Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Apr. 10, 2014 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'HEALTH REVENUE ASSURANCE HOLDINGS, INC. | ' | ' |
Entity Central Index Key | '0001514443 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $15,989,850 |
Entity Common Stock, Shares Outstanding | ' | 54,752,294 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Cash | $3,053,485 | $893,458 |
Accounts receivable | 901,918 | 1,246,814 |
Accounts receivable - Related Party, net of allowance $16,244 and $0 respectively | 25,000 | ' |
Prepaid expenses | 1,050,210 | 3,600 |
Other current assets | 1,676 | 688 |
Total Current Assets | 5,032,289 | 2,144,560 |
Property and Equipment, net | 381,847 | 365,017 |
Software, net | ' | 258,933 |
Other assets | 12,665 | 8,871 |
Finance costs, net | 2,150 | 2,477 |
Total Other Assets | 14,815 | 270,281 |
Total Assets | 5,428,951 | 2,779,858 |
Liabilities and Stockholders' Equity (Deficit) | ' | ' |
Accounts payable | 154,324 | 207,741 |
Due to officers | ' | 75,000 |
Accrued expenses | 40,373 | 64,077 |
Accrued payroll | 414,684 | 412,186 |
Loan payable to factor | 542,530 | 827,075 |
Accrued interest | 5,850 | 4,524 |
Line of credit | 44,692 | 25,000 |
Capital Leases, current portion | 32,768 | 16,923 |
Notes payable, current portion, net of discount | 380,326 | 202,557 |
Long term debt, current portion | 44,084 | 37,513 |
Settlement Payable | 7,000 | 115,278 |
Deferred Revenue | 209,033 | ' |
Other current liabilities | 43,379 | ' |
Warrant derivative fair value | 5,406,000 | ' |
Accrued preferred stock dividend payable | ' | ' |
Total Current Liabilities | 7,325,043 | 1,987,874 |
Capital Leases (net of current portion) | 26,108 | 23,974 |
Line of credit (net of current portion) | ' | 125,000 |
Notes payable (net of current portion), net of discount | 31,694 | 273,751 |
Long term debt (net of current portion) | 272,353 | 181,457 |
Total Liabilities | 7,655,198 | 2,592,056 |
Temporary Equity | ' | ' |
Commitments and Contingencies (See Note 10) | ' | ' |
Stockholders' Equity (Deficit): | ' | ' |
Common stock ($0.001 par value, 500,000,000 shares authorized, 54,752,294 and 39,054,867 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively) | 54,752 | 39,055 |
Additional paid-in capital | 6,543,224 | 2,738,545 |
Subscription receivable | ' | -5,000 |
Accumulated deficit | -10,752,223 | -2,584,798 |
Total Stockholders' Equity (Deficit) | -4,154,247 | 187,802 |
Total Liabilities and Stockholders' Equity (Deficit) | 5,428,951 | 2,779,858 |
Series A Preferred Stock [Member] | ' | ' |
Temporary Equity | ' | ' |
Series A 8% redeemable convertible preferred stock (13,500,000 and 0 shares issued and outstanding at December 31, 2013 and 2012, respectively)-Redemption value of $5,460,000) | $1,928,000 | ' |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Balance Sheets [Abstract] | ' | ' |
Allowance for doubtful accounts | $16,244 | ' |
Preferred stock, shares issued | 13,500,000 | 0 |
Preferred stock, shares outstanding | 13,500,000 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 54,752,294 | 39,054,867 |
Common Stock, Shares, Outstanding | 54,752,294 | 39,054,867 |
Temporary equity, redemption value | $5,460,000 | $5,460,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Statements of Operations [Abstract] | ' | ' |
Revenue | $7,099,514 | $5,806,848 |
Revenue - Related Party | 211,239 | ' |
Total Revenue | 7,310,753 | 5,806,848 |
Cost of Revenues | 4,061,644 | 2,830,008 |
Gross Profit | 3,249,109 | 2,976,840 |
Operating Expenses | ' | ' |
Selling and administrative expenses (includes stock compensation of $639,328 and $0 in 2013 and 2012, respectively) | 7,016,533 | 3,853,820 |
Research and development | ' | 64,386 |
Asset impairment | 946,931 | ' |
Depreciation and amortization | 83,900 | 50,765 |
Total Operating Expenses | 8,047,364 | 3,968,971 |
Operating Loss | -4,798,255 | -992,131 |
Other Income (Expense) | ' | ' |
Other income | 67 | 10 |
Interest expense | -927,047 | -465,349 |
Gain on extinguishment of debt for put premium | 33,364 | ' |
Gain from change in fair value of warrant liability | 365,255 | ' |
Loss on extinguishment of debt | -146,624 | ' |
Total Other Income (Expense), net | -674,985 | -465,339 |
Net Loss | -5,473,240 | -1,457,470 |
Cumulative series A preferred stock dividend | -60,000 | ' |
Deemed dividend for beneficial conversion feature of series A preferred stock | -2,634,185 | ' |
Net Loss available to common stockholders | ($8,167,425) | ($1,457,470) |
Net Loss Per Share | ' | ' |
basic and diluted | ($0.17) | ($0.04) |
Weighted Average Number of Shares Outstanding | ' | ' |
basic and diluted | 48,385,115 | 32,730,809 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Statements of Operations [Abstract] | ' | ' |
Stock compensation included in selling and administrative expenses | $639,328 | $0 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes In Stockholder's Equity (Deficit) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Subscription Receivable [Member] | Accumulated Deficit [Member] |
Beginning Balance at Dec. 31, 2011 | ($359,819) | $16,499 | $751,010 | ' | ($1,127,328) |
Beginning Balance, Shares at Dec. 31, 2011 | ' | 16,499,021 | ' | ' | ' |
Recapitalization | ' | 13,499 | -13,499 | ' | ' |
Recapitalization, Shares | ' | 13,499,206 | ' | ' | ' |
2011 bridge note converted in 2012 related to reverse merger | 250,000 | 1,344 | 248,656 | ' | ' |
2011 bridge note converted in 2012 related to reverse merger, Shares | ' | 1,343,729 | ' | ' | ' |
Issuance of common stock for cash | 1,056,094 | 4,352 | 1,051,742 | ' | ' |
Issuance of common stock for cash, Shares | ' | 4,352,312 | ' | ' | ' |
Repayment of advances with shares | 313,908 | 1,266 | 312,642 | ' | ' |
Repayment of advances with shares, Shares | ' | 1,265,381 | ' | ' | ' |
Value of Beneficial conversion feature in convertible debt | 300,000 | ' | 300,000 | ' | ' |
Repurchase of shares pursuant to settlement agreement | -232,500 | -3,300 | -229,200 | ' | ' |
Repurchase of shares pursuant to settlement agreement, Shares | ' | -3,299,802 | ' | ' | ' |
Conversion of convertible debt | 300,000 | 3,000 | 297,000 | ' | ' |
Conversion of convertible debt, shares | ' | 3,000,000 | ' | ' | ' |
Shares issued as loan fees | 343,500 | 2,375 | 341,125 | ' | ' |
Shares issued as fees, Shares | ' | 2,375,000 | ' | ' | ' |
Offering costs | 325,911 | 0 | -325,911 | ' | ' |
Receipt of subscription receivable | ' | 20 | 4,980 | -5,000 | ' |
Receipt of subscription receivable, Shares | ' | 20,000 | ' | ' | ' |
Fractional rounding | ' | 26 | ' | ' | ' |
Issuance of common stock as compensation | ' | ' | ' | ' | ' |
Deemed dividend for beneficial conversion feature of series A preferred stock | ' | ' | ' | ' | ' |
Dividends on series A preferred stock | ' | ' | ' | ' | ' |
Net Loss 2013 | -1,457,470 | ' | ' | ' | -1,457,470 |
Ending Balance at Dec. 31, 2012 | 187,802 | 39,055 | 2,738,545 | -5,000 | -2,584,798 |
Ending Balance, Shares at Dec. 31, 2012 | ' | 39,054,867 | ' | ' | ' |
Issuance of common stock for cash | 1,238,000 | 3,446 | 1,234,554 | ' | ' |
Issuance of common stock for cash, Shares | ' | 3,446,429 | ' | ' | ' |
Value of Beneficial conversion feature in convertible debt | 2,600,000 | ' | ' | ' | ' |
Conversion of convertible debt | 514,667 | 1,608 | 513,059 | ' | ' |
Conversion of convertible debt, shares | ' | 1,608,333 | ' | ' | ' |
Shares issued as loan fees | 679,353 | 5,575 | 673,778 | ' | ' |
Shares issued as fees, Shares | ' | 5,575,000 | ' | ' | ' |
Receipt of subscription receivable | 5,000 | ' | ' | 5,000 | ' |
Issuance of common stock as compensation | -159,005 | 463 | 158,542 | ' | ' |
Issuance of common stock as compensation, Shares | ' | 462,665 | ' | ' | ' |
Deemed dividend for beneficial conversion feature of series A preferred stock | -2,634,185 | ' | ' | ' | -2,634,185 |
Dividends on series A preferred stock | 60,000 | ' | ' | ' | -60,000 |
Public offering costs | -9,553 | ' | -9,553 | ' | ' |
Reclassification of warrant liability | -101,418 | ' | -101,418 | ' | ' |
Shares issued for services | 1,325,500 | 4,605 | 1,320,895 | ' | ' |
Shares issued for services, Shares | ' | 4,605,000 | ' | ' | ' |
Stock option expense | 14,822 | ' | 14,822 | ' | ' |
Net Loss 2013 | -5,473,240 | ' | ' | ' | -5,473,240 |
Ending Balance at Dec. 31, 2013 | ($4,154,247) | $54,752 | $6,543,224 | ' | ($10,752,223) |
Ending Balance, Shares at Dec. 31, 2013 | ' | 54,752,294 | ' | ' | ' |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from Operating Activities: | ' | ' |
Net loss available to common stockholders | ($5,473,240) | ($1,457,470) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Cumulative series A preferred stock dividend | 60,000 | ' |
Deemed dividend for beneficial conversion feature of series A preferred stock | 2,634,185 | ' |
Amortization of debt discount | 556,028 | 304,808 |
Amortization of debt issue costs | 327 | ' |
Depreciation expense | 83,573 | 50,765 |
Amortization of software | 64,137 | ' |
Software impairment | 946,931 | ' |
Accretion of premium on debt | 33,364 | ' |
Bad debt expense | 26,116 | ' |
Amortization of prepaid shares issued for services | 465,501 | ' |
Stock option expense | 14,822 | ' |
Stock issued for services | 159,005 | ' |
Loss on early extinguishment of debt | 146,624 | ' |
Gain from change in fair market value of warrant derivative liability | -365,255 | ' |
Change in operating assets and liabilities: | ' | ' |
Accounts receivable | -17,655 | -1,103,257 |
Other assets | -4,788 | 5,146 |
Prepaid expenses | -129,038 | 20,912 |
Accounts payable | -53,417 | 53,783 |
Accounts payable related party | ' | 75,000 |
Settlement accrual | 7,000 | ' |
Accrued liabilities | -85,801 | 383,835 |
Other accrued liabilities | 49,229 | ' |
Accrued payroll | 2,499 | ' |
Deferred revenue | 209,033 | -32,988 |
Net Cash used in operating activities | -3,365,005 | -1,699,466 |
Cash flows from Investing Activities: | ' | ' |
Capitalization of internally developed software | -752,135 | -258,933 |
Purchases of property and equipment | -10,304 | -20,985 |
Net Cash used in investing activities | -762,439 | -279,918 |
Cash flows from Financing Activities: | ' | ' |
Proceeds from issuance of common stock | 1,243,000 | 730,183 |
Proceeds from series A 8% convertible preferred stock issuance | 5,400,000 | ' |
Preferred and common stock offering costs | -505,901 | ' |
Stockholder loan repayment -related party | -115,000 | ' |
Stockholder loan - related party | 40,000 | ' |
Payment for repurchase of common stock | ' | -94,165 |
Loan proceeds | 1,595,000 | 1,193,908 |
Loan proceeds from factor, net | 26,890 | 827,075 |
Repayments of loans | -1,237,145 | -33,087 |
Repayment of capital lease | -18,015 | -1,072 |
Settlement payments | -115,278 | ' |
Borrowings (Repayments) on line of credit, net | -26,080 | 51,500 |
Net Cash provided by financing activities | 6,287,471 | 2,674,342 |
Net increase in cash | 2,160,027 | 694,958 |
Cash at beginning of year | 893,458 | 198,500 |
Cash at ending of year | 3,053,485 | 893,458 |
Supplemental schedule of cash paid during the period for: | ' | ' |
Interest | 376,539 | 36,156 |
Income Taxes | ' | ' |
Supplemental schedule of non-cash investing and financing activities: | ' | ' |
Issuance of stock to repay debt | 514,667 | 563,908 |
Capital lease obligation incurred for use of equipment | 90,099 | 38,704 |
Beneficial conversion feature on convertible debt charged to additional paid in capital | ' | 300,000 |
Conversion of $300,000 notes to common stock | ' | 300,000 |
Shares issued as a loan fee | 679,353 | 343,500 |
Transfer of accounts payable to notes payable | ' | 65,000 |
Insurance premium finance contract recorded as prepaid asset | 57,573 | ' |
Shares issued for prepaid services | 1,325,500 | ' |
Reclassification of line of credit to note payable | 133,333 | ' |
Constructive dividend | 2,634,185 | ' |
Reclassification of derivative to warrant liability | 5,771,255 | ' |
Debt discount | $37,500 | ' |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Statements of Cash Flows [Abstract] | ' | ' |
Amount of debt conversion | $300,000 | $300,000 |
Nature_of_Business_and_Going_C
Nature of Business and Going Concern | 12 Months Ended |
Dec. 31, 2013 | |
Nature of Business and Going Concern [Abstract] | ' |
NATURE OF BUSINESS AND GOING CONCERN | ' |
1 – NATURE OF BUSINESS AND GOING CONCERN | |
Overview | |
Health Revenue Assurance Holdings, Inc. (the “Company”) is a provider of revenue cycle services to a broad range of healthcare providers. We offer our customers integrated solutions designed around their specific business needs, including revenue cycle data analysis, contract and outsourced coding, billing, coding and compliance audits, coding education, coding consulting, physician coding services and ICD-10 education and transition services. With this approach, our customers benefit from integrated service offerings that we believe enhances their revenue integrity. As a result, we believe we help our customers achieve their business objectives and patient care objectives. | |
Dream Reachers, LLC, owns the Company’s offices and is the borrower on a mortgage loan related to such offices. Dream Reachers, LLC does not engage in real estate rental business. Its offices are occupied by Health Revenue Assurance Associates, Inc. (“HRAA”) at no cost and HRAA pays the related mortgage’s principal and interest, taxes and maintenance. The Company’s subsidiary HRAA is the sole member effective May 2011. Dream Reachers has been treated as a subsidiary for accounting purposes in the Company’s consolidated financial statements for all periods presented. (See Note 2) | |
On February 10, 2012, HRAA entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Health Revenue Assurance Holdings, Inc. (formerly known as Anvex International, Inc., "HRAH"), a Nevada company, and its wholly-owned subsidiary Health Revenue Acquisition Corporation (“Acquisition Sub”), which was treated for accounting purposes as a reverse recapitalization with HRAA, considered the accounting acquirer. Each share of HRAA's common stock was exchanged for the right to receive approximately 1,271 shares of HRAH’s common stock. Before their entry into the Merger Agreement, no material relationship existed between HRAH and Acquisition Sub or HRAA. (See Note 12) | |
On April 13, 2012, the Company changed its name from Anvex International, Inc. to Health Revenue Assurance Holdings, Inc. | |
On April 13, 2012, the Company’s board of directors authorized a 12.98 for 1 split of its common stock to stockholders of record as of April 13, 2012. Shares resulting from the split were issued on April 26, 2012. In connection therewith, the Company transferred $32,747 from additional paid in capital to common stock, representing the par value of additional shares issued. As a result of the stock split, fractional shares were rounded up. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the stock split. (See Note 12) | |
Going Concern | |
The Company’s future success is dependent upon its ability to achieve profitable operations and generate cash from operating activities, and upon additional financing, Management believes they can raise the appropriate funds needed to support their business plan and develop an operating company which is cash flow positive. | |
However, as of December 31, 2013, the Company has a working capital deficiency, stockholders’ deficit and accumulated deficit of $2,292,754, $4,154,247, and $10,752,223, respectively, for the year ended December 31, 2013, incurred net losses available to common stockholders of $8,167,425, and has used net cash in operations of $3,365,005. The Company has not been able to generate sufficient cash from operating activities to fund its on-going operations. There is no guarantee that the Company will be able to generate enough revenue and/or raise capital to support its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. | |
The consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern. | |
As of December 31, 2013, the Company has a cash balance of approximately $3,053,000. The Company is currently addressing the going concern and liquidity issues. The Company expects an increase in cash flow as the result of a growing customer demand for medical billing, consulting, training, and education. | |
On November 12, 2013, the Company entered into a Securities Purchase Agreement for the sale of $5.4 million in Series A 8% redeemable convertible preferred stock (the “Series A Preferred Stock”) and warrants to purchase shares of the Company’s common stock. The Series A Preferred Stock is convertible into common stock on a 2 for 1 basis and is redeemable by the Company, at the option of the investor, 48 months from November 12, 2013 at the stated value of $0.30 per share or a total of $5,400,000 plus accumulated but unpaid dividends, whether declared or not. The net proceeds to the Company after commissions and professional fees was $4,903,652 and after payment of stockholder loans is $4,322,000. The net raise is sufficient to fund on-going operations for the next several months. However, the funding is not sufficient to alleviate the going concern risk. (See Note 12) |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2013 | ||
Summary of Significant Accounting Policies [Abstract] | ' | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Principles of Consolidation | ||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Health Revenue Assurance Associates, Inc. and Dream Reachers, LLC. All significant inter-company transactions and balances are eliminated in consolidation. | ||
Use of Estimates | ||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements include valuation of accounts receivable, valuation of property and equipment, valuation and amortization period of software, valuation of beneficial conversion features in convertible debt, valuation of derivatives, valuation of equity based instruments issued for other than cash, revenue recognition, and the valuation allowance on deferred tax assets. | ||
Cash | ||
For purposes of the statement of cash flows, the Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. The Company’s cash balances are maintained at various banks that are insured by the Federal Deposit Insurance Corporation subject to certain limitations. | ||
Accounts Receivable and Factoring | ||
Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded using a specific identification method based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that an allowance in the amount of $16,244 is required as of December 31, 2013. The allowance arises from a website development project contracted with ResumeBear, a related party. The Company accounts for its factoring arrangements as either a sale or a secured financing based on the criteria in ASC 860 "Transfers and Servicing". Estimates of allowances for doubtful accounts are reflected as a recourse obligation, a liability, for factor arrangements treated as a sale with recourse or as a contra asset accounts receivable allowance account for arrangements accounted for as a secured financing. | ||
Property and Equipment | ||
Property and equipment is recorded at cost. Depreciation is computed using the straight-line method over estimated useful asset lives, which range from 5 to 39 years. Repairs and maintenance are expensed, while additions and betterments are capitalized. The cost and related accumulated depreciation of assets sold or retired are eliminated from the accounts and any gains or losses are reflected in earnings. | ||
Leases | ||
We perform a review of newly acquired leases to determine whether a lease should be treated as a capital or operating lease. Capital lease assets are capitalized and depreciated over the term of the initial lease. A liability equal to the present value of the aggregated lease payments is recorded utilizing the stated lease interest rate. If an interest rate is not stated, we will determine an estimated cost of capital and utilize that rate to calculate the present value. If the lease has an increasing rate over time, and (or) is an operating lease, all leasehold incentives, rent holidays, or other incentives will be considered in determining if a deferred rent liability is required. Leasehold incentives are capitalized and depreciated over the initial term of the lease. | ||
Software | ||
Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market and capitalization ceases after the general release of the software. Amortization of capitalized software development costs begins upon initial product shipment after general release. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months) using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. | ||
Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations. On July 15, 2013 the Company issued a general release for one of its products Visualizer. After the general release, the Company recorded approximately $64,000 in amortization expense in the accompanying consolidated financial statements for the year ended December 31, 2013. On September 30, 2013, the Company impaired the capitalized research and development costs for the Visualizer software suite of multiple offerings and the OMC Initiater after an evaluation based in part on the lack of cash flow and customer demand in ICD Visualizer after the general acceptance release date of July 15, 2013. In addition, the Company’s going concern opinion and cash liquidity concerns restrained the ability to make a capital investment in research and development to complete existing products in the pipeline as the available cash is needed to fund normal operating expenses. The resulting loss of $946,931 is presented as a line item entitled “asset impairment” on the consolidated statement of operations. The Company will continue to use the Visualizer suite of functionality as internally developed software to generate customized reports for revenue integrity auditing and compliance services but the Company no longer intends to market or sell internally developed software on a stand alone basis. | ||
Long-Lived Assets | ||
The Company reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying values may no longer be appropriate. Recoverability of carrying values is assessed by estimating future net cash flows from the assets. Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact management's assumptions as to sales prices, rental rates, costs, holding periods or other factors that may result in changes in the Company’s estimates of future cash flows. Although management believes the assumptions used in testing for impairment are reasonable, changes in any one of the assumptions could produce a significantly different result. | ||
Fair Value Measurements and Fair Value of Financial Instruments | ||
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: | ||
● | Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; | |
● | Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and | |
● | Level 3—Unobservable inputs that are supported by little or no market activity that is significant to the fair value of assets or liabilities. | |
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. | ||
Accounting for Derivatives | ||
The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. | ||
Revenue Recognition | ||
The Company recognizes medical coding audit services revenue based on the proportional performance method of recognizing revenue. | ||
A portion of the Company’s revenue is generated from medical coding audit services. Auditing revenue is invoiced in accordance with the contract, generally at three benchmark time periods which coincide with when specific, obligatory field work services have been rendered and completed, the value of this portion of the contract price has been predetermined and agreed upon, and the client has received benefit or value in the form of the independent identification of system weaknesses and risk analysis. Further, collectability is reasonably assured due to the existence of a fixed fee contract and the size and financial health of the Company’s clients. Below is a description of the general benchmarks and work phases associated with the Company’s audit services: | ||
● | Planning Phase - work commences prior to and as soon as the contract is signed and includes setting the audit scope, scheduling of the job, assignment of audit staff, understanding the client and their systems, determination of sample size and sampling methods to be employed, and other specific items as outlined in the contract. The planning phase includes the determination of deliverables as defined in the contract, generally consisting of a listing of errors, training and a final report. The Company generally invoices and recognizes 50% of the contract value at the completion of the Planning Phase. Although all of the contracts contain a clause making the first 50% of the engagement fee due and non-refundable at this point, the Company does not deem this initial fee to be recognized as deferred revenue under SAB 104 due to the extensive amount of work to be done prior to accepting the contract. | |
● | Field Work Phase – is performed at the client location and generally lasts one week and encompasses actual testing of sample claims preselected in the Planning Phase. The auditor generally preloads the selected claims into the Company’s proprietary software and audits the claim records by reviewing actual medical records. The software assists the auditor in determining proper classifications and allows the auditor to compare the proper classification against what was filed in the submission made by the client to Medicare. Notes and comments are recorded and audit reports are generated. The Company generally invoices and recognizes 40% of the contract value at the completion of the Field Work Phase. | |
● | Reporting Phase – includes a summary of audit findings, exit conference with clients, and any other specific deliverables as determined by the contract. The Company generally invoices and recognizes the remaining 10% of the contract value at the completion of the Reporting Phase. | |
A portion of the Company’s revenue is derived from consulting and coding services provided. Revenue from these revenue streams is recognized after services are performed based on the quoted and agreed upon fee contained in its contracts. | ||
Arrangements with customers may involve multiple elements including software products, education products, training, software product maintenance, coding services, coding audit services and other consulting services. Training and maintenance on software products will generally occur after the software product sale. Other services may occur before or after the product sales and may not relate to the products. Revenue recognition for multiple element arrangements is as follows: | ||
Each element is accounted for separately when each element has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the general and specific criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company has historically sold its services with established rates, which it believes is Company specific objective evidence of selling price. For the new software products, management has established selling prices, which qualifies as Company specific objective evidence of selling price. | ||
For our education products sold we have determined to account for the course materials and training components as one unit of accounting. Accordingly, revenue is recognized for the single unit upon delivery of the training through our online webinars. | ||
On July 15, 2013, the Company issued a general release for one of its products Visualizer. Software sales on a standalone basis will be recognized upon delivery of the software when evidence of the purchase arrangement exists and the price is determinable, and when collectability is reasonably assured. The Company will continue to use the Visualizer suite of functionality as internally developed software to generate customized reports for revenue integrity auditing and compliance services but the Company no longer intends to market or sell internally developed software on a stand alone basis. | ||
Cost of Revenues | ||
Cost of revenues includes labor costs for services and education development costs. Amortization costs in 2013 of approximately $64,000 were allocated to cost of sales related to software amortization. | ||
Share Based Compensation | ||
Compensation expense for all stock-based employee and director compensation awards granted is based on the grant date fair value estimated in accordance with the provisions of ASC Topic 718, Stock Compensation. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. Vesting terms vary based on the individual grant terms. | ||
The Company estimates the fair value of stock-based compensation awards on the date of grant using the Black-Scholes-Merton (“BSM”) option pricing model, which was developed for use in estimating the value of traded options that have no vesting restrictions and are freely transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. The BSM option-pricing model considers, among other factors, the expected term of the award and the expected volatility of the Company’s stock price. Expected terms are calculated using the Simplified Method, volatility is determined based on the Company's historical stock price trends and the discount rate is based upon treasury rates with instruments of similar expected terms. Warrants granted to non-employees are accounted for in accordance with the measurement and recognition criteria of ASC Topic 505-50, Equity Based Payments to Non-Employees. | ||
Research and Development Costs | ||
In accordance with ASC 730-10, research and development costs are expensed when incurred. Total research and development costs for the years ended December 31, 2013 and 2012 were $0 and $64,386, respectively. | ||
Advertising | ||
The cost of advertising is expensed as incurred. Advertising and marketing expenses amounted to approximately $121,000 and $130,000 for the year ended December 31, 2013 and 2012, respectively and the total is included in selling and administrative expenses. | ||
Income Taxes | ||
The Company’s subsidiary, HRAA, elected to convert from a Subchapter S corporation for Federal income tax purposes to a C corporation effective October 21, 2011. Upon HRAA’s C corporation election, it began to use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized. | ||
The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | ||
Earnings Per Share | ||
The Company computes and presents earnings or losses per share in accordance with FASB ASC Topic 260, Earnings per share. Basic earnings or losses per share are computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings or loss per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options and warrants using the average market prices during the period. | ||
As the Company incurred a net loss in all periods presented, all potentially dilutive securities were excluded from the computation of diluted loss per share since the effect of including them is anti-dilutive. Dilutive securities outstanding at December 31, 2013 were 1,000,000 stock options, 29,940,000 warrants, and Series A Preferred Stock convertible into 27,000,000 shares of common stock. No dilutive securities were outstanding in 2012. | ||
Segment Reporting | ||
Financial Accounting Standards Board (“FASB”) ASC Topic 280, Segment Reporting (“ASC 280”), establishes standards for the way public business enterprises report information about operating segments. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company has determined that based on these criteria it only operates one segment, consulting services, as all other services do not meet the minimum threshold for separate reporting of a segment. | ||
Contingencies | ||
We accrue for contingent obligations, including legal costs and restructuring costs, when the obligation is probable and the amount can be reasonably estimated. As facts concerning contingencies become known we reassess our position and make appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters that are subject to change as events evolve and additional information becomes available. Total legal settlement accrued costs for the year ended December 31, 2013 was $7,000. (See Note 10) | ||
Recent Accounting Pronouncements | ||
We have implemented all new accounting standards that are in effect and that may impact our consolidated financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. |
Accounts_Receivable
Accounts Receivable | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounts Receivable [Abstract] | ' | ||||||||
ACCOUNTS RECEIVABLE | ' | ||||||||
3 - ACCOUNTS RECEIVABLE | |||||||||
Accounts receivable at December 31, 2013 and December 31, 2012 was as follows: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accounts receivable | $ | 901,918 | $ | 1,246,814 | |||||
Accounts receivable –Related party | 41,244 | - | |||||||
Allowance for doubtful accounts | (16,244 | ) | - | ||||||
Total | $ | 926,918 | $ | 1,246,814 | |||||
We had $26,116 and $0 in bad debt expense on trade accounts receivable for years ended December 31, 2013 and 2012, respectively. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
4 - PROPERTY AND EQUIPMENT | |||||||||
Property and equipment consists of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Building and improvements | $ | 227,603 | $ | 227,603 | |||||
Furniture | 119,810 | 119,810 | |||||||
Computers and Equipment | 260,872 | 160,469 | |||||||
608,285 | 507,882 | ||||||||
Accumulated depreciation | (226,438 | ) | (142,865 | ) | |||||
Total | $ | 381,847 | $ | 365,017 | |||||
Depreciation expense for the years ended December 31, 2013 and 2012 was approximately $84,000 and $51,000, respectively. |
Research_and_Development_and_S
Research and Development and Software | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Research and Development and Software [Abstract] | ' | ||||||||
RESEARCH AND DEVELOPMENT AND SOFTWARE | ' | ||||||||
5 – RESEARCH AND DEVELOPMENT AND SOFTWARE | |||||||||
In early 2012, the Company started developing the Visualizer suite. This business intelligence product is designed to meet the emerging need for healthcare analytics. Customer data is infused into the suite, and the Company uses this data in its consulting services to develop pre-defined analytics targeted to address healthcare’s emerging concerns and needs. | |||||||||
The Company’s Visualizer suite offers our consultants a range of functionality. Visualizer, also assists healthcare leaders with their need to understand the impacts of the transition to ICD-10 including work flow, productivity, process changes and documentation and reimbursement risks. The application helps to visualize the reimbursement and operational effects of transitioning organizations to ICD-10 and identify where to focus education and documentation issues. It enables clients to develop a custom work plan to mitigate risks from the highest areas of exposure to the least. | |||||||||
At September 30, 2013, the Company had accumulated a total of $1,011,068 in capitalized costs related to the development of the Visualizer suite and the other functionality which was included as software on the accompanying consolidated balance sheet. As of September 30, 2013, we had amortized $64,137 of the capitalized software after the general release on July 15, 2013 for the Visualizer project. | |||||||||
At the end of September 2013, the Company re-evaluated the capitalized research and development costs for the Visualizer software suite. The evaluation was based in part on the lack of cash flow and customer demand in ICD Visualizer after its general acceptance release date of July 15, 2013. In addition, the Company also considered its going concern risk and cash liquidity concerns that restrain the ability to make capital investments in research and development to complete existing products in the pipeline as the available cash is needed to fund normal operating expenses. As a result of this evaluation, the Company recorded a loss of $946,931 that is presented as a line item entitled “asset impairment” on the consolidated statement of operations. The Company will continue to use the Visualizer suite of functionality as internally developed software to generate customized reports for revenue integrity auditing and compliance services but the Company no longer intends to market or sell internally developed software on a stand alone basis. | |||||||||
Amortization expense for software, for the years ended December 31, 2013 and 2012 was $64,137 and $0, respectively. Software consisted of the following at December 31, 2013 and December 31, 2012: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Software | $ | 1,011,068 | $ | 258,933 | |||||
Accumulated amortization | (64,137 | ) | - | ||||||
Asset Impairment | (946,931 | ) | - | ||||||
Software, net | $ | - | $ | 258,933 | |||||
Lines_of_Credit
Lines of Credit | 12 Months Ended |
Dec. 31, 2013 | |
Lines of Credit [Abstract] | ' |
LINES OF CREDIT | ' |
6 – LINES OF CREDIT | |
Bank | |
The Company has a $150,000 revolving line of credit with a bank (the “Line of Credit”), effective in December 2008, for its general working capital needs. The line contains certain restrictive covenants including restrictions on granting liens on the Company's assets. The line is also guaranteed by certain officers of the Company. The line of credit matured on December 18, 2009 and was renewed and was due on December 18, 2012. The revolving line was modified on December 18, 2012 so that the loan no longer has an expiration date of December 18, 2012, but instead, a final maturity date of December 18, 2018. The interest rate per year is equal to the bank’s prime rate plus 6.50%. The bank’s prime rate of interest at December 31, 2012 was 3.25%. The balance due at December 31, 2012 was $150,000 with $25,000 reflected as a current portion. | |
On September 19, 2013, the Company converted the Line of Credit to a term note. The Company consolidated the Line of Credit and an existing bank term loan into a consolidated term loan with a monthly payment in the amount of $3,209 with a new maturity date of September 19, 2017. At the time of the conversion the line of credit had an outstanding balance in the amount of $133,334. (See Note 7) | |
Dell | |
The Company maintains a Dell Business Credit line of up to $50,000. Interest rates vary under the line based on difference types of payment plans. The balance due under the line as of December 31, 2013 and 2012 was $44,692 and $25,000, respectively, which is included in line of credit, current portion in the accompanying consolidated financial statements. |
Long_Term_Debt_and_Notes_Payab
Long Term Debt and Notes Payable | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long Term Debt and Notes Payable [Abstract] | ' | ||||||||
LONG TERM DEBT AND NOTES PAYABLE | ' | ||||||||
7 – LONG TERM DEBT AND NOTES PAYABLE | |||||||||
Long Term Debt: | |||||||||
Long Term debt consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Bank term loan | $ | 141,857 | $ | 38,897 | |||||
Mortgage loan | 174,580 | 180,073 | |||||||
316,437 | 218,970 | ||||||||
Less current portion | (44,084 | ) | (37,513 | ) | |||||
Total long term portion | $ | 272,353 | $ | 181,457 | |||||
On October 21, 2011, the Company entered into a bridge loan agreement (the “Bridge Loan”) in the amount of $250,000 with a third party lender. The primary purpose was to repay an initial bridge loan and to pay for certain professional fees in connection with the Merger. The Bridge Loan incurred interest at the rate of 12% per annum which was due only in the event the Merger did not materialize. Upon the closing of the Merger, all interest accrued but not paid was deemed cancelled and paid in full and the entire principal amount of the note was automatically converted into an aggregate of 1,343,749 shares of common stock at a conversion price of $0.19 per share which is equal to a discount of 25% of to the purchase price. The loan was converted to stock in February 2012 (See Note 12). | |||||||||
In March 2009, HRAA entered into a term loan with Bank of America which proceeds were used for general working capital needs (the “Term Loan”). The Term Loan was established as a result of a conversion of a revolving line of credit. The Term Loan is personally guaranteed by Robert Rubinowitz and Andrea Clark and contains certain restrictive covenants including restrictions on granting liens on the Company's assets. The Term Loan matured in five years and incurred interest at the rate of 6.75% per annum. The balance due as of December 31, 2012 was approximately $39,000 and is allocated to current and long-term debt line items on the consolidated balance sheet. | |||||||||
On September 19, 2013, HRAA consolidated the above March 2009 Term Loan with the Line of Credit. (See Note 6) The outstanding balance for the Term Loan and the Line of Credit prior to consolidation was $20,697 and $133,334, respectively. The new consolidated term loan is personally guaranteed by Robert Rubinowitz and Andrea Clark and contains restrictive covenants, which among other things, prohibit the Company from granting any security interests or liens on the assets of the Company. Payments of principal and interest are approximately $3,200 per month. The new consolidated term loan matures on September 19, 2017 and incurs interest at a rate per year equal to the bank’s prime rate plus 3.5%. The balance due as of December 31, 2013 for the new consolidated term loan was approximately $142,000 and is included in the accompanying consolidated balance sheet. | |||||||||
The Company has a mortgage related to certain real estate, which houses the Company’s main offices in Plantation, Florida. The loan originated July 2010 in the amount of $192,500 and matures July 2020, when a balloon principal payment of approximately $129,000 becomes due. The loan is collateralized by the real estate and is personally guaranteed by Robert Rubinowitz, a stockholder of the Company. Interest is fixed at 6.625% for the first five years of the loan, and converts to an adjustable rate for the second five years at the Federal Funds Rate plus 3.25%, as established by the United State Federal Reserve. The balance under this mortgage loan as of December 31, 2013 and 2012 was approximately $175,000 and $180,000, respectively and is allocated to the current and long term debt line items in the accompanying consolidated balance sheet. Monthly payments for principal and interest are approximately $1,500 until July 2015, when the total monthly payment may vary due to the adjustable interest rate provision in the note. | |||||||||
Although the Company is current in its payments on these loans, management believes the Company may be in default of certain non-financial covenants. The banks have not notified the Company of any default. | |||||||||
Notes payable: | |||||||||
In December 2012, the Company entered into loan agreements with various investors and issued promissory notes upon receipt of $815,000. The loan agreements have an interest rate of 12% per annum. Principal and interest is payable over 26 months. Additionally, in connection with the financing, the Company issued 2,375,000 shares of common stock to the lenders as loan fees. The fair value per share of $0.28 (based on recent cash sales prices) was used to compute the relative fair value of the shares in accordance with ASC 470-20 which totaled $343,500 which was recorded as a debt discount with a credit to additional paid-in-capital and such discount is being amortized over the term of the loans. The unamortized discount was $114,958 and $338,692 as of December 31, 2013 and 2012, respectively. | |||||||||
In January and February 2013, the Company entered into loan agreements and promissory notes with various investors upon receipt of $1,220,000. The loan agreements have an interest rate of 12% per annum. Principal and interest is payable over 26 months. Additionally, in connection with the financing, the Company issued 5,575,000 shares of common stock to the lenders as loan fees (See Note 12). The fair value per share of $0.28 (based on recent cash sales prices) was used to compute the relative fair value of the shares in accordance with ASC 470-20 which totaled approximately $679,500 which was recorded as a debt discount with a credit to additional paid-in-capital and such discount is being amortized over the term of the loans. The unamortized discount was $350,522 as of December 31, 2013 and the Company recorded $5,850 in accrued interest. | |||||||||
Of the eighteen above-referenced loans, (i) thirteen of the loans are secured by contract accounts receivable of a Company customer which security interest is subordinate to the lender under the factoring agreement, and (ii) one of the loans is secured by the stock of HRAA. | |||||||||
The Company began paying principal and interest on the above-mentioned notes in early 2013 in accordance with the payment terms. In August 2013, the Company converted $402,083 in investor promissory notes for five (5) individuals into one million six hundred eight thousand three hundred and thirty three (1,608,333) shares of common stock at a conversion price of $0.25 per share. As a result of the conversion the Company expensed $128,452 of the unamortized discount as interest. Additionally, the Company recorded a loss on conversion of $112,584 as a result of issuing stock at a discount from fair market value. | |||||||||
Notes payable consisted of the following: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Principal amount of notes payable | $ | 877,500 | $ | 815,000 | |||||
Unamortized discount | (465,480 | ) | (338,692 | ) | |||||
Notes payable, net of discount | 412,020 | 476,308 | |||||||
Less current portion | (380,326 | ) | (202,557 | ) | |||||
Total Long term portion | $ | 31,694 | $ | 273,751 | |||||
As of December 31, 2013, principal payments required on long-term debt and notes payable over the next five years and thereafter are as follows: | |||||||||
2014 | $ | 786,584 | |||||||
2015 | 179,084 | ||||||||
2016 | 44,084 | ||||||||
2017 | 31,248 | ||||||||
2018 | 5,576 | ||||||||
Thereafter | 147,361 | ||||||||
Total | $ | 1,193,937 | |||||||
Factoring_Agreement
Factoring Agreement | 12 Months Ended |
Dec. 31, 2013 | |
Factoring Agreement [Abstract] | ' |
FACTORING AGREEMENT | ' |
8 – FACTORING AGREEMENT | |
In June 2012, the Company entered into a one-year factoring agreement with a finance company. The agreement automatically renews annually unless terminated by either party. Under the terms of the agreement, the Company, at its discretion, assigns the collection rights of its receivables to the finance company in exchange for an advance rate of 85% of face value. The assignments are transacted with recourse only at the option of the finance company in the event of non-payment. The Company's obligations under the factoring agreement are secured by substantially all assets of the Company. In accordance with ASC 860 "Transfers and Servicing" regarding transfers of receivables with recourse, this factoring arrangement is accounted for as a secured financing. For the year ended December 31, 2013 and 2012, the Company had factored approximately $4,693,000 and $3,850,000, respectively, of receivables and had received cash advances of approximately $4,708,000 and $3,272,000, respectively. Outstanding receivables purchased by the factor as of December 31, 2013 and 2012 were approximately $638,000 and $950,000, respectively, and are included in accounts receivable in the accompanying consolidated balance sheet, and the secured loan due to the lender was approximately $543,000 and $827,000 at December 31, 2013 and 2012, respectively. Factor fees were approximately $138,000 and $119,000 for the year ended December 2013 and 2012, respectively, and are included in interest expenses. (See Note 3) | |
Although the Company is current in its financial obligations under this factoring agreement, management believes the Company may be in default under the solvency provision and certain non-financial default provisions. The Company has not been notified of any default by the factor company. | |
Convertible_Promissory_Notes_a
Convertible Promissory Notes and Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Convertible Promissory Notes and Fair Value Measurements [Abstract] | ' | ||||||||||||||||
CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE MEASUREMENTS | ' | ||||||||||||||||
9 – CONVERTIBLE PROMISSORY NOTES AND FAIR VALUE MEASUREMENTS | |||||||||||||||||
In December 2011, the Company received a deposit of $170,000. This deposit was an advance on three convertible promissory notes totaling approximately $314,000 signed on February 2, 2012, automatically convertible into future securities sold at 100% of the sale price and non-interest bearing. These loans qualify as stock settled debt under ASC 480 with a fixed monetary amount of $314,000. These loans were to mature in August 2012 but were converted into common stock in February 2012. (See Note 12) | |||||||||||||||||
In May 2012, the Company received $300,000 related to five convertible notes. The term of each note was 12 months. Interest was computed at 6% based on a 360 day year and is payable on the maturity date, and the conversion rate was $0.10 per share. Interest was due and payable only if the notes were repaid in cash. These notes were converted to common stock at their contractual conversion rate of $0.10 per share on July 15, 2012. (See Note 12) At the note origination date, the Company recorded a debt discount for the beneficial conversion feature value related to the above referenced convertible note in the amount of $300,000, which is based on the intrinsic value between the fair market value of the Company’s stock and the conversion price. The discount is being amortized to interest expense over the term of the note. In accordance with ASC 470-20-40, upon conversion, the remaining unamortized portion of the beneficial conversion feature value was expensed. | |||||||||||||||||
On October 7, 2013, the Company entered into a one-year original issue discount (OID) convertible promissory note with warrants in the amount of $280,000 with Tonaquint, Inc., a Utah corporation (“Tonaquint”). The purchase price for this note and the warrants was $250,000. The Company had the option to repay this note at any time on or before the date that is sixty (60) days from October 7, 2013. The Company recorded a debt discount for the OID of $25,000 and expensed $5,000. The debt was treated as stock settled debt where a put premium of $120,000 was to be recorded over the six-month period to the first conversion date. Tonaquint had the right at any time after the date that is six (6) months from the effective date, at its election, to convert all or any part of the outstanding balance of the note into shares of fully paid and non-assessable common stock of the company based upon a formula that is seventy (70%) percent of the average of the two (2) lowest intra-day trade prices in the fifteen (15) trading days immediately preceding the conversion (the “Conversion Formula”). Tonaquint was granted the right to purchase at any time on or after October 7, 2013 until the date which is the last calendar day of the month in which the fifth anniversary of the “issue date” occurs, 350,000 fully paid and non-assessable shares of the Company’s common stock, par value $.001 per share, as such number may be the adjusted from time to time pursuant to the full ratchet price protection terms and conditions of the warrant. The initial “exercise price” is $0.40 per share of common stock. On November 12, 2013, the note was paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants pursuant to the Securities Purchase Agreement, dated November 12, 2013, between the Company and the investors named therein. (See Note 12) As mentioned above, the Company issued 350,000 free standing and detachable warrants related to the note. The Company accounted for these warrants issued in accordance with the GAAP accounting guidance under ASC 815 applicable to derivative instruments, which requires every derivative instrument within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. Based on this guidance, the Company determined that the Company's warrants do not meet the criteria for classification as equity due to the price protection provisions. Accordingly, the Company classified the warrants as current liabilities. The warrants are subject to re-measurement at each balance sheet date, with any change in fair value recognized as a component of other income (expense), net in the statements of operations. We will estimate the fair value of these warrants at the respective balance sheet dates, based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates and expected dividends on and expected volatility of the price of the underlying common stock. (See below for December 31, 2013 valuations). As a result of the November 12, 2013 financing and the full ratchet protection, the exercise price of the warrants was reduced to $0.20 per share and 350,000 additional warrants were issued to Tonaquint. | |||||||||||||||||
On October 17, 2013, the Company entered into a one-year OID convertible promissory note in the amount of $142,500 with Tonaquint. The purchase price for this note and the warrant was $125,000. The Company had the option to repay this note at any time on or before the date that is sixty (60) days from October 17, 2013. The Company recorded a debt discount for the OID of $12,500 and expensed $5,000. The debt was treated as stock settled debt where a put premium of $61,071 was to be recorded over the six-month period to the first conversion date. Tonaquint had the right at any time after the date that is six (6) months from the effective date, at its election, to convert all or any part of the outstanding balance of the note into shares of fully paid and non-assessable common stock of the Company based upon the Conversion Formula. Tonaquint was granted the right to purchase at any time on or after October 17, 2013 until the date which is the last calendar day of the month in which the fifth anniversary of the “issue date” occurs, 175,000 fully paid and non-assessable shares of the Company’s common stock, as such number may be the adjusted from time to time pursuant to the full ratchet price protection terms and conditions of the warrant. The initial “exercise price” is $0.40 per share of common stock. On November 12, 2013, the note was paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants pursuant to the Securities Purchase Agreement, dated November 12, 2013, between the Company and the investors named therein. (See Note 12) As mentioned above, the Company issued 175,000 free standing and detachable warrants related to the note. The Company accounted for these warrants issued in accordance with the US GAAP accounting guidance under ASC 815 applicable to derivative instruments, which requires every derivative instrument within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. Based on this guidance, the Company determined that the Company's warrants do not meet the criteria for classification as equity due to the price protection provisions. Accordingly, the Company classified the warrants as current liabilities. The warrants are subject to re-measurement at each balance sheet date, with any change in fair value recognized as a component of other income (expense), net in the statements of operations. We will estimate the fair value of these warrants at the respective balance sheet dates, based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates and expected dividends on and expected volatility of the price of the underlying common stock. (See below for December 31, 2013 valuations) As a result of the November 12, 2013 financing and the full ratchet anti-dilution provision, the exercise price of the warrants was reduced to $0.20 per share and 175,000 additional warrants were issued to Tonaquint. | |||||||||||||||||
At the time the above two notes were paid off, the Company had accreted $33,364 of the put premium and according recognized a gain on extinguishment of $33,364 relating to this put premium. Further, as only $3,459 of the discount was amortized, the Company recorded a loss on early debt extinguishment of $34,041. | |||||||||||||||||
Fair Value Measurements – Derivative liability: | |||||||||||||||||
The accounting guidance for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting guidance established a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | |||||||||||||||||
Assets and liabilities measured at fair value on a recurring and non-recurring basis consisted of the following at December 31, 2013: | |||||||||||||||||
Carrying | Fair Value Measurements at December 31, 2013 | ||||||||||||||||
Value at | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Warrant derivative liability (29,940,000 warrants - See Note 12) | $ | 5,406,000 | $ | - | $ | - | $ | 5,406,000 | |||||||||
The following is a summary of activity of Level 3 liabilities for the period ended December 31, 2013: | |||||||||||||||||
Balance at December 31, 2012 | $ | - | |||||||||||||||
Reclassification of warrant liability | 5,771,255 | ||||||||||||||||
Change in fair value | (365,255 | ) | |||||||||||||||
Balance December 31, 2013 | $ | 5,406,000 | |||||||||||||||
Changes in fair value of the warrant derivative liability is included in other income (expense) in the accompanying consolidated statements of operations. | |||||||||||||||||
The Company estimates the fair value of the warrant liability utilizing the Binomial Lattice model, which is dependent upon several variables such as the expected term (based on contractual term), expected volatility of our stock price over the expected term (based on historical volatility), expected risk-free interest rate over the expected term, and the expected dividend yield rate over the expected term. The Company also used the Black-Scholes pricing model as a comparison to the Binomial Lattice method and the results were similar. The Company believes this valuation methodology is appropriate for estimating the fair value of the warrant derivative liability. The following table summarizes the assumptions the Company utilized to estimate the fair value of the embedded conversion option at December 31, 2013: | |||||||||||||||||
Assumptions | December 31, | ||||||||||||||||
2013 | |||||||||||||||||
Expected term | 1 | ||||||||||||||||
Expected Volatility | 116 | % | |||||||||||||||
Risk free rate | 1.2 | % | |||||||||||||||
Dividend Yield | 0 | % | |||||||||||||||
There were no changes in the valuation techniques during 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||
COMMITMENTS AND CONTINGENCIES | ' | ||||||||
10 – COMMITMENTS AND CONTINGENCIES | |||||||||
Commitments | |||||||||
Leases: | |||||||||
Until August 2012, the Company leased certain office equipment under non-cancelable operating lease arrangements. Monthly payments under the lease agreements were approximately $600 per month. The lease expired in August 2012. In September 2012, the Company started a non-cancellable operating lease for office equipment. The lease term is 5 years. Lease payments during the five years are approximately $560 per month. | |||||||||
On September 1, 2011, the Company entered into a commercial lease agreement for additional office space. The lease term is one year with five successive one-year renewal options. Starting September 1, 2013, the lease has been renewed for one year with a fixed payment of approximately $5,800 per month. | |||||||||
Future minimum lease payments under these leases are as follows: | |||||||||
Years Ending December 31: | |||||||||
2014 | $ | 53,246 | |||||||
2015 | 6,720 | ||||||||
2016 | 6,720 | ||||||||
2017 | 5,040 | ||||||||
Thereafter | - | ||||||||
Total | $ | 71,726 | |||||||
Capital Leases: | |||||||||
HRAA leases its property and equipment from Dell Financial Services L.L.C. under several capital leases. The economic substance of the leases is that the Company is financing the acquisition of the assets through the lease and accordingly, it is recorded in the Company’s assets and liabilities. | |||||||||
The following is an analysis of the leased assets included in property and equipment: | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Equipment | $ | 79,210 | $ | 41,969 | |||||
Less accumulated depreciation | (33,607 | ) | (5,926 | ) | |||||
Total | $ | 45,603 | $ | 36,043 | |||||
The lease agreements contain bargain purchase options at the end of the lease terms. The total amount due at December 31, 2013 is $58,876 of which $32,768 is included in short term liabilities. | |||||||||
The following is a schedule by years of future minimum payments required under the lease together with their present value as of December 31, 2013: | |||||||||
Year Ending December 31: | |||||||||
2014 | $ | 32,768 | |||||||
2015 | 22,527 | ||||||||
2016 | 3,581 | ||||||||
Total minimum lease payments | 58,876 | ||||||||
Less amount representing interest | (9,087 | ) | |||||||
Present value of minimum lease payments | $ | 49,789 | |||||||
Amortization of assets held under capital leases is included with depreciation expense and is approximately $24,200 and $9,400 for the years ended as of December 31, 2013 and 2012, respectively. | |||||||||
Settlement Agreements: | |||||||||
On May 8, 2012, the Company terminated the employment of its Chief Marketing Officer (“CMO”) and subsequently amended its complaint to enforce certain non-competition clauses contained in the employment agreement. The Company sought a declaration of its obligations to pay severance under the terms of its then-existing employment agreement with the CMO. | |||||||||
On July 9, 2012, the Company and the former CMO entered into a settlement agreement to resolve two pending lawsuits arising out of the termination of his employment agreement. The lawsuit was initiated by the Company against the former CMO in the United States District Court for the Southern District of Florida. In addition, the former CMO sued the Company in the United States District Court of the District of Colorado. | |||||||||
Pursuant to the settlement agreement, the former CMO agreed to abolish all claims and lawsuits against the Company and its CEO and COO and resigned any and all positions which he had or presently may have had with the Company. As part of the settlement agreement, the Company agreed to make eleven (11) payments totaling $232,500 pursuant to the terms of his prior employment agreement. Additionally, the CMO agreed to transfer his 3,299,802 shares to an officer of the Company in 2012. These payments commenced July 2012 and the final payment in the amount of $23,056 was disbursed on July 29, 2013. In addition, the Company has agreed to abolish all claims and lawsuits against the former CMO. The settlement agreement has a seven (7) day grace period for payments to the former CMO, after which time, he may seek court intervention to enforce the payments. Robert Rubinowitz, the former chief operating officer and Andrea Clark, the chief visionary officer, have personally guaranteed the payments of the settlement agreement. As a result of the settlement agreement, both parties dismissed their respective filings and have agreed to not enter any more lawsuits concerning the scope of this matter. | |||||||||
On March 14, 2013, the Company and its former regional sales manager entered into a settlement agreement to resolve one pending lawsuits arising out of the termination of his employment. The lawsuit was initiated by the former regional sales manager against the Company in the United States District Court for the city of Denver, Colorado. Pursuant to the settlement agreement, the former regional sales manager agreed to abolish all claims and lawsuits against the Company. As part of the settlement agreement, the Company agreed to make a payment totaling $11,000 pursuant to the terms of the settlement agreement and general release of all claims executed by both parties. As of December 31, 2013 the Company had accrued $7,000 for settlement payable. | |||||||||
Employment Agreements: | |||||||||
On October 2, 2013 the Company entered into employment agreements with four (4) of its officers and directors. The employment agreements provide for severance benefits, change in control provisions, accrued but unpaid wages and bonuses, accrued but unpaid vacation time, incentive awards, equity and stock options, and other benefits. These four (4) employment agreements were amended on November 12, 2013. As of December 31, 2013, no performance bonuses have been earned. The Company owed Andrea Clark, its former chief executive officer, $75,000 pursuant to the Merger Agreement, which was accrued in the accompanying consolidated financial statements as due to Ms. Clark through September 30, 2013. The balance due to Ms. Clark was formalized in a promissory note in November 1, 2013. In addition, the Company owed Mr. Rubinowitz, its former president, $40,000 pursuant to a promissory note, dated November 1, 2013, for funds advanced in September 2013. On November 12, 2013, the promissory notes to Ms. Clark and Mr. Rubinowitz were paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants to purchase shares of the Company’s common stock pursuant to the Securities Purchase Agreement, dated November 12, 2013, between the Company and the investors named therein. | |||||||||
Contingencies | |||||||||
From time to time, the Company is involved in litigation matters relating to claims arising from the ordinary course of business. While the results of such claims and legal actions cannot be predicted with certainty, the Company’s management does not believe that there are claims or actions, pending or threatened against the Company, the ultimate disposition of which would have a material adverse effect on our business, results of operations, financial condition or cash flows. | |||||||||
On March 26, 2014, the Company notified Dean Boyer, its chief technology officer, that the Company was terminating his employment with the Company as well as that certain employment agreement with the Company dated October 1, 2013, as amended on November 13, 2013, effective March 31, 2014. On March 28, 2014, the Company received a letter from Mr. Boyer’s counsel demanding payment of $421,062.53 as severance in connection with the termination of Mr. Boyer’s employment agreement. On April 7, 2014, the Company received an additional letter from Mr. Boyer’s counsel demanding an additional $13,370.21 for accrued but unused vacation pay. The Company intends to dispute the amounts claimed to be owed to Mr. Boyer. |
Stock_Options_and_Warrants
Stock Options and Warrants | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Stock Options and Warrants [Abstract] | ' | |||||||||||||
STOCK OPTIONS AND WARRANTS | ' | |||||||||||||
11 – STOCK OPTIONS AND WARRANTS | ||||||||||||||
Share Based Compensation | ||||||||||||||
The Company is in the process of establishing a non-qualified stock option plan. In advance of the actual establishment of the plan the Company has granted a total of one million (1,000,000) stock options to an officer. The grant date is that which an employer and its employee reach a mutual understanding of the key terms and conditions of a share-based payment arrangement. This is the date on which the employer becomes contingently obligated to issue equity instruments or transfer assets to the employee who renders the requisite service. The Company is obligated for this grant as adoption of a stock option plan and board approval is considered a mere formality. | ||||||||||||||
Stock Options | ||||||||||||||
During the year ended December 31, 2013, the Company recorded pre-tax compensation expense of $14,822 related to the Company’s 1,000,000 options as discussed above. As of December 31, 2013, there was approximately $206,300 of unrecognized compensation expense related to stock options, which will be recognized over the weighted-average remaining requisite service period of 1.9 years. There were no exercises of stock options for the year ended December 31, 2013. | ||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The 1,000,000 options were valued at $221,121. The estimated value of stock options granted during the year ended December 31, 2013 was $0.22 per share, using the following assumptions: | ||||||||||||||
2013 | ||||||||||||||
Dividend yield (1) | 0 | % | ||||||||||||
Expected volatility (2) | 116 | % | ||||||||||||
5 Year Bond interest rate (3) | 1.2 | % | ||||||||||||
Expected life (4) | 6 | |||||||||||||
(1) Represents cash dividends paid as a percentage of the share price on the date of grant. | ||||||||||||||
(2) Based on historical volatility of the Company’s common stock over the expected life of the options. | ||||||||||||||
(3) Represents the U.S. Treasury rates over maturity periods matching the expected term of the options at the time of grant. | ||||||||||||||
(4) The period of time that options granted is expected to be outstanding based upon the simplified method. | ||||||||||||||
The following table summarizes stock option activity for the year ended December 31, 2013: | ||||||||||||||
Options | Shares | Weighted- | Weighted- | Aggregate | ||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value ($000) | ||||||||||||
Price | Contractual | |||||||||||||
Term | ||||||||||||||
Outstanding at January 1, 2013 | - | - | ||||||||||||
Granted | 1,000,000 | 0.26 | * | $ | - | |||||||||
Exercised | - | - | ||||||||||||
Forfeited or expired | - | - | ||||||||||||
Outstanding at December 31, 2013 | 1,000,000 | $ | 0.26 | * | $ | - | ||||||||
Exercisable at December 31, 2013 | - | - | - | - | ||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the fourth quarter of 2013 and the exercise price, multiplied by the number of in-the-money options). | ||||||||||||||
* These 1,000,000 options were granted without a specified expiration term. | ||||||||||||||
Warrants | ||||||||||||||
2013 | ||||||||||||||
In connection with the promissory notes issued to Tonaquint on October 7, 2013 and October 17, 2013, the Company issued 350,000 and 175,000 warrants, respectively. (See Note 9) As a result of the Series A Preferred Stock and warrant sale on November 12, 2013, the exercise price of both the 350,000 warrants and 175,000 warrants was reduced to $0.20 per share and an additional 525,000 warrants were issued to Tonaquint pursuant to full ratchet anti-dilution provisions. | ||||||||||||||
On November 12, 2013 and in connection with the Series A Preferred Stock offering, the Company issued 27,000,000 warrants to investors and 1,890,000 warrants were issued as a fee to the placement agent all at an exercise price of $0.30 per share. (See Note 12) | ||||||||||||||
Warrant activity for the year ended December 31, 2013 is as follows: | ||||||||||||||
Number of | Weighted | |||||||||||||
Warrants | Average | |||||||||||||
Exercise Price | ||||||||||||||
Outstanding at December 31, 2012 | - | $ | - | |||||||||||
Granted | 29,415,000 | 0.30 | ||||||||||||
Anti-dilution issuance | 525,000 | 0.20 | ||||||||||||
Exercised | - | - | ||||||||||||
Forfeited | - | - | ||||||||||||
Expired | - | - | ||||||||||||
Outstanding at December 31, 2013 | 29,940,000 | $ | 0.30 | |||||||||||
Exercisable at December 31, 2013 | 29,940,000 | $ | 0.30 | |||||||||||
Aggregate intrinsic value | $ | 52,500 | ||||||||||||
All warrants were issued with an exercise term of 5 years. | ||||||||||||||
Warrants outstanding have a weighted average remaining contractual life of 4.87 years as of December 31, 2013. |
Stockholders_Equity_Deficit
Stockholder's Equity (Deficit) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Stockholder's Equity (Deficit) [Abstract] | ' | ||||
STOCHOLDER'S EQUITY (DEFICIT) | ' | ||||
12 – STOCKHOLDER’S EQUITY (DEFICIT) | |||||
Recapitalization and Deemed Common Stock Issuance | |||||
On February 10, 2012, the Company entered into the Merger Agreement with HRAA and Acquisition Sub which was treated for accounting purposes as a reverse recapitalization with HRAA considered the accounting acquirer since the stockholders of HRAA obtained voting and management control of the Company. Each share of HRAA's common stock was exchanged for the right to receive approximately 1,271 shares of HRAH’s common stock. Before entry into the Merger Agreement, no material relationship existed between HRAH or Acquisition Sub and HRAA. As part of the recapitalization, the Company is deemed to have issued 13,499,226 shares of common stock, which represents the shares of common stock outstanding in HRAH just prior to the Merger. There were no recorded assets or liabilities in the Company just prior to the Merger. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the recapitalization. | |||||
Forward Stock Split | |||||
On April 13, 2012, the Company’s board of directors authorized a 12.98 for 1 split of its common stock to stockholders of record as of April 13, 2012. Shares resulting from the split were issued on April 26, 2012. In connection therewith, the Company transferred $32,747 from additional paid in capital to common stock, representing the par value of additional shares issued. As a result of the stock split, fractional shares were rounded up. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the stock split. | |||||
Capitalization Changes | |||||
On October 8, 2013, the Company amended its articles of incorporation with the Nevada Secretary of State by increasing the number of authorized shares of common stock from 75,000,000 to 500,000,000. This amendment has been retroactively disclosed on the balance sheet. | |||||
On October 17, 2013, the Company amended its articles of incorporation with the Nevada Secretary of State to authorize 25,000,000 shares of blank check preferred stock with the authority of the Board to determine the designations, rights, preferences, privileges, limitations and restrictions.(See temporary equity below) | |||||
Common Stock | |||||
2012:00:00 | |||||
On February 10, 2012, upon closing of the Merger Agreement, a $250,000 convertible bridge loan was automatically converted into an aggregate of 1,343,749 shares of common stock at the contractual conversion price of $0.19 per share. | |||||
On February 10, 2012, concurrently with the closing of the reverse merger, the Company sold 1,410,874 shares of the Company’s common stock for gross proceeds of $350,000 at a purchase price of $0.25 per share in a private placement offering. | |||||
On February 10, 2012 concurrently with the closing of the reverse merger, convertible promissory notes totaling $313,908 obtained on February 2, 2012 were converted into 1,265,381 shares of common stock or $0.25 per share based on the contractual conversion rate. | |||||
In April 2012, the Company sold 1,394,909 shares of common stock for approximately $349,000 at a price per share of $0.25. | |||||
In May 2012, the Company recorded $300,000 to additional paid-in capital for the beneficial conversion value of convertible debt (See Note 9). | |||||
In July 2012, pursuant to a settlement agreement (See Note 10), the Company agreed to pay $232,500 and 3,299,802 common shares were returned to the Company. The Company charged equity for the $232,500 in accordance with the settlement provisions of ASC 718 “Stock Compensation”. | |||||
In July 2012, in connection with the settlement agreement discussed in Note 10, upon return of the 3,299,802 shares to the transfer agent, the shares were simultaneously reissued to delegees of Andrea Clark, however, such shares were unvested and subsequently cancelled as a null and void issuance. | |||||
On July 15, 2012, the holders of the five convertible notes issued by the Company in May 2012 exercised their rights under the agreement and converted $300,000 into 3,000,000 shares of common stock at the contractual conversion rate of $0.10 per share. | |||||
In August 2012, the Company sold 77,743 shares of common stock for $22,000 at a price per share of $0.28. | |||||
During the period from October 2012 through December 2012, the Company sold 1,468,786 shares of common stock for $335,600 at prices per share between $0.20 and $0.28. | |||||
In December 2012, the Company issued 2,375,000 shares of common stock in connection with a financing transaction as more fully described in Note 6. | |||||
During 2012, the Company incurred approximately $326,000 in offering costs that were charged to additional paid-in capital. | |||||
2013:00:00 | |||||
On January 15, 2013, the Company sold 46,429 shares of common stock for $13,000 at a price per share of $0.28. | |||||
On January 31, 2013, the Company issued 50,266 shares of common stock as compensation to an employee for services rendered through March 31, 2013. The shares were valued at $0.49 per share based on the quoted trading price per share or $24,630, which was expensed. | |||||
In February 2013, the Company issued 5,575,000 shares of common stock in connection with a financing transaction as more fully described in Note 7. | |||||
In March 2013, the Company entered into a one-year agreement with a consultant for 230,000 vested shares and cash consideration. The shares were valued on the agreement date, which was the measurement date at $0.35, based on the quoted trading price, and the $80,500 was recorded as a prepaid asset and is being expensed over the term of the contract. The shares were issued on April 1, 2013 to the consultant. | |||||
On April 1, 2013, the Company issued an aggregate of 54,847 shares of common stock as compensation to two employees for services rendered through March 31, 2013. The shares were valued at $0.40 per share based on recent cash sales by the Company or $21,939, which was expensed. | |||||
On May 19, 2013, the Company sold 625,000 shares of common stock for $250,000 at a price per share of $0.40. | |||||
On May 24, 2013, the Company sold 125,000 shares of common stock for $50,000 at a price of $0.40 per share. | |||||
On June 21, 2013, the Company sold 750,000 shares of common stock for $300,000 at a price per share of $0.40. | |||||
On June 27, 2013, the Company entered into a financial advisor and agent placement agreement whereby the Company had the option to pay in cash or issue 100,000 shares of common stock. The shares were valued on the agreement date, which was the measurement date at $0.51 per share based on the quoted trading price, and the $51,000 is being expensed over the term of the contract. The Company issued the shares in September 2013. | |||||
On July 8, 2013, the Company sold 500,000 shares of common stock for $200,000 at a price per share $0.40. | |||||
On August 7, 2013, the Company sold 500,000 shares of common stock for $200,000 at a price per share $0.40. | |||||
On August 21, 2013, the Company sold 100,000 shares of common stock for $25,000 at a price per share of $0.25. | |||||
On August 27, 2013, the Company issued 400,000 shares of common stock for $100,000 at a price per share of $0.25. | |||||
On August 30, 2013, the Company issued 400,000 shares of common stock for $100,000 at a price per share of $0.25 per share. | |||||
On August 22, 2013 and August 28, 2013, the Company converted $402,083 in unsecured promissory notes for five (5) individuals into one million six hundred eight thousand three hundred and thirty three (1,608,333) shares of common stock at a conversion price of $0.25 per share. The shares of common stock were valued at $514,666 based on the quoted trading price of $0.32 and accordingly, the Company recorded a loss on conversion of $112,583. | |||||
In September 2013, the Company issued 95,052 shares of common stock as compensation to three employees for services rendered through June 30, 2013. The shares were valued at $0.48 per share based on the quoted trading price per share or $45,625, which was expensed. | |||||
On September 6, 2013, the Company entered into a three-year agreement with a company to provide consulting and recruiting services. Upon execution of the agreement, the Company issued 50,000 shares of common stock valued at $0.30 per share based on the quoted trading price, in consideration of their services to be rendered for the first year of the agreement. The $15,000 is being expensed over 12 months. | |||||
On September 9, 2013, the Company entered into a one year consulting agreement with a stockholder, Mr. Michael Ciprianni, to provide certain consulting services related to the Company’s business in exchange for four million one hundred twenty five thousand (4,125,000) shares of common stock in consideration of the services to be rendered. The shares were valued on the agreement date, which was the measurement date at $0.28 per share based on the quoted trading price, and the $1,155,000 is being expensed over the term of the contract. | |||||
On September 30, 2013, the Company issued 187,500 shares of common stock as compensation to two employees for services rendered through September 30, 2013. The shares were valued at $0.23 per share based on the quoted trading price per share or $43,125, which was expensed. | |||||
On October 9, 2013, the Company issued 100,000 shares of common stock as compensation to a consultant to provide services. The shares were valued at $0.24 per share based on the quoted trading price per share or $24,000, which was recorded as prepaid and is being expensed over the term of the agreement, which is six (6) months. | |||||
On December 31, 2013, in accordance with a 2012 employment agreement, the Company issued 75,000 shares of common stock as compensation to an employee for services rendered through December 31, 2013. The shares were valued at $0.25 per share based on the quoted trading price per share or $18,750, which was expensed. | |||||
Temporary Equity - Preferred Stock | |||||
On November 12, 2013, the Company entered into a Securities Purchase Agreement for the sale of Series A 8% Redeemable Convertible Preferred Stock (“Series A stock”) and warrants to purchase shares of the Company’s common stock. The Company sold 13,500,000 of Series A stock and warrants to purchase 27,000,000 shares of the Company’s common stock for gross proceeds of $5,400,000. The net proceeds to the Company after offering costs is $4,903,652. The Series A stock is convertible into common stock on a 2 for 1 basis and is redeemable by the Company, at the option of the investor, 48 months from November 12, 2013 at the stated value of $0.40 per share or a total of $5,400,000 plus accumulated but unpaid dividends, whether declared or not. Due to the redemption feature the Series A Stock is reflected as temporary equity at December 31, 2013 as follows: | |||||
Series A sale price | $ | 5,400,000 | |||
Less: Reclassification of warrant fair value to liability | (5,669,837 | ) | |||
Offering costs | (496,348 | ) | |||
Plus: Deemed dividend | 2,634,185 | ||||
Series A dividends | 60,000 | ||||
$ | 1,928,000 | ||||
The Company also issued warrants to purchase 1,890,000 shares of common stock to a placement agent. (See Note 11). | |||||
The Company recorded a beneficial conversion value for the preferred stock of approximately $2.6 million as an immediate charge to accumulated deficit as it is considered a constructive dividend to Series A preferred stockholders. As part of this equity financing transaction, the Company issued 27,000,000 five-year warrants (See Note 11) with immediate vesting rights to convert into common shares at an initial exercise price of $0.30 per share under price protection provisions. The warrants also contain cashless exercise provisions. Due to price protection provisions in the warrants, the Company will account for these warrants issued in accordance with the US GAAP accounting guidance under ASC 815 applicable to derivative instruments, which requires every derivative instrument within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. (See Notes 9 and 11) | |||||
In connection with the Securities Purchase Agreement, the Company entered into a registration rights agreement with the Purchasers, pursuant to which the Company agreed to register all of the shares of common stock underlying the Series A Preferred Stock and the shares of common stock underlying the Warrants on a registration statement on Form S-1 (the “Registration Statement”) to be filed with the SEC within 30 calendar days following the Closing Date (the “Filing Deadline”) and to use its best efforts to cause the Registration Statement to be declared effective under the Securities Act within 90 calendar days following the Filing Deadline. The Registration Statement was filed on December 11, 2013, as amended December 20, 2013 and declared effective on December 24, 2013. |
Concentrations
Concentrations | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Concentrations [Abstract] | ' | ||||
CONCENTRATIONS | ' | ||||
13 – CONCENTRATIONS | |||||
Sales to four (4) hospital customers represented approximately 60% of our revenues for the year ended December 31, 2013. We have direct relationships with the individual hospitals and the health systems. | |||||
Hospital Customer A | 42 | % | |||
Hospital Customer B | 6 | % | |||
Hospital Customer C | 6 | % | |||
Hospital Customer D | 6 | % | |||
Total | 60 | % | |||
Sales to thirteen (13) hospitals were approximately 89% of our revenues for the year ended December 31, 2012. | |||||
Five and four vendors represented approximately 56% and 67% of our outstanding accounts payable balance as of December 31, 2013 and December 31, 2012, respectively. | |||||
Four and one customers represented approximately 64% and 62% of our accounts receivable as of December 31, 2013 and December 31, 2012, respectively. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
INCOME TAXES | ' | ||||||||
14 – INCOME TAXES | |||||||||
The Company’s subsidiary, HRAA, elected to convert from a Subchapter S corporation for Federal income tax purposes to a C corporation effective October 21, 2011. Accordingly, HRAA’s income or losses are passed through to the stockholders of HRAA for the period January 1 to October 21, 2011. The Company will absorb the tax effects of any income or losses subsequent to the date of conversion to a C corporation and in future years. | |||||||||
The Company has incurred aggregate cumulative net operating losses of approximately $4,209,000 for C corporation income tax purposes through December 31, 2013. The net operating loss carries forward for income taxes, purposes and may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting in 2031 through 2033. Management believes that the realization of the benefits from these losses appears not more likely than not due to the Company’s limited operating history and continuing losses for income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management will review this valuation allowance periodically and make adjustments as warranted. | |||||||||
The Company’s income tax expense (benefit) differs from the “expected” tax expense for Federal income tax purposes computed by applying a Federal corporate tax rate of 34% to loss before income taxes as follows: | |||||||||
Year ended | Year ended | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
U.S. Federal "expected" income tax | $ | (1,860,902 | ) | $ | (495,540 | ) | |||
State income tax | (198,679 | ) | (52,906 | ) | |||||
Non-deductible beneficial conversion interest | - | 102,000 | |||||||
Stock compensation | 252,366 | 24,769 | |||||||
Change in fair value of warrant liability | (124,187 | ) | - | ||||||
Loss on extinguishment of debt | 49,852 | - | |||||||
Other | 23,585 | - | |||||||
Change in valuation allowance | 1,857,964 | 421,677 | |||||||
Total provision for income taxes | $ | - | $ | - | |||||
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2013 and 2012 are as follows: | |||||||||
2013 | 2012 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forward | $ | 1,593,719 | $ | 586,600 | |||||
Stock options | 5,578 | - | |||||||
Accrued salary and other | - | 35,821 | |||||||
Accrual to cash timing difference | 859,735 | - | |||||||
Total gross deferred tax assets | 2,459,032 | 622,421 | |||||||
Deferred tax liabilities: | |||||||||
Depreciation | (9,890 | ) | (31,244 | ) | |||||
Total gross deferred tax liabilities | (9,890 | ) | (31,244 | ) | |||||
Less valuation allowance | (2,449,142 | ) | (591,177 | ) | |||||
Net deferred tax assets | $ | - | $ | - | |||||
A deferred tax asset of approximately $169,500 results from the C corporation taxable losses totaling $434,509 from the period October 22, 2011 through December 31, 2011. The valuation allowance at December 31, 2012 was $591,177. The increase during 2013 was $1,857,964. | |||||||||
The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, 2013, tax years 2013, 2012 and 2011 remain open for Internal Revenue Service audit. The Company has received no notice of audit from the Internal Revenue Service for any of the open tax years. | |||||||||
The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
15 – RELATED PARTY TRANSACTIONS | |
The Company owed Andrea Clark $75,000. The balance due to Ms. Clark was formalized in a promissory note dated November 1, 2013. The Company also owed Robert Rubinowitz $40,000 pursuant to a promissory note dated November 1, 2013 for funds advanced in September 2013. On November 12, 2013 the promissory notes to Ms. Clark and Mr. Rubinowitz were paid in full from the net proceeds of the Securities Purchase Agreement, dated November 12, 2013, among the Company and the investors named therein. | |
In March 2013, the Company entered into a contract with ResumeBear, Inc. (“ResumeBear”), a related party, to provide website development services in the amount of $302,764. Mr. Peter Russo, a member of the Company’s board of directors, is the chief executive officer and a director of ResumeBear. Mr. Michael Brainard, a member of the Company’s board of directors, is also a director of ResumeBear. Revenues recorded from ResumeBear were $211,239 for the year ended December 31, 2013. In January 2014, the Company wrote-off approximately $108,000 of the account receivable with ResumeBear which is reflected in the December 31, 2013 consolidated financial statements as an allowance of $16,244 and a reduction of revenue of approximately $92,000. Due to cost overruns and product delivery issues relating primarly to a third party subcontractor, the Company estimates the total loss on this contract is approximately $108,000 through December 31, 2013 and another $88,000 through the date of this report. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events | ' |
SUBSEQUENT EVENTS | ' |
16 – SUBSEQUENT EVENTS | |
Separation Agreement with Robert Rubinowitz | |
On April 14, 2014, the Company entered into a separation agreement (the “Separation Agreement”) with Robert Rubinowitz, its President, Chief Operating Officer, Secretary, Treasurer and director, which provides for the termination of Mr. Rubinowitz's employment and his resignation as an officer and director of the Company, and the termination of that certain Employment Agreement dated October 1, 2013, as amended on November 12, 2013, between the Company and Mr. Rubinowitz (the “Employment Agreement”). The Separation Agreement provides that Mr. Rubinowitz will receive (i) $175,000 to be paid in equal increments of $3,365.39 on each of May 2, 2014, May 16, 2014, May 30, 2014, June 14, 2014 and June 27, 2014 and thereafter equal increments of $7,532.05 with the last payment date being April 17, 2015, (ii) $23,557.70 in accrued and unpaid base salary, bonus and vacation earned through April 11, 2014 payable in equal installments of $1,121.80 beginning on July 11, 2014, and (iii) $6,730.77 in accrued salary, in each case, less all applicable deductions and withholdings, from the Company in full and final satisfaction of the amounts due to Mr. Rubinowitz pursuant to the terms of the Employment Agreement. | |
The Separation Agreement also requires the Company to use commercially reasonable efforts to have Mr. Rubinowitz and Andrea Clark removed as a guarantors under certain of the Company's debt obligations. The Company also agreed to pay an early termination fee for the early return of Mr. Rubinowitz's leased vehicle. The Company further agreed to file a Registration Statement with the SEC to register the resale of Mr. Rubinowitz's outstanding common stock as of the date of Separation Agreement. | |
The foregoing description of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Separation Agreement, a copy of which is attached as Exhibit 10.22 to this Annual Report on Form 10-K. | |
Termination of Named Executive Officers | |
On March 26, 2014, the Company notified Dean Boyer, its chief technology officer, that the Company was terminating his employment with the Company as well as that certain employment agreement with the Company dated October 1, 2013, as amended on November 13, 2013, effective March 31, 2014. On March 28, 2014, the Company received a letter from Mr. Boyer’s counsel demanding payment of $421,062.53 as severance in connection with the termination of Mr. Boyer’s employment agreement. On April 7, 2014, the Company received an additional letter from Mr. Boyer’s counsel demanding an additional $13,370.21 for accrued but unused vacation pay. | |
On April 15, 2014, the Company notified Joseph Brophy, its senior vice president of operations, that the Company was terminating his employment with the Company as well as that certain letter agreement, dated December 5, 2012, both effective April 25, 2014. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Summary of Significant Accounting Policies [Abstract] | ' | |
Principles of Consolidation | ' | |
Principles of Consolidation | ||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Health Revenue Assurance Associates, Inc. and Dream Reachers, LLC. All significant inter-company transactions and balances are eliminated in consolidation. | ||
Use of Estimates | ' | |
Use of Estimates | ||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements include valuation of accounts receivable, valuation of property and equipment, valuation and amortization period of software, valuation of beneficial conversion features in convertible debt, valuation of derivatives, valuation of equity based instruments issued for other than cash, revenue recognition, and the valuation allowance on deferred tax assets. | ||
Cash | ' | |
Cash | ||
For purposes of the statement of cash flows, the Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. The Company’s cash balances are maintained at various banks that are insured by the Federal Deposit Insurance Corporation subject to certain limitations. | ||
Accounts Receivable and Factoring | ' | |
Accounts Receivable and Factoring | ||
Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded using a specific identification method based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that an allowance in the amount of $16,244 is required as of December 31, 2013. The allowance arises from a website development project contracted with ResumeBear, a related party. The Company accounts for its factoring arrangements as either a sale or a secured financing based on the criteria in ASC 860 "Transfers and Servicing". Estimates of allowances for doubtful accounts are reflected as a recourse obligation, a liability, for factor arrangements treated as a sale with recourse or as a contra asset accounts receivable allowance account for arrangements accounted for as a secured financing. | ||
Property and Equipment | ' | |
Property and Equipment | ||
Property and equipment is recorded at cost. Depreciation is computed using the straight-line method over estimated useful asset lives, which range from 5 to 39 years. Repairs and maintenance are expensed, while additions and betterments are capitalized. The cost and related accumulated depreciation of assets sold or retired are eliminated from the accounts and any gains or losses are reflected in earnings. | ||
Leases | ' | |
Leases | ||
We perform a review of newly acquired leases to determine whether a lease should be treated as a capital or operating lease. Capital lease assets are capitalized and depreciated over the term of the initial lease. A liability equal to the present value of the aggregated lease payments is recorded utilizing the stated lease interest rate. If an interest rate is not stated, we will determine an estimated cost of capital and utilize that rate to calculate the present value. If the lease has an increasing rate over time, and (or) is an operating lease, all leasehold incentives, rent holidays, or other incentives will be considered in determining if a deferred rent liability is required. Leasehold incentives are capitalized and depreciated over the initial term of the lease. | ||
Software | ' | |
Software | ||
Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market and capitalization ceases after the general release of the software. Amortization of capitalized software development costs begins upon initial product shipment after general release. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months) using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. | ||
Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations. On July 15, 2013 the Company issued a general release for one of its products Visualizer. After the general release, the Company recorded approximately $64,000 in amortization expense in the accompanying consolidated financial statements for the year ended December 31, 2013. On September 30, 2013, the Company impaired the capitalized research and development costs for the Visualizer software suite of multiple offerings and the OMC Initiater after an evaluation based in part on the lack of cash flow and customer demand in ICD Visualizer after the general acceptance release date of July 15, 2013. In addition, the Company’s going concern opinion and cash liquidity concerns restrained the ability to make a capital investment in research and development to complete existing products in the pipeline as the available cash is needed to fund normal operating expenses. The resulting loss of $946,931 is presented as a line item entitled “asset impairment” on the consolidated statement of operations. The Company will continue to use the Visualizer suite of functionality as internally developed software to generate customized reports for revenue integrity auditing and compliance services but the Company no longer intends to market or sell internally developed software on a stand alone basis. | ||
Long-Lived Assets | ' | |
Long-Lived Assets | ||
The Company reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying values may no longer be appropriate. Recoverability of carrying values is assessed by estimating future net cash flows from the assets. Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact management's assumptions as to sales prices, rental rates, costs, holding periods or other factors that may result in changes in the Company’s estimates of future cash flows. Although management believes the assumptions used in testing for impairment are reasonable, changes in any one of the assumptions could produce a significantly different result. | ||
Fair Value Measurements and Fair Value of Financial Instruments | ' | |
Fair Value Measurements and Fair Value of Financial Instruments | ||
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: | ||
● | Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; | |
● | Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and | |
● | Level 3—Unobservable inputs that are supported by little or no market activity that is significant to the fair value of assets or liabilities. | |
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. | ||
Accounting for Derivatives | ' | |
Accounting for Derivatives | ||
The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
The Company recognizes medical coding audit services revenue based on the proportional performance method of recognizing revenue. | ||
A portion of the Company’s revenue is generated from medical coding audit services. Auditing revenue is invoiced in accordance with the contract, generally at three benchmark time periods which coincide with when specific, obligatory field work services have been rendered and completed, the value of this portion of the contract price has been predetermined and agreed upon, and the client has received benefit or value in the form of the independent identification of system weaknesses and risk analysis. Further, collectability is reasonably assured due to the existence of a fixed fee contract and the size and financial health of the Company’s clients. Below is a description of the general benchmarks and work phases associated with the Company’s audit services: | ||
● | Planning Phase - work commences prior to and as soon as the contract is signed and includes setting the audit scope, scheduling of the job, assignment of audit staff, understanding the client and their systems, determination of sample size and sampling methods to be employed, and other specific items as outlined in the contract. The planning phase includes the determination of deliverables as defined in the contract, generally consisting of a listing of errors, training and a final report. The Company generally invoices and recognizes 50% of the contract value at the completion of the Planning Phase. Although all of the contracts contain a clause making the first 50% of the engagement fee due and non-refundable at this point, the Company does not deem this initial fee to be recognized as deferred revenue under SAB 104 due to the extensive amount of work to be done prior to accepting the contract. | |
● | Field Work Phase – is performed at the client location and generally lasts one week and encompasses actual testing of sample claims preselected in the Planning Phase. The auditor generally preloads the selected claims into the Company’s proprietary software and audits the claim records by reviewing actual medical records. The software assists the auditor in determining proper classifications and allows the auditor to compare the proper classification against what was filed in the submission made by the client to Medicare. Notes and comments are recorded and audit reports are generated. The Company generally invoices and recognizes 40% of the contract value at the completion of the Field Work Phase. | |
● | Reporting Phase – includes a summary of audit findings, exit conference with clients, and any other specific deliverables as determined by the contract. The Company generally invoices and recognizes the remaining 10% of the contract value at the completion of the Reporting Phase. | |
A portion of the Company’s revenue is derived from consulting and coding services provided. Revenue from these revenue streams is recognized after services are performed based on the quoted and agreed upon fee contained in its contracts. | ||
Arrangements with customers may involve multiple elements including software products, education products, training, software product maintenance, coding services, coding audit services and other consulting services. Training and maintenance on software products will generally occur after the software product sale. Other services may occur before or after the product sales and may not relate to the products. Revenue recognition for multiple element arrangements is as follows: | ||
Each element is accounted for separately when each element has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the general and specific criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company has historically sold its services with established rates, which it believes is Company specific objective evidence of selling price. For the new software products, management has established selling prices, which qualifies as Company specific objective evidence of selling price. | ||
For our education products sold we have determined to account for the course materials and training components as one unit of accounting. Accordingly, revenue is recognized for the single unit upon delivery of the training through our online webinars. | ||
On July 15, 2013, the Company issued a general release for one of its products Visualizer. Software sales on a standalone basis will be recognized upon delivery of the software when evidence of the purchase arrangement exists and the price is determinable, and when collectability is reasonably assured. The Company will continue to use the Visualizer suite of functionality as internally developed software to generate customized reports for revenue integrity auditing and compliance services but the Company no longer intends to market or sell internally developed software on a stand alone basis. | ||
Cost of Revenues | ' | |
Cost of Revenues | ||
Cost of revenues includes labor costs for services and education development costs. Amortization costs in 2013 of approximately $64,000 were allocated to cost of sales related to software amortization. | ||
Share-Based Compensation | ' | |
Share Based Compensation | ||
Compensation expense for all stock-based employee and director compensation awards granted is based on the grant date fair value estimated in accordance with the provisions of ASC Topic 718, Stock Compensation. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. Vesting terms vary based on the individual grant terms. | ||
The Company estimates the fair value of stock-based compensation awards on the date of grant using the Black-Scholes-Merton (“BSM”) option pricing model, which was developed for use in estimating the value of traded options that have no vesting restrictions and are freely transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. The BSM option-pricing model considers, among other factors, the expected term of the award and the expected volatility of the Company’s stock price. Expected terms are calculated using the Simplified Method, volatility is determined based on the Company's historical stock price trends and the discount rate is based upon treasury rates with instruments of similar expected terms. Warrants granted to non-employees are accounted for in accordance with the measurement and recognition criteria of ASC Topic 505-50, Equity Based Payments to Non-Employees. | ||
Research and Development Costs | ' | |
Research and Development Costs | ||
In accordance with ASC 730-10, research and development costs are expensed when incurred. Total research and development costs for the years ended December 31, 2013 and 2012 were $0 and $64,386, respectively. | ||
Advertising | ' | |
Advertising | ||
The cost of advertising is expensed as incurred. Advertising and marketing expenses amounted to approximately $121,000 and $130,000 for the year ended December 31, 2013 and 2012, respectively and the total is included in selling and administrative expenses. | ||
Income Taxes | ' | |
Income Taxes | ||
The Company’s subsidiary, HRAA, elected to convert from a Subchapter S corporation for Federal income tax purposes to a C corporation effective October 21, 2011. Upon HRAA’s C corporation election, it began to use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized. | ||
The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | ||
Earnings Per Share | ' | |
Earnings Per Share | ||
The Company computes and presents earnings or losses per share in accordance with FASB ASC Topic 260, Earnings per share. Basic earnings or losses per share are computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings or loss per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options and warrants using the average market prices during the period. | ||
As the Company incurred a net loss in all periods presented, all potentially dilutive securities were excluded from the computation of diluted loss per share since the effect of including them is anti-dilutive. Dilutive securities outstanding at December 31, 2013 were 1,000,000 stock options, 29,940,000 warrants, and Series A Preferred Stock convertible into 27,000,000 shares of common stock. No dilutive securities were outstanding in 2012. | ||
Segment Reporting | ' | |
Segment Reporting | ||
Financial Accounting Standards Board (“FASB”) ASC Topic 280, Segment Reporting (“ASC 280”), establishes standards for the way public business enterprises report information about operating segments. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company has determined that based on these criteria it only operates one segment, consulting services, as all other services do not meet the minimum threshold for separate reporting of a segment. | ||
Contingencies | ' | |
Contingencies | ||
We accrue for contingent obligations, including legal costs and restructuring costs, when the obligation is probable and the amount can be reasonably estimated. As facts concerning contingencies become known we reassess our position and make appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters that are subject to change as events evolve and additional information becomes available. Total legal settlement accrued costs for the year ended December 31, 2013 was $7,000. (see Note 10) | ||
Recent Accounting Pronouncements | ' | |
Recent Accounting Pronouncements | ||
We have implemented all new accounting standards that are in effect and that may impact our consolidated financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. |
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounts Receivable [Abstract] | ' | ||||||||
Summary of accounts receivable | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accounts receivable | $ | 901,918 | $ | 1,246,814 | |||||
Accounts receivable –Related party | 41,244 | - | |||||||
Allowance for doubtful accounts | (16,244 | ) | - | ||||||
Total | $ | 926,918 | $ | 1,246,814 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
Summary of property and equipment | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Building and improvements | $ | 227,603 | $ | 227,603 | |||||
Furniture | 119,810 | 119,810 | |||||||
Computers and Equipment | 260,872 | 160,469 | |||||||
608,285 | 507,882 | ||||||||
Accumulated depreciation | (226,438 | ) | (142,865 | ) | |||||
Total | $ | 381,847 | $ | 365,017 |
Research_and_Development_and_S1
Research and Development and Software (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Research and Development and Software [Abstract] | ' | ||||||||
Schedule of software's | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Software | $ | 1,011,068 | $ | 258,933 | |||||
Accumulated amortization | (64,137 | ) | - | ||||||
Asset Impairment | (946,931 | ) | - | ||||||
Software, net | $ | - | $ | 258,933 |
Long_Term_Debt_and_Notes_Payab1
Long Term Debt and Notes Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long Term Debt and Notes Payable [Abstract] | ' | ||||||||
Schedule of long term debt | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Bank term loan | $ | 141,857 | $ | 38,897 | |||||
Mortgage loan | 174,580 | 180,073 | |||||||
316,437 | 218,970 | ||||||||
Less current portion | (44,084 | ) | (37,513 | ) | |||||
Total long term portion | $ | 272,353 | $ | 181,457 | |||||
Schedule of notes payable | ' | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Principal amount of notes payable | $ | 877,500 | $ | 815,000 | |||||
Unamortized discount | (465,480 | ) | (338,692 | ) | |||||
Notes payable, net of discount | 412,020 | 476,308 | |||||||
Less current portion | (380,326 | ) | (202,557 | ) | |||||
Total Long term portion | $ | 31,694 | $ | 273,751 | |||||
Summary of future annual principal payments | ' | ||||||||
2014 | $ | 786,584 | |||||||
2015 | 179,084 | ||||||||
2016 | 44,084 | ||||||||
2017 | 31,248 | ||||||||
2018 | 5,576 | ||||||||
Thereafter | 147,361 | ||||||||
Total | $ | 1,193,937 |
Convertible_Promissory_Notes_a1
Convertible Promissory Notes and Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Convertible Promissory Notes and Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Assets and liabilities carried at fair value measured on a recurring and non-recurring basis | ' | ||||||||||||||||
Carrying | Fair Value Measurements at December 31, 2013 | ||||||||||||||||
Value at | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Warrant derivative liability (29,940,000 warrants - See Note 12) | $ | 5,406,000 | $ | - | $ | - | $ | 5,406,000 | |||||||||
Summary of activity level three liablities | ' | ||||||||||||||||
Balance at December 31, 2012 | $ | - | |||||||||||||||
Reclassification of warrant liability | 5,771,255 | ||||||||||||||||
Change in fair value | (365,255 | ) | |||||||||||||||
Balance December 31, 2013 | $ | 5,406,000 | |||||||||||||||
Summary of activity liabilities | ' | ||||||||||||||||
Assumptions | December 31, | ||||||||||||||||
2013 | |||||||||||||||||
Expected term | 1 | ||||||||||||||||
Expected Volatility | 116 | % | |||||||||||||||
Risk free rate | 1.2 | % | |||||||||||||||
Dividend Yield | 0 | % |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Commitments and Contingencies [Abstract] | ' | |||||||
Schedule of future minimum lease payments | ' | |||||||
2014 | $ | 53,246 | ||||||
2015 | 6,720 | |||||||
2016 | 6,720 | |||||||
2017 | 5,040 | |||||||
Thereafter | - | |||||||
Total | $ | 71,726 | ||||||
Analysis of the leased assets included in property and equipment | ' | |||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Equipment | $ | 79,210 | $ | 41,969 | ||||
Less accumulated depreciation | (33,607 | ) | (5,926 | ) | ||||
Total | $ | 45,603 | $ | 36,043 | ||||
Schedule by years of future minimum payments required under the lease | ' | |||||||
Year Ending December 31: | ||||||||
2014 | $ | 32,768 | ||||||
2015 | 22,527 | |||||||
2016 | 3,581 | |||||||
Total minimum lease payments | 58,876 | |||||||
Less amount representing interest | (9,087 | ) | ||||||
Present value of minimum lease payments | $ | 49,789 |
Stock_Options_and_Warrants_Tab
Stock Options and Warrants (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Stock Options and Warrants [Abstract] | ' | |||||||||||||
Summary of weighted-average assumptions | ' | |||||||||||||
2013 | ||||||||||||||
Dividend yield (1) | 0 | % | ||||||||||||
Expected volatility (2) | 116 | % | ||||||||||||
5 Year Bond interest rate (3) | 1.2 | % | ||||||||||||
Expected life (4) | 6 | |||||||||||||
(1) Represents cash dividends paid as a percentage of the share price on the date of grant. | ||||||||||||||
(2) Based on historical volatility of the Company’s common stock over the expected life of the options. | ||||||||||||||
(3) Represents the U.S. Treasury rates over maturity periods matching the expected term of the options at the time of grant. | ||||||||||||||
(4) The period of time that options granted is expected to be outstanding based upon the simplified method. | ||||||||||||||
Summary of stock option activity | ' | |||||||||||||
Options | Shares | Weighted- | Weighted- | Aggregate | ||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value ($000) | ||||||||||||
Price | Contractual | |||||||||||||
Term | ||||||||||||||
Outstanding at January 1, 2013 | - | - | ||||||||||||
Granted | 1,000,000 | 0.26 | * | $ | - | |||||||||
Exercised | - | - | ||||||||||||
Forfeited or expired | - | - | ||||||||||||
Outstanding at December 31, 2013 | 1,000,000 | $ | 0.26 | * | $ | - | ||||||||
Exercisable at December 31, 2013 | - | - | - | - | ||||||||||
* These 1,000,000 options were granted without a specified expiration term. | ||||||||||||||
Summary of warrants activity | ' | |||||||||||||
Number of | Weighted | |||||||||||||
Warrants | Average | |||||||||||||
Exercise Price | ||||||||||||||
Outstanding at December 31, 2012 | - | $ | - | |||||||||||
Granted | 29,415,000 | 0.30 | ||||||||||||
Anti-dilution issuance | 525,000 | 0.20 | ||||||||||||
Exercised | - | - | ||||||||||||
Forfeited | - | - | ||||||||||||
Expired | - | - | ||||||||||||
Outstanding at December 31, 2013 | 29,940,000 | $ | 0.30 | |||||||||||
Exercisable at December 31, 2013 | 29,940,000 | $ | 0.30 | |||||||||||
Aggregate intrinsic value | $ | 52,500 |
Stockholders_Equity_Deficit_Ta
Stockholder's Equity (Deficit) (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Stockholder's Equity (Deficit) [Abstract] | ' | ||||
Schedule of Temporary equity | ' | ||||
Series A sale price | $ | 5,400,000 | |||
Less: Reclassification of warrant fair value to liability | (5,669,897 | ) | |||
Offering costs | (496,348 | ) | |||
Plus: Deemed dividend | 2,634,185 | ||||
Series A dividends | 60,000 | ||||
$ | 1,928,000 | ||||
Concentrations_Tables
Concentrations (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Concentrations [Abstract] | ' | ||||
Schedule of sales generated by hospitals | ' | ||||
Hospital Customer A | 42 | % | |||
Hospital Customer B | 6 | % | |||
Hospital Customer C | 6 | % | |||
Hospital Customer D | 6 | % | |||
Total | 60 | % |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Summary of income tax expense (benefit) | ' | ||||||||
Year ended | Year ended | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
U.S. Federal "expected" income tax | $ | (1,860,902 | ) | $ | (495,540 | ) | |||
State income tax | (198,679 | ) | (52,906 | ) | |||||
Non-deductible beneficial conversion interest | - | 102,000 | |||||||
Stock compensation | 252,366 | 24,769 | |||||||
Change in fair value of warrant liability | (124,187 | ) | - | ||||||
Loss on extinguishment of debt | 49,852 | - | |||||||
Other | 23,585 | - | |||||||
Change in valuation allowance | 1,857,964 | 421,677 | |||||||
Total provision for income taxes | $ | - | $ | - | |||||
Summary of deferred tax assets and liabilities | ' | ||||||||
2013 | 2012 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forward | $ | 1,593,719 | $ | 586,600 | |||||
Stock options | 5,578 | - | |||||||
Accrued salary and other | - | 35,821 | |||||||
Accrual to cash timing difference | 859,735 | - | |||||||
Total gross deferred tax assets | 2,459,032 | 622,421 | |||||||
Deferred tax liabilities: | |||||||||
Depreciation | (9,890 | ) | (31,244 | ) | |||||
Total gross deferred tax liabilities | (9,890 | ) | (31,244 | ) | |||||
Less valuation allowance | (2,449,142 | ) | (591,177 | ) | |||||
Net deferred tax assets | $ | - | $ | - | |||||
Nature_of_Business_and_Going_C1
Nature of Business and Going Concern (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||
Nov. 12, 2013 | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 10, 2012 | Dec. 31, 2011 | |
Nature of Business and Going Concern (Textual) | ' | ' | ' | ' | ' | ' |
Shares exchange right on each share pursuant to Merger agreement | ' | ' | ' | ' | 1,271 | ' |
Stock split conversion ratio | '2 for 1 | '12.98 for 1 | ' | ' | ' | ' |
Amount transferred from additional paid in capital to common stock | ' | $32,747 | ' | ' | ' | ' |
Cash | ' | ' | 3,053,485 | 893,458 | ' | ' |
Working capital deficiency | ' | ' | 2,292,754 | ' | ' | ' |
Total Stockholders' Equity (Deficit) | ' | ' | -4,154,247 | 187,802 | ' | -359,819 |
Accumulated deficit | ' | ' | -10,752,223 | -2,584,798 | ' | ' |
Net Cash (Used) For Operating Activities | ' | ' | -3,365,005 | -1,699,466 | ' | ' |
Net Loss available to common stockholders | ' | ' | -8,167,425 | -1,457,470 | ' | ' |
Proceeds from issuance of Series A Preferred Stock | 5,400,000 | ' | ' | ' | ' | ' |
Convertible preferred stock, dividend percentage | 8.00% | ' | ' | ' | ' | ' |
Series A Preferred Stock, conversion ratio | ' | ' | ' | ' | ' | ' |
The Series A Preferred Stock is convertible into common stock on a 2 for 1 basis and is redeemable by the Company, at the option of the investor, 48 months from November 12, 2013 at the stated value of $0.30 per share or a total of $5,400,000 plus accumulated but unpaid dividends, whether declared or not. | ||||||
Series A Preferred Stock, stated value | $0.30 | ' | ' | ' | ' | ' |
Series A Preferred Stock option to investor | '48 months | ' | ' | ' | ' | ' |
Net proceeds after commissions and professional fees | 4,903,652 | ' | ' | ' | ' | ' |
Net proceeds from issuance of convertible preferred stock after payment of expense | $4,322,000 | ' | ' | ' | ' | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Jul. 29, 2013 | |
Segment | |||
Summary of Significant Accounting Policies (Textual) | ' | ' | ' |
Allowance for doubtful accounts receivable | $16,244 | ' | ' |
Amortization expense | 64,000 | ' | ' |
Asset impairment | 946,931 | ' | ' |
Percentage of contract value that is recognized at the completion of planning phase | 50.00% | ' | ' |
Percentage of engagement fee due and non-refundable as per clause | 50.00% | ' | ' |
Percentage of contract value recognized at completion of field work phase | 40.00% | ' | ' |
Remaining percentage of contract value that recognize at completion of report phase | 10.00% | ' | ' |
Research and development | ' | 64,386 | ' |
Advertising and marketing expenses | 121,000 | 130,000 | ' |
Legal settlement accrued costs | $7,000 | $115,278 | $23,056 |
Number of operating segments | 1 | ' | ' |
Series A prefered stock converted into comon stock | 27,000,000 | ' | ' |
Equity Option [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) | ' | ' | ' |
Dilutive securities outstanding | 1,000,000 | ' | ' |
Warrant [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) | ' | ' | ' |
Dilutive securities outstanding | 29,940,000 | ' | ' |
Minimum [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) | ' | ' | ' |
Estimated useful asset lives | '5 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Summary of Significant Accounting Policies (Textual) | ' | ' | ' |
Estimated useful asset lives | '39 years | ' | ' |
Accounts_Receivable_Details
Accounts Receivable (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of Accounts receivable | ' | ' |
Accounts receivable | $901,918 | $1,246,814 |
Accounts receivable - Related party | 25,000 | ' |
Allowance for doubtful accounts | -16,244 | ' |
Total | $926,918 | $1,246,814 |
Accounts_Receivable_Details_Te
Accounts Receivable (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounts Receivable (Textual) | ' | ' |
Bad debt expense on trade accounts receivable | $26,116 | ' |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of Property and Equipment | ' | ' |
Building and improvements | $227,603 | $227,603 |
Furniture | 119,810 | 119,810 |
Computers and Equipment | 260,872 | 160,469 |
Property and Equipment, gross | 608,285 | 507,882 |
Accumulated depreciation | -226,438 | -142,865 |
Total | $381,847 | $365,017 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property and Equipment (Textual) | ' | ' |
Depreciation expense | $83,900 | $50,765 |
Research_and_Development_and_S2
Research and Development and Software (Details) (Software [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Software [Member] | ' | ' |
Schedule of software's | ' | ' |
Software | $1,011,068 | $258,933 |
Accumulated amortization | -64,137 | ' |
Asset Impairment | -946,931 | ' |
Software, net | ' | $258,933 |
Research_and_Development_and_S3
Research and Development and Software (Details Textual) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Software [Member] | Software [Member] | |||
Research and Development and Software (Textual) | ' | ' | ' | ' |
Accumulated capitalized cost | ' | ' | $1,011,068 | ' |
Software amortization expense | ' | ' | 64,137 | 0 |
Asset Impairment Charges | $946,931 | ' | $946,931 | ' |
Lines_of_Credit_Details
Lines of Credit (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 19, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Dell Business Credit Line [Member] | Revolving Credit Facility One [Member] | |||
Lines of Credit (Textual) | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | $150,000 | $50,000 | ' |
Line of credit maturity date | ' | ' | 19-Sep-17 | 18-Dec-18 | ' | 18-Dec-18 |
Outstanding balance | ' | ' | ' | ' | ' | 150,000 |
Revolving line of credit, periodic payment due amount | ' | ' | 3,209 | ' | ' | ' |
Line of credit | $44,692 | $25,000 | ' | ' | $44,692 | $25,000 |
Rate of interest above prime rate | ' | ' | ' | ' | ' | 6.50% |
Prime rate of interest | ' | ' | ' | ' | ' | 3.25% |
Long_Term_Debt_and_Notes_Payab2
Long Term Debt and Notes Payable (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of long term debt | ' | ' |
Total | $316,437 | $218,970 |
Less current portion | -44,084 | -37,513 |
Total long term portion | 272,353 | 181,457 |
Bank term loan [Member] | ' | ' |
Summary of long term debt | ' | ' |
Total | 141,857 | 38,897 |
Mortgage loan [Member] | ' | ' |
Summary of long term debt | ' | ' |
Total | $174,580 | $180,073 |
Long_Term_Debt_and_Notes_Payab3
Long Term Debt and Notes Payable (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of notes payable | ' | ' |
Principal amount of notes payable | $877,500 | $815,000 |
Unamortized discount | -465,480 | -338,692 |
Notes payable, net of discount | 412,020 | 476,308 |
Less current portion | -380,326 | -202,557 |
Total long term portion | $31,694 | $273,751 |
Long_Term_Debt_and_Notes_Payab4
Long Term Debt and Notes Payable (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of future annual principal payments | ' | ' |
2014 | $786,584 | ' |
2015 | 179,084 | ' |
2016 | 44,084 | ' |
2017 | 31,248 | ' |
2018 | 5,576 | ' |
Thereafter | 147,361 | ' |
Total | $316,437 | $218,970 |
Long_Term_Debt_and_Notes_Payab5
Long Term Debt and Notes Payable (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 2 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||
Aug. 30, 2013 | 31-May-12 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 17, 2013 | Oct. 07, 2013 | Jul. 15, 2012 | Sep. 19, 2013 | Oct. 21, 2011 | Sep. 19, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jul. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | |
Investor | Line of Credit [Member] | Bridge Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Loan Agreements [Member] | Loan Agreements [Member] | Loan Agreements [Member] | Mortgage Loans on Real Estate [Member] | Mortgage Loans on Real Estate [Member] | Mortgage Loans on Real Estate [Member] | |||||||
Long Term Debt and Notes Payable (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments of principal and interest (Monthly) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,200 | ' | ' | ' | ' | ' | $1,500 | ' | ' |
Maturity period of term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' |
Term loan, maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19-Sep-17 | ' | ' | ' | ' | ' | 31-Jul-20 | ' | ' |
Loan principal amount | ' | ' | 877,500 | 815,000 | ' | ' | ' | ' | 250,000 | ' | ' | ' | 1,220,000 | 815,000 | ' | ' | ' | ' |
Debt interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | 6.75% | ' | 12.00% | 12.00% | ' | ' | ' | ' |
Loan, balances due | ' | ' | ' | ' | ' | ' | ' | 133,334 | ' | 20,697 | 142,000 | 39,000 | ' | ' | ' | 192,500 | 175,000 | 180,000 |
Loan interest rate terms | ' | '6% based on a 360 day year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Interest is fixed at 6.625% for the first five years of the loan, and converts to an adjustable rate for the second five years at the Federal Funds Rate plus 3.25%, as established by the United State Federal Reserve. | ' | ' |
The new consolidated term loan matures on September 19, 2017 and incurs interest at a rate per year equal to the bank’s prime rate plus 3.5%. | ||||||||||||||||||
Conversion of convertible debt, shares | -1,608,333 | ' | ' | ' | ' | ' | ' | ' | 1,343,749 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertible debt amount | 402,083 | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | $0.25 | $0.10 | ' | ' | ' | ' | $0.10 | ' | $0.19 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price, description | ' | ' | ' | ' | ' | ' | ' | ' | 'Conversion price of $0.19 per share which is equal to a discount of 25% of to the Purchase Price. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number Of Investors | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued as a loan fee | ' | ' | 679,353 | 343,500 | ' | ' | ' | ' | ' | ' | ' | ' | 679,500 | 343,500 | ' | ' | ' | ' |
Stock issued to lenders in lieu of loan fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,575,000 | 2,375,000 | ' | ' | ' | ' |
Fair value of stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.28 | $0.28 | ' | ' | ' | ' |
Principal and interest payable period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '26 months | '26 months | ' | ' | ' | ' |
Unamortized discount | 128,452 | ' | ' | ' | 12,500 | 25,000 | ' | ' | ' | ' | ' | ' | 350,522 | 338,692 | 114,958 | ' | ' | ' |
Accrued interest | ' | ' | 5,850 | 4,524 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balloon principal payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 129,000 | ' | ' |
Loss on conversion of issuing stock at a discount from fair market value | ' | ' | $112,584 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Factoring_Agreement_Details
Factoring Agreement (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Factoring Agreement (Textual) | ' | ' | ' |
Period of factoring agreement | '1 year | ' | ' |
Percentage of total receivable's face value exchanged under factoring agreement | 85.00% | ' | ' |
Aggregate amount under factoring agreement | ' | $4,693,000 | $3,850,000 |
Advance received under factoring agreement | ' | 4,708,000 | 3,272,000 |
Outstanding receivables purchased by factor | ' | 638,000 | 950,000 |
Loan payable to factor | ' | 542,530 | 827,075 |
Factor fees | ' | $138,000 | $119,000 |
Convertible_Promissory_Notes_a2
Convertible Promissory Notes and Fair Value Measurements (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Warrant derivative liability | $5,406,000 | ' |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Warrant derivative liability | ' | ' |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Warrant derivative liability | ' | ' |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Warrant derivative liability | $5,406,000 | ' |
Convertible_Promissory_Notes_a3
Convertible Promissory Notes and Fair Value Measurements (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Convertible Promissory Notes and Fair Value Measurements [Abstract] | ' | ' |
Balance at December 31, 2012 | ' | ' |
Reclassification of warrant liability | -101,418 | ' |
Change in fair value | -365,255 | ' |
Balance December 31, 2013 | $5,406,000 | ' |
Convertible_Promissory_Notes_a4
Convertible Promissory Notes and Fair Value Measurements (Details 2) | 12 Months Ended |
Dec. 31, 2013 | |
Convertible Promissory Notes and Fair Value Measurements [Abstract] | ' |
Expected term | '1 year |
Expected volatility | 116.00% |
Risk free rate | 1.20% |
Dividend Yield | 0.00% |
Convertible_Promissory_Notes_a5
Convertible Promissory Notes and Fair Value Measurements (Detail Textual) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||
Oct. 17, 2013 | Oct. 07, 2013 | 31-May-12 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 30, 2013 | Jul. 15, 2012 | Nov. 12, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Feb. 10, 2012 | |
ConvertibleNote | ConvertibleNote | Warrant [Member] | Warrant [Member] | Convertible Debt [Member] | Convertible Debt [Member] | |||||||
ConvertiblePromissoryNotesAnd Fair Value Measurement Textual | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Advances on convertible promissory notes | ' | ' | $300,000 | $170,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of convertible notes issued | ' | ' | 5 | 3 | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible promissory notes | ' | ' | ' | 314,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Sale price of future securities | ' | ' | ' | '100% of the sale price and non-interest bearing | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity, description | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate terms | ' | ' | '6% based on a 360 day year | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible notes conversion price | ' | ' | $0.10 | ' | ' | ' | $0.25 | $0.10 | ' | ' | ' | $0.19 |
Debt discount | 12,500 | 25,000 | ' | ' | ' | ' | 128,452 | ' | ' | ' | ' | ' |
Debt expense | ' | 5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Promissory note | 142,500 | 280,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Promissory note payment term | 'The debt was treated as stock settled debt where a put premium of $61,071 was to be recorded over the six-month period to the first conversion date. Tonaquint had the right at any time after the date that is six (6) months from the effective date, at its election, to convert all or any part of the outstanding balance of the note into shares of fully paid and non-assessable common stock of the Company based upon the Conversion Formula. Tonaquint was granted the right to purchase at any time on or after October 17, 2013 until the date which is the last calendar day of the month in which the fifth anniversary of the "issue date" occurs, 175,000 fully paid and non-assessable shares of the Company's common stock, as such number may be the adjusted from time to time pursuant to the full rachet price protection terms and conditions of the warrant. The initial "exercise price" is $0.40 per share of common stock. On November 12, 2013, the note was paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants pursuant to the Securities Purchase Agreement, dated November 12, 2013, between the Company and the investors named therein. (See Note 12) As mentioned above, the Company issued 175,000 free standing and detachable warrants related to the note. | 'The Company had the option to repay this note at any time on or before the date that is sixty (60) days from October 7, 2013. The Company recorded a debt discount for the OID of $25,000 and expensed $5,000. The debt was treated as stock settled debt where a put premium of $120,000 was to be recorded over the six-month period to the first conversion date. Tonaquint had the right at any time after the date that is six (6) months from the effective date, at its election, to convert all or any part of the outstanding balance of the note into shares of fully paid and non-assessable common stock of the company based upon a formula that is seventy (70%) percent of the average of the two (2) lowest intra-day trade prices in the fifteen (15) trading days immediately preceding the conversion. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued price | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fully paid and non-assessable shares of the company common stock | 175,000 | 350,000 | ' | ' | ' | ' | ' | ' | 350,000 | ' | ' | ' |
Fully paid and non-assessable shares of the company common stock, par value | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants exercise price | ' | $0.40 | ' | ' | $0.30 | ' | ' | ' | $0.20 | ' | ' | ' |
Put premium | ' | ' | ' | ' | 33,364 | ' | ' | ' | ' | ' | ' | ' |
Loss on debt extinguishment | ' | ' | ' | ' | 556,028 | 304,808 | ' | ' | ' | ' | 3,459 | ' |
Loss on extinguishment of debt | ' | ' | ' | ' | -146,624 | ' | ' | ' | ' | ' | 34,041 | ' |
Gain on extinguishment of debt for put premium | ' | ' | ' | ' | 33,364 | ' | ' | ' | ' | ' | ' | ' |
Warrant issuance | ' | ' | ' | ' | 27,000,000 | ' | ' | ' | 175,000 | 29,940,000 | ' | ' |
Warrants purchase price | $125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2013 |
Schedule of Future minimum lease payments under lease | ' |
2014 | $53,246 |
2015 | 6,720 |
2016 | 6,720 |
2017 | 5,040 |
Thereafter | ' |
Total | $71,726 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Analysis of the leased assets included in property and equipment | ' | ' |
Equipment | $79,210 | $41,969 |
Less accumulated depreciation | -33,607 | -5,926 |
Total | $45,603 | $36,043 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 2) (USD $) | Dec. 31, 2013 |
Schedule of future minimum payments required under lease | ' |
2014 | $32,768 |
2015 | 22,527 |
2016 | 3,581 |
Total minimum lease payments | 58,876 |
Less amount representing interest | -9,087 |
Present value of minimum lease payments | $49,789 |
Commitments_and_Contingencies_4
Commitments and Contingencies (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 0 Months Ended | |||||||||
Sep. 01, 2013 | Sep. 30, 2012 | Jul. 31, 2012 | Sep. 30, 2011 | Dec. 31, 2013 | Jul. 29, 2013 | Dec. 31, 2012 | Mar. 14, 2014 | Apr. 07, 2014 | Mar. 28, 2014 | Nov. 01, 2013 | Nov. 01, 2013 | |
Lawsuit | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | President [Member] | Chief Executive Officer [Member] | |||||||
Commitments and Contingencies (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease arrangements periodic payment per month | ' | $560 | $600 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease arrangement payment paid per month | 5,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease expiration term | ' | '5 years | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' |
Lease arrangements term, Description | ' | ' | ' | 'One year with five successive one year renewal options. | ' | ' | ' | ' | ' | ' | ' | ' |
Renewed period of lease arrangements | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increment percentage in lease rent payment on renewal | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total minimum lease payments | ' | ' | ' | ' | 58,876 | ' | ' | ' | ' | ' | ' | ' |
Short term liabilities | ' | ' | ' | ' | 32,768 | ' | ' | ' | ' | ' | ' | ' |
Amortization of assets held under capital leases | ' | ' | ' | ' | 24,200 | ' | 9,400 | ' | ' | ' | ' | ' |
Number of pending lawsuits resolved | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lawsuit settlement, amount payable | ' | ' | 232,500 | ' | ' | ' | ' | 11,000 | ' | ' | ' | ' |
Terms of payment to Siddel for settlement of lawsuits | ' | ' | 'Eleven (11) payments totaling $232,500 pursuant to the terms of prior employment agreement. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares agreed to be transferred to company officer | ' | ' | 3,299,802 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Grace period for due payments under Settlement Agreement | ' | ' | '7 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlement Payable | ' | ' | ' | ' | 7,000 | 23,056 | 115,278 | ' | ' | ' | ' | ' |
Due to officer as stated in February 2012 merger agreement | ' | ' | ' | ' | ' | ' | 75,000 | ' | ' | ' | ' | 75,000 |
Promissory notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000 | ' |
Letter received from Mr. Boyers counsel | ' | ' | ' | ' | ' | ' | ' | ' | ' | 421,062.53 | ' | ' |
Additional letter received from Mr. Boyers counsel | ' | ' | ' | ' | ' | ' | ' | ' | $13,370.21 | ' | ' | ' |
Stock_Options_and_Warrants_Det
Stock Options and Warrants (Details) | 12 Months Ended | |
Dec. 31, 2013 | ||
Summary of weighted-average assumptions | ' | |
Expected volatility | 116.00% | |
5 Year Bond interest rate | 1.20% | |
Expected life | '1 year | |
Employee Stock Option [Member] | ' | |
Summary of weighted-average assumptions | ' | |
Dividend yield | 0.00% | [1] |
Expected volatility | 116.00% | [2] |
5 Year Bond interest rate | 1.20% | [3] |
Expected life | '6 years | [4] |
[1] | Represents cash dividends paid as a percentage of the share price on the date of grant. | |
[2] | Based on historical volatility of the Company's common stock over the expected life of the options. | |
[3] | Represents the U.S. Treasury rates over maturity periods matching the expected term of the options at the time of grant. | |
[4] | The period of time that options granted is expected to be outstanding based upon the simplified method. |
Stock_Options_and_Warrants_Det1
Stock Options and Warrants (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | |
Number of Shares, Outstanding, Beginning balance | ' | |
Number of Shares, Granted | 1,000,000 | |
Number of Shares, Exercised | ' | |
Number of Shares, Forfeited or expired | ' | |
Number of Shares, Outstanding, Ending balance | 1,000,000 | |
Number of Shares, Exercisable, Ending balance | ' | |
Weighted Average Exercise Price, Beginning balance | ' | |
Weighted Average Exercise Price, Granted | $0.26 | |
Weighted Average Exercise Price, Exercised | ' | |
Weighted Average Exercise Price, Forfeited or expired | ' | |
Weighted Average Exercise Price, Ending balance | $0.26 | |
Weighted Average Exercise Price, Exercisable, Ending balance | ' | |
Weighted-Average Remaining Contractual Term, Granted | '0 years | [1] |
Weighted-Average Remaining Contractual Term, Ending | '0 years | [1] |
Aggregate Intrinsic Value, Granted | ' | |
Aggregate Intrinsic Value, Ending balance | ' | |
Aggregate Intrinsic Value, Exercisable, Ending balance | ' | |
[1] | * These 1,000,000 options were granted without a specified expiration term. |
Stock_Options_and_Warrants_Det2
Stock Options and Warrants (Details 2) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number of Warrants, Outstanding at December 31, 2012 | ' |
Number of Warrants, Granted | 1,000,000 |
Number of Warrants, Outstanding at December 31, 2013 | 1,000,000 |
Weighted Average Exercise Price, Beginning balance | ' |
Weighted Average Exercise Price, Granted | $0.26 |
Weighted Average Exercise Price, Exercised | ' |
Weighted Average Exercise Price, Forfeited | ' |
Weighted Average Exercise Price, Ending balance | $0.26 |
Weighted Average Exercise Price, Exercisable, Ending balance | ' |
Warrant [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number of Warrants, Outstanding at December 31, 2012 | ' |
Number of Warrants, Granted | 29,415,000 |
Number of Warrants, Anti-dilution issuance | 525,000 |
Number of Warrants, Exercised | ' |
Number of Warrants, Forfeited | ' |
Number of Warrants, Expired | ' |
Number of Warrants, Outstanding at December 31, 2013 | 29,940,000 |
Number of Warrants, Exercisable at December 31, 2013 | 29,940,000 |
Weighted Average Exercise Price, Beginning balance | ' |
Weighted Average Exercise Price, Granted | $0.30 |
Weighted Average Exercise Price, Anti-dilution issuance | $0.20 |
Weighted Average Exercise Price, Exercised | ' |
Weighted Average Exercise Price, Forfeited | ' |
Weighted Average Exercise Price, Expired | ' |
Weighted Average Exercise Price, Ending balance | $0.30 |
Weighted Average Exercise Price, Exercisable, Ending balance | $0.30 |
Weighted Average Exercise Price, Aggregate intrinsic value | $52,500 |
Stock_Options_and_Warrants_Det3
Stock Options and Warrants (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||||||||
Oct. 17, 2013 | Oct. 07, 2013 | Aug. 30, 2013 | Aug. 27, 2013 | Aug. 21, 2013 | Aug. 07, 2013 | Jul. 08, 2013 | Jun. 21, 2013 | 24-May-13 | 19-May-13 | Jan. 15, 2013 | Feb. 10, 2012 | Aug. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 27, 2013 | Jan. 31, 2013 | Dec. 31, 2013 | Aug. 07, 2013 | Dec. 31, 2013 | Nov. 12, 2013 | Nov. 12, 2013 | Nov. 12, 2013 | ||
Stock Option [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Exercise Price One [Member] | Exercise Price Two [Member] | |||||||||||||||||||||
Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | ||||||||||||||||||||||||
Stock Options and Warrants (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Number of warrants issued in connection to promissory notes | 175,000 | 350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 525,000 | ' | 525,000 | 350,000 | 175,000 | |
Number of warrants issued in connection with preferred stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27,000,000 | ' | ' | |
Sale of Stock, Number of Shares Issued in Transaction | ' | ' | 400,000 | 400,000 | 100,000 | 500,000 | 500,000 | 750,000 | 125,000 | 625,000 | 46,429 | 1,410,874 | 77,743 | 1,394,909 | 1,468,786 | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | |
Proceeds from Issuance of Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,243,000 | $730,183 | ' | ' | $221,121 | ' | ' | ' | ' | ' | |
Sale of Stock, Price Per Share | ' | ' | $0.25 | $0.25 | $0.25 | $0.25 | $0.25 | $0.40 | $0.40 | $0.40 | $0.28 | $0.25 | $0.28 | $0.25 | ' | ' | ' | $0.51 | $0.49 | $0.22 | ' | ' | $0.30 | ' | ' | |
Number of Shares, Granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Share-based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 639,328 | 0 | ' | ' | 14,822 | ' | ' | ' | ' | ' | |
Unrecognized compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $206,300 | ' | ' | ' | ' | ' | |
Weighted-average remaining requisite service period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '0 years | [1] | ' | ' | ' | '1 year 10 months 24 days | ' | ' | ' | ' | ' |
Warrants outstanding have weighted average remaining contractual life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years 10 months 13 days | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | |
Warrants iissued as fee to placement agent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,890,000 | ' | ' | |
Warrant Exercise Price Reduced | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.20 | ' | ' | |
[1] | * These 1,000,000 options were granted without a specified expiration term. |
Stockholders_Equity_Deficit_De
Stockholder's Equity (Deficit) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Series A sale price | $5,460,000 | $5,460,000 |
Series A Preferred Stock [Member] | ' | ' |
Series A sale price | 5,400,000 | ' |
Less: Reclassification of warrant fair value to liability | -5,669,897 | ' |
Offering costs | -496,348 | ' |
Plus: Deemed dividend | 2,634,185 | ' |
Series A dividends | 60,000 | ' |
Redemption of temporary equity | $1,928,000 | ' |
Stockholders_Equity_Deficit_De1
Stockholder's Equity (Deficit) (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||||||||||||||||||||||||||||
Nov. 12, 2013 | Oct. 09, 2013 | Oct. 07, 2013 | Sep. 06, 2013 | Aug. 30, 2013 | Aug. 27, 2013 | Aug. 21, 2013 | Aug. 07, 2013 | Jul. 08, 2013 | Jun. 27, 2013 | Jun. 21, 2013 | 24-May-13 | 19-May-13 | Apr. 01, 2013 | Jan. 15, 2013 | Apr. 13, 2012 | Feb. 10, 2012 | Mar. 31, 2013 | Jan. 31, 2013 | Aug. 31, 2012 | 31-May-12 | Apr. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 10, 2014 | Jul. 15, 2012 | Dec. 31, 2013 | Feb. 28, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 10, 2012 | Feb. 10, 2012 | Feb. 10, 2012 | Oct. 17, 2013 | Oct. 08, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Aug. 07, 2013 | Jul. 08, 2013 | Nov. 12, 2013 | Nov. 12, 2013 | Jul. 15, 2012 | Jul. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 09, 2013 | ||
Investor | Stock Option [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Convertible bridge loan [Member] | Convertible Promissory Notes [Member] | Health Revenue Assurance Holdings [Member] | Articles Of Association [Member] | Articles Of Association [Member] | Minimum [Member] | Maximum [Member] | Private Placement [Member] | Private Placement [Member] | Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | Settlement Agreement [Member] | Settlement Agreement [Member] | Employee [Member] | Two Employees [Member] | Three Employees [Member] | Michael Ciprianni [Member] | ||||||||||||||||||||||||||||
Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stock shares issued | ' | ' | ' | ' | 400,000 | 400,000 | 100,000 | 500,000 | 500,000 | ' | 750,000 | 125,000 | 625,000 | ' | 46,429 | ' | 1,410,874 | ' | ' | 77,743 | ' | 1,394,909 | 1,468,786 | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | 13,499,226 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stock shares issued, value | ' | ' | ' | ' | $100,000 | $100,000 | $25,000 | $200,000 | $200,000 | ' | $300,000 | $50,000 | $250,000 | ' | $13,000 | ' | $350,000 | ' | ' | $22,000 | ' | $349,000 | $335,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Sale price of stock, per share | ' | ' | ' | ' | $0.25 | $0.25 | $0.25 | $0.25 | $0.25 | $0.51 | $0.40 | $0.40 | $0.40 | ' | $0.28 | ' | $0.25 | ' | $0.49 | $0.28 | ' | $0.25 | ' | ' | ' | ' | ' | $0.26 | ' | ' | ' | ' | ' | ' | ' | ' | $0.20 | $0.28 | $0.40 | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stock, shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000,000 | 500,000,000 | 500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Increment in shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Preferred stock, shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Preferred stock, shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 13,500,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,500,000 | ' | ' | ' | ' | ' | ' | |
Securities purchase agreement for the equity sale of convertible preferred stock | 5,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,400,000 | ' | ' | ' | ' | ' | ' | ' | |
Convertible preferred stock, dividend percentage | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | |
Warrant issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27,000,000 | ' | ' | ' | ' | ' | 1,890,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27,000,000 | ' | ' | ' | ' | ' | ' | ' | |
Warrants exercise price | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Warrants term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Net proceeds from issuance of convertible preferred stock after payment of expense | 4,322,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,903,652 | ' | ' | ' | ' | ' | ' | ' | |
Issuance of common stock as compensation, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 462,665 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Share-based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 639,328 | 0 | ' | ' | 14,822 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Term of agreement | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | |
Issuance of shares for cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51,000 | ' | ' | ' | ' | ' | ' | ' | 80,500 | ' | ' | ' | ' | ' | 1,238,000 | 1,056,094 | ' | ' | ' | ' | 3,446 | 4,352 | ' | ' | ' | ' | ' | ' | ' | 400,000 | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | |
Issuance of shares for cash, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | 230,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,446,429 | 4,352,312 | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stock issued for services, shares | ' | 100,000 | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 54,847 | ' | ' | ' | ' | 50,266 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,605,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000 | 187,500 | 95,052 | -4,125,000 | |
Shares issued for prepaid services | ' | 24,000 | ' | 15,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,939 | ' | ' | ' | ' | 24,630 | ' | ' | ' | ' | 1,325,500 | ' | ' | ' | ' | ' | 4,605 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,750 | 43,125 | 45,625 | 1,155,000 | |
Share price, per share | ' | $0.24 | ' | $0.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.35 | ' | $0.22 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.25 | $0.23 | $0.48 | $0.28 | |
Conversion of convertible debt amount | ' | ' | ' | ' | 402,083 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | 250,000 | 313,908 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | |
Conversion of convertible debt, shares | ' | ' | ' | ' | -1,608,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,343,749 | 1,265,381 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | |
Conversion price | ' | ' | ' | ' | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.10 | ' | ' | ' | ' | ' | $0.10 | ' | ' | ' | ' | $0.19 | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.10 | ' | ' | ' | ' | ' | |
Number of investors | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Convertible terms of conversion feature | ' | ' | ' | ' | 'The shares were valued at $514,666 based on the quoted trading price of $0.32 and accordingly, the company recorded a loss on conversion of $112,583. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Unrecognized compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 206,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Weighted-average remaining requisite service period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '0 years | [1] | ' | ' | ' | '1 year 10 months 24 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of agreement over expensed | ' | 'six (6) months. | ' | 'Expensed over 12 months. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Shares exchange right on each share pursuant to Merger agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,271 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,271 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common Stock, Shares, Outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39,054,867 | 54,752,294 | 39,054,867 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Stockholders equity forward stock split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '12.98 for 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stocks, including additional paid in capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,747 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Value of Beneficial conversion feature in convertible debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | 2,600,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Repurchase of shares pursuant to settlement agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -232,500 | ' | ' | ' | ' | ' | -3,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 232,500 | ' | ' | ' | ' | |
Repurchase of shares pursuant to settlement agreement, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -3,299,802 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,299,802 | ' | ' | ' | ' | |
Shares issued as fees, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,575,000 | 5,575,000 | 2,375,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Payment of financing and stock issuance costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -325,911 | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Convertible preferred stock beneficial description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
The preferred stock is convertible into Common on a 2 for 1 basis. The Company recorded a beneficial conversion value for the preferred stock of approximately $2.6 million as an immediate charge to accumulated deficit as it is considered a constructive dividend to Series A preferred stockholders. | |||||||||||||||||||||||||||||||||||||||||||||||||
Offering costs charged to additional paid-in capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $326,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common Stock, Par or Stated Value Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | * These 1,000,000 options were granted without a specified expiration term. |
Concentrations_Details
Concentrations (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Concentration Risk [Line Items] | ' |
Percentage of sales generated by hospitals | 60.00% |
Hospital Customer A [Member] | ' |
Concentration Risk [Line Items] | ' |
Percentage of sales generated by hospitals | 42.00% |
Hospital Customer B [Member] | ' |
Concentration Risk [Line Items] | ' |
Percentage of sales generated by hospitals | 6.00% |
Hospital Customer C [Member] | ' |
Concentration Risk [Line Items] | ' |
Percentage of sales generated by hospitals | 6.00% |
Hospital Customer D [Member] | ' |
Concentration Risk [Line Items] | ' |
Percentage of sales generated by hospitals | 6.00% |
Concentrations_Details_Textual
Concentrations (Details Textual) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Hospital | Hospital | |
Concentrations (Textual) | ' | ' |
Number of hospitals | 4 | 13 |
Concentration risk percentage sales | 60.00% | 89.00% |
Accounts Payable [Member] | Vendor [Member] | ' | ' |
Concentrations (Textual) | ' | ' |
Number of major vendors | 5 | 4 |
Concentration risk, percentage | 56.00% | 67.00% |
Accounts Receivable [Member] | Customer [Member] | ' | ' |
Concentrations (Textual) | ' | ' |
Number of major customer | 4 | 1 |
Concentration risk, percentage | 64.00% | 62.00% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of income tax expense (benefit) | ' | ' |
U.S. Federal "expected" income tax | ($1,860,902) | ($495,540) |
State income tax | -198,679 | -52,906 |
Non-deductible beneficial conversion interest | ' | 102,000 |
Stock compensation | 252,366 | 24,769 |
Change in fair value of warrant liability | -124,187 | ' |
Loss on extinguishment of debt | 49,852 | ' |
Other | 23,585 | ' |
Change in valuation allowance | 1,857,964 | 421,677 |
Total provision for income taxes | ' | ' |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Deferred tax assets: | ' | ' | ' |
Net operating loss carry forward | $1,593,719 | $586,600 | ' |
Stock options | 5,578 | ' | ' |
Accrued salary and other | ' | 35,821 | ' |
Accrual to cash timing difference | 859,735 | ' | ' |
Total gross deferred tax assets | 2,459,032 | 622,421 | 169,500 |
Deferred tax liabilities: | ' | ' | ' |
Depreciation | -9,890 | -31,244 | ' |
Total gross deferred tax liabilities | -9,890 | -31,244 | ' |
Less valuation allowance | -2,449,142 | -591,177 | ' |
Net deferred tax assets | ' | ' | ' |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes (Textual) | ' | ' | ' |
Net operating losses | ' | $4,209,000 | ' |
Valuation allowance on deferred tax asset | ' | 100.00% | ' |
Operating loss carryforwards expiration description | ' | 'Carry forwards will expire, if not utilized, starting in 2031 through 2033 | ' |
Federal corporate tax rate | ' | 34.00% | ' |
Total gross deferred tax assets | 169,500 | 2,459,032 | 622,421 |
Taxable Income (loss), total | 434,509 | ' | ' |
Valuation allowance | ' | 2,449,142 | 591,177 |
Increase in valuation allowance | ' | $1,857,964 | ' |
Related_Party_Transactions_Det
Related Party Transactions (Detail Textual) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2013 | Dec. 31, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | |
Andrea Clark | Andrea Clark | Andrea Clark | Robert Rubinowitz | ||||
Related Party Transaction (Textual) | ' | ' | ' | ' | ' | ' | ' |
Due to officer as stated in February 2012 merger agreement | ' | ' | $75,000 | ' | ' | $75,000 | ' |
Promissory notes payable | ' | ' | ' | ' | ' | ' | 40,000 |
Website development services | ' | 302,764 | ' | ' | ' | ' | ' |
Revenues recorded from ResumeBear | 211,239 | ' | ' | ' | ' | ' | ' |
Account receivable with resume bear | ' | ' | ' | ' | 108,000 | ' | ' |
Consolidated financial statements allowance | ' | ' | ' | ' | 16,244 | ' | ' |
Reduction of revenue | ' | ' | ' | ' | 92,000 | ' | ' |
Estimated contract income loss | ' | ' | ' | $88,000 | $108,000 | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent Event [Member], USD $) | 0 Months Ended | 0 Months Ended | ||
Apr. 15, 2014 | Apr. 07, 2014 | Mar. 28, 2014 | Apr. 14, 2014 | |
Separation Agreement [Member] | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' |
Payment to employer loan, description | ' | ' | ' | '$175,000 to be paid in equal increments of $3,365.39 on each of May 2, 2014, May 16, 2014, May 30, 2014, June 14, 2014 and June 27, 2014 and thereafter equal increments of $7,532.05 with the last payment date being April 17, 2015 |
Accrued and unpaid base salary bonus, description | ' | ' | ' | '$23,557.70 in accrued and unpaid base salary, bonus and vacation earned through April 11, 2014 payable in equal installments of $1,121.80 beginning on July 11, 2014 |
Accrued Salary | ' | ' | ' | $6,730,770 |
Letter received from Mr. Boyers counsel | ' | ' | 421,062.53 | ' |
Additional letter received from Mr. Boyers counsel | ' | $13,370.21 | ' | ' |
Employment termination agreement, description | 'On April 15, 2014, the Company notified Joseph Brophy, its senior vice president of operations, that the Company was terminating his employment with the Company as well as that certain letter agreement, dated December 5, 2012, both effective April 25, 2014. | ' | ' | ' |