Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 18, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'NOHO, Inc. | ' |
Entity Central Index Key | '0001535469 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 19,368,829 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash | $72,010 | $18,804 |
Accounts receivable | 43,912 | 50,392 |
Prepaid expenses | ' | 61,583 |
Inventory | 153,837 | 120,203 |
Total current assets | 269,759 | 250,982 |
Fixed assets, net of accumulated depreciation of $9,312 and $6,267, respectively | 9,734 | 12,772 |
Intangible assets, net of accumulated amortization of $55,713 and $43,911, respectively | 120,696 | 132,498 |
Total assets | 400,189 | 396,252 |
Current liabilities: | ' | ' |
Accounts payable | 641,450 | 272,253 |
Accrued compensation - related party | 1,039,012 | 803,236 |
Accrued interest | 113,050 | 46,312 |
Accrued interest - related party | 20,033 | 10,014 |
Line of credit - related party | 253,000 | 205,500 |
Notes payable, net of discounts of $31,107 and $0, respectively | 308,393 | 189,500 |
Convertible notes payable, net of discounts of $343,816 and $1,232 respectively | 472,434 | 254,268 |
Derivative liability | 710,316 | ' |
Total current liabilities | 3,557,688 | 1,781,083 |
Total liabilities | 3,557,688 | 1,781,083 |
Stockholders' (deficit): | ' | ' |
Common stock; $0.001 par value; 760,000,000 shares authorized; 18,643,829 and 16,919,081 issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 18,644 | 16,920 |
Additional paid in capital | 6,972,198 | 4,438,500 |
Accumulated (deficit) | -10,148,341 | -5,840,251 |
Total stockholders' (deficit) | -3,157,499 | -1,384,831 |
Total liabilities and stockholders' (deficit) | $400,189 | $396,252 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Accumulated depreciation of fixed assets | $9,312 | $6,267 |
Accumulated amortization of intangible assets | 55,713 | 43,911 |
Discounts on notes payable | 31,107 | 0 |
Discounts of convertible notes payable | $343,816 | $1,232 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 760,000,000 | 760,000,000 |
Common stock, issued | 18,643,829 | 16,919,081 |
Common stock, outstanding | 18,643,829 | 16,919,081 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Sales revenue, net | $31,252 | $169,898 | $461,893 | $447,876 |
License fee | 250,000 | ' | 250,000 | ' |
Total revenue | 281,252 | 169,898 | 711,893 | 447,876 |
Cost of goods sold | 13,750 | 90,812 | 254,778 | 372,647 |
Gross profit | 267,502 | 79,086 | 457,115 | 75,229 |
Operating expenses: | ' | ' | ' | ' |
Consulting fees | 352,890 | 43,227 | 517,099 | 100,514 |
Compensation expense | 73,097 | 386,803 | 2,715,156 | 899,420 |
General and administrative | 253,064 | 176,665 | 471,846 | 410,795 |
Professional fees | 24,571 | 37,926 | 144,099 | 88,187 |
Promotional and marketing | 4,737 | 19,926 | 43,081 | 46,333 |
Selling expenses | 12,597 | 69,125 | 200,999 | 160,735 |
Total operating expenses | 720,956 | 733,672 | 4,092,280 | 1,705,984 |
Loss from continuing operations | -453,454 | -654,586 | -3,648,914 | -1,630,755 |
Other income (expense): | ' | ' | ' | ' |
Interest expense, net | -213,521 | 10 | -274,849 | 10 |
Interest expense - related party | -18,191 | -53,693 | -69,160 | -134,585 |
Financing costs | -45,850 | ' | -45,850 | ' |
Unrealized gain (loss) on derivatives | -283,066 | ' | -283,066 | ' |
Total other income (expense) | -560,628 | -53,683 | -672,925 | -134,575 |
Net loss | ($1,014,082) | ($708,269) | ($4,308,090) | ($1,765,330) |
Net loss per share- basic and fully diluted | ($0.06) | ($0.04) | $0.03 | ($0.12) |
Weighted average number of shares outstanding - basic and fully diluted | 17,922,775 | 16,209,827 | 17,582,831 | 14,921,517 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net loss | ($4,308,090) | ($1,765,330) |
Adjustments to reconcile net loss from operations to net cash used in operating activities: | ' | ' |
Shares issued for services | 2,335,080 | 264,808 |
Shares issued for financing | 56,650 | ' |
Depreciation and amortization | 14,847 | 14,452 |
Amortization of debt discount | 84,666 | 25,739 |
Amortization of warrants issued for financing | 36,085 | ' |
Change in fair value of derivative liability | 283,066 | ' |
Increase in allowance for bad debt | 158,016 | ' |
Changes in operating assets and liablilities: | ' | ' |
Decrease (increase) in accounts receivable | -151,536 | 1,471 |
(Increase) in prepaid expenses | 61,583 | ' |
(Increase) in inventory | -33,634 | 44,816 |
Increase in accounts payable and accrued liabilities | 369,190 | 48,187 |
Increase in accrued payroll | 235,776 | 243,100 |
Increase in accrued interest | 66,738 | 11,219 |
Increase in accrued interest - related party | 10,019 | 61,226 |
Net cash used by operating activities | -781,544 | -1,050,312 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Purchase of fixed assets | ' | -2,570 |
Net cash used in investing activities | ' | -2,570 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds (payments) from line of credit, net - related party | 47,500 | 180,500 |
Proceeds from notes payabe | 150,000 | 289,500 |
Payments on notes payable | ' | -13,500 |
Proceeds from convertible notes payable | 581,750 | ' |
Proceeds from sale of common stock | 55,500 | 660,000 |
Net cash provided by financing activities | 834,750 | 1,116,500 |
Net change in cash | 53,206 | 63,618 |
Cash - beginning | 18,804 | 83,907 |
Cash - ending | 72,010 | 147,525 |
SUPPLEMENTAL INFORMATION: | ' | ' |
Interest paid | 22,064 | ' |
Income taxes paid | ' | ' |
SUPPLEMENTAL NON-CASH DISCLOSURES | ' | ' |
Shares issued for debt conversion | 21,000 | ' |
Shares issued in connection with convertible debenture | ' | ' |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
BASIS OF PRESENTATION | ' |
NOTE 1 – BASIS OF PRESENTATION | |
The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. | |
These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these condensed interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 and notes thereto included in the Company's Annual Report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports. | |
Results of operations for the interim periods are not indicative of annual results. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Cash and cash equivalents | |||||||||||
For purpose of the statements of cash flows, the Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less. | |||||||||||
Concentration of credit risk | |||||||||||
The Company primarily transacts its business with one financial institution. The amount on deposit in that one institution may from time to time exceed the federally-insured limit. | |||||||||||
Use of estimates | |||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||
Income taxes | |||||||||||
The Company accounts for its income taxes under the provisions of ASC Topic 740, “Income Taxes.” The method of accounting for income taxes under ASC 740 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. | |||||||||||
Revenue recognition | |||||||||||
The Company recognizes revenues from sales of products when the items have shipped and title has transferred to the purchaser. | |||||||||||
Accounts receivable | |||||||||||
Accounts receivable is reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. | |||||||||||
Inventory | |||||||||||
Inventories are stated at the lower of cost (first-in, first-out basis) or market (net realizable value). | |||||||||||
Property and equipment | |||||||||||
Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. | |||||||||||
Depreciation is computed on the straight-line and accelerated methods for financial reporting and income tax reporting purposes based upon the following estimated useful lives: | |||||||||||
Computer equipment | 3 years | ||||||||||
Computer hardware | 5 years | ||||||||||
Office furniture | 7 years | ||||||||||
Long-lived assets | |||||||||||
The Company accounts for its long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. The Company determined that none of its long-term assets at September 30, 2014 were impaired | |||||||||||
The Company's intangible assets consist of the costs of filing and acquiring various patents and trademarks. The trademarks are recorded at cost. The Company determined that the trademarks have an estimated useful life of approximately 11 years and will be reviewed annually for impairment. Amortization will be recorded over the estimated useful life of the assets using the straight-line method for financial statement purposes. | |||||||||||
Stock-based compensation | |||||||||||
The Company accounts for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant. | |||||||||||
The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants and warrant issuances utilizing the Binomial pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. | |||||||||||
Stock-based compensation (continued) | |||||||||||
The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on compensation under ASC Topic 505-50, In accordance with ASC 505-50, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Binomial or Black-Scholes option-pricing models, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. | |||||||||||
Fair Value of Financial Instruments | |||||||||||
For certain financial instruments, including accounts payable, accrued expenses and notes payable, the carrying amounts approximate fair value due to their relatively short maturities. | |||||||||||
The Company adopted ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate | |||||||||||
Fair Value of Financial Instruments (continued) | |||||||||||
of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||||||||||
· | Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. | ||||||||||
· | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | ||||||||||
· | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. | ||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities From Equity” and ASC 815, “Derivatives and Hedging.” Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant and option derivatives are valued using the Black-Scholes model. | |||||||||||
The Company’s derivative liabilities are carried at fair value totaling $710,316 and $0, as of September 30, 2014 and 2013, respectively. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as change to fair value of derivative liability. | |||||||||||
At September 30, 2014, the Company identified the following liability that is required to be presented on the balance sheet at fair value: | |||||||||||
Liabilities | Fair Value | Fair Value Measurements | |||||||||
As of | 30-Sep-14 | ||||||||||
30-Sep-14 | Using Fair Value Hierarchy | ||||||||||
Level 1 | Level 2 | Level 3 | |||||||||
Derivative Liabilities | $ | 710,316 | $ | 710,316 | |||||||
$ | 710,316 | $ | 710,316 | ||||||||
For the periods ended September 30, 2014 and 2013, the Company recognized an unrealized loss on derivative relating to its convertible notes of $283,066 and a loss of $0, respectively, for the changes in the valuation of the aforementioned derivative liabilities. | |||||||||||
Loss per share | |||||||||||
The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. | |||||||||||
Recent accounting pronouncements | |||||||||||
The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. |
GOING_CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
GOING CONCERN | ' |
NOTE 3 – GOING CONCERN | |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred a net loss of $1,014,082 and $4,308,090 for the three and nine months ended September 30, 2014, respectively and has an accumulated deficit of $10,148,341 as of September 30, 2014. | |
In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is significantly dependent upon its ability, and will continue to attempt, to secure equity and/or additional debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern. | |
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty. |
INVENTORY
INVENTORY | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
INVENTORY | ' | ||||||||
NOTE 4 – INVENTORY | |||||||||
Inventories consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 120,557 | $ | 43,851 | |||||
Finished goods | 33,280 | 76,352 | |||||||
$ | 153,837 | $ | 120,203 | ||||||
FIXED_ASSETS
FIXED ASSETS | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
FIXED ASSETS | ' | ||||||||
NOTE 5 – FIXED ASSETS | |||||||||
Fixed assets consisted of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Computer equipment | $ | 9,277 | $ | 9,769 | |||||
Furniture and fixtures | 9,769 | 9,270 | |||||||
Fixed assets, total | 19,046 | 19,039 | |||||||
Less: accumulated depreciation | (9,312 | ) | (6,267 | ) | |||||
Fixed assets, net | $ | 9,734 | $ | 12,772 | |||||
Depreciation expense for the three and nine months ended September 30, 2014 totaled $874 and $3,039, respectively, compared to $1,678 and $2,620 for the three and nine months ended September 30, 2013, respectively. |
LINE_OF_CREDIT_RELATED_PARTY
LINE OF CREDIT - RELATED PARTY | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
LINE OF CREDIT - RELATED PARTY | ' |
NOTE 6 – LINE OF CREDIT – RELATED PARTY | |
On November 15, 2011, the Company executed a revolving credit line with a related party for up to $150,000. The related party was an entity that is owned and controlled by an officer of the Company. | |
On November 15, 2012, the lender agreed to increase the credit line up to $200,000, extend the maturity date to March 31, 2013 and to decrease the interest rate from 30% to 15% per annum. On April 1, 2013, the lender agreed to a further increase up to $300,000 and to extend the maturity date to December 31, 2013, which was subsequently extended to March 31, 2015. As of September 30, 2014, the Company has drawn down a total of $253,000 with no repayments leaving a principal balance owed of $253,000. As of September 30, 2014 and 2013, the Company recorded interest expense of $32,084 and $22,769, respectively, and as restated. |
NOTES_PAYABLE_AND_CONVERTIBLE_
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | ' | ||||||||
NOTE 7 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE | |||||||||
Notes payable consisted of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Promissory note issued to an individual, non-interest bearing, unsecured and currently in default. | 4,500 | 4,500 | |||||||
Promissory note issued to an individual, effective interest rate 24%, unsecured and currently in default. | 110,000 | 110,000 | |||||||
Promissory note issued to an entity, effective interest rate 12%, unsecured and currently in default. | 75,000 | 75,000 | |||||||
Promissory note issued to an entity, effective interest rate 8%, maturing on March 5, 2015. | 150,000 | — | |||||||
Less discounts | (31,107 | ) | — | ||||||
Total notes payable | |||||||||
$ | 308,393 | $ | 189,500 | ||||||
Interest expense record in connection with the for the Company’s notes payable for the nine months ended September 30, 2014 and the year ended December 31, 2013 totaled $34,285 and $13,381, respectively. | |||||||||
Convertible notes payable consisted of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Convertible promissory note issued to an individual, bearing interest at a rate of 24%, convertible at a rate of $1, unsecured and due on demand. | $ | 125,000 | $ | 125,000 | |||||
Convertible promissory note issued to an individual, bearing interest at a rate of 29%, convertible at a rate of $1, unsecured and currently in default. | 100,000 | 100,000 | |||||||
Convertible promissory note issued to an individual, bearing interest at a rate of 24%, convertible at a rate of $1, unsecured and currently in default. | 13,000 | 13,000 | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a rate of $1, unsecured and due on demand. | 17,500 | 17,500 | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 12%, convertible at a variable rate based on average low trades and a discount of 40%, secured by assets of the Company and maturing on April 23, 2015. | 100,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on market price, secured by assets of the Company and maturing on January 14, 2015. | 50,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on average low trades and a discount of 40%, secured by assets of the Company and maturing on May 15, 2015. | 50,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on average low trades and a discount of 40%, secured by assets of the Company and maturing on March 12, 2015. | 150,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 12%, convertible at a variable rate based on average low trades and a discount of 35%, secured by assets of the Company and maturing on July 14, 2015. | 35,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on average low trades and a discount of 35%, secured by assets of the Company and maturing on June 24, 2015. | 58,500 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on average low trades and a discount of 35%, secured by assets of the Company and maturing on September 11, 2015. | 63,250 | — | |||||||
Less discounts | (343,816 | ) | (1,232 | ) | |||||
Total notes payable | |||||||||
$ | 472,434 | $ | 254,268 | ||||||
Interest expense record in connection with the for the Company’s convertible notes payable for the nine months ended September 30, 2014 and the year ended December 31, 2013 totaled $71,927and $13,381, respectively. Amortization expense related to debt discounts totaled $120,751 for the nine months ended September 30, 2013. Additionally, the Company recognized a derivative liability arising from variable conversion rates of its convertible debt with a fair value of $710,316 at September 30, 2013 and an unrealized loss on the adjustment to fair value of the derivatives in the amount of $283,066. |
STOCKHOLDERS_DEFICIT
STOCKHOLDERS' (DEFICIT) | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
STOCKHOLDERS' (DEFICIT) | ' |
NOTE 8 – STOCKHOLDERS’ (DEFICIT) | |
The Company is authorized to issue up to 760,000,000 shares of $0.001 par value, common stock as a result of the Company’s 15.2 to 1 forward split effective as of January 16, 2013. All equity has been retroactively restated for the effects of the forward split. | |
During the three months ended September 30, 2014, the Company authorized the issuance of a total of 1,181,100 shares of common stock for cash, services rendered and certain debt financing. Accordingly, the company, through its private placement memorandum issued 21,300 shares for $21,000 or $1 per share. The Company issues 1,106,500 shares as compensation for services rendered and recorded an expense to share based compensation in the amount of $851,475 (the 500,000 common stock shares issued to our two corporate officers were to supposed be issued at the beginning of 2014 and a portion of that expense was re-classified to adjust for the delay in issuance). The Company also issued 53,500 shares for a value of $39,817 to certain debt holders in connection with certain notes payable carried on its balance sheet. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
RELATED PARTY TRANSACTIONS | ' | ||||||||
NOTE 9 – RELATED PARTY TRANSACTIONS | |||||||||
Employment agreement with Chief Executive Officer | |||||||||
Effective January 1, 2014, the Company executed a five year employment agreement with its Chief Executive Officer, superseding all previous agreements. Pursuant to the agreement, the Company has agreed to pay the following cash and equity compensation over the five-year term of the agreement: | |||||||||
Years Ended December 31, | Annual Base Salary | Equity Compensation | |||||||
2014 | $ | 240,000 | 450,000 shares | ||||||
2015 | 300,000 | 500,000 shares | |||||||
2016 | 375,000 | 575,000 shares | |||||||
2017 | 450,000 | 700,000 shares | |||||||
2018 | 550,000 | 850,000 shares | |||||||
Total | $ | 1,915,000 | 3,075,000 shares | ||||||
In addition, the Company has agreed to grant has an automobile allowance of $18,000 per year. In the event, the Company does not make timely payments of salary; the interest is accrued on any unpaid portion at a rate of 10% per annum. | |||||||||
During the three months ended September 30, 2014, the Company recorded executive compensation totaling $60,000 and interest expense totaling $23,056. | |||||||||
Employment agreement with Chief Operating Officer | |||||||||
Effective January 1, 2014, the Company executed a five year employment agreement with its Chief Operating Officer, superseding all previous agreements. Pursuant to the agreement, the Company has agreed to pay the following cash and equity compensation over the five-year term of the agreement: | |||||||||
Years Ended December 31, | Annual Base Salary | Equity Compensation | |||||||
2014 | $ | 135,000 | 250,000 shares | ||||||
2015 | 150,000 | 275,000 shares | |||||||
2016 | 185,000 | 325,000 shares | |||||||
2017 | 225,000 | 450,000 shares | |||||||
2018 | 270,000 | 550,000 shares | |||||||
Total | $ | 965,000 | 1,850,000 shares | ||||||
In addition to the above compensation, the Company has agreed to a one-time grant of 250,000 shares as a signing bonus. Further, in the event, the Company does not make timely payments of salary; the interest is accrued on any unpaid portion at a rate of 10% per annum. | |||||||||
During the three months ended September 30, 2014, the Company recorded executive compensation totaling $33,750 and no interest expense. | |||||||||
Consulting agreement with Chief Financial Officer | |||||||||
Effective January 1, 2014 the Company extended its consulting agreement for services of the chief financial officer for an additional three-month term. In accordance with the agreement, the Company granted 30,000 shares of its common stock as full consideration for these services and has recorded compensation expense totaling $55,500 based on the fair market value on the date of grant. On April 1, 2014 and July 1, 2014, the parties agreed to a subsequent term of three months and an additional issuance of 30,000 shares of common stock for each three-month term. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
NOTE 10– COMMITMENTS AND CONTINGENCIES | |||||
On May 2, 2012, the Company executed a lease agreement for a period of 39 months with a monthly base rent of $750 plus estimated common area maintenance and HVAC charges of $1,230. The Company was required to pay a security deposit of $2,186. | |||||
The future minimum lease payments are as follows: | |||||
Years Ended December 31, | |||||
2014 | 23,760 | ||||
2015 | 13,860 | ||||
Total | $ | 37,620 | |||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 11 – SUBSEQUENT EVENTS | |
None. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
Cash and cash equivalents | ' | ||||||||||
Cash and cash equivalents | |||||||||||
For purpose of the statements of cash flows, the Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less. | |||||||||||
Concentrations of credit risk | ' | ||||||||||
Concentration of credit risk | |||||||||||
The Company primarily transacts its business with one financial institution. The amount on deposit in that one institution may from time to time exceed the federally-insured limit. | |||||||||||
Use of estimates | ' | ||||||||||
Use of estimates | |||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||
Income taxes | ' | ||||||||||
Income taxes | |||||||||||
The Company accounts for its income taxes under the provisions of ASC Topic 740, “Income Taxes.” The method of accounting for income taxes under ASC 740 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. | |||||||||||
Revenue recognition | ' | ||||||||||
Revenue recognition | |||||||||||
The Company recognizes revenues from sales of products when the items have shipped and title has transferred to the purchaser. | |||||||||||
Accounts receivable | ' | ||||||||||
Accounts receivable | |||||||||||
Accounts receivable is reported at the customers’ outstanding balances, less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. | |||||||||||
Inventory | ' | ||||||||||
Inventory | |||||||||||
Inventories are stated at the lower of cost (first-in, first-out basis) or market (net realizable value). | |||||||||||
Property and equipment | ' | ||||||||||
Property and equipment | |||||||||||
Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. | |||||||||||
Depreciation is computed on the straight-line and accelerated methods for financial reporting and income tax reporting purposes based upon the following estimated useful lives: | |||||||||||
Computer equipment | 3 years | ||||||||||
Computer hardware | 5 years | ||||||||||
Office furniture | 7 years | ||||||||||
Long-lived assets | ' | ||||||||||
Long-lived assets | |||||||||||
The Company accounts for its long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. The Company determined that none of its long-term assets at September 30, 2014 were impaired | |||||||||||
The Company's intangible assets consist of the costs of filing and acquiring various patents and trademarks. The trademarks are recorded at cost. The Company determined that the trademarks have an estimated useful life of approximately 11 years and will be reviewed annually for impairment. Amortization will be recorded over the estimated useful life of the assets using the straight-line method for financial statement purposes. | |||||||||||
Stock-based compensation | ' | ||||||||||
Stock-based compensation | |||||||||||
The Company accounts for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant. | |||||||||||
The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants and warrant issuances utilizing the Binomial pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. | |||||||||||
The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on compensation under ASC Topic 505-50, In accordance with ASC 505-50, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Binomial or Black-Scholes option-pricing models, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. | |||||||||||
Fair Value of Financial Instruments | ' | ||||||||||
Fair Value of Financial Instruments | |||||||||||
For certain financial instruments, including accounts payable, accrued expenses and notes payable, the carrying amounts approximate fair value due to their relatively short maturities. | |||||||||||
The Company adopted ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate | |||||||||||
Fair Value of Financial Instruments (continued) | |||||||||||
of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: | |||||||||||
· | Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. | ||||||||||
· | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | ||||||||||
· | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. | ||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities From Equity” and ASC 815, “Derivatives and Hedging.” Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant and option derivatives are valued using the Black-Scholes model. | |||||||||||
The Company’s derivative liabilities are carried at fair value totaling $710,316 and $0, as of September 30, 2014 and 2013, respectively. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as change to fair value of derivative liability. | |||||||||||
At September 30, 2014, the Company identified the following liability that is required to be presented on the balance sheet at fair value: | |||||||||||
Liabilities | Fair Value | Fair Value Measurements | |||||||||
As of | 30-Sep-14 | ||||||||||
30-Sep-14 | Using Fair Value Hierarchy | ||||||||||
Level 1 | Level 2 | Level 3 | |||||||||
Derivative Liabilities | $ | 710,316 | $ | 710,316 | |||||||
$ | 710,316 | $ | 710,316 | ||||||||
For the periods ended September 30, 2014 and 2013, the Company recognized an unrealized loss on derivative relating to its convertible notes of $283,066 and a loss of $0, respectively, for the changes in the valuation of the aforementioned derivative liabilities. | |||||||||||
Loss per share | ' | ||||||||||
Loss per share | |||||||||||
The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. | |||||||||||
Recent accounting pronouncements | ' | ||||||||||
Recent accounting pronouncements | |||||||||||
The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. |
INVENTORY_Tables
INVENTORY (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 120,557 | $ | 43,851 | |||||
Finished goods | 33,280 | 76,352 | |||||||
$ | 153,837 | $ | 120,203 |
FIXED_ASSETS_Tables
FIXED ASSETS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Fixed assets | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Computer equipment | $ | 9,277 | $ | 9,769 | |||||
Furniture and fixtures | 9,769 | 9,270 | |||||||
Fixed assets, total | 19,046 | 19,039 | |||||||
Less: accumulated depreciation | (9,312 | ) | (6,267 | ) | |||||
Fixed assets, net | $ | 9,734 | $ | 12,772 |
NOTES_PAYABLE_Tables
NOTES PAYABLE - (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Notes payable | ' | ||||||||
Notes payable consisted of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Promissory note issued to an individual, non-interest bearing, unsecured and currently in default. | 4,500 | 4,500 | |||||||
Promissory note issued to an individual, effective interest rate 24%, unsecured and currently in default. | 110,000 | 110,000 | |||||||
Promissory note issued to an entity, effective interest rate 12%, unsecured and currently in default. | 75,000 | 75,000 | |||||||
Promissory note issued to an entity, effective interest rate 8%, maturing on March 5, 2015. | 150,000 | — | |||||||
Less discounts | (31,107 | ) | — | ||||||
Total notes payable | |||||||||
$ | 308,393 | $ | 189,500 | ||||||
Convertible notes payable consisted of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Convertible promissory note issued to an individual, bearing interest at a rate of 24%, convertible at a rate of $1, unsecured and due on demand. | $ | 125,000 | $ | 125,000 | |||||
Convertible promissory note issued to an individual, bearing interest at a rate of 29%, convertible at a rate of $1, unsecured and currently in default. | 100,000 | 100,000 | |||||||
Convertible promissory note issued to an individual, bearing interest at a rate of 24%, convertible at a rate of $1, unsecured and currently in default. | 13,000 | 13,000 | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a rate of $1, unsecured and due on demand. | 17,500 | 17,500 | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 12%, convertible at a variable rate based on average low trades and a discount of 40%, secured by assets of the Company and maturing on April 23, 2015. | 100,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on market price, secured by assets of the Company and maturing on January 14, 2015. | 50,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on average low trades and a discount of 40%, secured by assets of the Company and maturing on May 15, 2015. | 50,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on average low trades and a discount of 40%, secured by assets of the Company and maturing on March 12, 2015. | 150,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 12%, convertible at a variable rate based on average low trades and a discount of 35%, secured by assets of the Company and maturing on July 14, 2015. | 35,000 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on average low trades and a discount of 35%, secured by assets of the Company and maturing on June 24, 2015. | 58,500 | — | |||||||
Convertible promissory note issued to an entity, bearing interest at a rate of 8%, convertible at a variable rate based on average low trades and a discount of 35%, secured by assets of the Company and maturing on September 11, 2015. | 63,250 | — | |||||||
Less discounts | (343,816 | ) | (1,232 | ) | |||||
Total notes payable | |||||||||
$ | 472,434 | $ | 254,268 | ||||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Cash and equity compensation over fire-year term of CEO and COO employment agreements | ' | ||||||||
Employment agreement with Chief Executive Officer | |||||||||
Years Ended December 31, | Annual Base Salary | Equity Compensation | |||||||
2014 | $ | 240,000 | 450,000 shares | ||||||
2015 | 300,000 | 500,000 shares | |||||||
2016 | 375,000 | 575,000 shares | |||||||
2017 | 450,000 | 700,000 shares | |||||||
2018 | 550,000 | 850,000 shares | |||||||
Total | $ | 1,915,000 | 3,075,000 shares | ||||||
Employment agreement with Chief Operating Officer | |||||||||
Years Ended December 31, | Annual Base Salary | Equity Compensation | |||||||
2014 | $ | 135,000 | 250,000 shares | ||||||
2015 | 150,000 | 275,000 shares | |||||||
2016 | 185,000 | 325,000 shares | |||||||
2017 | 225,000 | 450,000 shares | |||||||
2018 | 270,000 | 550,000 shares | |||||||
Total | $ | 965,000 | 1,850,000 shares | ||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Future minimum lease payments | ' | ||||
Years Ended December 31, | |||||
2014 | 23,760 | ||||
2015 | 13,860 | ||||
Total | $ | 37,620 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2014 | |
Computer software | ' |
Depreciation of equipment | '3 years |
Computer hardware | ' |
Depreciation of equipment | '5 years |
Office furniture | ' |
Depreciation of equipment | '7 years |
GOING_CONCERN_Details_Narrativ
GOING CONCERN (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' | ' | ' | ' |
Net loss | ($1,014,082) | ($708,269) | ($4,308,090) | ($1,765,330) | ' |
Accumulated net loss | ($10,148,341) | ' | ($10,148,341) | ' | ($5,840,251) |
INVENTORY_Inventory_Details
INVENTORY - Inventory (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $120,557 | $43,851 |
Finished goods | 33,280 | 76,352 |
Inventories, net | $153,837 | $120,203 |
FIXED_ASSETS_Fixed_assets_Deta
FIXED ASSETS - Fixed assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Abstract] | ' | ' |
Computer equipment | $9,277 | $9,769 |
Furniture and fixtures | 9,769 | 9,270 |
Fixed assets, total | 19,046 | 19,039 |
Less: accumulated depreciation | -9,312 | -6,267 |
Fixed assets, net | $9,734 | $12,772 |
FIXED_ASSETS_Details_Narrative
FIXED ASSETS (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment [Abstract] | ' | ' | ' | ' |
Depreciation expense | $874 | $3,039 | $1,678 | $2,620 |
LINE_OF_CREDIT_RELATED_PARTY_D
LINE OF CREDIT - RELATED PARTY (Details Narrative) (USD $) | 22 Months Ended | 34 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2014 | Apr. 02, 2013 | Nov. 15, 2012 | Nov. 15, 2011 | |
Debt Disclosure [Abstract] | ' | ' | ' | ' | ' |
Maximum amount of revolving credit line executed with related party | ' | ' | $300,000 | $200,000 | $150,000 |
Interest rate per annum | ' | ' | ' | 15.00% | 30.00% |
Total amount drawn down from credit line | ' | 253,000 | ' | ' | ' |
Amount repaid on credit line | ' | 253,500 | ' | ' | ' |
Remaining principal balance owed | ' | 253,000 | ' | ' | ' |
Interest expense | $22,769 | $32,084 | ' | ' | ' |
NOTES_PAYABLE_Notes_payable_De
NOTES PAYABLE - Notes payable (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Debenture to an entity, matured December 2013 | ' | ' |
Debenture | ' | $100,000 |
Interest rate | 0.00% | 0.00% |
Default interest rate | 18.00% | 18.00% |
Debenture to an individual, matured April 2013 | ' | ' |
Debenture | 125,000 | 125,000 |
Interest rate | 12.00% | 12.00% |
Default interest rate | 24.00% | 24.00% |
Debenture to an individual, matured July 2013 | ' | ' |
Debenture | 75,000 | 75,000 |
Interest rate | 12.00% | 12.00% |
Default interest rate | 24.00% | 24.00% |
Debenture to an individual, matured October 2013 | ' | ' |
Debenture | 110,000 | 110,000 |
Interest rate | 24.00% | 24.00% |
Default interest rate | 24.00% | 24.00% |
Debenture to an individual, matured September 2013 | ' | ' |
Debenture | 100,000 | 100,000 |
Interest rate | 12.00% | 12.00% |
Default interest rate | 24.00% | 24.00% |
Debenture to an individual, due on demand | ' | ' |
Debenture | 4,500 | 4,500 |
Interest rate | 12.00% | 12.00% |
Note payable to an entity, maturing March 5, 2015 | ' | ' |
Note payable | 150,000 | ' |
Interest rate | 8.00% | ' |
Convertible debenture to an entity, maturing May 2014 | ' | ' |
Convertible debenture | 21,500 | 17,500 |
Interest rate | 12.00% | 12.00% |
Conversion rate, per share | $2 | $2 |
Convertible debenture to an individual, maturing October 2013 | ' | ' |
Convertible debenture | 13,000 | ' |
Interest due in common stock, shares | 5,000 | ' |
Interest due in common stock, value | 14,000 | ' |
Total notes payable | ' | ' |
Debt discount | -62,037 | -1,232 |
Total notes payable, net of discount | $492,463 | $443,768 |
STOCKHOLDERS_DEFICIT_Details_N
STOCKHOLDERS' (DEFICIT) (Details Narrative) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Equity [Abstract] | ' | ' |
Common stock authorized, shares | 760,000,000 | 760,000,000 |
Common stock authorized, par value | $0.00 | $0.00 |
Authorized shares of common stock for issuance for services received | 277,738 | ' |
Compensation expense representing fair value of shares on date of grant | $172,493 | ' |
Issuance of shares for financing fees, shares | 61,000 | ' |
Issuance of shares for financing fees, value | 56,650 | ' |
Issuance of shares for conversion of short-term ntoes issued, shares | 21,000 | ' |
Issuance of shares for conversion of short-term ntoes issued, value | $21,000 | ' |
RELATED_PARTY_TRANSACTIONS_Cas
RELATED PARTY TRANSACTIONS - Cash and equity compensation over fire-year term of CEO and COO employment agreement, respectively (Details) (USD $) | 12 Months Ended | 60 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2018 | |
Chief Executive Officer | ' | ' | ' | ' | ' | ' |
Annual Base Salary | $550,000 | $450,000 | $375,000 | $300,000 | $240,000 | $1,915,000 |
Equity Compensation | 850,000 | 700,000 | 575,000 | 500,000 | 450,000 | 3,075,000 |
Chief Operating Officer | ' | ' | ' | ' | ' | ' |
Annual Base Salary | $270,000 | $225,000 | $185,000 | $150,000 | $135,000 | $965,000 |
Equity Compensation | 550,000 | 450,000 | 325,000 | 275,000 | 250,000 | 1,850,000 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2014 | Apr. 02, 2014 | |
Employment agreement with Chief Executive Officer | ' | ' | ' |
Annual automobile allowance | ' | $18,000 | ' |
Accrual rate for interest on unpaid CEO compensation, per annum | ' | 10.00% | ' |
Accrued compensation, CEO | 60,000 | ' | ' |
Accrued interest payable related to accrued compensation, CEO | 23,056 | ' | ' |
Employment agreement with Chief Operating Officer | ' | ' | ' |
One-time grant of shares as signing bonus | ' | 250,000 | ' |
Accrual rate for interest on unpaid COO compensation, per annum | ' | 10.00% | ' |
Accrued compensation, COO | 33,750 | ' | ' |
Accrued interest payable related to accrued compensation, COO | ' | ' | ' |
Consulting agreement with Chief Financial Officer | ' | ' | ' |
Shares of common stock received | 30,000 | ' | ' |
Compensation expense based on fair market value on date of grant | $55,000 | ' | ' |
Additional shares of common stock issued | ' | ' | 30,000 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES - Future minimum lease payments (Details) (USD $) | Dec. 31, 2015 | Dec. 31, 2014 |
Future minimum lease payments | $13,860 | $23,760 |
Total | ' | ' |
Future minimum lease payments | $37,620 | ' |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 2-May-12 |
Commitments and Contingencies Disclosure [Abstract] | ' |
Rent | $750 |
Maintenance and HVAC charges | 1,230 |
Security deposit | $2,186 |