Sanomedics (SIMH) 10-Q 16 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	9-May-14
Document And Entity Information	'	'
Entity Registrant Name	'Sanomedics International Holdings, Inc	'
Entity Central Index Key	'0001501972	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	11,037,976
Document Fiscal Period Focus	'Q1	'
Document Fiscal Year Focus	'2014	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Mar. 31, 2014	Dec. 31, 2013
Current Assets	'	'
Cash	$181,022	$9,560
Accounts receivable	56,716	19,225
Inventories	23,958	39,060
Prepaid expenses	32,744	612
Total Current Assets	294,440	68,457
Fixed assets, net	22,275	12,562
Patents, net	15,571	16,816
Deposit	7,999	7,999
Total Assets	340,285	105,834
Current Liabilities	'	'
Accrued salaries payable	705,569	705,569
Accounts payable and other liabilities	353,870	264,848
Accrued interest payable	410,862	362,284
Accrual for contingencies on contract rescission	159,419	500,000
Revolving line of credit	905,768	'
Notes payable - related parties net of discount, current portion	620,477	'
Convertible notes payable, net of discount	193,941	300,762
Derivative liabilities	1,150,651	1,070,728
Due to related parties	174,695	152,588
Total Current Liabilities	4,675,252	3,356,779
Notes payable - related parties net of discount,net of current portion	756,155	1,873,123
Total Liabilities	5,431,407	5,229,902
Stockholders' Deficit	'	'
Preferred stock, $0.001 par value: 1,000 shares authorized, issued and outstanding as of March 31, 2014 and December 31, 2013, respectively	1	1
Common stock, $0.001 par value: 250,000,000 shares authorized, 10,122,170 and 4,545,119 issued and outstanding as of March 31, 2014 and December 31, 2013, respectively.	10,123	4,545
Additional paid in capital	9,575,052	8,118,299
Stock subscription receivable	-20,000	-20,000
Accumulated deficit	-14,656,298	-13,226,913
Total Stockholders' Deficit	-5,091,122	-5,124,068
Total Liabilities and Stockholders' Deficit	$340,285	$105,834

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Stockholders' Deficit	'	'
Preferred stock, par value	$0.00	$0.00
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares issued	1,000	1,000
Preferred stock, shares outstanding	1,000	1,000
Common stock, par value	$0.00	$0.00
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	10,122,170	4,545,119
Common stock, shares outstanding	10,122,170	4,545,119

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidated Statements Of Operations	'	'
Revenues, net	$141,809	$57,138
Cost of goods sold	18,686	16,571
Gross profit	123,123	40,567
Operating expenses	'	'
General and administrative	595,417	184,132
Stock compensation	224,000	216,896
Research and development	22,509	27,750
Depreciation and amortization	1,899	1,899
Total operating expenses	843,825	430,677
Loss from operations	-720,702	-390,110
Other income (expense)	'	'
Amortization of debt discount	-478,983	-23,439
Derivative expense	-222,051	'
Change in fair value of derivative liabilities	64,597	'
Interest expense	-72,246	-26,023
Total other expense	-708,683	-49,462
Net loss before income taxes	-1,429,385	-439,572
Income taxes	'	'
Net loss	($1,429,385)	($439,572)
Net loss per share - basic and diluted	($0.16)	($0.22)
Weighted average number of shares outstanding during the period - basic and diluted	8,705,076	2,040,879

Condensed_Consolidated_Stateme1

Condensed Consolidated Statements of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES	'	'
Net loss	($1,429,385)	($439,572)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	1,899	1,899
Stock compensation	224,000	216,896
Amortization of debt discount on convertible notes	478,983	23,439
Derivative expense	222,051	'
Change in fair value of derivative liabilities	-64,597	'
Changes in operating assets and liabilities	'	'
Accounts receivable	-37,491	-37,952
Inventories	15,102	-3,585
Prepaid expenses and deposits	-32,132	-24,794
Accrued salaries payable	'	44,000
Accounts payable and other liabilities	89,023	45,375
Accrued interest payable	48,578	35,044
Accrual for contingencies on contract rescission	-340,581	'
Due to related parties	22,107	2,202
Net Cash Used In Operating Activities	-802,442	-137,048
CASH FLOWS USED FROM INVESTING ACTIVITIES	'	'
Purchase of fixed assets	-10,367	'
Net Cash Used In Investing Activities	-10,367	'
CASH FLOWS FROM FINANCING ACTIVITIES	'	'
Proceeds from convertible notes payable- related party	292,740	122,492
Proceeds from revolving line of credit, net	905,768	'
Proceeds from convertible notes payable	46,750	'
Payments of convertible notes payable	-260,987	'
Net Cash Provided By Financing Activities	984,271	122,492
Net increase (decrease) in cash	171,462	-14,556
Cash - beginning of period	9,560	26,084
Cash - end of period	181,022	11,528
Supplemental Disclosure of Cash Flow Information	'	'
Cash paid during the period for: Income taxes	'	'
Cash paid during the period for: Interest	'	'
NON-CASH TRANSACTIONS	'	'
Common stock issued for conversion of debt	$1,238,330	'

ORGANIZATION_AND_BASIS_OF_PRES

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION	'
	Sanomedics International Holdings, Inc. (referred to herein as “we”, “us”, “our” or the “Company”) is a medical technology products and services holding company which through its subsidiaries, designs, develops, markets and distributes non-invasive infrared thermometers principally for healthcare providers.
	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) which are necessary for a fair financial statement presentation have been made. The results for the interim period are not necessarily indicative of the results to be expected for the full year.
	The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which include Thermomedics, Inc. (since July 2009) and Anovent, Inc. (since December 2011). All significant inter-company accounts and transactions have been eliminated in consolidation.
	The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the fiscal year ended December 31, 2013.

LIQUIDITY_AND_GOING_CONCERN

LIQUIDITY AND GOING CONCERN	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
NOTE 2 - LIQUIDITY AND GOING CONCERN	'
	The condensed consolidated financial statements have been prepared on a going concern basis, and do not reflect any adjustments related to the uncertainty surrounding our recurring losses or accumulated deficit.
	The Company currently has limited revenue and is experiencing recurring losses which have caused an accumulated deficit of $14,656,298 and a working capital deficit of $4,380,812 as of March 31, 2014. These factors raise substantial doubt about its ability to continue as a going concern. Management has financed the Company's operations principally through loans from an affiliate of the Company’s former CEO, who is also one of the principal shareholders. Through March 31, 2014, the Company obtained its liquidity principally from approximately $906,000 of borrowing under a Revolving Line of Credit secured on January 9, 2014 from TCA Global Credit Master Fund, a Cayman Islands limited partnership (“TCA”), and $293,000 of cash advances from an affiliate of the former Chairman and CEO and the Company's principal shareholder. TCA has asserted a default under the Revolving Line of Credit as described elsewhere herein. The Company may need to continue borrowings from an affiliate of the former Chairman and CEO and the Company's principal shareholder and will also need to raise additional capital. However, management cannot provide any assurances that the Company will be successful in completing this financing and accomplishing any of its plans.
	The ability of the Company to continue as a going concern is dependent upon continued financial commitments from related parties and eventually secure other sources of financing in addition to those funds provided by its affiliate and attain profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

REVOLVING_LINE_OF_CREDIT

REVOLVING LINE OF CREDIT	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
NOTE 3 - REVOLVING LINE OF CREDIT	'
	On January 9, 2014, we entered into a Senior Secured Revolving Credit Facility Agreement (the "Credit Agreement") with TCA. Pursuant to the Credit Agreement, of which we and our subsidiaries are parties as borrowers, TCA extended to us a $5 million revolving credit facility. An initial credit line of $2,300,000 was provided by TCA at closing, with $1,000,000 funded on the date of closing and the remaining $1,300,000 representing  funding of an acquisition we may consummate within ninety (90) days from closing, which has been extended to an additional sixty (60) days. As of the date hereof, we are not a party to any pending acquisition  which TCA has approved and to which these funds could be used.
	The amounts borrowed pursuant to the Credit Agreement are evidenced by a Revolving Note (the "Note") from us and certain of our subsidiaries . The Note bears interest at the rate of 11% per annum and matures July 9, 2014.. The Note is convertible upon default at the option of TCA into shares of our common stock at a variable conversion price equal to 85% of the lowest daily trading volume weighted average price of our common stock during the five business days preceding the conversion date.
	We, including our subsidiaries, granted TCA a first position blanket security interest in our assets and we pledged the stock of our subsidiaries to secure the payment of the loan which is evidenced by a Security Agreement and a Pledge and Escrow Agreement. Certain of our affiliates, including our President and our Chief Financial Officer, also entered into Subordination Agreements.
	At closing we also paid TCA an equity advisory fee of $160,000 which was paid through the issuance of 134,454 shares of our common stock.
	The Credit Agreement contains negative covenants, which states among others, prevent the Company from entering into any new indebtedness, or become liable, whether as endorser, guarantor, surety or otherwise, for any debt or obligation of any other person, or otherwise consummate any transaction or series of transactions involving the issuance of debt securities of the Company, except for its obligations incurred in the ordinary course of business. Pursuant to the terms of the Credit Agreement, the Company shall not, nor shall the Company permit any of its subsidiaries to, either directly or indirectly, issue or distribute any additional capital stock or other securities of the Company or its subsidiaries with the prior written consent of TCA.
	The Credit Agreement contains financial covenants, which consist of: (1) positive EBITDA to be maintained at all times and, (2) the Company shall have cash flow and revenue projections that are not less than 75% of the cash flow and revenue projections as shown on the financial projections provided by the Company to TCA as part of TCA’s due diligence.
	As of March 31, 2014, the Company was not in compliance with certain covenants associated with the Credit Agreement. The amount of principal due at March 31, 2014 was $905,768, net of deposits of $94,232 held in lockbox by TCA belonging to the Company.
	On May 12, 2014, TCA provided the Company with a notice of default of the Credit Agreement. The company has ten (10) days from the date of notice to cure the alleged defaults. Management is attempting to refinance this obligation with alternative lenders. In the event we are unsuccessful in negotiating a settlement with TCA or obtaining alternative financing to satisfy the obligations to TCA under the Credit Agreement, TCA could seek to foreclose on our assets. In that event, we would be unable to continue our business as it is presently conducted and our ability to continue as a going concern is in jeopardy.

NOTES_PAYABLE_RELATED_PARTIES

NOTES PAYABLE - RELATED PARTIES	3 Months Ended
	Mar. 31, 2014
Notes Payable - Related Parties	'
NOTE 4 - NOTES PAYABLE - RELATED PARTIES	'
	Notes payable to related parties consists of the following:
		March 31,		31-Dec-13
		2014
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2010. Note accrues interest at 9% per annum, due and settled in 2014 (A)(B)(F)	$	-	$	50,000
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrues interest at 9% per annum, settled in 2014 (A)(B)(F)		-		66,750
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2011. Note accrues interest at 9% per annum, due and payable on March 30, 2015 (A)(B)(F)		40,000		95,000
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrues interest at 8% per annum, due and payable on March 30, 2015 (A)(F)		272,287		334,787
	Five (5) Secured Convertible Promissory Notes-CLSS Holdings LLC, dated February 21, 2014. Notes accrue interest at 8% per annum, due and payable on March 1, 2016 (A)(E)(F)		756,155		-
	Convertible Promissory Note - Officer dated June 17, 2013. Note accrues interest at 9% per annum, due and payable on March 30, 2015 , net of discount of $405,149 and $502,385, respectively (A)(D)		298,190		200,954
	Total Notes		1,366,632		747,491
	Other advances from CLSS Holdings, LLC, not evidenced by a Promissory Note (C)		10,000		1,125,632
			1,376,632		1,873,123
	Less: Current portion		620,477		-
		$	756,155	$	1,873,123
	The secured convertible promissory notes above are collateralized by substantially all the assets of the Company, and are convertible at the holder's option, into common shares of the Company at a fixed conversion price ranging from $0.25 to $0.50 per share. CLSS Holdings, LLC is wholly owned by the Company's former CEO who also is a principal shareholder of the Company. The Convertible Promissory Note-Officer is subordinate to the TCA security interest.
	(A) On August 13, 2013, the Company and an affiliate of the Company’s former CEO agreed to extend the maturity dates of the remaining Secured Promissory Notes to mature on March 30, 2015. As consideration for this extension the Company issued 300,000 shares of common stock valued at $0.03 per share to the affiliate.
	(B) During 2013, $556,250 was assigned to four (4) third parties, which subsequently converted to 1,533,632 shares of common stock.
	(C) On February 21, 2014 the Company memorialized the advances from CLSS Holdings into various convertible promissory notes, accruing interest at 9% and maturing March 1, 2016.
	(D) This note is convertible at a conversion price equal to the discount in the average of the lowest three closing bid prices of the common stock during the 10 day trading days prior to conversion. The embedded conversion features resulted in a derivative liability which has been measured using the Monte Carlo valuation method at March 31, 2014 and December 31, 2013..
	(E) On January 28, 2014 and March 24, 2014, convertible notes totaling $596,967 were converted into 4,466,020 shares of common stock at conversion prices of $0.10 and $0.21 per share.
	(F) During 2014, $399,750 was assigned to five (5) third parties, which subsequently converted to 785,643 shares of common stock.

CONVERTIBLE_NOTES_PAYABLE

CONVERTIBLE NOTES PAYABLE	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
NOTE 5 - CONVERTIBLE NOTES PAYABLE	'
	Third party convertible notes payable consists of the following:
		March 31,			December 31,
		2014			2013
	Convertible promissory note with interest at 9% per annum, convertible into common shares at fixed price of $0.50 per share. Matures on August 24, 2014, net of unamortized discount of $28,253 and $37,500, respectively.	$	46,747		$	37,500
	Seven (7) convertible promissory notes with interest ranging from 6% to 12% per annum, convertible into common shares at prices ranging from 10% to 50% discount to defined market prices. Maturity ranging from June 20, 2014 through October 25, 2014, net of unamortized discounts of $101,959 and $229,907, respectively (A)(B).		97,291			151,519
	Two (2) convertible promissory notes with interest at 12% per annum (zero interest first 90 days) plus a 10% original discount interest, convertible into common shares at a conversion price per share of 30% discount to a defined market price. Matures on June 16, and December 9, 2014, net of unamortized discount of $16,517 and $97,587 respectively (A).		41,081			111,743
	Seven (7) convertible promissory notes with interest ranging from 8% to 12% per annum, convertible into common shares at prices ranging from 25% to 70% discount to defined market prices. Maturity ranging from August 1, 2014 through March 31, 2015, net of unamortized discounts of $190,396.(A)(C)		8,822			-
			193,941			300,762
	Less current portion		(193,941	)		(300,762	)
	Long-term portion of convertible debt	$	-		$	-
	(A) These convertible promissory notes are  convertible at a conversion price equal to the discount to the average of the lowest three closing bid prices of the common stock during the 10 trading days prior to conversion. The embedded conversion features resulted in a derivative liability which has been measured using the Monte Carlo valuation method at March 31, 2014 and December 31, 2013, respectively.
	(B) Four of these promissory notes are  convertible at a conversion price equal to the discount to the average of the lowest three closing bid prices of the common stock during the 10 trading days prior to conversion. The embedded conversion features resulted in a derivative liability which has been measured using the Monte Carlo valuation method at March 31, 2014 and December 31, 2013, respectively.
	(C) During the quarter ended March 31, 2014, portions of two (2) convertible notes totaling $111,057 were converted into 493,921 shares of common stock.
	In accordance with ASC 470-20 Debt with Conversion and Other Options, at issuance, After issuance the Company allocated $532,326 and $828,906 of the derivative liability as discounts against the convertible notes. The discounts are being amortized to interest expense over the term of the notes using the effective interest method. The Company recorded $478,983 and $23,439 of interest expense pursuant to the amortization of the note discounts for the three months ended March 31, 2014 and 2013, respectively.

DERIVATIVE_LIABILITIES

DERIVATIVE LIABILITIES	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
NOTE 6 - DERIVATIVE LIABILITIES	'
	The Company analyzed the related party convertible note-officer and convertible promissory notes referred to in Notes 4 and 5 based on the provisions of ASC 815-15 and determined that the conversion options of the convertible notes qualify as embedded derivatives and required the recognition of derivative liabilities.
	For the derivative instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date. After date The Company estimates the fair value of the embedded derivatives using a Monte Carlo simulation valuation model that combines expected cash outflows with market-based assumptions regarding risk-adjusted yields, stock price volatility, probability of a change of control and the trading information of our common stock into which the notes are convertible, as appropriate to value the derivative instruments at inception and subsequent valuation dates and the value is reassessed at the end of each reporting period, in accordance with FASB ASC Topic 815-15.
	The aggregate fair value of derivative liabilities as of March 31, 2014 and December 31, 2013 and 2012 amounted to $1,150,651 and $1,070,728, respectively. The net increase of $79,923 in the fair value of the derivative liabilities from 2013 has been reflected as unamortized discount of $742,274 reflected in the convertible notes payable to officer and third parties, the amortization of debt discount of $478,983 and the change in fair value of the derivatives between the respective periods is included in other income (expenses) amounting to $64,597.

COMMITMENTS_AND_CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
NOTE 7 - COMMITMENTS AND CONTINGENCIES	'
	Litigation
	From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business.
	On May 21, 2013, Exergen Corporation commenced legal action in the United States District Court for the District of Massachusetts against us, claiming infringement of certain intellectual property. Exergen is seeking various types of relief, including an injunction against further infringement of certain intellectual property related to the Company’s thermometers. On September 3, 2013, the Company filed its answer to Exergens’ complaint and asserted counterclaims and affirmative defenses for non-infringement and invalidity of certain patents. The Company believes the alleged infringement is without merit and will vigorously defend its rights to market and sell the thermometers.
	After assuming control of the acquisition of Prime Time, the Company discovered that the Seller of Prime Time (“Miklos”) failed to disclose that there were on-going audits with respect to Prime Time’s Medicare and Medicaid billings for periods prior to the consummation of the transaction. These audits  escalated and, as a result, Prime Time was no longer able to invoice Medicare and Medicaid for any products or services and be paid for such products and services until the outcome of the audits which could last at least two years. Also, as a result of other Medicare and Medicaid audits for periods prior to the consummation of the transaction, Medicare and Medicaid are demanding payments for products that Prime Time was paid prior to the closing of the transaction that were improper. It is estimated that Prime Time may owe Medicare and Medicaid up to $500,000 in improper payments and at least another $500,000 in accounts receivable that will not be paid to Prime Time pending the outcome of the audits. On March 13, 2014, after discovering numerous material differences between financial statements reproduced by the Company and the financial statements provided by Miklos in connection with the Stock Purchase Agreement, coupled with the foregoing events and Medicare and Medicaid’s constraint on Prime Time’s business and payment stream, the Board of Directors of the Company determined that the business could no longer survive and thus opted to pursue a rescission of the completed transaction with Prime Time.
	As a result of discoveries of fraud and misrepresentations in the acquisition of Prime Time described above, on March 18, 2014, the Company filed a lawsuit against Mark R. Miklos in Miami-Dade County, Florida Case No.14007055CA01, alleging breach of contract, fraud in the inducement, fraudulent misrepresentation, unjust enrichment, conversion, breach of fiduciary duty and damages. The company is seeking judgment against the Seller, restitution, rescission of the Purchase Agreement and Employment Agreement and return of all moneys paid to the Seller.
	On March 19, 2014 the Company was served with a lawsuit filed by Mark Miklos against the Company and Anovent, Inc. in Hillsborough County, Florida Case No. 14-CA-2520 DIV K, alleging the following: breach of the Employment Agreement entered into with the Company; improper notice of termination; breach of the Short Term Note for $850,000; breach of Promissory Notes A and B for $500,000 each, and further includes an action to foreclose a security interest in personal property and intangibles as a result of the alleged defaults of the Notes and rights under the Security Agreement. The Company believes there is no merit to Mr. Miklos’ lawsuit and intends to defend itself aggressively.

COMMON_STOCK

COMMON STOCK	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
NOTE 8 - COMMON STOCK	'
	On January 28, 2014, in exchange for a reduction of debt of the Company owed to CLSS Holdings for a share price of $0.10 per share, the Company issued 3,142,270 shares of restricted common stock..
	On February 21, 2014, the Company converted a Convertible Note due to CLSS for $282,740 into 1,323,750 shares restricted at a price per share of $0.2136.
	On February 28, 2014, the Company issued 107,656 shares of common stock to three (3) parties as commissions on third party financing.
	During January 21, 2014 to March 28, 2014, the Company issued a total of 868,921 shares of restricted common stock to four (4) companies in connection with the conversion of convertible debt held.
	On March 28, 2014, the Company issued 134,454 shares of common stock as payment of advisory fee to TCA Global in connection with the TCA lending facility.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2014
Notes to Financial Statements	'
NOTE 9 - SUBSEQUENT EVENTS	'
	Share Issuances:
	During April 2014 and through May 5, 2014, the Company issued a total of 792,316 shares to seven (7) parties in connection with the conversion of convertible debt held.
	On April 28, 2014, the Company converted $167,853 portion of a Convertible Note due CLSS for $195,000 into 374,394 shares restricted at a price of $0.45.
	Management has evaluated the subsequent events through May 16, 2014, the date at which the condensed consolidated financial statements were available for issue.

NOTES_PAYABLE_RELATED_PARTY_Ta

NOTES PAYABLE -RELATED PARTY (Tables)	3 Months Ended
	Mar. 31, 2014
Notes Payable -Related Party Tables	'
Schedule of Notes payable	'
	Notes payable to related parties consists of the following:
		March 31,		31-Dec-13
		2014
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2010. Note accrues interest at 9% per annum, due and settled in 2014 (A)(B)(F)	$	-	$	50,000
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrues interest at 9% per annum, settled in 2014 (A)(B)(F)		-		66,750
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2011. Note accrues interest at 9% per annum, due and payable on March 30, 2015 (A)(B)(F)		40,000		95,000
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrues interest at 8% per annum, due and payable on March 30, 2015 (A)(F)		272,287		334,787
	Five (5) Secured Convertible Promissory Notes-CLSS Holdings LLC, dated February 21, 2014. Notes accrue interest at 8% per annum, due and payable on March 1, 2016 (A)(E)(F)		756,155		-
	Convertible Promissory Note - Officer dated June 17, 2013. Note accrues interest at 9% per annum, due and payable on March 30, 2015 , net of discount of $405,149 and $502,385, respectively (A)(D)		298,190		200,954
	Total Notes		1,366,632		747,491
	Other advances from CLSS Holdings, LLC, not evidenced by a Promissory Note (C)		10,000		1,125,632
			1,376,632		1,873,123
	Less: Current portion		620,477		-
		$	756,155	$	1,873,123

CONVERTIBLE_NOTES_PAYABLE_Tabl

CONVERTIBLE NOTES PAYABLE (Tables)	3 Months Ended
	Mar. 31, 2014
Convertible Notes Payable Tables	'
Convertible notes payable	'
	Third party convertible notes payable consists of the following:
		March 31,			December 31,
		2014			2013
	Convertible promissory note with interest at 9% per annum, convertible into common shares at fixed price of $0.50 per share. Matures on August 24, 2014, net of unamortized discount of $28,253 and $37,500, respectively.	$	46,747		$	37,500
	Seven (7) convertible promissory notes with interest ranging from 6% to 12% per annum, convertible into common shares at prices ranging from 10% to 50% discount to defined market prices. Maturity ranging from June 20, 2014 through October 25, 2014, net of unamortized discounts of $101,959 and $229,907, respectively (A)(B).		97,291			151,519
	Two (2) convertible promissory notes with interest at 12% per annum (zero interest first 90 days) plus a 10% original discount interest, convertible into common shares at a conversion price per share of 30% discount to a defined market price. Matures on June 16, and December 9, 2014, net of unamortized discount of $16,517 and $97,587 respectively (A).		41,081			111,743
	Seven (7) convertible promissory notes with interest ranging from 8% to 12% per annum, convertible into common shares at prices ranging from 25% to 70% discount to defined market prices. Maturity ranging from August 1, 2014 through March 31, 2015, net of unamortized discounts of $190,396.(A)(C)		8,822			-
			193,941			300,762
	Less current portion		(193,941	)		(300,762	)
	Long-term portion of convertible debt	$	-		$	-

LIQUIDITY_AND_GOING_CONCERN_De

LIQUIDITY AND GOING CONCERN (Details Narrative) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Liquidity And Going Concern Details Narrative	'	'
Accumulated deficit	($14,656,298)	($13,226,913)
Working capital deficit	4,380,812	'
Borrowing under revolving line of credit secured	906,000	'
Cash advances from former Chairman, CEO and shareholder	$293,000	'

REVOLVING_LINE_OF_CREDIT_Detai

REVOLVING LINE OF CREDIT (Details Narrative) (USD $)	Mar. 31, 2014
Revolving Line Of Credit Details Narrative	'
Principal amount of line of credit	$905,768
Net of deposits held in lockbox by TCA	$94,232

NOTES_PAYABLE_RELATED_PARTYIES

NOTES PAYABLE - RELATED PARTYIES (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Total Notes	$1,366,632	$747,491
Other advances from CLSS Holdings, LLC, not evidenced by a Promissory Note (C)	10,000	1,125,632
Notes payable - related party gross	1,376,632	1,873,123
Less: Current portion	620,477	'
Notes Payable-related parties, net	756,155	1,873,123
Secured Convertible Promissory Note September 30, 2010 [Member]	'	'
Total Notes	'	50,000
Secured Convertible Promissory Note March 12, 2011 [Member]	'	'
Total Notes	'	66,750
Secured Convertible Promissory Note September 30, 2011 [Member]	'	'
Total Notes	40,000	95,000
Secured Convertible Promissory Note One March 12, 2011 [Member]	'	'
Total Notes	272,287	334,787
Secured Convertible Promissory Note February 21, 2014 [Member]	'	'
Total Notes	756,155	'
Convertible Promissory Note June 17, 2013 [Member]	'	'
Total Notes	$298,190	$200,954

NOTES_PAYABLE_RELATED_PARTIES_

NOTES PAYABLE bRELATED PARTIES (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2014
Notes Payable Related Parties Details Narrative	'
Common stock convertible shares	785,643
Common stock convertible shares, value	$399,750

CONVERTIBLE_NOTES_PAYABLE_Deta

CONVERTIBLE NOTES PAYABLE (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Note Payable	$193,941	$300,762
Less current portion	-193,941	-300,762
Long-term portion of convertible debt	'	'
Convertible Promissory Note [Member]	'	'
Note Payable	46,747	37,500
Convertible promissory note One [Member]	'	'
Note Payable	97,291	151,519
Convertible promissory note Two [Member]	'	'
Note Payable	41,081	111,743
Convertible promissory note Three [Member]	'	'
Note Payable	$8,822	'

CONVERTIBLE_NOTES_PAYABLE_Deta1

CONVERTIBLE NOTES PAYABLE (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Convertible Notes Payable Details Narrative	'	'
Convertible notes totaling	$111,057	'
Common stock converted shares	493,921	'
Amortization of debt discount	($478,983)	($23,439)

DERIVATIVE_LIABILITIES_Details

DERIVATIVE LIABILITIES (Details Narrative) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Derivative Liabilities Details Narrative	'	'
Fair value of derivative liabilities	$1,150,651	$1,070,728