Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 09, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Windstream Technologies, Inc. | ' |
Entity Central Index Key | '0001439133 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 88,403,017 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash | $273,439 | $203,534 |
Accounts receivable | 483,933 | 401,549 |
Inventories | 1,277,492 | 946,805 |
Prepaid expenses | 398,925 | 187,341 |
Investor notes receivable | 250,000 | ' |
Deferred financing costs | 6,800 | 38,000 |
TOTAL CURRENT ASSETS | 2,690,598 | 1,776,758 |
Property and equipment, net of accumulated depreciation | 265,290 | 352,430 |
OTHER ASSETS | ' | ' |
Deposits | 18,035 | 7,500 |
TOTAL ASSETS | 2,973,923 | 2,136,688 |
CURRENT LIABILITIES | ' | ' |
Accounts payable | 831,916 | 742,482 |
Accrued liabilities | 917,456 | 789,338 |
Short Term Convertible Notes Payable, net of discount of $266,667 and $219,979, respectively | 483,333 | 330,021 |
Short Term Convertible Note Payable-Typenex less originalissue discount and derivative and warrantliability of $511,460 | 39,000 | ' |
Derivative and warrant liability on Typenex note | 461,460 | ' |
Short term debt - related parties | 182,500 | 187,500 |
Short term debt - third parties | 2,449,756 | 900,000 |
Current maturities of note payable | 164,087 | 224,087 |
TOTAL CURRENT LIABILITIES | 5,529,048 | 3,173,428 |
LONG TERM LIABILITY | ' | ' |
Note payable, non-current | 1,175,913 | 1,175,913 |
TOTAL LIABILITIES | 6,704,961 | 4,349,341 |
STOCKHOLDERS' DEFICIT | ' | ' |
Common stock; $0.001 par value; unlimited shares authorized; 87,957,589 and 83,461,899 shares issued and outstanding, respectively | 87,958 | 83,462 |
Additional paid in capital | 10,208,465 | 8,184,557 |
Accumulated deficit | -14,027,461 | -10,480,672 |
TOTAL STOCKHOLDERS' DEFICIT | -3,731,038 | -2,212,653 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $2,973,923 | $2,136,688 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Short term convertible notes payable, discount | $266,667 | $219,979 |
Short Term Convertible Note Payable, discount and derivative and warrant liability | $511,460 | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | ' | ' |
Common stock, shares issued | 87,957,589 | 83,461,899 |
Common stock, shares outstanding | 87,957,589 | 83,461,899 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
SALES | $373,538 | $47,857 | $825,798 | $603,480 |
COST OF GOODS SOLD | 685,528 | 57,896 | 1,235,126 | 488,207 |
GROSS (LOSS) PROFIT | -311,990 | -10,039 | -409,328 | 115,273 |
OPERATING EXPENSES: | ' | ' | ' | ' |
Research and development | 91,666 | 314,071 | 128,117 | 491,446 |
Write down of inventory | 0 | ' | 111,000 | ' |
General and administrative expenses | 867,094 | 681,996 | 2,300,491 | 2,735,359 |
TOTAL OPERATING EXPENSES | 958,760 | 996,067 | 2,539,608 | 3,226,805 |
LOSS FROM OPERATIONS | -1,270,750 | -1,006,106 | -2,948,936 | -3,111,532 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Other expense | -2,904 | ' | -2,105 | -800 |
Interest expense, net | -213,705 | -172,098 | -595,748 | -303,089 |
TOTAL OTHER INCOME (EXPENSE) | -216,609 | -172,098 | -597,853 | -303,889 |
NET LOSS | ($1,487,359) | ($1,178,204) | ($3,546,789) | ($3,415,421) |
Net Loss Per Share - Basic and Diluted | ($0.02) | ($0.02) | ($0.04) | ($0.07) |
Weighted Average Shares Outstanding - Basic and Diluted | 86,741,574 | 75,583,933 | 85,200,993 | 48,009,364 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($3,546,789) | ($3,415,421) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation | 93,325 | 123,289 |
Interest expense converted into Common Stock | 7,422 | ' |
Stock option expense | 122,126 | 358,454 |
Amortization of deferred financing costs | 30,720 | 30,000 |
Stock based compensation | ' | 1,558,200 |
Write-down of inventory | 111,000 | ' |
Amortization of debt discount | 353,312 | 168,284 |
Changes in operating Assets and Liabilities: | ' | ' |
Accounts receivables | -82,384 | -84,847 |
Inventory | -441,687 | -475,252 |
Prepaid expenses | -211,584 | 16,969 |
Accounts payable | 89,434 | -201,883 |
Accounts payable related parties | ' | -41,705 |
Accrued liabilities | 178,118 | 50,535 |
NET CASH USED IN OPERATING ACTIVITIES | -3,296,987 | -1,913,377 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Cash paid for purchase of fixed assets | -6,185 | -6,618 |
Deposits made | -10,535 | ' |
NET CASH USED BY INVESTING ACTIVITIES | -16,720 | -6,618 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Cash payments on deferred financing costs | ' | -42,000 |
Borrowings on line of credit | 2,045,000 | 785,712 |
Repayments on line of credit | -695,244 | -285,712 |
Proceeds from short term debt | 200,000 | ' |
Payments on short term debt | ' | -20,000 |
Proceeds from short term debt - related parties | 50,000 | 62,000 |
Payments on short term debt - related parties | -55,000 | -27,500 |
Proceeds from issuance of convertible debt | 650,000 | 550,000 |
Principal payments on long term debt | -60,000 | -75,000 |
Net proceeds from issuance of Common Stock and Warrants | 1,248,856 | 1,610,013 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,383,612 | 2,557,513 |
NET INCREASE (DECREASE) IN CASH | 69,905 | 637,518 |
CASH, Beginning of Period | 203,534 | 4,022 |
CASH, End of Period | 273,439 | 641,540 |
Cash paid during the year for: | ' | ' |
Interest | 51,468 | 213,817 |
Income taxes | ' | 800 |
NON CASH INVESTING AND FINANCING ACTIVITIES | ' | ' |
Common stock and paid in capital resulting from non-cash conversion of convertible notes including interest expense and accrued interest | 207,500 | ' |
Debt discount on warrants issued with convertible debt | 400,000 | 528,058 |
Derivative and warrant liability associated with convertible debt - Typenex | 511,460 | ' |
Contributed capital | 50,000 | ' |
Warrants Issued for deferred financing costs | ' | 48,138 |
Reclassification of debt related party debt to short term debt | ' | $100,000 |
Basis_of_Presentation_and_Natu
Basis of Presentation and Nature of Organization | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation and Nature of Organization | ' |
NOTE 1 – BASIS OF PRESENTATION AND NATURE OF ORGANIZATION | |
Organization | |
WindStream Technologies Inc. (the “Company”), is engaged in the development and commercialization of wind driven electrical generation. The Company’s facilities are located in North Vernon, Indiana. | |
On March 24, 2014, Windaus Global Energy, Inc. filed an Articles of Amendment with the Secretary of State of the State of Wyoming effecting a name change of Windaus Global Energy, Inc. to WindStream Technologies, Inc. (the “Name Change”). Windaus Global Energy, Inc. has notified the Financial Industry Regulatory Authority (“FINRA”) of the Name Change and a new trading symbol, “WSTI” was assigned effective March 27, 2014. The new CUSIP number for the Company’s common stock is 97382J102. | |
On October 26, 2013, the Company formed a 99.9% owned subsidiary company, in India, WindStream Energy Technologies India Private Limited, to perform various commercial activities including reselling, manufacturing, repairing, importing, exporting various types renewable energy sources including turbines, windmills, solar-wind hybrids and other devices. A Board of Directors was established consisting of the Chief Executive Officer of the Company and an Indian national. In July 2014, an office had been opened and operations commenced and the results, which are deminimous, are included in the consolidated results for the three months and nine months ended September 30, 2014. | |
In December 2013, the Company filed documents to incorporate a 100% owned subsidiary in Peru, Windstream Technologies Latin America S.A (“the Peru subsidiary”). The Peru subsidiary has appointed a temporary board of directors as required by local regulation, but the Peru subsidiary has had no operations, has entered into no contracts, opened no bank accounts and has not begun any business activity. As of September 30, 2014, operations have not yet commenced. | |
Basis of Presentation | |
The accompanying (a) condensed balance sheet at December 31, 2013, has been derived from audited statements and (b) unaudited interim financial statements as of September 30, 2014 and 2013 of WindStream Technologies, Inc. and Subsidiaries (the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K originally filed with the SEC on April 11, 2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2013 as reported in the Form 10-K have been omitted. | |
Summary of Significant Accounting Policies | |
This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company’s financial statements. The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. | |
Consolidations | |
The consolidated financial statements include the accounts of WindStream Technologies, Inc., WindStream Energy Technologies India Private Limited and Windstream Technologies Latin America S. A. All material intercompany balances have been eliminated in consolidation. | |
Comprehensive Income | |
The Company reports comprehensive income in accordance with FASB ASC Topic 220 “Comprehensive Income,” which established standards for reporting and displaying comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements. | |
Total comprehensive income is defined as all changes in stockholders’ equity during a period, other than those resulting from investments by and distributions to stockholders (i.e., issuance of equity securities and dividends). Generally, for the Company, total comprehensive income (loss) equals net income (loss) plus or minus adjustments for currency translation. Comprehensive income was deminimous for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Foreign Currency Transactions and Translation | |
The Company’s primary country of operations is India and Peru. The financial position and results of operations of the Company’s Indian and Peruvian operations are determined using the local currency, the Indian Rupee and the Peruvian nuevo sol as the functional currency. The results of transactions in foreign currency are remeasured into the functional currency at the average rate of exchange during the reporting period. Aggregate net foreign currency remeasurements included in the Condensed Consolidated Statement of Income were deminimous for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Assets and liabilities denominated in foreign currencies as the functional currency at the balance sheet date are translated into the Company’s reporting currency of United States dollars (“USD”) at the exchange rates prevailing at the balance sheet date. The registered equity capital denominated in the functional currency is translated into the reporting currency of USD at the historical rate of exchange at the time of capital contribution. All translation adjustments resulting from the translation of the financial statements into the reporting currency at USD are dealt with as a separate component within stockholders’ equity. Translation adjustments net of tax were deminimous for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Concentration of Credit Risk | |
The Company sells primarily to companies and governmental entities across the globe. Receivables arising from those sales domestically are not collateralized; however, credit risk is minimized by continuing to diversify the customer base. International sales typically take place under the auspices of the Export Import Bank, a U.S. government entity, and are guaranteed by that entity under the terms of an insurance policy with a limit of $4 million. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of the specific customers, historical trends and other information. | |
As of September 30, 2014 and December 31, 2013, two and four customers represented 82% and 94% of outstanding accounts receivable balances, respectively. For the three months September 30, 2014 and 2013, two customers represented approximately 98% and 81% of revenue, respectively. For the nine months ended September 30, 2014 and 2013, two and three customers represented approximately 85% and 89% of revenue, respectively. | |
For the three months ended September 30, 2014 and 2013, three vendors represented approximately 67% and 80% of total cost of goods sold, respectively. For the nine months ended September 30, 2014 and 2013, four vendors represented approximately 59% and 63% of total cost of goods sold, respectively. | |
Going Concern | |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. | |
The Company had an accumulated deficit of approximately $14,028,000 and $10,481,000 at September 30, 2014 and December 31, 2013, respectively, and has a history of recurring net losses and working capital deficits. These matters among others raise substantial doubt about our ability to continue as a going concern. | |
While the Company is attempting to increase operations and generate additional revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. The Company will continue to pursue additional equity and/or debt financing while managing cash flows from operations in an effort to provide funds to meet its obligations on a timely basis and to support future business development. There is no assurance that these efforts will be successful. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise the additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plans and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | |
Segment Information | |
The Company operates in two segments in accordance with accounting guidance FASB ASC Topic 280, Segment Reporting. Our Chief Executive Officer has been identified as the chief operating decision maker as defined by FASB ASC Topic 280. See additional discussion at Note 15. | |
Recently Adopted Accounting Pronouncements | |
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern. The new standard requires 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 it plans alleviate that doubt. The standard requires management to evaluate, for each reporting period, whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern with one year from the date the financial statements are issued. 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 retrospecive” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospecive” 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. | |
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Reverse_Merger
Reverse Merger | 9 Months Ended |
Sep. 30, 2014 | |
Business Combinations [Abstract] | ' |
Reverse Merger | ' |
NOTE 2 – REVERSE MERGER | |
Effective May 22, 2013, Windaus Global Energy, Inc. entered into a Share Exchange Agreement with WindStream Technologies, Inc., pursuant to which, the Company agreed to exchange the outstanding common and preferred stock of WindStream held by the WindStream Shareholders for shares of common stock of the Company on a 1:25.808 basis. At the Closing, there were approximately 955,000 shares of WindStream common stock and 581,961 shares of WindStream preferred stock outstanding. Pursuant to the Share Exchange Agreement, the shares of WindStream common stock and preferred stock were exchanged for 39,665,899 (24,646,646 for the WindStream common shares and 15,019,253 for the WindStream preferred shares) new shares of the Company’s common stock, par value of $0.001 per share. At the closing of the agreement, Windaus Global Energy, Inc. had approximately 24,000,000 shares of common stock issued outstanding and no preferred stock. The Company has retroactively restated the common shares outstanding and weighted average shares outstanding for prior years pursuant to the reverse merger share exchange ratio of 1:25.808. | |
For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of Windaus Global Energy, Inc., with WindStream Technologies, Inc. considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial statements of the registrant. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 39,665,899 shares issued to the shareholder of WindStream Technologies, Inc., and its designees in conjunction with the share exchange transaction have been presented as outstanding for all periods. The historical consolidated financial statements include the operations of the accounting acquirer for all periods presented. |
Accounts_Receivable
Accounts Receivable | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Receivables [Abstract] | ' | ||||||||
Accounts Receivables | ' | ||||||||
NOTE 3 – ACCOUNTS RECEIVABLE | |||||||||
Accounts receivable consisted of the following as of: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Accounts Receivable – EXIM insured | $ | 474,602 | $ | 379,195 | |||||
Accounts Receivable – not insured | $ | 9,331 | $ | 22,354 | |||||
$ | 483,933 | $ | 401,549 | ||||||
Under the terms of a revolving line of credit agreement with the Export Import Bank as discussed in Note 7, 98% of customer’s outstanding balances under the terms of the Export Import Bank are guaranteed by the Export Import Bank, an agency of the United States government. |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
NOTE 4 – INVENTORIES | |||||||||
Inventories consist of raw materials, work in process and finished goods. Inventory, consisting mostly of raw materials (which principally consist of components) are stated at the lower of cost or market on the first-in, first-out basis, or market. Inventories are classified as current assets. | |||||||||
Inventories consisted of the following as of: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Raw Materials | $ | 745,736 | $ | 517,842 | |||||
Work in process | 422,738 | 150,503 | |||||||
Finished goods | 109,018 | 278,460 | |||||||
$ | 1,277,492 | $ | 946,805 | ||||||
During the nine months ended September 30, 2014, the Company evaluated its inventory and wrote down inventory by approximately $111,000, which has been included in the accompanying condensed consolidated statements of operations. |
Property_and_Equipment
Property and Equipment | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||||||||
Property and Equipment | ' | ||||||||||||||||
NOTE 5 – PROPERTY AND EQUIPMENT | |||||||||||||||||
Property and equipment consisted of the following as of: | |||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Equipment | $ | 134,530 | $ | 128,345 | |||||||||||||
Factory equipment | 15,800 | 15,800 | |||||||||||||||
Furniture and fixtures | 7,888 | 7,888 | |||||||||||||||
Leasehold improvements | 64,582 | 64,582 | |||||||||||||||
Tooling | 473,893 | 473,893 | |||||||||||||||
Total | 696,693 | 690,508 | |||||||||||||||
Less accumulated depreciation | (431,403 | ) | (338,078 | ) | |||||||||||||
Net property, plant and equipment | $ | 265,290 | $ | 352,430 | |||||||||||||
Depreciation expense for the periods ended as follows amounted to approximately: | |||||||||||||||||
Three months | Three months | Nine months | Nine months | ||||||||||||||
ended | ended | ended | ended | ||||||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | Sept. 30, 2014 | Sept. 30, 2013 | ||||||||||||||
Depreciation Expense | $ | 31,000 | $ | 40,000 | $ | 93,000 | $ | 124,000 |
Accrued_Liabilities
Accrued Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued Liabilities | ' | ||||||||
NOTE 6 – ACCRUED LIABILITIES | |||||||||
Accrued expenses consisted of the following as of: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Accrued interest | $ | 295,452 | $ | 162,214 | |||||
Accrued payroll and other liabilities | 352,180 | 477,467 | |||||||
Accrued warranty | 213,000 | 63,000 | |||||||
Customer deposits | 48,550 | 25,907 | |||||||
Deposit for future fundings | - | 50,000 | |||||||
Accrued property taxes | 8,274 | 10,750 | |||||||
Total | $ | 917,456 | $ | 789,338 | |||||
During the three months ended September 30, 2014, the Company recognized warranty expense of $200,000. Customer deposits represent monies advanced by customers to secure future orders. Once the orders are invoiced, the liability is credited to the amount due from the customer. The deposit for future fundings was written off to additional paid capital as the potential investor who advanced the $50,000 did not make an investment in the Company. |
Short_Term_DebtThird_Parties
Short Term Debt-Third Parties | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Short Term Debt-Third Parties | ' |
NOTE 7 – SHORT TERM DEBT – THIRD PARTIES | |
On February 25, 2013, the Company entered into a working capital revolving line of credit with a bank, with a credit limit of $500,000, for use in financing overseas sales of the Company’s products. The Company’s draws under the line are transaction specific and the related receivables are guaranteed by the Export Import Bank, a U.S. government entity under the terms of an insurance policy with a limit of $4 million. Drawdowns on the line are used to meet the working capital needs of the Company to purchase materials and fund the labor and overhead to manufacture specific products for export to specific customers. The line, which accrues interest at a fixed rate of 6.0%, expires on June 26, 2015 and a total credit limit of 2,000,000. The loan is guaranteed by the Company’s President. | |
For the nine months ended September 30, 2014, there were total draws on the line of credit of $2,045,000 and repayments of approximately $695,000. The outstanding balance as of September 30, 2014 and December 31, 2013 was approximately $1,850,000 and $500,000, respectively, which has been included in the short-term debt – third parties in the accompanying condensed consolidated balance sheets. | |
During 2013 and 2012, the Company has entered into other various notes with individuals at interest rates ranging from 5% to 8% and are due on demand. During the three months and nine months ended September 30, 2014 and 2013, the Company made no repayments on these various notes. At September 30, 2014 and December 31, 2013, these notes aggregated $400,000 and are included in the short-term debt – third parties in the accompanying condensed consolidated balance sheets. | |
On April 15, 2014, the Company entered into a note payable for $200,000 with a term of one year and interest accruing at a rate of 8% which is accruing and due in full at the end of the note. At September 30, 2014, the outstanding balance on this note was $200,000 and is included in the short term debt – third parties in the accompanying condensed consolidated balance sheet along with the $1,849,756 line of credit and $400,000 in various notes payable to individuals above for a total of $2,449,756. | |
Interest expense for the short term debt for the three and nine months ended September 30, 2014 and 2013, was approximately $41,000 and $80,000 in 2014 and $11,000 and $35,000 in 2013, respectively. |
Convertible_Notes_Payable
Convertible Notes Payable | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Debt Disclosure [Abstract] | ' | ||||
Convertible Notes Payable | ' | ||||
NOTE 8 – CONVERTIBLE NOTES PAYABLE | |||||
On June 1, 2013, the Company entered into subscriptions agreements with five accredited investors for the issuance of convertible promissory notes in the aggregate principal amount of $550,000, which are convertible into shares of common stock of the Company at $0.25 per share, and warrants entitling the holder to purchase up to an aggregate of 1,600,000 of shares of common stock of the Company at $0.25 per share. The warrants have a term of three years and vested immediately. The notes bear interest at 8% and are due in one year. | |||||
The Company evaluated the embedded conversion features within the convertible debt under ASC 815 “Derivatives and Hedging” and determined that neither the embedded conversion feature nor the warrants qualified for derivative accounting. Additionally, the instruments were evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. It was concluded that a beneficial conversion feature existed for the convertible debt due to the relative fair value of the warrants issued with the debt. | |||||
The total debt discount recorded on the note with the June 1, 2013 date of issuance was $528,058 (warrant relative fair value of approximately $253,000 and the beneficial conversion feature was approximately $275,000) which are being amortized to interest expense over the term of the note). | |||||
On June 1, 2014, the Company entered into a subscription agreement with one accredited investor for the issuance of a convertible promissory note in the aggregate principal amount of $400,000, which is convertible into shares of common stock of the Company at $0.40 per share, and a warrant entitling the holder to purchase up to an aggregate of 50,000 of shares of common stock of the Company at $0.40 per share. The warrant has a term of three years and vested immediately. The note bears interest at 12% for the first ninety days of the term and then bears interest at 18% for the next nine months. The note is due in one year. In connection with this transaction, a major shareholder and a related party (the “Pledgor”) signed a pledge and security agreement, which grants a security interest in one million shares of the Company’s common stock owned by the Pledgor. | |||||
The Company evaluated the embedded conversion features within the convertible debt under ASC 815 “Derivatives and Hedging” and determined that neither the embedded conversion feature nor the warrants qualified for derivative accounting. Additionally, the instruments were evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. It was concluded that a beneficial conversion feature existed for the convertible debt due to the relative fair value of the warrants issued with the debt. | |||||
The total debt discount recorded on the note with the June 1, 2014 date of issuance was $400,000 (warrant relative fair value of approximately $42,000 and the beneficial conversion feature was approximately $358,000) which are being amortized to interest expense over the term of the note). The warrant and beneficial conversion feature was recorded as additional paid in capital. | |||||
The unamortized debt discount balance at September 30, 2014 and December 31, 2013 was approximately $267,000 and $220,000, respectively and is being netted against the total convertible promissory notes principal amount of $1,300,000 and $550,000, respectively, for presentation in the accompanying condensed balance sheets. | |||||
For the three months ended September 30, 2014 and 2013, the Company has amortized approximately $120,000 and $126,000 in 2013 to interest expense in the accompanying condensed consolidated statement of operations. | |||||
For the nine months ended September 30, 2014 and 2013, the Company amortized approximately $353,000 (including approximately $64,000 of debt discount related to notes converted to common stock, see below) in 2014 and $168,000 in 2013 to interest expense in the accompanying condensed consolidated statement of operations. | |||||
In connection with one of the five June 2013 debt issuances, the company paid finder’s fees of approximately $42,000 as well as 140,000 common stock warrants at $0.05 per share. The warrants vest immediately and have a three years term. The fair value of the warrants was determined to be approximately $48,000 based on the Black Scholes option pricing model using the same assumption as those used for the warrants above, except the exercise price was $0.05 per share. The combined value of the warrants and cash amounted to approximately $90,000, which was capitalized as a deferred financing cost and is being amortized to interest expense over the life of the notes. | |||||
In June 2014, holders of the warrants discussed above exercised warrants, on a cashless exercise basis pursuant to the agreement and the Company issued approximately 136,000 shares of common stock in a non-cash transaction. | |||||
As of September 30, 2014 and December 31, 2013, the deferred financing costs had an unamortized balance of approximately of $6,800 and $37,500, respectively. | |||||
Amortization of deferred financing costs, which has been included interest expense, for the three months and nine months ended September 30, 2014 and 2013, was approximately $7,500 and $28,000 and approximately $8,000 for the write off of the deferred financing costs associated with the conversion of the warrants discussed above in 2014 and $28,000 and $30,000 in 2013, respectively. | |||||
During the nine months ended September 30, 2014, four investors converted their notes payable of $200,000 (plus approximately $7,500 in accrued interest) in aggregate into shares of common stock at the conversion price of $0.25 per share resulting in the Company issuing 829,689 shares of common stock to these four investors and amortized approximately $64,000 of the remaining debt discount associated with these notes immediately to interest expense in the accompanying condensed consolidated statement of operations. | |||||
Interest expense for the three months and nine months ended September 30, 2014 and 2013 was $0 and $6,000 and $0 and $0, respectively. | |||||
Convertible Note Payable to Typenex Co-Investmet, LLC | |||||
On September 26, 2014 (the “Effective Date”), the Company entered into a Securities Purchase Agreement with Typenex Co-Investment, LLC (“Investor” or “Lender”) whereby it sold in a private placement a 10% Collateralized Convertible Promissory note with a $550,000 principal amount, which was issued at a $50,000 discount from the face amount (the “OID”), and three warrants to purchase the Company’s Common Stock at an exercise price of $.80 per share, exercisable at various dates (the “Investor Warrants”), in exchange for $250,000 cash and two 8% Investor Notes (“Investor Note #1 and “Investor Note #2”) with principal balances of $125,000 each. The note is collateralized by the Investor Notes. | |||||
The note is separated into three Conversion Eligible Tranches (discussed under Lender Conversion below) of the following amounts: | |||||
Initial Tranche | $ | 275,000 | |||
First Subsequent Tranche | 137,500 | ||||
Second Subsequent Tranche | 137,500 | ||||
$ | 550,000 | ||||
The note accrues interest at 10%, and is repayable in eight monthly installments beginning March 26, 2015, until the Maturity Date of October 26, 2015 (“Installment Dates”). At each of the Installment Dates, the Company is required to pay to the Lender the applicable “Installment Amount” due on such date. Installment Amount means $68,750 ($550,000 ÷ 8), plus the sum of any accrued and unpaid interest that has been added to the lowest-numbered then-current Conversion Eligible Tranche as of the applicable Installment Date and accrued, and unpaid late charges that have been added to the lowest-numbered then current Conversion Eligible Tranche, if any, under the note as of the applicable Installment Date, and any other amounts accruing or owing to Lender under the note as of such Installment Date; provided, however, that, if the remaining amount owing under all then-existing Conversion Eligible Tranches or otherwise with respect to the note as of the applicable Installment Date is less than the Installment Amount set forth above, then the Installment Amount for such Installment Date (and only such Installment Amount) will be reduced by the amount necessary to cause such Installment Amount to equal such outstanding amount. | |||||
Installment Conversions | |||||
At the option of the Company or the Lender, payments of each Installment Amount may be made (a) in cash, or (b) by converting such Installment Amount into a number of shares of Common Stock (“Installment Conversion Shares”) derived by dividing the portion of the applicable Installment Amount being converted by the Installment Conversion Price) an “Installment Conversion”), or (c) by any combination of the foregoing, so long as the cash is delivered to the Lender on the applicable Installment Date and the Installment Conversion Shares are delivered to the Lender on or before the applicable delivery date. | |||||
The Installment Conversion Price is the lesser of (i) the Lender Conversion Price (defined under Lender Conversion below), and (ii) 70% (the “Conversion Factor”) of the average of the three (3) lowest Closing Bid Prices in the twenty (20) Trading Days immediately preceding the applicable Conversion (the “Market Price”), provided that if at any time the average of the three (3) lowest Closing Bid Prices in the twenty (20) Trading Days immediately preceding any date of measurement is below $0.40, then the then-current Conversion Factor will be reduced to 65% for all future conversions (subject to other reductions). Additionally, if at any time after the Effective Date, Borrower is not DWAC Eligible, then the then-current Conversion Factor will automatically be reduced by 5% for all future Conversions. If at any time after the Effective Date, the Conversion Shares are not OTC Eligible, then the then-current Conversion Factor will automatically be reduced by an additional 5% for all future conversions. | |||||
On the date that is twenty (20) trading days (a “True-Up Date”) from each date Borrower delivers Free Trading (as defined below) Installment Conversion Shares to the Lender, there will be a true-up where the Company will deliver to the Lender additional Installment Conversion Shares (“True-Up Shares”) if the Installment Conversion Price as of the True-Up Date is less than the Installment Conversion Price used in the applicable Installment Notice. In such event, the Company must deliver to the Lender within three (3) trading days of the True-Up Date (the “True-Up Share Delivery Date”) a number of True-Up Shares equal to the difference between the number of Installment Conversion Shares that would have been delivered to the Lender on the True-Up Date based on the Installment Conversion Price as of the True-Up Date and the number of Installment Conversion Shares originally delivered to the Lender pursuant to the applicable Installment Notice. | |||||
The Company evaluated the note under the requirements of ASC 480 “Distinguishing Liabilities From Equity” and concluded that the note does not fall within the scope of ASC 480. The Company evaluated the Installment Conversion feature under the requirements of ASC 815 “Derivatives and Hedging”. Due to the existence of the antidilution provision which reduces the Lender Conversion Price in the event of subsequent Dilutive Issuances by the Company (see Lender Conversion below), the Installment Conversion feature does not meet the definition of “indexed to” the Company’s stock, and the scope exception to ASC 815’s derivative accounting provisions does not apply. The Company evaluated the embedded derivative criteria in ASC 815, and concluded that because the Common Stock that would be delivered by the Company if an Installment Conversion is elected (including True-Up Shares) would be readily convertible to cash by the Investor, the Installment Conversion feature meets the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. | |||||
Lender Conversion | |||||
The Lender has the right at any time after the Effective Date until the outstanding balance of the note has been paid in full, including without limitation (i) until any Optional Prepayment Date or at any time thereafter with respect to any amount that is not prepaid, and (ii) during or after any Fundamental Default Measuring Period, at its election, to convert (each instance of conversion is referred to as a “Lender Conversion”) all or any part of the outstanding balance into shares (“Lender Conversion Shares”) of the Company’s Common Stock, of the portion of the outstanding balance being converted (the “Conversion Amount”) divided by the “Lender Conversion Price” of $.80, subject to potential future adjustments described below. | |||||
The conversion by the Lender of any portion of the outstanding balance is only exercisable in three (3) tranches (each, a “Tranche”), consisting of (i) an initial Tranche in an amount equal to $275,000 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of the note and the other Transaction Documents (as defined in the Securities Purchase Agreement) (the “Initial Tranche”), and (ii) two (2) additional Tranches, each in the amount of $137,500, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of the note and the other Transaction Documents (each, a “Subsequent Tranche”). The Initial Tranche corresponds to the initial cash proceeds of $250,000 plus $25,000 of the OID, and may be converted any time subsequent to the Effective Date. The first Subsequent Tranche corresponds to Investor Note #1 plus $12,500 of the OID, and the second Subsequent Tranche corresponds to Investor Note #2 plus $12,500 of the OID. The Lender’s right to convert any portion of any of the Subsequent Tranches is conditioned upon the Lender’s payment in full of the Investor Note corresponding to such Subsequent Tranche (upon the satisfaction of such condition, such Subsequent Tranche becomes a “Conversion Eligible Tranche”). The Initial Tranche was immediately a Conversion Eligible Tranche at the Effective Date. | |||||
The Company evaluated the note under the requirements of ASC 815 “Derivatives and Hedging”. Due to the existence of the antidilution provision which reduces the Lender Conversion Price in the event of subsequent Dilutive Issuances by the Company described above, the Lender Conversion feature does not meet the definition of “indexed to” the Company’s stock, and the scope exception to ASC 815’s derivative accounting provisions does not apply. The Company also evaluated the embedded derivative criteria in ASC 815, and concluded that the default and remedy provisions of the note (see Default Provisions below) cause the Lender Conversion feature to meet the net settlement criterion in ASC 815. Based on the Lender Conversion feature meeting all the embedded derivative criteria in ASC 815, the Lender Conversion feature meets the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. | |||||
The Company evaluated the Company’s option to settle the Lender Conversion in cash in the event the Lender elects to convert subsequent to the occurrence of an Event of Default under the requirements of ASC 815, and included that it meets the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. | |||||
The Company evaluated the Lender Conversion Delay provision under the requirements of ASC 815 and concluded it meets the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. | |||||
As of September 30, 2014, the Conversion Eligible Outstanding Balance of the note was convertible into approximately 343,750 shares of the Company’s Common Stock. If the total outstanding balance of the note were convertible as of September 30, 2014, the note would have been convertible into 687,500. (See Note 18 - Subsequent Events to the condensed consolidated financial statements.) | |||||
The Company evaluated the embedded derivative criteria in ASC 815, and concluded that because certain of the Events of Default under the note are factors that are unrelated to a deterioration of the creditworthiness of the Company, the Events of Default and Default Interest provisions of the note are not considered clearly and closely related to the characteristics of debt. Based on meeting all the criteria in the definition, the Company concluded that the Events of Default and Default Interest provisions each meet the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. | |||||
Company Prepayment Option | |||||
So long as no Event of Default has occurred subsequent to the Effective Date, the Company may at any time up to the Maturity Date optionally prepay, in full, the outstanding balance of the note at a price of 125% of the aggregate principal amount of the note, plus accrued and unpaid interest, if any, at the date of prepayment (“Optional Prepayment Amount”). | |||||
The Company evaluated the embedded derivative criteria in ASC 815, and concluded that the Company’s prepayment option is not the type of call option that meets the definition of an embedded derivative. However, the Optional Prepayment Liquidated Damages clause does meet the definition of an embedded derivative that should be separated from the note and accounted for as a derivative liability. | |||||
Investor Warrants | |||||
The Investor Warrants allow the Investor to purchase the number of shares of Common Stock (“Warrant Shares”) equal to the purchase price allocated to each Investor Warrant divided by the Market Price of the Company’s Common Stock immediately preceding the date each Investor Warrant first becomes exercisable, as such number may be adjusted from time to time pursuant to the antidilution provisions of the Investor Warrant. The Purchase Price allocated to each Investor Warrant is: | |||||
Investor Warrant #1: | $ | 275,000 | |||
Investor Warrant #2: | 137,500 | ||||
Investor Warrant #3: | 137,500 | ||||
$ | 550,000 | ||||
The Market Price applicable to Investor Warrant #1, determined as of the Effective Date, was $.65 per share. Accordingly as of September 30, 2014, the maximum number of shares of the Company’s Common Stock Investor Warrant # 1 is exercisable into is 423,076 shares. The Market Price applicable to Investor Warrants #2 and #3 will be determined as of the related Investor Warrant’s “Exercisable Date” (defined below), so the number of shares into which Investor Warrants #2 and #3 are exercisable is not determinable as of September 30, 2014. Had all of the Investor Warrants been Exercisable as of September 30, 2014, the maximum number of shares of the Company’s Common Stock the Investor Warrants could be exercised into, based on the $.65 per share Market Price on that date, would be 846,153, which may ultimately be higher or lower. | |||||
The term of each Investor Warrant began on September 27, 2014 and expires on the fifth anniversary from each Investor Warrant becomes exercisable (the “Exercisable Date”). Investor Warrant #1 is exercisable at any time from September 27, 2014, and it expires September 27, 2019. The Exercisable Dates for Investor Warrant #2 and Investor Warrant #3 occur once the full outstanding balance of Investor Note #1 and Investor Note #2, respectively, has been paid to Company, and they expire on the fifth anniversary of their respective Exercisable Date. | |||||
The exercise price of the Investor Warrants is $.80 per share of the Company’s Common Stock, as may be adjusted from time to time pursuant to the antidilution provisions of the Warrants. | |||||
The Investor Warrants are exercisable by the Investor in whole or in part, as either a cash exercise or as a “cashless” exercise. | |||||
The Company evaluated the Warrants under ASC 480 “Distinguishing Liabilities From Equity” and ASC 815 “Derivatives and Hedging”. Due to the existence of the antidilution provision, which reduces the Exercise Price and Conversion Price in the event of subsequent Dilutive Issuances, the Investor Warrants are not indexed to the Company’s Common Stock, and the Company determined that the Warrants meet the definition of a derivative under ASC 815. Accordingly, the Warrants were recorded as derivative liabilities in the Condensed Consolidated Balance Sheet at their fair value of approximately $183,000 at the date of issuance. The fair value of the Warrants is measured in accordance with ASC 820 “Fair Value Measurement”, using “monte carlo simulation” modeling, incorporating the following inputs: | |||||
The fair value of the Warrants as of September 30, 2014 was approximately $183,000. At each subsequent reporting date, the fair value of the Warrants will be remeasured and changes in the fair value will be reported in the Condensed Consolidated Statements of Operations. | |||||
The Company has not elected to initially and subsequently measure the note as a hybrid instrument in its entirety at fair value. Therefore, in accordance with ASC 815, the Company is accounting for all the embedded derivatives identified in the note as a single compound embedded derivative. The compound embedded derivative was recorded as a derivative liability on the Condensed Consolidated Balance Sheet at its fair value of approximately $279,000 at the date of issuance of the note. The fair value of the embedded derivative liability is measured in accordance with ASC 820 “Fair Value Measurement”, using “monte carlo simulation” modeling incorporating the following inputs: | |||||
The fair value of the compound embedded derivative liability as of September 30, 2014 was approximately $279,000. At each subsequent reporting date, the fair value of the embedded derivative liability will be remeasured and changes in the fair value will be recorded in the Condensed Consolidated Statements of Operations. | |||||
Both the warrant derivative and embedded derivative liabilities are classified as noncurrent liabilities in the Condensed Consolidated Balance Sheet, and changes in their fair value are reported in general and administrative expense in the Condensed Consolidated Statements of Operations. There was no change in fair value of the warrant and embedded derivative liabilities for the three- and nine-month periods ended September 30, 2014 was $0. | |||||
The total proceeds $500,000 total proceeds received by the Company for the note and Investor Warrants, was allocated first to the Investor Warrant and embedded derivative liabilities at their initial fair values determined at the issuance date. The residual proceeds after that allocation was then applied to the note. Accordingly, the initial carrying amount of the note is approximately $39,000, derived as follows: | |||||
Face amount of note | $ | 550,000 | |||
Original issuance discount | (50,000 | ) | |||
Allocation to Investor Warrants | (182,000 | ) | |||
Allocated to embedded derivatives | (279,000 | ) | |||
$ | 39,000 | ||||
The total discount on the note of $511,460 is being amortized to interest expense through the note’s maturity date using its effective interest rate of 420%. The net carrying amount of the note as of September 30, 2014 was $38,540. Interest expense on the note recognized in the Condensed Consolidated Statements of Operations for the three- and nine-month periods ended September 30, 2014 was immaterial. | |||||
Investor Notes | |||||
The Company issued two Investor Notes on September 26, 2014. The principal of each Investor Note is $125,000. Interest accrues on the unpaid principal balance under the Investor Notes at a rate of eight percent (8%) per annum until the full amount of the principal and fees has been paid. The entire unpaid principal balance and all accrued and unpaid interest under each Investor Note, is due and payable thirteen (13) months from the date the Investor Note was entered into, which is October 26, 2015. However, the Investor may elect, in its sole discretion, to extend the maturity dates for up to thirty (30) days by delivering written notice of such election to Company at any time prior to the maturity date. The Investor may, with Company’s consent, prepay, without penalty, all or any portion of the outstanding balance of each Investor Note along with any accrued but unpaid interest at any time prior to the maturity date. | |||||
The Investor Notes contain certain default provisions of the Investor Notes generally such as the Investor’s failure to make any payment when due and payable, its failure to observe or perform any other covenant, obligation, condition or agreement contained in the Investor Note; or upon involuntary bankruptcy by the Investor, and such petition is not dismissed within sixty (60) days, or a receiver, trustee, liquidator, assignee, custodian, sequestrator or other similar official is appointed to take possession of any of the assets or properties of Investor. | |||||
The Investor Notes are recorded as non-current investments at cost, together with accrued interest thereon, in the Condensed Consolidated Balance Sheet. Interest income on the Investor Notes reported in the Condensed Consolidated Statements of Operations for the three- and nine-month periods ended September 30, 2014 was immaterial. |
Note_Payable
Note Payable | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||
Note Payable | ' | |||||||||||||
NOTE 9 – NOTE PAYABLE | ||||||||||||||
In July 2011, the Company entered into a $1,400,000 note agreement with the City of North Vernon, Indiana. Interest accrues at 5.5% and the note matures on August 1, 2016. As of September 30, 2014 and December 31, 2013, the note had an outstanding balance of $1,340,000 and $1,400,000, respectively. The Company made $60,000 principal payments during the nine months ended September 30, 2014. | ||||||||||||||
The Company was unable to pay the interest and principal payments due on August 1, 2012 and was in default of such payment. The Company was able to negotiate payment terms with the City of North Vernon, Indiana, which allowed the Company to delay scheduled repayments of the loan. | ||||||||||||||
During the three months and nine months ended September 30, 2014 and 2013, the Company made no payments to the City of North Vernon for accrued interest. | ||||||||||||||
Principal and interest payments are expected to be paid in each fiscal year follows at September 30, 2014: | ||||||||||||||
Principal | Interest | Total | ||||||||||||
2014 | $ | 164,087 | $ | 157,853 | $ | 321,940 | ||||||||
2015 | 107,838 | 126,464 | 234,302 | |||||||||||
2016 | 1,068,075 | 114,276 | 1,182,351 | |||||||||||
$ | 1,340,000 | $ | 398,593 | $ | 1,738,593 | |||||||||
Interest expense incurred and accrued on the note payable was approximately $19,000 and $68,000 for the three months and nine months ended September 30, 2014 and approximately $19,000 and $57,000 for the three months and nine months ended September 30, 2013, respectively. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
NOTE 10 – RELATED PARTY TRANSACTIONS | |
Expenses Paid by President | |
From time to time, the President of the Company will pay for expenses on behalf of the Company, which are recorded as expenses in the accompanying consolidated statement of operations and as a liability to the President of the Company under accounts payable - related parties in the accompanying consolidated balance sheet. | |
As of September 30, 2014 and December 31, 2013, the Company owed $0 to the Company president for expenses incurred on behalf of the Company. | |
Short Term Debt – Related Parties | |
During the nine months ended September 30, 2014 and 2013, the Company president advanced $50,000 and $62,000, respectively, to the Company to fund operations and the Company repaid $55,000 and $27,500 in 2014 and 2013, respectively. | |
As of September 30, 2014 and December 31, 2013, the outstanding balance of short-term debt – related parties was $182,500 and $187,500, respectively. The amounts accrue interest at 10% and are due on demand. | |
Interest expense incurred and accrued on Short Term Debt-Related Parties was approximately $2,600 and $7,800 for the three months and nine months ended September 30, 2014 and approximately $3,400 and $10,400 for the three months and nine months ended September 30, 2013. |
Common_Stock
Common Stock | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Common Stock | ' |
NOTE 11 – COMMON STOCK | |
During the nine months ended September 30, 2014, the Company entered into subscription agreements with accredited investors for the issuance of 3,430,069 shares of common stock at prices ranging from $0.35 to $0.50 per share, for an aggregate purchase price of $1,314,500 less commissions paid of $65,644. One investor also received warrants to purchase 100,000 shares of common stock at $0.80 per share. The warrants vested immediately and have a term of three years. | |
During the nine months ended September 30, 2014, four investors converted their notes payable of $200,000 in aggregate plus accrued interest of approximately $7,500 into shares of common stock at the conversion price of $0.25 per share resulting in the Company issuing 829,689 shares of common stock. | |
During the nine months ended September 30, 2014, holders of the Company’s warrants exercised warrants, on a cashless exercise basis pursuant to an agreement with the Company and the Company issued approximately 136,000 shares of common stock in a non-cash transaction. |
Stock_Options
Stock Options | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||||
Stock Options | ' | |||||||||||||||||
NOTE 12 – STOCK OPTIONS | ||||||||||||||||||
During the nine months ended September 30, 2014, the Company issued options to an employee, which allowed the employee to purchase 50,000 shares of the common stock at .05 per share. The options vest immediately and have a term of three years. These options have a fair value of approximately $2,500, which was calculated using the Black-Scholes option pricing model, which has been included in compensation expense during the three and nine months ended September 30, 2014 and has been included in general and administrative expenses in the accompanying consolidated statement of operations for the three and nine months ended September 30, 2014. | ||||||||||||||||||
During the nine months ended September 30, 2014, one option holder exercised his option to purchase 100,000 shares of the Company’s common stock in a non-cash transaction and received approximately 92,000 shares of the Company’s common stock. | ||||||||||||||||||
Stock option activity is presented in the table below: | ||||||||||||||||||
Number of | Weighted | Weight average | Aggregate | |||||||||||||||
Shares | average | Contractual | Intrinsic Value | |||||||||||||||
Exercise Price | Term (years) | |||||||||||||||||
Outstanding at December 31, 2013 | 10,110,640 | $ | 0.08 | 3.43 | — | |||||||||||||
Granted | 50,000 | 0.05 | 3 | — | ||||||||||||||
Outstanding at March 31, 2014 | 10,160,640 | 0.08 | 2.75 | — | ||||||||||||||
Granted | — | — | — | — | ||||||||||||||
Outstanding at June 30, 2014 | 10,160,640 | $ | 0.08 | 2.5 | — | |||||||||||||
Exercised | (100,000 | ) | 0.05 | — | — | |||||||||||||
Granted | — | — | — | — | ||||||||||||||
Outstanding at September 30, 2014 | 10,060,640 | $ | 0.08 | 2.5 | — | |||||||||||||
The options vested as of September 30, 2014 were 8,783,117 and the total options expected to vest, as of September 30, 2014, is 10,060,640. | ||||||||||||||||||
The Company recognized stock compensation expense as follows: | ||||||||||||||||||
Three months | Three months | Nine months | Nine months | |||||||||||||||
ended | ended | ended | ended | |||||||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | Sept. 30, 2014 | Sept. 30, 2013 | |||||||||||||||
$ | 39,898 | $ | 278,654 | $ | 122,126 | $ | 358,454 | |||||||||||
The total remainder of stock compensation expense to be recognized through the vesting period of the above options, at September 30, 2014, will be approximately $220,000. | ||||||||||||||||||
The fair value of the options granted during the various periods was estimated at the date of grant using the Black-Scholes option-pricing model and the following assumptions: | ||||||||||||||||||
2014 | ||||||||||||||||||
Year Options were granted | ||||||||||||||||||
Market value of stock on grant date | $ | 0.05 | ||||||||||||||||
Risk-free interest rate | 0.61 | % | ||||||||||||||||
Dividend Yield | 0 | % | ||||||||||||||||
Volatility Factor | 300 | % | ||||||||||||||||
Weighted average expected life | 3 years | |||||||||||||||||
Expected forfeiture rate | 0 | % |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
NOTE 13 – COMMITMENTS AND CONTINGENCIES | |
Legal | |
The Company is currently engaged in two cases, which are not expected to have a material effect on the Company’s operations. The first is a case between WindStream and a prior vendor that, at one time, supplied components for the Company’s products. As a result of this vendor’s disruption in the Company’s supply chain the Company has sought out and secured other, more reliable sources for the needed raw materials and has not seen a disruption in its final product output. The second case is a Trademark infringement issue that relates to the Company name, WindStream Technologies and prior use. Both of these cases are being, litigated by the Company’s attorneys and expect to be concluded shortly. While incapable of estimation, in the opinion of management, the individual regulatory and legal matters in which it might involve in the future are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows. | |
Leases | |
The Company leased various facilities under a non-cancelable operating lease, which expired on September 30, 2013. The current minimum monthly rental payment is $4,750 plus various expenses incidental to use of the property. The Company has an option to extend the lease for one twelve month period at slightly higher monthly rent. The Company has been in discussions with the landlord to obtain a new lease agreement and effective on October 1, 2014, the Company entered into a new lease agreement for this facility with a term of twenty-four months with an option for another twelve months. Rent in the first twenty-four months is $7,800 per month plus various expenses incidental to use of the property. If the Company exercises its option for another twelve months, the rent during that period will be $8,500 per month plus various expenses incidental to use of the property. | |
The Company also leased a research facility in New Albany, Indiana under a sixty-five month lease that was to expire on March 30, 2015. The Company evaluated the lease under FASB ASC 840-20 “Operating Leases” and notes that the lease qualifies as an escalating lease. Therefore, rent expense was calculated on a straight-line basis, and was determined to be $3,124 per month. In May 2013, the landlord terminated the lease and the company moved out of the related space. All past and future rent unpaid obligations under the lease were forgiven. The Company’s deferred rent liability at September 30, 2014 and 2013 was $0 and $0, respectively. | |
Rent expense for the three months and nine months ended September 30, 2014 and 2013 was $18,448 and $16,610 and $55,915 and $65,030 before the write off of the deferred rent liability of $48,426 during the nine month period ended September 30, 2013. | |
Sales | |
During the second quarter of 2014, the Company received two signed purchase orders from one customer, Jamaica’s National Utility company, Jamaica Public Service Co., for the delivery of the Company’s clean energy products as well as related energy storage, back-up emergency power equipment and custom energy monitoring, data collection and system analysis over the next eighteen to twenty four months. The purchase orders contain the Company’s customary terms regarding payment terms, return of products and return of products and are consistent with the Company’s terms with other customers. | |
Sales and Distribution Agreements | |
In the ordinary course of business, the Company enters into sales and distribution agreements with various parties in defined geographic areas around the world. The agreements are usually non-exclusive and contain general commercial terms, but no specific financial terms. It is the Company’s practice that such agreements do not contain performance related terms or favorable payment terms. These agreements are usually cancellable with written notice by either party and do not have terms greater than one year. | |
Investment Advisory Services | |
On April 1, 2014, the Company entered into an agreement with an investment banking firm which will provide advisory services in the area of corporate development, corporate finance and/or capital placement transactions. The agreement will expire twenty four months from the date the agreement was signed or the mutual written agreement of the Company and the investment banker. The Agreement specifies that all fees be on a “success” basis. If no debt or equity transaction is completed, the Company has no obligation under the terms of this agreement. | |
In the event of a successful transaction, the investment banking firm will earn fees based on a percentage of the aggregate consideration for an equity transaction on a sliding scale starting at 5% for Aggregate Consideration of less than USD $10,000,000 1% For Aggregate Consideration above USD $75,000,001. | |
To date, no transaction has been consummated. | |
On September 11, 2014, the Company entered into an agreement with an investment banking firm, which already had a fee sharing agreement with the investment banking firm disclosed above, which will provide advisory services in the area of corporate development, corporate finance and/or capital placement transactions. The agreement will expire in one year from the date the agreement was signed, with an option to terminate after six months, after all fees have been paid. The Agreement specifies that all fees be on a “success” basis. If no debt or equity transaction is completed, the Company has no obligation under the terms of this agreement. | |
In the event of a successful transaction, the investment banking firm will earn fees, for the first $2 million raised, 1.25% of fully diluted outstanding equity at day of closing and for each $1.5 million raised thereafter, 500,000 of shares of the Company’s common stock. | |
The investment firm was successful in completing an equity transaction with the Company and was paid commission of approximately $65,000. | |
On August 18, 2014, the Company entered into an agreement with an investment banking firm which will provide advisory services in the area of corporate development, corporate finance and/or capital placement transactions. The agreement, on an exclusive basis for sixty days from the date of the agreement and then reverting to a non-exclusive basis, will expire in one year from the date the agreement was signed, with an option to extend the agreement after six months, or either party can terminate in writing to the other party. The Agreement specifies that all fees be on a “success” basis. If no debt or equity transaction is completed, the Company has no obligation under the terms of this agreement. | |
In the event of a successful transaction, the investment banking firm will earn fees, 8% of the amount of any equity or hybrid equity raised up to $5 million and 6%, over $5 million, payable when the Company receives proceeds from the transaction. | |
In addition, the Company agreed to grant the investment banking firm warrants to purchase that number of shares of the Company’s common stock equal to 6% of the value of value of successful common stock equity raised at 100% of the price at closing of a transaction for a period of two years and/or grant investment banking firm warrants to purchase that number of shares of the Company’s common stock equal to 6% of the value of a successful preferred stock, debt, hybrid debt of any kind (convertibles, warrants, etc.) or debt and equity combination common stock equity raised at 100% of the price at closing of a transaction for a period of two years. These stocks shall be delivered in cashless exercise and issuable from the investment closing date up to no more than five years from the date and upon exercise shall be fully paid and non-assessable. The Company’s common stock obtainable upon exercise of such warrants shall carry unlimited “piggyback” registration rights of the Company. | |
The investment firm was successful in completing a debt transaction with the Company and will be paid a combination of cash and receive warrants as the proceeds from the debt transaction are received by the Company. No cash was paid or accrued and no warrants were issued during the nine months ended September 30, 2014 as the calculation of the amounts due had not yet been finalized between the parties. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
NOTE 14 – EARNINGS PER SHARE | |||||||||||||||||
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator denominator of the basic and diluted earnings (loss) per share (EPS) computations. | |||||||||||||||||
Basic earnings (loss) per share are computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares are dilutive. | |||||||||||||||||
As the Company has net losses, the Company had no potential dilutive securities for the three and nine months ended September 30, 2014 and 2013, as they would be anti-dilutive. Therefore, there is no difference in the basic and dilutive earnings (loss) per share. | |||||||||||||||||
The following table sets for the computation of basic and diluted net income (loss) per share: | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | ||||||||||||||
Ended | Ended | Ended | Ended | ||||||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | Sept. 30, 2014 | Sept. 30, 2013 | ||||||||||||||
Net loss attributable to common stockholders | $ | (1,487,359 | ) | $ | (1,178,204 | ) | $ | (3,546,789 | ) | $ | (3,415,421 | ) | |||||
Basic weighted average outstanding shares of common stock | 86,741,574 | 75,583,933 | 85,200,993 | 48,009,364 | |||||||||||||
Dilutive effect of common stock equivalents | — | — | — | — | |||||||||||||
Dilutive weighted average common stock equivalents | 86,741,574 | 75,583,933 | 85,200,993 | 48,009,364 | |||||||||||||
Net loss per share of voting and nonvoting common stock Basic and Diluted | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.07 | ) |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment Information | ' | ||||||||||||
NOTE 15 – SEGMENT INFORMATION | |||||||||||||
The Company’s operations are classified into the sales of products within the United States and outside the United States. We determined our operating segments in accordance with FASB Topic 280, Segment Reporting. Results of the operating segments are as follows: | |||||||||||||
Three months ended September 30, 2014: | |||||||||||||
Domestic | International | Total | |||||||||||
Sales | $ | 14,763 | $ | 358,775 | $ | 373,538 | |||||||
Cost of goods sold | 27,094 | 658,434 | 685,528 | ||||||||||
Gross profit | $ | (12,331 | ) | $ | (299,659 | ) | $ | (311,990 | ) | ||||
Accounts receivable | $ | 45,711 | $ | 438,222 | $ | 483,933 | |||||||
Three months ended September 30, 2013: | |||||||||||||
Domestic | International | Total | |||||||||||
Sales | $ | 12,684 | $ | 35,173 | $ | 47,857 | |||||||
Cost of goods sold | 15,344 | 42,552 | 57,896 | ||||||||||
Gross profit | $ | (2,660 | ) | $ | (7,379 | ) | $ | (10,039 | ) | ||||
Nine months ended September 30, 2014: | |||||||||||||
Domestic | International | Total | |||||||||||
Sales | $ | 14,763 | $ | 811,035 | $ | 825,798 | |||||||
Cost of goods sold | 22,081 | 1,213,045 | 1,235,126 | ||||||||||
Gross profit | $ | (7,318 | ) | $ | (402,010 | ) | $ | (409,328 | ) | ||||
Nine months ended September 30, 2013: | |||||||||||||
Domestic | International | Total | |||||||||||
Sales | $ | 10,954 | $ | 592,526 | $ | 603,480 | |||||||
Cost of goods sold | 8,862 | 479,345 | 488,207 | ||||||||||
Gross profit | $ | 2,092 | $ | 113,181 | $ | 115,273 |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
NOTE 16 – INCOME TAXES | |
The Company files federal and state income tax returns in jurisdictions with varying statutes of limitations. Income taxes are computed using the asset and liability method in accordance with FASB ASC 740 under which deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. A valuation allowance against deferred tax assets is recorded when it is more likely than not that such assets will not be fully realized. The Company has recorded a full valuation allowance against its net deferred tax assets as it is more likely than not that the benefit of the deferred tax assets will not be recognized in future periods. Tax credits are accounted for as a reduction of income taxes in the year in which the credit originates. The Company does not expect any significant unrecognized tax benefits to arise over the next twelve months and is fully reserved. | |
The Company’s provision for income taxes for continuing operations in interim periods is computed by applying its estimated annual effective rate against its loss before income tax (expense) benefit for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The effective tax rate for the three months and nine months ended September 30, 2014 and 2013 was nil. | |
The Company has not had to accrue any interest and penalties related to unrecognized income tax benefits. However, when or if the situation occurs, the Company will recognize interest and penalties within the income tax expense (benefit) line in the accompanying Condensed Statements of Operations and within the related tax liability line in the Condensed Consolidated Balance Sheets. |
Restatement_of_September_30_20
Restatement of September 30, 2013 Form 10Q | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||||
Restatement of September 30, 2013 Form 10Q | ' | ||||||||||||
NOTE 17 - RESTATEMENT OF SEPTEMBER 30, 2013 FORM 10Q | |||||||||||||
In connection with the audit of the Company’s financial statements for the fiscal year ended December 31, 2013, management of the Company conducted analysis of the Company’s equity transactions to determine if all of the transactions were recognized. As a result of the analysis, the Company determined that certain equity transactions were not recognized as of and for the period ended September 30, 2013. | |||||||||||||
On or about July 22, 2013, the Company issued a total of 1,100,000 warrants. The Company determined the fair value of the warrants as of the date of issuance was approximately $54,000 using the Black Scholes option value pricing model. | |||||||||||||
On or about July 29, 2013, the Company issued a total of 4,820,000 options. The Company determined the fair value of the options as of the date of issuance was approximately $240,000 using the Black Scholes option value pricing model. | |||||||||||||
As a result of the restatement, the table below sets forth the changes to be made in the condensed consolidated financial statements previously filed. The effect is due to the recognition of the issuance of the warrants and options on the date of grant. | |||||||||||||
Accordingly, the accounts below have been retroactively adjusted as summarized below: | |||||||||||||
As | Adjustment | As | |||||||||||
Previously | Restated | ||||||||||||
Reported | |||||||||||||
As of and for the period ended September 30, 2013 Condensed Consolidated Balance Sheet | |||||||||||||
Additional paid-in capital | 6,372,856 | 292,761 | 6,665,617 | ||||||||||
Accumulated deficit | (8,758,779 | ) | (292,761 | ) | (9,051,540 | ) | |||||||
Condensed Consolidated Statement of Operations | |||||||||||||
For the three months ended | |||||||||||||
General and administrative expenses | 389,235 | 292,761 | 681,996 | ||||||||||
Total operating expenses | 703,306 | 292,761 | 996,067 | ||||||||||
Loss from operations | (713,345 | ) | (292,761 | ) | (1,006,106 | ) | |||||||
Net loss | (885,443 | ) | (292,761 | ) | (1,178,204 | ) | |||||||
Net loss per share - basic and diluted | (0.01 | ) | (0.01 | ) | (0.02 | ) | |||||||
For the nine months ended | |||||||||||||
General and administrative expenses | 2,442,598 | 292,761 | 2,735,359 | ||||||||||
Total operating expenses | 2,934,044 | 292,761 | 3,226,805 | ||||||||||
Loss from operations | (2,818,771 | ) | (292,761 | ) | (3,111,532 | ) | |||||||
Net loss | (3,122,660 | ) | (292,761 | ) | (3,415,421 | ) | |||||||
Condensed Consolidated Statement of Cash Flows: | |||||||||||||
Net loss | (3,122,660 | ) | (292,761 | ) | (3,415,421 | ) | |||||||
Stock option expense | 119,693 | 238,761 | 358,454 | ||||||||||
Stock based compensation | 1,504,200 | 54,000 | 1,558,200 |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
NOTE 18 – SUBSEQUENT EVENTS | |
Subsequent to September 30, 2014, the Company entered into subscription agreements with accredited investors for the issuance of 445,428 shares of common stock at a price of $0.35 to $0.40 per share, for an aggregate purchase price of approximately $159,200 before commissions paid of $46,380. | |
On October 9, 2014, the Company entered into a subscription agreement with an accredited investor for the issuance of a convertible promissory note in the aggregate principal amount of $200,000, in exchange for $100,000 in cash at closing, additional amounts due to the Company at the investor’s discretion and $20,000 of original issue discount interest. The note is convertible into shares of common stock of the Company at $.80 per share or a price to be determined by a formula using the lowest bid price of the Company’s common stock for a period preceding the date of conversion. In addition, warrants entitling the investor to purchase 199,396 shares of the Company’s common stock at a price driven by the market price of the Company’s stock at the date of conversion. The warrants have a term of five years and vest immediately. The note bears interest at 10% per annum and any unpaid principal and interest is due in full in one year from October 9, 2014. | |
The Company is currently evaluating the embedded conversion features within this convertible debt agreement under ASC 815 “Derivatives and Hedging” and will determine whether the embedded conversion feature or the warrants qualify for derivative accounting. Additionally, this instrument will be evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. | |
On October 16, 2014, the Company entered into a Securities Purchase Agreement with accredited investors for the issuance of original issue discount senior debt secured convertible debentures in the aggregate principal amount of $3,520,000, in exchange for $3,520,000 in secured investor notes payable to the Company, less the initial subscription amount of $712,500 and initial cash at closing of $622,500. The debentures include a 5% original issue discount and bear interest at 10% per annum, of which the first year is guaranteed by the lenders. The secured investor notes are secured by equity interests in one of the investors held by members thereof pursuant to a security agreement. | |
The notes are convertible into shares of common stock of the Company at a price determined by a formula using the volume weighted average price of the Company’s stock for a twenty day trading period prior to the conversion date at a rate of 70%. The Company may prepay any portion of the principal amount due under the debentures at 130% of such amount. | |
Principal payments on the notes are due starting approximately six months from the date of the note, on April 15, 2015, in various amounts as contained in the notes and can be paid in cash, with a 30% premium over payments made in shares of the Company’s common stock, or, in issuances of the Company common stock. The final payment is due on October 1, 2015. The note bears interest at 12% per annum. | |
The Company will pay aggregate commissions to an investment advisor under the terms of the agreement disclosed herein in connection with the placement described herein in the amount of $253,000 payable as funds are received by the Company under the terms of the agreement. | |
The Company is currently evaluating the embedded conversion features within this senior secured convertible debenture agreements under ASC 815 “Derivatives and Hedging” and will determine whether the embedded conversion feature or the warrants qualify for derivative accounting. Additionally, this instrument will be evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. |
Basis_of_Presentation_and_Natu1
Basis of Presentation and Nature of Organization (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Organization | ' |
Organization | |
WindStream Technologies Inc. (the “Company”), is engaged in the development and commercialization of wind driven electrical generation. The Company’s facilities are located in North Vernon, Indiana. | |
On March 24, 2014, Windaus Global Energy, Inc. filed an Articles of Amendment with the Secretary of State of the State of Wyoming effecting a name change of Windaus Global Energy, Inc. to WindStream Technologies, Inc. (the “Name Change”). Windaus Global Energy, Inc. has notified the Financial Industry Regulatory Authority (“FINRA”) of the Name Change and a new trading symbol, “WSTI” was assigned effective March 27, 2014. The new CUSIP number for the Company’s common stock is 97382J102. | |
On October 26, 2013, the Company formed a 99.9% owned subsidiary company, in India, WindStream Energy Technologies India Private Limited, to perform various commercial activities including reselling, manufacturing, repairing, importing, exporting various types renewable energy sources including turbines, windmills, solar-wind hybrids and other devices. A Board of Directors was established consisting of the Chief Executive Officer of the Company and an Indian national. In July 2014, an office had been opened and operations commenced and the results, which are deminimous, are included in the consolidated results for the three months and nine months ended September 30, 2014. | |
In December 2013, the Company filed documents to incorporate a 100% owned subsidiary in Peru, Windstream Technologies Latin America S.A (“the Peru subsidiary”). The Peru subsidiary has appointed a temporary board of directors as required by local regulation, but the Peru subsidiary has had no operations, has entered into no contracts, opened no bank accounts and has not begun any business activity. As of September 30, 2014, operations have not yet commenced. | |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying (a) condensed balance sheet at December 31, 2013, has been derived from audited statements and (b) unaudited interim financial statements as of September 30, 2014 and 2013 of WindStream Technologies, Inc. and Subsidiaries (the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K originally filed with the SEC on April 11, 2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2013 as reported in the Form 10-K have been omitted. | |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company’s financial statements. The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. | |
Consolidations | ' |
Consolidations | |
The consolidated financial statements include the accounts of WindStream Technologies, Inc., WindStream Energy Technologies India Private Limited and Windstream Technologies Latin America S. A. All material intercompany balances have been eliminated in consolidation. | |
Comprehensive Income | ' |
Comprehensive Income | |
The Company reports comprehensive income in accordance with FASB ASC Topic 220 “Comprehensive Income,” which established standards for reporting and displaying comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements. | |
Total comprehensive income is defined as all changes in stockholders’ equity during a period, other than those resulting from investments by and distributions to stockholders (i.e., issuance of equity securities and dividends). Generally, for the Company, total comprehensive income (loss) equals net income (loss) plus or minus adjustments for currency translation. Comprehensive income was deminimous for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Foreign Currency Translation | ' |
Foreign Currency Transactions and Translation | |
The Company’s primary country of operations is India and Peru. The financial position and results of operations of the Company’s Indian and Peruvian operations are determined using the local currency, the Indian Rupee and the Peruvian nuevo sol as the functional currency. The results of transactions in foreign currency are remeasured into the functional currency at the average rate of exchange during the reporting period. Aggregate net foreign currency remeasurements included in the Condensed Consolidated Statement of Income were deminimous for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Assets and liabilities denominated in foreign currencies as the functional currency at the balance sheet date are translated into the Company’s reporting currency of United States dollars (“USD”) at the exchange rates prevailing at the balance sheet date. The registered equity capital denominated in the functional currency is translated into the reporting currency of USD at the historical rate of exchange at the time of capital contribution. All translation adjustments resulting from the translation of the financial statements into the reporting currency at USD are dealt with as a separate component within stockholders’ equity. Translation adjustments net of tax were deminimous for the three and nine months ended September 30, 2014 and 2013, respectively. | |
Concentration of Credit Risk | ' |
Concentration of Credit Risk | |
The Company sells primarily to companies and governmental entities across the globe. Receivables arising from those sales domestically are not collateralized; however, credit risk is minimized by continuing to diversify the customer base. International sales typically take place under the auspices of the Export Import Bank, a U.S. government entity, and are guaranteed by that entity under the terms of an insurance policy with a limit of $4 million. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of the specific customers, historical trends and other information. | |
As of September 30, 2014 and December 31, 2013, two and four customers represented 82% and 94% of outstanding accounts receivable balances, respectively. For the three months September 30, 2014 and 2013, two customers represented approximately 98% and 81% of revenue, respectively. For the nine months ended September 30, 2014 and 2013, two and three customers represented approximately 85% and 89% of revenue, respectively. | |
For the three months ended September 30, 2014 and 2013, three vendors represented approximately 67% and 80% of total cost of goods sold, respectively. For the nine months ended September 30, 2014 and 2013, four vendors represented approximately 59% and 63% of total cost of goods sold, respectively. | |
Going Concern | ' |
Going Concern | |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. | |
The Company had an accumulated deficit of approximately $14,028,000 and $10,481,000 at September 30, 2014 and December 31, 2013, respectively, and has a history of recurring net losses and working capital deficits. These matters among others raise substantial doubt about our ability to continue as a going concern. | |
While the Company is attempting to increase operations and generate additional revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. The Company will continue to pursue additional equity and/or debt financing while managing cash flows from operations in an effort to provide funds to meet its obligations on a timely basis and to support future business development. There is no assurance that these efforts will be successful. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise the additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plans and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | |
Segment Information | ' |
Segment Information | |
The Company operates in two segments in accordance with accounting guidance FASB ASC Topic 280, Segment Reporting. Our Chief Executive Officer has been identified as the chief operating decision maker as defined by FASB ASC Topic 280. See additional discussion at Note 15. | |
Recently Adopted Accounting Pronouncements | ' |
Recently Adopted Accounting Pronouncements | |
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern. The new standard requires 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 it plans alleviate that doubt. The standard requires management to evaluate, for each reporting period, whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern with one year from the date the financial statements are issued. 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 retrospecive” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospecive” 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. | |
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Receivables [Abstract] | ' | ||||||||
Schedule of Accounts Receivable by Major Categories | ' | ||||||||
Accounts receivable consisted of the following as of: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Accounts Receivable – EXIM insured | $ | 474,602 | $ | 379,195 | |||||
Accounts Receivable – not insured | $ | 9,331 | $ | 22,354 | |||||
$ | 483,933 | $ | 401,549 |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventories | ' | ||||||||
Inventories consisted of the following as of: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Raw Materials | $ | 745,736 | $ | 517,842 | |||||
Work in process | 422,738 | 150,503 | |||||||
Finished goods | 109,018 | 278,460 | |||||||
$ | 1,277,492 | $ | 946,805 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||||||||
Schedule of Property and Equipment | ' | ||||||||||||||||
Property and equipment consisted of the following as of: | |||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Equipment | $ | 134,530 | $ | 128,345 | |||||||||||||
Factory equipment | 15,800 | 15,800 | |||||||||||||||
Furniture and fixtures | 7,888 | 7,888 | |||||||||||||||
Leasehold improvements | 64,582 | 64,582 | |||||||||||||||
Tooling | 473,893 | 473,893 | |||||||||||||||
Total | 696,693 | 690,508 | |||||||||||||||
Less accumulated depreciation | (431,403 | ) | (338,078 | ) | |||||||||||||
Net property, plant and equipment | $ | 265,290 | $ | 352,430 | |||||||||||||
Schedule of Depreciation Expense | ' | ||||||||||||||||
Depreciation expense for the periods ended as follows amounted to approximately: | |||||||||||||||||
Three months | Three months | Nine months | Nine months | ||||||||||||||
ended | ended | ended | ended | ||||||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | Sept. 30, 2014 | Sept. 30, 2013 | ||||||||||||||
Depreciation Expense | $ | 31,000 | $ | 40,000 | $ | 93,000 | $ | 124,000 |
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Schedule of Accrued Expenses | ' | ||||||||
Accrued expenses consisted of the following as of: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Accrued interest | $ | 295,452 | $ | 162,214 | |||||
Accrued payroll and other liabilities | 352,180 | 477,467 | |||||||
Accrued warranty | 213,000 | 63,000 | |||||||
Customer deposits | 48,550 | 25,907 | |||||||
Deposit for future fundings | - | 50,000 | |||||||
Accrued property taxes | 8,274 | 10,750 | |||||||
Total | $ | 917,456 | $ | 789,338 |
Convertible_Note_Payable_Table
Convertible Note Payable (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of Conversion Eligible Tranches | ' | ||||
The note is separated into three Conversion Eligible Tranches (discussed under Lender Conversion below) of the following amounts: | |||||
Initial Tranche | $ | 275,000 | |||
First Subsequent Tranche | 137,500 | ||||
Second Subsequent Tranche | 137,500 | ||||
$ | 550,000 | ||||
Schedule of Investor Warrants | ' | ||||
The Purchase Price allocated to each Investor Warrant is: | |||||
Investor Warrant #1: | $ | 275,000 | |||
Investor Warrant #2: | 137,500 | ||||
Investor Warrant #3: | 137,500 | ||||
$ | 550,000 | ||||
Schedule of Debt | ' | ||||
The residual proceeds after that allocation was then applied to the note. Accordingly, the initial carrying amount of the note is approximately $39,000, derived as follows: | |||||
Face amount of note | $ | 550,000 | |||
Original issuance discount | (50,000 | ) | |||
Allocation to Investor Warrants | (182,000 | ) | |||
Allocated to embedded derivatives | (279,000 | ) | |||
$ | 39,000 |
Note_Payable_Tables
Note Payable (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||
Schedule of Principal and Interest Payments | ' | |||||||||||||
Principal and interest payments are expected to be paid in each fiscal year follows at September 30, 2014: | ||||||||||||||
Principal | Interest | Total | ||||||||||||
2014 | $ | 164,087 | $ | 157,853 | $ | 321,940 | ||||||||
2015 | 107,838 | 126,464 | 234,302 | |||||||||||
2016 | 1,068,075 | 114,276 | 1,182,351 | |||||||||||
$ | 1,340,000 | $ | 398,593 | $ | 1,738,593 |
Stock_Options_Tables
Stock Options (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||||
Schedule of Stock Option Activity | ' | |||||||||||||||||
Stock option activity is presented in the table below: | ||||||||||||||||||
Number of | Weighted | Weight average | Aggregate | |||||||||||||||
Shares | average | Contractual | Intrinsic Value | |||||||||||||||
Exercise Price | Term (years) | |||||||||||||||||
Outstanding at December 31, 2013 | 10,110,640 | $ | 0.08 | 3.43 | — | |||||||||||||
Granted | 50,000 | 0.05 | 3 | — | ||||||||||||||
Outstanding at March 31, 2014 | 10,160,640 | 0.08 | 2.75 | — | ||||||||||||||
Granted | — | — | — | — | ||||||||||||||
Outstanding at June 30, 2014 | 10,160,640 | $ | 0.08 | 2.5 | — | |||||||||||||
Exercised | (100,000 | ) | 0.05 | — | — | |||||||||||||
Granted | — | — | — | — | ||||||||||||||
Outstanding at September 30, 2014 | 10,060,640 | $ | 0.08 | 2.5 | — | |||||||||||||
Schedule of Stock Compensation Expense | ' | |||||||||||||||||
The Company recognized stock compensation expense as follows: | ||||||||||||||||||
Three months | Three months | Nine months | Nine months | |||||||||||||||
ended | ended | ended | ended | |||||||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | Sept. 30, 2014 | Sept. 30, 2013 | |||||||||||||||
$ | 39,898 | $ | 278,654 | $ | 122,126 | $ | 358,454 | |||||||||||
Schedule of Fair Value of Stock Option | ' | |||||||||||||||||
The fair value of the options granted during the various periods was estimated at the date of grant using the Black-Scholes option-pricing model and the following assumptions: | ||||||||||||||||||
2014 | ||||||||||||||||||
Year Options were granted | ||||||||||||||||||
Market value of stock on grant date | $ | 0.05 | ||||||||||||||||
Risk-free interest rate | 0.61 | % | ||||||||||||||||
Dividend Yield | 0 | % | ||||||||||||||||
Volatility Factor | 300 | % | ||||||||||||||||
Weighted average expected life | 3 years | |||||||||||||||||
Expected forfeiture rate | 0 | % |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share | ' | ||||||||||||||||
The following table sets for the computation of basic and diluted net income (loss) per share: | |||||||||||||||||
For the | For the | For the | For the | ||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | ||||||||||||||
Ended | Ended | Ended | Ended | ||||||||||||||
Sept. 30, 2014 | Sept. 30, 2013 | Sept. 30, 2014 | Sept. 30, 2013 | ||||||||||||||
Net loss attributable to common stockholders | $ | (1,487,359 | ) | $ | (1,178,204 | ) | $ | (3,546,789 | ) | $ | (3,415,421 | ) | |||||
Basic weighted average outstanding shares of common stock | 86,741,574 | 75,583,933 | 85,200,993 | 48,009,364 | |||||||||||||
Dilutive effect of common stock equivalents | — | — | — | — | |||||||||||||
Dilutive weighted average common stock equivalents | 86,741,574 | 75,583,933 | 85,200,993 | 48,009,364 | |||||||||||||
Net loss per share of voting and nonvoting common stock Basic and Diluted | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.07 | ) |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Schedule of Operating Segments | ' | ||||||||||||
Results of the operating segments are as follows: | |||||||||||||
Three months ended September 30, 2014: | |||||||||||||
Domestic | International | Total | |||||||||||
Sales | $ | 14,763 | $ | 358,775 | $ | 373,538 | |||||||
Cost of goods sold | 27,094 | 658,434 | 685,528 | ||||||||||
Gross profit | $ | (12,331 | ) | $ | (299,659 | ) | $ | (311,990 | ) | ||||
Accounts receivable | $ | 45,711 | $ | 438,222 | $ | 483,933 | |||||||
Three months ended September 30, 2013: | |||||||||||||
Domestic | International | Total | |||||||||||
Sales | $ | 12,684 | $ | 35,173 | $ | 47,857 | |||||||
Cost of goods sold | 15,344 | 42,552 | 57,896 | ||||||||||
Gross profit | $ | (2,660 | ) | $ | (7,379 | ) | $ | (10,039 | ) | ||||
Nine months ended September 30, 2014: | |||||||||||||
Domestic | International | Total | |||||||||||
Sales | $ | 14,763 | $ | 811,035 | $ | 825,798 | |||||||
Cost of goods sold | 22,081 | 1,213,045 | 1,235,126 | ||||||||||
Gross profit | $ | (7,318 | ) | $ | (402,010 | ) | $ | (409,328 | ) | ||||
Nine months ended September 30, 2013: | |||||||||||||
Domestic | International | Total | |||||||||||
Sales | $ | 10,954 | $ | 592,526 | $ | 603,480 | |||||||
Cost of goods sold | 8,862 | 479,345 | 488,207 | ||||||||||
Gross profit | $ | 2,092 | $ | 113,181 | $ | 115,273 |
Restatement_of_September_30_201
Restatement of September 30, 2013 Form 10Q (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||||
Summary of Accounts Retroactively Adjusted | ' | ||||||||||||
Accordingly, the accounts below have been retroactively adjusted as summarized below: | |||||||||||||
As | Adjustment | As | |||||||||||
Previously | Restated | ||||||||||||
Reported | |||||||||||||
As of and for the period ended September 30, 2013 Condensed Consolidated Balance Sheet | |||||||||||||
Additional paid-in capital | 6,372,856 | 292,761 | 6,665,617 | ||||||||||
Accumulated deficit | (8,758,779 | ) | (292,761 | ) | (9,051,540 | ) | |||||||
Condensed Consolidated Statement of Operations | |||||||||||||
For the three months ended | |||||||||||||
General and administrative expenses | 389,235 | 292,761 | 681,996 | ||||||||||
Total operating expenses | 703,306 | 292,761 | 996,067 | ||||||||||
Loss from operations | (713,345 | ) | (292,761 | ) | (1,006,106 | ) | |||||||
Net loss | (885,443 | ) | (292,761 | ) | (1,178,204 | ) | |||||||
Net loss per share - basic and diluted | (0.01 | ) | (0.01 | ) | (0.02 | ) | |||||||
For the nine months ended | |||||||||||||
General and administrative expenses | 2,442,598 | 292,761 | 2,735,359 | ||||||||||
Total operating expenses | 2,934,044 | 292,761 | 3,226,805 | ||||||||||
Loss from operations | (2,818,771 | ) | (292,761 | ) | (3,111,532 | ) | |||||||
Net loss | (3,122,660 | ) | (292,761 | ) | (3,415,421 | ) | |||||||
Condensed Consolidated Statement of Cash Flows: | |||||||||||||
Net loss | (3,122,660 | ) | (292,761 | ) | (3,415,421 | ) | |||||||
Stock option expense | 119,693 | 238,761 | 358,454 | ||||||||||
Stock based compensation | 1,504,200 | 54,000 | 1,558,200 |
Basis_of_Presentation_and_Natu2
Basis of Presentation and Nature of Organization (Details Narrative) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 26, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Two And Four Customers [Member] | Two And Four Customers [Member] | Two Customers [Member] | Two Customers [Member] | Two And Three Customers [Member] | Two And Three Customers [Member] | Three Vendors [Member] | Three Vendors [Member] | Four Vendors [Member] | Four Vendors [Member] | |||||
Percentage of formed owned subsidiary | ' | 100.00% | 99.90% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding accounts receivable | ' | ' | ' | ' | 82.00% | 94.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of revenue from customers | ' | ' | ' | ' | ' | ' | 98.00% | 81.00% | 85.00% | 89.00% | ' | ' | ' | ' |
Percentage of cost of goods sold during period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67.00% | 80.00% | 59.00% | 63.00% |
Accumulated deficit | $14,027,461 | $10,480,672 | ' | $9,051,540 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse_Merger_Details_Narrati
Reverse Merger (Details Narrative) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | 22-May-13 | 22-May-13 | 22-May-13 | 22-May-13 |
Common Stock [Member] | Preferred Stock [Member] | WindStream [Member] | ||||
Share exchange agreement, description | ' | ' | ' | ' | ' | ' |
1:25.808 basis | ||||||
Common stock outstanding | 87,957,589 | 83,461,899 | 24,000,000 | ' | ' | 955,000 |
Preferred stock outstanding | ' | ' | ' | ' | ' | 581,961 |
Number of shares exchanged in share exchange agreement | ' | ' | ' | ' | ' | 39,665,899 |
Issued stock for acquisition | ' | ' | ' | 24,646,646 | 15,019,253 | ' |
Common stock, par value | $0.00 | $0.00 | $0.00 | ' | ' | ' |
Accounts_Receivable_Details_Na
Accounts Receivable (Details Narrative) | 9 Months Ended |
Sep. 30, 2014 | |
Receivables [Abstract] | ' |
Percentage of debt outstanding under line of credit | 98.00% |
Accounts_Receivable_Schedule_o
Accounts Receivable - Schedule of Accounts Receivable by Major Categories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accounts receivable | $483,933 | $401,549 |
Accounts Receivable - EXIM Insured [Member] | ' | ' |
Accounts receivable | 474,602 | 379,195 |
Accounts Receivable - Not Insured [Member] | ' | ' |
Accounts receivable | $9,331 | $22,354 |
Inventories_Details_Narrative
Inventories (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Inventory Disclosure [Abstract] | ' | ' | ' | ' |
Write down of inventory | $0 | ' | $111,000 | ' |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $745,736 | $517,842 |
Work in process | 422,738 | 150,503 |
Finished goods | 109,018 | 278,460 |
Inventories | $1,277,492 | $946,805 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, plant and equipment gross | $696,693 | $690,508 |
Less accumulated depreciation | -431,403 | -338,078 |
Net property, plant and equipment | 265,290 | 352,430 |
Equipment [Member] | ' | ' |
Property, plant and equipment gross | 134,530 | 128,345 |
Factory Equipment [Member] | ' | ' |
Property, plant and equipment gross | 15,800 | 15,800 |
Furniture and Fixtures [Member] | ' | ' |
Property, plant and equipment gross | 7,888 | 7,888 |
Leasehold Improvements [Member] | ' | ' |
Property, plant and equipment gross | 64,582 | 64,582 |
Tooling [Member] | ' | ' |
Property, plant and equipment gross | $473,893 | $473,893 |
Property_and_Equipment_Schedul1
Property and Equipment - Schedule of Depreciation Expense (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment [Abstract] | ' | ' | ' | ' |
Depreciation Expense | $31,000 | $40,000 | $93,325 | $123,289 |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | 3 Months Ended |
Sep. 30, 2014 | |
Payables and Accruals [Abstract] | ' |
Warranty expense recognized | $200,000 |
Future fundings of deposits written off | $50,000 |
Accrued_Liabilities_Schedule_o
Accrued Liabilities - Schedule of Accrued Expenses (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | ' | ' |
Accrued interest | $295,452 | $162,214 |
Accrued payroll and other liabilities | 352,180 | 477,467 |
Accrued warranty | 213,000 | 63,000 |
Customer deposits | 48,550 | 25,907 |
Deposit for future fundings | ' | 50,000 |
Accrued property taxes | 8,274 | 10,750 |
Total | $917,456 | $789,338 |
Short_Term_DebtThird_Parties_D
Short Term Debt-Third Parties (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Apr. 15, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 01, 2013 | Feb. 25, 2013 | Dec. 31, 2012 | |
Debt Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit, maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | $500,000 | ' |
Insurance policy limit | ' | 4,000,000 | ' | 4,000,000 | ' | ' | ' | ' | ' |
Interest accrued, rate | 8.00% | 10.00% | ' | 10.00% | ' | 5.00% | 8.00% | 6.00% | 8.00% |
Line of credit, expiration date | ' | ' | ' | 26-Jun-15 | ' | ' | ' | ' | ' |
Total credit limit | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' |
Line of credit withdrawals | ' | ' | ' | 2,045,000 | 785,712 | ' | ' | ' | ' |
Line of credit repayments | ' | ' | ' | 695,244 | 285,712 | ' | ' | ' | ' |
Line of credit outstanding | ' | 1,850,000 | ' | 1,850,000 | ' | 500,000 | ' | ' | ' |
Repayment of notes | ' | 0 | 0 | 0 | 0 | ' | ' | ' | ' |
Short term debt aggregate amount | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' |
Notes payable | 200,000 | 200,000 | ' | 200,000 | ' | ' | ' | ' | ' |
Notes payable maturity term | '1 year | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit and other notes payable, total | ' | 2,449,756 | ' | 2,449,756 | ' | 900,000 | ' | ' | ' |
Interest expense | ' | $41,000 | $11,000 | $80,000 | $35,000 | ' | ' | ' | ' |
Convertible_Notes_Payable_Deta
Convertible Notes Payable (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | ||||||||||||||||||||||
Jun. 01, 2014 | Jul. 22, 2013 | Jun. 01, 2013 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Apr. 15, 2014 | Dec. 31, 2013 | Feb. 25, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 01, 2013 | Sep. 30, 2014 | Jun. 01, 2014 | Sep. 30, 2014 | Sep. 26, 2014 | Sep. 26, 2014 | Sep. 30, 2014 | Sep. 26, 2014 | Jun. 01, 2014 | Sep. 30, 2014 | Sep. 26, 2014 | Jun. 01, 2014 | Jun. 01, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Investor | Investor | Convertible Notes Payable One[Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Tranche One [Member] | Tranche Two [Member] | Convertible Notes Payable Two [Member] | Notes Issued on June 1, 2013 [Member] | Notes Issued on June 1, 2013 [Member] | Notes Issued on June 1, 2014 [Member] | Notes Issued on June 1, 2014 [Member] | One of Five Debt Issuance [Member] | Two Investors [Member] | One Investors [Member] | Four Investors [Member] | Typenex Co-Investment, LLC [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Investor Warrant #1 [Member] | Investor Warrant #2: [Member] | Investor Warrant #3: [Member] | |||||||||||
Investor | Investor | First Ninety Days of Term [Member] | Next Nine Months of Term [Member] | |||||||||||||||||||||||||||||||||
Number of accredited investors | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Promissory notes to related parties | $400,000 | ' | $550,000 | ' | ' | ' | $650,000 | $550,000 | ' | ' | ' | ' | ' | ' | ' | ' | $250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $550,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible price per share | $0.40 | ' | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued for purchase of common stock | 50,000 | ' | 1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants expiration term | ' | ' | '3 years | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' |
Interest accrued percentage | ' | ' | 8.00% | ' | 10.00% | ' | 10.00% | ' | 8.00% | 5.00% | 6.00% | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | 12.00% | 18.00% | ' | ' | ' |
Note expiration period | '1 year | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued for purchase of common stock exercise price | ' | ' | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | $0.80 | ' | ' | ' | ' | ' |
Warrant exchange for cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of collateral convertible promissory note | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of accrued interest | ' | ' | ' | ' | 10.00% | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of debt installments | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instruments installment period description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
eight monthly installments beginning March 26, 2015, until the Maturity Date of October 26, 2015 (“Installment Dates”). | ||||||||||||||||||||||||||||||||||||
Installment amount include of accrued and unpaid interest | ' | ' | ' | ' | 68,750 | ' | 68,750 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares owned for which security interest granted | 1,000,000 | ' | ' | ' | ' | ' | 0.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt discount | ' | ' | 528,058 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 528,058 | ' | 400,000 | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants | 253,000 | 54,000 | ' | ' | ' | ' | 183,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 253,000 | ' | 42,000 | ' | 48,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beneficial conversion feature | 275,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 275,000 | ' | 358,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt discount | ' | ' | ' | ' | 267,000 | ' | 267,000 | ' | ' | 220,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total convertible promissory notes principal amount | ' | ' | ' | ' | 1,300,000 | ' | 1,300,000 | ' | ' | 550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125,000 | 125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average volume of common stock principal market for the previous twenty (20) Trading Days | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of debt issuances | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average volume weighted average price per share | ' | ' | ' | ' | ' | ' | $0.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting stockholders tender or exchange offer | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of consummates business combination by other entity acquires | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of beneficial owner Stock | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of average conversion factor | ' | ' | ' | ' | ' | ' | 70.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Installment conversion price per share | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of conversion factor reduced | ' | ' | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of conversion factor automatically reduced | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable | ' | ' | ' | ' | 200,000 | ' | 200,000 | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | 275,000 | 137,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable, conversion, original debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,500 | 12,500 | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lender conversion shares value | ' | ' | ' | ' | ' | ' | 500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of lender conversion shares sale price | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lender conversion price maximum limit | ' | ' | ' | ' | ' | ' | 200.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt conversion of convertible debt into shares | ' | ' | ' | ' | ' | ' | 136,000 | ' | ' | ' | ' | ' | 343,750 | ' | ' | ' | ' | ' | 687,500 | ' | ' | ' | ' | ' | ' | ' | 829,689 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property or other assets | ' | ' | ' | ' | 100,000 | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of occurrence of any Major Default | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of resulting product to outstanding balance | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of Default occurred at interest rate equal to lesser | ' | ' | ' | ' | ' | ' | 22.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding price of note | ' | ' | ' | ' | ' | ' | 125.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants exercisable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 423,076 | 846,153 | 846,153 |
Warrants exercised price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.05 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.65 | $0.65 | $0.65 |
Investment warrants exercise price | ' | ' | ' | ' | ' | ' | $0.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative liability | ' | ' | ' | ' | 39,000 | ' | 39,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of debt | ' | ' | ' | ' | ' | ' | 0 | 62,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125,000 | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | 41,000 | 11,000 | 80,000 | 35,000 | ' | ' | ' | ' | 0 | 0 | 6,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument interest rate effective percentage | ' | ' | ' | ' | 0.00% | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortized debt discount for interest expense | ' | ' | ' | ' | 120,000 | 126,000 | 353,312 | 168,284 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 64,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt discount related to notes converted to common stock | ' | ' | ' | ' | 32,000 | ' | 64,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance cost | ' | ' | ' | ' | ' | ' | 42,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock warrants issued for consideration of finder's fees | ' | ' | ' | ' | ' | ' | 140,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock warrant | ' | ' | ' | ' | 0.05 | ' | 0.05 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Combined fair value of warrants and cash amount paid | ' | ' | ' | ' | ' | ' | 90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common stock issued in a non-cash transaction for exercised of warrants | ' | ' | ' | 136,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of deferred financing cost | ' | ' | ' | ' | 7,500 | 28,000 | 30,720 | 30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write off of deferred financing cost associated with conversion of warrants | ' | ' | ' | ' | ' | ' | 8,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest | ' | ' | ' | ' | 7,500 | ' | 7,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs | ' | ' | ' | ' | $6,800 | ' | $6,800 | ' | ' | $38,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_Notes_Payable_Sche
Convertible Notes Payable - Schedule of Conversion Eligible Tranches (Details) (USD $) | Sep. 30, 2014 |
Convertible debt | $550,000 |
Initial Tranche [Member] | ' |
Convertible debt | 275,000 |
First Subsequent Tranche [Member] | ' |
Convertible debt | 137,500 |
Second Subsequent Tranche [Member] | ' |
Convertible debt | $137,500 |
Convertible_Notes_Payable_Sche1
Convertible Notes Payable - Schedule of Investor Warrants (Details) (USD $) | Sep. 30, 2014 |
Purchase Price allocated to each Investor Warrant | $550,000 |
Investor Warrant #1 [Member] | ' |
Purchase Price allocated to each Investor Warrant | 275,000 |
Investor Warrant #2: [Member] | ' |
Purchase Price allocated to each Investor Warrant | 137,500 |
Investor Warrant #3: [Member] | ' |
Purchase Price allocated to each Investor Warrant | $137,500 |
Convertible_Notes_Payable_Sche2
Convertible Notes Payable - Schedule of Debt (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Jul. 31, 2011 |
Debt Disclosure [Abstract] | ' | ' | ' |
Face amount of note | $550,000 | ' | $1,400,000 |
Original issuance discount | -50,000 | ' | ' |
Allocation to Investor Warrants | -182,000 | ' | ' |
Allocated to embedded derivatives | -279,000 | ' | ' |
Notes Payable | $39,000 | ' | ' |
Note_Payable_Details_Narrative
Note Payable (Details Narrative) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Note payable | $1,400,000 | $550,000 | ' | $550,000 | ' | ' |
Percentage of accrued interest rate | 5.50% | ' | ' | ' | ' | ' |
Debt instrument, maturity date | 1-Aug-16 | ' | ' | ' | ' | ' |
Notes payable, outstanding | ' | 1,340,000 | ' | 1,340,000 | ' | 1,400,000 |
Notes, principal payment | ' | ' | ' | 1,340,000 | ' | ' |
Interest expense incurred and accrued on note payable | ' | 2,600 | 3,400 | 7,800 | 10,400 | ' |
Notes Payable [Member] | ' | ' | ' | ' | ' | ' |
Notes, principal payment | ' | ' | ' | 60,000 | ' | ' |
Interest expense incurred and accrued on note payable | ' | 19,000 | 19,000 | 68,000 | 57,000 | ' |
City Of North Vernon [Member]. | ' | ' | ' | ' | ' | ' |
Payments for accrued interest | ' | ' | ' | $0 | $0 | ' |
Note_Payable_Schedule_of_Princ
Note Payable - Schedule of Principal and Interest Payments (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Notes payable, Principal | $1,340,000 |
Notes payable, Interest | 398,593 |
Notes payable, Total | 1,738,593 |
2014 [Member] | ' |
Notes payable, Principal | 164,087 |
Notes payable, Interest | 157,853 |
Notes payable, Total | 321,940 |
2015 [Member] | ' |
Notes payable, Principal | 107,838 |
Notes payable, Interest | 126,464 |
Notes payable, Total | 234,302 |
2016 [Member] | ' |
Notes payable, Principal | 1,068,075 |
Notes payable, Interest | 114,276 |
Notes payable, Total | $1,182,351 |
Related_Party_Transaction_Deta
Related Party Transaction (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Apr. 15, 2014 | Dec. 31, 2013 | Jun. 01, 2013 | Feb. 25, 2013 | Dec. 31, 2012 | |
Related Party Transactions [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due to president for expenses paid by himself | $0 | ' | $0 | ' | ' | $0 | ' | ' | ' |
Advances from president for fund operations | ' | ' | 50,000 | 62,000 | ' | ' | ' | ' | ' |
Repayment of advances received from president | ' | ' | 55,000 | 27,500 | ' | ' | ' | ' | ' |
Short term debt to related parties | 182,500 | ' | 182,500 | ' | ' | 187,500 | ' | ' | ' |
Interest accrued percentage | 10.00% | ' | 10.00% | ' | 8.00% | 5.00% | 8.00% | 6.00% | 8.00% |
Interest expense on Short Term Debt-Related Parties | $2,600 | $3,400 | $7,800 | $10,400 | ' | ' | ' | ' | ' |
Common_Stock_Details_Narrative
Common Stock (Details Narrative) (USD $) | 0 Months Ended | 9 Months Ended | ||
Jun. 01, 2014 | Jun. 01, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Investor | ||||
Commissions paid | ' | ' | $65,644 | ' |
Warrants issued for purchase of common stock | 50,000 | 1,600,000 | ' | ' |
Warrants expiration term | ' | '3 years | '3 years | ' |
Number of investros notes payable plus accrued interest | ' | ' | 4 | ' |
Common shares issued upon conversion | ' | ' | 136,000 | ' |
Conversion of debt | ' | ' | 207,500 | ' |
Convertible debt, price per share | $0.40 | $0.25 | ' | ' |
Four Investors [Member] | ' | ' | ' | ' |
Conversion of convertible debt | ' | ' | 200,000 | ' |
Common shares issued upon conversion | ' | ' | 829,689 | ' |
Conversion of debt | ' | ' | 7,500 | ' |
Convertible debt, price per share | ' | ' | $0.25 | ' |
Warrants [Member] | ' | ' | ' | ' |
Common stock price per share | ' | ' | $0.80 | ' |
Warrants expiration term | '3 years | ' | ' | ' |
Minimum [Member] | ' | ' | ' | ' |
Common stock price per share | ' | ' | $0.35 | ' |
Maximum [Member] | ' | ' | ' | ' |
Common stock price per share | ' | ' | $0.50 | ' |
Common Stock [Member] | ' | ' | ' | ' |
Issuance of common stock, shares | ' | ' | 3,430,069 | ' |
Aggregate purchase price | ' | ' | $1,314,500 | ' |
Warrants issued for purchase of common stock | ' | ' | 100,000 | ' |
Warrants expiration term | ' | ' | '3 years | ' |
Stock_Options_Details_Narrativ
Stock Options (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | |
Options issued to employee, common stock | ' | ' | ' | 50,000 |
Issuance of options to purchase of common stock, price per share | $0.05 | ' | ' | $0.05 |
Option vesting period | ' | ' | ' | '3 years |
Total remainder of stock compensation expense | ' | ' | ' | $220,000 |
Option exercised | 100,000 | ' | ' | 100,000 |
Non-cash transaction of common stock | ' | ' | ' | 92,000 |
Options vested | ' | ' | ' | 8,783,117 |
Total options expected to vest | ' | ' | ' | 10,060,640 |
General and Administrative Expense [Member] | ' | ' | ' | ' |
Fair value of stock option | ' | ' | ' | $2,500 |
Stock_Options_Schedule_of_Stoc
Stock Options - Schedule of Stock Option Activity (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jul. 29, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' | ' |
Number of Shares, Outstanding, Beginning balance | ' | 10,160,640 | 10,160,640 | 10,110,640 | 10,110,640 |
Number of Shares, Granted | 4,820,000 | ' | ' | 50,000 | ' |
Number of shares, Exercised | ' | -100,000 | ' | ' | -100,000 |
Number of Shares, Outstanding, Ending balance | ' | 10,060,640 | 10,160,640 | 10,160,640 | 10,060,640 |
Number of Shares, Exercisable | ' | ' | ' | ' | ' |
Number of Shares, Vested | ' | ' | ' | ' | 8,783,117 |
Number of Shares, Expected to vest | ' | ' | ' | ' | ' |
Weighted average Exercise Price, Outstanding, Beginning balance | ' | $0.08 | $0.08 | $0.08 | $0.08 |
Weighted average Exercise Price, Granted | ' | ' | ' | $0.05 | ' |
Weighted average Exercise Price, Exercised | ' | $0.05 | ' | ' | ' |
Weighted average Exercise Price, Outstanding, Ending balance | ' | $0.08 | $0.08 | $0.08 | $0.08 |
Weight average Contractual Term (years), Outstanding | ' | '2 years 6 months | '2 years 9 months | '3 years 5 months 5 days | ' |
Weight average Contractual Term (years), Granted | ' | ' | ' | '3 years | ' |
Weight average Contractual Term (years), Ending balance | ' | '2 years 6 months | '2 years 6 months | '2 years 9 months | ' |
Aggregate Intrinsic Value, Outstanding | ' | ' | ' | ' | ' |
Stock_Options_Schedule_of_Stoc1
Stock Options - Schedule of Stock Compensation Expense (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' |
Stock compensation expense | $39,898 | $278,654 | $122,126 | $358,454 |
Stock_Options_Schedule_of_Fair
Stock Options - Schedule of Fair Value of Stock Option (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Market value of stock on grant date | $0.05 |
Risk-free interest rate | 0.61% |
Dividend Yield | 0.00% |
Volatility Factor | 300.00% |
Weighted average expected life | '3 years |
Expected forfeiture rate | 0.00% |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||||
Aug. 18, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Aug. 18, 2014 | Apr. 02, 2014 | Apr. 02, 2014 | Sep. 11, 2014 | Sep. 11, 2014 | Aug. 18, 2014 | Aug. 18, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Investor | Preferred Stock [Member] | First $2 Million Raised [Member] | Each $1.5 Million Raised [Member] | 8% Of Equity Raised [Member] | 6% Of Equity Raised [Member] | New Albany, Indiana [Member] | First Twenty-four Months [Member] | Another 12 Months [Member] | ||||||||
Non-cancelable operating lease, expiration term | ' | ' | ' | 30-Sep-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30-Mar-15 | ' | ' |
Monthly rental payment under operating lease | ' | ' | ' | $4,750 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,124 | $7,800 | $8,500 |
Lease, term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '65 months | '24 months | '12 months |
Lease term description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
extend the lease for one twelve month period at slightly higher monthly rent. | a sixty-five month lease that was to expire on March 30, 2015 | |||||||||||||||
Deferred rent liability | ' | 0 | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rent expense | ' | 18,448 | 55,915 | 16,610 | 65,030 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write off of deferred rent liability | ' | ' | ' | ' | 48,426 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of signed purchase order | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of customer | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of aggregate consideration for equity transaction | ' | ' | ' | ' | ' | ' | ' | 5.00% | 1.00% | ' | ' | ' | ' | ' | ' | ' |
Aggregate consideration for equity transaction, upper limit amount | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | 75,000,001 | ' | ' | ' | ' | ' | ' | ' |
Amount raised for successful transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | 1,500,000 | ' | ' | ' | ' | ' |
Percentage of diluted outstanding equity at day closing | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | ' | ' | ' | ' | ' | ' |
Number common stock issued during period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' |
Payment of commission | ' | 65,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of amount equity raised | 100.00% | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' |
Hybrid equity raised amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' |
Proceeds from repayment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5,000,000 | ' | ' | ' |
Percentage of common stock equal value | 6.00% | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings_Per_Share_Details_Nar
Earnings Per Share (Details Narrative) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share [Abstract] | ' | ' |
Potential dilutive securities | 0 | 0 |
Earnings_Per_Share_Schedule_of
Earnings Per Share - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net loss attributable to common stockholders | ($1,487,359) | ($1,178,204) | ($3,546,789) | ($3,415,421) |
Basic weighted average outstanding shares of common stock | 86,741,574 | 75,583,933 | 85,200,993 | 48,009,364 |
Dilutive effect of common stock equivalents | ' | ' | ' | ' |
Dilutive weighted average common stock equivalents | 86,741,574 | 75,583,933 | 85,200,993 | 48,009,364 |
Net loss per share of voting and nonvoting common stock Basic and Diluted | ($0.02) | ($0.02) | ($0.04) | ($0.07) |
Segment_Information_Schedule_o
Segment Information - Schedule of Operating Segments (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Sales | $373,538 | $47,857 | $825,798 | $603,480 | ' |
Cost of goods sold | 685,528 | 57,896 | 1,235,126 | 488,207 | ' |
Gross profit | -311,990 | -10,039 | -409,328 | 115,273 | ' |
Accounts receivable | 483,933 | ' | 483,933 | ' | 401,549 |
Domestic [Member] | ' | ' | ' | ' | ' |
Sales | 14,763 | 12,684 | 14,763 | 10,954 | ' |
Cost of goods sold | 27,094 | 15,344 | 22,081 | 8,862 | ' |
Gross profit | -12,331 | -2,660 | -7,318 | 2,092 | ' |
Accounts receivable | 45,711 | ' | 45,711 | ' | ' |
International [Member] | ' | ' | ' | ' | ' |
Sales | 358,775 | 35,173 | 811,035 | 592,526 | ' |
Cost of goods sold | 658,434 | 42,552 | 1,213,045 | 479,345 | ' |
Gross profit | -299,659 | -7,379 | -402,010 | 113,181 | ' |
Accounts receivable | $438,222 | ' | $438,222 | ' | ' |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Unrecognized tax benefits | $0 | ' | $0 | ' |
Effective tax rate | ' | ' | ' | ' |
Interest and penalties related to unrecognized income tax benefits | $0 | ' | $0 | ' |
Restatement_of_September_30_202
Restatement of September 30, 2013 Form 10Q (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jun. 01, 2014 | Jul. 29, 2013 | Jul. 22, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Warrants issued | ' | ' | $1,100,000 | ' | ' | ' | ' |
Fair value of the warrants as of the date of issuance | 253,000 | ' | 54,000 | ' | ' | ' | 183,000 |
Options issued | ' | 4,820,000 | ' | ' | ' | 50,000 | ' |
Fair value of the options as of the date of issuance | ' | $240,000 | ' | ' | ' | ' | ' |
Restatement_of_September_30_203
Restatement of September 30, 2013 Form 10Q - Summary of Accounts Retroactively Adjusted (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Additional paid-in capital | ' | $6,665,617 | ' | $6,665,617 | ' |
Accumulated deficit | -14,027,461 | -9,051,540 | -14,027,461 | -9,051,540 | -10,480,672 |
General and administrative expenses | 867,094 | 681,996 | 2,300,491 | 2,735,359 | ' |
Total operating expenses | 958,760 | 996,067 | 2,539,608 | 3,226,805 | ' |
Loss from operations | -1,270,750 | -1,006,106 | -2,948,936 | -3,111,532 | ' |
Net loss | -1,487,359 | -1,178,204 | -3,546,789 | -3,415,421 | ' |
Net loss per share - basic and diluted | ($0.02) | ($0.02) | ($0.04) | ($0.07) | ' |
Stock option expense | 39,898 | 278,654 | 122,126 | 358,454 | ' |
Stock based compensation | ' | ' | ' | 1,558,200 | ' |
Scenario, Previously Reported [Member] | ' | ' | ' | ' | ' |
Additional paid-in capital | ' | 6,372,856 | ' | 6,372,856 | ' |
Accumulated deficit | ' | -8,758,779 | ' | -8,758,779 | ' |
General and administrative expenses | ' | 389,235 | ' | 292,761 | ' |
Total operating expenses | ' | 703,306 | ' | 292,761 | ' |
Loss from operations | ' | -713,345 | ' | -292,761 | ' |
Net loss | ' | -885,443 | ' | -292,761 | ' |
Net loss per share - basic and diluted | ' | ($0.01) | ' | ' | ' |
Stock option expense | ' | ' | ' | 238,761 | ' |
Stock based compensation | ' | ' | ' | 54,000 | ' |
Adjustment [Member] | ' | ' | ' | ' | ' |
Additional paid-in capital | ' | 292,761 | ' | 292,761 | ' |
Accumulated deficit | ' | -292,761 | ' | -292,761 | ' |
General and administrative expenses | ' | 292,761 | ' | 2,442,598 | ' |
Total operating expenses | ' | 292,761 | ' | 2,934,044 | ' |
Loss from operations | ' | -292,761 | ' | -2,818,771 | ' |
Net loss | ' | -292,761 | ' | -3,122,660 | ' |
Net loss per share - basic and diluted | ' | ($0.01) | ' | ' | ' |
Stock option expense | ' | ' | ' | 119,693 | ' |
Stock based compensation | ' | ' | ' | $1,504,200 | ' |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||
Jun. 01, 2013 | Jul. 31, 2011 | Sep. 30, 2014 | Apr. 15, 2014 | Dec. 31, 2013 | Feb. 25, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Oct. 09, 2014 | Oct. 16, 2014 | |
Minimum [Member] | Maximum [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||||
Minimum [Member] | Maximum [Member] | Accredited Investors One [Member] | Accredited Investors Two [Member] | Accredited Investors Three [Member] | |||||||||||
Number of shares issuable to accredited investors, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 445,428 | ' | ' |
Share issuance per share | ' | ' | ' | ' | ' | ' | ' | $0.35 | $0.50 | ' | $0.35 | $0.40 | ' | $0.80 | ' |
Number of shares issuable to accredited investors, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $159,200 | ' | ' |
Commissions paid | ' | ' | 65,644 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 46,380 | ' | ' |
Note principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 3,520,000 |
Note exchange amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | 3,520,000 |
Discount interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000 | ' |
Share issued upon price of conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 199,396 | ' |
Warrants expiration term | '3 years | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' |
Interest rate for the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | 10.00% | 10.00% |
Note issuance date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9-Oct-14 | ' |
Subscription amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 712,500 |
Promissory note value | ' | 1,400,000 | 550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 622,500 |
Debentures discount percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Notes conversion rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70.00% | ' | ' | ' | ' | ' |
Interest accrued percentage | 8.00% | ' | 10.00% | 8.00% | 5.00% | 6.00% | 8.00% | ' | ' | 130.00% | ' | ' | ' | ' | ' |
Notes premium percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.3 | ' | ' | ' | ' | ' |
Note maturity date | ' | 1-Aug-16 | ' | ' | ' | ' | ' | ' | ' | 1-Oct-15 | ' | ' | ' | ' | ' |
Notes payable on private placements | ' | ' | ' | ' | ' | ' | ' | ' | ' | $253,000 | ' | ' | ' | ' | ' |