Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Apr. 30, 2014 | Jun. 30, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'Intelligent Highway Solutions, Inc. | ' | ' |
Entity Central Index Key | '0001549719 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Trading Symbol | 'IHSI | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 13,073,163 | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $1,401,819 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets | ' | ' |
Cash and cash equivalents | $28,664 | $0 |
Accounts receivable, net of allowance of $0 and $45,820 | 0 | 466,286 |
Other receivables | 0 | 120 |
Prepaid expenses | 194,481 | 49,196 |
Deferred loan costs, current | 182,324 | 0 |
Deposits | 0 | 6,005 |
Total current assets | 405,469 | 521,607 |
Property and equipment, net of accumulated depreciation of $1,607 and $935 | 1,752 | 2,424 |
Deferred loan costs, net | 78,833 | 0 |
Total assets | 486,054 | 524,031 |
Current liabilities | ' | ' |
Bank overdraft | 40 | 1,678 |
Accounts payable | 89,562 | 61,688 |
Accrued expenses and other liabilities | 909,105 | 1,308,185 |
Notes payable, current portion | 252,274 | 274,083 |
Convertible notes payable, current portion | 30,000 | 30,000 |
Derivative liability | 46,023 | 0 |
Accrued interest | 113,599 | 37,118 |
Total current liabilities | 1,440,603 | 1,712,752 |
Convertible notes payable, net of discounts of $589,075 and $0 | 310,925 | 0 |
Total liabilities | 1,751,528 | 1,712,752 |
Stockholders' deficit | ' | ' |
Common stock, $0.00001 par value; 100,000,000 shares authorized; 11,933,666 and 10,729,666 issued and outstanding at December 31, 2013 and December 31, 2012 | 119 | 107 |
Additional paid-in capital | 2,125,834 | 216,083 |
Accumulated deficit | -3,391,427 | -1,404,911 |
Total stockholders' deficit | -1,265,474 | -1,188,721 |
Total liabilities and stockholders' deficit | $486,054 | $524,031 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS [Parenthetical] (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts (in dollars) | $0 | $45,820 |
Net accumulated depreciation (in dollars) | 1,607 | 935 |
Debt Discount, unamortized (in dollars) | $589,075 | $0 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 11,933,666 | 10,729,666 |
Common stock, shares outstanding | 11,933,666 | 10,729,666 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue | $833,528 | $1,795,702 |
Cost of sales | 778,139 | 1,548,442 |
Gross profit | 55,389 | 247,260 |
Operating expenses | ' | ' |
Salaries and wages | 238,081 | 415,983 |
Reseasrch and development | 0 | 31,075 |
General and administrative | 1,253,838 | 796,997 |
Total operating expenses | 1,491,919 | 1,244,055 |
Loss from operations | -1,436,530 | -996,795 |
Other income (expense) | ' | ' |
Loss on extinguishment of debt | -87,219 | 0 |
Gain on derivative fair value adjustment | 27,428 | 0 |
Interest expense | -490,195 | -50,873 |
Total other expense | -549,986 | -50,873 |
Loss before income taxes | -1,986,516 | -1,047,668 |
Provision for income taxes | 0 | 0 |
Net loss | ($1,986,516) | ($1,047,668) |
Basic and diluted loss per common share (in dollars per share) | ($0.18) | ($0.10) |
Basic and diluted weighted average shares outsanding (in shares) | 11,056,661 | 10,223,504 |
STATEMENT_OF_STOCKHOLDERS_DEFI
STATEMENT OF STOCKHOLDERS' DEFICIT (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Balance at Dec. 31, 2011 | ($335,803) | $93 | $21,347 | ($357,243) |
Balance (in shares) at Dec. 31, 2011 | ' | 9,250,000 | ' | ' |
Common stock issued for services | 82,500 | 3 | 82,497 | 0 |
Common stock issued for services (in shares) | ' | 330,000 | ' | ' |
Common stock issued for prepaid expense | 50,000 | 2 | 49,998 | 0 |
Common stock issued for prepaid expense (in Shares) | ' | 200,000 | ' | ' |
Common stock issued as loan fee | 5,000 | 0 | 5,000 | 0 |
Common stock issued as loan fee (in shares) | ' | 20,000 | ' | ' |
Common stock issued as repayment of loan | 9,000 | 4 | 8,996 | 0 |
Common stock issued as repayment of loan (in shares) | ' | 355,263 | ' | ' |
Common stock issued as loan fee 1 | 6,250 | 0 | 6,250 | 0 |
Common stock issued as loan fee 1 (in Shares) | ' | 25,000 | ' | ' |
Common stock issued for cash | 42,000 | 5 | 41,995 | 0 |
Common stock issued for cash (in shares) | ' | 549,403 | ' | ' |
Net loss | -1,047,668 | 0 | 0 | -1,047,668 |
Balance at Dec. 31, 2012 | -1,188,721 | 107 | 216,083 | -1,404,911 |
Balance (in shares) at Dec. 31, 2012 | ' | 10,729,666 | ' | ' |
Common stock issued for services | 314,616 | 11 | 744,604 | 0 |
Common stock issued for services (in shares) | ' | 1,104,000 | ' | ' |
Common stock issued for extenstion of note | 88,500 | 1 | 88,499 | 0 |
Common stock issued for extenstion of note (in shares) | ' | 100,000 | ' | ' |
Options issued for loan costs | 276,648 | 0 | 276,648 | 0 |
Options issued for loan costs (in Shares) | ' | 0 | ' | ' |
Debt discounts recorded on convertible notes payable | 800,000 | 0 | 800,000 | 0 |
Net loss | -1,986,516 | 0 | 0 | -1,986,516 |
Balance at Dec. 31, 2013 | ($1,265,474) | $119 | $2,125,834 | ($3,391,427) |
Balance (in shares) at Dec. 31, 2013 | ' | 11,933,666 | ' | ' |
STATEMENT_OF_CASH_FLOWS
STATEMENT OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities | ' | ' |
Net loss | ($1,986,516) | ($1,047,668) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Common stock issued for services | 314,616 | 82,500 |
Loss on forgiveness of debt | 87,219 | 0 |
Common stock issued as loan origination fee | 0 | 11,250 |
Depreciation | 672 | 672 |
Amortization of deferred loan costs | 366,240 | 0 |
Gain on derivative fair value adjustment | -27,428 | 0 |
Excess derivative liability charged to interest | 43,451 | 0 |
Amortization of debt discount | 240,925 | 0 |
Allowance for doubtful accounts | -45,820 | 45,820 |
Expenses paid on behalf of the company | 55,664 | 0 |
Changes in operating assets and liabilities | ' | ' |
Accounts receivable | 512,106 | -407,040 |
Other receivables | 120 | 33,976 |
Prepaid expenses | 21,965 | 5,467 |
Deposits | 6,005 | -6,005 |
Accounts payable | 23,374 | 60,382 |
Accrued interest | 76,481 | 34,796 |
Accrued expenses and other liabilities | -399,080 | 1,085,285 |
Net cash used in operating activities | -710,006 | -100,565 |
Cash flows from investing activities | ' | ' |
Cash flows from financing activities | ' | ' |
Repayment of bank overdraft | -1,678 | 0 |
Proceeds from bank overdraft | 40 | 1,678 |
Proceeds from convertible notes payable | 760,836 | 30,000 |
Proceeds from notes payable | 20,000 | 0 |
Repayments of notes payable | -40,528 | -8,917 |
Issuance of common stock for cash | 0 | 42,000 |
Net cash provided by financing activities | 738,670 | 64,761 |
Change in cash and cash equivalents | 28,664 | -35,804 |
Cash at beginning of period | 0 | 35,804 |
Cash at end of period | 28,664 | 0 |
Supplemental disclosures of cash flow information | ' | ' |
Cash paid for interest | 25,271 | 52,415 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash financing activities: | ' | ' |
Common stock issued as loan repayment | 0 | 9,000 |
Debt discount on convertible notes | 800,000 | 0 |
Increase in derivative liability | 30,000 | 0 |
Stock options issued for prepaid expenses | 276,648 | 0 |
Common stock issued for prepaid expenses | $518,000 | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Organization, Nature of Business and Trade Name | |
Intelligent Highway Solutions, Inc. (the “Company” or “IHS”) was formed in April 22, 2011; IHS is a technology based intelligent highway solutions contractor. The Company’s primarily focus is in the California transportation market providing services that range from providing labor, materials, and related equipment for corrective service and maintenance services for the States transportation infrastructure. Additionally, the Company intends to develop transportation technology services that enable vehicles, roads, traffic lights, message signs, and other elements to become “intelligent” by embedding them with microchips and sensors and by empowering them to communicate with each other via wireless technologies. The acceleration of data collection and communication will allow state governments to improve transportation system performance by reducing congestion and increasing both traveler safety and convenience. | |
2012 Financial statements | |
Sam Kan & Company (“Sam Kan”) was our Independent Registered Public Accountant for the fiscal year ended December 31, 2012 and issued an audit report for that year. On February 20, 2014, however, the SEC denied Sam Kan the privilege of appearing or practicing before the SEC as an accountant. We, therefore, are no longer allowed to include any audit report issued by Sam Kan in any filing with the SEC on or after February 20, 2014. Accordingly, we have engaged our newly appointed accounting firm, Sadler Gibb & Associates, LLC (“Sadler”) to re-audit our fiscal year ended December 31, 2012, however, as of the date of this Annual Report on Form 10-K, such re-audit had not yet been completed. | |
GOING_CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2013 | |
Going Concern [Abstract] | ' |
GOING CONCERN | ' |
NOTE 2 – GOING CONCERN | |
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern, has recurring net losses, an accumulated deficit of $3,391,427 and a working capital deficit, all which raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. | |
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. | |
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Use of Estimates | ||||||||
The preparation of financial statements in 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. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. | ||||||||
Cash and Cash Equivalents | ||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. | ||||||||
Accounts Receivable | ||||||||
Accounts receivable are carried at the expected net realizable value. The allowance for doubtful accounts, is based on management's assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer's creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations. The Company had bad debt expense of $1,607 and $0 during the years ended December 31, 2013 and 2012, respectively. | ||||||||
Property, Plant and Equipment | ||||||||
Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. | ||||||||
Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: | ||||||||
Estimated Useful Life | ||||||||
Furniture and fixtures | 5 years | |||||||
Machinery and equipment | 5 years | |||||||
For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of December 31, 2013 and 2012 were: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 1,210 | 1,210 | ||||||
Sub Total | $ | 3,359 | $ | 3,359 | ||||
Accumulated depreciation | -1,607 | -935 | ||||||
Total | $ | 1,752 | $ | 2,424 | ||||
Depreciation expense for the years ended December 31, 2013 and 2012 was $672 and 672, respectively. | ||||||||
Accrued Expenses and Other Liabilities | ||||||||
Accrued expenses and other liabilities consisted of the following at December 31, 2013 and 2012: | ||||||||
December 31, 2013 | December 31, 2012 | |||||||
Deferred rent payable | $ | 2,673 | $ | 2,826 | ||||
Factoring advances | - | 356,976 | ||||||
Payroll tax liabilities | 637,139 | 602,267 | ||||||
Other payroll accruals | 51,711 | 217,034 | ||||||
Other | 217,582 | 129,082 | ||||||
Total | $ | 909,105 | $ | 1,308,185 | ||||
Revenue Recognition | ||||||||
Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. The Company’s service revenue is largely attributable professional engineering services where the fee is based on the billable rate of the employees. | ||||||||
Cost of Sales | ||||||||
Cost of sales comprises of costs associated with providing services related to the Company’s contracts including direct labor costs, job materials, automobile fuel, insurance, maintenance and operating leases. Cost of sales totaled $788,139 and $1,548,442 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
Reclassifications | ||||||||
Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. These reclassifications related to notes payable where prior periods had incorrectly shown certain notes as being related party, when in fact they were not. | ||||||||
Fair Value Measurements | ||||||||
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: | ||||||||
Level 1: Quoted market prices in active markets for identical assets or liabilities. | ||||||||
Level 2: Observable market-based inputs or inputs that are corroborated by market data. | ||||||||
Level 3: Unobservable inputs that are not corroborated by market data. | ||||||||
Convertible debt | ||||||||
The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes. | ||||||||
Net Loss Per Share | ||||||||
Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the year ended December 31, 2013 and 2012, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 3,274,868 and 101,807 such potentially dilutive shares excluded as of December 31, 2013 and 2012, respectively. | ||||||||
Recent Accounting Pronouncements | ||||||||
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements. | ||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||
NOTE 4 - FAIR VALUE MEASUREMENTS | ||||||||||||||
On a recurring basis, we measure certain financial assets and liabilities based upon the fair value hierarchy. The following table presents information about the Company’s liabilities measured at fair value as of December 31, 2013 and 2012: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
at | ||||||||||||||
December | ||||||||||||||
31, 2013 | ||||||||||||||
Liabilities | ||||||||||||||
Derivative Liability | - | $ | 46,023 | - | $ | 46,023 | ||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
at | ||||||||||||||
December | ||||||||||||||
31, 2012 | ||||||||||||||
Liabilities | ||||||||||||||
Derivative Liability | - | - | - | - | ||||||||||
The changes in the fair value of recurring fair value measurements are measured using the Black Scholes valuation model, and relate solely to the derivative liability as follows: | ||||||||||||||
Balance at December 31, 2012 | $ | - | ||||||||||||
Derivative liability recorded | 73,451 | |||||||||||||
Fair value adjustment | -27,428 | |||||||||||||
Balance at December 31, 2013 | $ | 46,023 | ||||||||||||
NOTES_PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' |
NOTES PAYABLE | ' |
NOTE 5 – NOTES PAYABLE | |
On June 17, 2011 the Company received a loan in the amount of $65,000 from Innovest, LLC (“Innovest”). The loan is unsecured and bears a simple interest of 1.5% per month to be paid monthly for the previous month’s outstanding principal. The loan was due on June 17, 2012; however, the Company negotiated to extend the maturity date to June 17, 2013. The Company negotiated further to extend the maturity date through the repayment of the note in full during 2014. Our Chief Executive Officer, Devon Jones, and our Chief Financial Officer and Chief Operating Officer, Philip Kirkland, have personally guaranteed this loan. There was $65,000 in principal plus accrued interest of $18,015 and $6,315 due at December 31, 2013 and 2012, respectively. | |
On October 30, 2011 the Company received a loan in the amount of $100,000 from Kenneth K. Polk. The loan is unsecured and bears simple interest of 2.5% monthly. The loan was originally due on March 30, 2012; however, the note’s maturity was extended until September 30, 2012. The Company is negotiating to further extend its maturity date. There was $100,000 in principal plus accrued interest of $35,376 and $15,475 due at December 31, 2013 and 2012, respectively. | |
On November 21, 2011 the Company received a loan in the amount of $27,000 from Byrd & Company LLC, Emerging Markets Consulting LLC, and Douglas S. Hackett ($9,000 from each party). The loan is unsecured and bears a simple interest of 12% per annum to be amortized in 6 equal installments of principal and interest commencing January 1, 2012 through June 1, 2012. Our Chief Executive Officer, Devon Jones, and our Chief Financial Officer and Chief Operating Officer, Philip Kirkland, have personally guaranteed this loan. On March 1, 2012, the Company issued Emerging Markets Consulting, LLC shares of common stock equivalent to $19,000, $10,000 for cash and $9,000 in satisfaction of the outstanding loan. Accordingly, the loan from Emerging Markets Consulting, LLC is no Consulting, LLC is no longer outstanding. Byrd & Company was repaid $3,803 and $3,917 during the years ended December 31, 2013 and 2012 with the remaining balance of $1,200 being forgiven during the year ended December 31, 2013. Also, the Company is negotiating to amend or extend the terms of the remaining amount of the note from Douglas S. Hackett. There was $9,000 and $14,083 in principal plus accrued interest of $2,278 and $1,220 due at December 31, 2013 and 2012. | |
On December 15, 2011 the Company received a loan in the amount of $100,000 from O.K. and B. The loan is unsecured and bears a simple interest of 5% per annum. The loan was originally due on March 15, 2012, however the note’s maturity was extended to September 15, 2013. The Company is negotiating to further extend its maturity date. The Company made principal payments totaling $16,726 and $5,000 during the years ended December 31, 2013 and 2012. There was $78,274 and $95,000 in principal plus accrued interest of $2,323 with prepaid interest of $1,266 at December 31, 2013 and 2012. | |
During the year ended December 31, 2013, the Company received a short term loan from Craig Spivey totaling $20,000. The loan was unsecured and bore no interest. The Company made principal payments of $20,000 during the year ended December 31, 2013, repaying the note in full. There was no balance due at December 31, 2013. | |
CONVERTIBLE_NOTES_PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||
CONVERTIBLE NOTES PAYABLE | ' | |||||||||||||||
NOTE 6 - CONVERTIBLE NOTES PAYABLE | ||||||||||||||||
On October 26, 2012, the Company received a loan totaling $30,000 from an unrelated party. The note bears interest at 10% per annum and had an original maturity date of April 26, 2013; however, the Company is in negotiations to extend the maturity date. There was $30,000 in principal plus accrued interest of $4,627 and $542 at December 31, 2013 and 2012. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30 (see Note 10). | ||||||||||||||||
During the year ended December 31, 2013, the Company entered into debt agreements with various individuals to borrow a total of $900,000, of which $55,664 went directly to third parties to pay off amounts owed by the Company, $83,500 went to the placement agent and were recorded as debt issuance costs to be amortized over the life of the note, leaving the Company with net proceeds of $760,836. The notes accrue interest at 10% per annum and are due in are due in full between January and December 2015 with no repayments due before maturity. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30. The intrinsic value of the conversion feature in these notes resulted in debt discounts totaling $800,000 which will be amortized over the lives of the notes. $210,925 of the debt discounts were recognized in interest expense during the year ended December 31, 2013 leaving an unamortized discount of $589,075 at December 31, 2013. The following table depicts the amounts due for each note as of December 31, 2013: | ||||||||||||||||
Maturity Date | Principal | Debt Discount | Carrying Amount | Accrued Interest | ||||||||||||
Note holder 1 | 1/24/15 | $ | 100,000 | $ | - | $ | 100,000 | $ | 8,795 | |||||||
Note holder 2 | 4/26/15 | 60,000 | -39,370 | 20,630 | 4,126 | |||||||||||
Note holder 3 | 5/3/15 | 25,000 | -16,712 | 8,288 | 1,658 | |||||||||||
Note holder 4 | 5/9/15 | 100,000 | -67,671 | 32,329 | 6,466 | |||||||||||
Note holder 4 | 5/31/15 | 50,000 | -35,342 | 14,658 | 2,932 | |||||||||||
Note holder 5 | 5/17/15 | 50,000 | -33,836 | 16,164 | 3,233 | |||||||||||
Note holder 6 | 5/30/15 | 100,000 | -66,849 | 33,151 | 6,630 | |||||||||||
Note holder 7 | 5/9/15 | 50,000 | -33,836 | 16,164 | 3,233 | |||||||||||
Note holder 8 | 5/9/15 | 50,000 | -34,315 | 15,685 | 3,137 | |||||||||||
Note holder 9 | 6/7/15 | 25,000 | -17,911 | 7,089 | 1,418 | |||||||||||
Note holder 10 | 7/1/15 | 100,000 | -74,932 | 25,068 | 5,014 | |||||||||||
Note holder 10 | 10/29/15 | 25,000 | -23,048 | 1,952 | 390 | |||||||||||
Note holder 11 | 7/15/24 | 50,000 | -38,425 | 11,575 | 2,315 | |||||||||||
Note holder 12 | 8/20/15 | 25,000 | -20,925 | 4,075 | 815 | |||||||||||
Note holder 12 | 10/18/15 | 25,000 | -22,911 | 2,089 | 418 | |||||||||||
Note holder 13 | 10/23/15 | 20,000 | -18,055 | 1,945 | 389 | |||||||||||
Note holder 16 | 12/30/15 | 45,000 | -44,939 | 63 | 12 | |||||||||||
Total | $ | 900,000 | $ | -589,075 | $ | 310,925 | $ | 50,981 | ||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 7 – RELATED PARTY TRANSACTIONS | |
We have engaged an entity controlled by the director of the Company to perform consulting services related to the development of new technologies. Payments to this party totaled $12,625 and $24,091during the years ended December 31, 2013 and 2012. | |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
NOTE 8 – COMMITMENTS AND CONTINGENCIES | |||||
The Company could become a party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. | |||||
As of the date of this report, except as described below, there are no material pending legal proceedings to which the Company is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities. | |||||
As of December 31, 2013 and 2012, the Company had accrued $637,139 and $602,267 in payroll tax liabilities. The payment of these liabilities has not been made due to our limited profitability. Due to the uncertainty regarding our future profitability, it is difficult to predict our ability to pay these liabilities. As a result, a federal tax lien has been levied that will have to be satisfied. | |||||
Vehicle Leases | |||||
The Company has entered into twelve separate month to month leases on various vehicles. The leases do not qualify as capital leases and are accounted for as operating leases as a result. Monthly payments total $3,971 for these leases. | |||||
Office and Warehouse Lease | |||||
The Company is required under the terms of the rental lease to make monthly lease payments. | |||||
The Company’s property lease is for an initial period of thirteen months from October 2011 and may be extended in two separate thirteen-month increments for up to a total term of 39 months. The Company may not terminate this lease prior to the agreed upon termination date. The minimum future annual rental commitments are as follows: | |||||
2014 | 42,471 | ||||
2015 | 1,053 | ||||
Total annual lease commitments | $ | 43,524 | |||
SIGNIFICANT_TRANSACTIONS
SIGNIFICANT TRANSACTIONS | 12 Months Ended |
Dec. 31, 2013 | |
Significant Transactions [Abstract] | ' |
SIGNIFICANT TRANSACTIONS | ' |
NOTE 9 - SIGNIFICANT TRANSACTIONS | |
On April 24, 2013, Intelligent Highway Solutions, Inc. (the “Company”) was informed that Mr. Michael Sullivan received notice on the same day from the Division of Procurement and Contracts of the California Department of Transportation (“Caltrans”) that Caltrans was terminating the nine Caltrans contracts (the “Agreements”), dated as of June 1, 2011, between Michael J. Sullivan Communications and Caltrans effective upon receipt of the notice pursuant to its right to terminate the Agreement upon thirty (30) days notice (the “Termination”). On June 21, 2011, the Company purchased the Agreements from Mr. Sullivan. Pursuant to Agreements, the Company provided on-call, as needed, maintenance and repair of Caltrans’ Traffic Operations System Network. | |
As a result of the Termination, the Company is negotiating with Caltrans to enter into a new agreement to perform the same services as agreed upon in the Agreements. However, as of the date hereof, the Company has not entered into an agreement and cannot make any assurance that an agreement will be executed. CalTrans accounted for 100% of our revenues during the years ended December 31, 2013 and 2012. | |
No material relationship exists between the Company and Caltrans, except in connection with the Agreements. | |
DERIVATIVE_LIABILITY
DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2013 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
DERIVATIVE LIABILITY | ' |
NOTE 10 – DERIVATIVE LIABILITY | |
As of December 31, 2013 the Company had a $46,023 derivative liability balance on the balance sheet, and for the year ended December 31, 2013, the Company recorded a $27,428 gain from derivative liability fair value adjustment. The derivative liability activity comes from convertible notes payable as follows: | |
As discussed in Note 5 – “Notes Payable”, during 2012, the Company issued an aggregate of $30,000 Convertible Promissory Notes to an unrelated party that matured on April 26, 2013. The Company is currently negotiating an extension of the maturity date and anticipates to successfully do so. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares, at the holder’s option, at the conversion rates of $0.30 per share. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. | |
The embedded derivative for the note is carried on the Company’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. The Company fair values the embedded derivative using the Black-Scholes option pricing model. The aggregate fair value of the derivative at the inception dates of the note was $73,451. Of the total, $30,000 was recorded as a debt discount, which is up to but not more than the net proceeds of the notes. $43,451 was charged to operations as non-cash interest expense. The fair value of $73,451 was recorded as a derivative liability on the balance sheet. | |
The debt discount for the note was amortized over the term of our stock’s opening trading day to the original maturity, or two days. On December 31, 2013, the Company marked-to-market the fair value of the derivative liabilities related to note and determined an aggregate fair value of $46,023 and recorded a $27,428 gain from change in fair value of derivatives for year ended December 31, 2013. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 113%, (3) risk-free interest rate of 0.07%, (4) expected life of 0.57 of a year, and (5) estimated fair value of the Company’s common stock of $0.87 per share. | |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
INCOME TAXES | ' | |||||||
NOTE 11 – INCOME TAXES | ||||||||
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period. | ||||||||
The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended December 2013 or 2012 applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns for the Company remain open. | ||||||||
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows: | ||||||||
Income tax provision at the federal statutory rate | 35 | % | ||||||
Effect on operating losses | -35 | % | ||||||
- | ||||||||
Changes in the net deferred tax assets consist of the following: | ||||||||
2013 | 2012 | |||||||
Net operating loss carry forward | $ | 797,485 | $ | 441,171 | ||||
Valuation allowance | -797,485 | -441,171 | ||||||
Net deferred tax asset | $ | - | $ | - | ||||
A reconciliation of income taxes computed at the statutory rate is as follows: | ||||||||
2013 | 2012 | |||||||
Computed federal income tax expense at statutory rate of 35% | $ | -695,281 | $ | -364,496 | ||||
Stock options issued for services | 110,116 | 50,313 | ||||||
Amortization of deferred loan costs | 128,184 | - | ||||||
Amortization of debt discount | 84,324 | - | ||||||
Depreciation and amortization | 235 | 235 | ||||||
Change in derivative liability | 16,108 | - | ||||||
Change in valuation allowance | 356,314 | 316,136 | ||||||
Income tax expense | $ | - | $ | - | ||||
The net federal operating loss carry forward will expire in 2031. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. | ||||||||
COMMON_STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2013 | |
Common Stock [Abstract] | ' |
COMMON STOCK | ' |
NOTE 12 – COMMON STOCK | |
The Company is authorized to issue up to 100,000,000 shares of $0.00001 par value common stock. | |
During the year ended December 31, 2012, the Company issued 330,000 shares for services valued at $82,500; 200,000 shares for a prepaid expense valued at $50,000; 20,000 shares as a loan fee valued at $5,000; 355,263 shares in connection with a note conversion of $9,000; 25,000 shares as a loan origination fee valued at $6,250 and 549,403 shares for total cash proceeds of $42,000. | |
During the year ended December 31, 2013, the Company issued a total of 1,104,000 shares for services valued at $744,615 and 100,000 shares valued at $88,500 as consideration of an extension of a note payable. | |
There were 11,933,666 and 10,729,666 common shares issued and outstanding at December 31, 2013 and 2012, respectively. | |
RESTATEMENT
RESTATEMENT | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||
RESTATEMENT | ' | ||||||||||
NOTE 13 – RESTATEMENT | |||||||||||
During our audit for the year ended December 31, 2013, certain information arose which created the need to restate certain balances as of and for the year ended December 31, 2012. The adjustments were related to the timing of the recognition of certain expenses, stock issuances, the misclassification of operating leases as capital leases, and correcting an accrued interest calculation. These adjustments had the following impacts during the unaudited year ended December 31, 2012: | |||||||||||
Balance Sheet: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Total assets | $ | 333,114 | $ | 188,493 | $ | 521,607 | |||||
Total current liabilities | 1,203,965 | 508,787 | 1,712,752 | ||||||||
Common stock | 104 | 3 | 107 | ||||||||
Additional paid in capital | 134,836 | 81,247 | 216,083 | ||||||||
Accumulated deficit | -1,026,531 | -378,380 | -1,404,911 | ||||||||
Statement of Operations: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Revenue | $ | 1,904,647 | $ | -108,945 | $ | 1,795,702 | |||||
Cost of sales | 1,445,958 | 102,484 | 1,548,442 | ||||||||
Operating expenses | 1,028,405 | 215,650 | 1,244,055 | ||||||||
Other income (expense) | -98,772 | 47,899 | -50,873 | ||||||||
Provision for income taxes | 800 | -800 | - | ||||||||
Net loss | -669,288 | -378,380 | -1,047,688 | ||||||||
Basic and diluted loss per common share | $ | -0.07 | $ | -0.03 | $ | -0.1 | |||||
Weighted average shares outstanding | 10,153,426 | 70,078 | 10,223,504 | ||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 14 – SUBSEQUENT EVENTS | |
On January 29, 2014, the Company entered into a note payable with an unrelated party totaling $335,000 of which $35,000 is considered an original issue discount. The note is interest free if repaid in full within ninety (90) days with a onetime charge of 12% on the unpaid balance on the ninety first (91st) day and is due on January 29, 2016. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to the lesser of $0.65 or 60% of the lowest trade price in the twenty five (25) trading days prior to conversion. The note requires a minimum of two million five hundred thousand (2,500,0000) to be held in reserve in the instance of conversion. | |
On February 27, 2014, the Company entered into a note payable with an unrelated party totaling $126,500. The note bears interest of 10% per annum and is due on February 27, 2015 with any amounts owing beyond that date carrying interest at 22% per annum. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion. | |
On February 28, 2014, the Company entered into a note payable with an unrelated party totaling $212,526. The note bears interest of 10% per annum and is due on February 27, 2015 with any amounts owing beyond that date carrying interest at 22% per annum. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. | |
On February 1, 2014, the Company issued a total of 100,000 common shares to a consultant upon the renewal of our agreement dated October 1, 2013. Additionally, on March 5, 2014, the Company entered into a separate agreement requiring 75,000 shares of common stock to be issued to the consultant. Lastly, the Company issued 500,000 shares to Seton Securities Group as fulfillment of performance based awards earned in connection with our advisory agreement. | |
On various dates in 2014, the Company was notified by three separate convertible note holders of their intention to convert their notes to common stock at $0.30 in accordance with the conversion rights stipulated in the note. These conversions resulted in 464,497 common shares being issued for $135,000 of principal plus accrued interest of $4,349. | |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Use of Estimates | ' | |||||||
Use of Estimates | ||||||||
The preparation of financial statements in 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. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. | ||||||||
Cash and Cash Equivalents | ' | |||||||
Cash and Cash Equivalents | ||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. | ||||||||
Accounts Receivable | ' | |||||||
Accounts Receivable | ||||||||
Accounts receivable are carried at the expected net realizable value. The allowance for doubtful accounts, is based on management's assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer's creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations. The Company had bad debt expense of $1,607 and $0 during the years ended December 31, 2013 and 2012, respectively. | ||||||||
Property, Plant and Equipment | ' | |||||||
Property, Plant and Equipment | ||||||||
Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. | ||||||||
Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: | ||||||||
Estimated Useful Life | ||||||||
Furniture and fixtures | 5 years | |||||||
Machinery and equipment | 5 years | |||||||
For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of December 31, 2013 and 2012 were: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 1,210 | 1,210 | ||||||
Sub Total | $ | 3,359 | $ | 3,359 | ||||
Accumulated depreciation | -1,607 | -935 | ||||||
Total | $ | 1,752 | $ | 2,424 | ||||
Depreciation expense for the years ended December 31, 2013 and 2012 was $672 and 672, respectively. | ||||||||
Accrued Expenses and Other Liabilities | ' | |||||||
Accrued Expenses and Other Liabilities | ||||||||
Accrued expenses and other liabilities consisted of the following at December 31, 2013 and 2012: | ||||||||
December 31, 2013 | December 31, 2012 | |||||||
Deferred rent payable | $ | 2,673 | $ | 2,826 | ||||
Factoring advances | - | 356,976 | ||||||
Payroll tax liabilities | 637,139 | 602,267 | ||||||
Other payroll accruals | 51,711 | 217,034 | ||||||
Other | 217,582 | 129,082 | ||||||
Total | $ | 909,105 | $ | 1,308,185 | ||||
Revenue Recognition | ' | |||||||
Revenue Recognition | ||||||||
Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. The Company’s service revenue is largely attributable professional engineering services where the fee is based on the billable rate of the employees. | ||||||||
Cost of Sales | ' | |||||||
Cost of Sales | ||||||||
Cost of sales comprises of costs associated with providing services related to the Company’s contracts including direct labor costs, job materials, automobile fuel, insurance, maintenance and operating leases. Cost of sales totaled $788,139 and $1,548,442 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
Reclassifications | ' | |||||||
Reclassifications | ||||||||
Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. These reclassifications related to notes payable where prior periods had incorrectly shown certain notes as being related party, when in fact they were not. | ||||||||
Fair Value Measurements | ' | |||||||
Fair Value Measurements | ||||||||
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: | ||||||||
Level 1: Quoted market prices in active markets for identical assets or liabilities. | ||||||||
Level 2: Observable market-based inputs or inputs that are corroborated by market data. | ||||||||
Level 3: Unobservable inputs that are not corroborated by market data. | ||||||||
Convertible debt | ' | |||||||
Convertible debt | ||||||||
The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes. | ||||||||
Net Loss Per Share | ' | |||||||
Net Loss Per Share | ||||||||
Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the year ended December 31, 2013 and 2012, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 3,274,868 and 101,807 such potentially dilutive shares excluded as of December 31, 2013 and 2012, respectively. | ||||||||
Recent Accounting Pronouncements | ' | |||||||
Recent Accounting Pronouncements | ||||||||
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements. | ||||||||
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Schedule of estimated useful lives of depreciable assets | ' | |||||||
The estimated useful lives of depreciable assets are: | ||||||||
Estimated Useful Life | ||||||||
Furniture and fixtures | 5 years | |||||||
Machinery and equipment | 5 years | |||||||
Summary of property, plant and equipment | ' | |||||||
Balances of each asset class as of December 31, 2013 and 2012 were: | ||||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 1,210 | 1,210 | ||||||
Sub Total | $ | 3,359 | $ | 3,359 | ||||
Accumulated depreciation | -1,607 | -935 | ||||||
Total | $ | 1,752 | $ | 2,424 | ||||
Schedule of Accrued expenses and other liabilities | ' | |||||||
Accrued expenses and other liabilities consisted of the following at December 31, 2013 and 2012: | ||||||||
December 31, 2013 | December 31, 2012 | |||||||
Deferred rent payable | $ | 2,673 | $ | 2,826 | ||||
Factoring advances | - | 356,976 | ||||||
Payroll tax liabilities | 637,139 | 602,267 | ||||||
Other payroll accruals | 51,711 | 217,034 | ||||||
Other | 217,582 | 129,082 | ||||||
Total | $ | 909,105 | $ | 1,308,185 | ||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
Summary of liabilities measured at fair value on recurring basis | ' | |||||||||||||
The following table presents information about the Company’s liabilities measured at fair value as of December 31, 2013 and 2012: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
at | ||||||||||||||
December | ||||||||||||||
31, 2013 | ||||||||||||||
Liabilities | ||||||||||||||
Derivative Liability | - | $ | 46,023 | - | $ | 46,023 | ||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||
at | ||||||||||||||
December | ||||||||||||||
31, 2012 | ||||||||||||||
Liabilities | ||||||||||||||
Derivative Liability | - | - | - | - | ||||||||||
Shedule of changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3) | ' | |||||||||||||
The changes in the fair value of recurring fair value measurements are measured using the Black Scholes valuation model, and relate solely to the derivative liability as follows: | ||||||||||||||
Balance at December 31, 2012 | $ | - | ||||||||||||
Derivative liability recorded | 73,451 | |||||||||||||
Fair value adjustment | -27,428 | |||||||||||||
Balance at December 31, 2013 | $ | 46,023 | ||||||||||||
CONVERTIBLE_NOTES_PAYABLE_Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||
Summary of amounts due for convertible notes payable | ' | |||||||||||||||
The following table depicts the amounts due for each note as of December 31, 2013: | ||||||||||||||||
Maturity Date | Principal | Debt Discount | Carrying Amount | Accrued Interest | ||||||||||||
Note holder 1 | 1/24/15 | $ | 100,000 | $ | - | $ | 100,000 | $ | 8,795 | |||||||
Note holder 2 | 4/26/15 | 60,000 | -39,370 | 20,630 | 4,126 | |||||||||||
Note holder 3 | 5/3/15 | 25,000 | -16,712 | 8,288 | 1,658 | |||||||||||
Note holder 4 | 5/9/15 | 100,000 | -67,671 | 32,329 | 6,466 | |||||||||||
Note holder 4 | 5/31/15 | 50,000 | -35,342 | 14,658 | 2,932 | |||||||||||
Note holder 5 | 5/17/15 | 50,000 | -33,836 | 16,164 | 3,233 | |||||||||||
Note holder 6 | 5/30/15 | 100,000 | -66,849 | 33,151 | 6,630 | |||||||||||
Note holder 7 | 5/9/15 | 50,000 | -33,836 | 16,164 | 3,233 | |||||||||||
Note holder 8 | 5/9/15 | 50,000 | -34,315 | 15,685 | 3,137 | |||||||||||
Note holder 9 | 6/7/15 | 25,000 | -17,911 | 7,089 | 1,418 | |||||||||||
Note holder 10 | 7/1/15 | 100,000 | -74,932 | 25,068 | 5,014 | |||||||||||
Note holder 10 | 10/29/15 | 25,000 | -23,048 | 1,952 | 390 | |||||||||||
Note holder 11 | 7/15/24 | 50,000 | -38,425 | 11,575 | 2,315 | |||||||||||
Note holder 12 | 8/20/15 | 25,000 | -20,925 | 4,075 | 815 | |||||||||||
Note holder 12 | 10/18/15 | 25,000 | -22,911 | 2,089 | 418 | |||||||||||
Note holder 13 | 10/23/15 | 20,000 | -18,055 | 1,945 | 389 | |||||||||||
Note holder 16 | 12/30/15 | 45,000 | -44,939 | 63 | 12 | |||||||||||
Total | $ | 900,000 | $ | -589,075 | $ | 310,925 | $ | 50,981 | ||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of minimum future annual rental commitments of office and warehouse lease | ' | ||||
The minimum future annual rental commitments are as follows: | |||||
2014 | 42,471 | ||||
2015 | 1,053 | ||||
Total annual lease commitments | $ | 43,524 | |||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Schedule of effective income tax rate reconciliation | ' | |||||||
The sources and tax effects of the differences for the periods presented are as follows: | ||||||||
Income tax provision at the federal statutory rate | 35 | % | ||||||
Effect on operating losses | -35 | % | ||||||
- | ||||||||
Schedule of net deferred tax assets | ' | |||||||
Changes in the net deferred tax assets consist of the following: | ||||||||
2013 | 2012 | |||||||
Net operating loss carry forward | $ | 797,485 | $ | 441,171 | ||||
Valuation allowance | -797,485 | -441,171 | ||||||
Net deferred tax asset | $ | - | $ | - | ||||
Schedule of income tax rate reconciliation at statutory rate | ' | |||||||
A reconciliation of income taxes computed at the statutory rate is as follows: | ||||||||
2013 | 2012 | |||||||
Computed federal income tax expense at statutory rate of 35% | $ | -695,281 | $ | -364,496 | ||||
Stock options issued for services | 110,116 | 50,313 | ||||||
Amortization of deferred loan costs | 128,184 | - | ||||||
Amortization of debt discount | 84,324 | - | ||||||
Depreciation and amortization | 235 | 235 | ||||||
Change in derivative liability | 16,108 | - | ||||||
Change in valuation allowance | 356,314 | 316,136 | ||||||
Income tax expense | $ | - | $ | - | ||||
RESTATEMENT_Tables
RESTATEMENT (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||
Summary of restatement to prior year balance sheet and operations | ' | ||||||||||
Balance Sheet: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Total assets | $ | 333,114 | $ | 188,493 | $ | 521,607 | |||||
Total current liabilities | 1,203,965 | 508,787 | 1,712,752 | ||||||||
Common stock | 104 | 3 | 107 | ||||||||
Additional paid in capital | 134,836 | 81,247 | 216,083 | ||||||||
Accumulated deficit | -1,026,531 | -378,380 | -1,404,911 | ||||||||
Statement of Operations: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Revenue | $ | 1,904,647 | $ | -108,945 | $ | 1,795,702 | |||||
Cost of sales | 1,445,958 | 102,484 | 1,548,442 | ||||||||
Operating expenses | 1,028,405 | 215,650 | 1,244,055 | ||||||||
Other income (expense) | -98,772 | 47,899 | -50,873 | ||||||||
Provision for income taxes | 800 | -800 | - | ||||||||
Net loss | -669,288 | -378,380 | -1,047,688 | ||||||||
Basic and diluted loss per common share | $ | -0.07 | $ | -0.03 | $ | -0.1 | |||||
Weighted average shares outstanding | 10,153,426 | 70,078 | 10,223,504 | ||||||||
GOING_CONCERN_Details_Textual
GOING CONCERN (Details Textual) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Retained Earnings (Accumulated Deficit), Total | $3,391,427 | $1,404,911 |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Furniture and fixtures [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '5 years |
Machinery and equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '5 years |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $3,359 | $3,359 |
Accumulated depreciation | -1,607 | -935 |
Total | 1,752 | 2,424 |
Machinery and equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 2,149 | 2,149 |
Furniture and fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $1,210 | $1,210 |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Other Payables [Line Items] | ' | ' |
Deferred rent payable | $2,673 | $2,826 |
Factoring advances | 0 | 356,976 |
Payroll tax liabilities | 637,139 | 602,267 |
Other payroll accruals | 51,711 | 217,034 |
Other | 217,582 | 129,082 |
Total | $909,105 | $1,308,185 |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Significant Accounting Policies [Line Items] | ' | ' |
Allowance for Loan and Lease Losses, Write-offs | $1,607 | $0 |
Earnings Per Share, Potentially Dilutive Securities | 'For the year ended December 31, 2013 and 2012, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 3,274,868 and 101,807 such potentially dilutive shares excluded as of December 31, 2013 and 2012, respectively. | ' |
Excluded Potentially Dilutive Securities (in shares) | 3,274,868 | 101,807 |
Depreciation | 672 | 672 |
Cost of Goods Sold | $778,139 | $1,548,442 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Liabilities | ' | ' |
Derivative Liability | $46,023 | $0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Liabilities | ' | ' |
Derivative Liability | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Liabilities | ' | ' |
Derivative Liability | 46,023 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Liabilities | ' | ' |
Derivative Liability | $0 | $0 |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 1) (Fair Value, Inputs, Level 3 [Member], USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value, Inputs, Level 3 [Member] | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Balance at December 31, 2012 | $0 |
Derivative liability recorded | 73,451 |
Fair value adjustment | -27,428 |
Balance at December 31, 2013 | $46,023 |
NOTES_PAYABLE_Details_Textual
NOTES PAYABLE (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 17, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 30, 2011 | Nov. 21, 2011 | Mar. 01, 2012 | Nov. 21, 2011 | Mar. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | Dec. 15, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | |
Common Stock [Member] | Byrd & Company LLC [Member] | Byrd & Company LLC [Member] | Craig Spivey [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | ||||
Innovest LLC [Member] | Innovest LLC [Member] | Innovest LLC [Member] | Kenneth K. Polk [Member] | Kenneth K. Polk [Member] | Kenneth K. Polk [Member] | Byrd & Company LLC [Member] | Emerging Markets Consulting LLC [Member] | Emerging Markets Consulting LLC [Member] | Emerging Markets Consulting LLC [Member] | Douglas S. Hackett [Member] | Douglas S. Hackett [Member] | Douglas S. Hackett [Member] | O.K And B [Member] | O.K And B [Member] | O.K And B [Member] | ||||||||
Common Stock [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowed amount | $900,000 | ' | $27,000 | ' | ' | ' | ' | ' | ' | $65,000 | ' | ' | $100,000 | $9,000 | ' | $9,000 | ' | ' | ' | $9,000 | $100,000 | ' | ' |
Interest rate per month | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' | 2.50% | 12.00% | ' | 12.00% | ' | ' | ' | 12.00% | 5.00% | ' | ' |
Note payable, maturity description | ' | ' | ' | ' | ' | ' | ' | 'The loan was due on June 17, 2012; however, the Company negotiated to extend the maturity date to June 17, 2013. | ' | ' | 'The loan was originally due on March 30, 2012; however, the note’s maturity was extended until September 30, 2012. | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'originally due on March 15, 2012, however the note’s maturity was extended to September 15, 2013 | ' | ' |
Notes Payable principal outstanding | ' | ' | ' | ' | ' | ' | ' | 65,000 | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | 9,000 | 14,083 | ' | ' | 78,274 | 95,000 |
Accrued interest | 50,981 | ' | ' | ' | ' | ' | ' | 18,015 | 6,315 | ' | 35,376 | 15,475 | ' | ' | ' | ' | ' | 2,278 | 1,220 | ' | ' | 2,323 | 2,323 |
Prepaid Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,266 | 1,266 |
Value of common stock in satisfaction of debt | 0 | 9,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, New Issues | ' | 42,000 | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,000 | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Common Stock | 0 | 42,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Annual Principal Payment | ' | ' | ' | ' | 3,803 | 3,917 | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,726 | 5,000 |
Debt Instrument, Decrease, Forgiveness | 87,219 | 0 | ' | ' | 1,200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term Debt, Total | ' | ' | ' | ' | ' | ' | $20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CONVERTIBLE_NOTES_PAYABLE_Deta
CONVERTIBLE NOTES PAYABLE (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | Dec. 31, 2013 | Oct. 26, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | ||||
Note holder 1 [Member] | Note holder 2 [Member] | Note holder 3 [Member] | Note holder 4 i [Member] | Note holder 4 ii [Member] | Note holder 5 [Member] | Note holder 6 [Member] | Note holder 7 [Member] | Note holder 8 [Member] | Note holder 9 [Member] | Note holder 10 i [Member] | Note holder 10 ii [Member] | Note holder 11 [Member] | Note holder 12 i [Member] | Note holder 12 ii [Member] | Note holder 13 [Member] | Note holder 16 [Member] | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity Date | ' | ' | ' | ' | ' | 24-Jan-15 | 26-Apr-15 | 3-May-15 | 9-May-15 | 31-May-15 | 17-May-15 | 30-May-15 | 9-May-15 | 9-May-15 | 7-Jun-15 | 1-Jul-15 | 29-Oct-15 | 15-Jul-24 | 20-Aug-15 | 18-Oct-15 | 23-Oct-15 | 30-Dec-15 |
Principal | $900,000 | ' | $27,000 | $900,000 | $30,000 | $100,000 | $60,000 | $25,000 | $100,000 | $50,000 | $50,000 | $100,000 | $50,000 | $50,000 | $25,000 | $100,000 | $25,000 | $50,000 | $25,000 | $25,000 | $20,000 | $45,000 |
Debt Discount | -589,075 | 0 | ' | ' | ' | 0 | -39,370 | -16,712 | -67,671 | -35,342 | -33,836 | -66,849 | -33,836 | -34,315 | -17,911 | -74,932 | -23,048 | -38,425 | -20,925 | -22,911 | -18,055 | -44,939 |
Carrying Amount | 310,925 | ' | ' | ' | ' | 100,000 | 20,630 | 8,288 | 32,329 | 14,658 | 16,164 | 33,151 | 16,164 | 15,685 | 7,089 | 25,068 | 1,952 | 11,575 | 4,075 | 2,089 | 1,945 | 63 |
Accrued interest | $50,981 | ' | ' | ' | ' | $8,795 | $4,126 | $1,658 | $6,466 | $2,932 | $3,233 | $6,630 | $3,233 | $3,137 | $1,418 | $5,014 | $390 | $2,315 | $815 | $418 | $389 | $12 |
CONVERTIBLE_NOTES_PAYABLE_Deta1
CONVERTIBLE NOTES PAYABLE (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | Oct. 26, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Third Party [Member] | Placememnt Agent [Member] | Interest Expense [Member] | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal | $900,000 | ' | $27,000 | $30,000 | $900,000 | ' | $55,664 | $83,500 | ' |
Interest rate | ' | 10.00% | ' | 10.00% | 10.00% | ' | ' | ' | ' |
Note payable, maturity description | ' | ' | ' | 'original maturity date of April 26, 2013; however, the Company is in negotiations to extend the maturity date | 'between January and December 2015 | ' | ' | ' | ' |
Notes Payable principal outstanding | ' | ' | ' | 30,000 | ' | ' | ' | ' | ' |
Debt Instrument, Increase, Accrued Interest | ' | ' | ' | ' | 4,627 | 542 | ' | ' | ' |
Conversion rates | ' | $0.30 | ' | $0.30 | $0.30 | ' | ' | ' | ' |
Proceeds from Convertible Debt | 760,836 | 30,000 | ' | ' | ' | ' | ' | ' | ' |
Amortization of Debt Discount (Premium) | 240,925 | 0 | ' | ' | 800,000 | ' | ' | ' | 210,925 |
Debt Instrument, Unamortized Discount | $589,075 | $0 | ' | ' | ' | ' | ' | ' | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (Director [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Director [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Consulting Charges To Related Party | $12,625 | $24,091 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (Office and Warehouse [Member], USD $) | Dec. 31, 2013 |
Office and Warehouse [Member] | ' |
Operating Leased Assets [Line Items] | ' |
2014 | $42,471 |
2015 | 1,053 |
Total annual lease commitments | $43,524 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Loss Contingencies [Line Items] | ' | ' |
Accrued payroll tax liabilities | $637,139 | $602,267 |
Monthly Payment of Operating Lease | $3,971 | ' |
Office and Warehouse [Member] | ' | ' |
Loss Contingencies [Line Items] | ' | ' |
Term of lease | '13 months | ' |
Description of term of lease | 'The Company’s property lease is for an initial period of thirteen months from October 2011 and may be extended in two separate thirteen-month increments for up to a total term of 39 months. | ' |
SIGNIFICANT_TRANSACTIONS_Detai
SIGNIFICANT TRANSACTIONS (Details Textual) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Significant Transactions [Line Items] | ' | ' |
Termination period of agreement | 'upon thirty (30) days notice | ' |
Revenue accountability of CalTrans | 100.00% | 100.00% |
DERIVATIVE_LIABILITY_Details_T
DERIVATIVE LIABILITY (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
DERIVATIVE LIABILITY [Line Items] | ' | ' |
Derivative Liability | $46,023 | $0 |
Gain on derivative fair value adjustment | 27,428 | 0 |
Convertible Promissory Notes to unrelated party | ' | 30,000 |
Interest rate per month | ' | 10.00% |
Conversion rates | ' | $0.30 |
Fair value of derivative | 73,451 | ' |
Non cash interest expense | 43,451 | ' |
Fair value of derivative liability | 73,451 | ' |
Unrelated party maturity date | ' | 26-Apr-13 |
Debt discount | 240,925 | 0 |
Dividend yield | 0.00% | ' |
Expected volatility | 113.00% | ' |
Risk-free interest rate | 0.07% | ' |
Expected life | '6 months 25 days | ' |
Common stock price,per share | $0.87 | ' |
Derivative Liability, Current | 46,023 | 0 |
Unrealized Gain (Loss) on Derivatives | $27,428 | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Income tax provision at the federal statutory rate | 35.00% |
Effect on operating losses | -35.00% |
Effective Income Tax Rate Reconciliation, Percent, Total | 0.00% |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Net operating loss carry forward | $797,485 | $441,171 |
Valuation allowance | -797,485 | -441,171 |
Net deferred tax asset | $0 | $0 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Computed federal income tax expense at statutory rate of 35% | ($695,281) | ($364,496) |
Stock options issued for services | 110,116 | 50,313 |
Amortization of deferred loan costs | 128,184 | 0 |
Amortization of debt discount | 84,324 | 0 |
Depreciation and amortization | 235 | 235 |
Change in derivative liability | 16,108 | 0 |
Change in valuation allowance | 356,314 | 316,136 |
Income tax expense | $0 | $0 |
INCOME_TAXES_Details_Textual
INCOME TAXES (Details Textual) | 12 Months Ended |
Dec. 31, 2013 | |
Operating Loss Carryforwards Expiration Year | '2031 |
COMMON_STOCK_Details_Textual
COMMON STOCK (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Common Stock Issuances [Line Items] | ' | ' |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Common Stock, Shares, Issued | 11,933,666 | 10,729,666 |
Common Stock, Shares, Outstanding, Ending Balance | 11,933,666 | 10,729,666 |
Stock Issued During Period, Value, Issued for Services | ($314,616) | ($82,500) |
Stock Issued During Period Value Prepaid Expense | ' | 50,000 |
Stock Issued During Period Value Issued For Loan Fee | ' | 5,000 |
Stock Issued During Period Value Issued For Repayment Of Loan | ' | 9,000 |
Stock Issued During Period Value Issued For Loan Fee 1 | ' | 6,250 |
Stock Issued During Period, Value, New Issues | ' | 42,000 |
Stock Issued During Period Value For Extension Of Note | 88,500 | ' |
Services [Member] | ' | ' |
Common Stock Issuances [Line Items] | ' | ' |
Stock Issued During Period, Shares, Issued for Services | 1,104,000 | 330,000 |
Stock Issued During Period, Value, Issued for Services | 744,615 | 82,500 |
Prepaid Expenses [Member] | ' | ' |
Common Stock Issuances [Line Items] | ' | ' |
Stock Issued During Period Shares Prepaid Expense | ' | 200,000 |
Stock Issued During Period Value Prepaid Expense | ' | 50,000 |
Loan Fee [Member] | ' | ' |
Common Stock Issuances [Line Items] | ' | ' |
Stock Issued During Period Shares Issued For Loan Fee | ' | 20,000 |
Stock Issued During Period Value Issued For Loan Fee | ' | 5,000 |
Note Conversion [Member] | ' | ' |
Common Stock Issuances [Line Items] | ' | ' |
Stock Issued During Period Shares Issued For Repayment Of Loan | ' | 355,263 |
Stock Issued During Period Value Issued For Repayment Of Loan | ' | 9,000 |
Loan Origination Fee [Member] | ' | ' |
Common Stock Issuances [Line Items] | ' | ' |
Stock Issued During Period Shares Issued For Loan Fee 1 | ' | 25,000 |
Stock Issued During Period Value Issued For Loan Fee 1 | ' | 6,250 |
Cash Proceeds [Member] | ' | ' |
Common Stock Issuances [Line Items] | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | 549,403 |
Stock Issued During Period, Value, New Issues | ' | 42,000 |
Extension of Note Payable [Member] | ' | ' |
Common Stock Issuances [Line Items] | ' | ' |
Stock Issued During Period Shares For Extension Of Note | 100,000 | ' |
Stock Issued During Period Value For Extension Of Note | $88,500 | ' |
RESTATEMENT_Details
RESTATEMENT (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net effect on revised statements of balance sheet and operations | ' | ' |
Total assets | $486,054 | $524,031 |
Total current liabilities | 1,440,603 | 1,712,752 |
Common stock | 119 | 107 |
Additional paid in capital | 2,125,834 | 216,083 |
Accumulated deficit | -3,391,427 | -1,404,911 |
Revenue | 833,528 | 1,795,702 |
Cost of sales | 778,139 | 1,548,442 |
Operating expenses | 1,491,919 | 1,244,055 |
Other income (expense) | ' | -50,873 |
Provision for income taxes | 0 | 0 |
Net loss | -1,986,516 | -1,047,668 |
Basic and diluted loss per common share | ($0.18) | ($0.10) |
Weighted average shares outstanding | 11,056,661 | 10,223,504 |
Adjustments [Member] | ' | ' |
Net effect on revised statements of balance sheet and operations | ' | ' |
Total assets | ' | 188,493 |
Total current liabilities | ' | 508,787 |
Common stock | ' | 3 |
Additional paid in capital | ' | 81,247 |
Accumulated deficit | ' | -378,380 |
Revenue | ' | -108,945 |
Cost of sales | ' | 102,484 |
Operating expenses | ' | 215,650 |
Other income (expense) | ' | 47,899 |
Provision for income taxes | ' | -800 |
Net loss | ' | -378,380 |
Basic and diluted loss per common share | ' | ($0.03) |
Weighted average shares outstanding | ' | 70,078 |
Actual [Member] | ' | ' |
Net effect on revised statements of balance sheet and operations | ' | ' |
Total assets | ' | 333,114 |
Total current liabilities | ' | 1,203,965 |
Common stock | ' | 104 |
Additional paid in capital | ' | 134,836 |
Accumulated deficit | ' | -1,026,531 |
Revenue | ' | 1,904,647 |
Cost of sales | ' | 1,445,958 |
Operating expenses | ' | 1,028,405 |
Other income (expense) | ' | -98,772 |
Provision for income taxes | ' | 800 |
Net loss | ' | ($669,288) |
Basic and diluted loss per common share | ' | ($0.07) |
Weighted average shares outstanding | ' | 10,153,426 |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | Mar. 05, 2014 | Feb. 02, 2014 | Feb. 28, 2014 | Feb. 27, 2014 | Jan. 29, 2014 | Jan. 31, 2014 | Mar. 05, 2014 |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
Seton Securities Group [Member] | ||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | $900,000 | ' | $27,000 | ' | ' | $212,526 | $126,500 | $335,000 | ' | ' |
Original Issue Discount | ' | ' | ' | ' | ' | ' | ' | 35,000 | ' | ' |
Percentage Of Onetime Charge On Unpaid Principal Balance | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' |
Debt Instrument, Maturity Date | ' | ' | ' | ' | ' | 27-Feb-15 | 27-Feb-15 | 29-Jan-16 | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | $0.30 | ' | ' | ' | ' | ' | $0.65 | $0.30 | ' |
Percentage Of Conversion Price | ' | ' | ' | ' | ' | 35.00% | ' | 60.00% | ' | ' |
Debt Instrument Amount Held In Reserve | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | 10.00% | ' | ' | ' | 10.00% | 10.00% | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum | ' | ' | ' | ' | ' | 22.00% | 22.00% | ' | ' | ' |
Percentage Of Discount From Daily Volume Weighted Average Price | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | 75,000 | 100,000 | ' | ' | ' | ' | 500,000 |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | ' | ' | ' | ' | 464,497 | ' |
Debt Conversion, Converted Instrument, Amount | ' | ' | ' | ' | ' | ' | ' | ' | 135,000 | ' |
Debt Instrument, Increase, Accrued Interest | ' | ' | ' | ' | ' | ' | ' | ' | $4,349 | ' |