Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 03, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Sanomedics, Inc. | |
Entity Central Index Key | 1,501,972 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
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 | 192,648,857 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash | $ 92,666 | $ 210,138 |
Accounts receivable, net | 65,453 | 241,967 |
Inventories | 35,423 | 22,472 |
Prepaid expenses | 34,987 | 338,990 |
Total Current Assets | 228,529 | 813,567 |
Fixed assets, net | 16,728 | 20,040 |
Patents, net | 7,336 | 11,836 |
Deposit | 7,999 | 7,999 |
Total Assets | 260,592 | 853,442 |
Current Liabilities | ||
Accrued salaries payable | 37,288 | 255,075 |
Accounts payable and other liabilities | 559,949 | 477,133 |
Accrued interest payable | 294,043 | 136,989 |
Accrual for contingencies on contract rescission | 123,204 | $ 165,702 |
Current portion of notes payable - related parties net of debt discount | 535,356 | |
Convertible notes payable, net of debt discount | 1,699,946 | $ 1,633,047 |
Derivative liabilities | 2,078,458 | 2,771,414 |
Due to related parties | 56,132 | 24,882 |
Total Current Liabilities | 5,384,376 | 5,464,242 |
Notes payable - related parties net of discount, net of current portion | 46,507 | 442,919 |
Total Liabilities | $ 5,430,883 | $ 5,907,161 |
Commitments and Contingencies (Note 7) | ||
Stockholders' Deficit | ||
Preferred stock, $0.001 par value: 1,000 shares authorized, issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | $ 1 | $ 1 |
Common stock, $0.001 par value: 650,000,000 shares authorized, 55,025,597 and 1,747,077 issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 55,026 | 1,747 |
Additional paid in capital | $ 16,564,598 | 15,204,169 |
Stock subscription receivable | (20,000) | |
Accumulated deficit | $ (21,789,916) | (20,239,635) |
Total Stockholders' Deficit | (5,170,291) | (5,053,718) |
Total Liabilities and Stockholders' Deficit | $ 260,592 | $ 853,442 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Stockholders' Deficit | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
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 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 650,000,000 | 650,000,000 |
Common stock, shares issued | 55,025,597 | 1,747,077 |
Common stock, shares outstanding | 55,025,597 | 1,747,077 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Condensed Consolidated Statements Of Operations | ||||
Revenues, net | $ 140,017 | $ 56,012 | $ 329,823 | $ 197,821 |
Cost of goods sold | 22,298 | 11,538 | 50,436 | 30,224 |
Gross profit | 117,719 | 44,474 | 279,387 | 167,597 |
Operating expenses | ||||
General and administrative | $ 494,463 | 792,199 | $ 1,127,429 | 1,611,615 |
Research and development | 21,194 | 43,703 | ||
Depreciation and amortization | $ 4,290 | 654 | $ 8,580 | 2,553 |
Total operating expenses | 498,753 | 814,047 | 1,136,008 | 1,657,871 |
Loss from operations | (381,034) | (769,573) | (856,622) | (1,490,274) |
Other income (expense) | ||||
Amortization of debt discount | (186,370) | (356,894) | (633,688) | (835,877) |
Change in fair value of derivative liabilities | (230,454) | $ (636,113) | 391,450 | $ (793,567) |
Loss on extinguishment of debt | (201,113) | (512,388) | ||
Interest expense | (72,266) | $ (99,521) | (157,632) | $ (171,767) |
Other income | 218,599 | 218,599 | ||
Total other expense | (471,604) | $ (1,092,528) | (693,659) | $ (1,801,211) |
Net loss before income taxes | $ (852,638) | $ (1,862,101) | $ (1,550,281) | $ (3,291,485) |
Income taxes | ||||
Net loss | $ (852,638) | $ (1,862,101) | $ (1,550,281) | $ (3,291,485) |
Net loss per share - basic and diluted | $ (0.06) | $ (0.49) | $ (0.07) | $ (0.32) |
Weighted average number of shares outstanding during the period - basic and diluted | 14,549,471 | 3,821,545 | 23,765,814 | 10,283,252 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($) | Preferred Stock | Common Stock, $.001 Par Value | Additional Paid-In Capital | Stock Subscription Receivable | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2014 | 1,000 | 1,747,077 | ||||
Beginning Balance, Amount at Dec. 31, 2014 | $ 1 | $ 1,747 | $ 15,204,169 | $ (20,000) | $ (20,239,635) | $ (5,053,718) |
Stock issued to consultants, Shares | 113,652 | |||||
Stock issued to consultants, Amount | $ 114 | 16,854 | 16,968 | |||
Conversion of debt to common stock, Shares | 53,163,034 | |||||
Conversion of debt to common stock, Amount | $ 53,164 | 907,177 | 960,341 | |||
Reclassification of fair value of derivative liabilities from debt conversion | 456,399 | $ 456,399 | ||||
Write-off for unpaid stock subsription | (20,000) | $ 20,000 | ||||
Share adjustment from round-up of reverse split, Shares | 1,834 | |||||
Share adjustment from round-up of reverse split, Amount | $ 1 | (1) | ||||
Net loss for the period | (1,550,281) | $ (1,550,281) | ||||
Ending Balance, Shares at Jun. 30, 2015 | 1,000 | 55,025,597 | ||||
Ending Balance, Amount at Jun. 30, 2015 | $ 1 | $ 55,026 | $ 16,564,598 | $ (21,789,916) | $ (5,170,291) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,550,281) | $ (3,291,485) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 8,581 | $ 2,553 |
Provision for sales returns and allowances | (6,000) | |
Stock compensation | 16,968 | $ 479,333 |
Amortization of debt discount on convertible notes | 633,688 | $ 835,877 |
Loss on extinguishment of debt | 512,388 | |
Amortization of prepaid expenses | 324,444 | |
Change in fair value of derivative liabilities | (391,450) | $ 793,567 |
Changes in operating assets and liabilities | ||
Accounts receivable | 182,514 | (28,001) |
Inventories | (12,951) | 19,313 |
Prepaid expenses | (20,441) | $ (51,218) |
Accrued salaries payable | (217,787) | |
Accounts payable and other liabilities | 82,818 | $ 323,989 |
Accrued interest payable | 157,054 | 78,349 |
Accrual for contingencies on contract rescission | (42,498) | (341,331) |
Due to related parties | (3,750) | (134,437) |
Net Cash Used In Operating Activities | (326,703) | (1,313,491) |
CASH FLOWS USED FROM INVESTING ACTIVITIES | ||
Purchase of fixed assets | (769) | (12,768) |
Net Cash Used In Investing Activities | (769) | (12,768) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable - related parties | $ 135,000 | 595,740 |
Proceeds from revolving line of credit, net | 905,768 | |
Payoffs of convertible notes payable | (252,750) | |
Proceeds from convertible notes payable | $ 75,000 | 75,000 |
Net Cash Provided By Financing Activities | 210,000 | 1,323,758 |
Net (decrease) increase in cash | (117,472) | (2,501) |
Cash - beginning of period | 210,138 | 9,560 |
Cash - end of period | $ 92,666 | $ 7,059 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid during the period for: Income taxes | ||
Cash paid during the period for: Interest | $ 578 | $ 93,418 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued for conversion of debt | $ 447,953 | 1,430,199 |
Accrued salaries payable converted to common stock | 145,596 | |
Promissory note-related party | $ 265,000 | |
Reclassification of fair value of derivative liabilities to equity | $ 456,399 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION | Sanomedics, Inc. (referred to herein as we, us, our or the Company) is a medical technology products and services holding company , formed in January 2009, 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 managements 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., Biscayne Medical LLC now known as Zen Medical LLC (commenced May 2015), and Anovent, Inc. formed as an acquisition corporation with no activity to date. All significant inter-company accounts and transactions have been eliminated in consolidation. The unaudited interim financial statements should be read in conjunction with the Companys Annual Report on Form 10-K, which contains the audited consolidated financial statements and notes thereto, together with the Managements Discussion and Analysis, for the fiscal year ended December 31, 2014. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Use of estimates includes the following: 1) valuation of intangible assets and derivative and equity instruments, 2) allowance for doubtful accounts, 3) estimated useful lives of property, equipment and intangible assets and, 4) estimates and valuations related to deferred tax assets. Inventories Inventories are stated at the lower of cost (on a first-in, first-out basis) or market value. The stated cost is comprised of finished goods of non-invasive thermometers. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated quarterly and are based on the Companys business plan and from feedback from customers and the product development team. As of June 30, 2015 and December 31, 2014, inventory reserves were not material. Basic and Diluted Net Loss Per Share The Company computes net income (loss) per share in accordance with ASC Topic 260, Earning per Share Six Months Ended June 30, 2015 2014 Options 8,120 8,778 Warrants 12,239 229 Shares from convertible notes 1,390,431,622 147,506 Total (1) 1,390,451,981 156,513 (1) Shares issuable upon conversion of preferred stock have been excluded from this computation because of the specific right of conversion as further explained in Note 8. Fair Value FASB ASC 820, Fair Value Measurements and Disclosure Level 1 Level 2 Level 3 The carrying amounts of cash, accounts receivable, accrued salaries payable, accounts payable and other liabilities, and accrued interest payable approximate fair value because of the short-term nature of these items. The fair value of the Companys debt approximated the carrying value of the Company's debt as of June 30, 2015 and December 31, 2014. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and term of debt. Recent Accounting Pronouncements In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation On February 18, 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis (ASU 2015-02). In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). On May 8, 2015, the FASB issued ASU 2015-08, Business Combinations (Topic 805) Pushdown Accounting In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 3 - 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 the Companys recurring losses or accumulated deficit. The Company currently has a working capital deficiency, limited revenue and is experiencing recurring losses which have caused an accumulated deficit of $21,789,916 and a working capital deficit of $5,155,847 as of June 30, 2015. These factors raise substantial doubt about its ability to continue as a going concern. Management has financed the Company's operations principally through the issuance of convertible debt instruments and loans from an affiliate of a former officer of the Company and a principal shareholder. During the quarter ended June 30, 2015, the Company obtained its liquidity principally from accounts receivable collections and $175,000 of new borrowing under convertible debt instruments as described elsewhere herein. The Company may need to continue borrowings from third party lenders 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 its ability to secure other sources of financing in addition to those funds provided by its affiliate and or officers 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. |
NOTES PAYABLE _ RELATED PARTIES
NOTES PAYABLE – RELATED PARTIES | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 4 - NOTES PAYABLE - RELATED PARTIES | Notes payable to related parties consists of the following: June 30, 2015 December 31, 2014 Two Secured Convertible Promissory Notes CLSS Holdings, LLC, dated June 30, 2014. Notes accrue interest at 8 % per annum, due and payable on June 1, 2016, net of discount of $213,232 and $369,477, at June 30, 2015 and December 31, 2014, respectively. $ 235,649 $ 131,243 Secured convertible Promissory Note CLSS Holdings, LLC dated December 1, 2014. Note accrues interest at 8% per annum, due and payable November 30, 2017, net of discount of $195,993 and $235,856, at June 30, 2015 and December 31, 2014, respectively. 46,507 6,644 Convertible Promissory Note - Officer dated June 17, 2013. Note accrues interest at 9% per annum, due and payable on March 15, 2016, net of discount of $-0- and $48,306, at June 30, 2015 and December 31, 2014, respectively. 298,339 305,032 Convertible Promissory Note company owned by Officer dated June 25, 2015. Note accrues interest at 12% per annum, due and payable on June 25, 2016, net of discount of $98,632 at June 30, 2015 . 1,368 - Total Notes $ 581,863 $ 442,919 Less current portion (535,356 ) - $ 46,507 $ 442,919 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 the lesser of (a) a fixed conversion price ranging from $31.25 to $62.50 per share or (b) at a conversion price of 50% discount to defined market prices. CLSS Holdings, LLC is wholly owned by a former officer of the Company and a principal shareholder. For the six months ended June 30, 2015, in connection with the above notes the Company issued 30,329,765 shares for the conversion of $131,839 in convertible debt and accrued interest held and recognized a loss of $259,599 on the extinguishment of the aforementioned converted debt with a fair value of the common stock issued of $391,437. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 5 - CONVERTIBLE NOTES PAYABLE | Third party convertible notes payable consists of the following: June 30, 2015 December 31, 2014 Convertible promissory note with interest at 9% per annum, convertible into common shares at a fixed price of $0.50 per share. Matured on August 24, 2014, net of unamortized discount of $9,503 at June 30, 2015. The conversion feature has not exercised by the note holders as of June 30, 2015. ( C) $ 65,497 $ 65,497 Convertible promissory notes with interest at 8% per annum, convertible into common shares at a conversion price of 50% discount to defined market prices. Matured June 20, 2014.(A)(B)( C) 36,500 36,500 Convertible promissory note with interest at 12% per annum ( zero interest first 90 days) ,plus 10% original interest discount, convertible at a conversion price of 30% discount to defined market price . Matured December 9, 2014. (A) (C) (See Note 7) 57,598 57,598 Three (3) Convertible promissory notes with interest ranging from 5.25% to 12% per annum, convertible into common shares at a conversion price of 50% discount to defined market prices. Maturity ranging from October 22, 2014 through October 11, 2015, net of unamortized discount of $ 7,181 and $ 52,763, respectively. (A) 65,430 113,548 Two (2) Convertible promissory notes with interest at 8% per annum, convertible into common shares at a conversion price of 15% discount to defined market prices .Matures on August 1, 2015 and October 11, 2015, respectively, net of unamortized discount of $ 6,740 and $80,599, respectively. (A) 728,260 679,401 Six (6) Convertible promissory notes with interest ranging from 12% to 13% per annum, convertible into common shares at a conversion price of 37.50% discount to defined market prices. Matures on April 15, 2015 through May 27, 2016, respectively, net of unamortized discount of $82,963 and $287,936, respectively. (A)(B) 746,661 680,503 1,699,946 1,633,047 Less current portion (1,699,946 ) (1,633,047 $ -0- $ -0- (A) The 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, 2015 and December 31, 2014. (B) Two of promissory notes are generally convertible at a conversion price equal to the lowest traded stock price for 20 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, 2015. (C) The Company is in default with regards to these notes, as the outstanding balances are past their maturity date for repayment. The Company is attempting to utilize on-going dialogue with the lenders to resolve their dispute and cure the default. For the six months ended June 30, 2015, in connection with the above notes the Company issued 22,833,269 shares for the conversion of $316,114 in convertible debt and accrued interest held and recognized a loss of $252,789 on the extinguishment of the aforementioned converted debt with a fair value of the common stock issued of $568,903. In accordance with ASC 470-20 Debt with Conversion and Other Options |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 6 - DERIVATIVE LIABILITIES | The Company analyzed the notes payable related parties and convertible notes payable 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 and any resulting gain or loss is recognized as a current period charge to the consolidated statements of operations. 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, 2015 and December 31, 2014 amounted to $2,078,458 and $2,771,414, respectively. The assets or liabilitys fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of the assets that are measured at fair value on a recurring basis. Consolidated Balance Sheet Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Derivative Liabilities: June 30, 2015 $ 2,078,458 $ - $ - $ 2,078,458 December 31, 2014 $ 2,771,414 $ - $ - $ 2,771,414 The following table sets forth a summary of the changes in the fair value of the Companys Level 3 financial liabilities that are measured at fair value on a recurring basis: Six Months Ended Year Ended Six Months Ended June 30, 2015 Year Ended December 31, 2014 Beginning balance $ 2,771,414 $ 1,070,728 Aggregate fair value of conversion features upon issuance 154,893 5,665,527 Fair value of derivatives reclassified to equity (456,399 ) (4,689,838 ) Net transfer into level 3 - 425,010 (1) Fair value of warrants netted against common stock issued for stock - 111,166 Change in fair value of conversion features (391,450 ) 723,137 Change in fair value of warrant and stock option derivative liabilities - (534,316 ) Ending balance $ 2,078,458 $ 2,771,414 (1) Represents transfers out of equity in connection with the respective warrant and stock option derivative liabilities as a result of insufficient authorized shares available at December 31, 2014 for settlement of warrants and stock options. The fair value of the embedded conversion feature of the Convertible Debt at June 30, 2015 was calculated using the Monte Carlo simulation with the following factors, assumptions and methodologies: (1) conversion prices per share ranging from $0.0035 to $20.00, (2) risk free rates ranging from .01% to .29%, (3) remaining life of conversion features (in years) ranging from .07 to 2.67, and (4) volatility ranging from 45.78% to 78.17%. The fair value of the embedded conversion feature of the Convertible Debt at December 31, 2014 was calculated using the Monte Carlo simulation with the following factors, assumptions and methodologies: (1) conversion prices per share ranging from $0.09 to $42.50, (2) risk free rates ranging from .03% to .25%, (3) remaining life of conversion features (in years) ranging from .12 to 3.0, and (4) volatility ranging from 21.51% to 75.48%. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
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. Exergen Litigation On October 10, 2012, the Company received a cease and desist demand letter from Exergen Corporation (Exergen), claiming that the Company infringed on certain patents relating to the Company's non-contact thermometers. On May 21, 2013 Exergen filed a complaint in the U.S. District Court of the District of Massachusetts against the Company and Thermomedics, Inc. ( its wholly owned subsidiary). 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. On March 26, 2015, Exergen and Sanomedics filed a partial dismissal that removes Sanomedics previous product, the Talking Non-Contact Thermometer, from the lawsuit. Exergen's claims against the Caregiver TouchFree Thermometer are ongoing. The Company will continue to vigorously defend its rights to market and sell the thermometers. Prime Time Medical Litigation After the acquisition of Prime Time Medical, Inc. (PTM) in August 2013, the Company discovered that the seller Mark R. Miklos (Seller) failed to disclose that there were on-going audits with respect to PTMs Medicare and Medicaid billings for periods prior to the consummation of the transaction. These audits escalated and, as a result, PTM can no longer invoiceMedicare and Medicaid for any products or services and be paid for such products and services until the outcome of the audits which could last several 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 PTM was paid prior to the closing of the transaction that were improper. It is estimated that PTM 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 PTM 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 the Seller in connection with the Stock Purchase Agreement, coupled with the foregoing events and Medicare and Medicaids constraint on PTMs 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 PTM and, the operations of PTM were subsequently deconsolidated from presentation in financial statements. The Company recorded an accrual for contingencies as a result of the contract recession and is reflected in the accompanying consolidated financial statement at $123,204 and $165,702 at June 30, 2015 and December 31, 2014, respectively. As a result of discoveries of fraud and misrepresentations in the acquisition of PTM, 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 Acquisition Note for $850,000; breach of Acquisition 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 will defend itself aggressively in this lawsuit. 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. 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 Floridas usury laws, and because JMJs 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 all moneys paid on the Note by the Company to JMJ must be returned to the Company) 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 JMJs claims, and pursue its claims, vigorously. Other: In June 2015 the Company recorded a gain of $209,944 as Other Income in the accompanying consolidated financial statements from the reversal of unpaid salaries for former management as no claims were made within the period allowed by the state statute of limitations. |
COMMON STOCK
COMMON STOCK | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 8 - COMMON STOCK | Common stock: From January 1, 2015 to March 31, 2015, the Company issued a total of 2,718,118 shares to three (3) parties in connection with the conversion of $69,846 in convertible debt held. On January 5, 2015, and March 19, 2015, the Company issued a total of 103,652 shares of restricted common stock to two (2) consultants as payment for financial consulting & investor relations services with a total value of $16,933. From January 1, 2015 to March 31, 2015, the Company issued 1,552,100 shares to a Company owned by a former officer and shareholder in connection with the conversion of $39,865 in convertible debt held. On March 9, 2015 and March 23, 2015, the Company issued a total of 1,424,253 shares of restricted common stock to an officer of the Company in connection with the conversion of $50,000 in convertible stock held. From January 1, 2015 to March 31, 2015 the Company issued a lender a total of 1,669,309 shares in connection with the conversion of $171,724 in convertible debt held. From April 1, 2015 to June 30, 2015, the Company issued a total of 5,853,569 shares to two (2) parties in connection with the conversion of $32,453 in convertible debt held plus interest. From April 1, 2015 to June 30, 2015, the Company issued 25,353,412 shares to a Company owned by a former officer and shareholder in connection with the conversion of $36,974 in convertible debt held. On June 10, 2015, the Company issued a total of 2,000,000 shares of restricted common stock to an officer of the Company in connection with the conversion of $5,000 in convertible stock held. From April 1, 2015 to June 30, 2015 the Company issued a lender a total of 10,211,321 shares in connection with the conversion of $37,091 in convertible debt held. On June 26, 2015 the Company issued a shareholder 1,200 shares of restricted common stock for exercise of his warrants at zero consideration plus an additional 8,800 shares and recorded $35 in total stock compensation expense for the total shares issued. On June 30, 2015 the Company issued a lender 2,380,952 shares in connection with the conversion of $5,000 in convertible debt held. (See Notes 4 and 5) Reverse split: On January 20, 2015, the Companys stockholders approved a reverse stock split of its common stock at a ratio of 1-for-125. The reverse stock split became effective on February 9, 2015 upon securing regulatory approval. All applicable share and per share amounts in the accompanying consolidated financial statements and footnotes have been adjusted to reflex the reverse stock split. Additionally in the same corporate action the Companys shareholders approved a change of its corporate name to Sanomedics, Inc., and an increase of the number of authorized shares of its common stock from 250,000,000 to 650,000,000. Preferred stock: On April 30, 2015, the Companys Board of Directors and Series A preferred shareholders approved a resolution to amend the conversion rights of the preferred shareholders to apply solely for purposes of the computation of voting interest. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 9 - CONCENTRATION OF CREDIT RISK | The Companys top two customers accounted for approximately 90% and 92% of total revenue for the three and six months ended June 30, 2015. These same customers accounted for 77% and 82% of total revenue for the three and six months ended June 30, 2014. Two customers accounted for approximately 78% and 18% of accounts receivable as of June 30, 2015. Two other customers accounted for approximately 54% and 43% of accounts receivable as of December 31, 2014. |
RELATED PARTY DISCLOSURE
RELATED PARTY DISCLOSURE | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 10 - RELATED PARTY DISCLOSURE | The accompanying consolidated financial statements reflect the following related party debt: June 30, 2015 December 31, 2014 Convertible note payable due to an affiliate of a former officer of the Company (see Note 4) $ 282,156 $ 137,887 Convertible note payable due Officer of the Company and an affiliate of Officer of the Company (see Note 4) 299,707 305,032 Total Convertible Notes $ 581,863 $ 442,919 Demand promissory note due to an affiliate of an Officer of the Company, secured by sales proceeds, interest at 12% $ 35,000 $ - Demand loan payable due former officer of the Company 21,132 24,882 Total Due to Related Parties $ 56,132 $ 24,882 The accompanying consolidated financial statements also reflect accrued interest on the aforementioned debt to related parties of $129,570 (June 30, 2015) and $85,915 (December 31, 2014), respectively, and interest expense of $22,531 and $40,718 for the three months and $58,048 and $85,671 for the six months ended June 30, 2015 and 2014, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2015 | |
Notes to Financial Statements | |
NOTE 11 - SUBSEQUENT EVENTS | Share Issuances: During July and through August 3, 2015, the Company issued a total of 24,551,340 shares to a lender in connection with the conversion of $20,000 in convertible debt held. During July and through August 3, 2015, the Company issued a total of 79,052,320 shares to a Company owned by a former officer and shareholder in connection with the conversion of $27,707 in convertible debt held. During July and through August 3, 2015, the Company issued Redwood 34,019,600 shares in connection with the conversion of $30,713 in convertible debt held. Financing: On July 7, 2015, the Company borrowed $74,000 from a third party lender with a maturity date of April 9, 2016, pursuant to a convertible promissory note (Note). Under the Note the Company received $68,000, which was net of legal fees. The note bears interest at 8% per annum and is convertible at the option of the lender, beginning 180 days following the date of the Note until maturity, into shares of the Companys common stock at a 39% discount to the price of common shares in the 20 days prior to conversion. The note might be accelerated if an event of default occurs under the terms of the note, including the Companys failure to pay principal and interest when due, certain bankruptcy events or if the Company is delinquent in its SEC filings. |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Summary Of Significant Accounting Policies Policies | |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Use of estimates includes the following: 1) valuation of intangible assets and derivative and equity instruments, 2) allowance for doubtful accounts, 3) estimated useful lives of property, equipment and intangible assets and, 4) estimates and valuations related to deferred tax assets. |
Inventories | Inventories are stated at the lower of cost (on a first-in, first-out basis) or market value. The stated cost is comprised of finished goods of non-invasive thermometers. Reserves, if necessary, are recorded to reduce inventory to market value based on assumptions about consumer demand, current inventory levels and product life cycles for the various inventory items. These assumptions are evaluated quarterly and are based on the Companys business plan and from feedback from customers and the product development team. As of June 30, 2015 and December 31, 2014, inventory reserves were not material. |
Basic and Diluted Net Loss Per Share | The Company computes net income (loss) per share in accordance with ASC Topic 260, Earning per Share Six Months Ended June 30, 2015 2014 Options 8,120 8,778 Warrants 12,239 229 Shares from convertible notes 1,390,431,622 147,506 Total (1) 1,390,451,981 156,513 (1) Shares issuable upon conversion of preferred stock have been excluded from this computation because of the specific right of conversion as further explained in Note 8. |
Fair Value | FASB ASC 820, Fair Value Measurements and Disclosure Level 1 Level 2 Level 3 The carrying amounts of cash, accounts receivable, accrued salaries payable, accounts payable and other liabilities, and accrued interest payable approximate fair value because of the short-term nature of these items. The fair value of the Companys debt approximated the carrying value of the Company's debt as of June 30, 2015 and December 31, 2014. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and term of debt. Recent Accounting Pronouncements In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation On February 18, 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis (ASU 2015-02). In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). On May 8, 2015, the FASB issued ASU 2015-08, Business Combinations (Topic 805) Pushdown Accounting In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Summary Of Significant Accounting Policies Tables | |
Basic and Diluted Net Loss Per Share | For the six months ended June 30, 2015 and 2014, outstanding stock options, warrants, and shares issuable upon conversion of convertible notes were anti-dilutive because of net losses, and, as such, their effect has not been included in the calculation of diluted net loss per share. Six Months Ended June 30, 2015 2014 Options 8,120 8,778 Warrants 12,239 229 Shares from convertible notes 1,390,431,622 147,506 Total (1) 1,390,451,981 156,513 |
NOTES PAYABLE _ RELATED PARTI20
NOTES PAYABLE – RELATED PARTIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Payable Related Parties Tables | |
Notes payable to related parties | Notes payable to related parties consists of the following: June 30, 2015 December 31, 2014 Two Secured Convertible Promissory Notes CLSS Holdings, LLC, dated June 30, 2014. Notes accrue interest at 8 % per annum, due and payable on June 1, 2016, net of discount of $213,232 and $369,477, at June 30, 2015 and December 31, 2014, respectively. $ 235,649 $ 131,243 Secured convertible Promissory Note CLSS Holdings, LLC dated December 1, 2014. Note accrues interest at 8% per annum, due and payable November 30, 2017, net of discount of $195,993 and $235,856, at June 30, 2015 and December 31, 2014, respectively. 46,507 6,644 Convertible Promissory Note - Officer dated June 17, 2013. Note accrues interest at 9% per annum, due and payable on March 15, 2016, net of discount of $-0- and $48,306, at June 30, 2015 and December 31, 2014, respectively. 298,339 305,032 Convertible Promissory Note company owned by Officer dated June 25, 2015. Note accrues interest at 12% per annum, due and payable on June 25, 2016, net of discount of $98,632 at June 30, 2015 . 1,368 - Total Notes $ 581,863 $ 442,919 Less current portion (535,356 ) - $ 46,507 $ 442,919 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Convertible Notes Payable Tables | |
Convertible notes payable | Third party convertible notes payable consists of the following: June 30, 2015 December 31, 2014 Convertible promissory note with interest at 9% per annum, convertible into common shares at a fixed price of $0.50 per share. Matured on August 24, 2014, net of unamortized discount of $9,503 at June 30, 2015. The conversion feature has not exercised by the note holders as of June 30, 2015. ( C) $ 65,497 $ 65,497 Convertible promissory notes with interest at 8% per annum, convertible into common shares at a conversion price of 50% discount to defined market prices. Matured June 20, 2014.(A)(B)( C) 36,500 36,500 Convertible promissory note with interest at 12% per annum ( zero interest first 90 days) ,plus 10% original interest discount, convertible at a conversion price of 30% discount to defined market price . Matured December 9, 2014. (A) (C) (See Note 7) 57,598 57,598 Three (3) Convertible promissory notes with interest ranging from 5.25% to 12% per annum, convertible into common shares at a conversion price of 50% discount to defined market prices. Maturity ranging from October 22, 2014 through October 11, 2015, net of unamortized discount of $ 7,181 and $ 52,763, respectively. (A) 65,430 113,548 Two (2) Convertible promissory notes with interest at 8% per annum, convertible into common shares at a conversion price of 15% discount to defined market prices .Matures on August 1, 2015 and October 11, 2015, respectively, net of unamortized discount of $ 6,740 and $80,599, respectively. (A) 728,260 679,401 Six (6) Convertible promissory notes with interest ranging from 12% to 13% per annum, convertible into common shares at a conversion price of 37.50% discount to defined market prices. Matures on April 15, 2015 through May 27, 2016, respectively, net of unamortized discount of $82,963 and $287,936, respectively. (A)(B) 746,661 680,503 1,699,946 1,633,047 Less current portion (1,699,946 ) (1,633,047 $ -0- $ -0- |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Liabilities Tables | |
Summary of assets | The assets or liabilitys fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The following table provides a summary of the assets that are measured at fair value on a recurring basis. Consolidated Balance Sheet Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Derivative Liabilities: June 30, 2015 $ 2,078,458 $ - $ - $ 2,078,458 December 31, 2014 $ 2,771,414 $ - $ - $ 2,771,414 |
Summary of changes in the fair value | The following table sets forth a summary of the changes in the fair value of the Companys Level 3 financial liabilities that are measured at fair value on a recurring basis: Six Months Ended Year Ended Six Months Ended June 30, 2015 Year Ended December 31, 2014 Beginning balance $ 2,771,414 $ 1,070,728 Aggregate fair value of conversion features upon issuance 154,893 5,665,527 Fair value of derivatives reclassified to equity (456,399 ) (4,689,838 ) Net transfer into level 3 - 425,010 (1) Fair value of warrants netted against common stock issued for stock - 111,166 Change in fair value of conversion features (391,450 ) 723,137 Change in fair value of warrant and stock option derivative liabilities - (534,316 ) Ending balance $ 2,078,458 $ 2,771,414 |
RELATED PARTY DISCLOSURE (Table
RELATED PARTY DISCLOSURE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Disclosure Tables | |
Reflection of financial statements - related party debt | The accompanying consolidated financial statements reflect the following related party debt: June 30, 2015 December 31, 2014 Convertible note payable due to an affiliate of a former officer of the Company (see Note 4) $ 282,156 $ 137,887 Convertible note payable due Officer of the Company and an affiliate of Officer of the Company (see Note 4) 299,707 305,032 Total Convertible Notes $ 581,863 $ 442,919 Demand promissory note due to an affiliate of an Officer of the Company, secured by sales proceeds, interest at 12% $ 35,000 $ - Demand loan payable due former officer of the Company 21,132 24,882 Total Due to Related Parties $ 56,132 $ 24,882 |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Total | 1,390,451,981 | 156,513 |
Options | ||
Total | 8,120 | 8,778 |
Warrant | ||
Total | 12,239 | 229 |
Shares from convertible stock | ||
Total | 1,390,431,622 | 147,506 |
LIQUIDITY AND GOING CONCERN (De
LIQUIDITY AND GOING CONCERN (Details Narrative) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Liquidity And Going Concern Details Narrative | ||
Accumulated deficit | $ 21,789,916 | $ 20,239,635 |
Working capital deficit | 5,155,847 | |
Convertible debt instruments | $ 175,000 |
NOTES PAYABLE - RELATED PARTIES
NOTES PAYABLE - RELATED PARTIES (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Total Notes | $ 581,863 | $ 442,919 |
Less: Current portion | (535,356) | |
Notes Payable-related parties, net | 46,507 | $ 442,919 |
Secured Convertible Promissory Note June 30, 2014 [Member] | ||
Total Notes | 235,649 | 131,243 |
Secured Convertible Promissory Note December 1, 2014 [Member] | ||
Total Notes | 46,507 | 6,644 |
Convertible Promissory Note June 17, 2013 [Member] | ||
Total Notes | 298,339 | $ 305,032 |
Convertible Promissory Note June 25 2015 [Member] | ||
Total Notes | $ 1,368 |
NOTES PAYABLE - RELATED PARTI27
NOTES PAYABLE - RELATED PARTIES (Details Narrative) - 6 months ended Jun. 30, 2015 - USD ($) | Total |
Notes Payable - Related Parties Details Narrative | |
Common stock convertible shares | 30,329,765 |
Common stock convertible shares, value | $ 131,839 |
Accrued interest | 259,599 |
Extinguishment of converted debt | $ 391,437 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Convertible Note Payable | $ 1,699,946 | $ 1,633,047 |
Less current portion | $ (1,699,946) | $ (1,633,047) |
Long-term portion of convertible debt | ||
Convertible Promissory Note [Member] | ||
Convertible Note Payable | $ 65,497 | $ 65,497 |
Convertible promissory note One [Member] | ||
Convertible Note Payable | 36,500 | 36,500 |
Convertible promissory note Two [Member] | ||
Convertible Note Payable | 57,598 | 57,598 |
Convertible promissory note Three [Member] | ||
Convertible Note Payable | 65,430 | 113,548 |
Convertible promissory note four [Member] | ||
Convertible Note Payable | 728,260 | 679,401 |
Convertible promissory note five [Member] | ||
Convertible Note Payable | $ 746,661 | $ 680,503 |
CONVERTIBLE NOTES PAYABLE (De29
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||||
Derivative liability as discounts | $ 154,928 | $ 3,525,257 | |||
Amortization of debt discount | $ 186,370 | $ 356,894 | $ 633,688 | $ 835,877 | |
Common stock convertible shares | 30,329,765 | ||||
Common stock convertible shares, value | $ 131,839 | ||||
Convertible Notes Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Common stock convertible shares | 22,833,269 | ||||
Common stock convertible shares, value | $ 316,114 | ||||
Accrued interest | 252,789 | ||||
Extinguishment of converted debt | $ 568,903 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Derivative Liabilities | $ 2,078,458 | $ 2,771,414 |
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member] | ||
Derivative Liabilities | ||
Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) [Member] | ||
Derivative Liabilities | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Derivative Liabilities | $ 2,078,458 | $ 2,771,414 |
DERIVATIVE LIABILITIES (Detai31
DERIVATIVE LIABILITIES (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Derivative Liabilities Details 1 | ||
Beginning balance | $ 2,771,414 | $ 1,070,728 |
Aggregate fair value of conversion features upon issuance | 154,893 | 5,665,527 |
Fair value of derivatives reclassified to equity | $ (456,399) | (4,689,838) |
Net transfer into level 3 | 425,010 | |
Fair value of warrants netted against common stock issued for stock | 111,166 | |
Change in fair value of conversion features | $ (391,450) | 723,137 |
Change in fair value of warrant and stock option derivative liabilities | (534,316) | |
Ending balance | $ 2,078,458 | $ 2,771,414 |
DERIVATIVE LIABILITIES (Detai32
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair value of derivative liabilities | $ 2,078,458 | $ 2,771,414 |
Minimum [Member] | ||
Conversion prices per share | $ 0.0035 | $ 0.09 |
Risk free interest rate | 0.01% | 0.03% |
Remaining life of conversion features | 26 days | 1 month 13 days |
Volatility ranging | 45.78% | 21.51% |
Maximum [Member] | ||
Conversion prices per share | $ 20 | $ 42.50 |
Risk free interest rate | 0.29% | 0.25% |
Remaining life of conversion features | 2 years 8 months 1 day | 3 years |
Volatility ranging | 78.17% | 75.48% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Commitments And Contingencies Details Narrative | ||
Accrual contingencies | $ 123,204 | $ 165,702 |
Other Income | $ 209,944 |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - 6 months ended Jun. 30, 2015 - USD ($) | Total |
Common Stock Details Narrative | |
Stock issued for conversion of convertible debt, Shares | 2,380,952 |
Stock issued for conversion of convertible debt, Amount | $ 5,000 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Customer Two [Member] | |||||
Significant Concentrations revenue percentage | 90.00% | 77.00% | 92.00% | 82.00% | |
Significant Concentrations accounts receivable percentage | 18.00% | 18.00% | 43.00% | ||
Customer One [Member] | |||||
Significant Concentrations accounts receivable percentage | 78.00% | 78.00% | 54.00% |
RELATED PARTY DISCLOSURE (Detai
RELATED PARTY DISCLOSURE (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Convertible note payable | $ 581,863 | $ 442,919 |
Due to Related Parties | 56,132 | 24,882 |
Former Officer [Member] | ||
Convertible note payable | 282,156 | $ 137,887 |
Due to Related Parties | 35,000 | |
Officer [Member] | ||
Convertible note payable | 299,707 | $ 305,032 |
Due to Related Parties | $ 21,132 | $ 24,882 |
RELATED PARTY DISCLOSURE (Det37
RELATED PARTY DISCLOSURE (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Interest expense | $ 22,531 | $ 40,718 | $ 58,048 | $ 85,671 | |
Former Chief Executive Officer [Member] | |||||
Accrued interest on notes payable | $ 129,570 | $ 129,570 | $ 85,915 |