Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 28, 2014 | Jun. 30, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'ADVANCED MEDICAL ISOTOPE Corp | ' | ' |
Entity Central Index Key | '0001449349 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' | ' |
Is Entity a Voluntary Filer? | 'No | ' | ' |
Is Entity's Reporting Status Current? | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $4,097,136 |
Entity Common Stock, Shares Outstanding | ' | 127,846,734 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
ASSETS | ' | ' |
Cash | $0 | $6,411 |
Accounts receivable - trade | 0 | 21,239 |
Prepaid expenses | 3,281 | 2,334 |
Prepaid expenses paid with stock, current portion | 107,763 | 0 |
Inventory | 8,475 | 4,100 |
Total current assets | 119,519 | 34,084 |
Fixed assets, net of accumulated depreciation | 14,913 | 214,656 |
License fees, net of amortization | 7,171 | 16,060 |
Patents and intellectual property | 35,482 | 360,475 |
Debt issuance costs | 19,786 | 542,454 |
Deposits | 5,406 | 5,406 |
Total other assets | 67,845 | 924,395 |
Total assets | 202,277 | 1,173,135 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ' | ' |
Accounts payable and accrued expenses | 1,221,063 | 1,278,605 |
Accrued interest payable | 1,195,385 | 787,415 |
Payroll liabilities payable | 81,514 | 74,349 |
Deferred income | 0 | 265,531 |
Short term loan payable | 349,913 | 35,846 |
Loans from stockholder | 0 | 43,349 |
Convertible notes payable, net | 375,259 | 395,102 |
Derivative liability | 1,476,615 | 3,938,318 |
Related party convertible notes payable, net | 4,158,819 | 3,573,892 |
Current portion of capital lease obligations | 309,145 | 346,270 |
Total current liabilities | 9,167,713 | 10,738,677 |
Capital lease obligations, net of current portion | 0 | 285,000 |
Total liabilities | 9,167,713 | 11,023,677 |
Stockholders' Equity (Deficit): | ' | ' |
Preferred Stock, $.001 par value, 20,000,000 shares authorized; zero issued and outstanding | 0 | 0 |
Common stock, $.001 par value; 200,000,000 shares authorized; 120,807,809 and 81,544,459 shares issued and outstanding, respectively | 120,807 | 81,544 |
Paid in capital | 27,052,282 | 22,735,626 |
Accumulated deficit | -36,138,525 | -32,667,712 |
Total stockholders' equity (deficit) | -8,965,436 | -9,850,542 |
Total liabilities and stockholders' equity (deficit) | $202,277 | $1,173,135 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders' Equity (Deficit): | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, authorized | 20,000,000 | 20,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 120,807,808 | 81,544,459 |
Common stock, outstanding | 120,807,808 | 81,544,459 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (Unaudited) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | ' | ' |
Revenues | $140,603 | $247,968 |
Operating expenses | ' | ' |
Cost of materials | 105,331 | 72,820 |
Sales and marketing expenses | 9,912 | 18,309 |
Depreciation and amortization | 208,632 | 483,200 |
Professional fees | 730,824 | 2,058,273 |
Stock options granted | 634,255 | 1,638,523 |
Payroll expenses | 812,507 | 728,609 |
General and administrative expenses | 1,218,760 | 1,118,927 |
Total operating expenses | 3,720,221 | 6,118,661 |
Operating loss | -3,579,618 | -5,870,693 |
Non-operating income (expense): | ' | ' |
Interest expense | -1,600,761 | -1,102,137 |
Loss on sale of assets | 0 | 0 |
Loss on impairment of assets | -332,709 | -16,661 |
Loss on settlement of debt | -97,816 | -48,469 |
Recognized income from grants | 265,531 | 680,234 |
Gain (loss) on derivative liability | 1,874,560 | -2,228,538 |
Non-operating income (expense), net | 108,805 | -2,715,571 |
Loss before Income Taxes | -3,470,813 | -8,586,264 |
Income Tax Provision | 0 | 0 |
Net loss | ($3,470,813) | ($8,586,264) |
Loss per common share | ($0.03) | ($0.11) |
Weighted average common shares outstanding | 100,687,798 | 75,672,167 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flow (Unaudited) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ' | ' |
Net Loss | ($3,470,813) | ($8,586,264) |
Adjustments to reconcile net loss to net cash used by operating activities: | ' | ' |
Depreciation of fixed assets | 199,743 | 472,038 |
Amortization of licenses and intangible assets | 8,889 | 11,162 |
Amortization of convertible debt discount | 713,429 | 479,239 |
Amortization of prepaid expenses paid with stock | 0 | 35,375 |
Amortization of debt issuance costs | 555,468 | 336,601 |
Impairment of intangible assets | 332,709 | 16,661 |
Gain on derivative liability | -1,874,560 | 2,228,538 |
Loss on settlement of debt | 97,816 | 48,469 |
Common stock issued for services | 135,656 | 1,391,946 |
Common stock issued for interest | 179,491 | 0 |
Stock options and warrants issued for services | 634,255 | 1,638,523 |
Warrants exercised for services | 20,000 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 21,239 | -7,540 |
Account receivable - other | 0 | 0 |
Inventory | -4,375 | 5,575 |
Prepaid expenses | -947 | -1,274 |
Accounts payable | 205,635 | 397,834 |
Payroll liabilities | 7,165 | 11,928 |
Accrued interest | 468,261 | 402,180 |
Deferred income | -265,531 | -680,234 |
Net cash used by operating activities | -2,036,470 | -1,799,243 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Cash used to acquire equipment | 0 | -14,750 |
Cash used to acquire patents and intellectual property | -7,716 | -77,412 |
Net cash used by investing activities | -7,716 | -92,162 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Payments on Washington Trust debt | -43,349 | -40,119 |
Principal payments on capital lease | -322,125 | -400,543 |
Proceeds from convertible note | 1,496,072 | 2,640,800 |
Debt issuance costs | -32,800 | -123,000 |
Proceeds from short term debt | 349,913 | 0 |
Payments on convertible debt | -145,500 | -221,000 |
Payments on short term debt | -35,846 | -10,879 |
Proceeds from sale of stock for cash | 877,500 | 0 |
Stock offering costs | -131,090 | 0 |
Proceeds from exercise of warrants | 25,000 | 0 |
Net cash provided by financing activities | 2,037,775 | 1,845,259 |
Net increase (decrease) in cash | -6,411 | -46,146 |
Cash, beginning of period | 6,411 | 52,557 |
CASH, END OF PERIOD | 0 | 6,411 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 126,494 | 155,865 |
Cash paid for income taxes | $0 | $0 |
Statements_of_Changes_in_Stock
Statements of Changes in Stockholders' Equity (Deficit) (USD $) | Series A Preferred Stock | Common Stock | Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2011 | ' | $70,653 | $19,174,984 | ($24,081,448) | ($4,835,811) |
Beginning Balance, Shares at Dec. 31, 2011 | ' | 70,653,399 | ' | ' | ' |
Common stock issued for: Services & other , Amount | ' | 8,311 | 1,383,635 | ' | 1,391,946 |
Common stock issued for: Services & other, Shares | ' | 8,310,500 | ' | ' | ' |
Common stock issued for: Loan fees on convertible debt, Amount | ' | 480 | 127,453 | ' | 127,933 |
Common stock issued for: Loan fees on convertible debt, Shares | ' | 480,120 | ' | ' | ' |
Common stock issued for: Debt converted, Amount | ' | 2,085 | 408,496 | ' | 410,581 |
Common stock issued for: Debt converted, Shares | ' | 2,085,440 | ' | ' | ' |
Common stock issued for: Accounts payable, Amount | ' | 15 | 2,535 | ' | 2,550 |
Common stock issued for: Accounts payable, Shares | ' | 15,000 | ' | ' | ' |
Vesting of stock options and warrants | ' | ' | 1,638,523 | ' | 1,638,523 |
Net Loss | ' | ' | ' | -8,586,264 | -8,586,264 |
Ending Balance, Amount at Dec. 31, 2012 | ' | 81,544 | 22,735,626 | -32,667,712 | -9,850,542 |
Ending Balance, Shares at Dec. 31, 2012 | ' | 81,544,459 | ' | ' | ' |
Common stock issued for: Loan fees on convertible debt, Amount | ' | 416 | 83,439 | ' | 83,855 |
Common stock issued for: Loan fees on convertible debt, Shares | ' | 416,109 | ' | ' | ' |
Common stock issued for: Debt converted, Amount | ' | 25,421 | 2,416,622 | ' | 2,442,043 |
Common stock issued for: Debt converted, Shares | ' | 25,421,425 | ' | ' | ' |
Vesting of stock options and warrants | ' | ' | 634,255 | ' | 634,255 |
Common stock issued for: Cash and exercise of options and warrants, Amount | ' | 7,258 | 895,242 | ' | 902,500 |
Common stock issued for: Cash and exercise of options and warrants, Shares | ' | 7,258,093 | ' | ' | ' |
Common stock issued for: Exercise of warrants for services, Amount | ' | 222 | 19,778 | ' | 20,000 |
Common stock issued for: Exercise of warrants for services, Shares | ' | 222,222 | ' | ' | ' |
Common stock issued for: Services & prepaid services, Amount | ' | 3,510 | 237,040 | ' | 240,550 |
Common stock issued for: Services & prepaid services, Shares | ' | 3,510,000 | ' | ' | ' |
Common stock issued for: Accounts payable and prepaid services, Amount | ' | 2,436 | 131,564 | ' | 134,000 |
Common stock issued for: Accounts payable and prepaid services, Shares | ' | 2,435,500 | ' | ' | ' |
Stock offering costs | ' | ' | -131,090 | ' | -131,090 |
Beneficial conversion feature | ' | ' | 22,759 | ' | 22,759 |
Warrants issued for accounts receivable | ' | ' | 7,047 | ' | 7,047 |
Net Loss | ' | ' | ' | -3,470,813 | -3,470,813 |
Ending Balance, Amount at Dec. 31, 2013 | $0 | $120,807 | $27,052,282 | ($36,138,525) | ($8,965,436) |
Ending Balance, Shares at Dec. 31, 2013 | 0 | 120,807,808 | ' | ' | ' |
1_BASIS_OF_PRESENTATION
1. BASIS OF PRESENTATION | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
NOTE 1. BASIS OF PRESENTATION | ' | ||||||||||||||||
Nature of Organization | |||||||||||||||||
Advanced Medical Isotope Corporation (the “Company” or “AMIC”) was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”) for the purpose of acquiring or investing in businesses which were developing and marketing active sports products, equipment, and apparel. The Company had limited activity since inception and was considered dormant from the period May 1, 2000 through December 31, 2005. On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation. AMIC has an authorized capital of 200,000,000 shares of Common Stock, $.001 par value per share and 20,000,000 shares of Preferred Stock, $.001 par value per share. | |||||||||||||||||
Going Concern | |||||||||||||||||
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. This raises substantial doubt about the Company’s ability to continue as a going concern. Historically, the Company has relied upon outside investor funds to maintain the Company’s operations and develop the Company’s business. The Company anticipates it will continue to require funding from investors for working capital as well as business expansion during this fiscal year and it can provide no assurance that additional investor funds will be available on terms acceptable to us. These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable time. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which it operates. | |||||||||||||||||
The Company anticipates a requirement of $1.5 million in funds over the next twelve months to maintain current operation activities. In addition the Company anticipates spending from approximately $2 million to $7 million over that period to fund the initial deployment of the Company’s brachytherapy products should FDA clearance be obtained, a modest distribution capability for third party isotopes and equipment and the potential acquisition of a controlling interest in a European company with which it is having discussions. As of December 31, 2013 the Company has $0 cash on hand which means there will be an anticipated shortfall of the full $2 to $7 million requirement in additional funds over the next twelve months. There are currently commitments to vendors for products and services purchased, plus, the employment agreements of the CFO and other employees of the Company and the Company’s current lease commitments that will necessitate liquidation of the Company if it is unable to raise additional capital. The current level of cash is not enough to cover the fixed and variable obligations of the Company. | |||||||||||||||||
Assuming the Company is successful in the Company’s sales/development effort it believes that it will be able to raise additional funds through the sale of the Company’s stock to either current or new stockholders. There is no guarantee that the Company will be able to raise additional funds or to do so at an advantageous price. | |||||||||||||||||
The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There is no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2013 and December 31, 2012, the balances reported for cash, prepaid expenses, accounts receivable, accounts payable, and accrued expenses, approximate the fair value because of their short maturities. | |||||||||||||||||
The Company adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) as of January 1, 2008 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: | |||||||||||||||||
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | |||||||||||||||||
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |||||||||||||||||
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |||||||||||||||||
The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at December 31, 2013: | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Total Assets Measured at Fair Value | $ | - | $ | - | $ | - | $ | - | |||||||||
Liabilities | |||||||||||||||||
Derivative Liability | $ | 1,476,615 | $ | - | $ | - | $ | 1,476,615 | |||||||||
Total Liabilities Measured at Fair Value | $ | 1,476,615 | $ | - | $ | - | $ | 1,476,615 | |||||||||
Assets and liabilities measured at fair value on a recurring basis are as follows at December 31, 2012: | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Total Assets Measured at Fair Value | $ | - | $ | - | $ | - | $ | - | |||||||||
Liabilities | |||||||||||||||||
Derivative Liability | $ | 3,938,318 | $ | - | $ | - | $ | 3,938,318 | |||||||||
Total Liabilities Measured at Fair Value | $ | 3,938,318 | $ | - | $ | - | $ | 3,938,318 | |||||||||
2_SUMMARY_OF_SIGNIFICANT_ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||
Use of Estimates | |||||||||
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||
Cash Equivalents | |||||||||
For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. | |||||||||
Accounts Receivable | |||||||||
Accounts receivables are stated at the amount that management of the Company expects to collect from outstanding balances. Management provides for probable uncollectible amounts through an allowance for doubtful accounts. Additions to the allowance for doubtful accounts are based on management’s judgment, considering historical write-offs, collections and current credit conditions. Balances which remain outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to the applicable accounts receivable. Payments received subsequent to the time that an account is written off are considered bad debt recoveries. As of December 31, 2013, the Company has experienced no bad debt write offs from operations. | |||||||||
Inventory | |||||||||
Inventory is reported at the lower of cost or market, determined using the first-in, first-out basis, or net realizable value. All inventories consist of Finished Goods. The Company had no Raw Materials or Work in Process. | |||||||||
Fixed Assets | |||||||||
Fixed assets are carried at the lower of cost or net realizable value. Production equipment with a cost of $2,500 or greater and other fixed assets with a cost of $1,500 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. | |||||||||
Depreciation is computed using the straight-line method over the following estimated useful lives: | |||||||||
Production equipment | 3 to 7 years | ||||||||
Office equipment | 2 to 5 years | ||||||||
Furniture and fixtures | 2 to 5 years | ||||||||
Leasehold improvements and capital lease assets are amortized over the shorter of the life of the lease or the estimated life of the asset. | |||||||||
Management of the Company reviews the net carrying value of all of its equipment on an asset by asset basis whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. These reviews consider the net realizable value of each asset, as measured in accordance with the preceding paragraph, to determine whether impairment in value has occurred, and the need for any asset impairment write-down. | |||||||||
The types of events and circumstances that management believes could indicate impairment are as follows: | |||||||||
· | A significant decrease in the market price of a long-lived asset. | ||||||||
· | A significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition. | ||||||||
· | A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator. | ||||||||
· | An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset. | ||||||||
· | A current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset. | ||||||||
· | A current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. | ||||||||
The fair value of assets is first determined by quoted market prices, if available. Otherwise, the estimate of fair value is based on the best information available in the circumstances, including prices for similar assets and the results of using other valuation techniques. If quoted market prices are not available a present value technique is often the best available valuation technique with which to estimate fair value. It is believed that an expected present value technique is superior to a traditional present value technique, especially in situations in which the timing or amount of estimated future cash flows is certain. | |||||||||
The traditional approach is useful for many measurements, especially those in which comparable assets and liabilities can be observed in the marketplace. However the traditional approach does not provide the tools needed to address some complex measurement problems, including the measurement of nonfinancial assets and liabilities for which no market for the item or a comparable item exists. The traditional approach places most of the emphasis on selection of an interest rate. A proper search for “the rate commensurate with the risk” requires analysis of at least two items – one asset or liability that exists in the marketplace and has an observed interest rate and the asset or liability being measured. The appropriate rate of interest for the cash flows being measured must be inferred from the observable rate of interest in some other asset or liability and, to draw that inference, the characteristics of the cash flows must be similar to those of the asset being measured. | |||||||||
Although management has made its best estimate of the factors that affect the carrying value based on current conditions, it is reasonably possible that changes could occur which could adversely affect management’s estimate of net cash flows expected to be generated from its assets, and necessitate asset impairment write-downs. | |||||||||
License Fees | |||||||||
License fees resulting from the acquisition of a patent license, for the production of Actinium 225, from a related individual for common stock valued, at the time of acquisition, at $75,000, and from the result of the acquisition of a patent license, for a Neutron Generator, from Neu-Hope Technologies for preferred stock valued, at the time of acquisition, at $3,040,000, discounted for 4.25% incremental borrowing rate to $2,897,625, were fully amortized as of December 31, 2010. License fees related to a Mo-99 patent license acquired in June 2010 for $10,000 and license fees related to a Brachytherapy patent license acquired in September 2010 for $10,000 are currently being amortized over a three year period. License fees are stated at cost, less accumulated amortization. Amortization of license fees is computed using the straight-line method over the estimated economic useful life of the assets. | |||||||||
The Company made a $10,000 investment in 2010 for a patent license regarding its technology for the production of Mo-99. In May 2010 the Company entered into a License Agreement for the Patent Rights in the area of radioisotope production using electron beam accelerator(s) for creating short lived radioisotopes such as Molybdenum-99 and Technetium-99 with the University of Missouri. This Agreement calls for a $10,000 nonrefundable fee paid upon execution, a royalty agreement on sales, and an equipment licensing fee on equipment sales. Additionally the Agreement calls for a milestone payment of $250,000, due and payable five years after execution of this agreement and a milestone payment of $250,000, due and payable upon reaching $50,000,000 in cumulative net sales. The $10,000 nonrefundable fee paid upon execution was capitalized as License Fees and is amortized on the straight line basis over a three year life. This license fee was fully amortized as of December 31, 2013. | |||||||||
The Company made a $10,000 investment in 2010 for an exclusive license with Battelle Memorial Institute regarding its technology for the production of a Brachytherapy seed. In August 2010 the Company entered into a License Agreement for the Patent Rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. This Agreement calls for a $10,000 nonrefundable fee upon execution, a royalty agreement on sales and on funds received from any sublicenses. The $10,000 nonrefundable fee paid upon execution was capitalized as License Fees and is amortized on the straight line basis over a three year life. Additionally the Agreement calls for a minimum annual fee as follows: | |||||||||
Calendar Year | Minimum Royalties per Calendar Year | ||||||||
2010 | $ | - | |||||||
2011 | $ | - | |||||||
2012 | $ | 2,500 | |||||||
2013 | $ | 5,000 | (1) | ||||||
2014 | $ | 7,500 | |||||||
2015 | $ | 10,000 | |||||||
2016 and each calendar | $ | 25,000 | |||||||
year thereafter | |||||||||
(1) Paid February, 2014. | |||||||||
The Company made a $5,000 investment in February 2011 for a one year option agreement to negotiate an exclusive license agreement with Battelle Memorial Institute regarding its patents for the production of a radiogel technology. This option agreement calls for a $5,000 upfront fee for the option, which expired February 2012 and was fully expensed in the twelve months ended December 31, 2011. Effective March 2012, the Company entered into an exclusive license agreement with Battelle Memorial Institute regarding the use of its patented radiogel technology. This license agreement calls for a $17,500 nonrefundable license fee and a royalty based on a percent of gross sales for licensed products sold; the license agreement also contains a minimum royalty amount to be paid each year starting with 2013. | |||||||||
The Company periodically reviews the carrying values of capitalized license fees and any impairments are recognized when the expected future operating cash flows to be derived from such assets are less than their carrying value. | |||||||||
Amortization is computed using the straight-line method over the estimated useful live of three years. Amortization of license fees was $8,889, and $11,162 for the years ended December 31, 2013, and 2012, respectively. Based on the license fees recorded at December 31, 2013, and assuming no subsequent impairment of the underlying assets, the remaining unamortized portion of $7,171, will be fully amortized during the year ending December 31, 2015. Future annual amortization is expected to be as follows: | |||||||||
Calendar Year | Annual Amortization | ||||||||
2014 | $ | 5,832 | |||||||
2015 | $ | 1,339 | |||||||
Patents and Intellectual Property | |||||||||
Patent filing costs and intellectual property costs totaling $7,716, and $77,412, were capitalized during the twelve months ended December 31, 2013, and 2012. The Company evaluates the recoverability of intangible assets, including patents and intellectual property, on a continual basis. Several factors are used to evaluate intangibles, including, but not limited to, management’s plans for future operations, recent operating results and projected and expected undiscounted future cash flows. During the years ended December 31, 2013 and 2012 the Company impaired $332,709 and $0, respectively, worth of patent and intellectual property. This left a total $35,482 and $360,475 of capitalized patents and intellectual property costs at December 31, 2013 and 2012, respectively. | |||||||||
While patents are being developed or pending they are not being amortized. Management has determined that the economic life of the patents to be 10 years and amortization, over such 10-year period and on a straight-line basis will begin once the patents have been issued and the Company begins utilization of the patents through production and sales, resulting in revenues. As of December 31, 2013, no amortization has begun. | |||||||||
Revenue Recognition | |||||||||
The Company recognized revenue related to product sales when (i) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. | |||||||||
Revenue for the fiscal year ended December 31, 2013 consisted of the sales of Oxygen 18 (stable isotope), Flouride 18 and Consulting Revenue. Revenue for the fiscal year ended December 31, 2012 consisted of the sales of Flouride 18 and Consulting Revenue. The Company recognizes revenue once an order has been received and shipped to the customer or services have been performed. Prepayments, if any, received from customers prior to the time products are shipped are recorded as deferred revenue. In these cases, when the related products are shipped, the amount recorded as deferred revenue is recognized as revenue. The Company does not accrue for sales returns and other allowances as it has not experienced any returns or other allowances. | |||||||||
Income from Grants and Deferred Income | |||||||||
Government grants are recognized when all conditions of such grants are fulfilled or there is reasonable assurance that they will be fulfilled. The Company has chosen to recognize income from grants as it incurs costs associated with those grants, and until such time as it recognizes the grant as income those funds received will be classified as Deferred Income on the balance sheet. | |||||||||
For the twelve months ended December 31, 2012 the Company recognized $680,234 of the $1,215,000 Department of Energy grant as income. The $680,234 recognized as of December 31, 2012 was for costs incurred for the twelve months ended December 31, 2012. | |||||||||
For the twelve months ended December 31, 2013 the Company recognized $265,531 of the $1,215,000 Department of Energy grant as income. The $265,531 recognized as of December 31, 2013 was for costs incurred for the twelve months ended December 31, 2013. | |||||||||
As of December 31, 2013 and 2012 the grant money received and grant money recognized as income and deferred income is: | |||||||||
$1,215,000 | |||||||||
Brachytherapy Grant | |||||||||
Deferred income at December 31, 2010 | $ | 1,191,492 | |||||||
Recognized income from grants in 2011 | 245,727 | ||||||||
Deferred income at December 31, 2011 | 945,765 | ||||||||
Recognized income from grants in 2012 | 680,234 | ||||||||
Deferred income at December 31, 2012 | 265,531 | ||||||||
Recognized income from grants in 2013 | 265,531 | ||||||||
Deferred income at December 31, 2013 | $ | - | |||||||
Net Loss Per Share | |||||||||
The Company accounts for its income (loss) per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic earnings/loss per share is computed by dividing income (loss) available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive common stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. | |||||||||
Securities, all of which represent common stock equivalents, that could be dilutive in the future as of December 31, 2013 and 2012 are as follows: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Convertible debt | 56,286,404 | 32,859,850 | |||||||
Common stock options | 10,350,000 | 4,775,000 | |||||||
Common stock warrants | 40,103,548 | 24,411,701 | |||||||
Total potential dilutive securities | 106,739,952 | 62,046,551 | |||||||
Research and Development Costs | |||||||||
Research and developments costs, including salaries, research materials, administrative expenses and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed. | |||||||||
The Company incurred $416,161, and $973,611 research and development costs for the years ended December 31, 2013, and 2012, respectively, all of which were recorded in the Company’s operating expenses noted on the income statements for the years then ended. | |||||||||
Advertising and Marketing Costs | |||||||||
Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. There were no tradeshow expenses incurred and not expensed as of the years ended December 31, 2013 and 2012. During the twelve months ended December 31, 2013 and 2012, the Company incurred $0 and $1,050 respectively, in advertising costs. | |||||||||
Shipping and Handling Costs | |||||||||
Shipping and handling costs are expensed as incurred and included in cost of product sales. | |||||||||
Legal Contingencies | |||||||||
In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. Currently, the Company does not believe any probable legal proceedings or claims will have a material impact on its financial position or results of operations. However, if actual or estimated probable future losses exceed the Company’s recorded liability for such claims, it would record additional charges as other expense during the period in which the actual loss or change in estimate occurred. | |||||||||
Income Taxes | |||||||||
To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition. | |||||||||
The Company files income tax returns in the U.S. federal jurisdiction, and Delaware. The Company did not have any tax expense for the years ended December 31, 2013 and 2012. The Company did not have any deferred tax liability or asset on its balance sheet on December 31, 2013 and 2012. | |||||||||
Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company's financial statements. For the years ended December 31, 2013 and 2012, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months. | |||||||||
Stock-Based Compensation | |||||||||
The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests. | |||||||||
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from non-employees. Costs are measured at the fair market value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of the date on which there first exists a firm commitment for performance by the provider of goods or services or on the date performance is complete. The Company recognizes the fair value of the equity instruments issued that result in an asset or expense being recorded by the Company, in the same period(s) and in the same manner, as if the Company has paid cash for the goods or services. | |||||||||
Recent Accounting Pronouncements | |||||||||
There are no recently issued accounting pronouncements that the Company believes are applicable or would have a material impact on the financial statements of the Company. | |||||||||
3_FIXED_ASSETS
3. FIXED ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
FIXED ASSETS | ' | ||||||||
Fixed assets consist of the following at December 31, 2013 and 2012: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Production equipment | $ | 2,131,377 | $ | 2,131,377 | |||||
Building | 446,772 | 446,772 | |||||||
Leasehold improvements | 3,235 | 3,235 | |||||||
Office equipment | 32,769 | 32,769 | |||||||
2,614,153 | 2,614,153 | ||||||||
Less accumulated depreciation | (2,599,240 | ) | (2,399,497 | ) | |||||
$ | 14,913 | $ | 214,656 | ||||||
Accumulated depreciation related to fixed assets is as follows: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Production equipment | $ | 2,119,830 | $ | 1,924,002 | |||||
Building | 446,772 | 446,772 | |||||||
Leasehold improvements | 3,235 | 3,235 | |||||||
Office equipment | 29,403 | 25,488 | |||||||
$ | 2,599,240 | $ | 2,399,497 | ||||||
Depreciation expense for the above fixed assets for the years ended December 31, 2013 and 2012, respectively, was $199,743 and $472,038. |
4_INTANGIBLE_ASSETS
4. INTANGIBLE ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
INTANGIBLE ASSETS | ' | ||||||||
Intangible assets consist of the following at December 31, 2013 and December 31, 2012: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
License Fee | $ | 112,500 | $ | 112,500 | |||||
Less accumulated amortization | (105,329 | ) | (96,440 | ) | |||||
7,171 | 16,060 | ||||||||
Patents and intellectual property | 35,482 | 360,475 | |||||||
$ | 42,653 | $ | 376,535 | ||||||
Amortization expense for the above intangible assets for the years ended December 31, 2013 and 2012, respectively, was $8,889 and $11,162. | |||||||||
5_RELATED_PARTY_TRANSACTIONS
5. RELATED PARTY TRANSACTIONS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
RELATED PARTY TRANSACTIONS | ' | ||||||||
Loans from Stockholder | |||||||||
The Company had a $200,000 revolving line of credit with Washington Trust Bank that was to expire in September 2009. The Company had $199,908 in borrowings under the line of credit as of October 28, 2008 at which time the line of credit was paid off and replaced with a loan in the initial principal amount of $199,908 from James C. Katzaroff and Carlton M. Cadwell. Mr. Katzaroff is the Company’s chief executive officer, and Mr. Katzaroff and Mr. Cadwell are directors and beneficial owners of more than 10% of the Company’s common stock. The loan calls for $4,066 monthly payments, including 8% interest, beginning November 30, 2008, with a balloon payment for the balance at October 31, 2009, at which time the note was extended for another year to October 31, 2010, at which time the note was extended for another year to October 31, 2011, at which time the note was extended for another year to October 31, 2012 with monthly payments increasing to $4,090, at which time the note was extended for another year to October 31, 2013 with monthly payments increasing to $4,100. There is no security held as collateral for this loan. During 2013 the Company paid $43,349 in principal and $2,286 in interest. As of December 31, 2013 and December 31, 2012, the outstanding principal balance on this loan was $0 and $43,349, respectively. | |||||||||
Related Party Convertible Notes Payable | |||||||||
The Company issued various shares of common stock and convertible promissory notes during the twelve months ended December 31, 2013 and 2012 to a director and major stockholder. The details of these transactions are outlined in Note 13: Stockholders’ Equity - Common Stock Issued for Convertible Debt. | |||||||||
Rent Expenses | |||||||||
On July 17, 2007, the Company entered into a lease at 6208 West Okanogan Avenue, Kennewick, Washington, 99336 which has been used as the Company’s production center. The term of the lease was five years, commencing on August 1, 2007. Monthly rent for the first year of tenancy was $3,500. Under the terms of the lease, the monthly rent would increase 8% each year so that monthly rent for the year beginning August 1, 2008 was $3,780, monthly rent for the year beginning August 1, 2009 was $4,082, monthly rent for the year beginning August 1, 2010 was $4,408, and monthly rent for the year beginning August 1, 2011 was $4,762. Subsequent to July 31, 2012 the Company is renting this space on a month to month basis at $11,904 per month. The landlord of this space is a non-affiliated stockholder of the Company, who holds less than 5 percent of the total outstanding shares | |||||||||
During the years ended December 31, 2013 and 2012 the Company incurred rent expenses for this facility totaling $142,851 and $88,087 respectively. In addition, the lease agreement called for the issuance of $187,500 in common stock valued at $0.40 per share for a total of 416,667 shares. The Company recognized the issuance of all 416,667 shares in 2007 and will amortize the $187,500 value of that stock over the sixty month term of the lease and was fully amortized as of December 31, 2013. For the years ended December 31, 2013 and 2012 the Company amortized $0 and $21,875 of this stock issuance and recognized it as rent expense. | |||||||||
There are no future minimum rental payments required under this rental agreement because it expired as of July 31, 2012 and subsequent to that date the Company is renting this space on a month to month basis. Additionally, in June 2008, the Company entered into two 12-month leases for its corporate offices with three four month options to renew but in no event will the lease extend beyond December 31, 2010. Subsequent to December 31, 2010, the Company is renting this space on a month to month basis. These lease agreements call for monthly rental payments of $2,733 and $2,328 per month respectively. Effective November 1, 2009, the Company terminated that portion of the lease agreements consisting of the $2,328 per month payment. Effective February 28, 2012 and retroactive back to December 1, 2011, the $2,328 rental payment per month was adjusted to $2,500 rental payment per month. The monthly rental was again adjusted to $2,675 for the months of March and April, 2012 and adjusted again to $2,850 effective for the months May through October, 2012. The monthly rent was again adjusted to $2,910 effective November, 2012. The Company terminated that lease effective December 31, 2013. For the years ended December 31, 2013 and 2012 the Company amortized $29,100 and $33,217 of this stock issuance and recognized it as rent expense. There are no future minimum rental payments required under this rental agreement because it expired as of December 31, 2010 and subsequent to that date the Company was renting this space on a month to month basis until the lease was terminated December 31, 2013. | |||||||||
Pursuant to a lease for its Corporate office entered into prior to 2013, the Company paid a monthly rent of $2,910 per month during 2013. The Company terminated that lease effective December 31, 2013. In January 2014, the Company relocated and entered into a new 12-month lease for its corporate offices for a monthly rent of $1,500 from an entity controlled by Carlton M. Cadwell, a significant shareholder and a Director of the Company. Because the lease expires in December of 2014 the only future minimum rental payments are $18,000 for 2014. | |||||||||
Rental expense for the years ended December 31, 2013 and 2012 consisted of the following: | |||||||||
Year ended | Year ended | ||||||||
December 31, 2013 | 31-Dec-12 | ||||||||
Office and warehouse space | $ | 142,851 | $ | 88,087 | |||||
Rental expense in the form of stock issuance | - | 21,875 | |||||||
Corporate office | 29,100 | 33,217 | |||||||
Total Rental Expense | $ | 171,951 | $ | 143,179 | |||||
7_PREPAID_EXPENSES_PAID_WITH_S
7. PREPAID EXPENSES PAID WITH STOCK | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
PREPAID EXPENSES PAID WITH STOCK | ' | ||||
The Company issued stock for prepaid rent which expired annually through July 2012 at the rate of $37,500 per year. Additionally, the Company issued stock for prepaid services for the twelve months ended December 31, 2013 in the amount of $78,000 of which $26,000 expired in 2013 and was expensed and recorded as stock issued for services. The $52,000 balance will expire through December 2014. The Company also issued stock for prepaid services for the twelve months ended December 31, 2013 in the amount of $69,550 of which $17,388 expired in 2013 and was expensed and recorded as stock issued for services. The $52,163 balance will expire through December 2014. The Company also issued stock for prepaid services for the twelve months ended December 31, 2013 in the amount of $3,600 of which $0 expired in 2013 and the $3,600 balance will expire through December 2014. Prepaid expenses are expected to mature as follows: | |||||
For the twelve month period ending December 31, 2014 | $ | 107,763 | |||
Thereafter | - | ||||
$ | 107,763 |
8_CAPITAL_LEASE_OBLIGATIONS
8. CAPITAL LEASE OBLIGATIONS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Leases [Abstract] | ' | ||||||||||||
CAPITAL LEASE OBLIGATIONS | ' | ||||||||||||
During September 2007, the Company obtained two master lease agreements for $1,875,000 and $631,000, with interest on both leases accruing at 8.6% annually, secured by equipment and personal guarantee of two of the major stockholders. These long-term agreements shall be deemed capital lease obligations for purposes of financial statement reporting. The purpose of the lease is to acquire a Pulsar 10.5 PET Isotope Production System for a contracted amount of $1,875,000 plus ancillary equipment and facility for $933,888. Advances made by the Lessor for the benefit of the Company, less payments, total $631,270 as of December 31, 2012 and $309,145 as of December 31, 2013. | |||||||||||||
This capital lease and its resulting obligation is recorded at an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term, excluding any portion of the payments representing taxes to be paid by the Company. This amount does not exceed the fair value of the leased property at the lease inception, so the recorded amount is the fair value. | |||||||||||||
Capital Lease Obligation | |||||||||||||
PET Isotope Production System | Ancillary Equipment | Total | |||||||||||
Total lease commitment | $ | 1,875,000 | $ | 933,888 | $ | 2,808,888 | |||||||
Advances made for purchases | $ | 1,511,268 | $ | 933,888 | $ | 2,445,156 | |||||||
Principal portion of payments | 1,202,123 | 933,888 | 2,136,011 | ||||||||||
Net balance of advances payable | 309,145 | - | 309,145 | ||||||||||
Add factor to arrive at total future minimum lease payments | 17,775 | - | 17,775 | ||||||||||
Total future minimum lease payments | 326,900 | - | 326,900 | ||||||||||
Less amount representing interest | 17,775 | - | 17,775 | ||||||||||
Present value of net minimum lease payments | 309,145 | - | 309,145 | ||||||||||
Amounts due within one year | 257,913 | - | 257,913 | ||||||||||
Amounts due after one year | $ | 51,232 | $ | - | $ | 51,232 | |||||||
The lease requires the Company to maintain a minimum debt service coverage ratio of 1:1 measured at fiscal year-end; non-compliance with this provision shall constitute a default and guarantors must contribute capital sufficient to fund any deficit in the debt service coverage ratio. | |||||||||||||
The definition of debt service coverage ratio is EBITDA (earnings before interest, taxes, depreciation and amortization), minus cash taxes, minus unfunded capital expenditures, plus capital injections, divided by (interest plus current portion of long-term debt). According to the debt service coverage ratio computation, at December 31, 2009 the Company was not in compliance with the minimum debt service coverage ratio stipulated in the loan covenants, accordingly the Company recorded the entire value of the leases as a current value at December 31, 2009. However the Company was in compliance with the minimum debt service coverage ratio stipulated in the loan covenants at December 31, 2010, and accordingly recognized current and long term portions of the lease on its balance sheet at December 31, 2010. The Company was in default on a covenant in the capital lease obligations as of December 31, 2011 due to failure to maintain the minimum debt service ratio required by the leases. Accordingly the Company recorded the entire value of the leases as a current obligation in the Company’s audited December 31, 2011 financial statements. However, the Company was in compliance with the minimum debt service coverage ratio stipulated in the loan covenants at December 31, 2012 and accordingly recognized current and long term portions of the lease on its balance sheet at December 31, 2012 and reclassified the December 31, 2011 capital lease obligations to current and long term portions as of that date. The reason the Company was able to come into compliance with the minimum debt service coverage ratio stipulated in the loan covenants was due to the additional convertible debt raised during the year ended December 31, 2012. According to the debt service coverage ratio computation, at December 31, 2013 the Company was not in compliance with the minimum debt service coverage ratio stipulated in the loan covenants, accordingly the Company recorded the entire value of the leases as a current value at December 31, 2013. | |||||||||||||
The Company’s results of the minimum debt service ratio calculation for the years December 31, 2013 and 2012 are as follows: | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Net loss | $ | (3,470,813 | ) | $ | (8,586,264 | ) | |||||||
- Interest | 1,600,761 | 1,102,137 | |||||||||||
- Depreciation and amortization | 208,632 | 483,200 | |||||||||||
EBITDA | (1,661,420 | ) | (7,000,927 | ) | |||||||||
- Cash taxes | - | - | |||||||||||
- Unfunded capital expenditures | - | - | |||||||||||
+ capital injections* | 2,748,485 | 2,375,300 | |||||||||||
1,087,065 | (4,625,627 | ) | |||||||||||
Less non-cash items:** | |||||||||||||
Stock based consulting fees | 131,388 | 1,405,445 | |||||||||||
Stock options granted | 634,255 | 1,638,361 | |||||||||||
Loss on derivative liability | (1,874,560 | ) | 2,228,538 | ||||||||||
Loss on extinguishment of debt | 97,816 | 48,470 | |||||||||||
$ | 75,964 | $ | 695,187 | ||||||||||
Interest plus current portion of long-term debt | $ | 273,536 | $ | 386,006 | |||||||||
Debt service coverage ratio | 0.28 | 1.8 | |||||||||||
* | Cash for stock and convertible debt. | ||||||||||||
** | Other deductions from net income (add back for net loss) that were not explicitly stated in Calculation for EBITDA, but are implied as they are non-cash expenditures. | ||||||||||||
Principal maturities on the amount of the capital lease obligations advanced through December 31, 2013 are due as follows: | |||||||||||||
Year ended December 31, | Production | Ancillary | |||||||||||
Facility | Equipment | ||||||||||||
2014 | 257,913 | - | |||||||||||
2015 | 51,232 | - | |||||||||||
Thereafter | - | - | |||||||||||
$ | 309,145 | $ | - | ||||||||||
The capital lease obligation is the only Company debt that contains covenants. | |||||||||||||
9_SHORT_TERM_LOAN_PAYABLE
9. SHORT TERM LOAN PAYABLE | 12 Months Ended |
Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' |
SHORT TERM LOAN PAYABLE | ' |
The Company had credit card debt of $46,725 that was converted to a promissory note March 15, 2012 secured by personal guarantees of Mr. Katzaroff, CEO and Mr. Jolliff, CFO of the Company. The note calls for $2,500 up front payment and nineteen payments of $2,568 including interest of twelve percent. As of December 31, 2012 the payments for August through December, 2012 had not yet been paid. For the twelve month period ending December 31, 2012 the Company paid $10,879 in principal and $1,894 in interest towards the debt. The note was called effective January 23, 2013 and the $5,301 of interest and collection costs as of that date have been accrued in the accompanying financial statement for the twelve months ending December 31, 2012. The principal balance of the loan was $35,846 and accrued interest of $5,326 was recorded as current liabilities as of December 31, 2012. No interest expense was recorded in 2013 for this note because the $35,846 principal balance and $5,326 accrued interest was paid in January 2013. As of December 31, 2013 there are no amounts due or outstanding. |
10_CONVERTIBLE_NOTES_PAYABLE
10. CONVERTIBLE NOTES PAYABLE | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||||
CONVERTIBLE NOTES PAYABLE | ' | |||||||||||||||||||
As of December 31, 2013 and 2012 the Company had the following convertible notes outstanding: | ||||||||||||||||||||
31-Dec-13 | 31-Dec-12 | |||||||||||||||||||
Principal (net) | Accrued Interest | Principal (net) | Accrued Interest | |||||||||||||||||
October 2012 $63,000 Convertible Note, 8% interest, due April 2013, $0 and $63,000 outstanding, net of debt discount of $0 and $22,209, respectively | - | - | 40,791 | 1,155 | (1) | |||||||||||||||
November 2012 $42,500 Convertible Note, 8% interest, due May 2013, $0 and $42,500 outstanding, net of debt discount of $0 and $16,724, respectively | - | - | 25,776 | 525 | (2) | |||||||||||||||
December 2012 $55,000 Convertible Note, 0% interest for the first 90 days, due December 2013, with a 10% original issue discount, $0 and $55,000 outstanding, net of debt discount of $0 and $5,839, respectively | - | - | 49,161 | - | (3) | |||||||||||||||
January 2013 $30,024 Convertible Note, 10% one-time interest, due January 2014, with a 10% original issue discount, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively | - | - | - | - | (4) | |||||||||||||||
March 2013 $60,000 Convertible Note, 0% interest for the first 90 days, due March 2014, with a 8% original issue discount, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively | - | - | - | - | (5) | |||||||||||||||
July and August 2012 $1,060,000 Convertible Notes, 12% interest, due December 2013 and January 2014 (18 month notes), $180,000 and $888,500 outstanding , net of debt discount of $8,576 and $628,846, respectively | 171,424 | 30,610 | 259,654 | 47,199 | (6) | |||||||||||||||
September and October 2012 $115,000 Convertible Notes, 12% interest, due February and March 2014 (18 month notes), $0 and $115,000 outstanding, net of debt discount of $0 and $95,280, respectively | - | - | 19,720 | 3,575 | (7) | |||||||||||||||
May 2013 $224,000 Convertible Note, 12% interest, due November 2014 (18 month note), $30,000 and $0 outstanding, net of debt discount of $17,450 and $0, respectively | 12,550 | 2,257 | - | - | (8) | |||||||||||||||
April 2013 $72,280 Convertible Note, 0% interest for the first 90 days, due April 2014, with a 10% original issue discount, $16,646 and $0 outstanding, net of debt discount of $4,241 and $0, respectively | 12,405 | - | - | - | (9) | |||||||||||||||
April 2013 $53,000 Convertible Note, 8% interest, due November 2013, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively | - | - | - | - | (10) | |||||||||||||||
June 2013 $34,560 Convertible Note, 0% interest for the first 90 days, due June 2014, with a 10% original issue discount, $34,650 and $0 outstanding, net of debt discount of $14,676 and $0, respectively | 19,884 | 3,456 | - | - | (11) | |||||||||||||||
July 2013 $53,000 Convertible Note, 8% interest, due February 2014, $53,000 and $0 outstanding, net of debt discount of $19,395 and $0, respectively | 33,605 | 2,033 | - | - | -12 | |||||||||||||||
July 2013 $30,024 Convertible Note, 10% one-time interest, due July 2014, with a 10% original issue discount, $30,024 and $0 outstanding, net of debt discount of $15,876 and $0, respectively | 14,148 | 3,002 | - | - | -13 | |||||||||||||||
August 2013 $53,000 Convertible Note, 8% interest, due March 2014, $53,000 and $0 outstanding, net of debt discount of $28,716 and $0, respectively | 24,284 | 1,464 | - | - | -14 | |||||||||||||||
September 2013 $10,000 Convertible Note, 10% interest, due September 2014 (12 month note), $10,000 and $0 outstanding, net of debt discount of $131 and $0, respectively | 9,869 | 330 | - | - | -15 | |||||||||||||||
September 2013 $30,000 Convertible Note, 12% interest, due September 2014, with a $1,500 original issue discount, $30,000 and $0 outstanding, net of debt discount of $17,945 and $0, respectively | 12,055 | 937 | - | - | -16 | |||||||||||||||
October 2013 $37,500 Convertible Note, 8% interest, due July 2014, $37,500 and $0 outstanding, net of debt discount of $26,182 and $0, respectively | 11,318 | 682 | - | - | -17 | |||||||||||||||
October 2013 $97,700 Convertible Note, 8% interest, due April 2014, with a 12% original issue discount, $97,700 and $0 outstanding, net of debt discount of $64,773 and $0, respectively | 32,927 | 1,954 | - | - | -18 | |||||||||||||||
November 2013 $42,500 Convertible Note, 8% interest, due August 2014, $42,500 and $0 outstanding, net of debt discount of $34,368 and $0, respectively | 8,132 | 494 | - | - | -19 | |||||||||||||||
November 2013 $27,800 Convertible Note, 10% one-time interest, due November 2014, with a 10% original issue discount, $27,800 and $0 outstanding, net of debt discount of $24,296 and $0, respectively | 3,504 | 2,780 | - | - | -20 | |||||||||||||||
December 2013 $27,500 Convertible Note, 8% interest, due September 2014, $27,500 and $0 outstanding, net of debt discount of $26,005 and $0, respectively | 1,495 | 90 | - | - | -21 | |||||||||||||||
December 2013 $69,120 Convertible Note, 0% interest for the first 90 days, due December 2014, with a 10% original issue discount, $69,120 and $0 outstanding, net of debt discount of $65,143 and $0, respectively | 3,977 | 6,912 | - | - | (22) | |||||||||||||||
December 2013 $55,000 Convertible Note, 12% interest, due December 2014, with a $3,300 original issue discount, $55,000 and $0 outstanding, net of debt discount of $51,317 and $0, respectively | 3,683 | 442 | - | - | -23 | |||||||||||||||
Total Convertible Notes Payable, Net | $ | 375,259 | $ | 57,443 | $ | 395,102 | $ | 52,454 | ||||||||||||
(1) The Company borrowed $63,000 October 2012, due April 2013, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (April 10, 2013), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $31,500 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During 2012 total amortization was recorded in the amount of $9,291 resulting in a debt discount of $22,209 December 31, 2012. Also during 2012, interest expense of $1,155 was recorded for the note. During the twelve months ending December 31, 2013 total amortization was recorded in the amount of $22,209 resulting in a debt discount of $0 at December 31, 2013. Also during the twelve months ending December 31, 2013, interest expense of $1,341 was recorded for the note. | ||||||||||||||||||||
(2) The Company borrowed $42,500 November 2012, due May 2013, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (May 2, 2013), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $21,250 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During 2012 total amortization was recorded in the amount of $4,526 resulting in a debt discount of $16,724 December 31, 2012. Also during 2012, interest expense of $572 was recorded for the note. During the twelve months ending December 31, 2013 total amortization was recorded in the amount of $16,724 resulting in a debt discount of $0 at December 31, 2013. Also during the twelve months ending December 31, 2013, interest expense of $1,106 was recorded for the note. | ||||||||||||||||||||
(3) The Company borrowed $55,000 December 2012, due December 2013. The holder of the note has the right, after the first one hundred eighty days of the note (June 7, 2013), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.28 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. During that time the amount of any prepayment would equal 111.2% of the outstanding principal balance of the note ($61,160) with no interest on the note. The Company had the right to prepay the note and accrued interest during the next ninety days following the date of the note. During that time the amount of any prepayment would equal 111.2% ($61,160) of the outstanding principal balance of the note plus a onetime interest charge of 10% applied to the principal ($6,116) for a total repayment amount of $66,660. The Company recorded a debt discount of $6,160 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the twelve month life of the note. During 2012 total amortization was recorded in the amount of $321 resulting in a debt discount of $5,839 December 31, 2012. Also during 2012, interest expense of $0 was recorded for the note. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $3,949 and total principal of $55,000 was converted into shares of common stock (see Note 13: Stockholders’ Equity) resulting in a decrease to the debt discount of $1,890. After conversions and amortization, principal and debt discount totaled $0 at December 31, 2013. Also during the twelve months ending December 31, 2013, interest expense of $6,116 was recorded for the note. | ||||||||||||||||||||
(4) The Company borrowed $27,000 January 2013, due January 2014, with a one-time interest charge of 10%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.195 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $3,024 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $30,024 related to the conversion feature and original issue discount, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2013, total amortization was recorded in the amount of $23,032 and total principal of $30,024 was converted into shares of common stock (see Note 13: Stockholders’ Equity) resulting in a decrease to the debt discount of $6,992. After conversions and amortization, principal and debt discount totaled $0 at December 31, 2013. Also during the twelve months ending December 31 2013, interest expense of $3,002 was recorded for the note. | ||||||||||||||||||||
(5) The Company borrowed $60,000 March 2013, due December 2013, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (September 13, 2013), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $21,935 and total principal of $60,000 was converted into shares of common stock resulting in a decrease to the debt discount of $8,065. After conversions and amortization, principal and debt discount totaled $0 at December 31, 2013. Also during the twelve months ending December 31, 2013, interest expense of $2,400 was recorded for the note. | ||||||||||||||||||||
(6) The Company had received $1,060,000 in cash as of December 31, 2012 in exchange for Convertible Debt instruments. These Convertible Debt instruments have an eighteen month term, accrued interest at an annual rate of 12% and a conversion price of $0.10. In addition, the Convertible Debt instruments have an equal amount of $0.15, five year common stock warrants. During the year ending December 31, 2013, the Company entered into new notes with attached warrants with an exercise price of $0.06 per share, which triggered a reset provision of the exercise price of this note’s conversion price and the price of the warrants to $0.06. The Convertible Debt instruments also include Additional Investment Rights to enter into an additional convertible note with a corresponding amount of warrants equal to forty percent of the convertible note principal. The Company recorded a debt discount of $1,060,000 related to the conversion feature of the notes and the attached warrants, along with a derivative liability at inception (see Note 11: Derivative Liability). | ||||||||||||||||||||
During December of 2012 the holders of the Convertible Debt instruments exercised their conversion rights and converted $171,500 and $37,044 of the outstanding principal and accrued interest balances, respectively, into 2,085,440 shares of the Company’s common stock (see Note 13: Stockholders’ Equity). | ||||||||||||||||||||
During the twelve months ending December 31, 2013 the holders of the Convertible Debt instruments exercised their conversion rights and converted $708,500 and $153,036 of the outstanding principal and accrued interest balances. | ||||||||||||||||||||
Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the Convertible Debt instruments. During 2012 total amortization was recorded in the amount of $431,154 resulting in a debt discount of $628,846 at December 31, 2012. During 2012 interest expense of $84,243 was recorded for the Convertible Debt Instruments. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $213,838 and principal of $708,500 was converted into shares of common stock (see Note 13: Stockholders’ Equity) resulting in a decrease to the debt discount of $404,627. After conversions and amortization, principal totaled $180,000 and debt discount totaled $8,576 at December 31, 2013. During the twelve months ending December 31, 2013 interest expense of $136,447 was recorded for the Convertible Debt Instruments. | ||||||||||||||||||||
(7) The Company had received $115,000 in cash as of December 31, 2012 in exchange for Convertible Debt instruments. These Convertible Debt instruments have an eighteen month term, accrued interest at an annual rate of 12% and a conversion price of $0.10. In addition the Convertible Debt instruments have an equal amount of $0.06, five year common stock warrants. During the year ending December 31, 2013, the Company entered into new notes with attached warrants with an exercise price of $0.06 per share, which triggered a reset provision of the exercise price of this note’s conversion price and the price of the warrants to $0.06. The Convertible Debt instruments also include Additional Investment Rights to enter into an additional convertible note with a corresponding amount of warrants equal to forty percent of the convertible note principal. The Company recorded a debt discount of $115,000 related to the conversion feature of the notes and the attached warrants, along with a derivative liability at inception (see Note 11: Derivative Liability). | ||||||||||||||||||||
During the twelve months ending December 31, 2013 the holders of the Convertible Debt instruments exercised their conversion rights and converted $115,000 and $24,840 of the outstanding principal and accrued interest balances(see Note 13: Stockholders’ Equity). | ||||||||||||||||||||
Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the Convertible Debt instruments. During 2012 total amortization was recorded in the amount of $19,720 resulting in a debt discount of $95,280 at December 31, 2012. During 2012 interest expense of $3,575 was recorded for the Convertible Debt Instruments. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $9,297 the conversion of the total principal of $115,000 resulted in a decrease to the debt discount of $85,983. After conversions and amortization, principal and debt discount totaled $0 at December 31, 2013.. During the twelve months ending December 31, 2013 interest expense of $21,265 was recorded for the Convertible Debt Instruments. | ||||||||||||||||||||
(8) The Company had received $224,000 in cash as of December 31, 2013 in exchange for Convertible Debt instruments. These Convertible Debt instruments have an eighteen month term, accrued interest at an annual rate of 12% and a conversion price of $0.06. In addition the Convertible Debt instruments have an equal amount of $0.06, five year common stock warrants. The Company recorded a debt discount of $220,000 related to the conversion feature of the notes and the attached warrants, along with a derivative liability at inception (see Note 11: Derivative Liability). | ||||||||||||||||||||
During the twelve months ending December 31, 2013 the holders of the Convertible Debt instruments exercised their conversion rights and converted $194,000 and $41,040 of the outstanding principal and accrued interest balances(see Note 13: Stockholders’ Equity). | ||||||||||||||||||||
Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the Convertible Debt instruments. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $79,904 and the conversion of principal of $194,000 (see Note 13: Stockholders’ Equity) resulted in a decrease to the debt discount of $122,647. After conversions and amortization, principal totaled $30,000 and debt discount totaled $17,450 at December 31, 2013. During the twelve months ending December 31, 2013 interest expense of $43,296 was recorded for the Convertible Debt Instruments. | ||||||||||||||||||||
(9) The Company borrowed $65,000 April 2013, due April 2014. The holder of the note has the right, after the first one hundred eighty days of the note (September 30, 2013), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.28 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. During that time the amount of any prepayment would equal 111.2% of the outstanding principal balance of the note ($72,280) with no interest on the note. The Company had the right to prepay the note and accrued interest during the next ninety days following the date of the note. During that time the amount of any prepayment would equal 111.2% ($72,280) of the outstanding principal balance of the note plus a onetime interest charge of 10% applied to the principal ($7,228) for a total repayment amount of $79,508. The Company recorded a debt discount of $72,280 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $46,458 (see Note 13: Stockholders’ Equity) resulting in a decrease to the debt discount of $21,581. The net total of principal totaled $16,646 and debt discount totaled $4,241 at December 31, 2013. | ||||||||||||||||||||
(10) The Company borrowed $53,000 April 2013, due January 2014, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (October 27, 2013), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $26,500 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013, the Company paid cash of $40,000 to reduce the note. Also during the year ending December 31, 2013, total amortization was recorded in the amount of $24,333 (see Note 13: Stockholders’ Equity) resulting in a decrease to the debt discount of $2,167. The net total of principal and debt discount totaled $0 at December 31, 2013. Also during the twelve months ending December 31, 2013, interest expense of $2,120 was recorded for the note. | ||||||||||||||||||||
(11) The Company borrowed $31,200 June 2013, due June 2014. The holder of the note has the right, after the first one hundred eighty days of the note (December 1, 2013), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.28 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. During that time the amount of any prepayment would equal 111.2% of the outstanding principal balance of the note ($4,560) with no interest on the note. The Company had the right to prepay the note and accrued interest during the next ninety days following the date of the note. During that time the amount of any prepayment would equal 111.2% ($4,560) of the outstanding principal balance of the note plus a onetime interest charge of 10% applied to the principal ($3,456) for a total repayment amount of $38,016. The Company recorded a debt discount of $34,560 related to the conversion feature of the note, along with a derivative liability at inception(see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $19,884 resulting in a debt discount of $14,676 at December 31, 2013. | ||||||||||||||||||||
(12) The Company borrowed $53,000 July 2013, due April 2014, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (January 6, 2013), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $53,000 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $33,605 resulting in a debt discount of $19,395 at December 31, 2013. Also during the twelve months ending December 31, 2013, interest expense of $2,033 was recorded for the note. | ||||||||||||||||||||
(13) The Company borrowed $27,000 July 2013, due July 2014, with a one-time interest charge of 10%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.195 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $3,024 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $30,024 related to the conversion feature and original issue discount, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2013, interest expense of $3,002 was recorded, and total amortization of $14,148 was recorded resulting in a debt discount of $15,876 at December 31, 2013. | ||||||||||||||||||||
(14) The Company borrowed $53,000 August 2013, due May 2014, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (January 6, 2013), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $53,000 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013 total amortization was recorded in the amount of $24,284 resulting in a debt discount of $28,716 December 31, 2013. Also during the twelve months ending December 30, 2013, interest expense of $1,464 was recorded for the note. | ||||||||||||||||||||
(15) The Company issued 4,000 shares of its common stock and a convertible promissory note in the amount of $10,000 with interest payable at 10% per annum in September 2013. The Note matures in September of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $10,000 debt plus the $0.10 fair market value of the 4,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $10,000 debt and the value of the 4,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $9,804 toward the debt and $196 to the shares and $0 to the beneficial conversion feature. The $196 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. $65 of the debt discount has been amortized bringing the net total debt balance related to this convertible promissory note to $9,869 as of December 31, 2013. Additionally, $330 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | ||||||||||||||||||||
(16) The Company borrowed $28,500 September 2013, due July 2014, with interest at 12%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.195 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $1,500 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $24,259 related to the conversion feature and original issue discount. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2013, $937 interest expense was recorded, and total amortization of $6,314 was recorded resulting in a debt discount of $17,945 at December 31, 2013. | ||||||||||||||||||||
(17) The Company borrowed $37,500 October 2013, due July 2014, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (April 7, 2014), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $37,500 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013 total amortization was recorded in the amount of $11,318 resulting in a debt discount of $26,182 December 31, 2013. Also during the twelve months ending December 30, 2013, interest expense of $682 was recorded for the note. | ||||||||||||||||||||
(18) The Company borrowed $97,700 October 2013, due April 2014, with interest at 8%. The holder of the note has the right, after the first ninety days of the note (January 29, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% (representing a discount rate of 40%) of the lowest trading price for the Common Stock during the twenty trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first one hundred eighty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $97,700 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013 total amortization was recorded in the amount of $32,927 resulting in a debt discount of $64,773 December 31, 2013. Also during the twelve months ending December 31, 2013, interest expense of $1,954 was recorded for the note. | ||||||||||||||||||||
(19) The Company borrowed $42,500 November 2013, due August 2014, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (May 7, 2014), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $42,500 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013 total amortization was recorded in the amount of $8,132 resulting in a debt discount of $34,368 December 31, 2013. Also during the twelve months ending December 31, 2013, interest expense of $494 was recorded for the note. | ||||||||||||||||||||
(20) The Company borrowed $25,000 November 2013, due November 2014, with a one-time interest charge of 10%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.195 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $2,800 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $27,800 related to the conversion feature and original issue discount, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2013, interest expense of $2,780 was recorded, and total amortization of $3,504 was recorded resulting in a debt discount of $24,296 at December 31, 2013. | ||||||||||||||||||||
(21) The Company borrowed $27,500 December 2013, due September 2014, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (June 14, 2014), to convert the note and accrued interest into common stock at a price per share equal to 61% (representing a discount rate of 39%) of the average of the lowest five trading prices for the Common Stock during the ten trading day period ending one trading day prior to the date of Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment during the first sixty days is 130% of the outstanding amounts owed while the amount of the prepayment increases every subsequent thirty days to 135%, 140%, 145%, and 150% of the outstanding amounts owed. The Company recorded a debt discount of $27,500 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the eighteen month life of the note. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $1,495 resulting in a debt discount of $26,005 December 31, 2013. Also during the twelve months ending December 30, 2013, interest expense of $90 was recorded for the note. | ||||||||||||||||||||
(22) The Company borrowed $62,400 December 2013, due December 2014. The holder of the note has the right, after the first one hundred eighty days of the note (June 8, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.28 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. During that time the amount of any prepayment would equal 111.2% of the outstanding principal balance of the note ($69,120) with no interest on the note. The Company had the right to prepay the note and accrued interest during the next ninety days following the date of the note. During that time the amount of any prepayment would equal 111.2% ($69,120) of the outstanding principal balance of the note plus a onetime interest charge of 10% applied to the principal ($6,912) for a total repayment amount of $83,773. The Company recorded a debt discount of $69,120 related to the conversion feature of the note, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2013, total amortization was recorded in the amount of $3,977 resulting in a debt discount of $65,143 at December 31, 2013. | ||||||||||||||||||||
(23) The Company borrowed $51,700 December 2013, due December 2014. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.195 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $3,300 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $55,000 related to the conversion feature and original issue discount. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2013, $442 of interest expense was recorded, and total amortization of $3,683 was recorded resulting in a debt discount of $51,317 at December 31, 2013. |
11_DERIVATIVE_LIABILITY
11. DERIVATIVE LIABILITY | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
DERIVATIVE LIABILITY | ' | ||||||||||||
During the years ending December 31, 2013 and 2012 the Company had the following activity in their derivative liability account: | |||||||||||||
Warrants | Conversion Feature | Total | |||||||||||
Derivative Liability at December 31, 2011 | $ | - | $ | - | $ | - | |||||||
Liability on 2012 Issuances of Warrants and Debt | 2,516,204 | 2,226,600 | 4,742,804 | ||||||||||
Elimination of Liability on Conversion | - | (280,185 | ) | (280,185 | ) | ||||||||
Change in Fair Value at Year End | (172,844 | ) | (351,457 | ) | (524,301 | ) | |||||||
Derivative Liability at December 31, 2012 | 2,343,360 | 1,594,958 | 3,938,318 | ||||||||||
Liability on 2013 Issuances of Warrants and Debt | 199,752 | 1,213,731 | 1,413,483 | ||||||||||
Elimination of Liability on Conversion | - | (1,402,242 | ) | (1,402,242 | ) | ||||||||
Change in Fair Value at Year End | (1,739,289 | ) | (733,655 | ) | (2,472,944 | ) | |||||||
Derivative Liability at December 31, 2013 | $ | 803,823 | $ | 672,792 | $ | 1,476,615 | |||||||
The Company uses the Black-Scholes pricing model to estimate fair value at inception and at each reporting date. As of December 31, 2013 and 2012 the Company used the following assumptions in their Black-Scholes model: | |||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||
Risk-free interest rate | 0.07% - 1.58% | 0.16% - 0.70% | |||||||||||
Expected life in years | 0.08 – 4.37 | 1.25 - 4.75 | |||||||||||
Dividend yield | 0% | 0% | |||||||||||
Expected volatility | 116.63% - 209.82% | 112.26% - 206.14% | |||||||||||
During 2013 the Company recorded a total loss on derivative liability of $598,384 on the inception dates of the various new borrowings. This, net against the change in the fair value of the derivative liability at year end, which was a gain of $2,472,944, resulted in a total gain on derivative liability for 2013 of $1,874,560. | |||||||||||||
12_INCOME_TAXES
12. INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
NOTE 12. INCOME TAXES | ' | ||||||||
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||
Net deferred tax assets consist of the following components as of December 31, 2013 and 2012: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryover | $ | 6,175,600 | $ | 5,755,600 | |||||
Depreciation | 341,200 | 217,600 | |||||||
Related party accrual | 379,800 | 247,400 | |||||||
Deferred tax liabilities | - | - | |||||||
Valuation allowance | (7,921,200 | ) | (6,220,600 | ) | |||||
Net deferred tax asset | $ | - | $ | - | |||||
The income tax provision differs from the amount of income tax determined by applying the U.S. Federal income tax rate to pretax income from continuing operations for the years ended December 31, 2013 and 2012 due to the following: | |||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Book loss | $ | (1,180,100 | ) | $ | (2,919,300 | ) | |||
Grant income | (90,300 | ) | -231,300 | ||||||
Depreciation | 12,300 | 99,200 | |||||||
Intangible asset impairment | 113,100 | - | |||||||
Related party accrual | 132,400 | 104,400 | |||||||
Meals and entertainment | 2,700 | 3,300 | |||||||
Stock for services | 46,100 | 473,300 | |||||||
Options expense | 215,600 | 557,000 | |||||||
Non-cash interest expense | 81,500 | 56,100 | |||||||
Other non-deductable expenses | (67,100 | ) | 987,200 | ||||||
Valuation allowance | 733,800 | 870,100 | |||||||
Income tax expense | $ | - | $ | - | |||||
At December 31, 2013, the Company had net operating loss carryforwards of approximately $18,163,600 that may be offset against future taxable income from the year 2014 through 2033. | |||||||||
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years. | |||||||||
Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company's financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. | |||||||||
At the adoption date of January 1, 2007, the Company had no unrecognized tax benefit which would affect the effective tax rate if recognized. | |||||||||
The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2013, the Company had no accrued interest or penalties related to uncertain tax positions. | |||||||||
The Company files income tax returns in the U.S. federal jurisdiction and in the state of Washington. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2006. |
13_STOCKHOLDERS_EQUITY
13. STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||||||
Common Stock Issued for Cash and the Exercise of Options and Warrants | |||||||||||||||||||||
In February 2013, the Company issued 60,000 restricted shares of its common stock shares in exchange for $6,000 and the cancellation of the Additional Investment Rights attached to a convertible note received August 1, 2012. The Company also issued 60,000 restricted shares of its restricted stock in exchange for $9,000 and the cancellation of the warrants attached to the Additional Investment Rights. Additionally, the Company issued 150,000 restricted shares of its common stock shares for the exercise of warrants for $22,500 cash. | |||||||||||||||||||||
In March 2013 the Company issued 166,666 shares of common stock with a total fair market value of $25,000 to the Chief Executive Office and the Chief Financial Officer of the Company. The fair market value of the shares issued was $0.15 per share. The shares were issued for $25,000 cash. | |||||||||||||||||||||
In March 2013 the Company sold 3,333,333 shares of its common stock for $500,000. Stock offering costs incurred on this transaction were $84,045. | |||||||||||||||||||||
In April 2013 the Company sold 2,857,142 shares of its common stock for $300,000. Stock offering costs incurred on this transaction were $47,045. | |||||||||||||||||||||
In August 2013 the Company sold 214,285 shares of its common stock at $0.07 per share for cash of $15,000. In addition to the common stock shares the Company issued 214,285 $0.10 warrants good until August 5, 2014. | |||||||||||||||||||||
In September 2013 the Company issued 416,667 shares of its common stock in exchange for $25,000 in conjunction with the exercise of the Warrants attached to a convertible note received August 1, 2012. | |||||||||||||||||||||
Common Stock Issued for the Exercise of Warrants for Services | |||||||||||||||||||||
In January 2013 the Company issued 222,222 shares of common stock with a total fair market value of $20,000. The fair market value of the shares issued was $0.09 per share. The shares were exchanged for 222,222 warrants and were issued for $20,000 worth of current year services. | |||||||||||||||||||||
Common Stock Issued for Services and Prepaid Services | |||||||||||||||||||||
In March 2012 the Company issued 3,990,500 shares of common stock with a total fair market value of $359,145. The fair market value of the shares issued was $0.09 per share. The shares were issued for $359,145 worth of current year services. | |||||||||||||||||||||
In April 2012 the Company issued 20,000 shares of common stock with a total fair market value of $1,800. The fair market value of the shares issued was $0.09 per share. The shares were issued for $1,800 worth of current year services. | |||||||||||||||||||||
In June 2012 the Company issued 250,000 shares of common stock with a total fair market value of $50,000. The fair market value of the shares issued was $0.20 per share. The shares were issued for $50,000 worth of current year services. | |||||||||||||||||||||
In August 2012 the Company issued 3,000,000 shares of common stock with a total fair market value of $780,000. The fair market value of the shares issued was $0.26 per share. The shares were issued for $780,000 worth of current year services. | |||||||||||||||||||||
In November 2012 the Company issued 750,000 shares of common stock with a total fair market value of $150,000. The fair market value of the shares issued was $0.20 per share. The shares were issued for $150,000 worth of current year services. | |||||||||||||||||||||
In November 2012 the Company issued 300,000 shares of common stock with a total fair market value of $51,000. The fair market value of the shares issued was $0.17 per share. The shares were issued for $51,000 worth of current year services. | |||||||||||||||||||||
In January 2013 the Company issued 80,000 shares of common stock with a total fair market value of $15,600. The fair market value of the shares issued was $0.195 per share. The shares were issued for $15,600 worth of current year services. | |||||||||||||||||||||
In April 2013 the Company issued 500,000 shares of common stock with a total fair market value of $57,500. The fair market value of the shares issued was $0.115 per share. The shares were issued for $57,500 worth of current year services. | |||||||||||||||||||||
In May 2013 the Company issued 100,000 shares of common stock with a total fair market value of $7,500. The fair market value of the shares issued was $0.075 per share. The shares were issued for $7,500 worth of current year services. | |||||||||||||||||||||
In August 2013 the Company entered into a Consulting Agreement with an Investment Consultant to assist the Company in entering the Global markets. The Consulting Agreement called for a payment of cash plus 1,500,000 shares of the Company’s common stock. The issued shares resulted in an expense of $26,000 worth of current year services and $52,000 worth of future services based on the closing price of the Company’s common stock on the date the agreement was entered into. | |||||||||||||||||||||
In October 2013 the Company entered into a Consulting Agreement with a Marketing Consultant to assist the Company in promoting the Company’s stock. The Consulting Agreement called for a payment of cash plus 200,000 shares of the Company’s common stock. The issued shares resulted in an expense of $8,800 worth of current year services based on the closing price of the Company’s common stock on the date the agreement was entered into. | |||||||||||||||||||||
In November 2013 the Company issued 60,000 shares of common stock with a total fair market value of $3,600. The fair market value of the shares issued, based on the closing price of the Company’s common stock on the date the agreement was entered into, was $0.06 per share. The shares were issued for $3,600 worth of future services. | |||||||||||||||||||||
In December 2013 the Company issued 1,070,000 shares of common stock with a total fair market value of $69,550. The fair market value of the shares, based on the closing price of the Company’s common stock on the date the agreement was entered into, issued was $0.065 per share. The shares were issued for $17,388 worth of current year services and $52,163 worth of future services. | |||||||||||||||||||||
Common Stock Issued for Accounts Payable and Prepaid Services | |||||||||||||||||||||
In February 2012 the Company issued 15,000 shares of common stock with a total fair market value of $2,550. The fair market value of the shares issued was $0.17 per share. The shares were issued to extinguish $2,000 of a prior year liability and a loss on the extinguishment of debt was recorded for $550. | |||||||||||||||||||||
In January 2013 the Company issued 35,500 shares of common stock with a total fair market value of $6,000. The fair market value of the shares issued was $0.169 per share. The shares were issued to extinguish $2,130 of a prior year liability for $2,870 worth of current year services and a loss on the extinguishment of debt was recorded for $1,000. | |||||||||||||||||||||
In September 2013 the Company issued 1,000,000 shares of common stock to a employee in exchange for a reduction in the balance of accounts payable due the employee. The fair market value of the shares was $44,000, based on the $0.044 per share closing price of the Company's common stock on the date the shares were issued. | |||||||||||||||||||||
In December 2013 the Company issued 1,400,000 shares of its common stock with a total fair market value of $84,000. The fair market value of the shares, based on the closing price of the Company’s common stock on the date the agreement was entered into, was $0.06 per share. The shares were issued to extinguish $210,000 of a prior year liability and a gain on the extinguishment of debt was recorded for $126,000. | |||||||||||||||||||||
Common Stock Issued for Loan Fees on Convertible Debt | |||||||||||||||||||||
The Company issued a convertible promissory note in the amount of $375,000 with interest payable at 10% per annum in 2008 to the Company’s major stockholder, who is also a Director. The Note matures on December 16, 2009 (the "Maturity Date"). The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the Maturity Date. Interest on the Note is payable every six months until the Note is paid in full. Additionally, in connection with the convertible note, 150,000 shares of the Company’s common stock were issued to the note holder. At the option of the holder, the note is convertible, in whole or in part, into the Company’s common stock by taking the principal to be converted and dividing it by fifty percent of the volume-weighted average trading price of the Company’s common stock for the 10 consecutive trading days immediately preceding the date of conversion. The note is convertible at any time. | |||||||||||||||||||||
The embedded conversion feature within the convertible promissory note was assessed to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. | |||||||||||||||||||||
The Company believes that the embedded derivative instrument shall not be separated from the host contract and accounted for as a derivative instrument because the criteria for that treatment has not been met as the Company’s stock is not considered to be readily convertible to cash. Per the agreement the Company is required to deliver shares of its common stock and there is no mechanism outside the contract that facilitates that. Therefore the Company concluded that conversion feature should not be bifurcated from the host instrument. | |||||||||||||||||||||
The Company allocated the proceeds to the shares issued and the debt and then calculated a beneficial conversion feature. The Company performed these calculations which resulted in a beneficial conversion feature with an intrinsic value of $322,234. The 150,000 shares of common stock were valued at $46,053 and the debt was recorded at $6,713. Because the debt is immediately convertible, the value of the beneficial conversion feature is calculated as if converted on the commitment date. The $322,234 allocated to the beneficial conversion feature along with the $46,053 allocated to the 150,000 shares of common stock is being accreted to interest expense over the twelve month life of the debt. Interest expense of $368,287 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $375,000 as of December 31, 2009. The note expired December 16, 2009, was extended by the note holder for another year until December 16, 2010, and another year to December 16, 2011, and another year to December 16, 2012, and another year to December 16, 2013, and another year to December 16, 2014. The Company recognized interest expense of $37,418 and $37,500 in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 40,000 shares of its common stock and a convertible promissory note in the amount of $100,000 with interest payable at 10% per annum in March 2009 to the Company’s major stockholder, who is also a Director. The Note matured in March of 2010, was extended by the note holder for another year until March, 2011, and another year until March, 2012, and another year until March, 2013, and another year until March, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.30 per share. The value of the $100,000 debt plus the $0.31 fair market value of the 40,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,000 debt and the value of the 40,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $74,603 toward the debt and $11,032 to the shares and $14,365 to the beneficial conversion feature. The $11,032 value of the shares and the $14,365 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $25,397 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,000 as of December 31, 2010. Additionally, $9,942 and $10,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 20,000 shares of its common stock and a convertible promissory note in the amount of $50,000 with interest payable at 10% per annum in April 2009 to the Company’s major stockholder, who is also a Director. The Note matured in April of 2010, was extended by the note holder for another year until April, 2011, and extended again until April, 2012, and extended again until April, 2013, and extended again until April, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.31 per share. The value of the $50,000 debt plus the $0.31 fair market value of the 20,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $50,000 debt and the value of the 20,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $31,268 toward the debt and $6,140 to the shares and $12,592 to the beneficial conversion feature. The $6,140 value of the shares and the $12,592 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $18,732 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $50,000 as of December 31, 2010. Additionally, $5,000 and $5,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 90,560 shares of its common stock and a convertible promissory note in the amount of $226,400 with interest payable at 10% per annum in September 2009 to the Company’s major stockholder, who is also a Director. The Note matured in September of 2010, was extended by the note holder for another year until September, 2011, and extended again until September 2012, and extended again until September 2013, and extended again until September 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.31 per share. The value of the $226,400 debt plus the $0.39 fair market value of the 90,560 shares at the date of the agreement was prorated to arrive at the allocation of the original $226,400 debt and the value of the 90,560 shares and the beneficial conversion feature. The computation resulted in an allocation of $106,870 toward the debt and $30,552 to the shares and $88,978 to the beneficial conversion feature. The $30,552 value of the shares and the $88,978 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $119,530 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $226,400 as of December 31, 2010. Additionally, $22,640 and $22,640 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 66,000 shares of its common stock and a convertible promissory note in the amount of $155,000 with interest payable at 10% per annum in October 2009 to the Company’s major stockholder, who is also a Director. The Note matured in October of 2010, was extended by the note holder for another year until October, 2011, and extended another year to October 2012, and extended another year to October 2013, and extended another year to October 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.51 per share. The value of the $155,000 debt plus the $0.51 fair market value of the 66,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $155,000 debt and the value of the 66,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $99,690 toward the debt and $27,655 to the shares and $27,655 to the beneficial conversion feature. The $27,655 value of the shares and the $27,655 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $55,310 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $155,000 as of December 31, 2010. Additionally, $15,500 and $15,500 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 80,000 shares of its common stock and a convertible promissory note in the amount of $200,000 with interest payable at 10% per annum in November 2009 to the Company’s major stockholder, who is also a Director. The Note matured in November of 2010, was extended by the note holder for another year until November, 2011, and extended another year until November 2012, and extended another year until November 2013, and extended another year until November 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.59 per share. The value of the $200,000 debt plus the $0.59 fair market value of the 80,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $200,000 debt and the value of the 80,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $123,624 toward the debt and $38,188 to the shares and $38,188 to the beneficial conversion feature. The $38,188 value of the shares and the $38,188 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $76,376 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $200,000 as of December 31, 2010, respectively. Additionally, $20,000 and $20,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 40,000 shares of its common stock and a convertible promissory note in the amount of $100,000 with interest payable at 10% per annum in December 2009 to the Company’s major stockholder, who is also a Director. The Note matured in December of 2010, was extended by the note holder for another year until December, 2011, and another year to December, 2012, and another year to December, 2013, and another year to December, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.59 per share. The value of the $100,000 debt plus the $0.59 fair market value of the 40,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,000 debt and the value of the 40,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $61,812 toward the debt and $19,094 to the shares and $19,094 to the beneficial conversion feature. The $19,094 value of the shares and the $19,094 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $38,188 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,000 as of December 31, 2010. Additionally, $10,000 and $10,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 40,000 shares of its common stock and a convertible promissory note in the amount of $100,000 with interest payable at 10% per annum in January 2010 to the Company’s major stockholder, who is also a Director. The Note matures in January of 2011, was extended by the note holder for another year until January, 2012, and extended another year to January, 2013, and extended another year to January, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.50 per share. The value of the $100,000 debt plus the $0.45 fair market value of the 40,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,000 debt and the value of the 40,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $79,492 toward the debt and $15,254 to the shares and $5,254 to the beneficial conversion feature. The $15,254 value of the shares and the $5,254 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $20,508 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,000 as of December 31, 2011. Additionally, $10,000 and $10,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 40,000 shares of its common stock and a convertible promissory note in the amount of $100,000 with interest payable at 10% per annum in February 2010 to the Company’s major stockholder, who is also a Director. The Note matures in February of 2011, was extended by the note holder for another year until February, 2012, and extended another year to February, 2013, and extended another year to February, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.50 per share. The value of the $100,000 debt plus the $0.49 fair market value of the 40,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,000 debt and the value of the 40,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $69,224 toward the debt and $16,388 to the shares and $14,388 to the beneficial conversion feature. The $16,388 value of the shares and the $14,388 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $30,776 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,000 as of December 31, 2011. Additionally, $10,000 and $10,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 90,000 shares of its common stock and a convertible promissory note in the amount of $225,000 with interest payable at 10% per annum in March 2010. The Note matures in March of 2011, was extended by the note holder for another year until March, 2012, and was extended by the note holder for another year until March, 2013, and was extended by the note holder for another year until March, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity Date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.40 per share. The value of the $225,000 debt plus the $0.40 fair market value of the 90,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $225,000 debt and the value of the 90,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $162,932 toward the debt and $31,034 to the shares and $31,034 to the beneficial conversion feature. The $31,034 value of the shares and the $31,034 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $62,068 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $225,000 as of December 31, 2011. Additionally, $22,500 and $22,500 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 20,200 shares of its common stock and a convertible promissory note in the amount of $50,500 with interest payable at 10% per annum in April 2010 to the Company’s major stockholder, who is also a Director. The Note matures in April of 2011, was extended by the note holder for another year until April, 2012, and was extended by the note holder for another year until April, 2013, and was extended by the note holder for another year until April, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.40 per share. The value of the $50,500 debt plus the $0.40 fair market value of the 20,200 shares at the date of the agreement was prorated to arrive at the allocation of the original $50,500 debt and the value of the 20,200 shares and the beneficial conversion feature. The computation resulted in an allocation of $36,568 toward the debt and $6,966 to the shares and $6,966 to the beneficial conversion feature. The $6,966 value of the shares and the $6,966 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $13,932 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $50,500 December 31, 2011. Additionally, $5,050 and $5,050 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 22,880 shares of its common stock and a convertible promissory note in the amount of $57,200 with interest payable at 10% per annum in May 2010 to the Company’s major stockholder, who is also a Director. The Note matures in May of 2011, was extended by the note holder for another year until May, 2012, and extended by the note holder for another year until May, 2013, and extended by the note holder for another year until May, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.30 per share. The value of the $57,200 debt plus the $0.30 fair market value of the 22,880 shares at the date of the agreement was prorated to arrive at the allocation of the original $57,200 debt and the value of the 22,880 shares and the beneficial conversion feature. The computation resulted in an allocation of $44,942 toward the debt and $6,129 to the shares and $6,129 to the beneficial conversion feature. The $6,129 value of the shares and the $6,129 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $12,258 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $57,200 as of December 31, 2011. Additionally, $5,720 and $5,720 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 20,000 shares of its common stock and a convertible promissory note in the amount of $50,000 with interest payable at 10% per annum in June 2011 to the Company’s major stockholder, who is also a Director. The Note matures in June of 2012 and was extended by the note holder for another year until June, 2013, and was extended by the note holder for another year until June, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.22 per share. The value of the $50,000 debt plus the $0.22 fair market value of the 20,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $50,000 debt and the value of the 20,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $41,912 toward the debt and $4,044 to the shares and $4,044 to the beneficial conversion feature. The $4,044 value of the shares and the $4,044 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $8,088 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $50,000 as of December 31, 2012. Additionally, $5,000 and $5,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 15,400 shares of its common stock and a convertible promissory note in the amount of $38,500 with interest payable at 10% per annum in June 2011 to the Company’s major stockholder, who is also a Director. The Note matures in June of 2012, and was extended by the note holder for another year until June, 2013, and was extended by the note holder for another year until June, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.20 per share. The value of the $38,500 debt plus the $0.20 fair market value of the 15,400 shares at the date of the agreement was prorated to arrive at the allocation of the original $38,500 debt and the value of the 15,400 shares and the beneficial conversion feature. The computation resulted in an allocation of $32,796 toward the debt and $2,852 to the shares and $2,852 to the beneficial conversion feature. The $2,852 value of the shares and the $2,852 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $5,704 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $38,500 as of December 31, 2012. Additionally, $3,851 and $3,851 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 40,346 shares of its common stock and a convertible promissory note in the amount of $100,866 with interest payable at 10% per annum in June 2011 to the Company’s major stockholder, who is also a Director. The Note matures in June of 2012, and was extended by the note holder for another year until June, 2013, and was extended by the note holder for another year until June, 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.20 per share. The value of the $100,866 debt plus the $0.20 fair market value of the 40,346 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,866 debt and the value of the 40,346 shares and the beneficial conversion feature. The computation resulted in an allocation of $85,922 toward the debt and $7,472 to the shares and $7,472 to the beneficial conversion feature. The $7,472 value of the shares and the $7,472 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $14,944 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,866 as of December 31, 2012. Additionally, $10,087 and $10,008 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 40,280 shares of its common stock and a convertible promissory note in the amount of $100,700 with interest payable at 10% per annum in August 2011 to the Company’s major stockholder, who is also a Director. The Note matures in August of 2012, and was extended by the note holder for another year until August 2013, and was extended by the note holder for another year until August 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.25 per share. The value of the $100,700 debt plus the $0.25 fair market value of the 40,280 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,700 debt and the value of the 40,280 shares and the beneficial conversion feature. The computation resulted in an allocation of $82,390 toward the debt and $9,155 to the shares and $9,155 to the beneficial conversion feature. The $9,155 value of the shares and the $9,155 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $18,310 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,700 as of December 31, 2012. Additionally, $10,070 and $10,072 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 10,000 shares of its common stock and a convertible promissory note in the amount of $25,000 with interest payable at 10% per annum in September 2011 to the Company’s major stockholder, who is also a Director. The Note matures in September of 2012, and was extended by the note holder for another year until September 2013, and was extended by the note holder for another year until September 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.28 per share. The value of the $25,000 debt plus the $0.28 fair market value of the 10,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $25,000 debt and the value of the 10,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $19,964 toward the debt and $2,518 to the shares and $2,518 to the beneficial conversion feature. The $2,518 value of the shares and the $2,518 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $5,036 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $25,000 as of December 31, 2012. Additionally, $2,500 and $2,500 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 20,000 shares of its common stock and a convertible promissory note in the amount of $50,000 with interest payable at 10% per annum in September 2011 to the Company’s major stockholder, who is also a Director. The Note matures in September of 2012, and was extended by the note holder for another year until September 2013, and was extended by the note holder for another year until September 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.28 per share. The value of the $50,000 debt plus the $0.28 fair market value of the 20,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $50,000 debt and the value of the 20,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $39,928 toward the debt and $5,036 to the shares and $5,036 to the beneficial conversion feature. The $5,036 value of the shares and the $5,036 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $10,072 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $50,000 as of December 31, 2012. Additionally, $5,000 and $5,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 6,000 shares of its common stock and a convertible promissory note in the amount of $15,000 with interest payable at 10% per annum in October 2011 to the Company’s major stockholder, who is also a Director. The Note matures in October of 2012, and was extended by the note holder for another year until October 2013, and was extended by the note holder for another year until October 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.22 per share. The value of the $15,000 debt plus the $0.22 fair market value of the 6,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $15,000 debt and the value of the 6,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $12,574 toward the debt and $1,213 to the shares and $1,213 to the beneficial conversion feature. The $1,213 value of the shares and the $1,213 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $2,426 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $15,000 as of December 31, 2012. Additionally, $1,500 and $1,500 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 40,000 shares of its common stock and a convertible promissory note in the amount of $100,000 with interest payable at 10% per annum in October 2011 to the Company’s major stockholder, who is also a Director. The Note matures in October of 2012, and was extended by the note holder for another year until October 2013, and was extended by the note holder for another year until October 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.24 per share. The value of the $100,000 debt plus the $0.24 fair market value of the 40,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,000 debt and the value of the 40,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $82,482 toward the debt and $8,759 to the shares and $8,759 to the beneficial conversion feature. The $8,759 value of the shares and the $8,759 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $17,518 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,000 as of December 31, 2012. Additionally, $10,000 and $10,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 42,200 shares of its common stock and a convertible promissory note in the amount of $105,500 with interest payable at 10% per annum in November 2011 to the Company’s major stockholder, who is also a Director. The Note matures in November of 2012, and was extended by the note holder for another year until November 2013, was extended by the note holder for another year until November 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.23 per share. The value of the $105,500 debt plus the $0.23 fair market value of the 42,200 shares at the date of the agreement was prorated to arrive at the allocation of the original $105,500 debt and the value of the 42,200 shares and the beneficial conversion feature. The computation resulted in an allocation of $87,724 toward the debt and $8,888 to the shares and $8,888 to the beneficial conversion feature. The $8,888 value of the shares and the $8,888 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $17,777 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $105,500 as of December 31, 2012. Additionally, $10,550 and $10,552 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 45,440 shares of its common stock and a convertible promissory note in the amount of $113,600 with interest payable at 10% per annum in December 2011 to the Company’s major stockholder, who is also a Director. The Note matures in December of 2012, and was extended by the note holder for another year until December 2013, and was extended by the note holder for another year until December 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $113,600 debt plus the $0.10 fair market value of the 45,440 shares at the date of the agreement was prorated to arrive at the allocation of the original $113,600 debt and the value of the 45,440 shares and the beneficial conversion feature. The computation resulted in an allocation of $104,862 toward the debt and $4,369 to the shares and $4,369 to the beneficial conversion feature. The $4,369 value of the shares and the $4,369 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $8,738 has been accreted and added to the note payable bringing the total debt balance related to this convertible promissory note to $113,600 as of December 31, 2012. Additionally, $11,360 and $11,360 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012. | |||||||||||||||||||||
The Company issued 51,400 shares of its common stock and a convertible promissory note in the amount of $128,500 with interest payable at 10% per annum in January 2012 to the Company’s major stockholder, who is also a Director. The Note matures in January of 2013, and was extended by the note holder for another year until December 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.15 per share. The value of the $128,500 debt plus the $0.15 fair market value of the 51,400 shares at the date of the agreement was prorated to arrive at the allocation of the original $128,500 debt and the value of the 51,400 shares and the beneficial conversion feature. The computation resulted in an allocation of $113,952 toward the debt and $7,274 to the shares and $7,274 to the beneficial conversion feature. The $7,274 value of the shares and the $7,274 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $1,212 and $13,336 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $128,500 and $127,288 as of December 31, 2013, and 2012, respectively. Additionally, $12,850 and $11,781 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013, and 2012, respectively. | |||||||||||||||||||||
The Company issued 48,600 shares of its common stock and a convertible promissory note in the amount of $121,500 with interest payable at 10% per annum in February 2012 to the Company’s major stockholder, who is also a Director. The Note matures in February of 2013, and was extended by the note holder for another year until February 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.16 per share. The value of the $121,500 debt plus the $0.16 fair market value of the 48,600 shares at the date of the agreement was prorated to arrive at the allocation of the original $121,500 debt and the value of the 48,600 shares and the beneficial conversion feature. The computation resulted in an allocation of $106,884 toward the debt and $7,308 to the shares and $7,308 to the beneficial conversion feature. The $7,308 value of the shares and the $7,308 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $2,133 and $12,484 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $121,500 and $119,368 as of December 31, 2013 and 2012, respectively. Additionally, $12,150 and $10,379 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 46,000 shares of its common stock and a convertible promissory note in the amount of $115,000 with interest payable at 10% per annum in March 2012 to the Company’s major stockholder, who is also a Director. The Note matures in March of 2013, and was extended by the note holder for another year until March 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.14 per share. The value of the $115,000 debt plus the $0.14 fair market value of the 46,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $115,000 debt and the value of the 46,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $102,804 toward the debt and $6,098 to the shares and $6,098 to the beneficial conversion feature. The $6,098 value of the shares and the $6,098 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $2,796 and $9,401 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $115,000 and $112,205 as of December 31, 2013 and 2012, respectively. Additionally, $11,500 and $8,865 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 53,120 shares of its common stock and a convertible promissory note in the amount of $132,800 with interest payable at 10% per annum in April 2012 to the Company’s major stockholder, who is also a Director. The Note matures in April of 2013, and was extended by the note holder for another year until April 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.09 per share. The value of the $132,800 debt plus the $0.09 fair market value of the 53,120 shares at the date of the agreement was prorated to arrive at the allocation of the original $132,800 debt and the value of the 53,120 shares and the beneficial conversion feature. The computation resulted in an allocation of $123,570 toward the debt and $4,615 to the shares and $4,615 to the beneficial conversion feature. The $4,615 value of the shares and the $4,615 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $2,715 and $6,514 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $132,800 and $130,084 as of December 31, 2013 and 2012, respectively. Additionally, $13,280 and $9,340 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 40,000 shares of its common stock and a convertible promissory note in the amount of $100,000 with interest payable at 10% per annum in April 2012 to the Company’s major stockholder, who is also a Director. The Note matures in April of 2013, and was extended by the note holder for another year until April 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $100,000 debt plus the $0.10 fair market value of the 40,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,000 debt and the value of the 40,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $92,308 toward the debt and $3,846 to the shares and $3,846 to the beneficial conversion feature. The $3,846 value of the shares and the $3,846 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $2,566 and $5,126 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,000 and $97,434 as of December 31, 2013 and 2012, respectively. Additionally, $10,000 and $6,670 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 22,000 shares of its common stock and a convertible promissory note in the amount of $55,000 with interest payable at 10% per annum in May 2012 to the Company’s major stockholder, who is also a Director. The Note matures in May of 2013, and was extended by the note holder for another year until May 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.09 per share. The value of the $55,000 debt plus the $0.09 fair market value of the 22,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $55,000 debt and the value of the 22,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $51,178 toward the debt and $1,911 to the shares and $1,911 to the beneficial conversion feature. The $1,911 value of the shares and the $1,911 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $1,432 and $2,390 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $55,000 and $53,568 as of December 31, 2013 and 2012, respectively. Additionally, $5,500 and $3,438 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 28,000 shares of its common stock and a convertible promissory note in the amount of $70,000 with interest payable at 10% per annum in May 2012 to the Company’s major stockholder, who is also a Director. The Note matures in May of 2013, and was extended by the note holder for another year until May 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $70,000 debt plus the $0.10 fair market value of the 28,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $70,000 debt and the value of the 28,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $64,616 toward the debt and $2,692 to the shares and $2,692 to the beneficial conversion feature. The $2,692 value of the shares and the $2,692 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $2,243 and $3,142 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $70,000 and $67,758 as of December 31, 2013 and 2012, respectively. Additionally, $7,000 and $4,080 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 24,000 shares of its common stock and a convertible promissory note in the amount of $60,000 with interest payable at 10% per annum in August 2012 to the Company’s major stockholder, who is also a Director. The Note matures in August of 2013, and was extended by the note holder for another year until August 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.245 per share. The value of the $60,000 debt plus the $0.245 fair market value of the 24,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $60,000 debt and the value of the 24,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $49,290 toward the debt and $5,355 to the shares and $5,355 to the beneficial conversion feature. The $5,355 value of the shares and the $5,355 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $7,172 and $3,568 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $60,000 and $52,858 as of December 31, 2013 and 2012, respectively. Additionally, $6,000 and $2,000 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 58,000 shares of its common stock and a convertible promissory note in the amount of $145,000 with interest payable at 10% per annum in October 2012 to the Company’s major stockholder, who is also a Director. The Note matures in August of 2013, and was extended by the note holder for another year until August 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.15 per share. The value of the $145,000 debt plus the $0.15 fair market value of the 58,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $145,000 debt and the value of the 58,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $128,585 toward the debt and $8,208 to the shares and $8,208 to the beneficial conversion feature. The $8,208 value of the shares and the $8,208 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $12,995 and $3,420 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $145,000 and $132,004 as of December 31, 2013 and 2012, respectively. Additionally, $14,500 and $3,020 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 44,000 shares of its common stock and a convertible promissory note in the amount of $110,000 with interest payable at 10% per annum in October 2012 to the Company’s major stockholder, who is also a Director. The Note matures in August of 2013, and was extended by the note holder for another year until August 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.14 per share. The value of the $110,000 debt plus the $0.14 fair market value of the 44,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $110,000 debt and the value of the 44,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $98,334 toward the debt and $5,833 to the shares and $5,833 to the beneficial conversion feature. The $5,833 value of the shares and the $5,833 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $9,717 and $1,950 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $110,000 and $100,284 as of December 31, 2013 and 2012, respectively. Additionally, $11,000 and $1,830 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 5,000 shares of its common stock and a convertible promissory note in the amount of $12,500 with interest payable at 10% per annum in November 2012 to the Company’s major stockholder, who is also a Director. The Note matures in November of 2013, and was extended by the note holder for another year until November 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.16 per share. The value of the $12,500 debt plus the $0.16 fair market value of the 5,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $12,500 debt and the value of the 5,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $10,996 toward the debt and $752 to the shares and $752 to the beneficial conversion feature. The $752 value of the shares and the $752 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $1,254 and $250 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $12,500 and $11,246 as of December 31, 2013 and 2012, respectively. Additionally, $1,250 and $210 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 60,000 shares of its common stock and a convertible promissory note in the amount of $150,000 with interest payable at 10% per annum in December 2012 to the Company’s major stockholder, who is also a Director. The Note matures in December of 2013, and was extended by the note holder for another year until December 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.18 per share. The value of the $150,000 debt plus the $0.18 fair market value of the 60,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $150,000 debt and the value of the 60,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $129,850 toward the debt and $10,075 to the shares and $10,075 to the beneficial conversion feature. The $10,075 value of the shares and the $10,075 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $18,470 and $1,679 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $150,000 and $131,529 as of December 31, 2013 and 2012, respectively. Additionally, $15,000 and $1,250 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013 and 2012, respectively. | |||||||||||||||||||||
The Company issued 40,509 shares of its common stock and a convertible promissory note in the amount of $101,272 with interest payable at 10% per annum in January 2013 to the Company’s major stockholder, who is also a Director. The Note matures in January of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.17 per share. The value of the $101,272 debt plus the $0.17 fair market value of the 40,509 shares at the date of the agreement was prorated to arrive at the allocation of the original $101,272 debt and the value of the 40,509 shares and the beneficial conversion feature. The computation resulted in an allocation of $88,376 toward the debt and $6,448 to the shares and $6,448 to the beneficial conversion feature. The $6,448 value of the shares and the $6,448 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $12,362 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $100,738 as of December 31, 2013. Additionally, $9,695 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 16,400 shares of its common stock and a convertible promissory note in the amount of $41,000 with interest payable at 10% per annum in January 2013 to the Company’s major stockholder, who is also a Director. The Note matures in January of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.17 per share. The value of the $41,000 debt plus the $0.17 fair market value of the 16,400 shares at the date of the agreement was prorated to arrive at the allocation of the original $41,000 debt and the value of the 16,400 shares and the beneficial conversion feature. The computation resulted in an allocation of $35,780 toward the debt and $2,610 to the shares and $2,610 to the beneficial conversion feature. The $2,610 value of the shares and the $2,610 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $5,006 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $40,786 as of December 31, 2013. Additionally, $3,925 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 20,200 shares of its common stock and a convertible promissory note in the amount of $50,500 with interest payable at 10% per annum in June 2013 to the Company’s major stockholder, who is also a Director. The Note matures in June of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.069 per share. The value of the $50,500 debt plus the $0.069 fair market value of the 20,200 shares at the date of the agreement was prorated to arrive at the allocation of the original $50,500 debt and the value of the 20,200 shares and the beneficial conversion feature. The computation resulted in an allocation of $47,788 toward the debt and $1,356 to the shares and $1,356 to the beneficial conversion feature. The $1,356 value of the shares and the $1,356 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $1,469 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $49,257 as of December 31, 2013. Additionally, $2,735 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 20,200 shares of its common stock and a convertible promissory note in the amount of $50,500 with interest payable at 10% per annum in July 2013 to the Company’s major stockholder, who is also a Director. The Note matures in July of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.068 per share. The value of the $50,500 debt plus the $0.068 fair market value of the 20,200 shares at the date of the agreement was prorated to arrive at the allocation of the original $50,500 debt and the value of the 20,200 shares and the beneficial conversion feature. The computation resulted in an allocation of $47,826 toward the debt and $1,337 to the shares and $1,337 to the beneficial conversion feature. The $1,337 value of the shares and the $1,337 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $1,227 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $49,053 as of December 31, 2013. Additionally, $2,316 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 20,000 shares of its common stock and a convertible promissory note in the amount of $50,000 with interest payable at 10% per annum in August 2013 to the Company’s major stockholder, who is also a Director. The Note matures in August of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $50,000 debt plus the $0.10 fair market value of the 20,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $50,000 debt and the value of the 20,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $49,020 toward the debt and $980 to the shares and $0 to the beneficial conversion feature. The $980 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $405 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $49,425 as of December 31, 2013. Additionally, $2,083 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 20,200 shares of its common stock and a convertible promissory note in the amount of $50,500 with interest payable at 10% per annum in August 2013 to the Company’s major stockholder, who is also a Director. The Note matures in August of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $50,500 debt plus the $0.10 fair market value of the 20,200 shares at the date of the agreement was prorated to arrive at the allocation of the original $50,500 debt and the value of the 20,200 shares and the beneficial conversion feature. The computation resulted in an allocation of $49,510 toward the debt and $990 to the shares and $0 to the beneficial conversion feature. The $990 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $373 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $49,883 as of December 31, 2013. Additionally, $1,893 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 40,200 shares of its common stock and a convertible promissory note in the amount of $100,500 with interest payable at 10% per annum in September 2013 to the Company’s major stockholder, who is also a Director. The Note matures in September of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $100,500 debt plus the $0.10 fair market value of the 40,200 shares at the date of the agreement was prorated to arrive at the allocation of the original $100,500 debt and the value of the 40,200 shares and the beneficial conversion feature. The computation resulted in an allocation of $98,529 toward the debt and $1,971 to the shares and $0 to the beneficial conversion feature. The $1,971 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $618 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $99,147 as of December 31, 2013. Additionally, $3,143 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 12,000 shares of its common stock and a convertible promissory note in the amount of $30,000 with interest payable at 10% per annum in October 2013 to the Company’s major stockholder, who is also a Director. The Note matures in October of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $30,000 debt plus the $0.10 fair market value of the 12,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $30,000 debt and the value of the 12,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $29,551 toward the debt and $449 to the shares and $0 to the beneficial conversion feature. The $449 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $90 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $29,641 as of December 31, 2013. Additionally, $625 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 12,000 shares of its common stock and a convertible promissory note in the amount of $30,000 with interest payable at 10% per annum in November 2013 to the Company’s major stockholder, who is also a Director. The Note matures in November of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.12 per share. The value of the $30,000 debt plus the $0.12 fair market value of the 12,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $30,000 debt and the value of the 12,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $27,252 toward the debt and $1,374 to the shares and $1,374 to the beneficial conversion feature. The $1,374 value of the shares and the $1,374 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $340 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $27,592 as of December 31, 2013. Additionally, $375 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 10,400 shares of its common stock and a convertible promissory note in the amount of $26,000 with interest payable at 10% per annum in December 2013 to the Company’s major stockholder, who is also a Director. The Note matures in December of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.065 per share. The value of the $26,000 debt plus the $0.065 fair market value of the 10,400 shares at the date of the agreement was prorated to arrive at the allocation of the original $26,000 debt and the value of the 10,400 shares and the beneficial conversion feature. The computation resulted in an allocation of $24,682 toward the debt and $659 to the shares and $659 to the beneficial conversion feature. The $659 value of the shares and the $659 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $50 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $24,732 as of December 31, 2013. Additionally, $100 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 4,000 shares of its common stock and a convertible promissory note in the amount of $10,000 with interest payable at 10% per annum in October 2013 from a stockholder holding less that 5% of the total shares outstanding. The Note matures in October of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. At the option of the holder, the note and interest is convertible into the Company’s common stock at $0.10 per share. The value of the $10,000 debt plus the $0.10 fair market value of the 4,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $26,000 debt and the value of the 10,400 shares and the beneficial conversion feature. The computation resulted in an allocation of $10,004 toward the debt and $196 to the shares and $0 to the beneficial conversion feature. The $196 value of the shares and the $0 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $16 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $10,020 as of December 31, 2013. Additionally, $80 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
The Company issued 200,000 shares of its common stock and a convertible promissory note in the amount of $51,700 with interest payable at 12% per annum in December 2013 from a stockholder holding less that 5% of the total shares outstanding. The Note matures in December of 2014. The entire outstanding principal balance and any outstanding fees or interest is due and payable in full on the maturity date. The value of the $51,700 debt plus the fair market value of the 200,000 shares at the date of the agreement was prorated to arrive at the allocation of the original $51,700 debt and the value of the 200,000 shares and the beneficial conversion feature. The computation resulted in an allocation of $0 toward the debt and $10,388 to the shares and $41,312 to the beneficial conversion feature. The $10,388 value of the shares and the $41,312 value of the beneficial conversion feature are then amortized to interest over the twelve month life of the debt. Interest expense of $3,683 has been accrued and added to the note payable bringing the total debt balance related to this convertible promissory note to $3,683 as of December 31, 2013. Additionally, $442 worth of interest expense on the notes principal balance has been recognized in the accompanying financial statements for the twelve months ending December 31, 2013. | |||||||||||||||||||||
Common Stock Issued for Debt Converted | |||||||||||||||||||||
During December of 2012 the holders of the Convertible Debt instruments exercised their conversion rights and converted $171,500 and $37,044 of the outstanding principal and accrued interest balances, respectively, into 2,085,440 shares of the Company’s common stock. The fair market value of the shares issued was determined based on the market value of the shares on the date of conversion. The total fair market value of the shares issued was $410,581 and a debt discount of $126,067 was written off to equity for the unamortized balance of the debt converted. Additionally, the derivative liability for the debt converted of $280,185 was written off, resulting in a loss on extinguishment of debt of $47,919. | |||||||||||||||||||||
During 2013 the holders of the Convertible Debt instruments exercised their conversion rights and converted the outstanding principal and accrued interest balances, respectively, into 25,421,425 shares of the Company’s common stock. The fair market value of the shares issued was determined based on the market value of the shares on the date of conversion. The total fair market value of the shares issued was $2,442,044 and a debt discount of $653,954 was written off to equity for the unamortized balance of the debt converted. Additionally, the derivative liability for the debt converted of $1,402,242 was written off, resulting in a loss on extinguishment of debt of $222,816. | |||||||||||||||||||||
Common Stock Options | |||||||||||||||||||||
During March 2012, the Company granted consultants and employees options to purchase 1,450,000 shares of the Company’s common stock, at an exercise price of $0.09 per share. The options are fully vested and expire March 9, 2015. The quoted market price of the common stock at the time of issuance of the options was $0.09 per share. The fair value of the options totaled $87,000 using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 0.51%, ii) expected life of 3 years, iii) dividend yield of 0%, iv) expected volatility of 119.9%. | |||||||||||||||||||||
During March 2012, the Company granted directors options to purchase 500,000 shares of the Company’s common stock, at an exercise price of $0.09 per share. The options are fully vested and expire March 9, 2015. The quoted market price of the common stock at the time of issuance of the options was $0.09 per share. The fair value of the options totaled $30,000 using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 0.51%, ii) expected life of 3 years, iii) dividend yield of 0%, iv) expected volatility of 119.9%. | |||||||||||||||||||||
During June 2012, the Company granted consultants options to purchase 750,000 shares of the Company’s common stock, at an exercise price of $0.20 per share. The options are fully vested and expire June 2015. The quoted market price of the common stock at the time of issuance of the options was $0.09 per share. The fair value of the options totaled $111,980 using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 0.39%, ii) expected life of 3 years, iii) dividend yield of 0%, iv) expected volatility of 131.4%. | |||||||||||||||||||||
During September 2012, the Company granted a director, options to purchase 250,000 shares of the Company’s common stock, at an exercise price of $0.21 per share. The options are fully vested and expire September 5, 2015. The quoted market price of the common stock at the time of issuance of the options was $0.21 per share. The fair value of the options totaled $40,000 using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 0.34%, ii) expected life of 3 years, iii) dividend yield of 0%, iv) expected volatility of 131.4%. | |||||||||||||||||||||
During November 2012, the Company granted a consultant options to purchase 700,000 shares of the Company’s common stock, at an exercise price of $0.15 per share. The options are fully vested and expire November 14, 2015. The quoted market price of the common stock at the time of issuance of the options was $0.16 per share. The fair value of the options totaled $84,000 using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 0.36%, ii) expected life of 3 years, iii) dividend yield of 0%, iv) expected volatility of 134.7%. | |||||||||||||||||||||
During February 2013, the Company granted consultants and employees options to purchase 1,790,000 shares of the Company’s common stock, at a $0.20 exercise price per share. The options are fully vested and expire February 11, 2016. The quoted market price of the common stock at the time of issuance of the options was $0.19 per share. The fair value of the options totaled $250,600 using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 0.40%, ii) expected life of 3 years, iii) dividend yield of 0%, iv) expected volatility of 132.79%. | |||||||||||||||||||||
During February 2013, the Company granted an employee options to purchase 3,250,000 shares of the Company’s common stock, at a $0.20 exercise price per share. Of the 3,250,000 total options, 800,000 are fully vested and expire February 11, 2023 and 2,450,000 are vested ratably over two years and expire February 11, 2023. The quoted market price of the common stock at the time of issuance of the options was $0.19 per share. The fair value of the options totaled $617,500 using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 1.98%, ii) expected life of 10 years, iii) dividend yield of 0%, iv) expected volatility of 196.37%. | |||||||||||||||||||||
During May 2013, the Company granted consultants options to purchase 600,000 shares of the Company’s common stock, at an exercise price ranging from $0.075 to $0.120 per share. The options are fully vested and 100,000 of the options expire May 15, 2016 and 500,000 of the options expire May 29, 2014. The quoted market price of the common stock at the time of issuance of the options was $0.105 and $0.072 per share, respectively. The fair value of the options totaled $27,638 using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 0.40% and 0.14%, respectively, ii) expected life of 3 and 1 years, respectively, iii) dividend yield of 0% and 0%, respectively, iv) expected volatility of 125.04% and 159.23%, respectively. | |||||||||||||||||||||
On November 15, 2013 the Company repriced 8,300,000 of their previously issued options, reducing their strike price to $0.15, which resulted in them effectively cancelling the old options and reissuing new options in their place. | |||||||||||||||||||||
The following schedule summarizes the changes in the Company’s stock options: | |||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||
Options Outstanding | Average | Average | |||||||||||||||||||
Number | Exercise | Remaining | Aggregate | Exercise | |||||||||||||||||
Of | Price | Contractual | Intrinsic | Price | |||||||||||||||||
Shares | Per Share | Life | Value | Per Share | |||||||||||||||||
Balance at December 31, 2011 | 5,135,000 | $ | 0.20-0.50 | 0.94 years | $ | 90,000 | $ | 0.35 | |||||||||||||
Options granted | 3,650,000 | $ | 0.09-0.21 | 2.41 years | $ | 0.13 | |||||||||||||||
Options exercised | - | $ | - | - | $ | - | |||||||||||||||
Options expired | (4,010,000 | ) | $ | 0.20-0.50 | - | $ | 0.37 | ||||||||||||||
Balance at December 31, 2012 | 4,775,000 | $ | 0.09-0.30 | 2.09 years | $ | 540,000 | $ | 0.17 | |||||||||||||
Options granted | 13,340,000 | $ | 0.08-0.20 | 2.75 years | $ | 0.17 | |||||||||||||||
Options exercised | - | $ | - | - | $ | - | |||||||||||||||
Options expired | (7,765,000 | ) | $ | 0.15-0.30 | - | $ | 0.21 | ||||||||||||||
Balance at December 31, 2013 | 10,350,000 | $ | 0.08-0.28 | 3.78 years | $ | - | $ | 0.14 | |||||||||||||
Exercisable at December 31, 2012 | 4,775,000 | $ | 0.09-0.30 | 2.09 years | $ | 540,000 | $ | 0.17 | |||||||||||||
Exercisable at December 31, 2013 | 8,975,000 | $ | 0.08-0.28 | 2.96 years | $ | - | $ | 0.13 | |||||||||||||
Common Stock Warrants | |||||||||||||||||||||
During the year ended December 31, 2012, the Company granted lenders a total of 11,558,334 warrants to purchase the Company’s common stock in conjunction with convertible debt (see Note 10: Convertible Notes Payable), which resulted in a debt discount, derivative liability (see Note 11: Derivative Liability), and loss on derivative being recorded upon issuance. | |||||||||||||||||||||
During the year ending December 31, 2012 the Company issued 3,740,297 warrants for fees incurred in conjunction with their debt financing arrangement. At inception the fair value of the warrants were recognized as debt offering costs (see Note 15: Debt Issuance Costs) and as a derivative liability (see Note 11: Derivative Liability). | |||||||||||||||||||||
During the year ended December 31, 2012, the Company granted consultants 9,113,070 warrants to purchase the Company’s common stock for services provided. The $1,285,381 fair value of the warrants was recognized in earnings and determined using the Black-Scholes option pricing model with the following assumptions: i) risk free interest rate of 0.36% to 0.62%, ii) expected life of 3 to 5 years, iii) dividend yield of 0%, iv) expected volatility of 113.8% to 131.5%. | |||||||||||||||||||||
During the year ended December 31, 2013, the Company granted consultants 5,500,000 warrants to purchase the Company’s common stock for services provided in conjunction with a capital investment transaction. | |||||||||||||||||||||
During the year ended December 31, 2013, the Company issued 2,240,000 warrants to purchase the Company’s common stock in conjunction with convertible debt (see Note 10: Convertible Notes Payable), which resulted in a debt discount, derivative liability (see Note 11: Derivative Liability), and loss on derivative being recorded upon issuance. | |||||||||||||||||||||
During the year ended December 31, 2013, the Company issued 7,357,140 warrants to purchase the Company’s common stock in conjunction with capital investment transactions. | |||||||||||||||||||||
During the year ended December 31, 2013, the Company issued 250,000 warrants to purchase the Company’s common stock in conjunction with a capital investment transaction by the Chief Executive Office and the Chief Financial Officer of the Corporation. | |||||||||||||||||||||
In October 2013 the Company sold 7,046,666 warrants for $7,047 to a Director. The warrants have an exercise price of $0.10 and expire December 31, 2020. | |||||||||||||||||||||
The following schedule summarizes the changes in the Company’s stock warrants: | |||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||
Warrants Outstanding | Average | Average | |||||||||||||||||||
Number | Exercise | Remaining | Aggregate | Exercise | |||||||||||||||||
Of | Price | Contractual | Intrinsic | Price | |||||||||||||||||
Shares | Per Share | Life | Value | Per Share | |||||||||||||||||
Balance at December 31, 2011 | - | $ | - | - | - | $ | - | ||||||||||||||
Warrants granted | 24,411,701 | $ | 0.09-0.25 | 3.76 years | $ | 2,292,551 | $ | 0.15 | |||||||||||||
Warrants exercised | - | $ | - | - | $ | - | |||||||||||||||
Warrants expired | - | $ | - | - | $ | - | |||||||||||||||
Balance at December 31, 2012 | 24,411,701 | $ | 0.09-0.25 | 3.76 years | $ | 2,292,551 | $ | 0.15 | |||||||||||||
Warrants granted | 22,393,806 | $ | 0.06-0.18 | 3.54 years | $ | 0.13 | |||||||||||||||
Warrants exercised | (788,889 | ) | $ | 0.06-0.09 | - | $ | 0.07 | ||||||||||||||
Warrants expired | (5,913,070 | ) | $ | 0.10-0.15 | - | $ | 0.13 | ||||||||||||||
Balance at December 31, 2013 | 40,103,548 | $ | 0.06-0.25 | 3.19 years | $ | 50,796 | $ | 0.11 | |||||||||||||
Exercisable at December 31, 2012 | 24,411,701 | $ | 0.09-0.25 | 3.76 years | $ | 2,292,551 | $ | 0.15 | |||||||||||||
Exercisable at December 31, 2013 | 40,103,548 | $ | 0.06-0.25 | 3.19 years | $ | 50,796 | $ | 0.11 | |||||||||||||
The following summarizes the exercise price per share and expiration date of the Company’s outstanding and exercisable warrants to purchase common stock at December 31, 2013: | |||||||||||||||||||||
Number | Exercise Price | Expiration Date | |||||||||||||||||||
214,285 | $ | 0.1 | 5-Aug-14 | ||||||||||||||||||
7,142,855 | $ | 0.15 | 18-Oct-14 | ||||||||||||||||||
5,500,000 | $ | 0.06 | 1-Mar-15 | ||||||||||||||||||
250,000 | $ | 0.18 | 15-Mar-15 | ||||||||||||||||||
977,778 | $ | 0.09 | 4-Jun-15 | ||||||||||||||||||
2,000,000 | $ | 0.25 | 4-Jun-15 | ||||||||||||||||||
9,240,297 | $ | 0.06 | 13-Jul-17 | ||||||||||||||||||
1,000,000 | $ | 0.06 | 30-Jul-17 | ||||||||||||||||||
2,200,000 | $ | 0.06 | 1-Aug-17 | ||||||||||||||||||
1,750,000 | $ | 0.06 | 2-Aug-17 | ||||||||||||||||||
833,334 | $ | 0.06 | 26-Sep-17 | ||||||||||||||||||
125,000 | $ | 0.06 | 5-Oct-17 | ||||||||||||||||||
40,000 | $ | 0.1 | 1-Apr-18 | ||||||||||||||||||
1,783,333 | $ | 0.06 | 15-May-18 | ||||||||||||||||||
7,046,666 | $ | 0.1 | 31-Dec-20 | ||||||||||||||||||
40,103,548 | |||||||||||||||||||||
14_CONCENTRATIONS_OF_CREDIT_AN
14. CONCENTRATIONS OF CREDIT AND OTHER RISKS | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value Disclosures [Abstract] | ' |
NOTE 14. CONCENTRATIONS OF CREDIT AND OTHER RISKS | ' |
Accounts Receivable | |
The Company’s accounts receivable result from credit sales to customers. The Company had one customer that represented 72.4% and another customer that represented 72.7% of the Company’s total revenues for the years ended December 31, 2013 and 2012, respectively. The customer that represented 72.4% of the Company’s total revenues for the year ended December 31, 2013 accounted for 100% of the Stable Isotope revenues for that year, and the customer that represented 72.7% of the Company’s total revenues for the twelve months ended December 31, 2012 accounted for 100% of the total F-18 sales for that year. The Company had no net accounts receivable balance at December 31, 2013. | |
The loss of a significant customer representing the percentage of total revenues as represented for the years ended December 31, 2013 and 2012 would have a temporary adverse effect on the Company’s revenues, which would continue until the Company located new customers to replace them. | |
The Company routinely assesses the financial strength of its customers and provides an allowance for doubtful accounts as necessary. As of December 31, 2013 and 2012 the Company had no allowance or bad debt expense recorded. | |
Inventories | |
The Company has two products, one of which is produced in the Company’s production facility and the other product sold by the Company is purchased from one supplier. The failure of this supplier to meet its commitment on schedule could have a material adverse effect on the Company’s business, operating results and financial condition. If the sole-source supplier were to go out of business or otherwise become unable to meet its supply commitments, the process of locating and qualifying alternate sources could require up to several months, during which time the Company’s sales could be delayed. Such delays could have a material adverse effect on the Company’s business, operating results and financial condition. |
15_DEBT_ISSUANCE_COSTS
15. DEBT ISSUANCE COSTS | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
DEBT ISSUANCE COSTS | ' | ||||
During the year ending December 31, 2012 the Company issued 3,740,297 warrants for fees incurred in conjunction with their debt financing arrangement. The warrants were valued at $756,055 (see Note 13: Common Stock) and were recorded as debt issuance costs with a corresponding derivative liability (see Note 11: Derivative Liability). Additionally, the Company paid $123,000 in cash for debt arrangements during the year ended December 31, 2012. During the year ending December 31, 2013 the Company paid $32,800 in cash for debt arrangements. | |||||
The Company amortizes debt issuance costs on a straight-line basis over the life of the debt arrangements and recognized $555,468 and $336,601 during the years ending December 31, 2013 and 2012, respectively. | |||||
During the twelve months ending December 31, 2013 and 2012 the Company had the following activity in their debt issuance cost account: | |||||
3,740,297 Warrants issued as fees for debt financing arrangements | $ | 756,055 | |||
Cash paid as fees for debt arrangements | 123,000 | ||||
Total debt issuance costs incurred in 2012 | 879,055 | ||||
Amortization of debt issuance costs | (336,601 | ) | |||
Debt issuance costs at December 31, 2012 | 542,454 | ||||
Cash paid as fees for debt arrangements | 32,800 | ||||
Amortization of debt issuance costs | (555,468 | ) | |||
Debt issuance costs at December 31, 2013 | $ | 19,786 | |||
16_SUPPLEMENTAL_CASH_FLOW_INFO
16. SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2013 | |
Supplemental Cash Flow Elements [Abstract] | ' |
SUPPLEMENTAL CASH FLOW INFORMATION | ' |
During the year ended December 31, 2013, the Company had the following non-cash investing and financing activities: | |
Issued 2,435,500 shares of common stock for an extinguishment of $256,130 worth of debt. | |
Issued 222,222 warrants for an extinguishment of $20,000 worth of debt. | |
Issued 25,421,425 shares of common stock for an extinguishment of $1,231,158 worth of principal on convertible notes payable $239,782 worth of accrued interest, $1,404,242 worth of derivative liabilities and $653,954 worth of debt discount. | |
Increased derivative liability and decreased convertible notes payable by $815,099. | |
Issued 3,510,000 shares of common stock valued at $240,550, of which $107,762 was recorded as prepaid expenses and $132,788 was recorded as stock for services. | |
Decreased related party convertible notes by $31,959 and decreased convertible notes payable by $51,896 and increased additional paid in capital by $83,439 and increased common stock by $416 due to 416,109 shares issued in conjunction with convertible notes for the debt discount. | |
Increased additional paid in capital and increased debt discount for $22,759 for a beneficial conversion feature on a convertible note. | |
Sold 7,046,666 warrants for $7,047 to a director which was offset against accounts payable owing to him. | |
During the year ended December 31, 2012, the Company had the following non-cash investing and financing activities: | |
Issued 15,000 shares of common stock for an extinguishment of $2,000 worth of debt. | |
Decreased related party convertible notes payable by $127,933 and increased additional paid in capital by $127,453 and increased common stock by $480 due to 480,120 shares issued in conjunction with convertible notes for a debt discount. | |
Issued 2,085,440 shares of common stock for an extinguishment of $171,500 worth of principal on convertible notes payable and $37,044 worth of accrued interest. | |
Increased derivative liability and decreased convertible notes payable by $1,989,965. | |
·Converted $46,725 worth of accounts payable into a short term loan. |
17_SUBSEQUENT_EVENTS
17. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
In January 2014 the Company issued 100,000 restricted shares of its common stock to a consultant in payment of $7,500 in fees owed. | |
On January 16, 2014, the Company issued 608,000 unrestricted shares of its common stock shares in exchange for $30,000 as a result of an exercise of the Additional Investment Rights attached to a convertible note received August 1, 2012 and converted May 17, 2013 plus $6,480 of accrued interest on the note. In addition the Company also issued on January 24, 2014 100,000 restricted shares of its restricted stock in exchange for $6,000 as a result of an exercise of the warrants attached to the Additional Investment Rights. | |
In January 2014 the Company received $26,000 in exchange for a convertible 10%, one year note. The note plus interest is convertible at the option of the note holder into common stock share at $0.095 per share. In addition the Company issued the note holder 10,400 shares of its common stock as a loan origination fee. | |
In January 2014 the Company issued an 8% Convertible Promissory Note in the amount of $50,000 to an unrelated company. The note is not convertible by the holder for the first 180 days. The note may not be prepaid without the consent of the note holder. | |
In January 2014 the Company issued a 12% Convertible Promissory Note in the amount of $50,000 to an unrelated company. The note may not be prepaid without the consent of the note holder. | |
In January 2014 the Company issued an 8% Convertible Promissory Note in the amount of $50,000 to an unrelated company. The note is not convertible by the holder for the first 180 days. The note may not be prepaid without the consent of the note holder. | |
In January 2014 the Company issued a 10% Convertible Promissory Note in the amount of $55,500 to an unrelated company. The note is not convertible by the holder for the first 180 days, in which time the Company can repay the note plus interest. If the Company repays the note within the first 90 days the Company will pay 111.2% of the unpaid note balance plus interest. | |
In January 2014 the Company issued a 10% Convertible Promissory Note in the amount of $55,500 to an unrelated company. The note is not convertible by the holder for the first 180 days, in which time the Company can repay the note plus interest. If the Company repays the note within the first 90 days the Company will pay 111.2% of the unpaid note balance plus interest. | |
In February 2014 the Company issued an 8% Convertible Promissory Note in the amount of $50,000 to an unrelated company. The note is not convertible by the holder for the first 180 days. The note may not be prepaid without the consent of the note holder. | |
In February 2014 the Company issued a Convertible Promissory Note in the amount of $278,000 to an unrelated company for 0.0% interest for the first ninety days, during which time the Company can repay the note. The Company may not repay the note after the first ninety days without approval of the note holder. Interest on the note after the first ninety days is calculated at a onetime 10% of the original principal balance. The note is not convertible by the holder for the first 180 days. | |
In February 2014 the Company issued a 12% Convertible Promissory Note in the amount of $55,000 to an unrelated company. The note calls for a 200,000 restricted shares of the Company’s common stock to be issued a loan fee. The note is not convertible by the holder for the first 180 days, in which time the Company can repay the note plus interest. If the Company repays the note within the first 30 days the interest rate is calculated at 25% of the note balance, if paid between 31 days and 179 days the interest rate is calculated at 35% of the note balance, and if repaid after 180 days the interest rate is calculated at 45% of the note balance. | |
In February 2014 the Company issued 71,250 restricted shares of its common stock, representing $5,000, to a consultant for services. | |
In March 2014 the Company issued 100,000 restricted shares of its common stock representing $6,000, to a consultant for services. | |
On March 18, 2014, the Company issued 202,666 unrestricted shares of its common stock shares included in its S-1 filing that was effective December 7, 2012 representing 166,666 shares for the note and 36,000 shares for the interest on the note. | |
In March 2014 the Company issued a 10% Convertible Promissory Note in the amount of $335,000 to an unrelated company. If the Company prepays the note the prepayment amount shall be 125% of the original principal amount. | |
During the months of January, February, and March 2014 the Company issued 5,343,939 shares of unrestricted stock in exchange for convertible debt raised in 2013. The Company also issued 302,671 shares of unrestricted stock representing of the accrued interest on the convertible debt that was converted. | |
The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events to disclose. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU1
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary Of Significant Accounting Policies Policies | ' | ||||||||
Use of Estimates | ' | ||||||||
Use of Estimates | |||||||||
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||
Cash Equivalents | ' | ||||||||
Cash Equivalents | |||||||||
For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. | |||||||||
Accounts Receivable | ' | ||||||||
Accounts Receivable | |||||||||
Accounts receivables are stated at the amount that management of the Company expects to collect from outstanding balances. Management provides for probable uncollectible amounts through an allowance for doubtful accounts. Additions to the allowance for doubtful accounts are based on management’s judgment, considering historical write-offs, collections and current credit conditions. Balances which remain outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to the applicable accounts receivable. Payments received subsequent to the time that an account is written off are considered bad debt recoveries. As of December 31, 2013, the Company has experienced no bad debt write offs from operations. | |||||||||
Inventory | ' | ||||||||
Inventory | |||||||||
Inventory is reported at the lower of cost or market, determined using the first-in, first-out basis, or net realizable value. All inventories consist of Finished Goods. The Company had no Raw Materials or Work in Process. | |||||||||
Fixed Assets | ' | ||||||||
Fixed Assets | |||||||||
Fixed assets are carried at the lower of cost or net realizable value. Production equipment with a cost of $2,500 or greater and other fixed assets with a cost of $1,500 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. | |||||||||
Depreciation is computed using the straight-line method over the following estimated useful lives: | |||||||||
Production equipment | 3 to 7 years | ||||||||
Office equipment | 2 to 5 years | ||||||||
Furniture and fixtures | 2 to 5 years | ||||||||
Leasehold improvements and capital lease assets are amortized over the shorter of the life of the lease or the estimated life of the asset. | |||||||||
Management of the Company reviews the net carrying value of all of its equipment on an asset by asset basis whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. These reviews consider the net realizable value of each asset, as measured in accordance with the preceding paragraph, to determine whether impairment in value has occurred, and the need for any asset impairment write-down. | |||||||||
The types of events and circumstances that management believes could indicate impairment are as follows: | |||||||||
· | A significant decrease in the market price of a long-lived asset. | ||||||||
· | A significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition. | ||||||||
· | A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator. | ||||||||
· | An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset. | ||||||||
· | A current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset. | ||||||||
· | A current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. | ||||||||
The fair value of assets is first determined by quoted market prices, if available. Otherwise, the estimate of fair value is based on the best information available in the circumstances, including prices for similar assets and the results of using other valuation techniques. If quoted market prices are not available a present value technique is often the best available valuation technique with which to estimate fair value. It is believed that an expected present value technique is superior to a traditional present value technique, especially in situations in which the timing or amount of estimated future cash flows is certain. | |||||||||
The traditional approach is useful for many measurements, especially those in which comparable assets and liabilities can be observed in the marketplace. However the traditional approach does not provide the tools needed to address some complex measurement problems, including the measurement of nonfinancial assets and liabilities for which no market for the item or a comparable item exists. The traditional approach places most of the emphasis on selection of an interest rate. A proper search for “the rate commensurate with the risk” requires analysis of at least two items – one asset or liability that exists in the marketplace and has an observed interest rate and the asset or liability being measured. The appropriate rate of interest for the cash flows being measured must be inferred from the observable rate of interest in some other asset or liability and, to draw that inference, the characteristics of the cash flows must be similar to those of the asset being measured. | |||||||||
Although management has made its best estimate of the factors that affect the carrying value based on current conditions, it is reasonably possible that changes could occur which could adversely affect management’s estimate of net cash flows expected to be generated from its assets, and necessitate asset impairment write-downs. | |||||||||
License Fees | ' | ||||||||
License Fees | |||||||||
License fees resulting from the acquisition of a patent license, for the production of Actinium 225, from a related individual for common stock valued, at the time of acquisition, at $75,000, and from the result of the acquisition of a patent license, for a Neutron Generator, from Neu-Hope Technologies for preferred stock valued, at the time of acquisition, at $3,040,000, discounted for 4.25% incremental borrowing rate to $2,897,625, were fully amortized as of December 31, 2010. License fees related to a Mo-99 patent license acquired in June 2010 for $10,000 and license fees related to a Brachytherapy patent license acquired in September 2010 for $10,000 are currently being amortized over a three year period. License fees are stated at cost, less accumulated amortization. Amortization of license fees is computed using the straight-line method over the estimated economic useful life of the assets. | |||||||||
The Company made a $10,000 investment in 2010 for a patent license regarding its technology for the production of Mo-99. In May 2010 the Company entered into a License Agreement for the Patent Rights in the area of radioisotope production using electron beam accelerator(s) for creating short lived radioisotopes such as Molybdenum-99 and Technetium-99 with the University of Missouri. This Agreement calls for a $10,000 nonrefundable fee paid upon execution, a royalty agreement on sales, and an equipment licensing fee on equipment sales. Additionally the Agreement calls for a milestone payment of $250,000, due and payable five years after execution of this agreement and a milestone payment of $250,000, due and payable upon reaching $50,000,000 in cumulative net sales. The $10,000 nonrefundable fee paid upon execution was capitalized as License Fees and is amortized on the straight line basis over a three year life. This license fee was fully amortized as of December 31, 2013. | |||||||||
The Company made a $10,000 investment in 2010 for an exclusive license with Battelle Memorial Institute regarding its technology for the production of a Brachytherapy seed. In August 2010 the Company entered into a License Agreement for the Patent Rights in the area of a Brachytherapy seed with a Fast-dissolving Matrix for Optimized Delivery of Radionuclides. This Agreement calls for a $10,000 nonrefundable fee upon execution, a royalty agreement on sales and on funds received from any sublicenses. The $10,000 nonrefundable fee paid upon execution was capitalized as License Fees and is amortized on the straight line basis over a three year life. Additionally the Agreement calls for a minimum annual fee as follows: | |||||||||
Calendar Year | Minimum Royalties per Calendar Year | ||||||||
2010 | $ | - | |||||||
2011 | $ | - | |||||||
2012 | $ | 2,500 | |||||||
2013 | $ | 5,000 | (1) | ||||||
2014 | $ | 7,500 | |||||||
2015 | $ | 10,000 | |||||||
2016 and each calendar | $ | 25,000 | |||||||
year thereafter | |||||||||
(1) Paid February, 2014. | |||||||||
The Company made a $5,000 investment in February 2011 for a one year option agreement to negotiate an exclusive license agreement with Battelle Memorial Institute regarding its patents for the production of a radiogel technology. This option agreement calls for a $5,000 upfront fee for the option, which expired February 2012 and was fully expensed in the twelve months ended December 31, 2011. Effective March 2012, the Company entered into an exclusive license agreement with Battelle Memorial Institute regarding the use of its patented radiogel technology. This license agreement calls for a $17,500 nonrefundable license fee and a royalty based on a percent of gross sales for licensed products sold; the license agreement also contains a minimum royalty amount to be paid each year starting with 2013. | |||||||||
The Company periodically reviews the carrying values of capitalized license fees and any impairments are recognized when the expected future operating cash flows to be derived from such assets are less than their carrying value. | |||||||||
Amortization is computed using the straight-line method over the estimated useful live of three years. Amortization of license fees was $8,889, and $11,162 for the years ended December 31, 2013, and 2012, respectively. Based on the license fees recorded at December 31, 2013, and assuming no subsequent impairment of the underlying assets, the remaining unamortized portion of $7,171, will be fully amortized during the year ending December 31, 2015. Future annual amortization is expected to be as follows: | |||||||||
Calendar Year | Annual Amortization | ||||||||
2014 | $ | 5,832 | |||||||
2015 | $ | 1,339 | |||||||
Patents and Intellectual Property | ' | ||||||||
Patents and Intellectual Property | |||||||||
Patent filing costs and intellectual property costs totaling $7,716, and $77,412, were capitalized during the twelve months ended December 31, 2013, and 2012. The Company evaluates the recoverability of intangible assets, including patents and intellectual property, on a continual basis. Several factors are used to evaluate intangibles, including, but not limited to, management’s plans for future operations, recent operating results and projected and expected undiscounted future cash flows. During the years ended December 31, 2013 and 2012 the Company impaired $332,709 and $0, respectively, worth of patent and intellectual property. This left a total $35,482 and $360,475 of capitalized patents and intellectual property costs at December 31, 2013 and 2012, respectively. | |||||||||
While patents are being developed or pending they are not being amortized. Management has determined that the economic life of the patents to be 10 years and amortization, over such 10-year period and on a straight-line basis will begin once the patents have been issued and the Company begins utilization of the patents through production and sales, resulting in revenues. As of December 31, 2013, no amortization has begun. | |||||||||
Revenue Recognition | ' | ||||||||
Revenue Recognition | |||||||||
The Company recognized revenue related to product sales when (i) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. | |||||||||
Revenue for the fiscal year ended December 31, 2013 consisted of the sales of Oxygen 18 (stable isotope), Flouride 18 and Consulting Revenue. Revenue for the fiscal year ended December 31, 2012 consisted of the sales of Flouride 18 and Consulting Revenue. The Company recognizes revenue once an order has been received and shipped to the customer or services have been performed. Prepayments, if any, received from customers prior to the time products are shipped are recorded as deferred revenue. In these cases, when the related products are shipped, the amount recorded as deferred revenue is recognized as revenue. The Company does not accrue for sales returns and other allowances as it has not experienced any returns or other allowances. | |||||||||
Income from Grants | ' | ||||||||
Income from Grants and Deferred Income | |||||||||
Government grants are recognized when all conditions of such grants are fulfilled or there is reasonable assurance that they will be fulfilled. The Company has chosen to recognize income from grants as it incurs costs associated with those grants, and until such time as it recognizes the grant as income those funds received will be classified as Deferred Income on the balance sheet. | |||||||||
For the twelve months ended December 31, 2012 the Company recognized $680,234 of the $1,215,000 Department of Energy grant as income. The $680,234 recognized as of December 31, 2012 was for costs incurred for the twelve months ended December 31, 2012. | |||||||||
For the twelve months ended December 31, 2013 the Company recognized $265,531 of the $1,215,000 Department of Energy grant as income. The $265,531 recognized as of December 31, 2013 was for costs incurred for the twelve months ended December 31, 2013. | |||||||||
As of December 31, 2013 and 2012 the grant money received and grant money recognized as income and deferred income is: | |||||||||
$1,215,000 | |||||||||
Brachytherapy Grant | |||||||||
Deferred income at December 31, 2010 | $ | 1,191,492 | |||||||
Recognized income from grants in 2011 | 245,727 | ||||||||
Deferred income at December 31, 2011 | 945,765 | ||||||||
Recognized income from grants in 2012 | 680,234 | ||||||||
Deferred income at December 31, 2012 | 265,531 | ||||||||
Recognized income from grants in 2013 | 265,531 | ||||||||
Deferred income at December 31, 2013 | $ | - | |||||||
Net Loss Per Share | ' | ||||||||
Net Loss Per Share | |||||||||
The Company accounts for its income (loss) per common share by replacing primary and fully diluted earnings per share with basic and diluted earnings per share. Basic earnings/loss per share is computed by dividing income (loss) available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period, and does not include the impact of any potentially dilutive common stock equivalents since the impact would be anti-dilutive. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. | |||||||||
Securities, all of which represent common stock equivalents, that could be dilutive in the future as of December 31, 2013 and 2012 are as follows: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Convertible debt | 56,286,404 | 32,859,850 | |||||||
Common stock options | 10,350,000 | 4,775,000 | |||||||
Common stock warrants | 40,103,548 | 24,411,701 | |||||||
Total potential dilutive securities | 106,739,952 | 62,046,551 | |||||||
Research and Development Costs | ' | ||||||||
Research and Development Costs | |||||||||
Research and developments costs, including salaries, research materials, administrative expenses and contractor fees, are charged to operations as incurred. The cost of equipment used in research and development activities which has alternative uses is capitalized as part of fixed assets and not treated as an expense in the period acquired. Depreciation of capitalized equipment used to perform research and development is classified as research and development expense in the year computed. | |||||||||
The Company incurred $416,161, and $973,611 research and development costs for the years ended December 31, 2013, and 2012, respectively, all of which were recorded in the Company’s operating expenses noted on the income statements for the years then ended. | |||||||||
Advertising and Marketing Costs | ' | ||||||||
Advertising and Marketing Costs | |||||||||
Advertising and marketing costs are expensed as incurred except for the cost of tradeshows which are deferred until the tradeshow occurs. There were no tradeshow expenses incurred and not expensed as of the years ended December 31, 2013 and 2012. During the twelve months ended December 31, 2013 and 2012, the Company incurred $0 and $1,050 respectively, in advertising costs. | |||||||||
Shipping and Handling Costs | ' | ||||||||
Shipping and Handling Costs | |||||||||
Shipping and handling costs are expensed as incurred and included in cost of product sales. | |||||||||
Legal Contingencies | ' | ||||||||
Legal Contingencies | |||||||||
In the ordinary course of business, the Company is involved in legal proceedings involving contractual and employment relationships, product liability claims, patent rights, and a variety of other matters. The Company records contingent liabilities resulting from asserted and unasserted claims against it, when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. The Company discloses contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimated probable losses require analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. Currently, the Company does not believe any probable legal proceedings or claims will have a material impact on its financial position or results of operations. However, if actual or estimated probable future losses exceed the Company’s recorded liability for such claims, it would record additional charges as other expense during the period in which the actual loss or change in estimate occurred. | |||||||||
Income Taxes | ' | ||||||||
Income Taxes | |||||||||
To address accounting for uncertainty in tax positions, the Company clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company also provides guidance on de-recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure and transition. | |||||||||
The Company files income tax returns in the U.S. federal jurisdiction, and Delaware. The Company did not have any tax expense for the years ended December 31, 2013 and 2012. The Company did not have any deferred tax liability or asset on its balance sheet on December 31, 2013 and 2012. | |||||||||
Interest costs and penalties related to income taxes, if any, will be classified as interest expense and general and administrative costs, respectively, in the Company's financial statements. For the years ended December 31, 2013 and 2012, the Company did not recognize any interest or penalty expense related to income taxes. The Company believes that it is not reasonably possible for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months. | |||||||||
Stock-Based Compensation | ' | ||||||||
Stock-Based Compensation | |||||||||
The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests. | |||||||||
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from non-employees. Costs are measured at the fair market value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of the date on which there first exists a firm commitment for performance by the provider of goods or services or on the date performance is complete. The Company recognizes the fair value of the equity instruments issued that result in an asset or expense being recorded by the Company, in the same period(s) and in the same manner, as if the Company has paid cash for the goods or services. | |||||||||
Recent Accounting Pronouncements | ' | ||||||||
Recent Accounting Pronouncements | |||||||||
There are no recently issued accounting pronouncements that the Company believes are applicable or would have a material impact on the financial statements of the Company. | |||||||||
1_BASIS_OF_PRESENTATION_Tables
1. BASIS OF PRESENTATION (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Basis Of Presentation Tables | ' | ||||||||||||||||
Schedule of fair value of financial instruments | ' | ||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at December 31, 2013: | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Total Assets Measured at Fair Value | $ | - | $ | - | $ | - | $ | - | |||||||||
Liabilities | |||||||||||||||||
Derivative Liability | $ | 1,476,615 | $ | - | $ | - | $ | 1,476,615 | |||||||||
Total Liabilities Measured at Fair Value | $ | 1,476,615 | $ | - | $ | - | $ | 1,476,615 | |||||||||
Assets and liabilities measured at fair value on a recurring basis are as follows at December 31, 2012: | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Total Assets Measured at Fair Value | $ | - | $ | - | $ | - | $ | - | |||||||||
Liabilities | |||||||||||||||||
Derivative Liability | $ | 3,938,318 | $ | - | $ | - | $ | 3,938,318 | |||||||||
Total Liabilities Measured at Fair Value | $ | 3,938,318 | $ | - | $ | - | $ | 3,938,318 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Summary Of Significant Accounting Policies Tables | ' | ||||||||
Depreciation estimated useful life | ' | ||||||||
Production equipment | 3 to 7 years | ||||||||
Office equipment | 2 to 5 years | ||||||||
Furniture and fixtures | 2 to 5 years | ||||||||
License minimum annual fee | ' | ||||||||
Calendar Year | Minimum Royalties per Calendar Year | ||||||||
2010 | $ | - | |||||||
2011 | $ | - | |||||||
2012 | $ | 2,500 | |||||||
2013 | $ | 5,000 | (1) | ||||||
2014 | $ | 7,500 | |||||||
2015 | $ | 10,000 | |||||||
2016 and each calendar | $ | 25,000 | |||||||
year thereafter | |||||||||
Future annual amortization license fee | ' | ||||||||
Calendar Year | Annual Amortization | ||||||||
2014 | $ | 5,832 | |||||||
2015 | $ | 1,339 | |||||||
Income from Grants | ' | ||||||||
$1,215,000 | |||||||||
Brachytherapy Grant | |||||||||
Deferred income at December 31, 2010 | $ | 1,191,492 | |||||||
Recognized income from grants in 2011 | 245,727 | ||||||||
Deferred income at December 31, 2011 | 945,765 | ||||||||
Recognized income from grants in 2012 | 680,234 | ||||||||
Deferred income at December 31, 2012 | 265,531 | ||||||||
Recognized income from grants in 2013 | 265,531 | ||||||||
Deferred income at December 31, 2013 | $ | - | |||||||
Dilutive securities | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Convertible debt | 56,286,404 | 32,859,850 | |||||||
Common stock options | 10,350,000 | 4,775,000 | |||||||
Common stock warrants | 40,103,548 | 24,411,701 | |||||||
Total potential dilutive securities | 106,739,952 | 62,046,551 |
3_FIXED_ASSETS_Tables
3. FIXED ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Fixed Assets Tables | ' | ||||||||
Fixed assets | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Production equipment | $ | 2,131,377 | $ | 2,131,377 | |||||
Building | 446,772 | 446,772 | |||||||
Leasehold improvements | 3,235 | 3,235 | |||||||
Office equipment | 32,769 | 32,769 | |||||||
2,614,153 | 2,614,153 | ||||||||
Less accumulated depreciation | (2,599,240 | ) | (2,399,497 | ) | |||||
$ | 14,913 | $ | 214,656 | ||||||
Accumulated depreciation related to fixed assets | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Production equipment | $ | 2,119,830 | $ | 1,924,002 | |||||
Building | 446,772 | 446,772 | |||||||
Leasehold improvements | 3,235 | 3,235 | |||||||
Office equipment | 29,403 | 25,488 | |||||||
$ | 2,599,240 | $ | 2,399,497 |
4_INTANGIBLE_ASSETS_Tables
4. INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Intangible Assets Tables | ' | ||||||||
INTANGIBLE ASSETS | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
License Fee | $ | 112,500 | $ | 112,500 | |||||
Less accumulated amortization | (105,329 | ) | (96,440 | ) | |||||
7,171 | 16,060 | ||||||||
Patents and intellectual property | 35,482 | 360,475 | |||||||
$ | 42,653 | $ | 376,535 |
5_RELATED_PARTY_TRANSACTIONS_T
5. RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Related Party Transactions Tables | ' | ||||||||
RELATED PARTY TRANSACTIONS | ' | ||||||||
Year ended | Year ended | ||||||||
December 31, 2013 | 31-Dec-12 | ||||||||
Office and warehouse space | $ | 142,851 | $ | 88,087 | |||||
Rental expense in the form of stock issuance | - | 21,875 | |||||||
Corporate office | 29,100 | 33,217 | |||||||
Total Rental Expense | $ | 171,951 | $ | 143,179 |
7_PREPAID_EXPENSES_PAID_WITH_S1
7. PREPAID EXPENSES PAID WITH STOCK (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Prepaid Expenses Paid With Stock Tables | ' | ||||
Prepaid with stock | ' | ||||
For the twelve month period ending December 31, 2014 | $ | 107,763 | |||
Thereafter | - | ||||
$ | 107,763 |
8_CAPITAL_LEASE_OBLIGATIONS_Ta
8. CAPITAL LEASE OBLIGATIONS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Capital Lease Obligations Tables | ' | ||||||||||||
Fair value of leased property | ' | ||||||||||||
Capital Lease Obligation | |||||||||||||
PET Isotope Production System | Ancillary Equipment | Total | |||||||||||
Total lease commitment | $ | 1,875,000 | $ | 933,888 | $ | 2,808,888 | |||||||
Advances made for purchases | $ | 1,511,268 | $ | 933,888 | $ | 2,445,156 | |||||||
Principal portion of payments | 1,202,123 | 933,888 | 2,136,011 | ||||||||||
Net balance of advances payable | 309,145 | - | 309,145 | ||||||||||
Add factor to arrive at total future minimum lease payments | 17,775 | - | 17,775 | ||||||||||
Total future minimum lease payments | 326,900 | - | 326,900 | ||||||||||
Less amount representing interest | 17,775 | - | 17,775 | ||||||||||
Present value of net minimum lease payments | 309,145 | - | 309,145 | ||||||||||
Amounts due within one year | 257,913 | - | 257,913 | ||||||||||
Amounts due after one year | $ | 51,232 | $ | - | $ | 51,232 | |||||||
Minimum debt service ratio calculation | ' | ||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Net loss | $ | (3,470,813 | ) | $ | (8,586,264 | ) | |||||||
- Interest | 1,600,761 | 1,102,137 | |||||||||||
- Depreciation and amortization | 208,632 | 483,200 | |||||||||||
EBITDA | (1,661,420 | ) | (7,000,927 | ) | |||||||||
- Cash taxes | - | - | |||||||||||
- Unfunded capital expenditures | - | - | |||||||||||
+ capital injections* | 2,748,485 | 2,375,300 | |||||||||||
1,087,065 | (4,625,627 | ) | |||||||||||
Less non-cash items:** | |||||||||||||
Stock based consulting fees | 131,388 | 1,405,445 | |||||||||||
Stock options granted | 634,255 | 1,638,361 | |||||||||||
Loss on derivative liability | (1,874,560 | ) | 2,228,538 | ||||||||||
Loss on extinguishment of debt | 97,816 | 48,470 | |||||||||||
$ | 75,964 | $ | 695,187 | ||||||||||
Interest plus current portion of long-term debt | $ | 273,536 | $ | 386,006 | |||||||||
Debt service coverage ratio | 0.28 | 1.8 | |||||||||||
Principal maturities on amount of capital lease obligations advanced | ' | ||||||||||||
Year ended December 31, | Production | Ancillary | |||||||||||
Facility | Equipment | ||||||||||||
2014 | 257,913 | - | |||||||||||
2015 | 51,232 | - | |||||||||||
Thereafter | - | - | |||||||||||
$ | 309,145 | $ | - |
10_CONVERTIBLE_NOTES_PAYABLE_T
10. CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||
Convertible notes outstanding | ' | ||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
Principal (net) | Accrued Interest | Principal (net) | Accrued Interest | ||||||||||||||
October 2012 $63,000 Convertible Note, 8% interest, due April 2013, $0 and $63,000 outstanding, net of debt discount of $0 and $22,209, respectively | - | - | 40,791 | 1,155 | (1) | ||||||||||||
November 2012 $42,500 Convertible Note, 8% interest, due May 2013, $0 and $42,500 outstanding, net of debt discount of $0 and $16,724, respectively | - | - | 25,776 | 525 | (2) | ||||||||||||
December 2012 $55,000 Convertible Note, 0% interest for the first 90 days, due December 2013, with a 10% original issue discount, $0 and $55,000 outstanding, net of debt discount of $0 and $5,839, respectively | - | - | 49,161 | - | (3) | ||||||||||||
January 2013 $30,024 Convertible Note, 10% one-time interest, due January 2014, with a 10% original issue discount, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively | - | - | - | - | (4) | ||||||||||||
March 2013 $60,000 Convertible Note, 0% interest for the first 90 days, due March 2014, with a 8% original issue discount, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively | - | - | - | - | (5) | ||||||||||||
July and August 2012 $1,060,000 Convertible Notes, 12% interest, due December 2013 and January 2014 (18 month notes), $180,000 and $888,500 outstanding , net of debt discount of $8,576 and $628,846, respectively | 171,424 | 30,610 | 259,654 | 47,199 | (6) | ||||||||||||
September and October 2012 $115,000 Convertible Notes, 12% interest, due February and March 2014 (18 month notes), $0 and $115,000 outstanding, net of debt discount of $0 and $95,280, respectively | - | - | 19,720 | 3,575 | (7) | ||||||||||||
May 2013 $240,000 Convertible Note, 12% interest, due November 2014 (18 month note), $30,000 and $0 outstanding, net of debt discount of $17,450 and $0, respectively | 12,550 | 2,257 | - | - | (8) | ||||||||||||
April 2013 $72,280 Convertible Note, 0% interest for the first 90 days, due April 2014, with a 10% original issue discount, $16,646 and $0 outstanding, net of debt discount of $4,241 and $0, respectively | 12,405 | - | - | - | (9) | ||||||||||||
April 2013 $53,000 Convertible Note, 8% interest, due November 2013, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively | - | - | - | - | (10) | ||||||||||||
June 2013 $34,560 Convertible Note, 0% interest for the first 90 days, due June 2014, with a 10% original issue discount, $34,650 and $0 outstanding, net of debt discount of $14,676 and $0, respectively | 19,884 | 3,456 | - | - | (11) | ||||||||||||
July 2013 $53,000 Convertible Note, 8% interest, due February 2014, $53,000 and $0 outstanding, net of debt discount of $19,395 and $0, respectively | 33,605 | 2,033 | - | - | -12 | ||||||||||||
July 2013 $30,024 Convertible Note, 10% one-time interest, due July 2014, with a 10% original issue discount, $30,024 and $0 outstanding, net of debt discount of $15,876 and $0, respectively | 14,148 | 3,002 | - | - | -13 | ||||||||||||
August 2013 $53,000 Convertible Note, 8% interest, due March 2014, $53,000 and $0 outstanding, net of debt discount of $28,716 and $0, respectively | 24,284 | 1,464 | - | - | -14 | ||||||||||||
September 2013 $10,000 Convertible Note, 10% interest, due September 2014 (12 month note), $10,000 and $0 outstanding, net of debt discount of $131 and $0, respectively | 9,869 | 330 | - | - | -15 | ||||||||||||
September 2013 $30,000 Convertible Note, 12% interest, due September 2014, with a $1,500 original issue discount, $30,000 and $0 outstanding, net of debt discount of $17,945 and $0, respectively | 12,055 | 937 | - | - | -16 | ||||||||||||
October 2013 $37,500 Convertible Note, 8% interest, due July 2014, $37,500 and $0 outstanding, net of debt discount of $26,182 and $0, respectively | 11,318 | 682 | - | - | -17 | ||||||||||||
October 2013 $97,700 Convertible Note, 8% interest, due April 2014, with a 12% original issue discount, $97,700 and $0 outstanding, net of debt discount of $64,773 and $0, respectively | 32,927 | 1,954 | - | - | -18 | ||||||||||||
November 2013 $42,500 Convertible Note, 8% interest, due August 2014, $42,500 and $0 outstanding, net of debt discount of $34,368 and $0, respectively | 8,132 | 494 | - | - | -19 | ||||||||||||
November 2013 $27,800 Convertible Note, 10% one-time interest, due November 2014, with a 10% original issue discount, $27,800 and $0 outstanding, net of debt discount of $24,296 and $0, respectively | 3,504 | 2,780 | - | - | -20 | ||||||||||||
December 2013 $27,500 Convertible Note, 8% interest, due September 2014, $27,500 and $0 outstanding, net of debt discount of $26,005 and $0, respectively | 1,495 | 90 | - | - | -21 | ||||||||||||
December 2013 $69,120 Convertible Note, 0% interest for the first 90 days, due December 2014, with a 10% original issue discount, $69,120 and $0 outstanding, net of debt discount of $65,143 and $0, respectively | 3,977 | 6,912 | - | - | (22) | ||||||||||||
December 2013 $55,000 Convertible Note, 12% interest, due December 2014, with a $3,300 original issue discount, $55,000 and $0 outstanding, net of debt discount of $51,317 and $0, respectively | 3,683 | 442 | - | - | -23 | ||||||||||||
Total Convertible Notes Payable, Net | $ | 375,259 | $ | 57,443 | $ | 395,102 | $ | 52,454 | |||||||||
11_DERIVATIVE_LIABILITY_Tables
11. DERIVATIVE LIABILITY (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Activity in derivative liability account | ' | ||||||||||||
Warrants | Conversion Feature | Total | |||||||||||
Derivative Liability at December 31, 2011 | $ | - | $ | - | $ | - | |||||||
Liability on 2012 Issuances of Warrants and Debt | 2,516,204 | 2,226,600 | 4,742,804 | ||||||||||
Elimination of Liability on Conversion | - | (280,185 | ) | (280,185 | ) | ||||||||
Change in Fair Value at Year End | (172,844 | ) | (351,457 | ) | (524,301 | ) | |||||||
Derivative Liability at December 31, 2012 | 2,343,360 | 1,594,958 | 3,938,318 | ||||||||||
Liability on 2013 Issuances of Warrants and Debt | 199,752 | 1,213,731 | 1,413,483 | ||||||||||
Elimination of Liability on Conversion | - | (1,402,242 | ) | (1,402,242 | ) | ||||||||
Change in Fair Value at Year End | (1,739,289 | ) | (733,655 | ) | (2,472,944 | ) | |||||||
Derivative Liability at December 31, 2013 | $ | 803,823 | $ | 672,792 | $ | 1,476,615 | |||||||
Schedule of assumptions for fair value determination | ' | ||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||
Risk-free interest rate | 0.07% - 1.58% | 0.16% - 0.70% | |||||||||||
Expected life in years | 0.08 – 4.37 | 1.25 - 4.75 | |||||||||||
Dividend yield | 0% | 0% | |||||||||||
Expected volatility | 116.63% - 209.82% | 112.26% - 206.14% |
12_INCOME_TAXES_Tables
12. INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of Net deferred tax assets | ' | ||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryover | $ | 6,175,600 | $ | 5,755,600 | |||||
Depreciation | 341,200 | 217,600 | |||||||
Related party accrual | 379,800 | 247,400 | |||||||
Deferred tax liabilities | - | - | |||||||
Valuation allowance | (7,921,200 | ) | (6,220,600 | ) | |||||
Net deferred tax asset | $ | - | $ | - | |||||
Schedule of federal income tax rate | ' | ||||||||
31-Dec-13 | 31-Dec-12 | ||||||||
Book loss | $ | (1,180,100 | ) | $ | (2,919,300 | ) | |||
Grant income | (90,300 | ) | -231,300 | ||||||
Depreciation | 12,300 | 99,200 | |||||||
Intangible asset impairment | 113,100 | - | |||||||
Related party accrual | 132,400 | 104,400 | |||||||
Meals and entertainment | 2,700 | 3,300 | |||||||
Stock for services | 46,100 | 473,300 | |||||||
Options expense | 215,600 | 557,000 | |||||||
Non-cash interest expense | 81,500 | 56,100 | |||||||
Other non-deductable expenses | (67,100 | ) | 987,200 | ||||||
Valuation allowance | 733,800 | 870,100 | |||||||
Income tax expense | $ | - | $ | - |
13_STOCKHOLDERS_EQUITY_Tables
13. STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||||
Stock options | ' | ||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||
Options Outstanding | Average | Average | |||||||||||||||||||
Number | Exercise | Remaining | Aggregate | Exercise | |||||||||||||||||
Of | Price | Contractual | Intrinsic | Price | |||||||||||||||||
Shares | Per Share | Life | Value | Per Share | |||||||||||||||||
Balance at December 31, 2011 | 5,135,000 | $ | 0.20-0.50 | 0.94 years | $ | 90,000 | $ | 0.35 | |||||||||||||
Options granted | 3,650,000 | $ | 0.09-0.21 | 2.41 years | $ | 0.13 | |||||||||||||||
Options exercised | - | $ | - | - | $ | - | |||||||||||||||
Options expired | (4,010,000 | ) | $ | 0.20-0.50 | - | $ | 0.37 | ||||||||||||||
Balance at December 31, 2012 | 4,775,000 | $ | 0.09-0.30 | 2.09 years | $ | 540,000 | $ | 0.17 | |||||||||||||
Options granted | 13,340,000 | $ | 0.08-0.20 | 2.75 years | $ | 0.17 | |||||||||||||||
Options exercised | - | $ | - | - | $ | - | |||||||||||||||
Options expired | (7,765,000 | ) | $ | 0.15-0.30 | - | $ | 0.21 | ||||||||||||||
Balance at December 31, 2013 | 10,350,000 | $ | 0.08-0.28 | 3.78 years | $ | - | $ | 0.14 | |||||||||||||
Exercisable at December 31, 2012 | 4,775,000 | $ | 0.09-0.30 | 2.09 years | $ | 540,000 | $ | 0.17 | |||||||||||||
Exercisable at December 31, 2013 | 8,975,000 | $ | 0.08-0.28 | 2.96 years | $ | - | $ | 0.13 | |||||||||||||
Exercise price per share | ' | ||||||||||||||||||||
Number | Exercise Price | Expiration Date | |||||||||||||||||||
214,285 | $ | 0.1 | 5-Aug-14 | ||||||||||||||||||
7,142,855 | $ | 0.15 | 18-Oct-14 | ||||||||||||||||||
5,500,000 | $ | 0.06 | 1-Mar-15 | ||||||||||||||||||
250,000 | $ | 0.18 | 15-Mar-15 | ||||||||||||||||||
977,778 | $ | 0.09 | 4-Jun-15 | ||||||||||||||||||
2,000,000 | $ | 0.25 | 4-Jun-15 | ||||||||||||||||||
9,240,297 | $ | 0.06 | 13-Jul-17 | ||||||||||||||||||
1,000,000 | $ | 0.06 | 30-Jul-17 | ||||||||||||||||||
2,200,000 | $ | 0.06 | 1-Aug-17 | ||||||||||||||||||
1,750,000 | $ | 0.06 | 2-Aug-17 | ||||||||||||||||||
833,334 | $ | 0.06 | 26-Sep-17 | ||||||||||||||||||
125,000 | $ | 0.06 | 5-Oct-17 | ||||||||||||||||||
40,000 | $ | 0.1 | 1-Apr-18 | ||||||||||||||||||
1,783,333 | $ | 0.06 | 15-May-18 | ||||||||||||||||||
7,046,666 | $ | 0.1 | 31-Dec-20 | ||||||||||||||||||
40,103,548 |
15_DEBT_ISSUANCE_COSTS_Tables
15. DEBT ISSUANCE COSTS (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
Debt issuance cost account | ' | ||||
3,740,297 Warrants issued as fees for debt financing arrangements | $ | 756,055 | |||
Cash paid as fees for debt arrangements | 123,000 | ||||
Total debt issuance costs incurred in 2012 | 879,055 | ||||
Amortization of debt issuance costs | (336,601 | ) | |||
Debt issuance costs at December 31, 2012 | 542,454 | ||||
Cash paid as fees for debt arrangements | 32,800 | ||||
Amortization of debt issuance costs | (555,468 | ) | |||
Debt issuance costs at December 31, 2013 | $ | 19,786 |
1_BASIS_OF_PRESENTATION_Detail
1. BASIS OF PRESENTATION (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Total Assets Measured at Fair Value | $0 | $0 |
Liabilities | ' | ' |
Derivative Liability | 1,476,615 | 3,938,318 |
Total Liabilities Measured at Fair Value | 1,476,615 | 3,938,318 |
Level 1 | ' | ' |
Assets | ' | ' |
Total Assets Measured at Fair Value | 0 | 0 |
Liabilities | ' | ' |
Derivative Liability | 0 | 0 |
Total Liabilities Measured at Fair Value | 0 | 0 |
Level 2 | ' | ' |
Assets | ' | ' |
Total Assets Measured at Fair Value | 0 | 0 |
Liabilities | ' | ' |
Derivative Liability | 0 | 0 |
Total Liabilities Measured at Fair Value | 0 | 0 |
Level 3 | ' | ' |
Assets | ' | ' |
Total Assets Measured at Fair Value | 0 | 0 |
Liabilities | ' | ' |
Derivative Liability | 1,476,615 | 3,938,318 |
Total Liabilities Measured at Fair Value | $1,476,615 | $3,938,318 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Production Equipment | Minimum | ' |
Estimated useful life | '3 years |
Production Equipment | Maximum | ' |
Estimated useful life | '7 years |
Office Equipment | Minimum | ' |
Estimated useful life | '2 years |
Office Equipment | Maximum | ' |
Estimated useful life | '5 years |
Furniture And Fixtures | Minimum | ' |
Estimated useful life | '2 years |
Furniture And Fixtures | Maximum | ' |
Estimated useful life | '5 years |
2_SUMMARY_OF_SIGNIFICANT_ACCOU4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (Minimum Royalties per Calendar Year, USD $) | Dec. 31, 2013 | |
Minimum Royalties per Calendar Year | ' | |
2010 | $0 | |
2011 | 0 | |
2012 | 2,500 | |
2013 | 5,000 | [1] |
2014 | 7,500 | |
2015 | 10,000 | |
2016 and each calendar year thereafter | $25,000 | |
[1] | (1) Paid February, 2014 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Dec. 31, 2013 |
Summary Of Significant Accounting Policies Details 2 | ' |
2014 | $5,832 |
2015 | $1,339 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary Of Significant Accounting Policies Details 3 | ' | ' | ' |
Deferred income Beginning Balance | $265,531 | $945,765 | $1,191,492 |
Recognized income from grants | 265,531 | 680,234 | 245,727 |
Deferred income Ending Balance | $0 | $265,531 | $945,765 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Summary Of Significant Accounting Policies Details 4 | ' | ' |
Convertible debt | 56,286,404 | 32,859,850 |
Common stock options | 10,350,000 | 4,775,000 |
Common stock warrants | 40,103,548 | 24,411,701 |
Total potential dilutive securities | 106,739,952 | 62,046,551 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU8
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Summary Of Significant Accounting Policies Details Narrative | ' | ' |
Amortization of license fees | $8,889 | $11,162 |
Remaining unamortized portion | 7,171 | ' |
Amortized period | 31-Dec-15 | ' |
Patent filing costs and intellectual property costs | 7,716 | 77,412 |
Capitalized patents and intellectual property costs | 354,482 | 360,475 |
Impairment of patent and intellectual property | 332,709 | 0 |
Department of Energy grant as income | 265,531 | 680,234 |
Research and development costs | 416,161 | 973,611 |
Advertising costs | $0 | $1,050 |
3_FIXED_ASSETS_Details
3. FIXED ASSETS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Total Fixed assets | $2,614,153 | $2,614,153 |
Less accumulated depreciation | -2,599,240 | -2,399,497 |
Net Fixed assets | 14,913 | 214,656 |
EquipmentMember | ' | ' |
Total Fixed assets | 2,131,377 | 2,131,377 |
Less accumulated depreciation | -2,119,830 | -1,924,002 |
BuildingMember | ' | ' |
Total Fixed assets | 446,772 | 446,772 |
Less accumulated depreciation | -446,772 | -446,772 |
LeaseholdImprovementsMember | ' | ' |
Total Fixed assets | 3,235 | 3,235 |
Less accumulated depreciation | -3,235 | -3,235 |
OfficeEquipmentMember | ' | ' |
Total Fixed assets | 32,769 | 32,769 |
Less accumulated depreciation | ($29,403) | ($25,488) |
3_FIXED_ASSETS_Details_1
3. FIXED ASSETS (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property Plant And Equipment | ' | ' |
Accumulated depreciation | $2,599,240 | $2,399,497 |
EquipmentMember | ' | ' |
Property Plant And Equipment | ' | ' |
Accumulated depreciation | 2,119,830 | 1,924,002 |
BuildingMember | ' | ' |
Property Plant And Equipment | ' | ' |
Accumulated depreciation | 446,772 | 446,772 |
LeaseholdImprovementsMember | ' | ' |
Property Plant And Equipment | ' | ' |
Accumulated depreciation | 3,235 | 3,235 |
OfficeEquipmentMember | ' | ' |
Property Plant And Equipment | ' | ' |
Accumulated depreciation | $29,403 | $25,488 |
3_FIXED_ASSETS_Details_Narrati
3. FIXED ASSETS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property Plant And Equipment | ' | ' |
Depreciation expense | $199,743 | $472,038 |
4_INTANGIBLE_ASSETS_Details
4. INTANGIBLE ASSETS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
INTANGIBLE ASSETS | ' | ' |
License Fee | $112,500 | $112,500 |
Less accumulated amortization | -105,329 | -96,440 |
License Fee, Net | 7,171 | 16,060 |
Patents and intellectual property | 35,482 | 360,475 |
Intangible assets net of accumulated amortization | $42,653 | $376,535 |
4_INTANGIBLE_ASSETS_Details_Na
4. INTANGIBLE ASSETS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
INTANGIBLE ASSETS | ' | ' |
Amortization expense, intangible assets | $8,889 | $11,162 |
5_RELATED_PARTY_TRANSACTIONS_D
5. RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Office and warehouse lease effective August 1, 2007 | ' | ' |
Monthly rental payments | $142,851 | $88,087 |
Rental expense in the form of stock issuance | 0 | 21,875 |
Corporate office | 29,100 | 33,217 |
Total Rental Expense | $171,951 | $143,179 |
7_PREPAID_EXPENSES_PAID_WITH_S2
7. PREPAID EXPENSES PAID WITH STOCK (Details) (USD $) | Dec. 31, 2013 |
Prepaid Expenses Paid With Stock Details | ' |
Prepaid expenses mature during the twelve month period ending December 31, 2014 | $107,763 |
Thereafter | 0 |
Total | $107,763 |
8_CAPITAL_LEASE_OBLIGATIONS_De
8. CAPITAL LEASE OBLIGATIONS (Details) (USD $) | Dec. 31, 2013 |
Total lease commitment | $2,808,888 |
Advances made for purchases | 2,445,156 |
Principal portion of payments | 2,136,011 |
Net balance of advances payable | 309,145 |
Add factor to arrive at total future minimum lease payments | 17,775 |
Total future minimum lease payments | 326,900 |
Less amount representing interest | 17,775 |
Present value of net minimum lease payments | 309,145 |
Amounts due within one year | 257,913 |
Amounts due after one year | 51,232 |
Ancillary Equipment | ' |
Total lease commitment | 933,888 |
Advances made for purchases | 933,888 |
Principal portion of payments | 933,888 |
Net balance of advances payable | 0 |
Add factor to arrive at total future minimum lease payments | 0 |
Total future minimum lease payments | 0 |
Less amount representing interest | 0 |
Present value of net minimum lease payments | 0 |
Amounts due within one year | 0 |
Amounts due after one year | 0 |
PET Isotope Production System | ' |
Total lease commitment | 1,875,000 |
Advances made for purchases | 1,511,268 |
Principal portion of payments | 1,202,123 |
Net balance of advances payable | 309,145 |
Add factor to arrive at total future minimum lease payments | 17,775 |
Total future minimum lease payments | 326,900 |
Less amount representing interest | 17,775 |
Present value of net minimum lease payments | 309,145 |
Amounts due within one year | 257,913 |
Amounts due after one year | $51,232 |
8_CAPITAL_LEASE_OBLIGATIONS_De1
8. CAPITAL LEASE OBLIGATIONS (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net loss | ($3,470,813) | ($8,586,264) |
- Interest | 1,600,761 | 1,102,137 |
- Depreciation and amortization | 208,632 | 483,200 |
EBITDA | -3,579,618 | -5,870,693 |
- Cash taxes | 0 | 0 |
Stock options granted | 634,255 | 1,638,523 |
Minimum Debt Service Ratio | ' | ' |
Net loss | -3,470,813 | -8,586,264 |
- Interest | 1,600,761 | 1,102,137 |
- Depreciation and amortization | 208,632 | 483,200 |
EBITDA | -1,661,420 | -7,000,927 |
- Cash taxes | 0 | 0 |
- Unfunded capital expenditures | 0 | 0 |
+ capital injections* | 2,748,485 | 2,375,300 |
Earning After tax | 1,087,065 | -4,625,627 |
Stock based consulting fees | 131,388 | 1,405,445 |
Stock options granted | 634,255 | 1,638,361 |
Loss on derivative liability | -1,874,560 | 2,228,538 |
Loss on extinguishment of debt | 97,816 | 48,470 |
Net Non cash item | 75,964 | 695,187 |
Interest plus current portion of long-term debt | $273,536 | $386,006 |
Debt service coverage ratio | '28% | '1.8% |
8_CAPITAL_LEASE_OBLIGATIONS_De2
8. CAPITAL LEASE OBLIGATIONS (Details 2) (USD $) | Dec. 31, 2013 |
2014 | $257,913 |
Thereafter | 51,232 |
Production Facility | ' |
2014 | 257,913 |
2015 | 51,232 |
Thereafter | 0 |
Capital lease,Net | 309,145 |
Ancillary Equipment | ' |
2014 | 0 |
2015 | 0 |
Thereafter | 0 |
Capital lease,Net | $0 |
9_SHORT_TERM_LOAN_PAYABLE_Deta
9. SHORT TERM LOAN PAYABLE (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | ||
Short Term Loan Payable Details Narrative | ' | ' | |
Principal amount of debt | $10,879 | [1] | ' |
Debt interest | 0 | ' | |
Interest costs accrued | 5,326 | ' | |
Principal balance of loan | 35,846 | ' | |
Accrued interest | $57,443 | $52,454 | |
[1] | The Company paid $1,894 in interest towards the debt |
10_CONVERTIBLE_NOTES_PAYABLE_D
10. CONVERTIBLE NOTES PAYABLE (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Convertible notes payable (net) | $375,259 | $395,102 |
Accrued Interest | 57,443 | 52,454 |
Oct-12 | ' | ' |
Convertible notes payable (net) | 0 | 40,791 |
Accrued Interest | 0 | 1,155 |
Nov-12 | ' | ' |
Convertible notes payable (net) | 0 | 25,776 |
Accrued Interest | 0 | 525 |
Dec-12 | ' | ' |
Convertible notes payable (net) | 0 | 49,161 |
Accrued Interest | 0 | 0 |
Jan-13 | ' | ' |
Convertible notes payable (net) | 0 | 0 |
Accrued Interest | 0 | 0 |
Mar-13 | ' | ' |
Convertible notes payable (net) | 0 | 0 |
Accrued Interest | 0 | 0 |
July and August 2012 | ' | ' |
Convertible notes payable (net) | 171,424 | 259,654 |
Accrued Interest | 30,610 | 47,199 |
September and October 2012 | ' | ' |
Convertible notes payable (net) | 0 | 19,720 |
Accrued Interest | 0 | 3,575 |
May-13 | ' | ' |
Convertible notes payable (net) | 12,550 | 0 |
Accrued Interest | 2,257 | 0 |
Apr-13 | ' | ' |
Convertible notes payable (net) | 12,405 | 0 |
Accrued Interest | 0 | 0 |
April 2013 B | ' | ' |
Convertible notes payable (net) | 0 | 0 |
Accrued Interest | 0 | 0 |
Jun-13 | ' | ' |
Convertible notes payable (net) | 19,884 | 0 |
Accrued Interest | 3,456 | 0 |
Jul-13 | ' | ' |
Convertible notes payable (net) | 33,605 | 0 |
Accrued Interest | 2,033 | 0 |
July 2013 B | ' | ' |
Convertible notes payable (net) | 14,148 | 0 |
Accrued Interest | 3,002 | 0 |
Aug-13 | ' | ' |
Convertible notes payable (net) | 24,284 | 0 |
Accrued Interest | 1,464 | 0 |
Sep-13 | ' | ' |
Convertible notes payable (net) | 9,869 | 0 |
Accrued Interest | 330 | 0 |
September 2013 B | ' | ' |
Convertible notes payable (net) | 12,055 | 0 |
Accrued Interest | 937 | 0 |
Oct-13 | ' | ' |
Convertible notes payable (net) | 11,318 | 0 |
Accrued Interest | 682 | 0 |
October 2013 B | ' | ' |
Convertible notes payable (net) | 32,927 | 0 |
Accrued Interest | 1,954 | 0 |
Nov-13 | ' | ' |
Convertible notes payable (net) | 8,132 | 0 |
Accrued Interest | 494 | 0 |
November 2013 B | ' | ' |
Convertible notes payable (net) | 3,504 | 0 |
Accrued Interest | 2,780 | 0 |
Dec-13 | ' | ' |
Convertible notes payable (net) | 1,495 | 0 |
Accrued Interest | 90 | 0 |
December 2013 B | ' | ' |
Convertible notes payable (net) | 3,977 | 0 |
Accrued Interest | 6,912 | 0 |
December 2013 C | ' | ' |
Convertible notes payable (net) | 3,683 | 0 |
Accrued Interest | $442 | $0 |
11_DERIVATIVE_LIABILITY_Detail
11. DERIVATIVE LIABILITY (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Derivative liability Beginning Balance | $3,938,318 | $0 |
Liability on Issuances of Warrants and Debt | 1,413,483 | 4,742,804 |
Elimination of Liability on Conversion | -1,402,242 | -280,185 |
Change in fair value | -2,472,944 | -524,301 |
Derivative liability, ending balance | 1,476,615 | 3,938,318 |
Conversion feature | ' | ' |
Derivative liability Beginning Balance | 1,594,958 | 0 |
Liability on Issuances of Warrants and Debt | 1,213,731 | 2,226,600 |
Elimination of Liability on Conversion | -1,402,242 | -280,185 |
Change in fair value | -733,655 | -351,457 |
Derivative liability, ending balance | 672,792 | 1,594,958 |
Warrant [Member] | ' | ' |
Derivative liability Beginning Balance | 2,343,360 | 0 |
Liability on Issuances of Warrants and Debt | 199,752 | 2,516,204 |
Elimination of Liability on Conversion | 0 | 0 |
Change in fair value | -1,739,289 | -172,844 |
Derivative liability, ending balance | $803,823 | $2,343,360 |
11_DERIVATIVE_LIABILITY_Detail1
11. DERIVATIVE LIABILITY (Details 1) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Dividend yield | 0.00% | 0.00% |
Minimum | ' | ' |
Risk-free interest rate Minimum | 0.07% | 0.16% |
Expected life in years | '29 days | '1 year 3 months |
Expected volatility | 116.63% | 112.26% |
Maximum [Member] | ' | ' |
Risk-free interest rate Minimum | 1.58% | 0.70% |
Expected life in years | '4 years 4 months 13 days | '4 years 9 months |
Expected volatility | 209.82% | 206.14% |
9_INCOME_FROM_GRANTS_AND_DEFER
9. INCOME FROM GRANTS AND DEFERRED INCOME (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income From Grants And Deferred Income Details | ' | ' | ' |
Recognized income from grants | $265,531 | $680,234 | $245,727 |
Deferred income | $0 | $265,531 | ' |
10_COMMON_STOCK_OPTIONS_AND_WA
10. COMMON STOCK OPTIONS AND WARRANTS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Number of Options | ' | ' |
Outstanding, beginning | 4,775,000 | 5,135,000 |
Number of Options Exercised | ' | ' |
Number of Options Expired | -7,765,000 | -4,010,000 |
Outstanding, ending | 10,350,000 | 4,775,000 |
Exercisable, ending | 8,975,000 | 4,775,000 |
Weighted Average Exercise Price | ' | ' |
Weighted Average Exercise Price Outstanding, Beginning | $0.17 | $0.35 |
Weighted Average Exercise Price Granted | $0.17 | $0.13 |
Weighted Average Exercise Price Exercised | ' | ' |
Weighted Average Exercise Price Expired | $0.21 | $0.37 |
Weighted Average Exercise Price Outstanding, Ending | $0.14 | $0.17 |
Weighted Average Exercise Price Exercisable | $0.13 | $0.17 |
12_INCOME_TAXES_Details
12. INCOME TAXES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes Details | ' | ' |
Net operating loss carryover | $6,175,600 | $5,755,600 |
Depreciation | 341,200 | 217,600 |
Related party accrual | 379,800 | 247,400 |
Deferred tax liabilities | 0 | 0 |
Valuation allowance | -7,921,200 | -6,220,600 |
Net deferred tax asset | $0 | $0 |
12_INCOME_TAXES_Details_1
12. INCOME TAXES (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes Details 1 | ' | ' |
Book income | ($1,180,100) | ($2,919,300) |
Grant income | -90,300 | -231,300 |
Depreciation | 12,300 | 99,200 |
Intangible asset impairment | 113,100 | 0 |
Related party accrual | 132,400 | 104,400 |
Meals and entertainment | 2,700 | 3,300 |
Stock for services | 46,100 | 473,300 |
Options expense | 215,600 | 557,000 |
Non-cash interest expense | 81,500 | 56,100 |
Other non-deductable expenses | -67,100 | 987,200 |
Valuation allowance | 733,800 | 870,100 |
Income tax expense | $0 | $0 |
12_INCOME_TAXES_Details_Narrat
12. INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | ||
Income Taxes Details Narrative | ' | |
Net operating loss carryforwards | $18,163,600 | |
Net operating loss carryforwards, expiration date | 1-Jan-14 | [1] |
[1] | from the year 2014 through 2033 |
13_STOCKHOLDERS_EQUITY_Details
13. STOCKHOLDERS EQUITY (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
COMMON STOCK OPTIONS | ' | ' | ' |
Outstanding, beginning | 4,775,000 | 5,135,000 | ' |
Options granted, Shares | 13,340,000 | 3,650,000 | ' |
Options exercised, Shares | ' | ' | ' |
Options expired, Shares | -7,765,000 | -4,010,000 | ' |
Outstanding, ending | 10,350,000 | 4,775,000 | ' |
Exercisable, ending | 8,975,000 | 4,775,000 | ' |
Weighted Average Remaining Contractual Life, Beggining Balance | ' | ' | '11 months 8 days |
Weighted Average Remaining Contractual Life, Options granted | '2 years 9 months | '2 years 4 months 28 days | ' |
Weighted Average Remaining Contractual Life, Ending Balance | '3 years 9 months 11 days | '2 years 1 month 2 days | ' |
Weighted Average Remaining Contractual Life,Exercisable Ending Balance | '2 years 11 months 16 days | '2 years 1 month 2 days | ' |
Aggregate Intrinsic Value, Beggining Balance | $540,000 | $540,000 | $90,000 |
Aggregate Intrinsic Value, Ending Balance | $540,000 | $540,000 | $90,000 |
Weighted Average Exercise Price Outstanding, Beginning | $0.14 | $0.17 | $0.35 |
Weighted Average Exercise Price Per Share, Options granted | $0.17 | $0.13 | ' |
Weighted Average Exercise Price Per Share,Options exercised | ' | ' | ' |
Weighted Average Exercise Price Per Share, Options expired | $0.21 | $0.37 | ' |
Weighted Average Exercise Price Outstanding, Ending | $0.14 | $0.17 | $0.35 |
Weighted Average Exercise Price Per Share, Ending Balance Exercisable | $0.13 | $0.17 | ' |
Minimum | ' | ' | ' |
COMMON STOCK OPTIONS | ' | ' | ' |
Exercise Price Per Share Outstanding, beginning | $0.09 | $0.20 | ' |
Options granted, Exercise Price Per Share | $0.08 | $0.09 | ' |
Options exercised, Exercise Price Per Share | ' | ' | ' |
Options expired, Exercise Price Per Share | $0.15 | $0.20 | ' |
Options Outstanding | $0.08 | $0.09 | ' |
Exercisable Outstanding, Ending Balance Exercise Price Per Share | $0.08 | $0.09 | ' |
MaximumMember | ' | ' | ' |
COMMON STOCK OPTIONS | ' | ' | ' |
Exercise Price Per Share Outstanding, beginning | $0.30 | $0.50 | ' |
Options granted, Exercise Price Per Share | $0.20 | $0.21 | ' |
Options exercised, Exercise Price Per Share | ' | ' | ' |
Options expired, Exercise Price Per Share | $0.30 | $0.50 | ' |
Options Outstanding | $0.28 | $0.30 | ' |
Exercisable Outstanding, Ending Balance Exercise Price Per Share | $0.28 | $0.30 | ' |
13_STOCKHOLDERS_EQUITY_Details1
13. STOCKHOLDERS' EQUITY (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
COMMON STOCK OPTIONS | ' | ' |
Outstanding, beginning | 4,775,000 | 5,135,000 |
Warrants granted, Shares | 13,340,000 | 3,650,000 |
Warrants exercised, Shares | ' | ' |
Warrants expired, Shares | -7,765,000 | -4,010,000 |
Outstanding, ending | 10,350,000 | 4,775,000 |
Exercisable, ending | 8,975,000 | 4,775,000 |
Weighted Average Remaining Contractual Life, Beggining Balance | ' | '11 months 8 days |
Weighted Average Remaining Contractual Life, Warrants granted | '2 years 9 months | '2 years 4 months 28 days |
Weighted Average Remaining Contractual Life, Ending Balance | '3 years 9 months 11 days | '2 years 1 month 2 days |
Weighted Average Remaining Contractual Life,Exercisable Ending Balance | '2 years 11 months 16 days | '2 years 1 month 2 days |
Aggregate Intrinsic Value, Beggining Balance | $540,000 | $90,000 |
Aggregate Intrinsic Value, Ending Balance | 540,000 | 540,000 |
Weighted Average Exercise Price Outstanding, Beginning | $0.17 | $0.35 |
Weighted Average Exercise Price Per Share, Warrants granted | $0.17 | $0.13 |
Weighted Average Exercise Price Per Share,Warrants exercised | ' | ' |
Weighted Average Exercise Price Per Share, Warrants expired | $0.21 | $0.37 |
Weighted Average Exercise Price Outstanding, Ending | $0.14 | $0.17 |
Weighted Average Exercise Price Per Share, Ending Balance Exercisable | $0.13 | $0.17 |
Minimum | ' | ' |
COMMON STOCK OPTIONS | ' | ' |
Exercise Price Per Share Outstanding, beginning | $0.09 | $0.20 |
Warrants granted, Exercise Price Per Share | $0.08 | $0.09 |
Warrants exercised, Exercise Price Per Share | ' | ' |
Warrants expired, Exercise Price Per Share | $0.15 | $0.20 |
Exercisable Outstanding, Ending Balance Exercise Price Per Share | $0.08 | $0.09 |
MaximumMember | ' | ' |
COMMON STOCK OPTIONS | ' | ' |
Exercise Price Per Share Outstanding, beginning | $0.30 | $0.50 |
Warrants granted, Exercise Price Per Share | $0.20 | $0.21 |
Warrants exercised, Exercise Price Per Share | ' | ' |
Warrants expired, Exercise Price Per Share | $0.30 | $0.50 |
Exercisable Outstanding, Ending Balance Exercise Price Per Share | $0.28 | $0.30 |
Warrants | Minimum | ' | ' |
COMMON STOCK OPTIONS | ' | ' |
Warrants granted, Exercise Price Per Share | $0.06 | $0.09 |
Warrants exercised, Exercise Price Per Share | $0.06 | ' |
Warrants expired, Exercise Price Per Share | $0.10 | ' |
Warrants Outstanding | $0.06 | $0.09 |
Exercisable Outstanding, Ending Balance Exercise Price Per Share | $0.06 | $0.09 |
Warrants | MaximumMember | ' | ' |
COMMON STOCK OPTIONS | ' | ' |
Warrants granted, Exercise Price Per Share | $0.18 | $0.25 |
Warrants exercised, Exercise Price Per Share | $0.09 | ' |
Warrants expired, Exercise Price Per Share | $0.15 | ' |
Warrants Outstanding | $0.25 | $0.25 |
Exercisable Outstanding, Ending Balance Exercise Price Per Share | $0.25 | $0.25 |
Warrant [Member] | ' | ' |
COMMON STOCK OPTIONS | ' | ' |
Outstanding, beginning | 24,411,701 | 0 |
Warrants granted, Shares | 22,393,806 | 24,411,701 |
Warrants exercised, Shares | -788,889 | 0 |
Warrants expired, Shares | -5,913,070 | 0 |
Outstanding, ending | 40,103,548 | 24,411,701 |
Exercisable, ending | 40,103,548 | 24,411,701 |
Weighted Average Remaining Contractual Life, Beggining Balance | '3 years 9 months 4 days | ' |
Weighted Average Remaining Contractual Life, Warrants granted | '3 years 6 months 14 days | '3 years 9 months 4 days |
Weighted Average Remaining Contractual Life, Ending Balance | '3 years 2 months 8 days | '3 years 9 months 4 days |
Weighted Average Remaining Contractual Life,Exercisable Ending Balance | '3 years 2 months 8 days | '3 years 9 months 4 days |
Aggregate Intrinsic Value, Beggining Balance | 2,292,551 | ' |
Aggregate Intrinsic Value, Warrants granted | ' | 2,292,551 |
Aggregate Intrinsic Value, Ending Balance | 50,796 | 2,292,551 |
Aggregate Intrinsic Value, Ending Balance Exercisable | $50,796 | $2,292,551 |
Weighted Average Exercise Price Outstanding, Beginning | $0.15 | ' |
Weighted Average Exercise Price Per Share, Warrants granted | $0.13 | $0.15 |
Weighted Average Exercise Price Per Share,Warrants exercised | $0.07 | ' |
Weighted Average Exercise Price Per Share, Warrants expired | $0.13 | ' |
Weighted Average Exercise Price Outstanding, Ending | $0.11 | $0.15 |
Weighted Average Exercise Price Per Share, Ending Balance Exercisable | $0.11 | $0.15 |
13_STOCKHOLDERS_EQUITY_Details2
13. STOCKHOLDERS' EQUITY (Details 2) | Dec. 31, 2013 |
Outstanding and exercisable warrants | 40,103,548 |
$0.10 | ' |
Outstanding and exercisable warrants | 214,285 |
$0.15 | ' |
Outstanding and exercisable warrants | 7,142,855 |
$0.06 One | ' |
Outstanding and exercisable warrants | 5,500,000 |
$0.18 One | ' |
Outstanding and exercisable warrants | 250,000 |
$0.09 | ' |
Outstanding and exercisable warrants | 977,778 |
$0.25 | ' |
Outstanding and exercisable warrants | 2,000,000 |
$0.06 Two | ' |
Outstanding and exercisable warrants | 9,240,297 |
$0.06Three | ' |
Outstanding and exercisable warrants | 1,000,000 |
$0.06Four | ' |
Outstanding and exercisable warrants | 2,200,000 |
$0.06 Five | ' |
Outstanding and exercisable warrants | 1,750,000 |
$0.06 Six | ' |
Outstanding and exercisable warrants | 833,334 |
$0.06 Seven | ' |
Outstanding and exercisable warrants | 125,000 |
$0.10 Two | ' |
Outstanding and exercisable warrants | 40,000 |
$0.06 Eight | ' |
Outstanding and exercisable warrants | 1,783,333 |
$0.10 Three | ' |
Outstanding and exercisable warrants | 7,046,666 |
14_CONCENTRATIONS_OF_CREDIT_AN1
14. CONCENTRATIONS OF CREDIT AND OTHER RISKS (Details Narrative) (One customer's percentage of total revenues) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
One customer's percentage of total revenues | ' | ' |
Concentration risk | 72.40% | 72.70% |
15_DEBT_ISSUANCE_COSTS_Details
15. DEBT ISSUANCE COSTS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Debt Issuance Costs Details | ' | ' |
3,740,297 Warrants issued as fees for debt financing arrangements | ' | $756,055 |
Cash paid as fees for debt arrangements | 32,800 | 123,000 |
Total debt issuance costs incurred in 2012 | ' | 879,055 |
Amortization of debt issuance costs | -555,468 | -336,601 |
Debt issuance costs at end of period | $19,786 | $542,454 |