Sanomedics (SIMH) 10-Q 19 Aug 14 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 11, 2014
Document And Entity Information	'	'
Entity Registrant Name	'Sanomedics International Holdings, Inc	'
Entity Central Index Key	'0001501972	'
Document Type	'10-Q	'
Document Period End Date	30-Jun-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	'	18,030,724
Document Fiscal Period Focus	'Q2	'
Document Fiscal Year Focus	'2014	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current Assets	'	'
Cash	$7,059	$9,560
Accounts receivable	47,226	19,225
Inventories	19,747	39,060
Prepaid expenses	51,830	612
Total Current Assets	125,862	68,457
Fixed assets, net	24,022	12,562
Patents, net	15,571	16,816
Deposit	7,999	7,999
Total Assets	173,454	105,834
Current Liabilities	'	'
Accrued salaries payable	559,973	705,569
Accounts payable and other liabilities	442,529	264,848
Accrued interest payable	175,633	362,284
Accrual for contingencies on contract rescission	158,669	500,000
Revolving line of credit	905,768	'
Notes payable - related parties net of discount, current portion	395,426	'
Convertible notes payable, net of discount	243,631	300,762
Derivative liabilities	1,779,510	1,070,728
Due to related parties	18,151	152,588
Total Current Liabilities	4,679,290	3,356,779
Notes payable - related parties net of discount,net of current portion	1,209,633	1,873,123
Total Liabilities	5,888,923	5,229,902
Stockholders' Deficit	'	'
Preferred stock, $0.001 par value: 1,000 shares authorized, issued and outstanding as of June 30, 2014 and December 31, 2013, respectively	1	1
Common stock, $0.001 par value: 250,000,000 shares authorized, 12,911,121 and 4,545,119 issued and outstanding as of June 30, 2014 and December 31, 2013, respectively.	12,911	4,545
Additional paid in capital	10,545,353	8,118,299
Stock subscription receivable	20,000	-20,000
Accumulated deficit	-16,253,734	-13,226,913
Total Stockholders' Deficit	-5,715,469	-5,124,068
Total Liabilities and Stockholders' Deficit	$173,454	$105,834

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 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	12,911,121	4,545,119
Common stock, shares outstanding	12,911,121	4,545,119

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Condensed Consolidated Statements Of Operations	'	'	'	'
Revenues, net	$56,012	$63,941	$197,821	$121,079
Cost of goods sold	11,538	17,021	30,224	33,592
Gross profit	44,474	46,920	167,597	87,487
Operating expenses	'	'	'	'
General and administrative	536,866	269,676	1,132,282	453,808
Stock compensation	74,825	38,842	298,825	255,738
Research and development	21,194	25,750	43,703	53,500
Depreciation and amortization	654	1,899	2,553	3,798
Total operating expenses	633,539	336,167	1,477,363	766,844
Loss from operations	-589,065	-289,247	-1,309,766	-679,357
Other income (expense)	'	'	'	'
Amortization of debt discount	-356,894	-30,898	-835,877	-54,337
Derivative expense	-505,864	-2,405,507	-727,915	-2,405,507
Change in fair value of derivative liabilities	-46,093	622,337	18,504	622,337
Interest expense	-99,521	-27,092	-171,767	-53,115
Total other expense	-1,008,372	-1,841,160	-1,717,055	-1,890,622
Net loss before income taxes	-1,597,437	-2,130,407	-3,026,821	-2,569,979
Income taxes	'	'	'	'
Net loss	($1,597,437)	($2,130,407)	($3,026,821)	($2,569,979)
Net loss per share - basic and diluted	($0.42)	($1.04)	($0.29)	($1.26)
Weighted average number of shares outstanding during the period - basic and diluted	3,821,545	2,041,010	10,283,252	2,045,442

Condensed_Consolidated_Stateme1

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES	'	'
Net loss	($3,026,821)	($2,569,979)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	2,553	3,798
Stock compensation	298,825	255,738
Amortization of debt discount on convertible notes	835,877	54,337
Derivative expense	727,915	2,830,798
Change in fair value of derivative liabilities	-18,504	-1,047,628
Changes in operating assets and liabilities	'	'
Accounts receivable	-28,001	-41,259
Inventories	19,313	-147
Prepaid expenses and deposits	-51,218	-418,809
Accrued salaries payable	'	69,392
Accounts payable and other liabilities	323,989	50,951
Accrued interest payable	78,349	66,856
Accrual for contingencies on contract rescission	-341,331	'
Due to related parties	-134,437	60,859
Net Cash Used In Operating Activities	-1,313,491	-685,095
CASH FLOWS USED FROM INVESTING ACTIVITIES	'	'
Purchase of fixed assets	-12,768	'
Net Cash Used In Investing Activities	-12,768	'
CASH FLOWS FROM FINANCING ACTIVITIES	'	'
Proceeds from convertible notes payable- related party	595,740	581,492
Proceeds from revolving line of credit, net	905,768	'
Proceeds from convertible notes payable	75,000	150,000
Payments of convertible notes payable	-252,750	'
Net Cash Provided By Financing Activities	1,323,758	731,492
Net (decrease) increase in cash	-2,501	46,397
Cash - beginning of period	9,560	26,084
Cash - end of period	7,059	72,481
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION	'	'
Cash paid during the period for: Interest	93,418	'
NON-CASH TRANSACTIONS	'	'
Common stock issued for conversion of debt	1,430,199	78,197
Accrued salaries payable converted to convertible promissory note-officer	'	703,339
Accrued salaries payable converted to common stock	145,596	'
Accrued interest payable converted to convertible promissory note-related party	$265,000	'

ORGANIZATION_AND_BASIS_OF_PRES

ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 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. The interim results for the three and six months ended June 30, 2014 are not necessarily indicative of the results for the full fiscal year.

LIQUIDITY_AND_GOING_CONCERN

LIQUIDITY AND GOING CONCERN	6 Months Ended
	Jun. 30, 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 $16,253,734 and a working capital deficit of $4,553,428 as of June 30, 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 June 30, 2014, the Company obtained its liquidity principally from approximately $905,000 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 $596,000 of cash advances from a company owned by a former Chairman and CEO and a shareholder of the Company. TCA has asserted a default under the Revolving Line of Credit and filed a lawsuit 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	6 Months Ended
	Jun. 30, 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 for pending acquisitions. As of the date hereof, we are not a party to any pending acquisition for 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 in the principal amount of $1,000,000. The amount of principal due at June 30, 2014 was $905,768, net of deposits of $94,232 held in lockbox by TCA belonging to the Company. The outstanding balance bears interest at the rate of 11% per annum and matured July 9, 2014. The Note is convertible 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, however to date the holder has not opted to convert the Note into Company stock.
	The Credit Agreement contains negative covenants prevent the Company from entering into any new indebtedness, or become liable, whether as endorser, guarantor, surety 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.
	The Credit Agreement also 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 June 30, 2014, the Company was not in compliance with certain covenants associated with the Credit Agreement. 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.
	On May 12, 2014, TCA provided the Company with a notice of default of the Credit Agreement. The Company had ten (10) days from the date of notice to cure the alleged defaults. Management is attempting to refinance this obligation with alternative lenders or provide a settlement with TCA. On May 21, 2014, the Company, along with several other entities, filed a Complaint in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, against TCA for breach of contract and unjust enrichment. The Company alleges in the Complaint that TCA loaned $1 million to the Company pursuant to a Credit Agreement that provided for a revolving credit facility of up to $5 million. As alleged in the Complaint, the Credit Agreement provides that all of the Company’s revenues are to be re-directed to a lock-box account controlled solely by TCA. TCA would then pay itself fees and interest, and distribute the remaining revenues to the Company. The Company alleges that TCA breached the Credit Agreement by failing to distribute any of the lock-box revenues collected. The Company further alleges that TCA breached the Credit Agreement by unreasonably withholding approval of an acquisition target and failing to disburse $1.3 million in funds earmarked for the acquisition. The Company seeks damages, return of the moneys owed to the Company, and costs against TCA. On July 1, 2014, TCA filed a separate action against the Company, two officers of the Company, and its wholly owned subsidiaries, claiming that the Company has defaulted on the note, and seeking at least $901,142 (and perhaps as much as $1,112,983) in damages, plus pre-judgment interest, attorney’s fees, costs, foreclosure on associated collateral, and the proceeds from any sale of that collateral. The Company intends to defend against these claims vigorously. The Company has filed a Motion to consolidate the two lawsuits relating to the TCA Credit Agreement.
	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	6 Months Ended
	Jun. 30, 2014
Notes Payable - Related Parties	'
NOTE 4 - NOTES PAYABLE - RELATED PARTIES	'
	Notes payable to related parties consists of the following:
		June 30,		December 31,
		2014		2013
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2010. Note accrued interest at 9% per annum. (D)	$	-	$	50,000
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrued interest at 9% per annum. (D)		-		66,750
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2011. Note accrued interest at 9% per annum. (D)		-		95,000
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrued interest at 8% per annum., (D)		-		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 (C)		346,089		-
	Secured Convertible Promissory Note-CLSS Holdings LLC, dated February 21, 2014. Notes accrue interest at 8% per annum, due and payable on May 6, 2016 (C)		265,000		-
	Two (2) Secured Convertible Promissory Notes-CLSS Holdings LLC, dated June 30, 2014. Note accrues interest at 8% per annum, due and payable on June 1, 2016 (C)		598,544		-
	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 $307,913(B)		395,426		200,954
	Total Notes		1,605,059		747,491
	Other advances from CLSS Holdings, LLC, not evidenced by a Promissory Note (A)		-		1,125,632
			1,605,059		1,873,123
	Less: Current portion		395,426		-
		$	1,209,633	$	1,873,123
	The secured convertible promissory notes above are collateralized by substantially all the assets of the Company, subordinated to the TCA security interest, 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 (“CLSS Holdings”) is wholly owned by the Company's former CEO and a shareholder of the Company.
	(A) On February 21, 2014, the Company memorialized the advances from CLSS Holdings into various convertible promissory notes, accruing interest at 9% and matures March 1, 2016.
	(B) 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 June 30, 2014 and December 31, 2014.
	(C) 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.
	(D) Through the six months ended June 30, 2014, $546,537 was assigned by the holder to five (5) third parties, which subsequently converted to 985,643 shares of common stock.

CONVERTIBLE_NOTES_PAYABLE

CONVERTIBLE NOTES PAYABLE	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
NOTE 5 - CONVERTIBLE NOTES PAYABLE	'
	Third party convertible notes payable consists of the following:
		June 30,			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 $18,878 and $37,500, respectively.	$	56,122		$	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 ranges through October 25, 2014, net of unamortized discounts of $-0- and $229,907, respectively (A)(B).		36,500			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 through December 9, 2014, net of unamortized discount of $10,439 and $97,587 respectively (A)(C).		47,159			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 ranges through March 31, 2015, net of unamortized discounts of $268,150.(A)(B)(C)		103,850			-
			243,631			300,762
	Less current portion		(243,631	)		( 300,762	)
	Long-term portion of convertible debt	$	-		$	-
	(A) These convertible promissory notes are generally 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 June 30, 2014 and December 31, 2013.
	(B) During the period ended June 30, 2014, six (6) convertible notes totaling $258,275 were converted into 1,163,254 shares of common stock.
	(C) During the period ended June 30, 2014, three (3) convertible notes totaling $252,750 were paid.
	In accordance with ASC 470-20 Debt with Conversion and Other Options, at time of issuance the Company allocated $752,326 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 $835,877 and $54,337 of interest expense pursuant to the amortization of the note discounts for the six months ended June 30, 2014 and 2013, respectively.

DERIVATIVE_LIABILITIES

DERIVATIVE LIABILITIES	6 Months Ended
	Jun. 30, 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 requires 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. 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 June 30, 2014 and December 31, 2013 amounted to $1,779,510 and $1,070,728, respectively. The net increase of $708,782 in the fair value of the derivative liabilities from 2013 has been reflected as unamortized discount of $605,380 reflected in the convertible notes payable to officer and third parties, the amortization of debt discount of $835,877 and the change in fair value of the derivatives between the respective periods is included in other income (expenses) amounting to $18,504.

COMMITMENTS_AND_CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
NOTE 7 - COMMITMENTS AND CONTINGENCIES	'
	TCA Litigation
	On May 21, 2014, the Company, along with several other entities, filed a Complaint in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, against TCA for breach of contract and unjust enrichment. The Company alleges in the Complaint that TCA loaned $1 million to the Company pursuant to a Credit Agreement that provided for a revolving credit facility of up to $5 million. As alleged in the Complaint, the Credit Agreement provides that all of the Company’s revenues are to be re-directed to a lock-box account controlled solely by TCA. TCA would then pay itself fees and interest, and distribute the remaining revenues to the Company. The Company alleges that TCA breached the Credit Agreement by failing to distribute any of the lock-box revenues collected. The Company further alleges that TCA breached the Credit Agreement by unreasonably withholding approval of an acquisition target and failing to disburse $1.3 million in funds earmarked for the acquisition. The Company seeks damages, return of the moneys owed to the Company, and costs against TCA. On July 1, 2014, TCA filed a separate action against the Company, two officers of the Company, and its wholly owned subsidiaries, claiming that the Company has defaulted on the note, and seeking at least $901,142 (and perhaps as much as $1,112,983) in damages, plus pre-judgment interest, attorney’s fees, costs, foreclosure on associated collateral, and the proceeds from any sale of that collateral. The Company intends to defend against these claims vigorously. The Company has filed a Motion to consolidate the two lawsuits relating to the TCA Credit Agreement.
	JMJ Litigation
	On May 29, 2014, Justin Keener d/b/a JMJ Financial (“JMJ”) filed a Complaint against the Company in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida. In the Complaint, JMJ alleges that the Company breached a convertible promissory note dated June 17, 2013, pursuant to which JMJ provided $150,000 to the Company on or about June 19, 2013, and an additional $50,000 to the Company on or about December 12, 2013. JMJ alleges that on February 4, 2014, it agreed to accept $280,000 in satisfaction of the note. JMJ alleges that the Company paid $186,667 to JMJ on February 19, 2014. JMJ alleges that the Company has breached the promissory note by failing to repay the purported outstanding amount of the note either through conversion into the Company’s common stock or through cash payment, and seeks an award of damages (including but not limited to purported lost profits and opportunity costs relating to an inability to convert and thereafter sell the Company’s shares), interest, attorneys’ fees, and costs. On July 21, 2014, the Company filed its Answer, Affirmative Defenses, and Counterclaim against JMJ. As affirmative defenses, the Company asserts, among others, that JMJ is not entitled to the relief requested because the promissory note at issue charges usurious interest rates in violation of Florida’s usury laws, and because JMJ’s claims for lost profits are speculative. The Company also asserts counter-claims for Declaratory Relief (seeking an order that the promissory note is usurious under Florida law and the entire debt and conversion rights thus are unenforceable) and for usury (seeking damages for all moneys paid pursuant to the promissory note, reasonable attorneys’ fees, and costs). The Company intends to defend against these claims vigorously.
	Prime Time Medical Litigation
	After assuming control of the acquisition of Prime Time in August 2013, 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 have escalated and, as a result, Prime Time can no longer 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.
	Exergen Litigation
	On May 21, 2013, Exergen Corporation commenced legal action in the United States District Court for the District of Massachusetts against the Company, alleged infringement of certain intellectual property through the Company’s sale of the Caregiver Thermometer, as well as the Company's prior sales of its talking non-contact thermometer. Exergen is seeking various types of relief, including damages and an injunction against further alleged infringement of the intellectual property. On September 3, 2013, the Company filed its answer to Exergens’ complaint and asserted counterclaims and affirmative defenses for non-infringement and invalidity of the asserted patents. The Company believes the alleged claim of infringement is without merit and will vigorously defend its rights to market and sell the thermometers.
	Other 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.

COMMON_STOCK

COMMON STOCK	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
NOTE 8 - COMMON STOCK	'
	On January 16, 2014, the former CEO and shareholder assigned 650 shares of preferred stock from his holdings of 750 shares allocating 452 shares to two (2) members of management, 100 shares to its Chairman of the Board and 98 shares to a family member.
	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 3,142,278 shares of restricted common stock to various existing individual shareholders designated by the owner of CLSS Holdings.
	On February 21, 2014, the Company converted a Convertible Note due to CLSS Holdings for $282,740 into 1,313,750 shares restricted at a price per share of $0.2136.
	On January 21, 2014, and, in connection with a Securities Purchase Agreement and convertible promissory note in the principal amount of $50,000, the Company converted the note into a total of 160,000 shares of the Company’s common stock at a conversion price of $0.03 per share.
	On February 28, 2014, the Company issued 107,656 shares of common stock to two (2) parties as commissions on the TCA lending 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 in connection with the TCA lending facility.
	From April 1, 2014 to June 30, 2014, the Company issued a total of 869,333 shares of common stock to six (6) companies in connection with the conversion of convertible debt held.
	On April 28, 2014 and May 16, 2014, the Company converted a total of $362,353 portions of a Convertible Note due CLSS totaling $539,491 into 1,152,394 shares restricted at a prices ranging from $0.25 to $0.45.
	During April and May 2014, pursuant to portions of Convertible Notes due to CLSS, Holdings the holder assigned to three (3) third parties the principal amounts totaling $140,000.. These three notes were converted on April 24, 2014, May 5, 2014 and May 21, 2014 into a total of 400,000 shares.
	On June 9, 2014 the Company issued 182,500 shares of restricted common stock at a price of $0.41 per share to a third party as payment for services related to investor relations.
	On June 11, 2014, the Company issued 584,724 shares of restricted common stock to its former CEO and a shareholder at a price per share of $0.25 in settlement of $145,596 of unpaid and accrued salaries.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
NOTE 9 - SUBSEQUENT EVENTS	'
	Third Party Debt Financing
	On July 8, 2014, a portion of a convertible note originally for $265,000 held by CLSS Holdings, was purchased and assigned to a third party lender for $85,000. The convertible promissory note carries interest at 9% per annum, convertible into common shares at fixed price of $0.50 per share and matures on July 7, 2015. On July 11, 2014, a conversion for $20,217 resulted in a share issuance of 175,000 shares.
	Share Issuances
	During July 2014 and through August 13, 2014, the Company issued a total of 551,811 shares to three (3) parties in connection with the conversion of convertible debt held.
	On July 15 and August 4, 2014 the Company issued a total of 1,464,533 shares of restricted common stock to its former CEO and shareholder at a price per share ranging from $0.07 to $0.25 in settlement of $175,132 of unpaid and accrued salaries.
	On July 25, 2014, the Company issued 2,904,163 shares of restricted common stock to an officer of the Company in connection with the partial conversion of convertible stock held.
	Management has evaluated the subsequent events through August 19, 2014, the date at which the condensed consolidated financial statements were available for issue.

NOTES_PAYABLE_RELATED_PARTY_Ta

NOTES PAYABLE - RELATED PARTY (Tables)	6 Months Ended
	Jun. 30, 2014
Notes Payable - Related Party Tables	'
Schedule of Notes payable	'
	Notes payable to related parties consists of the following:
		June 30,		December 31,
		2014		2013
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2010. Note accrued interest at 9% per annum. (D)	$	-	$	50,000
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrued interest at 9% per annum. (D)		-		66,750
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated September 30, 2011. Note accrued interest at 9% per annum. (D)		-		95,000
	Secured Convertible Promissory Note - CLSS Holdings, LLC, dated March 12, 2011. Note accrued interest at 8% per annum., (D)		-		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 (C)		346,089		-
	Secured Convertible Promissory Note-CLSS Holdings LLC, dated February 21, 2014. Notes accrue interest at 8% per annum, due and payable on May 6, 2016 (C)		265,000		-
	Two (2) Secured Convertible Promissory Notes-CLSS Holdings LLC, dated June 30, 2014. Note accrues interest at 8% per annum, due and payable on June 1, 2016 (C)		598,544		-
	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 $307,913(B)		395,426		200,954
	Total Notes		1,605,059		747,491
	Other advances from CLSS Holdings, LLC, not evidenced by a Promissory Note (A)		-		1,125,632
			1,605,059		1,873,123
	Less: Current portion		395,426		-
		$	1,209,633	$	1,873,123

CONVERTIBLE_NOTES_PAYABLE_Tabl

CONVERTIBLE NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2014
Convertible Notes Payable Tables	'
Convertible notes payable	'
	Third party convertible notes payable consists of the following:
		June 30,			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 $18,878 and $37,500, respectively.	$	56,122		$	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 ranges through October 25, 2014, net of unamortized discounts of $-0- and $229,907, respectively (A)(B).		36,500			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 through December 9, 2014, net of unamortized discount of $10,439 and $97,587 respectively (A)(C).		47,159			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 ranges through March 31, 2015, net of unamortized discounts of $268,150.(A)(B)(C)		103,850			-
			243,631			300,762
	Less current portion		(243,631	)		( 300,762	)
	Long-term portion of convertible debt	$	-		$	-

LIQUIDITY_AND_GOING_CONCERN_De

LIQUIDITY AND GOING CONCERN (Details Narrative) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Liquidity And Going Concern Details Narrative	'	'
Accumulated deficit	$16,253,734	$13,226,913
Working capital deficit	4,553,428	'
Borrowing under revolving line of credit secured	905,000	'
Cash advances from former Chairman, CEO and shareholder	$596,000	'

REVOLVING_LINE_OF_CREDIT_Detai

REVOLVING LINE OF CREDIT (Details Narrative) (USD $)	Jun. 30, 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 $)	Jun. 30, 2014	Dec. 31, 2013
Total Notes	$1,605,059	$747,491
Other advances from CLSS Holdings, LLC, not evidenced by a Promissory Note (C)	'	1,125,632
Notes payable - related party gross	1,605,059	1,873,123
Less: Current portion	395,426	'
Notes Payable-related parties, net	1,209,633	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	'	95,000
Secured Convertible Promissory Note One March 12, 2011 [Member]	'	'
Total Notes	'	334,787
Secured Convertible Promissory Note February 21, 2014 [Member]	'	'
Total Notes	346,089	'
Secured Convertible Promissory Note February 21, 2014 [Member]	'	'
Total Notes	265,000	'
Convertible Promissory Note June 1, 2016 [Member]	'	'
Total Notes	598,544	'
Convertible Promissory Note June 17, 2013 [Member]	'	'
Total Notes	$395,426	$200,954

NOTES_PAYABLE_RELATED_PARTIES_

NOTES PAYABLE b RELATED PARTIES (Details Narrative) (USD $)	6 Months Ended
	Jun. 30, 2014
Notes Payable Related Parties Details Narrative	'
Common stock convertible shares	985,643
Common stock convertible shares, value	$546,537

CONVERTIBLE_NOTES_PAYABLE_Deta

CONVERTIBLE NOTES PAYABLE (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Note Payable	$243,631	$300,762
Less current portion	-243,631	-300,762
Long-term portion of convertible debt	'	'
Convertible Promissory Note [Member]	'	'
Note Payable	56,122	37,500
Convertible promissory note One [Member]	'	'
Note Payable	36,500	151,519
Convertible promissory note Two [Member]	'	'
Note Payable	47,159	111,743
Convertible promissory note Three [Member]	'	'
Note Payable	$103,850	'

CONVERTIBLE_NOTES_PAYABLE_Deta1

CONVERTIBLE NOTES PAYABLE (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Convertible Notes Payable Details Narrative	'	'	'	'
Convertible notes totaling	'	'	$258,275	'
Common stock converted shares	'	'	1,163,254	'
Convertible notes paid	'	'	252,750	'
Amortization of debt discount	($356,894)	($30,898)	($835,877)	($54,337)

DERIVATIVE_LIABILITIES_Details

DERIVATIVE LIABILITIES (Details Narrative) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Derivative Liabilities Details Narrative	'	'
Fair value of derivative liabilities	$1,779,510	$1,070,728