Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 04, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ORIGINCLEAR, INC. | |
Entity Central Index Key | 1,419,793 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 155,520,165 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash | $ 180,699 | $ 198,384 |
Work in progress | 124,609 | 87,123 |
Prepaid expenses | 83,747 | 46,482 |
TOTAL CURRENT ASSETS | 389,055 | 331,989 |
NET PROPERTY AND EQUIPMENT | 78,746 | 78,888 |
OTHER ASSETS | ||
Other asset | 37,038 | 37,038 |
Trademark | 4,467 | 4,467 |
Security deposit | 9,650 | 10,247 |
TOTAL OTHER ASSETS | 51,155 | 51,752 |
TOTAL ASSETS | 518,956 | 462,629 |
CURRENT LIABILITIES | ||
Accounts payable | 22,833 | 203,082 |
Accrued expenses | 347,122 | 272,291 |
Deferred income | 41,266 | 47,570 |
Derivative liabilities | 4,611,398 | 4,052,401 |
Convertible promissory notes, net of discount of $599,857 and $454,054, respectively | 3,878,846 | 3,087,602 |
TOTAL CURRENT LIABILITIES | $ 8,901,465 | $ 7,662,946 |
SHAREHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value, 25,000,000 shares authorized 1,000 shares issued and outstanding, respectively | ||
Common stock, $0.0001 par value, 1,000,000,000 shares authorized 147,198,804 and 99,748,172 shares issued and outstanding, respectively | $ 14,719 | $ 9,975 |
Preferred treasury stock,1000 and 0 shares outstanding, respectively | ||
Additional paid in capital | $ 42,540,326 | $ 40,258,419 |
Accumulated deficit | (50,937,554) | (47,468,711) |
TOTAL SHAREHOLDERS' DEFICIT | (8,382,509) | (7,200,317) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 518,956 | $ 462,629 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Discount on debt | $ 599,857 | $ 454,054 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 147,198,804 | 99,748,172 |
Common stock, shares outstanding | 147,198,804 | 99,748,172 |
Preferred treasury stock shares outstanding | 1,000 | 0 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Sales | $ 88,710 | $ 136,280 | $ 159,410 | |
Cost of Goods Sold | 58,130 | 86,294 | 105,970 | |
Gross Profit | 30,580 | 49,986 | 53,440 | |
Operating Expenses | ||||
Selling and general and administrative expenses | 1,325,401 | $ 2,435,225 | 2,296,539 | 3,701,076 |
Research and development | 201,386 | 232,590 | 460,742 | 479,437 |
Depreciation and amortization expense | 4,700 | 4,115 | 9,171 | 7,971 |
Total Operating Expenses | 1,531,487 | 2,671,930 | 2,766,452 | 4,188,484 |
Loss from Operations | $ (1,500,907) | $ (2,671,930) | $ (2,716,466) | (4,135,044) |
OTHER (EXPENSE) INCOME | ||||
Realized gain on investment | $ 6,353 | |||
Loss on sale of asset | $ (1,552) | $ (1,552) | ||
Fair value of financing cost | (143,172) | $ (143,172) | ||
Fair value of discounted warrants | 149,807 | |||
Gain (Loss) on change in derivative liability | $ 133,783 | $ (1,817,609) | $ 308,740 | $ (3,951,326) |
Commitment fee | (38,540) | (51,697) | (38,540) | |
Interest expense | $ (417,739) | (623,788) | (864,696) | (1,265,554) |
TOTAL OTHER (EXPENSE) INCOME | (278,873) | (2,479,937) | (752,377) | (5,249,067) |
NET LOSS | $ (1,779,780) | $ (5,151,867) | $ (3,468,843) | $ (9,384,111) |
BASIC AND DILUTED LOSS PER SHARE | $ (0.01) | $ (0.07) | $ (0.03) | $ (0.14) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 132,818,686 | 77,341,561 | 119,701,452 | 68,231,895 |
Condensed Statement of Sharehol
Condensed Statement of Shareholders' Equity Deficit - 6 months ended Jun. 30, 2015 - USD ($) | Total | Preferred stock | Common stock | Additional Paid-in Capital | Accumulated deficit |
Beginning balance at Dec. 31, 2014 | $ (7,200,317) | $ 9,975 | $ 40,258,419 | $ (47,468,711) | |
Beginning balance (shares) at Dec. 31, 2014 | 99,748,172 | ||||
Common stock issued for exercise of warrants for cash | 246,180 | $ 491 | 245,689 | ||
Common stock issued for exercise of warrants for cash, (shares) | 4,923,624 | ||||
Common stock issued for cash | 57,500 | $ 192 | 57,308 | ||
Common stock issued for cash (shares) | 1,916,667 | ||||
Common stock issuance for conversion of debt | 980,015 | $ 2,888 | 977,127 | ||
Common stock issuance for conversion of debt (shares) | 28,884,487 | ||||
Common stock issuance of supplemental shares | 51,697 | $ 58 | 51,639 | ||
Common stock issuance of supplemental shares (shares) | 574,796 | ||||
Common stock issued at fair value for services | 739,090 | $ 1,115 | 737,975 | ||
Common stock issued at fair value for services (shares) | 11,151,058 | ||||
Stock compensation cost | 89,747 | 89,747 | |||
Beneficial conversion feature | 122,422 | $ 122,422 | |||
Net loss for the six months ended June 30, 2015 | (3,468,843) | $ (3,468,843) | |||
Ending balance at Jun. 30, 2015 | $ (8,382,509) | $ 14,719 | $ 42,540,326 | $ (50,937,554) | |
Ending balance (shares) at Jun. 30, 2015 | 147,198,804 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,468,843) | $ (9,384,111) |
Adjustment to reconcile net loss to net cash used in operating activities | ||
Depreciation & amortization | $ 9,171 | 7,971 |
Gain on sale of investment | $ (6,353) | |
Loss on sale of asset | $ 1,552 | |
Common stock and warrants issued for services | 739,090 | $ 1,646,390 |
Stock and warrant compensation expense | 89,747 | $ 103,678 |
Fair value of debt financing cost | 143,172 | |
Change in valuation of derivative liability | (308,740) | $ 3,951,326 |
Debt discount and original issue discount recognized as interest expense | 701,181 | 1,174,432 |
Equity based commitment fee expense | 51,697 | 38,540 |
(Increase) Decrease in: | ||
Prepaid expenses | (37,265) | 10,687 |
Work in progress | (37,486) | (52,253) |
Other asset | 597 | 1,903 |
Increase (Decrease) in: | ||
Accounts payable | 252,300 | 161,688 |
Accrued expenses | 144,848 | (33,355) |
Deferred income | (6,304) | (50,000) |
NET CASH USED IN OPERATING ACTIVITIES | $ (1,725,283) | (2,429,457) |
CASH FLOWS USED FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of investment, at cost | 6,815 | |
Purchase of fixed assets | $ (11,082) | (11,212) |
CASH USED IN INVESTING ACTIVITIES | (11,082) | (4,397) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible promissory notes | 1,415,000 | 1,515,000 |
Proceeds for issuance of common stock | 303,680 | 750,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,718,680 | 2,265,000 |
NET DECREASE IN CASH | (17,685) | (168,854) |
CASH BEGINNING OF PERIOD | 198,384 | 821,448 |
CASH END OF PERIOD | 180,699 | 652,594 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | $ 452 | $ 1,282 |
Taxes paid | ||
SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS | ||
Common stock issued for supplemental shares | $ 51,697 | $ 144,293 |
Common stock issuance for conversion of debt | $ 980,015 | $ 1,220,139 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 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 Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 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 June 30, 2015, the Company has excluded 3,954,644 options, 24,263,426 warrants outstanding, and notes convertible into 213,616,541 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 June 30, 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 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 June 30, 2015: Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 4,611,398 $ - $ - $ 4,611,398 Total liabilities measured at fair value $ 4,611,398 $ - $ - $ 4,611,398 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 867,737 Loss on change in derivative liability (308,740 ) Ending balance as of June 30, 2015 $ 4,611,398 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, 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). |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2015 | |
Capital Stock [Abstract] | |
CAPITAL STOCK | 3. CAPITAL STOCK Preferred Stock On April 8, 2015, the Board of Directors of OriginClear, Inc. (the “Company”) authorized the issuance of 1,000 shares of Series A Preferred Stock to the Company’s Chief Executive Officer and Director, T. Riggs Eckelberry, and the Company filed a Certificate of Designation for is Series A Preferred Stock with the Secretary of State of Nevada designating 1,000 shares of its authorized preferred stock as Series A Preferred. The shares of Series A Preferred Stock have a par value of $0.0001 per share. The Series A Preferred Shares do not have a dividend rate or liquidation preference and are not convertible into shares of common stock. The preferred stock gave the CEO voting rights of 51%, which remained issued and outstanding until July 8, 2015 at which time, the shares were automatically rescinded by the Company. Common Stock During the six months ended June 30, 2015, the Company issued 4,923,624 shares of common stock for exercise of the purchase warrants in the amount of 4,923,624 for prices ranging from $0.02 to $0.05 per share for cash in the amount of $246,180. During the six months ended June 30, 2015, the Company issued 1,916,667 shares of commons stock at $0.03 per share for cash in the amount of $57,500. The shares were issued through a private offering pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, Regulation D and Regulation S promulgated under the Securities Act. During the six months ended June 30, 2015, the Company issued 28,884,487 shares of common stock for the settlement of convertible promissory notes in an aggregate principal in the amount of $910,000, plus interest in the amount of $70,015, based upon conversion prices ranging from $0.02 to $0.052. During the six months ended June 30, 2015, the Company issued 11,151,058 shares of common stock for services at fair value of $739,090. During the six months ended June 30, 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 | 6 Months Ended |
Jun. 30, 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 January 25, 2016. The Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $0.06 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 six months ended June 30, 2015, the Company issued an additional $615,000 of these Notes, and converted $680,000 in aggregate principal, plus accrued interest of $70,015 into 24,429,065 shares of common stock. As of June 30, 2015, the Notes had an aggregate remaining balance of $2,820,000. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $384,895 during the six months ended June 30, 2015. On February 24, 2015, the OID Notes with an aggregate remaining balance of $273,125 were amended. The Notes are unsecured convertible promissory notes (the “OID Notes”), that included 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. On February 24, 2015, the Notes were amended and have a maturity date of December 31, 2015. The Notes were analyzed under ASC 470 (Extinguishment & Modification of debt) During the six months ended June 30, 2015, the Company entered into various unsecured convertible Notes (the “Convertible Promissory Notes” or “Notes”), for an aggregate amount of $800,000. The notes mature nine months from the date of issuance and bear interest at 10% per annum. The Notes mature on various dates ending on February 25, 2016. The Notes may be converted into shares of the Company’s common stock at conversion prices ranging from the lesser of $0.06 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 $83,487 during the six months ended June 30, 2015. On June 30, 2015, the Company issued a convertible note in exchange for an accounts payable in the amount of $432,048, which could be converted into shares of the Company’s common stock after December 31, 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 $123 during the six months ended June 30, 2015. 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 $144,892 during the six months ended June 30, 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. |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
Jun. 30, 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 .01% - .28 % Stock volatility factor 55.59% - 124.86 % Weighted average expected option life 6 - 9 months Expected dividend yield None The derivative liability recognized in the financial statements as of June 30, 2015 was $4,611,398. |
Options and Warrants
Options and Warrants | 6 Months Ended |
Jun. 30, 2015 | |
Options and Warrants [Abstract] | |
OPTIONS AND WARRANTS | 6. OPTIONS AND WARRANTS Option s The Board of Directors adopted the OriginClear, Inc. (formerly 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 Five Hundred Thousand (500,000) shares of Common Stock. On May 25, 2012, the Board of Directors adopted a new OriginClear, Inc. (formerly 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 One Million (1,000,000) shares of Common Stock. On June 14, 2013, the Board of Directors adopted a new OriginClear, Inc. (formerly 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 Four Million (4,000,000) shares of Common Stock. Options granted under these Plans may be either incentive options or nonqualified options and shall be administered by the Company's Board. Each Option shall be exercisable to the nearest whole share, in installments or otherwise, as the respective option agreements may provide. Notwithstanding any other provision of the Plan 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 effective 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 thirty (30) days nor more than three (3) months after such termination. With respect to Non-statutory Options granted to employees, directors or consultants, the Board or Committee may specify such period for exercise that the Option shall automatically terminate following the termination of employment or services as to shares covered by the Option as the Board or Committee deems reasonable and appropriate. During the six months ended June 30, 2015, the Company did not grant any incentive stock options, but recognized compensation costs of $89,747 based on the fair value of the options vested for the six months ended June 30, 2015. A summary of the Company’s stock option activity and related information follows: June 30, 2015 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 2,450,520 $ 0.39 Weighted average fair value of options granted during the period $ - The weighted average remaining contractual life of options outstanding issued under the 2009 Plan, 2012 Plan, and 2013 Plan as of June 30, 2015 was as follows: Weighted Weighted Weighted Average Average Average Stock Stock Remaining Exercise Price Exercise Price Exercisable Options Options Contractual of Options of Options Prices Outstanding Exercisable Life (years) Outstanding Exercisable $ 0.43 - 4.20 1,321,978 1,118,562 1.05 - 8.21 $ 0.46 $ 0.46 $ 0.29 500,000 500,000 8.01 $ 0.41 - 0.44 1,382,666 691,333 8.21 $ 0.53 $ 0.53 $ 0.19 750,000 140,625 9.27 3,954,644 2,450,520 The intrinsic value of the outstanding options, as of June 30, 2015 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 six months ended June 30, 2015 was $89,747. Restricted Stock to CEO On November 13, 2014, the Company entered into a Restricted Stock Grant Agreement (“the RSGA”) with its Chief Executive Officer, Riggs Eckelberry, to create management incentives to improve the economic performance of the Company and to increase its value and stock price. All shares issuable under the RSGA are performance based shares and none have yet vested nor have any been issued. The RSGA provides for the issuance of up to 40,000,000 shares of the Company’s common stock to the CEO provided certain milestones are met in certain stages; 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 Restricted Stock to Employees On November 13, 2014, the Company entered into RSGAs with the employees of OriginClear Inc. (formerly OriginOil, Inc.), for the economic performance of the Company. All shares issuable under the RSGAs are performance based shares and none have yet vested nor have any been issued. The RSGAs provides for the issuance of up to 26,050,000 shares of the Company’s common stock to the Employees provided certain milestones are met in certain stages; 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. The Company has not recognized any costs associated with the milestones, due to not being able to estimate the probability of it being achieved. As the performance goals are achieved, the shares shall become eligible for vesting and issuance. Warrants During the six months ended June 30, 2015, the Company did not grant any warrants. A summary of the Company’s warrant activity and related information follows: June 30, 2015 Weighted average exercise Options price Outstanding - January 1, 2015 30,946,563 $ 0.27 Granted - - Exercised (6,523,624 ) 0.19 Forfeited (159,513 ) 8.40 Outstanding - June 30, 2015 24,263,426 $ 0.29 At June 30, 2015, 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 22,855,390 22,855,390 0.02 - 2.93 $ 0.26 - 5.70 866,362 866,362 0.10 - 3.22 $ 0.90 - 8.70 541,674 541,674 0.21 - 7.39 24,263,426 24,263,426 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 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 July 1, 2015 and July 31, 2015, the Company sold to accredited investors 3,066,670 shares of common stock for aggregate consideration of $92,000. Shares issued in this offering are subject to certain price protection for a period of one year from the issuance of the shares. On July 16, 2015, a holder of convertible promissory notes, known in our filings as “Convertible Promissory Notes”, converted an aggregate principal amount of $70,000, plus unpaid interest amount of $8,170 into an aggregate of 5,194,011 shares of the Company’s common stock. On July 31, 2015, the Company issued 60,680 shares of common stock for services at a fair value of $2,549. On July 31, 2015, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Progressive Water Treatment, Inc., a Texas corporation (“PWT”) and Marc Stevens, PWT’s sole shareholder (“Stevens”). Upon the satisfaction or waiver of the conditions in the agreement, but in no event later than October 31, 2015 (the “Closing Date”), the Company will acquire PWT from Stevens through the transfer of all issued and outstanding shares of PWT in exchange (the “Exchange”) for 10,000 shares of a new series of preferred stock, the Series B Preferred Stock, to be created by the Company prior to the Closing Date, using the form of Certificate of Designation attached as an exhibit to the Share Exchange Agreement. Each share of Series B Preferred Stock will have a stated value of $150 per share and will be convertible into shares of the Company’s common stock at a conversion price of $0.03 per share, which may be converted to the Company’s common stock in three annual increments beginning 12 months from closing. The Series B Preferred Stock shall be entitled to vote with holders of the Company’s common stock on all corporate actions, including the election of the Company’s directors. The holders of the Series B Preferred Stock shall be entitled to cast one vote for each share of Series B Preferred Stock owned. Consummation of the Exchange is subject to a number of closing conditions, including, among other things, (i) the satisfaction of due diligence by the parties of each other, (ii) the accuracy of the representations and warranties, subject to customary materiality qualifiers; and (iii) the execution of an employment agreement by Stevens, in the form of the Employment Agreement attached to the Share Exchange Agreement. On August 4, 2015, the Company’s board of directors authorized the issuance of an aggregate of 3,282,410 shares of the Company’s common stock to former holders of warrants who previously exchanged their warrants for an aggregate of 4,923,624 shares of the Company’s common stock. The additional issuance of shares was made as a result of an adjustment to the purchase price for the exchange. Shares issued in the exchange, including the additional shares, are subject to certain price protection for a period of one year from the exchange. On August 4, 2015, the Company’s board of directors authorized the issuance of an aggregate of 2,000,000 shares to consultants of the Company in lieu of cash consideration. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 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 June 30, 2015, the Company has excluded 3,954,644 options, 24,263,426 warrants outstanding, and notes convertible into 213,616,541 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 June 30, 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 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 June 30, 2015: Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 4,611,398 $ - $ - $ 4,611,398 Total liabilities measured at fair value $ 4,611,398 $ - $ - $ 4,611,398 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 867,737 Loss on change in derivative liability (308,740 ) Ending balance as of June 30, 2015 $ 4,611,398 |
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, 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). |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of fair value of financial instruments | Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 4,611,398 $ - $ - $ 4,611,398 Total liabilities measured at fair value $ 4,611,398 $ - $ - $ 4,611,398 |
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 867,737 Loss on change in derivative liability (308,740 ) Ending balance as of June 30, 2015 $ 4,611,398 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Liabilities [Abstract] | |
Schedule of derivative liabilities at fair value | Risk free interest rate .01% - .28 % Stock volatility factor 55.59% - 124.86 % Weighted average expected option life 6 - 9 months Expected dividend yield None |
Options and Warrants (Tables)
Options and Warrants (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Options and Warrants [Abstract] | |
Schedule of company's stock option activity and related information | June 30, 2015 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 2,450,520 $ 0.39 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 Weighted Weighted Average Average Average Stock Stock Remaining Exercise Price Exercise Price Exercisable Options Options Contractual of Options of Options Prices Outstanding Exercisable Life (years) Outstanding Exercisable $ 0.43 - 4.20 1,321,978 1,118,562 1.05 - 8.21 $ 0.46 $ 0.46 $ 0.29 500,000 500,000 8.01 $ 0.41 - 0.44 1,382,666 691,333 8.21 $ 0.53 $ 0.53 $ 0.19 750,000 140,625 9.27 3,954,644 2,450,520 |
Schedule of company's warrant activity and related information | June 30, 2015 Weighted average exercise Options price Outstanding - January 1, 2015 30,946,563 $ 0.27 Granted - - Exercised (6,523,624 ) 0.19 Forfeited (159,513 ) 8.40 Outstanding - June 30, 2015 24,263,426 $ 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 22,855,390 22,855,390 0.02 - 2.93 $ 0.26 - 5.70 866,362 866,362 0.10 - 3.22 $ 0.90 - 8.70 541,674 541,674 0.21 - 7.39 24,263,426 24,263,426 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Liability | $ 4,611,398 | |
Total liabilities measured at fair value | $ 4,611,398 | |
(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 | $ 4,611,398 | $ 4,052,401 |
Total liabilities measured at fair value | $ 4,611,398 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Details 1) - Jun. 30, 2015 - USD ($) | Total |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | |
Ending balance | $ 4,611,398 |
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 | 867,737 |
Loss on change in derivative liability | (308,740) |
Ending balance | $ 4,611,398 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Detail Textuals) | 6 Months Ended |
Jun. 30, 2015shares | |
Summary Of Significant Accounting Policies (Textual) | |
Antidilutive securities excluded from computation of earnings per share | 213,616,541 |
Warrant [Member] | |
Summary Of Significant Accounting Policies (Textual) | |
Antidilutive securities excluded from computation of earnings per share | 24,263,426 |
Stock Option [Member] | |
Summary Of Significant Accounting Policies (Textual) | |
Antidilutive securities excluded from computation of earnings per share | 3,954,644 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Capital Stock (Textual) | ||
Common stock issued for exercise of warrants for cash | $ 246,180 | |
Aggregate principal amount | 910,000 | |
Interest amount | 70,015 | |
Common stock issued at fair value for services | $ 739,090 | |
Supplemental agreement terms | Under the terms of the supplemental agreement, if at any time within eighteen (18) months following the issuance of shares | |
Series A Preferred Stock, shares issued | 1,000 | 1,000 |
Series A Preferred Stock, shares authorized | 25,000,000 | 25,000,000 |
Series A Preferred Stock, par value | $ 0.0001 | $ 0.0001 |
Series A Preferred Stock voting rights description | The preferred stock gave the CEO voting rights of 51%, which remained issued and outstanding until July 8, 2015 at which time, the shares were automatically rescinded by the Company. | |
Common stock issued for cash | $ 57,500 | |
Share price | $ 0.03 | |
Maximum [Member] | ||
Capital Stock (Textual) | ||
Issue price of common stock issued for services at fair value (in dollars per share) | 0.05 | |
Debt Instrument, Convertible, Conversion Price | 0.052 | |
Minimum [Member] | ||
Capital Stock (Textual) | ||
Issue price of common stock issued for services at fair value (in dollars per share) | 0.02 | |
Debt Instrument, Convertible, Conversion Price | $ 0.02 | |
Common Stock [Member] | ||
Capital Stock (Textual) | ||
Common stock issued for exercise of warrants for cash, (shares) | 4,923,624 | |
Common stock issued for exercise of warrants for cash | $ 491 | |
Common stock issuance for conversion of debt (shares) | 28,884,487 | |
Common stock issued at fair value for services (shares) | 11,151,058 | |
Common stock issued at fair value for services | $ 1,115 | |
Common stock issuance of supplemental shares (shares) | 574,796 | |
Common stock issued for cash | $ 192 | |
Common stock issued for cash (shares) | 1,916,667 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
Feb. 24, 2015 | Sep. 29, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | May. 19, 2015 | Dec. 31, 2014 | |
Short-term Debt [Line Items] | ||||||
Debt instrument outstanding amount | $ 2,885,000 | |||||
Converted an aggregate principal amount | $ 980,015 | $ 1,220,139 | ||||
Maximum [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Conversion price of debt | $ 0.052 | |||||
Minimum [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Conversion price of debt | $ 0.02 | |||||
Convertible Promissory Notes [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt instrument interest rate | 10.00% | |||||
Debt instrument, Maturity date | Jan. 25, 2016 | |||||
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 | $ 615,000 | |||||
Converted an aggregate principal amount | 680,000 | |||||
Interest and extension fee amount | $ 70,015 | |||||
Aggregate common stock | 24,429,065 | |||||
Aggregate remaining amount | $ 2,820,000 | |||||
Recognized interest expense | $ 384,895 | |||||
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 | $ 0.06 | |||||
OID Notes [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt instrument, Maturity date | Sep. 19, 2014 | Dec. 31, 2015 | ||||
Conversion price of debt | $ 0.4375 | $ 0.02 | ||||
Conversion price per share of debt, Description | After the amendment the conversion price changed to the lesser of $0.08 per share, or b) fifty percent (50%) of the lowest trade price of common stock recorded since the original effective date of this note, or c) the lowest effective price per share granted to any person or entity after the effective date. | |||||
Recognized interest expense | $ 87,786 | |||||
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 | $ 144,892 | |||||
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 2 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Debt instrument interest rate | 10.00% | |||||
Debt instrument, Maturity date | Feb. 25, 2016 | |||||
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 | $ 800,000 | |||||
Recognized interest expense | $ 83,487 | |||||
Unsecured convertible notes 2 [Member] | Maximum [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Conversion price of debt | $ 0.08 | |||||
Unsecured convertible notes 2 [Member] | Minimum [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Conversion price of debt | $ 0.06 | |||||
Convertable promissory notes 3 [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Recognized interest expense | $ 123 | |||||
Conversion of accounts payable into a convertible note | $ 432,048 | |||||
Percentage of average of lowest closing prices | 75.00% | |||||
Number of trading days previous to conversion | 25 days |
Derivative Liabilities (Details
Derivative Liabilities (Details) - 6 months ended Jun. 30, 2015 | Total |
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 | 0.01% |
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 | 0.28% |
Stock volatility factor | 124.86% |
Weighted average expected option life | 9 months |
Derivative Liabilities (Detai24
Derivative Liabilities (Details Textual) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative Liabilities (Textual) | ||
Fair value of derivative liabilities | $ 4,611,398 | $ 4,052,401 |
Options and Warrants (Details)
Options and Warrants (Details) - 6 months ended Jun. 30, 2015 - Stock Options - $ / shares | Total |
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 | 2,450,520 |
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 | $ 0.39 |
Weighted average fair value of options granted during the period |
Options and Warrants (Details 1
Options and Warrants (Details 1) - Jun. 30, 2015 - Stock Options - 2009 Plan, 2012 Plan, and 2013 Plan - $ / shares | Total |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Options Outstanding | 3,954,644 |
Stock Options Exercisable | 2,450,520 |
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 | 1,118,562 |
Weighted Average Exercise Price of Options Outstanding | $ 0.46 |
Weighted Average Exercise Price of Options Exercisable | $ 0.46 |
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 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 2 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 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 | 691,333 |
Weighted Average Remaining Contractual Life (years) | 8 years 2 months 16 days |
Weighted Average Exercise Price of Options Outstanding | $ 0.53 |
Weighted Average Exercise Price of Options Exercisable | 0.53 |
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 | 140,625 |
Weighted Average Remaining Contractual Life (years) | 9 years 3 months 7 days |
Options and Warrants (Details 2
Options and Warrants (Details 2) - 6 months ended Jun. 30, 2015 - Warrant - $ / shares | Total |
Class Of Warrant Or Right [Roll Forward] | |
Warrants, outstanding -beginning of period | 30,946,563 |
Warrants, granted | |
Warrants, exercised | (6,523,624) |
Warrants, forfeited | (159,513) |
Warrants, outstanding - end of period | 24,263,426 |
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 | $ 0.19 |
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) - Jun. 30, 2015 - Warrant [Member] - $ / shares | Total |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Warrants Outstanding | 24,263,426 |
Warrants Exercisable | 24,263,426 |
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 | 22,855,390 |
Warrants Exercisable | 22,855,390 |
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) | 7 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) | 2 years 11 months 5 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) | 1 month 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 2 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 | 541,674 |
Warrants Exercisable | 541,674 |
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) | 2 months 16 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 4 months 21 days |
Options and Warrants (Detail Te
Options and Warrants (Detail Textuals) - USD ($) | Nov. 13, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 14, 2013 | May. 25, 2012 |
Options And Warrants Textual [Abstract] | |||||
Employee Termination | Not less than thirty (30) days nor more than three (3) months after such termination. | ||||
Stock Compensation Expense | $ 89,747 | $ 103,678 | |||
Intrinsic value | $ 0 | ||||
Employee Stock Option [Member] | |||||
Options And Warrants Textual [Abstract] | |||||
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] | |||||
Options And Warrants Textual [Abstract] | |||||
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 $20,000,000, the Company will issue up to 24,000,000 shares of its common stock. | ||||
2009 Incentive Stock Option Plan [Member] | |||||
Options And Warrants Textual [Abstract] | |||||
Common stock shares reserves and sets aside for the granting of options (in shares) | 500,000 | ||||
2012 Incentive Stock Option Plan [Member] | |||||
Options And Warrants Textual [Abstract] | |||||
Common stock shares reserves and sets aside for the granting of options (in shares) | 1,000,000 | ||||
2013 Incentive Stock Option Plan [Member] | |||||
Options And Warrants Textual [Abstract] | |||||
Common stock shares reserves and sets aside for the granting of options (in shares) | 4,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Jul. 31, 2015 | Jul. 16, 2015 | Jun. 30, 2015 | Aug. 04, 2015 | Dec. 31, 2014 | |
Subsequent Event [Line Items] | |||||
Issuance of common stock | $ 57,500 | ||||
Common stock issued at fair value for services | $ 739,090 | ||||
Share price per share | $ 0.03 | ||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | |||
Common Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Common stock issuance for conversion of debt (shares) | 28,884,487 | ||||
Issuance of common stock | $ 192 | ||||
Issuance of common stock, shares | 1,916,667 | ||||
Common stock issued at fair value for services | $ 1,115 | ||||
Common stock issued for services (in shares) | 11,151,058 | ||||
Common stock issued for exercise of warrants for cash, (shares) | 4,923,624 | ||||
Convertible Promissory Notes [Member] | |||||
Subsequent Event [Line Items] | |||||
Common stock issuance for conversion of debt (shares) | 24,429,065 | ||||
Subsequent Event [Member] | Series B Preferred Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Preferred stock issued during period of acquisition, shares | 10,000 | ||||
Share price per share | $ 150 | ||||
Conversion price per share | $ 0.03 | ||||
Subsequent Event [Member] | Common Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Common stock issued at fair value for services | $ 2,549 | ||||
Common stock issued for services (in shares) | 60,680 | ||||
Common stock, shares authorized | 2,000,000 | ||||
Subsequent Event [Member] | Warrant [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of shares authorized for issuance | 3,282,410 | ||||
Subsequent Event [Member] | Investor [Member] | |||||
Subsequent Event [Line Items] | |||||
Issuance of common stock | $ 92,000 | ||||
Issuance of common stock, shares | 3,066,670 | ||||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | |||||
Subsequent Event [Line Items] | |||||
Unpaid interest | $ 8,170 | ||||
Common stock issuance for conversion of debt (shares) | 5,194,011 | ||||
Convertible note outstanding principal amount | $ 70,000 |