Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 14, 2014 | |
Entity Registrant Name | 'Arista Power, Inc. | ' |
Entity Central Index Key | '0001424640 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 20,979,877 |
Series A Convertible Preferred Stock [Member] | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 1,360 |
Condensed_Balance_Sheets_Unaud
Condensed Balance Sheets (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash | $353,166 | $297,385 |
Accounts Receivable (less allowance for doubtful accounts of $0 at September 30, 2014 and December 31,2013) | 143,103 | 265,245 |
Prepaid expenses and other current assets | 101,717 | 232,570 |
Inventory | 496,313 | 496,313 |
Deferred debt discount | 820,750 | 820,750 |
Total current assets | 1,915,049 | 2,112,263 |
Other assets | 139,344 | 172,362 |
Intangible assets, net | 23,796 | 25,305 |
Property and equipment, net | 19,080 | 69,555 |
Total assets | 2,097,269 | 2,379,485 |
Current liabilities | ' | ' |
Accounts payable | 487,192 | 1,175,221 |
Borrowings under line of credit, net of debt discount | 941,248 | 684,994 |
Customer deposits | 18,850 | 19,000 |
Accrued payroll | 54,763 | 146,465 |
Deferred revenue | 318,977 | 63,311 |
Accrued warranty costs | 142,504 | 140,074 |
Accrued liabilities | 442,640 | 496,011 |
Accrued loss contract | 542,842 | 519,092 |
Accrued dividends | 63,675 | 0 |
Derivative liabilities, short term | 0 | 13,200 |
Current portion of long term debt | 277 | 11,782 |
Total current liabilities | 3,012,968 | 3,269,150 |
Long term liabilities | ' | ' |
Long term debt | 0 | 16,169 |
Derivative liabilities | 556,070 | 762,396 |
Total long term liabilities | 556,070 | 778,565 |
Total liabilities | 3,569,038 | 4,047,715 |
Stockholders' (deficit) | ' | ' |
Preferred stock, 5,000,000 shares authorized, $0.002 par value; 1,415 and 0 issued and outstanding at September 30, 2014 or December 31, 2013 | 3 | 0 |
Common stock, 500,000,000 shares authorized, $0.002 par value; 19,892,264 and 17,993,694 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 39,784 | 35,987 |
Additional paid-in capital | 23,923,613 | 25,330,474 |
Deficit accumulated | -25,435,169 | -27,034,691 |
Total stockholders' (deficit) | -1,471,769 | -1,668,230 |
Total liabilities and stockholders' deficit | $2,097,269 | $2,379,485 |
Condensed_Balance_Sheets_Unaud1
Condensed Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Balance Sheets [Abstract] | ' | ' |
Allowance for doubtful accounts | $0 | $0 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares issued | 1,415 | 0 |
Preferred stock, shares outstanding | 1,415 | 0 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares issued | 19,892,264 | 17,993,694 |
Common stock, shares outstanding | 19,892,264 | 17,993,694 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statements of Operations [Abstract] | ' | ' | ' | ' |
Sales | $250,231 | $578,689 | $541,675 | $1,015,949 |
Cost of Goods Sold | 423,487 | 1,219,094 | 654,038 | 1,740,939 |
Gross Margin/(Loss) | -173,256 | -640,405 | -112,363 | -724,990 |
Operating Expenses: | ' | ' | ' | ' |
Research and development expenses | 0 | 63,639 | 0 | 320,341 |
Selling, general and administrative expenses | 341,237 | 463,492 | 1,190,233 | 1,828,753 |
Total expenses | 341,237 | 527,131 | 1,190,233 | 2,149,094 |
Loss from operations | -514,493 | -1,167,536 | -1,302,596 | -2,874,084 |
Non-operating revenue/(expense) | ' | ' | ' | ' |
Interest expense | -111,900 | -112,498 | -336,419 | -518,428 |
Unrealized gain (loss) on change in fair value of derivative liabilities | 1,149,696 | 237,538 | 3,240,052 | 218,968 |
Net loss before income taxes | 523,303 | -1,042,496 | 1,601,037 | -3,173,544 |
Income taxes (credits) | -360 | 0 | 1,515 | -103,471 |
Net income (loss) | 523,663 | -1,042,496 | 1,599,522 | -3,070,073 |
Less preferred stock dividends | -32,288 | 0 | -86,557 | 0 |
Net Income (loss) available to common shareholders | $491,375 | ($1,042,496) | $1,512,965 | ($3,070,073) |
Net income (loss) per common share - basic | $0.02 | ($0.06) | $0.08 | ($0.21) |
Weighted average number of common sharesoutstanding - basic | 19,892,264 | 17,793,694 | 19,352,887 | 14,462,909 |
Net income (loss) per common share - diluted | $0.02 | ($0.06) | $0.06 | ($0.21) |
Weighted average number of common sharesoutstanding - diluted | 29,248,946 | 17,793,694 | 24,354,789 | 14,462,909 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Operating activities | ' | ' |
Net income (loss) | $1,599,522 | ($3,070,073) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Amortization and depreciation expense | 33,076 | 48,769 |
Stock-based compensation | 171,141 | 650,505 |
Amortization of prepaid warrants for rent, non-cash | 33,018 | 0 |
Amortization of prepaid warrants for consulting, non-cash | 157,593 | 0 |
Stock issued for rent and services | 0 | 92,470 |
Amortization of debt discount | 256,254 | 441,228 |
Impairment of intangible assets | 0 | 3,699 |
Issuance of warrants for services | 0 | 137,496 |
Change in derivative liability | -3,240,052 | -218,968 |
Gain on sale of equipment | -5,592 | 0 |
Increase in lower of cost or market reserve | ' | 20,486 |
Changes in operating assets and liabilities: | ' | ' |
(Increase) in prepaid expenses and other current assets | -26,740 | -92,351 |
Decrease (increase) in trade accounts receivable | 122,142 | 305,482 |
Decrease in inventory | 0 | 57,133 |
Increase in customer deposits | -150 | 81,028 |
Increase (Decrease) in deferred revenue | 255,666 | -28,900 |
Increase (Decrease) in accrued loss contract | 23,750 | 638,850 |
Increase (Decrease) in trade accounts payable and accrued liabilities | -714,673 | -90,919 |
Net cash provided by/(used in) operating activities | -1,335,045 | -1,024,065 |
Investing activities | ' | ' |
Proceeds from sale of truck | 18,500 | 0 |
Net cash provided by investing activities | 18,500 | 0 |
Financing activities | ' | ' |
Proceeds from issuance of common stock, net of placement costs | 0 | 1,245,000 |
Proceeds from issuance of preferred stock | 1,500,000 | 0 |
Stock offering costs paid | -100,000 | 0 |
Borrowings on line of credit | 0 | 270,000 |
Payments on debt | -27,674 | -8,705 |
Net cash provided by financing activities | 1,372,326 | 1,506,295 |
Increase/(decrease) in cash | 55,781 | 482,230 |
Cash - beginning of period | 297,385 | 78,253 |
Cash - end of period | 353,166 | 560,483 |
Supplemental Information: | ' | ' |
Income Taxes Paid/(Tax credits received) | 1,515 | -103,471 |
Interest Paid | 3,409 | 1,402 |
Non-cash investing and financing activities: | ' | ' |
Warrant derivative liability incurred with preferred stock offering | 3,020,526 | 0 |
Issuance of warrants with Preferred stock | -2,868,750 | 0 |
Additional warrants issued for anti-dilution clause | -151,776 | 0 |
Stock issued for accounts payable and accrued expenses | 110,000 | 157,903 |
Application of deferred debt discount | 0 | 270,000 |
Warrants issued for prepaid rent | 0 | 746,332 |
Payment of accrued dividend with common stock | 22,881 | 0 |
Transfer of property for accounts payable | $6,000 | $0 |
Statement_of_Shareholders_Defi
Statement of Shareholders' (Deficit) (Unaudited) (USD $) | Total | Common Stock | Preferred Stock | Additional paid-in capital | Accumulated Deficit |
Beginning Balance at Dec. 31, 2013 | ($1,668,230) | $35,987 | $0 | $25,330,474 | ($27,034,690) |
Beginning Balance, shares at Dec. 31, 2013 | ' | 17,993,694 | 0 | ' | ' |
Issuance of convertible preferred stock for cash | 1,500,000 | ' | 3 | 1,499,997 | ' |
Issuance of convertible preferred stock for cash, shares | ' | ' | 1,500 | ' | ' |
Stock offering costs | -100,000 | ' | ' | -100,000 | ' |
Issuance of warrants with private placement | -2,868,750 | ' | ' | -2,868,750 | ' |
Issuance of common stock and warrants for antidilution clause | -151,776 | 2,510 | ' | -154,286 | ' |
Issuance of common stock and warrants for antidilution clause, Shares | ' | 1,255,000 | ' | ' | ' |
Issuance of shares for legal services | 110,000 | 880 | ' | 109,120 | ' |
Issuance of shares for legal services, Shares | ' | 440,000 | ' | ' | ' |
Conversion of Preferred shares to Common Shares | 22,881 | 1,120 | ' | 21,761 | ' |
Conversion of Preferred shares to Common Shares, Shares | ' | 560,237 | -85 | ' | ' |
Stock options and stock compensation | 171,141 | 20 | ' | 171,121 | ' |
Stock options and stock compensation, Shares | ' | 10,000 | ' | ' | ' |
Retirement of Shares | 0 | -733 | ' | 733 | ' |
Retirement of Shares, Shares | ' | -366,667 | ' | ' | ' |
Declared Dividend on Preferred Shares | -86,557 | ' | ' | -86,557 | ' |
Net income for nine months | 1,599,522 | ' | ' | ' | 1,599,522 |
Balance at Sep. 30, 2014 | ($1,471,769) | $39,784 | $3 | $23,923,613 | ($25,435,169) |
Balance, shares at Sep. 30, 2014 | ' | 19,892,264 | 1,415 | ' | ' |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Description of Business and Summary of Significant Accounting Policies [Abstract] | ' |
Description of Business and Summary of Significant Accounting Policies | ' |
Note 1 – Description of Business and Summary of Significant Accounting Policies | |
Description of Business | |
Arista Power, Inc. (the “Company”) was incorporated on March 30, 2001 in the State of New York as Future Energy Solutions, Inc. and in November 2008 changed its name to WindTamer Corporation. In May 2011, the Company changed its name to Arista Power, Inc. The name change more accurately reflects the broadening of the Company’s focus beyond the WindTamer® brand and entry into areas within the energy storage and power management industries. | |
The Company is a developer, integrator, and supplier of custom-designed power management systems, and a supplier, designer and installer of solar energy systems. The Company’s patented Power on Demand system utilizes inputs from multiple energy sources including solar, wind, fuel cells, generators, and/or the grid, in conjunction with a custom-designed battery storage system and a proprietary smart monitoring technology that releases energy at optimal times to reduce electricity costs for large energy users. The Company also designs, sells and installs residential and commercial solar PV systems. | |
Basis of Preparation | |
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required by GAAP for complete annual financial statement presentation. | |
In the opinion of management, all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of the results of operations have been included in the accompanying unaudited condensed financial statements. Operating results for the three-month and nine-month periods ended September 30, 2014 are not necessarily indicative of the results to be expected for other interim periods or the full fiscal year. These financial statements should be read in conjunction with the financial statements and accompanying notes contained in the Company’s Form 10-K for the fiscal year ended December 31, 2013. | |
Method of Accounting | |
The accompanying financial statements have been prepared in accordance with GAAP. Arista Power maintains its books and prepares its financial statements on the accrual basis of accounting. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Cash and Cash Equivalents | |
For financial statement presentation purposes, the Company considers all short-term, highly liquid investments with original maturities of three months or less to be cash and cash equivalents. The Company maintains its cash and cash equivalents in bank deposit accounts, which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk as a result of any non-performance by the financial institutions. | |
Accounts Receivable | |
Accounts receivable represents amounts due from customers in the ordinary course of business, based upon invoiced amounts, net of any allowance for doubtful accounts. We evaluate accounts receivable quarterly on a specific account basis to determine the need to an allowance for doubtful account reserve. As of September 30, 2014 and December 31, 2013, the allowance for doubtful accounts was $0. | |
Inventory | |
Inventory consists primarily of parts and subassemblies for Power on Demand systems, solar photovoltaic (“PV”) systems, and is stated at the lower of cost or market value. The Company capitalizes applicable direct and indirect costs incurred in the Company’s manufacturing operations to bring its products to a sellable state. The inventory as of September 30, 2014 consisted of raw materials amounting to $346,014 and work-in-process amounting to $150,299. Inventory is reviewed quarterly to determine the need for an excess and obsolete inventory reserve. As of September 30, 2014 and December 31, 2013, no reserve was necessary. | |
Fixed Assets | |
Fixed assets are recorded at cost. Depreciation is on a straight line basis over the shorter of the estimated useful lives or the related lease for leasehold improvements. Leasehold improvements for space leased on a month-to-month basis are expensed when incurred. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Any gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place. | |
Intangible Assets | |
Intangible assets consist of costs associated with the application and acquisition of the Company’s patents. Patent application costs are capitalized and amortized over the estimated useful life of the patent, which generally approximates its legal life. For the three and nine months ended September 30, 2013, trademark costs totaling $0 and $3,396, respectfully relating to the Company’s WindTamer® trademark were impaired, while no intangible assets were impaired for the three and nine months ended September 30, 2014. | |
Impairment of Long-Lived Assets | |
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset, including its ultimate disposition. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the three and nine months ended September 30, 2014 and 2013, no assets were impaired. | |
Fair Value of Financial Instruments | |
The carrying amount of cash, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. | |
Revenue Recognition | |
Revenue is recognized when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3) the sale price to be paid by the customer is fixed or determinable; and (4) the collection of the sale price is reasonably assured. Amounts collected prior to satisfying our revenue recognition policy are reflected as customer deposits. | |
For research and development contracts, we recognize the revenue using the proportional effort method based upon the relationship of costs incurred to date to the total estimated cost to complete the contract. Cost elements include direct labor, materials, overhead costs and outside contractor costs. The excess of amounts billed on a milestone basis versus the amounts recorded as revenue on a proportional effort basis is classified as deferred revenue. We provide for any loss that we expect to incur in the agreements when the loss is probable. | |
The Company uses contract accounting for Power on Demand system sales. Due to the limited number of these systems that have been installed to date, revenue is recognized based on the completed contract method whereby revenue and costs are deferred until the contract is completed. For contracts that contain provisions related to proceeds being paid based upon cost savings generated by the system, revenue is recorded as the costs savings are realized by and billed to the customer. If accumulated costs exceed accumulated billings at the reporting date the asset is presented net as costs of uncompleted contracts in excess of related billings. If there is a net liability it is presented as billings on uncompleted contracts in excess of related costs. We provide for any loss that we expect to incur on a contract at the time the loss is probable. | |
At September 30, 2014, the Company had costs of uncompleted contracts in excess of related billings totaling $96,008 ($0 as of September 30, 2013). This amount was netted with the accrued loss contract on the Company’s balance sheet. | |
Research and Development Costs | |
All costs related to research and development are expensed when incurred. Research and development costs consist of expenses associated with the development of the Company’s Power on Demand system and the Mobile Renewable Power Station. Specifically, these costs consist of labor, materials, and consulting. | |
Warranty Costs | |
The Company’s standard warranty on each Power on Demand system, wind turbine, and solar system sold protects against defects in design, material, and workmanship under normal use for varying periods, based upon the product sold. Several warranties have specific additional terms and conditions. The Company provides for estimated cost of warranties at the time the revenue is recognized. Factors that affect the warranty reserve are projected cost of repair and/or replacement, component life cycles, manufacturer’s warranty on component parts, and historical data. These estimates are reviewed quarterly and are updated as new information becomes available. The impact of any change in estimates will be taken into account when analyzing future warranty reserve requirements. | |
Stock-Based Compensation | |
The Company accounts for stock option awards granted under the Company’s Equity Incentive Plan in accordance with ASC 718. Under ASC 718, compensation expense related to stock-based payments is recorded over the requisite service period based on the grant date fair value of the awards. Compensation previously recorded for unvested stock options that are forfeited is reversed upon forfeiture. The Company uses the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes model requires the use of assumptions which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock. | |
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505-50. Accordingly, the measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant’s or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement, or over the specified vesting period. | |
Income Taxes | |
The Company accounts for income taxes using the asset and liability approach, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of such assets and liabilities. This method utilizes enacted statutory tax rates in effect for the year in which the temporary differences are expected to reverse and gives immediate effect to changes in income tax rates upon enactment. Deferred assets are recognized, net of any valuation allowance, for temporary differences and net operating loss and tax credit carry forwards. Deferred income tax expense represents the change in net deferred assets and liability balances. | |
Basic and Diluted Loss Per Share | |
Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potentially issued common shares would be anti-dilutive. | |
As of September 30, 2014, 1,415 shares of our Series A Convertible Preferred Stock, convertible into 7,075,000 shares of common stock, 2,455,191 stock options and 18,292,916 warrants were outstanding which, upon exercise, could dilute future earnings per share. Diluted Weighted Average Shares reflect the Company’s total weighted average shares outstanding during the period, which includes the conversion of the Series A Convertible Preferred Stock as well as any stock options or warrants in which the exercise price is below the Company’s stock trading price, less the stock that can be repurchased with funds received from such exercise. |
Going_Concern
Going Concern | 9 Months Ended |
Sep. 30, 2014 | |
Going Concern [Abstract] | ' |
Going Concern | ' |
Note 2 - Going Concern | |
The financial statements have been prepared assuming that the Company will continue as a going concern. Since its formation, the Company utilized funds generated from private placement offerings and debt to fund its product development and operations and has incurred a cumulative net loss of $25,435,169 as of September 30, 2014. The recurring losses from operations and current liquidity raise substantial doubt about the Company’s ability to continue as a going concern. Continuation of the Company is dependent on achieving sufficiently profitable operations and obtaining additional financing. |
Debt
Debt | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Debt [Abstract] | ' | ||||
Debt | ' | ||||
Note 3 – Debt | |||||
On September 4, 2012, the Company entered into an unsecured loan agreement with TMK-ENT, Inc. that provided for a $500,000 working capital revolving line of credit. Advances under the line of credit bear interest at 10% per year, payable annually. On November 13, 2012, the Company amended its loan agreement to increase the revolving line of credit from $500,000 to $750,000, and on December 21, 2012 amended its loan agreement to increase the revolving credit from $750,000 to $1,250,000. The note matures on December 21, 2014. Borrowings under the line of credit amount to $1,018,500 as of September 30, 2014 and December 31, 2013. In conjunction with the line of credit facility, the Company issued 1,250,000 warrants to purchase the Company’s common stock at varying prices from $1.38 to $1.62 per share. The warrants vested one year from issuance and have a ten year term. The fair market value of the warrants at grant date was determined utilizing the Black Scholes option pricing model and amounted to $1,839,250. The difference between the fair market value of the warrants and draws on the line of credit is $820,750 as of September 30, 2014 and December 31, 2013, which is recorded as deferred debt discount. The deferred debt discount will be recognized and recorded as debt discount as the Company continues to borrow against the line of credit. Debt discount costs will be recognized as the Company draws down the available line of credit, and will be amortized over the remaining term of the loan. As a result of the amortization of the debt discount, the Company expensed $256,254 and $441,228, respectively, for the nine months ended September 30, 2014 and 2013 and $85,732 and $86,674 for the three months ended September 30, 2014 and 2013. | |||||
Annual maturities of debt are as follows: | |||||
2014 (includes TMK-ENT, Inc. line of credit repayment) | $ | 1,018,777 |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2014 | |
Stockholders' Equity [Abstract] | ' |
Stockholders' Equity | ' |
Note 4 – Stockholders’ Equity | |
On March 31, 2014, the Company sold, pursuant to a securities purchase agreement, an aggregate of 1,500 shares of Series A Convertible Preferred Stock, with a stated value of $1,500,000 that are convertible into shares of the Company’s common stock at a conversion price of $0.20 in stated value per share (7,500,000 shares of common stock), and five-year warrants, which vested in full upon issuance, to purchase up to 11,250,000 additional shares of common stock at a purchase price of $0.25 per share to 8 institutional investors. Stock offering costs for the private placement amounted to $100,000. Each share of Preferred Stock is entitled to cash interest payments of 9% of the stated value per year, payable quarterly. The Preferred Stock is voluntarily and mandatorily convertible into shares of common stock pursuant to the provisions of the securities purchase agreement, with any shares of Preferred Stock outstanding on March 31, 2017 automatically converting into common stock. The investors received rights of first refusal and rights of participation in future financings of the Company until March 31, 2015. In addition, the investors received most favored nation protections on the terms and conditions of the warrants and preferred stock so long as such securities remain outstanding. Additionally, until September 30, 2015, each investor has the right to invest an amount equal to the amount invested by such investor in the above-referenced transaction in preferred stock of Arista Power on substantially similar terms. The Preferred Stock and warrants have customary anti-dilution protections and registration rights including a “full ratchet” anti-dilution adjustment provision. The warrants associated with this transaction were valued at their date of issue utilizing the Black-Scholes option pricing model, which amounted to $2,868,750. The difference between the warrants valuation of $2,878,560 and the net proceeds received by the Company of $1,400,000 results in a deemed dividend of $1,468,750, which has been charged to additional paid-in-capital, as the Company has no retained earnings from which to declare a dividend. | |
On March 31, 2014, in conjunction with the full ratchet and anti-dilution provisions of the July and August 2013 private placement of common stock, shareholders were awarded an additional 1,255,000 shares of common stock and 612,000 warrants to purchase common stock for $0.25 per share, and the exercise price for the 3,060,000 warrants outstanding that were associated with this transaction were reduced from $0.30 to $0.25 per share. |
Stock_Based_Compensation
Stock Based Compensation | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Stock Based Compensation [Abstract] | ' | ||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||
Note 5 – Stock Based Compensation | |||||||||||||||
The Company has established the 2008 Equity Incentive Plan, which is a shareholder-approved plan that permits the granting of stock options and restricted stock to employees, directors and consultants. The 2008 Equity Incentive Plan provides for the issuance of up to 3,550,000 shares of common stock of which 50,000 shares are available for grant as Incentive Stock Options. The exercise price for options awarded is no less than 100% of the fair market value of the common stock on the day of grant. The options generally vest either immediately on the date of grant or one to three years from the date of grant. | |||||||||||||||
For the three and nine months ended September 30, 2014, the Company recorded compensation costs for options and warrants of $59,147 and $171,141 respectively, as compared to $111,114 and $650,505 for the nine and three months ended September 30, 2013. For the nine months ended September 30, 2013, compensation costs relating to the issuance of options and warrants amounted to $539,926 and the Company recorded an expense of $110,579 associated with the repricing of options and warrants held by a former consultant/outside counsel who is now an employee of the Company, while for the nine months ended September 30, 2014, there was no expense associated with the repricing of options or warrants. | |||||||||||||||
The Company has valued the options at their date of grant utilizing the Black Scholes option pricing model. Prior to the fourth quarter of 2009, there was not a public market for the Company shares. Accordingly, the fair value of the underlying shares was determined based on recent transactions by the Company to sell shares to third parties and other factors determined by management to be relevant to the valuation of such shares. Beginning in the fourth quarter of 2009, the quoted price for the Company’s shares on the OTCBB or the OTCQB, as applicable, was used to value the underlying shares. Expected volatility is based upon a weighted average historical volatility of peer companies operating in a similar industry. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options depending on the date of the grant and expected life of the options. The expected life of options used was based on the contractual life of the option granted. The Company determined the expected dividend rate based on the assumption and expectation that earnings generated from operations are not expected to be adequate to allow for the payment of dividends in the near future. The following weighted-average assumptions were utilized in the fair value calculations for options granted: | |||||||||||||||
Nine Months | Nine Months Ended | ||||||||||||||
Ended | |||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||
Expected stock price volatility | 112 | % | 105-108 | % | |||||||||||
Risk-free interest rate | 3.63 | % | 2.68-3.44 | % | |||||||||||
Expected life of options | .14-9.78 years | .4-9.9 years | |||||||||||||
The following table summarizes the status of the Company’s aggregate stock options granted: | |||||||||||||||
Number of Shares Remaining Options | Weighted Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||
Outstanding at January 1, 2014 | 1,386,108 | $ | 0.61 | ||||||||||||
Options granted during 2014 | 1,365,000 | $ | 0.19 | 9.8 years | $ | ||||||||||
Options cancelled or expired during 2014 | (295,917 | ) | $ | 0.56 | |||||||||||
Outstanding at September 30, 2014 | 2,455,191 | $ | 0.34 | 8.7 years | $ | 0 | |||||||||
Exercisable at September 30, 2014 | 725,191 | $ | 0.6 | 6.7 years | $ | 0 | |||||||||
For the nine and three months ended September 30, 2014, the Company recorded compensation costs for options granted under the plan of $139,010 and $45,553, as compared to $190,861 and $20,800 for the nine and three months ended September 30, 2013. Stock option grants amounted to 1,365,000 for the nine months ended September 30, 2014 (1,655,208 for the nine months ended September 30, 2013) while 251,250 options vested during that period (166,858 options vested for the nine months ended September 30, 2013). There were 295,917 options cancelled or expired for the nine months ended September 30, 2014, while 23,000 options were cancelled for the nine months ended September 30, 2013. No options were exercised for the nine months ended September 30, 2014 or September 30, 2013. | |||||||||||||||
The weighted average fair value of options granted during the nine months ended September 30, 2014 was $0.19 per share, compared to $0.45 per share for the nine months ended September 30, 2013. | |||||||||||||||
For the nine months ended September 30, 2013, the Company recorded expenses totaling $13,575 associated with the repricing of 25,000 options awarded to a former consultant/outside counsel who is now an employee of the Company. No such expense was recorded for the nine months ended September 30, 2014. | |||||||||||||||
On December 13, 2010, the Board of Directors approved a restricted stock grant award to certain employees in lieu of future salary cash payments. The employees forfeited salary over a twelve-week period to purchase common shares, which were valued at fair market value as of the date of grant. The Compensation Committee of the Company’s Board of Directors have approved a change in the vesting date for restricted stock held by certain employees from April 1, 2011 to April 1, 2015. A total of 55,969 shares vested on April 1, 2011, and 118,378 shares remain outstanding and are scheduled to vest on April 1, 2015. | |||||||||||||||
On March 31, 2014, Adeeb Saba was named Chief Operating Officer and the Company awarded him 250,000 shares of restricted common stock pursuant to the Company’s 2008 Equity Incentive Plan, which will vest one half each on the first and second anniversary of the award. Compensation costs associated with this award amount to $72,500 and will be recognized over the vesting period of the stock. On May 28, 2014, the Company awarded an employee 100,000 shares of restricted common stock pursuant to the Company’s 2008 Equity Incentive Plan, which will vest one half each on March 31, 2015 and March 31, 2016. Compensation costs associated with this award amount to $15,000 and will be recognized over the vesting period of the stock. On June 16, 2014, Stephen Brown was named as the acting Chief Financial Officer and the Company awarded him 50,000 shares of restricted common stock pursuant to the Company’s 2008 Equity Incentive Plan, of which 10,000 shares vested immediately and the remaining 40,000 shares shall vest on December 16, 2014. Compensation costs associated with this award amount to $9,000 and will be recognized over the vesting period of the stock. | |||||||||||||||
The following table summarizes the status of the Company’s restricted common stock awards: | |||||||||||||||
Number of | Weighted Average | ||||||||||||||
Restricted Shares | Fair Value at | ||||||||||||||
Restricted Shares | Grant Date | ||||||||||||||
Non-vested at September 30, 2014 | 118,378 | $ | 2.8 | ||||||||||||
Awarded during 2014 | 400,000 | $ | 0.23 | ||||||||||||
Cancelled or expired | (138,296 | ) | $ | 0.36 | |||||||||||
Non-vested at September 30, 2014 | 380,082 | $ | 0.39 | ||||||||||||
The compensation expense related to these grants were $30,026 for the nine months ended September 30, 2014. There was no expense for the nine months ended September 30, 2013. |
Warrants
Warrants | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Warrants [Abstract] | ' | ||||||||||||||
Warrants | ' | ||||||||||||||
Note 6 – Warrants | |||||||||||||||
The Company has valued warrants at their date of issue utilizing the Black-Scholes option pricing model. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the warrants depending on the date of the issue and their expected life. The expected life of warrants used was based on the term of the warrant. The Company determined the expected dividend rate based on the assumption and expectation that earnings generated from operations are not expected to be adequate to allow for the payment of dividends in the near future. The following weighted-average assumptions were utilized in the fair value calculations for warrants granted: | |||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||
Expected stock price volatility | 134 | % | 93-98 | % | |||||||||||
Risk-free interest rate | 1.73-1.75 | % | .14–2.60 | % | |||||||||||
Expected life of warrants | 4.1-8.8 years | 35-9.3 years | |||||||||||||
The following table summarizes the status of the Company’s warrants granted: | |||||||||||||||
Number of Shares Remaining Warrants | Weighted Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||
Outstanding at January 1, 2014 | 7,671,267 | $ | 1.51 | ||||||||||||
Warrants granted during 2014 | 11,862,000 | $ | 0.25 | ||||||||||||
Warrants expired during 2014 | (1,240,351 | ) | 0.5 | ||||||||||||
Outstanding at September 30,2014 | 18,292,916 | $ | 0.78 | 5.1 years | $ | 0 | |||||||||
Exercisable at September 30,2014 | 18,139,250 | $ | 0.75 | 5.4 years | $ | 0 | |||||||||
The weighted average fair value of warrants issued during the nine months ended September 30, 2014 and 2013 was $.25 and $.41, respectively. During the nine months ended September 30, 2014, 11,878,000 warrants vested (4,302,625 vested for the nine months ended September 30, 2013), and 1,240,351 warrants expired. No warrants expired for the nine months ended September 30, 2013. | |||||||||||||||
For the nine months ended September 30, 2014 and 2013, respectively, the Company recorded compensation costs of $4,962 and $349,065 for warrants issued to a former consultant/outside counsel (now an employee) of the Company. The warrants have a ten year life, a $1.20 exercise price, and vest from nine months to three years from grant date. | |||||||||||||||
For the nine months ended September 30, 2013, the Company recorded expenses totaling $62,623 associated with the repricing of 423,125 outstanding warrants awarded to a former consultant/outside counsel who is now an employee of the Company. No such expense was recorded for the nine months ended September 30, 2014. |
Derivative_Liabilities
Derivative Liabilities | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Derivative Liabilities [Abstract] | ' | ||||||||||||||||
Derivative Liabilities | ' | ||||||||||||||||
Note 7 – Derivative Liabilities | |||||||||||||||||
Certain warrants issued by the Company do not have fixed settlement provisions because their exercise prices may be lowered if the Company issues securities at lower prices in the future, are classified as derivative liabilities, and are revalued at each reporting date. These warrants include (1) warrants issued to 1999 Mt RB, LLC in conjunction with our lease modification on February 4, 2013, which expired on February 4, 2014 (2) warrants issued in conjunction with the Company’s strategic advisory agreement with Sunrise Financial Group, Inc. on May 21, 2013, which were cancelled on June 19, 2014 and (3) warrants issued in conjunction with the Company’s private placements on July 31, 2013, August 6, 2013 and March 31, 2014. The reset provisions protect the warrant holders from the potential dilution associated with future financings. | |||||||||||||||||
The Company has valued warrants at their date of issue utilizing the Black-Scholes option pricing model. Expected volatility is based upon a weighted average historical volatility of peer companies operating in a similar industry, or if applicable based upon the term of the warrant, based upon the Company’s historical volatility. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the warrants depending on the date of the issue and their expected life. The expected life of warrants used was based on the term of the warrant. The Company determined the expected dividend rate based on the assumption and expectation that earnings generated from operations are not expected to be adequate to allow for the payment of dividends in the near future. The following weighted-average assumptions were utilized in the fair value calculations for warrants granted and subsequent revaluation: | |||||||||||||||||
Nine Months Ended | Nine Months | ||||||||||||||||
Ended | |||||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||
Expected stock price volatility | 142-148 | % | 90-172 | % | |||||||||||||
Risk-free interest rate | 1.62-178 | % | .08-1.41 | % | |||||||||||||
Expected life of warrants | 2.9-4.5 years | .35-4.84 years | |||||||||||||||
Number of warrants | 14,922,000 | 4,300,351 | |||||||||||||||
Fair value of warrants | $ | 556,070 | $ | 1,232,676 | |||||||||||||
The fair value of these warrant liabilities was $556,070 at September 30, 2014. The change in fair value for the nine months ended September 30, 2014 was $3,240,052 and is reported in our statement of operations as an unrealized gain on the change in fair value of the derivative liabilities. For the nine months ended September 30, 2013, we recorded an unrealized loss on the change in fair value of the derivative liabilities totaling $218,968. The fair value of the derivative liabilities are re-measured at the end of every reporting period and upon the exercise of the warrant. | |||||||||||||||||
Fair Value Measurement | |||||||||||||||||
Valuation Hierarchy | |||||||||||||||||
ASC 820, “Fair Value Measurements and Disclosures,” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | |||||||||||||||||
The following table provides the liabilities carried at fair value measured on a recurring basis as of September 30, 2014: | |||||||||||||||||
Fair Value Measurements at | |||||||||||||||||
30-Sep-14 | |||||||||||||||||
Total | Quoted | Significant | Significant | ||||||||||||||
Carrying | Prices in | Other | Unobservable | ||||||||||||||
Value at | Active | Observable | Inputs | ||||||||||||||
September 30, | Markets | Inputs | (Level 3) | ||||||||||||||
2014 | (Level 1) | (Level 2) | |||||||||||||||
Derivative liabilities | $ | 556,070 | $ | - | $ | - | $ | 556,070 | |||||||||
The derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors, and are classified within Level 3 of the valuation hierarchy. | |||||||||||||||||
The following table sets forth a summary of the changes in the fair value of our Level 3 financial liabilities that are measured at fair value on a recurring basis: | |||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||
2014 | |||||||||||||||||
Beginning balance January 1, 2014 | $ | 775,596 | |||||||||||||||
Issuance of derivative financial instruments in 2014 | 3,020,526 | ||||||||||||||||
Net unrealized (gain) loss on derivative financial instruments | (3,240,052 | ) | |||||||||||||||
Ending balance as of September 30, 2014 | $ | 556,070 |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2014 | |
Recent Accounting Pronouncements [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Note 8- Recent Accounting Pronouncements | |
In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements - Going Concern . The new standard required management of public and private companies to evaluate whether there is substantial doubt about the entity's ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption of the ASU to have a significant impact on our consolidated financial statements. | |
In May 2014, the "FASB" issued ASU 2014-09 Revenue from Contracts with Customers , which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. We are carefully evaluating our existing revenue recognition practices to determine whether any contracts in the scope of the guidance will be affected by the new requirements. The effects may include identifying performance obligations in existing arrangements, determining the transaction price and allocating the transaction price to each separate performance obligation. We will also establish practices to determine when a performance obligation has been satisfied, and recognize revenue in accordance with the new requirements. The new standard is effective for us on January 1, 2017. Early adoption is not permitted. The standard allows for either "full retrospective" adoption, meaning the standard is applied to all of the periods presented, or "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements. We are currently evaluating the transition method that will be elected. | |
In June 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-12 Compensation - Stock Compensation ("ASU 2014-12"). ASU2014-12 is intended to resolve diverse accounting treatment for share based awards in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The standard is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 and may be applied prospectively or retrospectively. The Company does not expect adoption of this standard will have a significant impact on the Company's consolidated financial statements. |
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Description of Business and Summary of Significant Accounting Policies [Abstract] | ' |
Description of Business | ' |
Description of Business | |
Arista Power, Inc. (the “Company”) was incorporated on March 30, 2001 in the State of New York as Future Energy Solutions, Inc. and in November 2008 changed its name to WindTamer Corporation. In May 2011, the Company changed its name to Arista Power, Inc. The name change more accurately reflects the broadening of the Company’s focus beyond the WindTamer® brand and entry into areas within the energy storage and power management industries. | |
The Company is a developer, integrator, and supplier of custom-designed power management systems, and a supplier, designer and installer of solar energy systems. The Company’s patented Power on Demand system utilizes inputs from multiple energy sources including solar, wind, fuel cells, generators, and/or the grid, in conjunction with a custom-designed battery storage system and a proprietary smart monitoring technology that releases energy at optimal times to reduce electricity costs for large energy users. The Company also designs, sells and installs residential and commercial solar PV systems. | |
Basis of Preparation | ' |
Basis of Preparation | |
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required by GAAP for complete annual financial statement presentation. | |
In the opinion of management, all adjustments (consisting only of normal and recurring adjustments) necessary for a fair presentation of the results of operations have been included in the accompanying unaudited condensed financial statements. Operating results for the three-month and nine-month periods ended September 30, 2014 are not necessarily indicative of the results to be expected for other interim periods or the full fiscal year. These financial statements should be read in conjunction with the financial statements and accompanying notes contained in the Company’s Form 10-K for the fiscal year ended December 31, 2013. | |
Method of Accounting | ' |
Method of Accounting | |
The accompanying financial statements have been prepared in accordance with GAAP. Arista Power maintains its books and prepares its financial statements on the accrual basis of accounting. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
For financial statement presentation purposes, the Company considers all short-term, highly liquid investments with original maturities of three months or less to be cash and cash equivalents. The Company maintains its cash and cash equivalents in bank deposit accounts, which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk as a result of any non-performance by the financial institutions. | |
Accounts Receivable | ' |
Accounts Receivable | |
Accounts receivable represents amounts due from customers in the ordinary course of business, based upon invoiced amounts, net of any allowance for doubtful accounts. We evaluate accounts receivable quarterly on a specific account basis to determine the need to an allowance for doubtful account reserve. As of September 30, 2014 and December 31, 2013, the allowance for doubtful accounts was $0. | |
Inventory | ' |
Inventory | |
Inventory consists primarily of parts and subassemblies for Power on Demand systems, solar photovoltaic (“PV”) systems, and is stated at the lower of cost or market value. The Company capitalizes applicable direct and indirect costs incurred in the Company’s manufacturing operations to bring its products to a sellable state. The inventory as of September 30, 2014 consisted of raw materials amounting to $346,014 and work-in-process amounting to $150,299. Inventory is reviewed quarterly to determine the need for an excess and obsolete inventory reserve. As of September 30, 2014 and December 31, 2013, no reserve was necessary. | |
Fixed Assets | ' |
Fixed Assets | |
Fixed assets are recorded at cost. Depreciation is on a straight line basis over the shorter of the estimated useful lives or the related lease for leasehold improvements. Leasehold improvements for space leased on a month-to-month basis are expensed when incurred. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Any gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place. | |
Intangible Assets | ' |
Intangible Assets | |
Intangible assets consist of costs associated with the application and acquisition of the Company’s patents. Patent application costs are capitalized and amortized over the estimated useful life of the patent, which generally approximates its legal life. For the three and nine months ended September 30, 2013, trademark costs totaling $0 and $3,396, respectfully relating to the Company’s WindTamer® trademark were impaired, while no intangible assets were impaired for the three and nine months ended September 30, 2014. | |
Impairment of Long-Lived Assets | ' |
Impairment of Long-Lived Assets | |
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset, including its ultimate disposition. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the three and nine months ended September 30, 2014 and 2013, no assets were impaired. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The carrying amount of cash, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. | |
Revenue Recognition | ' |
Revenue Recognition | |
Revenue is recognized when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3) the sale price to be paid by the customer is fixed or determinable; and (4) the collection of the sale price is reasonably assured. Amounts collected prior to satisfying our revenue recognition policy are reflected as customer deposits. | |
For research and development contracts, we recognize the revenue using the proportional effort method based upon the relationship of costs incurred to date to the total estimated cost to complete the contract. Cost elements include direct labor, materials, overhead costs and outside contractor costs. The excess of amounts billed on a milestone basis versus the amounts recorded as revenue on a proportional effort basis is classified as deferred revenue. We provide for any loss that we expect to incur in the agreements when the loss is probable. | |
The Company uses contract accounting for Power on Demand system sales. Due to the limited number of these systems that have been installed to date, revenue is recognized based on the completed contract method whereby revenue and costs are deferred until the contract is completed. For contracts that contain provisions related to proceeds being paid based upon cost savings generated by the system, revenue is recorded as the costs savings are realized by and billed to the customer. If accumulated costs exceed accumulated billings at the reporting date the asset is presented net as costs of uncompleted contracts in excess of related billings. If there is a net liability it is presented as billings on uncompleted contracts in excess of related costs. We provide for any loss that we expect to incur on a contract at the time the loss is probable. | |
At September 30, 2014 the Company had costs of uncompleted contracts in excess of related billings totaling $96,008 ($0 as of September 30, 2013). This amount was netted with the accrued loss contract on the Company’s balance sheet. | |
Research and Development Costs | ' |
Research and Development Costs | |
All costs related to research and development are expensed when incurred. Research and development costs consist of expenses associated with the development of the Company’s Power on Demand system and the Mobile Renewable Power Station. Specifically, these costs consist of labor, materials, and consulting. | |
Warranty Costs | ' |
Warranty Costs | |
The Company’s standard warranty on each Power on Demand system, wind turbine, and solar system sold protects against defects in design, material, and workmanship under normal use for varying periods, based upon the product sold. Several warranties have specific additional terms and conditions. The Company provides for estimated cost of warranties at the time the revenue is recognized. Factors that affect the warranty reserve are projected cost of repair and/or replacement, component life cycles, manufacturer’s warranty on component parts, and historical data. These estimates are reviewed quarterly and are updated as new information becomes available. The impact of any change in estimates will be taken into account when analyzing future warranty reserve requirements. | |
Stock-Based Compensation | ' |
Stock-Based Compensation | |
The Company accounts for stock option awards granted under the Company’s Equity Incentive Plan in accordance with ASC 718. Under ASC 718, compensation expense related to stock-based payments is recorded over the requisite service period based on the grant date fair value of the awards. Compensation previously recorded for unvested stock options that are forfeited is reversed upon forfeiture. The Company uses the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes model requires the use of assumptions which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock. | |
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505-50. Accordingly, the measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant’s or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement, or over the specified vesting period. | |
Income Taxes | ' |
Income Taxes | |
The Company accounts for income taxes using the asset and liability approach, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of such assets and liabilities. This method utilizes enacted statutory tax rates in effect for the year in which the temporary differences are expected to reverse and gives immediate effect to changes in income tax rates upon enactment. Deferred assets are recognized, net of any valuation allowance, for temporary differences and net operating loss and tax credit carry forwards. Deferred income tax expense represents the change in net deferred assets and liability balances. | |
Basic and Diluted Loss Per Share | ' |
Basic and Diluted Loss Per Share | |
Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potentially issued common shares would be anti-dilutive. | |
As of September 30, 2014, 1,415 shares of our Series A Convertible Preferred Stock, convertible into 7,075,000 shares of common stock, 2,455,191 stock options and 18,292,916 warrants were outstanding which, upon exercise, could dilute future earnings per share. Diluted Weighted Average Shares reflect the Company’s total weighted average shares outstanding during the period, which includes the conversion of the Series A Convertible Preferred Stock as well as any stock options or warrants in which the exercise price is below the Company’s stock trading price, less the stock that can be repurchased with funds received from such exercise. |
Debt_Tables
Debt (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Debt [Abstract] | ' | ||||
Summary of annual maturities of debt | ' | ||||
2014 (includes TMK-ENT, Inc. line of credit repayment) | $ | 1,018,777 |
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||||
Summary of Company's restricted share awards | ' | ||||||||||||||
Number of | Weighted Average | ||||||||||||||
Restricted Shares | Fair Value at | ||||||||||||||
Restricted Shares | Grant Date | ||||||||||||||
Non-vested at September 30, 2014 | 118,378 | $ | 2.8 | ||||||||||||
Awarded during 2014 | 400,000 | $ | 0.23 | ||||||||||||
Cancelled or expired | (138,296 | ) | $ | 0.36 | |||||||||||
Non-vested at September 30, 2014 | 380,082 | $ | 0.39 | ||||||||||||
Employee Stock Option [Member] | ' | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||||
Weighted-average assumptions used to fair value calculation for options granted | ' | ||||||||||||||
Nine Months | Nine Months Ended | ||||||||||||||
Ended | |||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||
Expected stock price volatility | 112 | % | 105-108 | % | |||||||||||
Risk-free interest rate | 3.63 | % | 2.68-3.44 | % | |||||||||||
Expected life of options | .14-9.78 years | .4-9.9 years | |||||||||||||
Summary of Company's aggregate stock options granted | ' | ||||||||||||||
Number of Shares Remaining Options | Weighted Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||
Outstanding at January 1, 2014 | 1,386,108 | $ | 0.61 | ||||||||||||
Options granted during 2014 | 1,365,000 | $ | 0.19 | 9.8 years | $ | ||||||||||
Options cancelled or expired during 2014 | (295,917 | ) | $ | 0.56 | |||||||||||
Outstanding at September 30, 2014 | 2,455,191 | $ | 0.34 | 8.7 years | $ | 0 | |||||||||
Exercisable at September 30, 2014 | 725,191 | $ | 0.6 | 6.7 years | $ | 0 | |||||||||
Warrants_Tables
Warrants (Tables) (Warrants [Member]) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Warrants [Member] | ' | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||||
Weighted-average assumptions utilized in fair value calculations for warrants granted | ' | ||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||
Expected stock price volatility | 134 | % | 93-98 | % | |||||||||||
Risk-free interest rate | 1.73-1.75 | % | .14–2.60 | % | |||||||||||
Expected life of warrants | 4.1-8.8 years | 35-9.3 years | |||||||||||||
Summary of status of Company's warrant granted | ' | ||||||||||||||
Number of Shares Remaining Warrants | Weighted Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||
Outstanding at January 1, 2014 | 7,671,267 | $ | 1.51 | ||||||||||||
Warrants granted during 2014 | 11,862,000 | $ | 0.25 | ||||||||||||
Warrants expired during 2014 | (1,240,351 | ) | 0.5 | ||||||||||||
Outstanding at September 30,2014 | 18,292,916 | $ | 0.78 | 5.1 years | $ | 0 | |||||||||
Exercisable at September 30,2014 | 18,139,250 | $ | 0.75 | 5.4 years | $ | 0 | |||||||||
Derivative_Liabilities_Tables
Derivative Liabilities (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Derivative Liabilities [Abstract] | ' | ||||||||||||||||
Summary of weighted-average assumptions of fair value calculations for warrants granted and subsequent revaluation | ' | ||||||||||||||||
Nine Months Ended | Nine Months | ||||||||||||||||
Ended | |||||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||
Expected stock price volatility | 142-148 | % | 90-172 | % | |||||||||||||
Risk-free interest rate | 1.62-178 | % | .08-1.41 | % | |||||||||||||
Expected life of warrants | 2.9-4.5 years | .35-4.84 years | |||||||||||||||
Number of warrants | 14,922,000 | 4,300,351 | |||||||||||||||
Fair value of warrants | $ | 556,070 | $ | 1,232,676 | |||||||||||||
Summary of derivative liabilities fair value measured on a recurring basis | ' | ||||||||||||||||
Fair Value Measurements at | |||||||||||||||||
30-Sep-14 | |||||||||||||||||
Total | Quoted | Significant | Significant | ||||||||||||||
Carrying | Prices in | Other | Unobservable | ||||||||||||||
Value at | Active | Observable | Inputs | ||||||||||||||
September 30, | Markets | Inputs | (Level 3) | ||||||||||||||
2014 | (Level 1) | (Level 2) | |||||||||||||||
Derivative liabilities | $ | 556,070 | $ | - | $ | - | $ | 556,070 | |||||||||
Summary of changes in fair value of Level 3 financial liabilities | ' | ||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||
2014 | |||||||||||||||||
Beginning balance January 1, 2014 | $ | 775,596 | |||||||||||||||
Issuance of derivative financial instruments in 2014 | 3,020,526 | ||||||||||||||||
Net unrealized (gain) loss on derivative financial instruments | (3,240,052 | ) | |||||||||||||||
Ending balance as of September 30, 2014 | $ | 556,070 |
Description_of_Business_and_Su2
Description of Business and Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Description of Business and Summary of Significant Accounting Policies (Textual) | ' | ' | ' | ' | ' |
Allowance for doubtful accounts | $0 | ' | $0 | ' | $0 |
Inventory, raw materials | 346,014 | ' | 346,014 | ' | ' |
Inventory, work in process | 150,299 | ' | 150,299 | ' | ' |
Inventory reserves | 0 | ' | 0 | ' | 0 |
Impairment of trademark cost | 0 | 0 | 0 | 3,396 | ' |
Excess in related billings | $96,008 | $0 | $96,008 | $0 | ' |
Preferred Stock [Member] | ' | ' | ' | ' | ' |
Description of Business and Summary of Significant Accounting Policies (Textual) | ' | ' | ' | ' | ' |
Number of preferred Stock convertible into common stock | ' | ' | 1,415 | ' | ' |
Number of common stock shares issued upon conversion of Preferred Stock | 7,075,000 | ' | 7,075,000 | ' | ' |
Stock options [Member] | ' | ' | ' | ' | ' |
Description of Business and Summary of Significant Accounting Policies (Textual) | ' | ' | ' | ' | ' |
Securities outstanding which dilutive for future earnings | ' | ' | 2,455,191 | ' | ' |
Warrants [Member] | ' | ' | ' | ' | ' |
Description of Business and Summary of Significant Accounting Policies (Textual) | ' | ' | ' | ' | ' |
Securities outstanding which dilutive for future earnings | ' | ' | 18,292,916 | ' | ' |
Going_Concern_Details
Going Concern (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Going Concern (Textual) | ' | ' |
Cumulative net loss | ($25,435,169) | ($27,034,691) |
Debt_Details
Debt (Details) (USD $) | Sep. 30, 2014 |
Summary of annual maturities of debt | ' |
2014 (includes TMK-ENT, Inc. line of credit repayment) | $1,018,777 |
Debt_Details_Textual
Debt (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Dec. 21, 2012 | Sep. 04, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Nov. 13, 2012 | |
Debt (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Working capital revolving line of credit | $750,000 | $500,000 | ' | ' | ' | ' | ' | $500,000 |
Line of credit interest rate | ' | 10.00% | ' | ' | ' | ' | ' | ' |
Maximum borrowing, line of credit | 1,250,000 | ' | ' | ' | ' | ' | ' | 750,000 |
Line of credit maturity date | 21-Dec-14 | ' | ' | ' | ' | ' | ' | ' |
Line of credit, amount payable | ' | ' | 1,018,500 | ' | 1,018,500 | ' | 1,018,500 | ' |
Warrants issued to purchase common stock | ' | ' | 1,250,000 | ' | 1,250,000 | ' | ' | ' |
Warrants purchase common stock varying prices minimum (Per share) | ' | ' | ' | ' | $1.38 | ' | ' | ' |
Warrants purchase common stock varying prices maximum (Per share) | ' | ' | ' | ' | $1.62 | ' | ' | ' |
Warrants vesting period | ' | ' | ' | ' | '1 year | ' | ' | ' |
Term of warrants | ' | ' | ' | ' | '10 years | ' | ' | ' |
Fair market value of warrants | ' | ' | 1,839,250 | ' | 1,839,250 | ' | ' | ' |
Deferred debt discount | ' | ' | 820,750 | ' | 820,750 | ' | 820,750 | ' |
Amortization of debt discount | ' | ' | $85,732 | $86,674 | $256,254 | $441,228 | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | |
Maximum [Member] | Minimum [Member] | Securities Purchase Agreement [Member] | Series A Convertible Preferred Stock [Member] | Series A Convertible Preferred Stock [Member] | Warrants [Member] | Private placement [Member] | ||
Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | |||||||
Stockholders' Equity (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Number of preferred Stock convertible into common stock | ' | ' | ' | ' | 1,415 | 1,500 | ' | ' |
Preferred stock converted, value | ' | ' | ' | ' | ' | $1,500,000 | ' | ' |
Conversion price | ' | ' | ' | ' | ' | $0.20 | ' | ' |
Number of common stock shares issued upon conversion of Preferred Stock | ' | ' | ' | 7,500,000 | 7,075,000 | ' | ' | ' |
Term of warrants | '10 years | ' | ' | '5 years | ' | ' | ' | ' |
Warrants issued to purchase common stock, shares | ' | ' | ' | 11,250,000 | ' | ' | ' | ' |
Warrants issued to purchase common stock, share price | ' | ' | ' | $0.25 | ' | ' | ' | ' |
Stock offering costs for the private placement | ' | ' | ' | ' | ' | ' | ' | 100,000 |
Percentage of Preferred Stock cash interest payments | ' | ' | ' | 9.00% | ' | ' | ' | ' |
Fair value of warrants issued under securitiies purchase agreement | ' | ' | ' | 2,868,750 | ' | ' | ' | ' |
Warrants valuation, amount | ' | ' | ' | 2,878,560 | ' | ' | ' | ' |
Proceeds from issuance of warrants with private placement | ' | ' | ' | 1,400,000 | ' | ' | ' | ' |
Deemed dividend | ' | ' | ' | $1,468,750 | ' | ' | ' | ' |
Additional common stock awarded to shareholders | ' | ' | ' | 1,255,000 | ' | ' | ' | ' |
Warrants exercise price, reset | ' | $0.30 | $0.25 | ' | ' | ' | $1.20 | ' |
Warrants outstanding, reset | ' | ' | ' | 3,060,000 | ' | ' | ' | ' |
Additional warrants issued to shareholders | ' | ' | ' | 612,000 | ' | ' | ' | ' |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) (Stock options [Member]) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Stock options [Member] | ' | ' |
Weighted-average assumptions used to fair value calculation for options granted | ' | ' |
Expected dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 112.00% | ' |
Expected stock price volatility, minimum | ' | 105.00% |
Expected stock price volatility, maximum | ' | 108.00% |
Risk-free interest rate | 3.63% | ' |
Risk-free interest rate, minimum | ' | 2.68% |
Risk-free interest rate, maximum | ' | 3.44% |
Expected life of options, minimum (Years) | '1 month 21 days | '4 months 24 days |
Expected life of options, maximum (Years) | '9 years 9 months 11 days | '9 years 10 months 24 days |
Stock_Based_Compensation_Detai1
Stock Based Compensation (Details 1) (Stock options [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Stock options [Member] | ' |
Summary of Company's aggregate stock options granted | ' |
Number of Shares Remaining Options/Warrants, Outstanding, beginning balance | 1,386,108 |
Number of Shares Remaining Options, granted | 1,365,000 |
Number of Shares Remaining Options, cancelled or expired | -295,917 |
Number of Shares Remaining Options/Warrants, Outstanding, balance | 2,455,191 |
Number of Shares Remaining Options/Warrants, Exercisable | 725,191 |
Weighted Average Exercise Price, Outstanding, beginning balance | $0.61 |
Weighted Average Exercise Price, Options granted | $0.19 |
Weighted Average Exercise Price, Cancelled/expired | $0.56 |
Weighted Average Exercise Price, Outstanding, balance | $0.34 |
Weighted Average Exercise Price, Exercisable | $0.60 |
Weighted-Average Remaining Contractual Term, Options granted | '9 years 9 months 18 days |
Weighted-Average Remaining Contractual Term, Outstanding | '8 years 8 months 12 days |
Weighted Average Remaining Contractual Term, Exercisable | '6 years 8 months 12 days |
Aggregate Intrinsic Value, Outstanding | $0 |
Aggregate Intrinsic Value, Exercisable | $0 |
Stock_Based_Compensation_Detai2
Stock Based Compensation (Details 2) (Restricted Stock [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Restricted Stock [Member] | ' |
Summary of Company's restricted share awards | ' |
Number of Restricted Shares, Non-vested at March 31, 2014 | 118,378 |
Weighted Average Fair Value at Grant Date, Non-vested at March 31, 2014 | $2.80 |
Number of Restricted Shares, Awarded | 400,000 |
Weighted Average Fair Value at Grant Date, Awarded | $0.23 |
Number of Restricted Shares, Cancelled or expired | 138,296 |
Weighted Average Fair Value at Grant Date, Cancelled or expired | $0.36 |
Number of Restricted Shares, Non-vested at March 31, 2014 | 380,082 |
Weighted Average Fair Value at Grant Date, Non-vested at March 31, 2014 | $0.39 |
Stock_Based_Compensation_Detai3
Stock Based Compensation (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | 28-May-14 | Jun. 16, 2014 | Jun. 16, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | |
April 1 2011 [Member] | April 1, 2015 [Member] | Board of Directors [Member] | Chief Operating Officer [Member] | Employee [Member] | Stephen Brown [Member] | Stephen Brown [Member] | Stock Option [Member] | Stock Option [Member] | |||||
December 16, 2014 [Member] | |||||||||||||
Stock Based Compensation (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price, Options granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.19 | $0.45 |
Options expired or cancelled | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 295,917 | 23,000 |
Stock option granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,365,000 | 1,655,208 |
Stock options vested | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 251,250 | 166,858 |
Share-based compensation vesting period | ' | ' | 'Either immediately on the date of grant or one to three years from the date of grant. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense of repricing for options and warrants | ' | ' | ' | $110,579 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Salary forfeited to purchase common share | ' | ' | ' | ' | ' | ' | 'Employees forfeited salary over a twelve-week period to purchase common shares | ' | ' | ' | ' | ' | ' |
Number of restricted shares vested | ' | ' | ' | ' | 55,969 | ' | ' | ' | ' | 10,000 | ' | ' | ' |
Number of restricted shares expected to vest in future | ' | ' | ' | ' | ' | 118,378 | ' | ' | ' | ' | 40,000 | ' | ' |
Restricted stock grants | ' | ' | ' | ' | ' | ' | ' | 250,000 | 100,000 | 50,000 | ' | ' | ' |
Expenses related to restricted stock awards | ' | ' | 30,026 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity Incentive Plan provided for the issuance common stock, shares | 3,550,000 | ' | 3,550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares are available for grant as Incentive Stock Options | 50,000 | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price for options award | ' | ' | 'No less than 100% of the fair market value of the common stock on the day of grant. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | 59,147 | 111,114 | 171,141 | 650,505 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation costs relating to issuance | ' | ' | ' | 539,926 | ' | ' | ' | 72,500 | 15,000 | 9,000 | ' | ' | ' |
Compensation costs for options granted | 45,553 | 20,800 | 139,010 | 190,861 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expenses occurred in repricing of options | ' | ' | ' | $13,575 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense of repricing by consultant to options | ' | ' | ' | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants_Details
Warrants (Details) (Warrant [Member]) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Warrant [Member] | ' | ' |
Weighted-average assumptions utilized in fair value calculations for warrants granted | ' | ' |
Expected dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 134.00% | ' |
Expected stock price volatility, minimum | ' | 93.00% |
Expected stock price volatility, maximum | ' | 98.00% |
Risk-free interest rate, minimum | 1.73% | 0.14% |
Risk-free interest rate, maximum | 1.75% | 2.60% |
Expected life of warrants, minimum | '4 years 1 month 6 days | '3 years 6 months |
Expected life of warrants, maximum | '8 years 9 months 18 days | '9 years 3 months 18 days |
Warrants_Details_1
Warrants (Details 1) (Warrants [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Warrants [Member] | ' |
Summary of status of Company's warrant granted | ' |
Number of Shares Remaining Options/Warrants, Outstanding, beginning balance | 7,671,267 |
Number of Shares Remaining Warrants, Granted | 11,862,000 |
Warrant expired | -1,240,351 |
Number of Shares Remaining Options/Warrants, Outstanding, balance | 18,292,916 |
Number of Shares Remaining Options/Warrants, Exercisable | 18,139,250 |
Weighted Average Exercise Price, Outstanding, beginning balance | $1.51 |
Weighted Average Exercise Price, Warrant granted | $0.25 |
Weighted Average Exercise Price, Warrants expired | $0.50 |
Weighted Average Exercise Price, Outstanding, balance | $0.78 |
Weighted Average Exercise Price, Exercisable | $0.75 |
Weighted-Average Remaining Contractual Term, Outstanding | '5 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Exercisable | '5 years 4 months 24 days |
Aggregate Intrinsic Value, Outstanding | $0 |
Aggregate Intrinsic Value, Exercisable | $0 |
Warrants_Details_Textual
Warrants (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Warrants (Textual) | ' | ' |
Term of warrants | '10 years | ' |
Warrants [Member] | ' | ' |
Warrants (Textual) | ' | ' |
Weighted average fair value of warrants | $0.25 | $0.41 |
Warrants vested | 11,878,000 | 4,302,625 |
Warrants exercise price | ' | $1.20 |
Warrant expired | -1,240,351 | ' |
Warrants [Member] | Consultant [Member] | ' | ' |
Warrants (Textual) | ' | ' |
Warrants exercise price | $1.20 | ' |
Compensation costs | $4,962 | $349,065 |
Term of warrants | '10 years | ' |
Outstanding warrants repriced | 423,125 | ' |
Warrants vesting period description | ' | ' |
Vest from nine months to three years from grant date. | ||
Expenses associated with the repricing | ' | $62,623 |
Derivative_Liabilities_Details
Derivative Liabilities (Details) (Warrants [Member], USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Warrants [Member] | ' | ' |
Summary of weighted-average assumptions of fair value calculations for warrants granted and subsequent revaluation | ' | ' |
Expected dividend yield | 0.00% | 0.00% |
Expected stock price volatility, minimum | 142.00% | 90.00% |
Expected stock price volatility, maximum | 148.00% | 172.00% |
Risk-free interest rate, minimum | 1.62% | 0.08% |
Risk-free interest rate, maximum | 178.00% | 1.41% |
Expected life of warrants, minimum | '2 years 10 months 24 days | '4 months 6 days |
Expected life of warrants, maximum | '4 years 6 months | '4 years 10 months 2 days |
Number of warrants | 14,922,000 | 4,300,351 |
Fair value of warrants | $556,070 | $1,232,676 |
Derivative_Liabilities_Details1
Derivative Liabilities (Details 1) (Fair Value, Measurements, Recurring [Member], USD $) | Sep. 30, 2014 |
Summary of derivative liabilities fair value measured on a recurring basis | ' |
Fair value of warrants liabilities | $556,070 |
Quoted Prices in Active Markets (Level 1) | ' |
Summary of derivative liabilities fair value measured on a recurring basis | ' |
Fair value of warrants liabilities | ' |
Significant Other Observable Inputs (Level 2) | ' |
Summary of derivative liabilities fair value measured on a recurring basis | ' |
Fair value of warrants liabilities | ' |
Significant Unobservable Inputs (Level 3) | ' |
Summary of derivative liabilities fair value measured on a recurring basis | ' |
Fair value of warrants liabilities | $556,070 |
Derivative_Liabilities_Details2
Derivative Liabilities (Details 2) (USD $) | Dec. 31, 2013 | Sep. 30, 2014 |
Fair Value, Measurements, Recurring [Member] | ||
Summary of changes in fair value of Level 3 financial liabilities | ' | ' |
Beginning balance | $775,596 | $775,596 |
Issuance of derivative financial instruments in 2014 | ' | 3,020,526 |
Net unrealized (gain) loss on derivative financial instruments | ' | -3,240,052 |
Ending balance | $775,596 | $556,070 |
Derivative_Liabilities_Details3
Derivative Liabilities (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Derivative Liabilities (Textual) | ' | ' | ' | ' |
Unrealized gain (loss) on change in fair value of derivative liabilities | $1,149,696 | $237,538 | $3,240,052 | $218,968 |
Warrant [Member] | ' | ' | ' | ' |
Derivative Liabilities (Textual) | ' | ' | ' | ' |
Fair value of warrants liabilities | $556,070 | $1,232,676 | $556,070 | $1,232,676 |