Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 20-May-14 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Echo Automotive, Inc. | ' |
Entity Central Index Key | '0001453420 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'true | ' |
Amendment Description | ' | ' |
This Amendment No. 1 (the “Amendment”) to Echo Automotive Inc.’s (the “Company”) Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2014 amends and restates the Company’s Quarterly Report on Form 10-Q filed on May 20, 2014 (the “Initial 10-Q”). | ||
Current Fiscal Year End Date | '--12-31 | ' |
Entity a Well-known Seasoned Issuer | 'No | ' |
Entity a Voluntary Filer | 'No | ' |
Entity's Reporting Status Current | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 93,888,127 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash | $253,623 | $47,916 |
Other current assets | 29,798 | 85,095 |
Total current assets | 283,421 | 133,011 |
Property and equipment, net | 767,923 | 779,233 |
Intangibles, net | 3,154,815 | 3,234,355 |
Deferred loan fees, net | 101,036 | 26,200 |
Total assets | 4,307,195 | 4,172,799 |
Current liabilities: | ' | ' |
Accounts payable | 1,212,576 | 1,186,562 |
Accounts payable - related party | 27,073 | 27,073 |
Accrued liabilities | 504,178 | 489,055 |
Derivative Liability | 9,640,069 | ' |
Related party advances | 111,603 | 111,603 |
Current portion of notes payable, net of debt discount of $751,580 and $247,439 for March 31, 2014 and December 31, 2013, respectively | 1,264,420 | 737,561 |
Total current liabilities | 12,759,919 | 2,551,854 |
Long-term portion of notes payable, net of current portion and debt discount of $862,826 and $559,100 for March 31, 2014 and December 31, 2013, respectively | 1,026,341 | 940,900 |
Total liabilities | 13,786,260 | 3,492,754 |
Contingencies and commitments | ' | ' |
Stockholders' equity (deficit): | ' | ' |
Common stock, par value $.001, 650,000,000 shares authorized; 91,577,278 and 87,796,524 issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 91,578 | 87,797 |
Additional paid in capital | 9,751,630 | 9,702,505 |
Accumulated deficit | -19,322,273 | -9,110,257 |
Total stockholders' equity (deficit) | -9,479,065 | 680,045 |
Total liabilities and stockholders' equity (deficit) | $4,307,195 | $4,172,799 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Notes payable discount - current portion | $751,580 | $247,439 |
Notes payable - current portion of debt and discount | $862,826 | $559,100 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 650,000,000 | 650,000,000 |
Common stock, shares issued | 91,577,278 | 87,796,524 |
Common stock, shares outstanding | 91,577,278 | 87,796,524 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 52 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Income Statement [Abstract] | ' | ' | ' |
Revenue | ' | $600 | $133,456 |
Operating expenses: | ' | ' | ' |
General and administrative | 1,835,470 | 842,049 | 10,623,656 |
Selling and marketing | 22,004 | 4,779 | 147,396 |
Total operating expenses | 1,857,474 | 846,828 | 10,771,052 |
Operating loss | -1,857,474 | -846,228 | -10,637,596 |
Other income and expense: | ' | ' | ' |
Interest expense | 14,205,454 | -25,711 | 14,535,589 |
Loss on debt extinguishment | 147,671 | ' | 147,671 |
Gain on change in fair value of derivative | -6,123,583 | ' | -6,123,583 |
Other expense | 125,000 | ' | 125,000 |
Total other income and expense | 8,354,542 | -25,711 | 8,684,677 |
Loss before income tax provision | -10,212,016 | -871,939 | -19,322,273 |
Income tax provision | ' | ' | ' |
Net loss | ($10,212,016) | ($871,939) | ($19,322,273) |
Net loss per share | ' | ' | ' |
Basic and diluted (in dollars per share) | ($0.11) | ($0.01) | ' |
Weighted average common shares outstanding | ' | ' | ' |
Basic and diluted (in shares) | 89,216,962 | 75,000,000 | ' |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) (USD $) | Common Stock [Member] | Additional Paid In Capital [Member] | Stock Subscriptions [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Nov. 25, 2009 | ' | ' | ' | ' | ' |
Beginning balance (in shares) at Nov. 25, 2009 | ' | ' | ' | ' | ' |
Member contributions | 800 | 2,524 | ' | ' | 3,324 |
Member contributions (in shares) | 800,288 | ' | ' | ' | ' |
Net loss | ' | ' | ' | -5,555 | -5,555 |
Ending balance at Dec. 31, 2009 | 800 | 2,524 | ' | -5,555 | -2,231 |
Ending balance (in shares) at Dec. 31, 2009 | 800,288 | ' | ' | ' | ' |
Member contributions | 10,810 | 34,090 | ' | ' | 44,900 |
Member contributions (in shares) | 10,810,148 | ' | ' | ' | ' |
Member withdrawals | -722 | -2,278 | ' | ' | -3,000 |
Member withdrawals (in shares) | -722,282 | ' | ' | ' | ' |
Net loss | ' | ' | ' | -38,600 | -38,600 |
Ending balance at Dec. 31, 2010 | 10,888 | 34,336 | ' | -44,155 | 1,069 |
Ending balance (in shares) at Dec. 31, 2010 | 10,888,154 | ' | ' | ' | ' |
Member contributions | 15,128 | 47,707 | ' | ' | 62,835 |
Member contributions (in shares) | 15,128,188 | ' | ' | ' | ' |
Net loss | ' | ' | ' | -300,542 | -300,542 |
Ending balance at Dec. 31, 2011 | 26,016 | 82,043 | ' | -344,697 | -236,638 |
Ending balance (in shares) at Dec. 31, 2011 | 26,016,342 | ' | ' | ' | ' |
Member contributions | 26,484 | 83,516 | ' | ' | 110,000 |
Member contributions (in shares) | 26,483,658 | ' | ' | ' | ' |
Common stock of Canterbury | 22,500 | 1,777,532 | ' | ' | 1,800,032 |
Common stock of Canterbury (in shares) | 22,500,000 | ' | ' | ' | ' |
Stock subscriptions assumed in the merger | ' | ' | -434,507 | ' | -434,507 |
Extinguishment of related party payable | ' | 91,761 | ' | ' | 91,761 |
Issuance of warrants | ' | 25,565 | ' | ' | 25,565 |
Net loss | ' | ' | ' | -2,362,922 | -2,362,922 |
Ending balance at Dec. 31, 2012 | 75,000 | 2,060,417 | -434,507 | -2,707,619 | -1,006,709 |
Ending balance (in shares) at Dec. 31, 2012 | 75,000,000 | ' | ' | ' | ' |
Financing agreements | 5,000 | 495,000 | ' | ' | 500,000 |
Financing agreements (in shares) | 5,000,000 | ' | ' | ' | ' |
Recognition of share issued in exchange for assets acquired | 6,528 | 4,402,417 | ' | ' | 4,408,945 |
Recognition of share issued in exchange for assets acquired (in shares) | 6,527,778 | ' | ' | ' | ' |
Stock based compensation | ' | 24,961 | ' | ' | 24,961 |
Stock subscription receivable | ' | 1,500,000 | -1,500,000 | ' | ' |
Receipt of funds on stock subscriptions | ' | ' | 1,934,507 | ' | 1,934,507 |
Recognition of contingent beneficial conversion feature and warrants | ' | 893,871 | ' | ' | 893,871 |
Shares issued for services | 1,269 | 325,839 | ' | ' | 327,108 |
Shares issued for services (in shares) | 1,268,746 | ' | ' | ' | ' |
Net loss | ' | ' | ' | -6,402,638 | -6,402,638 |
Ending balance at Dec. 31, 2013 | 87,797 | 9,702,505 | ' | -9,110,257 | 680,045 |
Ending balance (in shares) at Dec. 31, 2013 | 87,796,524 | ' | ' | ' | ' |
Stock based compensation | ' | 10,921 | ' | ' | 10,921 |
Shares issued for services | 1,293 | 316,167 | ' | ' | 317,460 |
Shares issued for services (in shares) | 1,293,334 | ' | ' | ' | 1,293,344 |
Shares issued for conversion and settlement of debts | 2,488 | 510,697 | ' | ' | 513,185 |
Shares issued for conversion and settlement of debts (in shares) | 2,487,420 | ' | ' | ' | ' |
Equity instruments reclassified to derivative liabilities | ' | -788,660 | ' | ' | -788,660 |
Net loss | ' | ' | ' | -10,212,016 | -10,212,016 |
Ending balance at Mar. 31, 2014 | $91,578 | $9,751,630 | ' | ($19,322,273) | ($9,479,065) |
Ending balance (in shares) at Mar. 31, 2014 | 91,577,278 | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | 52 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | |
Cash flows from operating activities: | ' | ' | ' |
Net loss | ($10,212,016) | ($871,939) | ($19,322,273) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depreciation and amortization | 148,569 | 19,028 | 611,880 |
Amortization of debt discount | 377,434 | 4,863 | 490,331 |
Amortization of deferred loan fees | 15,916 | ' | 17,716 |
Non-cash stock compensation | 10,921 | ' | 35,882 |
Gain on change in fair value of warrant liability | -6,123,583 | ' | -6,123,583 |
Shares issuable for services rendered | 150,960 | ' | 476,799 |
Loss on extinguishment of debt | 147,671 | ' | 147,671 |
Interest expense related to beneficial conversion feature and warrants issued | 13,769,305 | ' | 13,769,305 |
Changes in operating assets and liabilities: | ' | ' | ' |
Other current assets | 180,297 | -10,967 | 95,202 |
Accounts payable | 179,714 | 31,771 | 1,355,762 |
Accounts payable - related party | ' | 27,073 | 27,073 |
Bank overdraft | ' | -37,616 | ' |
Accrued liabilities | 97,688 | 11,034 | 561,743 |
Related party advance | ' | 23,000 | 111,603 |
Net cash used in operating activities | -1,257,124 | -803,753 | -7,744,889 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of intangibles | ' | ' | -50,000 |
Purchases of property and equipment | -57,719 | -79,120 | -550,673 |
Net cash used in investing activities | -57,719 | -79,120 | -600,673 |
Cash flows from financing activities | ' | ' | ' |
Proceeds from stock subscriptions | ' | 434,507 | 3,402,307 |
Proceeds from issuances of notes payable | 1,611,300 | ' | 4,294,300 |
Principal repayments on notes payable | ' | -31,000 | -88,000 |
Proceeds from financing agreement | ' | 500,000 | 507,797 |
Proceeds from shares issued in exchange for assets acquired | ' | ' | 493,472 |
Advances from Company officers | ' | ' | 159,250 |
Repayments to Company officers on advances | ' | ' | -159,250 |
Deferred loan costs | -90,750 | ' | -118,750 |
Capital withdrawals | ' | ' | -3,000 |
Capital contributions | ' | ' | 111,059 |
Net cash provided by financing activities | 1,520,550 | 903,507 | 8,599,185 |
Increase (decrease) in cash | 205,707 | 20,634 | 253,623 |
Cash, beginning of period | 47,916 | 1,879 | ' |
Cash, end of period | 253,623 | 22,513 | 253,623 |
Supplemental cash flow information | ' | ' | ' |
Cash paid for interest | ' | 473 | ' |
Original issue discounts | 44,167 | ' | ' |
Extinguishment of related party payable | 50,000 | ' | ' |
Non cash transactions: | ' | ' | ' |
Discount arising from conversion features and warrants | 1,250,343 | 21,956 | ' |
Discount reduced upon conversion of debt | 67,237 | ' | ' |
Conversion of convertible debt | 82,800 | ' | ' |
Extinguished debt | 275,000 | ' | ' |
Accrued interest removed through debt extinguishement | 27,386 | ' | ' |
Accrued expense paid through issuance of common stock | 55,179 | ' | ' |
Derivative liability removed through conversion of debt | 85,879 | ' | ' |
Debt paid through issuance of common stock | $175,000 | ' | ' |
Description_of_Business
Description of Business | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Description of Business | ' |
Note 1 – Description of Business | |
Canterbury Resources, Inc. (“Canterbury”) was organized under the laws of the State of Nevada on September 2, 2008. Canterbury’s initial business plan was to acquire and explore mineral properties. | |
Exchange Agreement | |
On September 21, 2012 Echo Automotive LLC (“Echo”) and DBPJ Stock Holding, LLC, sole member of Echo (the “Echo Member”) entered into an exchange agreement (the “Exchange Agreement”) with Canterbury. The Exchange Agreement resulted in the Echo Member receiving a total of 52,500,000 shares of common stock of Canterbury in exchange for 100% of the issued and outstanding units of Echo. In accordance with the terms of the Exchange Agreement, the shares received by the Echo Member represented 70% of the issued and outstanding common stock of Canterbury at the time of the Exchange Agreement. As part of the exchange, Canterbury changed its name to Echo Automotive, Inc. | |
Operations | |
Echo Automotive, Inc. (the Company) is developing a set of technologies that it believes will reduce overall fuel expenses in commercial fleet vehicles by augmenting existing powertrains with highly efficient electrical energy delivered by electric motors powered by Echo’s modular plug-in battery modules. Echo believes this technology will achieve an immediate return on investment for each individual vehicle in a fleet. | |
The Company’s operations have previously been funded by advances and subsequent equity conversions by the majority stockholders. Future funding is expected to be provided in part by equity investments from other accredited investors. There can be no assurance that any of these strategies will be achieved on terms attractive to us. |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Note 2 – Basis of Presentation | |
As a result of the Exchange Agreement, Canterbury merged with Echo, with Echo being the accounting acquirer thus resulting in a reverse merger. Therefore, the accompanying financial statements are on a consolidated basis subsequent to September 21, 2012, but only reflect the operations of Echo up to September 21, 2012. | |
In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting of only normal recurring accruals, necessary for a fair statement of financial position, results of operations, and cash flows. The information included in this Quarterly Report on Form 10-Q/A should be read in conjunction with the consolidated financial statements and the accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2013. The accounting policies are described in the “Notes to the Consolidated Financial Statements” in the 2013 Annual Report on Form 10-K and updated, as necessary, in this Form 10-Q/A. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the operating results for the full year or for any other subsequent interim period. | |
The Company is a development stage company and has incurred significant losses during the three months ended March 31, 2014 and 2013 and for the period from inception (November 25, 2009) through March 31, 2014 and has experienced negative cash flows from operations since inception. These circumstances result in substantial doubt as to the ability of the Company to continue as a going concern as noted in Note 11. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||
Note 3 – Summary of Significant Accounting Policies | |||||||||||||
Principles of Consolidation | |||||||||||||
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Echo Automotive, LLC and Advanced Technical Asset Holdings, LLC, beginning with their respective dates of acquisition. All significant intercompany accounts and transactions have been eliminated. | |||||||||||||
Fair Value | |||||||||||||
ASC 820 Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | |||||||||||||
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. | |||||||||||||
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services. | |||||||||||||
Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort. | |||||||||||||
As of March 31, 2014 the significant inputs to the Company’s derivative liability calculation were Level 3 inputs. | |||||||||||||
The following schedule summarizes the valuation of financial instruments at fair value in the balance sheets as of March 31, 2014 and December 31, 2013: | |||||||||||||
Fair Value Measurements as of March 31, 2014 | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Assets | |||||||||||||
None | $ | — | $ | — | $ | — | |||||||
Total assets | — | — | — | ||||||||||
Liabilities | |||||||||||||
Derivative liability | — | — | 9,640,069 | ||||||||||
Total liabilities | — | — | 9,640,069 | ||||||||||
Fair Value Measurements as of December 31, 2013 | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Assets | |||||||||||||
None | $ | — | $ | — | $ | — | |||||||
Total assets | — | — | — | ||||||||||
Liabilities | |||||||||||||
Derivative liability | — | — | — | ||||||||||
Total liabilities | — | — | — | ||||||||||
The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: | |||||||||||||
Significant Unobservable | |||||||||||||
Inputs | |||||||||||||
(Level 3) | |||||||||||||
Three Months Ended March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Beginning balance | $ | — | $ | — | |||||||||
Total (gains) losses | (6,123,583 | ) | — | ||||||||||
Settlements | (88,813 | ) | — | ||||||||||
Additions | 15,852,465 | — | |||||||||||
Ending balance | $ | 9,640,069 | $ | — | |||||||||
Change in unrealized gains(losses) included in earnings relating to derivatives still held as of March 31, 2014 and 2013 | $ | (6,123,583 | ) | $ | — |
Balance_Sheet_Information
Balance Sheet Information | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Balance Sheet Related Disclosures [Abstract] | ' | ||||||||
Balance Sheet Information | ' | ||||||||
Note 4: Balance Sheet Information | |||||||||
Balance sheet information is as follows: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Property and equipment, net: | |||||||||
Office equipment/computer | $ | 113,769 | $ | 113,769 | |||||
Prototype vehicles | 615,945 | 615,945 | |||||||
Equipment and tools | 332,686 | 274,966 | |||||||
1,062,400 | 1,004,680 | ||||||||
Less: Accumulated depreciation | (294,477 | ) | (225,447 | ) | |||||
$ | 767,923 | $ | 779,233 | ||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Intangible assets, net: | |||||||||
Intangible assets | $ | 3,474,719 | $ | 3,474,719 | |||||
Less: Accumulated amortization | (319,904 | ) | (240,364 | ) | |||||
$ | 3,154,815 | $ | 3,234,355 | ||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued liabilities: | |||||||||
Accrued expenses | $ | 311,561 | $ | 282,886 | |||||
Accrued interest | 192,617 | 206,169 | |||||||
$ | 504,178 | $ | 489,055 |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 5: Related Party Transactions | |
During the year ended December 31, 2013, shareholders of the Company made net advances of $111,603 for working capital purposes. The advances are due on demand, non-interest bearing, and classified within related party advances in the accompanying condensed consolidated balance sheet as of March 31, 2014 and December 31, 2013. | |
The Company paid consulting fees to certain shareholders and directors of the Company that amounted to $30,000, $70,000, and $1,037,238 for the three months ended March 31, 2014 and 2013 and for the period from inception (November 25, 2009) through March 31, 2014, respectively. | |
The Company incurred interest expense with related parties of $45,205, $4,458, and $140,223 for the three months ended March 31, 2014 and 2013 and for the period from inception (November 25, 2009) through March 31, 2014, respectively. The Company has accrued interest on related party notes payable of $126,973 and $96,117 recorded within accrued liabilities in the accompanying condensed consolidated balance sheets as of March 31, 2014 and December 31, 2013, respectively. | |
The shareholder associated with the $2,000,000 financing agreement discussed within Note 6 overpaid the Company $16,559 when making the final payment on the stock subscription in January 2013. Additionally, this shareholder paid for $10,514 of legal expenses on behalf of the Company. The total of these two transactions, $27,073, is included within accounts payable – related party in the accompanying condensed consolidated balance sheets as of March 31, 2014 and December 31, 2013. | |
During the three months ended March 31, 2014, the Company entered into a financing arrangement with GEL Properties, LLC whereby the 7 percent note payable with BK Family Trust was repaid. Additionally, the Company issued common stock to BK Family Trust to repay accrued interest on the 7 percent note payable. BK Family Trust’s trustee and beneficiary is an immediate family member of the Company’s Chief Executive Officer. See Note 6. | |
During the three months ended March 31, 2014, the Company entered into a financing arrangement with William W. Kennedy, an immediate family member of the Company’s Chief Executive Officer. The financing arrangement included the issuance of warrants to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.01 per share, exercisable over an eighteen (18) month term. See Note 6. |
Notes_Payable
Notes Payable | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Debt Instruments [Abstract] | ' | ||||||||
Notes Payable | ' | ||||||||
Note 6: Notes Payable | |||||||||
Notes payable consisted of the following as of March 31, 2014 and December 31, 2013: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
7% note payable issued March 30, 2011, principal and interest due December 31, 2013. (8) | $ | 50,000 | $ | 50,000 | |||||
7% convertible note payable with related party issued March 31, 2012, principal and interest due January 1, 2014. (11) | — | 50,000 | |||||||
7% convertible note payable with related party issued July 27, 2012, principal and interest due July 27, 2014. (1) | 150,000 | 150,000 | |||||||
12% convertible note payable issued October 25, 2012, principal and interest due July 1, 2015. (10) | 25,000 | 25,000 | |||||||
12% convertible note payable with related party issued April 11, 2012, principal and interest due | 100,000 | 100,000 | |||||||
April 11, 2014. (9) | |||||||||
12% convertible note payable issued November 11, 2011, principal and interest due January 1, 2014. (13) | — | 100,000 | |||||||
12% note payable issued December 1, 2011, principal and interest due December 31, 2012. (4) | 100,000 | 100,000 | |||||||
18% convertible note payable issued May 30, 2012, principal and interest due January 1, 2014. (12) | — | 60,000 | |||||||
21% note payable with related party issued July 13, 2012, principal and interest due January 1, 2014, | 10,000 | 10,000 | |||||||
containing a warrant feature which requires the Company to issue warrants to purchase 100,000 | |||||||||
shares of the Company's common stock at no more than $0.01 per share with a term of five years. (3) | |||||||||
21% note payable issued July 13, 2012, principal and interest due January 1, 2014. (2) | — | 65,000 | |||||||
8% convertible note payable issued in 9 installments. For each $0.55 of cash, the company issued a | 1,500,000 | 1,500,000 | |||||||
warrant to purchase 1.25 shares of stock at $0.65 with a term of 18 months (increased to 5 years during the | |||||||||
quarter ending March 31, 2014). The exercise price was lowered to $0.35 subsequent to March 31, 2014. | |||||||||
Principal and interest due June 15, 2018. (5) | |||||||||
8% convertible note payable issued July 8, 2013, principal and interest due June 20, 2018. (6) | — | 175,000 | |||||||
15% note payables issued December 31, 2013, principal and interest due June 1, 2014. (7) | 100,000 | 100,000 | |||||||
12% note payable issued January 9, 2014, principal and interest due July 3, 2014. (14) | 375,000 | — | |||||||
15% note payable issued January 28, 2014, principal and interest due June 1, 2014. (15) | 110,000 | — | |||||||
12% convertible note payable issued February 6, 2014, principal and interest due February 6, 2016. (16) | 166,667 | — | |||||||
10% convertible note payable issued February 12, 2014, principal and interest due February 11, 2015. (17) | 55,000 | — | |||||||
8% convertible note payable issued February 21, 2014, prinicpal and interest due February 20, 2015. (18) | 65,000 | — | |||||||
8% convertible note payable issued February 21, 2014, prinicpal and interest due February 20, 2015. (18) | 50,000 | — | |||||||
10% convertible note payable issued February 28, 2014, principal and interest due October 27, 2015. (19) | 222,500 | — | |||||||
8% convertible note payable issued March 6, 2014, principal and interest due February 20, 2015. (20) | 50,000 | — | |||||||
8% convertible note payable issued March 10, 2014, principal and interest due February 20, 2015. (20) | 37,500 | — | |||||||
8% convertible note payable issued March 7, 2014, principal and interest due March 7, 2015. (21) | 50,000 | — | |||||||
7% note payable issued March 11, 2014, principal and interest due April 10, 2014. (22) | 110,000 | — | |||||||
8% convertible note payable issued March 17, 2014, principal and interest due November 12, 2014. (23) | 78,500 | — | |||||||
15% convertible note payable issued March 26, 2014, principal and interest due June 1, 2014. (24) | 500,000 | — | |||||||
3,905,167 | 2,485,000 | ||||||||
Less debt discount | (1,614,406 | ) | (806,539 | ) | |||||
Less current portion of notes payable | (1,264,420 | ) | (737,561 | ) | |||||
Long-term notes payable | $ | 1,026,341 | $ | 940,900 | |||||
-1 | The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, for every share issued to the lender, the lender will receive one additional warrant to purchase one share of the Company’s common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. | ||||||||
-2 | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.375 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on February 21, 2014, the note payable principal balance was bought out by a third party (see (18) below). The Company issued 124,730 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every $10 outstanding at the end of each calendar month, the Company would issue the lender one warrant to purchase one share of the Company’s common stock at no more than $0.01 per share with no vesting requirement and a term of five years. Accordingly, in February 2014, the Company issued the lender a warrant totaling 253,500 shares, at a strike price of $0.01 with a term of 5 years. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
-3 | For every $10 outstanding at the end of each calendar month, the Company will issue the lender one warrant to purchase one share of the Company’s common stock at no more than $0.01 per share with no vesting requirement and a term of five years. The note was issued for $50,000 and the Company subsequently repaid $20,000 in 2012, with $10,000 payments in both November and December 2012, and the Company repaid $20,000 in 2013, with two $10,000 repayments made in January 2013. Accordingly, the lender received 5,000 warrants each month from issuance through October 2012, 4,000 warrants in November 2012, 3,000 warrants in December 2012, and 1,000 warrants per month thereafter. Foregoing warrants are included within warrants granted in Note 8. The Company is currently negotiating an extension for this note. | ||||||||
-4 | The note payable agreement is convertible into 395,000 shares of the Company’s common stock. However, the lender is disputing the conversion terms of the agreement. Additionally, the Company is in default with regards to the note, as the outstanding balance is past due, and has offered to repay the lender in full. The Company is attempting to utilize on-going dialogue with the lender to resolve the dispute and cure the default. | ||||||||
-5 | Pursuant to the terms and conditions of this agreement, United Fleet Financing, LLC, (“UFF”), of which the sole member is a related party, has agreed to provide the Company $1,500,000 of financing for working capital. The financing was provided to the Company during 2013 in several installments. Each installment payment has a term of 5 years from first installment of funding. Pursuant to the agreement, UFF has the option to convert any amounts paid to the Company pursuant to the financing agreement, into common stock at a conversion price of $0.55 per share. The agreement also provided UFF the right to receive up to 2,727,272 warrants, each to purchase 1.25 shares of common stock at a per share exercise price of $0.65 with a term of 18 months; accordingly, the Company has issued UFF a total of 3,409,093 warrants in connection with this arrangement. During January, 2014, the Company agreed to extend the warrant term to 5 years. Foregoing warrants are included within warrants granted in Note 8. As of March 31, 2014, the Company has received $1,500,000 in cash related to this agreement. A debt discount of $596,169 was recorded to reflect a beneficial conversion feature and warrants associated with the cash received. The debt discount is being amortized to interest expense until maturity or its earlier repayment or conversion. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. | ||||||||
-6 | On June 20, 2013, the Company entered into a financing and security agreement and a secured convertible promissory note (the “Emerald Note”) in the amount of $200,000 with Emerald Private Equity Fund, LLC (“Emerald”). Pursuant to the terms of the Emerald Note, Emerald provided the Company with $200,000 upon execution. In connection with this financing, Emerald received a warrant to purchase 714,286 shares of the Company’s common stock at an exercise price of $0.65 per share, exercisable over a five (5) year term. The Emerald Note has a maturity date of five (5) years and bears interest at eight percent (8%) annually. The unpaid outstanding balance on the Emerald Note may be converted at the option of either party a rate of two (2) shares of the Company’s restricted common stock for each $0.70. As of December 31, 2013 the Company received $200,000 under this private placement, repaid Emerald $25,000, and issued the related warrants. During the period ending March 31, 2014, the Company issued a total of 1,142,858 shares of its common stock to Emerald relating to this agreement. The Emerald Note was considered to be in default because the Company’s S-1 filing was not cleared within the time frame required in the Emerald Note; as such, during the period ending March 31, 2014, the parties agreed to a revised due date for the Emerald Note of June 1, 2014, and the Company increased the number of the shares under the warrant by 285,714 to 1,000,000. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
-7 | On December 31, 2013, the Company entered into two promissory note agreements in the amount of $40,000 and $60,000 with UFF. Pursuant to the terms and conditions of these agreements, UFF provided the Company with $100,000 and UFF received a warrant to purchase 800,000 shares of the Company’s common stock at an exercise price of $0.55 per share, exercisable over a five (5) year term. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. The promissory notes, as amended, have a maturity date of June 1, 2014. The stated interest rate is equal to 15% per year. | ||||||||
-8 | On March 13, 2014, this note agreement was modified to extend the due date to January 1, 2015. Subsequent to March 31, 2014, the Company repaid this note and all accrued interest on the note through the issuance of 489,171 shares of its common stock. | ||||||||
-9 | The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.50 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, the Company shall issue the lender 150,000 warrants, each of which allows the lender to purchase one share of the Company’s common stock at $0.01, with a term of 18 months. The Company is currently negotiating an extension for this note. | ||||||||
-10 | On March 19, 2014, this note agreement was modified to extend the due date to July 1, 2015. The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.50 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, the Company shall issue the lender 30,000 warrants, each of which allows the lender to purchase one share of the Company’s common stock at $0.01, with a term of 18 months. | ||||||||
-11 | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on March 7, 2014, the note payable principal balance was bought out by a third party (see (20) below). The Company issued 37,849 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company’s common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Accordingly, in March 2014, the Company issued the lender a warrant totaling 161,240 shares, at a strike price of $0.75 and extended the contractual warrant term from a term of 18 months to a term of 5 years. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
(12) | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on March 10, 2014, the note payable principal balance was bought out by a third party (see (21) below). The Company issued 99,668 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company’s common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Accordingly, in March 2014, the Company issued the lender a warrant totaling 271,097 shares, at a strike price of $0.75 extended the contractual warrant term from a term of 18 months to a term of 5 years. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
-13 | On February 20, 2014 the Company issued 337,855 shares of its common stock to satisfy its obligation in connection with its 12% convertible note payable issued November 11, 2011 totaling $100,000, including accrued interest on this obligation. Additionally, in connection with this transaction, the Company issued a warrant to purchase 506,782 shares of the Company’s common stock at an exercise price of $0.01 per share, exercisable over a five (5) year term. Foregoing warrants are included within warrants granted in Note 8. The transaction was analyzed for extinguishment accounting and the company determined that extinguishment accounting was appropriate and any additional consideration provided in the transaction was recorded as a gain/loss on debt extinguishment in other income and expense. | ||||||||
-14 | On January 9, 2014, the Company received gross proceeds of $250,000 via a financing arrangement with Hanover Holdings I, LLC. The principal balance of $375,000 includes a $125,000 prepaid contingent expense that the Company became subject to by (i) failing to file a S-1 registration statement (covering the resale of the underlying common stock pertaining to this financing arrangement) by February 18, 2014 ($40,000); and (ii) failing to have the S-1 registration statement become effective by May 3, 2014 ($85,000). Neither of these criteria were met by the Company. The terms of this financing arrangement bears interest at twelve percent (12%) annually, and has a maturity date of July 3, 2014. The unpaid outstanding balance may be converted at the option of the investor a rate of one (1) share of the Company’s restricted common stock for each $0.15223, subject to adjustment. On February 17, 2014 the Company expensed the registration right penalties. The note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. Subsequent to March 31, 2014, the conversion feature of the financing arrangement was modified whereby the unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) sixty percent (60%) of the lowest trade price in the 10 days prior to conversion; or (ii) the original conversion price as stated in the January, 2014 financing arrangement. | ||||||||
-15 | On January 28, 2014, the Company received gross proceeds of $110,000 via a financing arrangement with UFF. The terms of this financing arrangement, as amended, bears interest at fifteen percent (15%) annually, and has a maturity date of June 1, 2014. In connection with this financing arrangement, the Company issued warrants to purchase 800,000 shares of the Company’s common stock at an exercise price of $0.55 per share, exercisable over a five (5) year term. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. | ||||||||
-16 | On February 6, 2014, the Company received gross proceeds of $150,000 via a financing arrangement with JMJ Financial. The principal balance of $166,666 includes a $16,666 original issue discount. The terms of this financing arrangement bears interest at twelve percent (12%) annually, and has a maturity date of February 6, 2016. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of the Company’s restricted common stock for each $0.23, or (ii) sixty percent (60%) of the lowest trade price in the 25 days prior to conversion. The variable conversion feature qualifies the note as a derivative instrument and tainted all other equity linked instruments including outstanding warrants and fixed rate convertible debt. See further discussion below in Derivative Liabilities- Convertible Notes. | ||||||||
-17 | On February 12, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with Vista Capital Investments, LLC. The principal balance of $55,000 includes a $5,000 original issue discount. The terms of this financing arrangement bears interest at ten percent (10%) annually, and has a maturity date of February 11, 2015. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of our restricted common stock for each $0.35, or (ii) seventy percent (70%) of the lowest trade price in the 20 days prior to conversion. The variable conversion feature qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. | ||||||||
-18 | On February 21, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with LG Capital Funding, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of February 20, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on February 21, 2014, LG Capital Funding, LLC paid off the 21 percent note payable issued July 13, 2012 totaling $65,000 (see (2) above), on the Company’s behalf, and, accordingly, the Company agreed to repay LG Capital Funding, LLC a total of $65,000 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note’s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the 10 days prior to conversion. The variable conversion feature of the replacement note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. The transaction was analyzed for extinguishment accounting and the Company determined that extinguishment accounting was appropriate and any additional consideration provided in the transaction was recorded as a gain/loss on debt extinguishment in other income and expense. | ||||||||
-19 | On February 28, 2014, the Company received gross proceeds of $200,000 via a financing arrangement with Typenex Co-Investment, LLC. The principal balance of $222,500 includes a $22,500 original issue discount. The terms of this financing arrangement bears interest at ten percent (10%) annually, and has a maturity date of October 27, 2015. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of our restricted common stock for each $0.27, or (ii) seventy percent (70%) of the lowest trade price in the fifteen (15) days prior to conversion. The note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. | ||||||||
-20 | On March 6, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with GEL Properties, LLC, The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of February 20, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 7, 2014, GEL Properties, LLC paid off the 7 percent note payable with a related party issued March 31, 2012 totaling $50,000 (see (11) above), on the Company’s behalf, and, accordingly, the Company agreed to repay GEL Properties, LLC a total of $52,500 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note’s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. During the period ending March 31, 2014, GEL Properties, LLC elected to convert $15,000 of principal balance under the terms of the replacement note, and received a total of 164,935 shares of the Company’s common stock. The variable conversion feature of the replacement note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. The transaction was analyzed for extinguishment accounting and the Company determined that extinguishment accounting was appropriate and any additional consideration provided in the transaction was recorded as a gain/loss on debt extinguishment in other income and expense. | ||||||||
-21 | On March 10, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with Union Capital, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of March 7, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 10, 2014, Union Capital, LLC paid off the 18 percent note payable issued May 30, 2012 totaling $60,000 (see (12) above), on the Company’s behalf, and, accordingly, the Company agreed to repay Union Capital, LLC a total of $67,800 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of March 7, 2015. The replacement note‘s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. During the period ending March 31, 2014, Union Capital, LLC elected to convert its principal balance under the terms of the replacement note, and received a total of 579,525 shares of the Company’s common stock. The variable conversion feature of the note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. The transaction was analyzed for extinguishment accounting and the Company determined that extinguishment accounting was appropriate and any additional consideration provided in the transaction was recorded as a gain/loss on debt extinguishment in other income and expense. | ||||||||
-22 | On March 11, 2014, the Company received gross proceeds of $110,000 via a financing arrangement with William W. Kennedy, of whom Mr. William D. Kennedy, our CEO, is an immediate family member. The terms of this financing arrangement bears interest at seven percent (7%) annually, and has a maturity date of April 10, 2014. In connection with this financing arrangement, we issued warrants to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.01 per share, exercisable over an eighteen (18) month term. Foregoing warrants are included within warrants granted in Note 8. The Company is currently negotiating an extension for this note. | ||||||||
-23 | On March 17, 2014, the Company received gross proceeds of $78,500 via a financing arrangement with Asher Enterprises, Inc. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of November 12, 2014. The unpaid outstanding balance may be converted at sixty-nine percent (69%) of the lowest trade price in the ten (10) days prior to conversion. The variable conversion feature of the note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. Additionally, the note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. | ||||||||
-24 | On March 26, 2014, the Company received gross proceeds of $500,000 via a financing arrangement with UFF. The terms of this financing arrangement bears interest at fifteen percent (15%) annually, and has a maturity date of June 1, 2014. In connection with this financing arrangement, the Company issued warrants to purchase 1,428,571 shares of the Company’s common stock at an exercise price of $0.35 per share, exercisable over a five (5) year term. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
Interest expense incurred on all debt, which excludes the expense related to the accretion of the debt discount and excludes the expense related to the change in the valuation of derivative instruments, was $69,014, $25,711, and $278,274 for the three months ended March 31, 2014 and 2013 and for the period from inception (November 25, 2009) through March 31, 2014, respectively. Of the total interest expense incurred on all debt, approximately $45,205, $4,458, and $140,223 pertained to related party notes payable for the three months ended March 31, 2014 and 2013 and for the period from inception (November 25, 2009) through March 31, 2014, respectively. Included within interest expense in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2014, 2013, and the period from inception (November 25, 2009) through March 31, 2014, is $218,269, $2,597 and $399,213 of expense related to the accretion of the debt discount recorded due to the issuance of the warrants associated with the notes payable. Included within interest expense in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2014, 2013, and the period from inception (November 25, 2009) through March 31, 2014, is $13,918,171, $0 and $13,918,171 of expense related to the valuation of the notes payable and warrants classified as derivative liability. | |||||||||
Derivative Liabilities- Convertible Notes | |||||||||
The embedded conversion and anti-dilution features in the convertible debt instruments and warrants issued in the three months ending March 31, 2014 qualify certain notes as derivative instruments since the number of shares issuable under the notes are indeterminate based on guidance in FASB ASC 815, Derivatives and Hedging. These convertible notes tainted all other equity linked instruments including outstanding warrants and fixed rate convertible debt. | |||||||||
The valuation of the derivative liability attached to the convertible debt was arrived at through the use of a Monte Carlo model that values the derivative liability within the notes. The technique applied generates a large number of possible (but random) price paths for the underlying (or underlyings) via simulation, and then calculates the associated payment value (cash, stock, or warrants) of the derivative features. The price of the underlying common stock is modeled such that it follows a geometric Brownian motion with constant drift, and elastic volatility (increasing as stock price decreases). The stock price is determined by a random sampling from a normal distribution. Since the underlying random process is the same, for enough price paths, the value of the derivative is derived from path dependent scenarios and outcomes. The features in the notes that were analyzed and incorporated into the model included the conversion features with the reset provisions, the call/redemption/prepayment options, and the default provisions. Based on these features, there are six primary events that can occur; payments are made in cash; payments are made with stock; the noteholder converts upon receiving a redemption notice; the noteholder converts the note; the issuer redeems the note; or the Company defaults on the note. | |||||||||
The model simulates the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e. stock price, conversion price, etc.). Probabilities were assigned to each variable such as redemption likelihood, default likelihood, and timing and pricing of reset events over the remaining term of the note based on management projections. This led to a cash flow simulation over the life of the note. A discounted cash flow for each simulation was completed, and it was compared to the discounted cash flow of the note without the embedded features, thus determining a value for the derivative liability of $10,340,351 at either issuance date or tainting date. The Company recorded the change in the fair value of the derivative liability as a gain of $4,146,356 to reflect the value of the derivative liability as $6,105,182 as of March 31, 2014. The Company also recorded settlements of $88,813 related to conversions of three of their convertible notes. | |||||||||
Extinguishments and Settlements | |||||||||
During the three months ending March 31, 2014, the Company entered into certain debt transactions (see footnotes 13, 18, 20, and 21 to debt schedule above) in which extinguishment accounting was applied. As a result, a loss on extinguishment of debt of $147,671 was recorded as a loss on debt extinguishment in other income and expense related to these extinguishments. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2014 | |
Equity [Abstract] | ' |
Equity | ' |
Note 7: Equity | |
In January, 2014, the Company issued 1,142,858 shares of its common stock to Emerald in connection with the Emerald Note (see Note 6). No proceeds were received in connection with this common stock issuance. The common stock was issued to reduce the Emerald Note’s principal balance and accrued interest. The Emerald Note was considered to be in default because the Company’s S-1 filing was not cleared within the time frame required in the Emerald Note, so in response the parties agreed to an accelerated due date for the Emerald Note, and agreed to increase the number of the shares under the warrant by 285,714 to 1,000,000. | |
On February 20, 2014, the Company issued 337,855 shares of its common stock to satisfy its obligation in connection with its 12% convertible note payable issued November 11, 2011 totaling $100,000 (see Note 6). Additionally, in connection with this transaction, the Company issued a warrant to purchase 506,782 shares of the Company’s common stock at an exercise price of $0.01 per share, exercisable over a five (5) year term. In connection with the Company’s financing arrangement with LG Capital Funding, LLC, whereby LG Capital Funding, LLC repaid the 21% convertible note payable issued July 13, 2012 totaling $65,000, on February 20, 2014, the Company issued 124,730 shares of its common stock to the same lender to satisfy accrued interest on the repaid, extinguished obligation. | |
In connection with the Company’s financing arrangement with GEL Properties, LLC, whereby GEL Properties, LLC repaid the 7% convertible note payable with a related party issued March 31, 2012 totaling $50,000, on March 7, 2014, the Company issued 37,849 shares of its common stock to the related party to satisfy accrued interest on the repaid, extinguished obligation. Furthermore, GEL Properties, LLC, elected to convert a portion of their principal balance to common stock as permitted in connection with the replacement note payable, and, accordingly, on March 11, 2014, the Company issued 164,935 shares of its common stock to GEL Properties, LLC to reduce the obligation under the replacement note payable by a total of $15,000. | |
In connection with the Company’s financing arrangement with Union Capital, LLC, whereby Union Capital, LLC repaid the 18% convertible note payable issued May 30, 2012 totaling $60,000, on March 10, 2014, the Company issued 99,668 shares of its common stock to the same lender to satisfy accrued interest on the repaid, extinguished obligation. Furthermore, Union Capital, LLC, elected to convert their principal balance to common stock as permitted in connection with the replacement note payable, and, accordingly, on March 10, 2014 and March 14, 2014, the Company issued 359,858 and 219,667 shares of its common stock, respectively, to Union Capital, LLC to fully extinguish the obligation under the replacement note payable. | |
During the three months ending March 31, 2014, the Company issued a total of 1,293,344 shares of its common stock to various service providers in a series of transactions related to consulting and professional services rendered during 2013 and 2014. The total operating expense related to these transactions was $317,460; of which $166,500 was included in accrued liabilities at December 31, 2013. | |
During the three months ending March 31, 2014, the Company recorded stock based compensation expense of $10,921. | |
The embedded conversion and anti-dilution features in the convertible debt instruments issued in the three months ending March 31, 2014 qualify certain notes as a derivative instrument since the number of shares issuable under the note is indeterminate based on guidance in FASB ASC 815, Derivatives and Hedging. These convertible notes tainted all other equity linked instruments including outstanding warrants and fixed rate convertible debt. The Company determined that there was a total fair value of $788,660 related to tainted warrants classified as equity that were reclassified during the period and recorded as a derivative liability. | |
Warrants
Warrants | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||
Warrants | ' | ||||||||||||||||||
Note 8: Warrants | |||||||||||||||||||
As discussed in Note 6, the Company issued warrants during the three months ended March 31, 2014. The following summarizes the warrant activity for the three months ended March 31, 2014: | |||||||||||||||||||
Number of | Weighted- Average | Weighted- Average | Intrinsic value | ||||||||||||||||
Units | Exercise Price | Remaining | |||||||||||||||||
Contractual Term | |||||||||||||||||||
(in years) | |||||||||||||||||||
Outstanding at December 31, 2013 | 13,764,472 | $ | 0.66 | ||||||||||||||||
Grants | 31,609,124 | 0.06 | |||||||||||||||||
Outstanding at March 31, 2014 | 45,373,596 | $ | 0.23 | 4.6 | $ | 5,913,522 | |||||||||||||
Exercisable at March 31, 2014 | 45,373,596 | $ | 0.23 | 4.6 | $ | 5,913,522 | |||||||||||||
During the three months ended March 31, 2014 and 2013, the Company entered into several note payable agreements that included detachable warrants with no vesting requirements, as discussed in Note 6. The weighted-average grant date fair value for the three months ended March 31, 2014, equaled $0.16 per share. The total fair value of warrants granted and vested during the three months ended March 31, 2014 and 2013 was $5,131,613 and $25,565, of which an allocated portion was recorded as a debt discount. During the three months ended March 31, 2014 and 2013, $375,239 and $16,351 of the discount was accreted to interest expense. The grant-date fair value of the warrants, and thus the debt discount, was valued using a Monte Carlo model. | |||||||||||||||||||
Derivative Liabilities- Warrants | |||||||||||||||||||
The embedded conversion and anti-dilution features in the convertible debt instruments and warrants issued in the three months ending March 31, 2014 qualify certain notes as a derivative instrument since the number of shares issuable under the note is indeterminate based on guidance in FASB ASC 815, Derivatives and Hedging. These convertible notes tainted all other equity linked instruments including outstanding warrants and fixed rate convertible debt. | |||||||||||||||||||
The valuation of the derivative liability of the warrants was determined through the use of a Monte Carlo options model that values the liability of the warrants based on a risk-neutral valuation where the price of the option is its discounted expected value. The technique applied generates a large number of possible (but random) price paths for the underlying common stock via simulation, and then calculates the associated exercise value (i.e. "payoff") of the option for each path. These payoffs are then averaged and discounted to a current valuation date resulting in the fair value of the option. | |||||||||||||||||||
Using this model, the Company determined a fair value of $5,512,114 at either issuance date or tainting date, including the warrants previously classified in equity which had a value at tainting of $788,660 (see Note 7). The Company recorded the change in the fair value of the derivative liability as a gain of $1,977,227 to reflect the value of the derivative liability as $3,534,887 as of March 31, 2014. |
Stock_Options
Stock Options | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||
Stock Options | ' | ||||||||||||||||||
Note 9: Stock Options | |||||||||||||||||||
On December 10, 2013, the Company’s Board of Directors (the “Board”), after careful consideration, unanimously approved the 2013 Equity Incentive Plan (the “Equity Incentive Plan”), pursuant to which the Company reserved for issuance thereunder 8,000,000 shares of the Company’s outstanding Common Stock. The Company’s stockholders approved the Equity Incentive Plan and it became effective in January 2014. | |||||||||||||||||||
From time to time, the Company grants stock option awards to officers and employees. Such awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures, using a Black-Scholes option pricing model. | |||||||||||||||||||
Stock option awards are expensed on a straight-line basis over the requisite service period. During the three months ended March 31, 2014 and 2013, the Company recognized compensation expense of $10,921 and $0, respectively, associated with stock option awards. At March 31, 2014, future stock compensation expense (net of estimated forfeitures) not yet recognized was $213,731 and will be recognized over a weighted average remaining vesting period of 3.63 years. | |||||||||||||||||||
The following summarizes stock option activity for the three months ended March 31, 2014: | |||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||
Average | Average | ||||||||||||||||||
Number of | Exercise | Remaining | |||||||||||||||||
Shares | Price | Contractual Life | Intrinsic Value | ||||||||||||||||
Outstanding at December 31, 2013 | 1,000,000 | $ | 0.26 | ||||||||||||||||
Granted | — | — | |||||||||||||||||
Exercised | — | — | |||||||||||||||||
Forfeited | — | — | |||||||||||||||||
Outstanding at March 31, 2014 | 1,000,000 | $ | 0.26 | 9.74 | $ | — | |||||||||||||
Exercisable at March 31, 2014 | 143,750 | $ | 0.26 | 9.74 | $ | — | |||||||||||||
The following table summarizes information about the Company’s non-vested shares as of March 31, 2014: | |||||||||||||||||||
Weighted-Average | |||||||||||||||||||
Number of | Grant-Date | ||||||||||||||||||
Shares | Fair Value | ||||||||||||||||||
Nonvested at December 31, 2013 | 900,000 | $ | 0.25 | ||||||||||||||||
Granted | — | — | |||||||||||||||||
Vested | (43,750 | ) | 0.25 | ||||||||||||||||
Nonvested at March 31, 2014 | 856,250 | $ | 0.25 | ||||||||||||||||
The Company has issued shares of its common stock registered in connection with its Form S-8 filing to certain consultants and service providers. See Notes 7 and 13. |
Basic_and_Diluted_Net_Loss_Per
Basic and Diluted Net Loss Per Share | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Net loss per share | ' | ||||||||
Basic and Diluted Net Loss Per Share | ' | ||||||||
Note 10: Basic and Diluted Net Loss Per Share | |||||||||
Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. For the three months ended March 31, 2014 and 2013, the assumed exercise of exercisable warrants and conversion of convertible notes payable are anti-dilutive due to the Company’s net loss and are excluded from the determination of net loss per common share – diluted. Accordingly, net loss per common share – diluted equals net loss per common share – basic in all periods presented. | |||||||||
The following table summarizes the potential shares of common stock that were excluded from diluted net loss per share, because the effect of including these potential shares was antidilutive: | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Convertible notes payable | 76,669,368 | 1,654,524 | |||||||
Warrants | 45,373,596 | 5,364,500 | |||||||
Stock Options | 143,750 | — |
Going_Concern
Going Concern | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Going Concern | ' |
Note 11: Going Concern | |
The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the three months ended March 31, 2014, the Company had a net loss of $10,212,016 as compared to a net loss of $871,939 for the three months ended March 31, 2013. Additionally, the Company has incurred a net loss of $19,322,273 for the period from inception (November 25, 2009) to March 31, 2014. As of March 31, 2014, the Company had not emerged from the development stage. These circumstances result in substantial doubt as to the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to begin operations and achieve a level of profitability. The Company intends to finance operations by issuing additional common stock, warrants and through bridge and long term financing. The failure to achieve the necessary levels of profitability and obtain the additional funding would be detrimental to the Company. The condensed consolidated financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Note 12: Commitments and Contingencies | |
Litigation | |
The Company may from time to time be involved in legal proceedings arising from the normal course of business. | |
Note Payable Default and Dispute | |
On August 16, 2013, the Company received notice of a lawsuit filed in the District Court of Clark County, Nevada filed by Portofino Investments II Limited Partnership (“Portofino”) against the Company regarding a convertible loan in the principal amount of $100,000. The lawsuit alleges that the Company has failed to repay the loan amount and interest that were due to Portofino under the convertible loan and that Portofino is entitled to judgment in the full amount due under such convertible loan, in addition to costs and expenses relating to the cause of action. The Company has filed an answer to the complaint and Portofino has subsequently filed an amended complaint. The Company is currently working on a response, and is simultaneously negotiating with Portofino as to a potential settlement. | |
Former Service Provider Dispute | |
A former service provider of the Company has asserted various claims regarding the Company relating to activities that took place during 2012 and 2013. The Company has concluded an independent investigation, performed by a third party legal firm, into the merit of these claims and determined that they were either without merit or immaterial. The Company does not believe that any amounts that may potentially be paid as a result of any of these claims would have a material effect on its condensed consolidated financial statements. | |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 13: Subsequent Events | |
Subsequent to March 31, 2014, the Company received gross proceeds of $35,000 via an advance from Mindnest LLC. The terms of this advance incurs a total of $2,000 of interest, and has a maturity date of May 31, 2014. | |
Subsequent to March 31, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with Mr. Mark Brooks. The terms of this financing arrangement bears interest at twenty-one percent (21%) annually, and had a maturity date of May 11, 2014. The Company repaid the loan plus accrued interest on May 9, 2014. In connection with this financing arrangement, the Company issued warrants to purchase 100,000 shares of our common stock at an exercise price of $0.10 per share, exercisable over an eighteen (18) month term. | |
Subsequent to March 31, 2014, the Company received gross proceeds of $124,300 via a financing arrangement with Blue Citi, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of May 5, 2015. The unpaid outstanding balance may be converted at fifty-eight percent (58%) of the lowest trade price in the twenty (20) days prior to conversion. Additionally, subsequent to March 31, 2014, Blue Citi, LLC repaid the 12 percent note payable issued April 11, 2012 totaling $100,000, and, accordingly, we agreed to repay Blue Citi, LLC a total of $125,067 via a Replacement Note bearing interest at eight percent (8%) annually, with a maturity date of May 5, 2015. The Replacement Note unpaid outstanding balance may be converted at fifty-eight percent (58%) of the lowest trade price in the twenty (20) days prior to conversion. In connection with this financing arrangement, the Company issued warrants to purchase 310,750 shares of our common stock at an exercise price of $0.20 per share, exercisable over a five (5) year term. | |
Subsequent to March 31, 2014, the Company received gross proceeds of $400,000 via a financing arrangement with 31 Group, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of May 7, 2016. The unpaid outstanding balance may be converted at the option of the investor at the lesser of (i) a rate of one (1) share of our restricted common stock for each $0.15, or (ii) sixty-five percent (65%) of the average of the lowest three trade prices in the ten (10) days prior to conversion. | |
Subsequent to March 31, 2014, the Company issued 109,810 shares of its common stock to GEL Properties, LLC, 105,281 shares of its common stock to LG Capital Fund, LLC and 246,305 shares of its common stock to Blue Citi, LLC in connection with their respective convertible notes. No proceeds were received in connection with these common stock issuances. The common stock was issued to reduce the Company's note payable balances. | |
Subsequent to March 31, 2014, the Company issued 760,282 shares of its common stock with respect to the exercise of two warrants. The Company received total proceeds of $7,603 in connection with this warrant exercise. | |
Subsequent to March 31, 2014, the Company issued 489,171 shares of its common stock to satisfy its obligation in connection with its 7% note payable issued March 30, 2011 totaling $50,000. | |
Subsequent to March 31, 2014, the Company issued a total of 600,000 shares of its common stock to various service providers in a series of transactions related to consulting and professional services rendered during 2014, totaling $78,000. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||
Principles of Consolidation | ' | ||||||||||||
Principles of Consolidation | |||||||||||||
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Echo Automotive, LLC and Advanced Technical Asset Holdings, LLC, beginning with their respective dates of acquisition. All significant intercompany accounts and transactions have been eliminated. | |||||||||||||
Fair Value | ' | ||||||||||||
Fair Value | |||||||||||||
ASC 820 Fair Value Measurements and Disclosures (“ASC 820”), defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | |||||||||||||
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. | |||||||||||||
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services. | |||||||||||||
Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort. | |||||||||||||
As of March 31, 2014 the significant inputs to the Company’s derivative liability calculation were Level 3 inputs. | |||||||||||||
The following schedule summarizes the valuation of financial instruments at fair value in the balance sheets as of March 31, 2014 and December 31, 2013: | |||||||||||||
Fair Value Measurements as of March 31, 2014 | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Assets | |||||||||||||
None | $ | — | $ | — | $ | — | |||||||
Total assets | — | — | — | ||||||||||
Liabilities | |||||||||||||
Derivative liability | — | — | 9,640,069 | ||||||||||
Total liabilities | — | — | 9,640,069 | ||||||||||
Fair Value Measurements as of December 31, 2013 | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Assets | |||||||||||||
None | $ | — | $ | — | $ | — | |||||||
Total assets | — | — | — | ||||||||||
Liabilities | |||||||||||||
Derivative liability | — | — | — | ||||||||||
Total liabilities | — | — | — | ||||||||||
The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: | |||||||||||||
Significant Unobservable | |||||||||||||
Inputs | |||||||||||||
(Level 3) | |||||||||||||
Three Months Ended March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Beginning balance | $ | — | $ | — | |||||||||
Total (gains) losses | (6,123,583 | ) | — | ||||||||||
Settlements | (88,813 | ) | — | ||||||||||
Additions | 15,852,465 | — | |||||||||||
Ending balance | $ | 9,640,069 | $ | — | |||||||||
Change in unrealized gains(losses) included in earnings relating to derivatives still held as of March 31, 2014 and 2013 | $ | (6,123,583 | ) | $ | — |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||
Schedule of summarizes valuation of financial instruments | ' | ||||||||||||
The following schedule summarizes the valuation of financial instruments at fair value in the balance sheets as of March 31, 2014 and December 31, 2013: | |||||||||||||
Fair Value Measurements as of March 31, 2014 | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Assets | |||||||||||||
None | $ | — | $ | — | $ | — | |||||||
Total assets | — | — | — | ||||||||||
Liabilities | |||||||||||||
Derivative liability | — | — | 9,640,069 | ||||||||||
Total liabilities | — | — | 9,640,069 | ||||||||||
Fair Value Measurements as of December 31, 2013 | |||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||
Assets | |||||||||||||
None | $ | — | $ | — | $ | — | |||||||
Total assets | — | — | — | ||||||||||
Liabilities | |||||||||||||
Derivative liability | — | — | — | ||||||||||
Total liabilities | — | — | — | ||||||||||
Schedule of summarizes reconciliation of changes in the fair value of financial assets and liabilities | ' | ||||||||||||
The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: | |||||||||||||
Significant Unobservable | |||||||||||||
Inputs | |||||||||||||
(Level 3) | |||||||||||||
Three Months Ended March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Beginning balance | $ | — | $ | — | |||||||||
Total (gains) losses | (6,123,583 | ) | — | ||||||||||
Settlements | (88,813 | ) | — | ||||||||||
Additions | 15,852,465 | — | |||||||||||
Ending balance | $ | 9,640,069 | $ | — | |||||||||
Change in unrealized gains(losses) included in earnings relating to derivatives still held as of March 31, 2014 and 2013 | $ | (6,123,583 | ) | $ | — |
Balance_Sheet_Information_Tabl
Balance Sheet Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Balance Sheet Related Disclosures [Abstract] | ' | ||||||||
Schedule of Property and Equipment | ' | ||||||||
Balance sheet information is as follows: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Property and equipment, net: | |||||||||
Office equipment/computer | $ | 113,769 | $ | 113,769 | |||||
Prototype vehicles | 615,945 | 615,945 | |||||||
Equipment and tools | 332,686 | 274,966 | |||||||
1,062,400 | 1,004,680 | ||||||||
Less: Accumulated depreciation | (294,477 | ) | (225,447 | ) | |||||
$ | 767,923 | $ | 779,233 | ||||||
Schedule of Intangible Assets | ' | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Intangible assets, net: | |||||||||
Intangible assets | $ | 3,474,719 | $ | 3,474,719 | |||||
Less: Accumulated amortization | (319,904 | ) | (240,364 | ) | |||||
$ | 3,154,815 | $ | 3,234,355 | ||||||
Schedule of Accrued Liabilities | ' | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued liabilities: | |||||||||
Accrued expenses | $ | 311,561 | $ | 282,886 | |||||
Accrued interest | 192,617 | 206,169 | |||||||
$ | 504,178 | $ | 489,055 | ||||||
Notes_Payable_Tables
Notes Payable (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Debt Instruments [Abstract] | ' | ||||||||
Schedule of notes payable | ' | ||||||||
Notes payable consisted of the following as of March 31, 2014 and December 31, 2013: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
7% note payable issued March 30, 2011, principal and interest due December 31, 2013. (8) | $ | 50,000 | $ | 50,000 | |||||
7% convertible note payable with related party issued March 31, 2012, principal and interest due January 1, 2014. (11) | — | 50,000 | |||||||
7% convertible note payable with related party issued July 27, 2012, principal and interest due July 27, 2014. (1) | 150,000 | 150,000 | |||||||
12% convertible note payable issued October 25, 2012, principal and interest due July 1, 2015. (10) | 25,000 | 25,000 | |||||||
12% convertible note payable with related party issued April 11, 2012, principal and interest due | 100,000 | 100,000 | |||||||
April 11, 2014. (9) | |||||||||
12% convertible note payable issued November 11, 2011, principal and interest due January 1, 2014. (13) | — | 100,000 | |||||||
12% note payable issued December 1, 2011, principal and interest due December 31, 2012. (4) | 100,000 | 100,000 | |||||||
18% convertible note payable issued May 30, 2012, principal and interest due January 1, 2014. (12) | — | 60,000 | |||||||
21% note payable with related party issued July 13, 2012, principal and interest due January 1, 2014, | 10,000 | 10,000 | |||||||
containing a warrant feature which requires the Company to issue warrants to purchase 100,000 | |||||||||
shares of the Company's common stock at no more than $0.01 per share with a term of five years. (3) | |||||||||
21% note payable issued July 13, 2012, principal and interest due January 1, 2014. (2) | — | 65,000 | |||||||
8% convertible note payable issued in 9 installments. For each $0.55 of cash, the company issued a | 1,500,000 | 1,500,000 | |||||||
warrant to purchase 1.25 shares of stock at $0.65 with a term of 18 months (increased to 5 years during the | |||||||||
quarter ending March 31, 2014). The exercise price was lowered to $0.35 subsequent to March 31, 2014. | |||||||||
Principal and interest due June 15, 2018. (5) | |||||||||
8% convertible note payable issued July 8, 2013, principal and interest due June 20, 2018. (6) | — | 175,000 | |||||||
15% note payables issued December 31, 2013, principal and interest due June 1, 2014. (7) | 100,000 | 100,000 | |||||||
12% note payable issued January 9, 2014, principal and interest due July 3, 2014. (14) | 375,000 | — | |||||||
15% note payable issued January 28, 2014, principal and interest due June 1, 2014. (15) | 110,000 | — | |||||||
12% convertible note payable issued February 6, 2014, principal and interest due February 6, 2016. (16) | 166,667 | — | |||||||
10% convertible note payable issued February 12, 2014, principal and interest due February 11, 2015. (17) | 55,000 | — | |||||||
8% convertible note payable issued February 21, 2014, prinicpal and interest due February 20, 2015. (18) | 65,000 | — | |||||||
8% convertible note payable issued February 21, 2014, prinicpal and interest due February 20, 2015. (18) | 50,000 | — | |||||||
10% convertible note payable issued February 28, 2014, principal and interest due October 27, 2015. (19) | 222,500 | — | |||||||
8% convertible note payable issued March 6, 2014, principal and interest due February 20, 2015. (20) | 50,000 | — | |||||||
8% convertible note payable issued March 10, 2014, principal and interest due February 20, 2015. (20) | 37,500 | — | |||||||
8% convertible note payable issued March 7, 2014, principal and interest due March 7, 2015. (21) | 50,000 | — | |||||||
7% note payable issued March 11, 2014, principal and interest due April 10, 2014. (22) | 110,000 | — | |||||||
8% convertible note payable issued March 17, 2014, principal and interest due November 12, 2014. (23) | 78,500 | — | |||||||
15% convertible note payable issued March 26, 2014, principal and interest due June 1, 2014. (24) | 500,000 | — | |||||||
3,905,167 | 2,485,000 | ||||||||
Less debt discount | (1,614,406 | ) | (806,539 | ) | |||||
Less current portion of notes payable | (1,264,420 | ) | (737,561 | ) | |||||
Long-term notes payable | $ | 1,026,341 | $ | 940,900 | |||||
-1 | The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, for every share issued to the lender, the lender will receive one additional warrant to purchase one share of the Company’s common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. | ||||||||
-2 | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.375 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on February 21, 2014, the note payable principal balance was bought out by a third party (see (18) below). The Company issued 124,730 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every $10 outstanding at the end of each calendar month, the Company would issue the lender one warrant to purchase one share of the Company’s common stock at no more than $0.01 per share with no vesting requirement and a term of five years. Accordingly, in February 2014, the Company issued the lender a warrant totaling 253,500 shares, at a strike price of $0.01 with a term of 5 years. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
-3 | For every $10 outstanding at the end of each calendar month, the Company will issue the lender one warrant to purchase one share of the Company’s common stock at no more than $0.01 per share with no vesting requirement and a term of five years. The note was issued for $50,000 and the Company subsequently repaid $20,000 in 2012, with $10,000 payments in both November and December 2012, and the Company repaid $20,000 in 2013, with two $10,000 repayments made in January 2013. Accordingly, the lender received 5,000 warrants each month from issuance through October 2012, 4,000 warrants in November 2012, 3,000 warrants in December 2012, and 1,000 warrants per month thereafter. Foregoing warrants are included within warrants granted in Note 8. The Company is currently negotiating an extension for this note. | ||||||||
-4 | The note payable agreement is convertible into 395,000 shares of the Company’s common stock. However, the lender is disputing the conversion terms of the agreement. Additionally, the Company is in default with regards to the note, as the outstanding balance is past due, and has offered to repay the lender in full. The Company is attempting to utilize on-going dialogue with the lender to resolve the dispute and cure the default. | ||||||||
-5 | Pursuant to the terms and conditions of this agreement, United Fleet Financing, LLC, (“UFF”), of which the sole member is a related party, has agreed to provide the Company $1,500,000 of financing for working capital. The financing was provided to the Company during 2013 in several installments. Each installment payment has a term of 5 years from first installment of funding. Pursuant to the agreement, UFF has the option to convert any amounts paid to the Company pursuant to the financing agreement, into common stock at a conversion price of $0.55 per share. The agreement also provided UFF the right to receive up to 2,727,272 warrants, each to purchase 1.25 shares of common stock at a per share exercise price of $0.65 with a term of 18 months; accordingly, the Company has issued UFF a total of 3,409,093 warrants in connection with this arrangement. During January, 2014, the Company agreed to extend the warrant term to 5 years. Foregoing warrants are included within warrants granted in Note 8. As of March 31, 2014, the Company has received $1,500,000 in cash related to this agreement. A debt discount of $596,169 was recorded to reflect a beneficial conversion feature and warrants associated with the cash received. The debt discount is being amortized to interest expense until maturity or its earlier repayment or conversion. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. | ||||||||
-6 | On June 20, 2013, the Company entered into a financing and security agreement and a secured convertible promissory note (the “Emerald Note”) in the amount of $200,000 with Emerald Private Equity Fund, LLC (“Emerald”). Pursuant to the terms of the Emerald Note, Emerald provided the Company with $200,000 upon execution. In connection with this financing, Emerald received a warrant to purchase 714,286 shares of the Company’s common stock at an exercise price of $0.65 per share, exercisable over a five (5) year term. The Emerald Note has a maturity date of five (5) years and bears interest at eight percent (8%) annually. The unpaid outstanding balance on the Emerald Note may be converted at the option of either party a rate of two (2) shares of the Company’s restricted common stock for each $0.70. As of December 31, 2013 the Company received $200,000 under this private placement, repaid Emerald $25,000, and issued the related warrants. During the period ending March 31, 2014, the Company issued a total of 1,142,858 shares of its common stock to Emerald relating to this agreement. The Emerald Note was considered to be in default because the Company’s S-1 filing was not cleared within the time frame required in the Emerald Note; as such, during the period ending March 31, 2014, the parties agreed to a revised due date for the Emerald Note of June 1, 2014, and the Company increased the number of the shares under the warrant by 285,714 to 1,000,000. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
-7 | On December 31, 2013, the Company entered into two promissory note agreements in the amount of $40,000 and $60,000 with UFF. Pursuant to the terms and conditions of these agreements, UFF provided us with $100,000 and UFF received a warrant to purchase 800,000 shares of our common stock at an exercise price of $0.55 per share, exercisable over a five (5) year term. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. The promissory notes, as amended, have a maturity date of June 1, 2014. The stated interest rate is equal to 15% per year. | ||||||||
-8 | On March 13, 2014, this note agreement was modified to extend the due date to January 1, 2015. Subsequent to March 31, 2014, the Company repaid this note and all accrued interest on the note through the issuance of 489,171 shares of its common stock. | ||||||||
-9 | The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.50 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, the Company shall issue the lender 150,000 warrants, each of which allows the lender to purchase one share of the Company’s common stock at $0.01, with a term of 18 months. The Company is currently negotiating an extension for this note. | ||||||||
-10 | On March 19, 2014, this note agreement was modified to extend the due date to July 1, 2015. The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.50 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, the Company shall issue the lender 30,000 warrants, each of which allows the lender to purchase one share of the Company’s common stock at $0.01, with a term of 18 months. | ||||||||
-11 | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on March 7, 2014, the note payable principal balance was bought out by a third party (see (20) below). The Company issued 37,849 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company’s common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Accordingly, in March 2014, the Company issued the lender a warrant totaling 161,240 shares, at a strike price of $0.75 and extended the contractual warrant term from a term of 18 months to a term of 5 years. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
(12) | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on March 10, 2014, the note payable principal balance was bought out by a third party (see (21) below). The Company issued 99,668 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company’s common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Accordingly, in March 2014, the Company issued the lender a warrant totaling 271,097 shares, at a strike price of $0.75 extended the contractual warrant term from a term of 18 months to a term of 5 years. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
-13 | On February 20, 2014 the Company issued 337,855 shares of its common stock to satisfy its obligation in connection with its 12% convertible note payable issued November 11, 2011 totaling $100,000, including accrued interest on this obligation. Additionally, in connection with this transaction, the Company issued a warrant to purchase 506,782 shares of the Company’s common stock at an exercise price of $0.01 per share, exercisable over a five (5) year term. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
-14 | On January 9, 2014, the Company received gross proceeds of $250,000 via a financing arrangement with Hanover Holdings I, LLC. The principal balance of $375,000 includes a $125,000 prepaid contingent expense that the Company became subject to by (i) failing to file a S-1 registration statement (covering the resale of the underlying common stock pertaining to this financing arrangement) by February 18, 2014 ($40,000); and (ii) failing to have the S-1 registration statement become effective by May 3, 2014 ($85,000). Neither of these criteria were met by the Company. The terms of this financing arrangement bears interest at twelve percent (12%) annually, and has a maturity date of July 3, 2014. The unpaid outstanding balance may be converted at the option of the investor a rate of one (1) share of the Company’s restricted common stock for each $0.15223, subject to adjustment. On February 17, 2014 the Company expensed the registration right penalties. The note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. Subsequent to March 31, 2014, the conversion feature of the financing arrangement was modified whereby the unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) sixty percent (60%) of the lowest trade price in the 10 days prior to conversion; or (ii) the original conversion price as stated in the January, 2014 financing arrangement. | ||||||||
-15 | On January 28, 2014, the Company received gross proceeds of $110,000 via a financing arrangement with UFF. The terms of this financing arrangement, as amended, bears interest at fifteen percent (15%) annually, and has a maturity date of June 1, 2014. In connection with this financing arrangement, the Company issued warrants to purchase 800,000 shares of the Company’s common stock at an exercise price of $0.55 per share, exercisable over a five (5) year term. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. | ||||||||
-16 | On February 6, 2014, the Company received gross proceeds of $150,000 via a financing arrangement with JMJ Financial. The principal balance of $166,666 includes a $16,666 original issue discount. The terms of this financing arrangement bears interest at twelve percent (12%) annually, and has a maturity date of February 6, 2016. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of the Company’s restricted common stock for each $0.23, or (ii) sixty percent (60%) of the lowest trade price in the 25 days prior to conversion. The variable conversion feature qualifies the note as a derivative instrument and tainted all other equity linked instruments including outstanding warrants and fixed rate convertible debt. See further discussion below in Derivative Liabilities- Convertible Notes. | ||||||||
-17 | On February 12, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with Vista Capital Investments, LLC. The principal balance of $55,000 includes a $5,000 original issue discount. The terms of this financing arrangement bears interest at ten percent (10%) annually, and has a maturity date of February 11, 2015. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of our restricted common stock for each $0.35, or (ii) seventy percent (70%) of the lowest trade price in the 20 days prior to conversion. The variable conversion feature qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. | ||||||||
-18 | On February 21, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with LG Capital Funding, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of February 20, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on February 21, 2014, LG Capital Funding, LLC paid off the 21 percent note payable issued July 13, 2012 totaling $65,000 (see (2) above), on the Company’s behalf, and, accordingly, the Company agreed to repay LG Capital Funding, LLC a total of $65,000 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note’s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the 10 days prior to conversion. The variable conversion feature of the replacement note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. The transaction was analyzed for extinguishment accounting and the Company determined that extinguishment accounting was appropriate and any additional consideration provided in the transaction was recorded as a gain/loss on debt extinguishment in other income and expense. | ||||||||
-19 | On February 28, 2014, the Company received gross proceeds of $200,000 via a financing arrangement with Typenex Co-Investment, LLC. The principal balance of $222,500 includes a $22,500 original issue discount. The terms of this financing arrangement bears interest at ten percent (10%) annually, and has a maturity date of October 27, 2015. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of our restricted common stock for each $0.27, or (ii) seventy percent (70%) of the lowest trade price in the fifteen (15) days prior to conversion. The note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. | ||||||||
-20 | On March 6, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with GEL Properties, LLC, The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of February 20, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 7, 2014, GEL Properties, LLC paid off the 7 percent note payable with a related party issued March 31, 2012 totaling $50,000 (see (11) above), on the Company’s behalf, and, accordingly, the Company agreed to repay GEL Properties, LLC a total of $52,500 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note’s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. During the period ending March 31, 2014, GEL Properties, LLC elected to convert $15,000 of principal balance under the terms of the replacement note, and received a total of 164,935 shares of the Company’s common stock. The variable conversion feature of the replacement note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. The transaction was analyzed for extinguishment accounting and the Company determined that extinguishment accounting was appropriate and any additional consideration provided in the transaction was recorded as a gain/loss on debt extinguishment in other income and expense. | ||||||||
-21 | On March 10, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with Union Capital, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of March 7, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 10, 2014, Union Capital, LLC paid off the 18 percent note payable issued May 30, 2012 totaling $60,000 (see (12) above), on the Company’s behalf, and, accordingly, the Company agreed to repay Union Capital, LLC a total of $67,800 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of March 7, 2015. The replacement note‘s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. During the period ending March 31, 2014, Union Capital, LLC elected to convert its principal balance under the terms of the replacement note, and received a total of 579,525 shares of the Company’s common stock. The variable conversion feature of the note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. The transaction was analyzed for extinguishment accounting and the Company determined that extinguishment accounting was appropriate and any additional consideration provided in the transaction was recorded as a gain/loss on debt extinguishment in other income and expense. | ||||||||
-22 | On March 11, 2014, the Company received gross proceeds of $110,000 via a financing arrangement with William W. Kennedy, of whom Mr. William D. Kennedy, our CEO, is an immediate family member. The terms of this financing arrangement bears interest at seven percent (7%) annually, and has a maturity date of April 10, 2014. In connection with this financing arrangement, we issued warrants to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.01 per share, exercisable over an eighteen (18) month term. Foregoing warrants are included within warrants granted in Note 8. The Company is currently negotiating an extension for this note. | ||||||||
-23 | On March 17, 2014, the Company received gross proceeds of $78,500 via a financing arrangement with Asher Enterprises, Inc. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of November 12, 2014. The unpaid outstanding balance may be converted at sixty-nine percent (69%) of the lowest trade price in the ten (10) days prior to conversion. The variable conversion feature of the note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. Additionally, the note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. | ||||||||
-24 | On March 26, 2014, the Company received gross proceeds of $500,000 via a financing arrangement with UFF. The terms of this financing arrangement bears interest at fifteen percent (15%) annually, and has a maturity date of June 1, 2014. In connection with this financing arrangement, the Company issued warrants to purchase 1,428,571 shares of the Company’s common stock at an exercise price of $0.35 per share, exercisable over a five (5) year term. Foregoing warrants are included within warrants granted in Note 8. | ||||||||
Warrants_Tables
Warrants (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||
Schedule of Warrant Activity | ' | ||||||||||||||||||
The following summarizes the warrant activity for the three months ended March 31, 2014: | |||||||||||||||||||
Number of | Weighted- Average | Weighted- Average | Intrinsic value | ||||||||||||||||
Units | Exercise Price | Remaining | |||||||||||||||||
Contractual Term | |||||||||||||||||||
(in years) | |||||||||||||||||||
Outstanding at December 31, 2013 | 13,764,472 | $ | 0.66 | ||||||||||||||||
Grants | 31,609,124 | 0.06 | |||||||||||||||||
Outstanding at March 31, 2014 | 45,373,596 | $ | 0.23 | 4.6 | $ | 5,913,522 | |||||||||||||
Exercisable at March 31, 2014 | 45,373,596 | $ | 0.23 | 4.6 | $ | 5,913,522 | |||||||||||||
Stock_Options_Tables
Stock Options (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||
Schedule of stock option activity | ' | ||||||||||||||||||
The following summarizes stock option activity for the three months ended March 31, 2014: | |||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||
Average | Average | ||||||||||||||||||
Number of | Exercise | Remaining | |||||||||||||||||
Shares | Price | Contractual Life | Intrinsic Value | ||||||||||||||||
Outstanding at December 31, 2013 | 1,000,000 | $ | 0.26 | ||||||||||||||||
Granted | — | — | |||||||||||||||||
Exercised | — | — | |||||||||||||||||
Forfeited | — | — | |||||||||||||||||
Outstanding at March 31, 2014 | 1,000,000 | $ | 0.26 | 9.74 | $ | — | |||||||||||||
Exercisable at March 31, 2014 | 143,750 | $ | 0.26 | 9.74 | $ | — | |||||||||||||
Schedule of non-vested shares | ' | ||||||||||||||||||
The following table summarizes information about the Company’s non-vested shares as of March 31, 2014: | |||||||||||||||||||
Weighted-Average | |||||||||||||||||||
Number of | Grant-Date | ||||||||||||||||||
Shares | Fair Value | ||||||||||||||||||
Nonvested at December 31, 2013 | 900,000 | $ | 0.25 | ||||||||||||||||
Granted | — | — | |||||||||||||||||
Vested | (43,750 | ) | 0.25 | ||||||||||||||||
Nonvested at March 31, 2014 | 856,250 | $ | 0.25 | ||||||||||||||||
Basic_and_Diluted_Net_Loss_Per1
Basic and Diluted Net Loss Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Net loss per share | ' | ||||||||
Schedule of earnings per share | ' | ||||||||
The following table summarizes the potential shares of common stock that were excluded from diluted net loss per share, because the effect of including these potential shares was antidilutive: | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Convertible notes payable | 76,669,368 | 1,654,524 | |||||||
Warrants | 45,373,596 | 5,364,500 | |||||||
Stock Options | 143,750 | — |
Description_of_Business_Detail
Description of Business (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended |
Sep. 21, 2012 | Dec. 31, 2012 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' |
Number of shares issued persuant to exchange agreement | $52,500,000 | $1,800,032 |
Percentage of ownership after agreement | 70.00% | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Mar. 31, 2014 |
Liabilities | ' |
Derivative liability | $3,534,887 |
Level 3 [Member] | ' |
Liabilities | ' |
Derivative liability | 9,640,069 |
Total liabilities | $9,640,069 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (Level 3 [Member], USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Level 3 [Member] | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ' |
Total (gains) losses | ($6,123,583) |
Settlements | -88,813 |
Additions | 15,852,465 |
Ending balance | 9,640,069 |
Change in unrealized gains (losses) included in earnings relating to derivatives still held as of March 31, 2014 and 2013 | ($6,123,583) |
Balance_Sheet_Information_Deta
Balance Sheet Information (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Property and Equipment, net | ' | ' |
Property and equipment, gross | $1,062,400 | $1,004,680 |
Less: Accumulated depreciation | -294,477 | -225,447 |
Property and equipment, net | 767,923 | 779,233 |
Office Equipment/Computer [Member] | ' | ' |
Property and Equipment, net | ' | ' |
Property and equipment, gross | 113,769 | 113,769 |
Prototype Vehicle [Member] | ' | ' |
Property and Equipment, net | ' | ' |
Property and equipment, gross | 615,945 | 615,945 |
Equipment and tools [Member] | ' | ' |
Property and Equipment, net | ' | ' |
Property and equipment, gross | $332,686 | $274,966 |
Balance_Sheet_Information_Deta1
Balance Sheet Information (Details 1) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Intangible assets, net: | ' | ' |
Intangible assets | $3,474,719 | $3,474,719 |
Less : Accumulated amortization | -319,904 | -240,364 |
Intangible assets, net | $3,154,815 | $3,234,355 |
Balance_Sheet_Information_Deta2
Balance Sheet Information (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Accrued liabilities: | ' | ' |
Accrued expenses | $311,561 | $282,886 |
Accrued interest | 192,617 | 206,169 |
Accrued liabilities | $504,178 | $489,055 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 3 Months Ended | 52 Months Ended | 1 Months Ended | 3 Months Ended | 52 Months Ended | |||||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |
Shareholders [Member] | Shareholders [Member] | Shareholders [Member] | Shareholders [Member] | Related Parties [Member] | Related Parties [Member] | Related Parties [Member] | Related Parties [Member] | |||||
$2,000,000 Financing Agreement [Member] | $2,000,000 Financing Agreement [Member] | $2,000,000 Financing Agreement [Member] | ||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Advances for working capital purposes | ' | ' | ' | ' | $111,603 | ' | ' | ' | ' | ' | ' | ' |
Consultation fee expense - shareholders and directors | ' | ' | ' | ' | ' | ' | ' | ' | 30,000 | 70,000 | 1,037,238 | ' |
Interest expense | 45,205 | 4,458 | 140,223 | ' | ' | ' | ' | ' | 45,205 | 4,458 | 140,223 | ' |
Accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | 126,973 | ' | 126,973 | 96,117 |
Overpayment on stock subscription | ' | ' | ' | ' | ' | 16,559 | ' | ' | ' | ' | ' | ' |
Legal fees paid by related party | ' | ' | ' | ' | ' | 10,514 | ' | ' | ' | ' | ' | ' |
Accounts payable - related party | $27,073 | ' | $27,073 | $27,073 | ' | ' | $27,073 | $27,073 | ' | ' | ' | ' |
Notes_Payable_Details_Narrativ
Notes Payable (Details Narrative) (USD $) | 3 Months Ended | 52 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Feb. 06, 2014 | |
Debt Instruments [Abstract] | ' | ' | ' | ' |
Interest expense debt | $69,014 | $25,711 | $278,274 | ' |
Interest expense from related party notes payable | 45,205 | 4,458 | 140,223 | ' |
Accretion expense debt discount | 218,269 | 2,597 | 399,213 | ' |
Total interest expense | 13,918,171 | 0 | 13,918,171 | ' |
Gain on derivative liability | 4,146,356 | ' | ' | ' |
Derivative liability | 6,105,182 | ' | 6,105,182 | 10,340,351 |
Conversions settlements of three convertible notes | $88,813 | ' | ' | ' |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2012 | Mar. 31, 2014 | Oct. 31, 2012 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 14, 2014 | Mar. 10, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable, Other Payables [Member] | Notes Payable, Other Payables [Member] | Convertible Note Payable - Related Party [Member] | Convertible Note Payable - Related Party [Member] | Convertible Note Payable - Related Party [Member] | Convertible Note Payable - Related Party [Member] | Convertible Note Payable - Related Party [Member] | Convertible Note Payable [Member] | Convertible Note Payable [Member] | Convertible Note Payable - Related Party [Member] | Convertible Note Payable - Related Party [Member] | Convertible Note Payable [Member] | Convertible Note Payable [Member] | Note Payable [Member] | Note Payable [Member] | Convertible Note Payable [Member] | Convertible Note Payable [Member] | Notes Payable - Related Party [Member] | Notes Payable - Related Party [Member] | Notes Payable - Related Party [Member] | Notes Payable - Related Party [Member] | Notes Payable - Related Party [Member] | Notes Payable - Related Party [Member] | Note Payable [Member] | Note Payable [Member] | United Fleet Financing Convertible Note Payable [Member] | United Fleet Financing Convertible Note Payable [Member] | United Fleet Financing Convertible Note Payable [Member] | Emerald Note Payable [Member] | Emerald Note Payable [Member] | United Fleet Financing Promissory Note Payable [Member] | United Fleet Financing Promissory Note Payable [Member] | United Fleet Financing Promissory Note Payable [Member] | Hanover Holdings I Note Payable [Member] | Hanover Holdings I Note Payable [Member] | United Fleet Financing Note Payable [Member] | United Fleet Financing Note Payable [Member] | United Fleet Financing Note Payable [Member] | JMJ Financial Convertible Note Payable [Member] | JMJ Financial Convertible Note Payable [Member] | Vista Capital Investments Convertible Note Payable [Member] | Vista Capital Investments Convertible Note Payable [Member] | LG Capital Funding Convertible Note Payable [Member] | LG Capital Funding Convertible Note Payable [Member] | LG Capital Funding Convertible Note Payable [Member] | LG Capital Funding Convertible Note Payable [Member] | Typenex Co-Investment Convertible Note Payable [Member] | Typenex Co-Investment Convertible Note Payable [Member] | GEL Properties Convertible Note Payable [Member] | GEL Properties Convertible Note Payable [Member] | GEL Properties Convertible Note Payable [Member] | GEL Properties Convertible Note Payable [Member] | Union Capital Convertible Note Payable [Member] | Union Capital Convertible Note Payable [Member] | Union Capital Convertible Note Payable [Member] | Union Capital Convertible Note Payable [Member] | Note Payable (William W. Kennedy) [Member] | Note Payable (William W. Kennedy) [Member] | Asher Enterprises Convertible Note Payable [Member] | Asher Enterprises Convertible Note Payable [Member] | United Fleet Financing Convertible Note Payable [Member] | United Fleet Financing Convertible Note Payable [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Number | Number | Number | Number | Number | Number | Number | Number | Number | Number | Number | Subsequent Event [Member] | Number | Number | Subsequent Event [Member] | Number | Subsequent Event [Member] | Number | Number | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes payable | $3,905,167 | $2,485,000 | $50,000 | [1] | $50,000 | [1] | ' | [2] | $50,000 | [2] | $150,000 | [3] | $150,000 | [3] | ' | $25,000 | [4] | $25,000 | [4] | $100,000 | [5] | $100,000 | [5] | ' | [6] | $100,000 | [6] | $100,000 | [7] | $100,000 | [7] | ' | [8] | $60,000 | [8] | ' | ' | $10,000 | [9] | ' | $10,000 | [9] | $10,000 | [9] | ' | [10] | $65,000 | [10] | $1,500,000 | [11] | $1,500,000 | [11] | ' | ' | [12] | $175,000 | [12] | $100,000 | [13] | $100,000 | [13] | ' | $375,000 | [14] | ' | [14] | $110,000 | [15] | ' | [15] | ' | $166,667 | [16] | ' | [16] | $55,000 | [17] | ' | [17] | $65,000 | [18] | ' | [18] | $50,000 | [18] | ' | [18] | $222,500 | [19] | ' | [19] | $50,000 | [20] | ' | [20] | $37,500 | [20] | ' | [20] | ' | ' | $50,000 | [21] | ' | [21] | $110,000 | [22] | ' | [22] | $78,500 | [23] | ' | [23] | $500,000 | [24] | ' | [24] |
Interest rate (in percent) | ' | ' | 7.00% | ' | 7.00% | ' | 7.00% | ' | ' | 12.00% | ' | 12.00% | ' | 12.00% | ' | 12.00% | ' | 18.00% | ' | ' | ' | 21.00% | ' | ' | 21.00% | 21.00% | ' | 8.00% | ' | ' | 8.00% | ' | 15.00% | ' | ' | 12.00% | ' | 15.00% | ' | ' | 12.00% | ' | 10.00% | ' | 8.00% | ' | 8.00% | ' | 10.00% | ' | 8.00% | ' | 8.00% | ' | ' | ' | 8.00% | ' | 7.00% | ' | 8.00% | ' | 15.00% | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance date | ' | ' | 30-Mar-11 | ' | 31-Mar-12 | ' | 27-Jul-12 | ' | ' | 25-Oct-12 | ' | 11-Apr-12 | ' | 11-Nov-11 | ' | 1-Dec-11 | ' | 30-May-12 | ' | ' | ' | 13-Jul-12 | ' | ' | ' | 13-Jul-12 | ' | 26-Mar-14 | ' | ' | 8-Jul-13 | ' | 31-Dec-13 | ' | ' | 9-Jan-14 | ' | 28-Jan-14 | ' | ' | 6-Feb-14 | ' | 12-Feb-14 | ' | 21-Feb-14 | ' | 21-Feb-14 | ' | 28-Feb-14 | ' | 6-Mar-14 | ' | 10-Mar-14 | ' | ' | ' | 7-Mar-14 | ' | 11-Mar-14 | ' | 17-Mar-14 | ' | 26-Mar-14 | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date | ' | ' | 31-Dec-13 | ' | 1-Jan-14 | ' | 27-Jul-14 | ' | ' | 1-Jul-15 | ' | 11-Apr-14 | ' | 1-Jan-14 | ' | 31-Dec-12 | ' | 1-Jan-14 | ' | ' | ' | 1-Jan-14 | ' | ' | ' | 1-Jan-14 | ' | 15-Jun-18 | ' | ' | 20-Jun-18 | ' | 1-Jun-14 | ' | ' | 3-Jul-14 | ' | 1-Jun-14 | ' | ' | 6-Feb-16 | ' | 11-Feb-15 | ' | 20-Feb-15 | ' | 20-Feb-15 | ' | 27-Oct-15 | ' | 20-Feb-15 | ' | 20-Feb-15 | ' | ' | ' | 7-Mar-15 | ' | 10-Apr-14 | ' | 12-Nov-14 | ' | 1-Jun-14 | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of types of equity security converted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company’s common stock. | Upon conversion of the note, for every share issued to the lender, the lender will receive one additional warrant to purchase one share of the Company’s common stock. | Each of which allows the lender to purchase one share of the Company’s common stock. | Each of which allows the lender to purchase one share of the Company’s common stock. | Each of which allows the lender to purchase one share of the Company’s common stock. | For every $10 outstanding at the end of each calendar month, the Company would issue the lender one warrant to purchase one share of the Company’s common stock. | The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company’s common stock. | For every $10 outstanding at the end of each calendar month, the Company will issue the lender one warrant to purchase one share of the Company’s common stock. | For every $10 outstanding at the end of each calendar month, the Company would issue the lender one warrant to purchase one share of the Company’s common stock. | The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of the Company’s restricted common stock for each $0.23, or (ii) sixty percent (60%) of the lowest trade price in the 25 days prior to conversion. | The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of our restricted common stock for each $0.35, or (ii) seventy percent (70%) of the lowest trade price in the 20 days prior to conversion. The variable conversion feature qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. | The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on February 21, 2014, LG Capital Funding, LLC paid off the 21 percent note payable issued July 13, 2012 totaling $65,000 (see (2) above), on the Company’s behalf, and, accordingly, the Company agreed to repay LG Capital Funding, LLC a total of $65,000 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note’s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the 10 days prior to conversion. | The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on February 21, 2014, LG Capital Funding, LLC paid off the 21 percent note payable issued July 13, 2012 totaling $65,000 (see (2) above), on the Company’s behalf, and, accordingly, the Company agreed to repay LG Capital Funding, LLC a total of $65,000 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note’s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the 10 days prior to conversion. | The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of our restricted common stock for each $0.27, or (ii) seventy percent (70%) of the lowest trade price in the fifteen (15) days prior to conversion. The note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. | The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 7, 2014, GEL Properties, LLC paid off the 7 percent note payable with a related party issued March 31, 2012 totaling $50,000 (see (11) above), on the Company’s behalf, and, accordingly, the Company agreed to repay GEL Properties, LLC a total of $52,500 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note’s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. | The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 7, 2014, GEL Properties, LLC paid off the 7 percent note payable with a related party issued March 31, 2012 totaling $50,000 (see (11) above), on the Company’s behalf, and, accordingly, the Company agreed to repay GEL Properties, LLC a total of $52,500 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note’s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. | The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 10, 2014, Union Capital, LLC paid off the 18 percent note payable issued May 30, 2012 totaling $60,000 (see (12) above), on the Company’s behalf, and, accordingly, the Company agreed to repay Union Capital, LLC a total of $67,800 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of March 7, 2015. The replacement note‘s unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. | The unpaid outstanding balance may be converted at sixty-nine percent (69%) of the lowest trade price in the ten (10) days prior to conversion. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Numbers of warrants issued | ' | ' | ' | ' | 150,000 | ' | 150,000 | ' | ' | 30,000 | ' | 150,000 | ' | 506,782 | ' | 253,500 | ' | 271,097 | ' | 3,000 | 4,000 | 100,000 | 5,000 | ' | 1,000 | 253,500 | ' | 2,727,272 | ' | ' | 714,286 | ' | 800,000 | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | 1,428,571 | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per unit) | 0.23 | 0.66 | ' | ' | 0.75 | ' | 0.75 | ' | 0.35 | 0.01 | ' | 0.01 | ' | 0.01 | ' | 0.01 | ' | 0.75 | ' | ' | ' | 0.01 | ' | ' | 0.01 | 0.01 | ' | 0.65 | ' | 0.35 | 0.65 | ' | 0.55 | ' | 0.35 | ' | ' | 0.55 | ' | 0.35 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.01 | ' | ' | ' | 0.35 | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant term | ' | ' | ' | ' | '18 months | ' | '18 months | ' | ' | '18 months | ' | '18 months | ' | '5 years | ' | '5 years | ' | '18 months | ' | ' | ' | '5 years | ' | ' | ' | '5 years | ' | '18 months | ' | ' | '5 years | ' | '5 years | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | '5 years | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Revised warrant term | ' | ' | ' | ' | '5 years | ' | '5 years | ' | ' | '5 years | ' | '5 years | ' | '5 years | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants oustanding | 45,373,596 | 13,764,472 | ' | ' | 161,240 | ' | 161,240 | ' | ' | ' | ' | 161,240 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,409,093 | ' | ' | 1,000,000 | 285,714 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,409,093 | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt discount | -1,614,406 | -806,539 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 596,169 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,666 | ' | 5,000 | ' | ' | ' | ' | ' | 22,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Current portion of notes payable | -1,264,420 | -737,561 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term notes payable | 1,026,341 | 940,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of common stock issued for repayment of notes | ' | ' | 489,171 | ' | 37,849 | ' | 37,849 | ' | ' | 337,855 | ' | 37,849 | ' | 337,855 | ' | 395,000 | ' | 99,668 | ' | ' | ' | ' | ' | ' | ' | 124,730 | ' | ' | ' | ' | 1,142,858 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 164,935 | ' | 164,935 | ' | 219,667 | 359,858 | 579,525 | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayments of notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | 10,000 | ' | 20,000 | 20,000 | ' | ' | ' | ' | ' | ' | ' | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65,000 | ' | ' | ' | ' | ' | 52,500 | ' | 52,500 | ' | ' | ' | 67,800 | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuance of private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross proceeds from notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | 110,000 | ' | ' | 150,000 | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | 110,000 | ' | 78,500 | ' | 500,000 | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid contingent expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument, beneficial conversion feature | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $15,000 | ' | $15,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||||||||||||||||||||||||||||||||||||||||||||
[1] | On March 13, 2014, this note agreement was modified to extend the due date to January 1, 2015. Subsequent to March 31, 2014, the Company repaid this note and all accrued interest on the note through the issuance of 489,171 shares of its common stock. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on March 7, 2014, the note payable principal balance was bought out by a third party (see (20) below). The Company issued 37,849 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company's common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Accordingly, in March 2014, the Company issued the lender a warrant totaling 161,240 shares, at a strike price of $0.75 and extended the contractual warrant term from a ter | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, for every share issued to the lender, the lender will receive one additional warrant to purchase one share of the Company's common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[4] | On March 19, 2014, this note agreement was modified to extend the due date to July 1, 2015. The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.50 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, the Company shall issue the lender 30,000 warrants, each of which allows the lender to purchase one share of the Company's common stock at $0.01, with a term of 18 months. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[5] | The note contains a conversion feature which enables either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.50 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014. Upon conversion of the note, the Company shall issue the lender 150,000 warrants, each of which allows the lender to purchase one share of the Company's common stock at $0.01, with a term of 18 months. The Company is currently negotiating an extension for this note. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[6] | On February 20, 2014 the Company issued 337,855 shares of its common stock to satisfy its obligation in connection with its 12% convertible note payable issued November 11, 2011 totaling $100,000, including accrued interest on this obligation. Additionally, in connection with this transaction, the Company issued a warrant to purchase 506,782 shares of the Company's common stock at an exercise price of $0.01 per share, exercisable over a five (5) year term. Foregoing warrants are included within warrants granted in Note 8. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[7] | The note payable agreement is convertible into 395,000 shares of the Company's common stock. However, the lender is disputing the conversion terms of the agreement. Additionally, the Company is in default with regards to the note, as the outstanding balance is past due, and has offered to repay the lender in full. The Company is attempting to utilize on-going dialogue with the lender to resolve the dispute and cure the default. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on March 10, 2014, the note payable principal balance was bought out by a third party (see (21) below). The Company issued 99,668 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company's common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Accordingly, in March 2014, the Company issued the lender a warrant totaling 271,097 shares, at a strike price of $0.75 extended the contractual warrant term from a term o | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | For every $10 outstanding at the end of each calendar month, the Company will issue the lender one warrant to purchase one share of the Company's common stock at no more than $0.01 per share with no vesting requirement and a term of five years. The note was issued for $50,000 and the Company subsequently repaid $20,000 in 2012, with $10,000 payments in both November and December 2012, and the Company repaid $20,000 in 2013, with two $10,000 repayments made in January 2013. Accordingly, the lender received 5,000 warrants each month from issuance through October 2012, 4,000 warrants in November 2012, 3,000 warrants in December 2012, and 1,000 warrants per month thereafter. Foregoing warrants are included within warrants granted in Note 8. The Company is currently negotiating an extension for this note. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[10] | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.375 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on February 21, 2014, the note payable principal balance was bought out by a third party (see (18) below). The Company issued 124,730 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every $10 outstanding at the end of each calendar month, the Company would issue the lender one warrant to purchase one share of the Company's common stock at no more than $0.01 per share with no vesting requirement and a term of five years. Accordingly, in February 2014, the Company issued the lender a warrant totaling 253,500 shares, at a strike price of $0.01 with a term of 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[11] | Pursuant to the terms and conditions of this agreement, United Fleet Financing, LLC, ("UFF"), of which the sole member is a related party, has agreed to provide the Company $1,500,000 of financing for working capital. The financing was provided to the Company during 2013 in several installments. Each installment payment has a term of 5 years from first installment of funding. Pursuant to the agreement, UFF has the option to convert any amounts paid to the Company pursuant to the financing agreement, into common stock at a conversion price of $0.55 per share. The agreement also provided UFF the right to receive up to 2,727,272 warrants, each to purchase 1.25 shares of common stock at a per share exercise price of $0.65 with a term of 18 months; accordingly, the Company has issued UFF a total of 3,409,093 warrants in connection with this arrangement. During January, 2014, the Company agreed to extend the warrant term to 5 years. Foregoing warrants are included within warrants granted in Note 8. As of March | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[12] | On June 20, 2013, the Company entered into a financing and security agreement and a secured convertible promissory note (the "Emerald Note") in the amount of $200,000 with Emerald Private Equity Fund, LLC ("Emerald"). Pursuant to the terms of the Emerald Note, Emerald provided the Company with $200,000 upon execution. In connection with this financing, Emerald received a warrant to purchase 714,286 shares of the Company's common stock at an exercise price of $0.65 per share, exercisable over a five (5) year term. The Emerald Note has a maturity date of five (5) years and bears interest at eight percent (8%) annually. The unpaid outstanding balance on the Emerald Note may be converted at the option of either party a rate of two (2) shares of the Company's restricted common stock for each $0.70. As of December 31,2013 the Company received $200,000 under this private placement, repaid Emerald $25,000, and issued the related warrants. During the period ending March 31, 2014, the Company issued a total of 1,142 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[13] | On December 31, 2013, the Company entered into two promissory note agreements in the amount of $40,000 and $60,000 with UFF. Pursuant to the terms and conditions of these agreements, UFF provided us with $100,000 and UFF received a warrant to purchase 800,000 shares of our common stock at an exercise price of $0.55 per share, exercisable over a five (5) year term. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. The promissory notes, as amended, have a maturity date of June 1, 2014. The stated interest rate is equal to 15% per year. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[14] | On January 9, 2014, the Company received gross proceeds of $250,000 via a financing arrangement with Hanover Holdings I, LLC. The principal balance of $375,000 includes a $125,000 prepaid contingent expense that the Company became subject to by (i) failing to file a S-1 registration statement (covering the resale of the underlying common stock pertaining to this financing arrangement) by February 18, 2014 ($40,000); and (ii) failing to have the S-1 registration statement become effective by May 3, 2014 ($85,000). Neither of these criteria were met by the Company. The terms of this financing arrangement bears interest at twelve percent (12%) annually, and has a maturity date of July 3, 2014. The unpaid outstanding balance may be converted at the option of the investor a rate of one (1) share of the Company's restricted common stock for each $0.15223, subject to adjustment. On February 17, 2014 the Company expensed the registration right penalties. The note contains an anti-dilution protection full-ratchet | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[15] | On January 28, 2014, the Company received gross proceeds of $110,000 via a financing arrangement with UFF. The terms of this financing arrangement, as amended, bears interest at fifteen percent (15%) annually, and has a maturity date of June 1, 2014. In connection with this financing arrangement, the Company issued warrants to purchase 800,000 shares of the Company's common stock at an exercise price of $0.55 per share, exercisable over a five (5) year term. Subsequent to March 31, 2014, the Company lowered the warrant strike price to $0.35 per share. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[16] | On February 6, 2014, the Company received gross proceeds of $150,000 via a financing arrangement with JMJ Financial. The principal balance of $166,666 includes a $16,666 original issue discount. The terms of this financing arrangement bears interest at twelve percent (12%) annually, and has a maturity date of February 6, 2016. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of the Company's restricted common stock for each $0.23, or (ii) sixty percent (60%) of the lowest trade price in the 25 days prior to conversion. The variable conversion feature qualifies the note as a derivative instrument and tainted all other equity linked instruments including outstanding warrants and fixed rate convertible debt. See further discussion below in Derivative Liabilities- Convertible Notes. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[17] | On February 12, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with Vista Capital Investments, LLC. The principal balance of $55,000 includes a $5,000 original issue discount. The terms of this financing arrangement bears interest at ten percent (10%) annually, and has a maturity date of February 11, 2015. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of our restricted common stock for each $0.35, or (ii) seventy percent (70%) of the lowest trade price in the 20 days prior to conversion. The variable conversion feature qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[18] | On February 21, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with LG Capital Funding, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of February 20, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on February 21, 2014, LG Capital Funding, LLC paid off the 21 percent note payable issued July 13, 2012 totaling $65,000 (see (2) above), on the Company's behalf, and, accordingly, the Company agreed to repay LG Capital Funding, LLC a total of $65,000 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note's unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the 10 days prior to conversion. The variable conversion feature of the replacement note qualifies the note as a d | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[19] | On February 28, 2014, the Company received gross proceeds of $200,000 via a financing arrangement with Typenex Co-Investment, LLC. The principal balance of $222,500 includes a $22,500 original issue discount. The terms of this financing arrangement bears interest at ten percent (10%) annually, and has a maturity date of October 27, 2015. The unpaid outstanding balance may be converted at the option of the investor at the lessor of (i) a rate of one (1) share of our restricted common stock for each $0.27, or (ii) seventy percent (70%) of the lowest trade price in the fifteen (15) days prior to conversion. The note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[20] | On March 6, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with GEL Properties, LLC, The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of February 20, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 7, 2014, GEL Properties, LLC paid off the 7 percent note payable with a related party issued March 31, 2012 totaling $50,000 (see (11) above), on the Company's behalf, and, accordingly, the Company agreed to repay GEL Properties, LLC a total of $52,500 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note's unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. During the period ending March 31, 2014, GEL Properties, LLC elected to | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[21] | On March 10, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with Union Capital, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of March 7, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 10, 2014, Union Capital, LLC paid off the 18 percent note payable issued May 30, 2012 totaling $60,000 (see (12) above), on the Company's behalf, and, accordingly, the Company agreed to repay Union Capital, LLC a total of $67,800 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of March 7, 2015. The replacement note's unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. During the period ending March 31, 2014, Union Capital, LLC elected to convert its principal balance und | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[22] | On March 11, 2014, the Company received gross proceeds of $110,000 via a financing arrangement with William W. Kennedy, of whom Mr. William D. Kennedy, our CEO, is an immediate family member. The terms of this financing arrangement bears interest at seven percent (7%) annually, and has a maturity date of April 10, 2014. In connection with this financing arrangement, we issued warrants to purchase 100,000 shares of the Company's common stock at an exercise price of $0.01 per share, exercisable over an eighteen (18) month term. Foregoing warrants are included within warrants granted in Note 8. The Company is currently negotiating an extension for this note. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[23] | On March 17, 2014, the Company received gross proceeds of $78,500 via a financing arrangement with Asher Enterprises, Inc. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of November 12, 2014. The unpaid outstanding balance may be converted at sixty-nine percent (69%) of the lowest trade price in the ten (10) days prior to conversion. The variable conversion feature of the note qualifies the note as a derivative instrument since the number of shares issuable under the note is indeterminate. Additionally, the note contains an anti-dilution protection full-ratchet reset feature which qualifies the note as a derivative instrument. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[24] | On March 26, 2014, the Company received gross proceeds of $500,000 via a financing arrangement with UFF. The terms of this financing arrangement bears interest at fifteen percent (15%) annually, and has a maturity date of June 1, 2014. In connection with this financing arrangement, the Company issued warrants to purchase 1,428,571 shares of the Company's common stock at an exercise price of $0.35 per share, exercisable over a five (5) year term. Foregoing warrants are included within warrants granted in Note 8. |
Equity_Details_Narrative
Equity (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | 52 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 14, 2014 | Mar. 10, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |||||||||||||||
Emerald Note Payable [Member] | Emerald Note Payable [Member] | Convertible Note Payable [Member] | Convertible Note Payable [Member] | Note Payable [Member] | Note Payable [Member] | Convertible Note Payable - Related Party [Member] | Convertible Note Payable - Related Party [Member] | GEL Properties Convertible Note Payable [Member] | GEL Properties Convertible Note Payable [Member] | Convertible Note Payable [Member] | Convertible Note Payable [Member] | Union Capital Convertible Note Payable [Member] | Union Capital Convertible Note Payable [Member] | Union Capital Convertible Note Payable [Member] | Union Capital Convertible Note Payable [Member] | GEL Properties, LLC [Member] | Union Capital, LLC [Member] | Union Capital, LLC [Member] | ||||||||||||||||||
Number | Number | Number | Number | Convertible Note Payable - Related Party [Member] | Convertible Note Payable [Member] | Convertible Note Payable [Member] | ||||||||||||||||||||||||||||||
Warrants oustanding | 45,373,596 | 13,764,472 | 45,373,596 | 1,000,000 | 285,714 | ' | ' | ' | ' | 161,240 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Number of common stock issued for repayment of notes | ' | ' | ' | 1,142,858 | ' | 337,855 | ' | 124,730 | ' | 37,849 | ' | 164,935 | ' | 99,668 | ' | 219,667 | 359,858 | 579,525 | ' | 37,849 | 99,668 | ' | ||||||||||||||
Notes payable | $3,905,167 | $2,485,000 | $3,905,167 | ' | [1] | $175,000 | [1] | ' | [2] | $100,000 | [2] | ' | [3] | $65,000 | [3] | ' | [4] | $50,000 | [4] | $50,000 | [5] | ' | [5] | ' | [6] | $60,000 | [6] | ' | ' | $50,000 | [7] | ' | [7] | ' | ' | $60,000 |
Interest rate (in percent) | ' | ' | ' | 8.00% | ' | 12.00% | ' | 21.00% | ' | 7.00% | ' | 8.00% | ' | 18.00% | ' | ' | ' | 8.00% | ' | 7.00% | 18.00% | ' | ||||||||||||||
Numbers of warrants issued | ' | ' | ' | 714,286 | ' | 506,782 | ' | 253,500 | ' | ' | ' | ' | ' | 271,097 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Warrant exercise price (in dollars per unit) | 0.23 | 0.66 | 0.23 | 0.65 | ' | 0.01 | ' | 0.01 | ' | 0.75 | ' | ' | ' | 0.75 | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Warrant term | ' | ' | ' | '5 years | ' | '5 years | ' | '5 years | ' | '18 months | ' | ' | ' | '18 months | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Repayments of notes payable | ' | ' | ' | ' | 25,000 | ' | ' | ' | ' | ' | ' | 52,500 | ' | ' | ' | ' | ' | 67,800 | ' | 50,000 | ' | ' | ||||||||||||||
Debt instrument, beneficial conversion feature | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Number of common stock issued for consulting and professional services | 1,293,344 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Total operating expense for consulting and professional services | ' | 317,460 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Accrued liabilities for consulting and professional services | ' | 166,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Stock based compensation | 10,921 | 24,961 | 35,882 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
Fair value of derivative liability | $788,660 | ' | $788,660 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||
[1] | On June 20, 2013, the Company entered into a financing and security agreement and a secured convertible promissory note (the "Emerald Note") in the amount of $200,000 with Emerald Private Equity Fund, LLC ("Emerald"). Pursuant to the terms of the Emerald Note, Emerald provided the Company with $200,000 upon execution. In connection with this financing, Emerald received a warrant to purchase 714,286 shares of the Company's common stock at an exercise price of $0.65 per share, exercisable over a five (5) year term. The Emerald Note has a maturity date of five (5) years and bears interest at eight percent (8%) annually. The unpaid outstanding balance on the Emerald Note may be converted at the option of either party a rate of two (2) shares of the Company's restricted common stock for each $0.70. As of December 31,2013 the Company received $200,000 under this private placement, repaid Emerald $25,000, and issued the related warrants. During the period ending March 31, 2014, the Company issued a total of 1,142 | |||||||||||||||||||||||||||||||||||
[2] | On February 20, 2014 the Company issued 337,855 shares of its common stock to satisfy its obligation in connection with its 12% convertible note payable issued November 11, 2011 totaling $100,000, including accrued interest on this obligation. Additionally, in connection with this transaction, the Company issued a warrant to purchase 506,782 shares of the Company's common stock at an exercise price of $0.01 per share, exercisable over a five (5) year term. Foregoing warrants are included within warrants granted in Note 8. | |||||||||||||||||||||||||||||||||||
[3] | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.375 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on February 21, 2014, the note payable principal balance was bought out by a third party (see (18) below). The Company issued 124,730 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every $10 outstanding at the end of each calendar month, the Company would issue the lender one warrant to purchase one share of the Company's common stock at no more than $0.01 per share with no vesting requirement and a term of five years. Accordingly, in February 2014, the Company issued the lender a warrant totaling 253,500 shares, at a strike price of $0.01 with a term of 5 | |||||||||||||||||||||||||||||||||||
[4] | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on March 7, 2014, the note payable principal balance was bought out by a third party (see (20) below). The Company issued 37,849 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company's common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Accordingly, in March 2014, the Company issued the lender a warrant totaling 161,240 shares, at a strike price of $0.75 and extended the contractual warrant term from a ter | |||||||||||||||||||||||||||||||||||
[5] | On March 6, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with GEL Properties, LLC, The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of February 20, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 7, 2014, GEL Properties, LLC paid off the 7 percent note payable with a related party issued March 31, 2012 totaling $50,000 (see (11) above), on the Company's behalf, and, accordingly, the Company agreed to repay GEL Properties, LLC a total of $52,500 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of February 20, 2015. The replacement note's unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. During the period ending March 31, 2014, GEL Properties, LLC elected to | |||||||||||||||||||||||||||||||||||
[6] | The note contained a conversion feature which enabled either the Company or the lender to convert the outstanding balance into common stock of the Company at a rate of one share per $0.35 of converted dollars. The conversion feature was not exercised by either party as of March 31, 2014; alternatively, on March 10, 2014, the note payable principal balance was bought out by a third party (see (21) below). The Company issued 99,668 shares of its common stock in consideration of the accrued interest owed on this note payable as of the transaction date. The terms of the original note provided that, upon conversion of the note, for every share issued to the lender, the lender would receive one additional warrant to purchase one share of the Company's common stock at a strike price of $0.75 with no vesting requirement and a term of 18 months. Accordingly, in March 2014, the Company issued the lender a warrant totaling 271,097 shares, at a strike price of $0.75 extended the contractual warrant term from a term o | |||||||||||||||||||||||||||||||||||
[7] | On March 10, 2014, the Company received gross proceeds of $50,000 via a financing arrangement with Union Capital, LLC. The terms of this financing arrangement bears interest at eight percent (8%) annually, and has a maturity date of March 7, 2015. The unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. Additionally, on March 10, 2014, Union Capital, LLC paid off the 18 percent note payable issued May 30, 2012 totaling $60,000 (see (12) above), on the Company's behalf, and, accordingly, the Company agreed to repay Union Capital, LLC a total of $67,800 via a replacement note bearing interest at eight percent (8%) annually, with a maturity date of March 7, 2015. The replacement note's unpaid outstanding balance may be converted at fifty-five percent (55%) of the lowest trade price in the ten (10) days prior to conversion. During the period ending March 31, 2014, Union Capital, LLC elected to convert its principal balance und |
Warrants_Details_Narrative
Warrants (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Equity [Abstract] | ' | ' |
Weighted average grant-date fair value of warrants (in dollars per share) | $0.16 | ' |
Fair value of warrants granted and vested | $5,131,613 | $25,565 |
Debt discount accreted | 375,239 | 16,351 |
Fair value of derivative liabilities- warrants | 5,512,114 | ' |
Fair value of warrants previously classified in equity | 788,660 | ' |
Gain on derivative liability | 1,977,227 | ' |
Fair value of derivative liabilities- warrants | $3,534,887 | ' |
WarrantsDetails
Warrants(Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Number of Units | ' |
Balance, beginning | 13,764,472 |
Grants | 31,609,124 |
Balance, ending | 45,373,596 |
Exercisable at period end | 45,373,596 |
Weighted-average exercise price | ' |
Exercise price of warrants, beginning | 0.66 |
Grants | 0.06 |
Exercise price of warrants | 0.23 |
Exercisable at period-end | 0.23 |
Weighted-Average Remaining Contractual Term (in years) | ' |
Balance, ending | '4 years 7 months 6 days |
Exercisable at year-end | '4 years 7 months 6 days |
Intrinsic value | ' |
Balance, ending | $5,913,522 |
Exercisable at year-end | $5,913,522 |
Stock_Options_Details_Narrativ
Stock Options (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | 52 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' |
Stock reserved for future issuance | 8,000,000 | ' | 8,000,000 |
Stock based compensation | $10,921 | $24,961 | $35,882 |
Future stock compensation expense | $213,731 | ' | $213,731 |
Preiod for recognition | '3 years 7 months 17 days | ' | ' |
Stock_Options_Details
Stock Options (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' |
Outstanding, beginning | 1,000,000 |
Outstanding, ending | 1,000,000 |
Exercisable, ending | 143,750 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' |
Outstanding, beginning | $0.26 |
Outstanding, ending | $0.26 |
Exercisable, ending | $0.26 |
Weighted Average Remaining Contractual Life | ' |
Outstanding, ending | '9 years 8 months 27 days |
Exercisable, ending | '9 years 8 months 27 days |
Stock_Options_Details_1
Stock Options (Details 1) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ' |
Nonvested shares, beginning | 900,000 |
Vested | -43,750 |
Nonvested shares, ending | 856,250 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ' |
Nonvested, beginning | $0.25 |
Granted | ' |
Vested | $0.25 |
Nonvested, ending | $0.25 |
Basic_and_Diluted_Net_Loss_Per2
Basic and Diluted Net Loss Per Share (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Convertible notes payable [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potentially antidilutive securities excluded from earnings per share | 76,669,368 | 1,654,524 |
Warrants [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potentially antidilutive securities excluded from earnings per share | 45,373,596 | 5,364,500 |
Stock Options [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potentially antidilutive securities excluded from earnings per share | 143,750 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Principal amount of loan disputed in lawsuit | $100,000 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 52 Months Ended | ||
Sep. 21, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Warrant exercise price | ' | 0.23 | ' | 0.66 | ' | 0.23 |
Interest expense debt | ' | $69,014 | $25,711 | ' | ' | $278,274 |
Number of common stock issued for repayment of notes,value | 52,500,000 | ' | ' | ' | 1,800,032 | ' |
Number of common stock issued for consulting and professional services | ' | 1,293,344 | ' | ' | ' | ' |
Shares issued for services | ' | 317,460 | ' | 327,108 | ' | ' |
Subsequent Event [Member] | ' | ' | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Number of common stock issued for warrants exercise | ' | 760,282 | ' | ' | ' | ' |
Number of common stock issued for warrants exercise,value | ' | 7,603 | ' | ' | ' | ' |
Number of common stock issued for consulting and professional services | ' | 600,000 | ' | ' | ' | ' |
Shares issued for services | ' | 78,000 | ' | ' | ' | ' |
Subsequent Event [Member] | 7% Note Payable [Member] | ' | ' | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Number of common stock issued for repayment of notes | ' | 489,171 | ' | ' | ' | ' |
Number of common stock issued for repayment of notes,value | ' | 50,000 | ' | ' | ' | ' |
Subsequent Event [Member] | Notes Payable (Mindnest LLC) [Member] | ' | ' | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Maturity date | ' | 31-May-14 | ' | ' | ' | ' |
Gross proceeds from notes payable | ' | 35,000 | ' | ' | ' | ' |
Interest expense debt | ' | 2,000 | ' | ' | ' | ' |
Subsequent Event [Member] | Note Payable (Mr. Mark Brooks) [Member] | ' | ' | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Interest rate | ' | 21.00% | ' | ' | ' | 21.00% |
Maturity date | ' | 11-May-14 | ' | ' | ' | ' |
Numbers of warrants issued | ' | 100,000 | ' | ' | ' | ' |
Warrant exercise price | ' | 0.1 | ' | ' | ' | 0.1 |
Warrant term | ' | '18 months | ' | ' | ' | ' |
Gross proceeds from notes payable | ' | 50,000 | ' | ' | ' | ' |
Subsequent Event [Member] | Blue Citi Financing Convertible Note Payable [Member] | ' | ' | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Interest rate | ' | 8.00% | ' | ' | ' | 8.00% |
Maturity date | ' | 5-May-15 | ' | ' | ' | ' |
Description of types of equity security converted | ' | ' | ' | ' | ' | ' |
The unpaid outstanding balance may be converted at fifty-eight percent (58%) of the lowest trade price in the twenty (20) days prior to conversion. | ||||||
Numbers of warrants issued | ' | 310,750 | ' | ' | ' | ' |
Warrant term | ' | '5 years | ' | ' | ' | ' |
Gross proceeds from notes payable | ' | 124,300 | ' | ' | ' | ' |
Repayments of notes payable | ' | 125,067 | ' | ' | ' | ' |
Subsequent Event [Member] | 31 Group Financing Convertible Note Payable [Member] | ' | ' | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Interest rate | ' | 8.00% | ' | ' | ' | 8.00% |
Maturity date | ' | 7-May-16 | ' | ' | ' | ' |
Description of types of equity security converted | ' | ' | ' | ' | ' | ' |
The unpaid outstanding balance may be converted at the option of the investor at the lesser of (i) a rate of one (1) share of our restricted common stock for each $0.15, or (ii) sixty-five percent (65%) of the average of the lowest three trade prices in the ten (10) days prior to conversion. | ||||||
Gross proceeds from notes payable | ' | $400,000 | ' | ' | ' | ' |
Number of common stock issued for repayment of notes | ' | 246,305 | ' | ' | ' | ' |
Subsequent Event [Member] | GEL Properties Convertible Note Payable [Member] | ' | ' | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Number of common stock issued for repayment of notes | ' | 109,810 | ' | ' | ' | ' |
Subsequent Event [Member] | LG Capital Fund Convertible Note Payable [Member] | ' | ' | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Number of common stock issued for repayment of notes | ' | 105,281 | ' | ' | ' | ' |