissory Notes [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock issued for conversion of debt (in shares) | 10,195,172 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock issued | 4,200,000 | |||
Shares issued in Lieu of cash consideration per month | 2,500 | |||
Common stock issued under anti-dilution agreements | Of these shares, 2,000,000 shares plus the $2,500 monthly shares are subject to one-time make good anti-dilution agreements. | |||
Subsequent Event [Member] | Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock issued at fair value for services (in shares) | 3,500,000 | |||
Common stock value of shares issued for services | 200,900 | |||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | ||||
Subsequent Event [Line Items] | ||||
Unpaid interest | 18,489 | |||
Common stock issued for conversion of debt (in shares) | 4,455,422 | 6,687,866 | ||
Convertible note outstanding principal amount | $230,000 | $180,000 |