Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 20-May-14 | |
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 | ' | 14,603,791 |
Document Type | '10-Q | ' |
Amendment Flag | 'true | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
Amendment Description | 'This Amendment No. 1 (this “Amendment”) to our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014, originally filed with the Securities and Exchange Commission on May 20, 2014 (the “Original Form 10-Q”), is being filed because the Company’s independent registered public accounting firm has now completed its review of the financial statements included in the original Form 10-Q. As a result of the completion of this review, the Company’s financial statements and notes thereto included in Part I, Item 1 of the Original Form 10-Q, are amended and restated herein in their entirety. In addition, Item I, Part 2 is amended and restated herein in its entirety to address the revisions to the financial statements and notes thereto. In connection with the filing of this Amendment and pursuant to SEC Exchange Act Rule 12b-15, the Company is filing as exhibits to this Amendment new certifications of the Company’s principal executive officer and principal financial officer under Part II, Item 6 hereof in respect of the period covered by the Amendment. In addition, the Company is filing as exhibit 101 to this Amendment the amended and restated financial statements and related notes formatted in XBRL (extensible Business Reporting Language) under Part II, Item 6 hereof to reflect the revisions to the Company’s financial statements and notes thereto. No other changes have been made to the Original Form 10-Q except for the Items described above. | ' |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash and cash equivalents | $28,931 | $28,664 |
Accounts receivable, net of allowance of $0 | 64,153 | 0 |
Prepaid expenses | 47,125 | 194,481 |
Deferred loan costs, current | 143,465 | 138,324 |
Total current assets | 283,674 | 361,469 |
Property and equipment, net of accumulated depreciation of $1,878 and $1,607 | 6,544 | 1,752 |
Deferred loan costs, net | 32,092 | 60,128 |
Total assets | 322,310 | 423,349 |
Current liabilities | ' | ' |
Bank overdraft | 40 | 40 |
Accounts payable | 96,893 | 89,562 |
Accrued expenses and other liabilities | 938,666 | 909,105 |
Notes payable, current portion | 9,000 | 252,274 |
Convertible notes payable, current portion, net | 28,591 | 30,000 |
Derivative liability | 397,641 | 46,023 |
Accrued interest | 77,536 | 113,599 |
Total current liabilities | 1,548,367 | 1,440,603 |
Convertible notes payable, net | 364,153 | 248,220 |
Total liabilities | 1,912,520 | 1,688,823 |
Stockholders' deficit | ' | ' |
Common stock, $0.00001 par value; 100,000,000 shares authorized; 16,073,163 and 11,933,666 issued; 12,573,163 and 11,933,666 outstanding at March 31, 2014 and December 31, 2013 | 127 | 119 |
Additional paid-in capital | 2,391,186 | 2,071,274 |
Accumulated deficit | -3,981,523 | -3,336,867 |
Total stockholders' deficit | -1,590,210 | -1,265,474 |
Total liabilities and stockholders' deficit | $322,310 | $423,349 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS [Parenthetical] (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts (in dollars) | $0 | $0 |
Net accumulated depreciation (in dollars) | $1,878 | $1,607 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 16,073,163 | 11,933,666 |
Common stock, shares outstanding | 12,573,163 | 11,933,666 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Revenue | $64,152 | $620,245 |
Cost of sales | 58,015 | 598,782 |
Gross profit | 6,137 | 21,463 |
Operating expenses | ' | ' |
Salaries and wages | 53,752 | 67,361 |
General and administrative | 372,921 | 173,414 |
Total operating expenses | 426,673 | 240,775 |
Loss from operations | -420,536 | -219,312 |
Other income (expense) | ' | ' |
Gain on extinguishment of debt | 84,073 | 0 |
Loss on derivative fair value adjustment | -55,854 | 0 |
Interest expense | -252,340 | -15,785 |
Total other expense | -224,121 | -15,785 |
Loss before income taxes | -644,656 | -235,097 |
Provision for income taxes | 0 | 0 |
Net loss | ($644,656) | ($235,097) |
Basic and diluted loss per common share (in dollars per share) | ($0.05) | ($0.02) |
Basic and diluted weighted average shares outstanding (in shares) | 12,254,099 | 10,729,666 |
CONDENSED_STATEMENT_OF_CASH_FL
CONDENSED STATEMENT OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Cash flows from operating activities | ' | ' |
Net loss | ($644,656) | ($235,097) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Common stock issued for services | 82,250 | 0 |
Gain on forgiveness of debt | -84,073 | 0 |
Depreciation | 271 | 168 |
Amortization of deferred loan costs | 34,226 | 0 |
Loss on derivative fair value adjustment | 55,854 | 0 |
Amortization of debt discount | 190,503 | 1,154 |
Changes in operating assets and liabilities | ' | ' |
Accounts receivable | -64,153 | -13,471 |
Other receivables | 0 | 120 |
Prepaid expenses | 147,356 | 6,250 |
Deferred loan costs | 0 | -10,000 |
Accounts payable | 7,331 | 33,188 |
Accrued interest | -13,214 | -33,476 |
Accrued expenses and other liabilities | 63,635 | 155,255 |
Net cash used in operating activities | -224,670 | -95,909 |
Cash flows from investing activities | ' | ' |
Purchase of equipment | -5,063 | 0 |
Cash flows from investing activities | -5,063 | 0 |
Cash flows from financing activities | ' | ' |
Repayment of bank overdraft | 0 | -1,678 |
Proceeds from convertible notes payable | 230,000 | 100,000 |
Repayments of notes payable | 0 | -1,400 |
Net cash provided by financing activities | 230,000 | 96,922 |
Change in cash and cash equivalents | 267 | 1,013 |
Cash at beginning of period | 28,664 | 0 |
Cash at end of period | 28,931 | 1,013 |
Supplemental disclosures of cash flow information | ' | ' |
Cash paid for interest | 0 | 47,507 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash financing activities: | ' | ' |
Common stock issued as loan repayment | 147,526 | 0 |
Common stock issued as interest repayment | 7,447 | 0 |
Debt discount on convertible notes | 367,128 | 0 |
Initial measurements of derivative liabilities | 312,130 | 0 |
Exchange of note payable and accrued interest for convertible note payable | $212,526 | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2014 | |
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 State’s 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. | |
CONDENSED_FINANCIAL_STATEMENTS
CONDENSED FINANCIAL STATEMENTS | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
CONDENSED FINANCIAL STATEMENTS | ' |
NOTE 2 – CONDENSED FINANCIAL STATEMENTS | |
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the three months ended March 31, 2014 and for all periods presented herein, have been made. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2013 audited financial statements. The results of operations for the periods ended March 31, 2014 are not necessarily indicative of the operating results for the full year. | |
GOING_CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2014 | |
Going Concern [Abstract] | ' |
GOING CONCERN | ' |
NOTE 3 – 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. 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 | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||
NOTE 4 - 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. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented. | ||||||||
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 expenses of $0 during the three months ended March 31, 2014 and 2013. | ||||||||
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 | 3 - 5 years | |||||||
Machinery and equipment | 5 years | |||||||
Vehicles | 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 March 31, 2014 and December 31, 2013 were: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 1,210 | ||||||
Sub Total | $ | 8,422 | $ | 3,359 | ||||
Accumulated depreciation | -1,878 | -1,607 | ||||||
Total | $ | 6,544 | $ | 1,752 | ||||
Depreciation expense for the three months ended March 31, 2014 and 2013 was $271 and $168, respectively. | ||||||||
Accrued Expenses and Other Liabilities | ||||||||
Accrued expenses and other liabilities consisted of the following at March 31, 2014 and December 31, 2013: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Deferred rent payable | $ | 2,782 | $ | 2,673 | ||||
Factoring advances | - | - | ||||||
Payroll tax liabilities | 641,143 | 637,139 | ||||||
Other payroll accruals | 58,210 | 51,711 | ||||||
Other | 236,531 | 217,582 | ||||||
Total | $ | 938,666 | $ | 909,105 | ||||
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 $58,015 and $598,782 for the three months ended March 31, 2014 and 2013, 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 three months ended March 31, 2014 and 2013, 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 5,841,603 and 137,607 such potentially dilutive shares excluded for the three months ended March 31, 2014 and 2013, 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 | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||
NOTE 5 - 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 March 31, 2014 and December 31, 2013: | ||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||
at | ||||||||||||
March 31, 2014 | ||||||||||||
Liabilities | ||||||||||||
Derivative Liability | - | $ | 397,641 | - | $ | 397,641 | ||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||
at | ||||||||||||
December | ||||||||||||
31, 2013 | ||||||||||||
Liabilities | ||||||||||||
Derivative Liability | - | 46,023 | - | 46,023 | ||||||||
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, 2013 | $ | 46,023 | ||||||||||
Derivative liabilities recorded | 312,130 | |||||||||||
Change due to note conversion | -16,366 | |||||||||||
Fair value adjustment | 55,854 | |||||||||||
Balance at March 31, 2014 | $ | 397,641 | ||||||||||
NOTES_PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2014 | |
Debt Disclosure [Abstract] | ' |
NOTES PAYABLE | ' |
NOTE 6 – NOTES PAYABLE | |
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 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 $9,000 in principal plus accrued interest of $2,545 and $2,278 due at March 31, 2014 and December 31, 2013. | |
CONVERTIBLE_NOTES_PAYABLE
CONVERTIBLE NOTES PAYABLE | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||
CONVERTIBLE NOTES PAYABLE | ' | |||||||||||||||
NOTE 7 – 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 $5,367 and $4,627 at March 31, 2014 and December 31, 2013. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30. | ||||||||||||||||
On February 27, 2014, the Company received a loan totaling $339,026 from an unrelated party. The note bears interest at 10% per annum and matures February 27, 2015. Of the $339,026 total note, $212,526 was paid to former note holders on our behalf and $1,500 was withheld as debt issue costs resulting in net cash proceeds to the company of $125,000. 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 28, 2014, the Company accepted the conversion of $5,526 of this note at a rate of $0.21 per share resulting in 26,045 shares of common stock being issued. Additionally, on March 17, 2014, the Company accepted the conversion of $7,000 of this note at a rate of $0.13 per share resulting in 52,661 shares of common stock being issued. There was $326,500 in principal plus $2,840 in accrued interest due at March 31, 2014. | ||||||||||||||||
On January 30, 2014, the Company entered into a note with an unrelated party to borrow up to $300,000 which would carry $35,000 as an original issue discount bringing the total note to $335,000 if fully borrowed. Upon closing the agreement, the Company received a loan totaling $50,000 which carried a prorated original issue discount of $5,833 bringing the total note to $55,833. 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, but does not become convertible until 180 days after the effective date which is July 29, 2014. The note requires a minimum of two million five hundred thousand (2,500,0000) to be held in reserve in the instance of conversion. The note carried interest at 12% per annum and is due on January 30, 2016. There was $55,833 in principal plus $1,101 in interest due at March 31, 2014. | ||||||||||||||||
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 2015with 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 | ||||||||
During the three months ended March 31, 2014, the Company entered into debt agreements with various individuals to borrow a total of $55,000. The notes accrue interest at 10% per annum and are due in full in March 2016 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 $55,000 which will be amortized over the lives of the notes. $582 of the debt discounts were recognized in interest expense during the three months ended March 31, 2014 leaving an unamortized discount of $54,418 at March 31, 2014. Additionally, during the three months ended March 31, 2014, the Company accepted the full conversion of two notes and the partial conversion of third to common stock at $0.30 per share. The following table depicts the amounts due for each note as of March 31, 2014: | ||||||||||||||||
Maturity | Principal | Debt Discount | Carrying | Accrued | ||||||||||||
Date | Amount | Interest | ||||||||||||||
Note holder 1 | 1/24/15 | $ | 50,000 | $ | - | $ | 50,000 | $ | 11,260 | |||||||
Note holder 3 | 5/3/15 | 25,000 | -13,630 | 11,370 | 2,274 | |||||||||||
Note holder 4 | 5/9/15 | 100,000 | -29,178 | 70,822 | 8,932 | |||||||||||
Note holder 4 | 5/31/15 | 50,000 | -55,342 | -5,342 | 4,164 | |||||||||||
Note holder 4 | 3/21/16 | 30,000 | -29,589 | 411 | 82 | |||||||||||
Note holder 5 | 5/17/15 | 50,000 | -27,671 | 22,329 | 4,466 | |||||||||||
Note holder 6 | 5/30/15 | 100,000 | -54,521 | 45,479 | 9,096 | |||||||||||
Note holder 7 | 5/9/15 | 50,000 | -27,671 | 22,329 | 4,466 | |||||||||||
Note holder 8 | 5/9/15 | 50,000 | -28,151 | 21,849 | 4,370 | |||||||||||
Note holder 10 | 7/1/15 | 100,000 | -62,602 | 37,398 | 7,479 | |||||||||||
Note holder 10 | 10/29/15 | 25,000 | -19,966 | 5,034 | 1,007 | |||||||||||
Note holder 11 | 7/15/24 | 50,000 | -32,260 | 17,740 | 3,548 | |||||||||||
Note holder 12 | 8/20/15 | 25,000 | -17,842 | 7,158 | 1,432 | |||||||||||
Note holder 12 | 10/18/15 | 25,000 | -19,829 | 5,171 | 1,034 | |||||||||||
Note holder 13 | 10/23/15 | 20,000 | -15,589 | 4,411 | 882 | |||||||||||
Note holder 16 | 12/30/15 | 45,000 | -39,390 | 5,610 | 1,122 | |||||||||||
Note holder 17 | 3/26/16 | 25,000 | -24,827 | 173 | 68 | |||||||||||
Total | $ | 820,000 | $ | -498,058 | $ | 321,942 | $ | 65,682 | ||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 8 – RELATED PARTYTRANSACTIONS | |
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 $1,850 and $1,775 during the three months ended March 31, 2014 and 2013. | |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
NOTE 9 – 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 March 31, 2014 and December 31, 2013, the Company had accrued $641,143 and $637,139 and 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 | 32,643 | ||||
2015 | 1,053 | ||||
Total annual lease commitments | $ | 33,696 | |||
DERIVATIVE_LIABILITY
DERIVATIVE LIABILITY | 3 Months Ended |
Mar. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
DERIVATIVE LIABILITY | ' |
NOTE 10 – DERIVATIVE LIABILITY | |
As of March 31, 2014 the Company had a $397,641 derivative liability balance on the balance sheet, and for the three months ended March 31, 2014, the Company recorded a $55,854 loss from derivative liability fair value adjustment. The derivative liability activity comes from convertible notes payable as follows: | |
As discussed in Note 7 – “Convertible 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 rate 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 date 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 March 31, 2014, the Company marked-to-market the fair value of the derivative liabilities related to note and determined an aggregate fair value of $29,585 and recorded a $16,438 gain from change in fair value of derivatives for three months ended March 31, 2014. 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 60%, (3) risk-free interest rate of 7%, (4) expected life of 0.07 of a year, and (5) estimated fair value of the Company’s common stock of $0.50 per share. | |
As discussed in Note 7 – “Convertible Notes Payable”, on February 27, 2014, the Company issued an aggregate of $339,026 Convertible Promissory Notes to an unrelated party that mature on February 27, 2015. 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 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. 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 date of the note was $312,128 which was recorded as a debt discount, which is up to but not more than the net proceeds of the notes. The fair value of $312,128 was recorded as a derivative liability on the balance sheet. | |
The debt discount for the note will be amortized over the term of the note, or one year. On March 31, 2014, the Company marked-to-market the fair value of the derivative liabilities related to note and determined an aggregate fair value of $368,056 and recorded a $72,292 loss from change in fair value of derivatives for three months ended March 31, 2014. 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 152%, (3) risk-free interest rate of .13%, (4) expected life of 0.91 of a year, and (5) estimated fair value of the Company’s common stock of $0.50 per share. | |
STOCK_OPTIONS_AND_WARRANTS
STOCK OPTIONS AND WARRANTS | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Stock Options And Warrants [Abstract] | ' | |||||||||||||||||
STOCK OPTIONS AND WARRANTS | ' | |||||||||||||||||
NOTE 11 – STOCK OPTIONS AND WARRANTS | ||||||||||||||||||
The following table summarizes all stock option and warrant activity for the three month period ended March 31, 2014: | ||||||||||||||||||
Shares | Weighted- | |||||||||||||||||
Average | ||||||||||||||||||
Exercise Price | ||||||||||||||||||
Per Share | ||||||||||||||||||
Outstanding, December 31, 2013 | 293,333 | $ | 0.3 | |||||||||||||||
Granted | 201,666 | 0.3 | ||||||||||||||||
Exercised | - | - | ||||||||||||||||
Forfeited | - | - | ||||||||||||||||
Expired | - | - | ||||||||||||||||
Outstanding, March 31, 2014 | 494,999 | $ | 0.3 | |||||||||||||||
The following table discloses information regarding outstanding and exercisable options and warrants at March 31, 2014: | ||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||
Exercise | Number of | Weighted | Weighted | Number of | Weighted | |||||||||||||
Prices | Option Shares | Average | Average | Option | Average | |||||||||||||
Exercise | Remaining Life | Shares | Exercise | |||||||||||||||
Price | (Years) | Price | ||||||||||||||||
$ | 0.3 | 494,999 | $ | 0.3 | 3.4 | 311,666 | $ | 0.3 | ||||||||||
494,999 | $ | 0.3 | 3.4 | 311,666 | $ | 0.3 | ||||||||||||
In determining the compensation cost of the stock options granted, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in these calculations are summarized as follows: | ||||||||||||||||||
March 31, 2014 | ||||||||||||||||||
Expected term of options granted | 2 - 5 years | |||||||||||||||||
Expected volatility range | 394 - 408 | % | ||||||||||||||||
Range of risk-free interest rates | 1.70 – 1.73 | % | ||||||||||||||||
Expected dividend yield | 0 | % | ||||||||||||||||
RESTATEMENT
RESTATEMENT | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||
RESTATEMENT | ' | ||||||||||
NOTE 12 - RESTATEMENT | |||||||||||
The Company has restated its results for the three months ended March 31, 2013 to appropriately reflect the issuance of options as part of debt issue costs, the amortization of those issue costs, the recognition of prepaid expenses associated with common stock grants during the year ended December 31, 2012 and the treatment of previously capitalized leases as operating leases. The net effect on the revised balance sheet and statements of operations for March 31, 2013 are: | |||||||||||
Balance Sheet: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Total assets | $ | 344,601 | $ | 204,545 | $ | 549,146 | |||||
Total current liabilities | 1,355,854 | 508,786 | 1,864,640 | ||||||||
Common stock | 104 | 3 | 107 | ||||||||
Additional paid in capital | 134,836 | 35,010 | 169,846 | ||||||||
Accumulated deficit | -1,257,488 | -327,959 | -1,585,447 | ||||||||
Statement of Operations: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Revenue | $ | 621,230 | $ | -985 | $ | 620,245 | |||||
Cost of sales | 589,337 | 9,445 | 598,782 | ||||||||
Operating expenses | 248,219 | -7,444 | 240,775 | ||||||||
Other income (expense) | -14,631 | -1,154 | -15,785 | ||||||||
Provision for income taxes | - | - | - | ||||||||
Net loss | -230,957 | -4,140 | -235,097 | ||||||||
Net loss per common share | -0.02 | - | -0.02 | ||||||||
Weighted average shares outstanding | 10,404,666 | 325,000 | 10,729,666 | ||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 13 – SUBSEQUENT EVENTS | |
On April 14, 2014, the Company entered into a $90,000 note payable with an unrelated party which required 75,000 shares of common stock to be issued as consideration and bears no interest. The note is due on August 14, 2014 with payments of $30,000 due on each June 14, July 14 and August 14, 2014. The note will be in default if a payment is late which carries a penalty of an additional 50,000 common shares to be issued plus interest on the unpaid balance of 1.5%. | |
On April 7, 2014, the Company issued 500,000 shares to settle a claim of $75,000 being owed for prior services. | |
On April 15, 2014, the Company issued 500,000 shares pursuant to an advisory agreement dated October 18, 2013. The earning of the shares were based on certain milestones which were achieved in April 2014. | |
On various dates in May 2014, the Company accepted the conversion of three separate convertible notes payable and the accrued interest on these notes. The conversions resulted in the issuance of 641,667 common shares for the reduction of total principal balance on the notes of $175,000 and accrued interest totaling $17,500. | |
On various dates in April and May 2014, the Company accepted four separate partial conversions of the $339,026 note discussed in Note 7 – Convertible Notes Payable. The conversions were for 47,269 common shares at $0.32 per share, 64,049 common shares at $0.23 per share, 69,051 common shares at $0.14 per share and 54,886 common shares at $0.18 per share for a total conversion of $50,000 totaling 235,255 common shares. | |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
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. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented. | ||||||||
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 expenses of $0 during the three months ended March 31, 2014 and 2013. | ||||||||
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 | 3 - 5 years | |||||||
Machinery and equipment | 5 years | |||||||
Vehicles | 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 March 31, 2014 and December 31, 2013 were: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 1,210 | ||||||
Sub Total | $ | 8,422 | $ | 3,359 | ||||
Accumulated depreciation | -1,878 | -1,607 | ||||||
Total | $ | 6,544 | $ | 1,752 | ||||
Depreciation expense for the three months ended March 31, 2014 and 2013 was $271 and $168, respectively. | ||||||||
Accrued Expenses and Other Liabilities | ' | |||||||
Accrued Expenses and Other Liabilities | ||||||||
Accrued expenses and other liabilities consisted of the following at March 31, 2014 and December 31, 2013: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Deferred rent payable | $ | 2,782 | $ | 2,673 | ||||
Factoring advances | - | - | ||||||
Payroll tax liabilities | 641,143 | 637,139 | ||||||
Other payroll accruals | 58,210 | 51,711 | ||||||
Other | 236,531 | 217,582 | ||||||
Total | $ | 938,666 | $ | 909,105 | ||||
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 $58,015 and $598,782 for the three months ended March 31, 2014 and 2013, 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 three months ended March 31, 2014 and 2013, 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 5,841,603 and 137,607 such potentially dilutive shares excluded for the three months ended March 31, 2014 and 2013, 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) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Schedule of estimated useful lives of depreciable assets | ' | |||||||
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 | 3 - 5 years | |||||||
Machinery and equipment | 5 years | |||||||
Vehicles | 5 years | |||||||
Summary of property, plant and equipment | ' | |||||||
Balances of each asset class as of March 31, 2014 and December 31, 2013 were: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 1,210 | ||||||
Sub Total | $ | 8,422 | $ | 3,359 | ||||
Accumulated depreciation | -1,878 | -1,607 | ||||||
Total | $ | 6,544 | $ | 1,752 | ||||
Schedule of Accrued expenses and other liabilities | ' | |||||||
Accrued expenses and other liabilities consisted of the following at March 31, 2014 and December 31, 2013: | ||||||||
March 31, 2014 | December 31, 2013 | |||||||
Deferred rent payable | $ | 2,782 | $ | 2,673 | ||||
Factoring advances | - | - | ||||||
Payroll tax liabilities | 641,143 | 637,139 | ||||||
Other payroll accruals | 58,210 | 51,711 | ||||||
Other | 236,531 | 217,582 | ||||||
Total | $ | 938,666 | $ | 909,105 | ||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
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 March 31, 2014 and December 31, 2013: | ||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||
at | ||||||||||||
March 31, 2014 | ||||||||||||
Liabilities | ||||||||||||
Derivative Liability | - | $ | 397,641 | - | $ | 397,641 | ||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||
at | ||||||||||||
December | ||||||||||||
31, 2013 | ||||||||||||
Liabilities | ||||||||||||
Derivative Liability | - | 46,023 | - | 46,023 | ||||||||
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, 2013 | $ | 46,023 | ||||||||||
Derivative liabilities recorded | 312,130 | |||||||||||
Change due to note conversion | -16,366 | |||||||||||
Fair value adjustment | 55,854 | |||||||||||
Balance at March 31, 2014 | $ | 397,641 | ||||||||||
CONVERTIBLE_NOTES_PAYABLE_Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
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 | ||||||||
Maturity | Principal | Debt Discount | Carrying | Accrued | ||||||||||||
Date | Amount | Interest | ||||||||||||||
Note holder 1 | 1/24/15 | $ | 50,000 | $ | - | $ | 50,000 | $ | 11,260 | |||||||
Note holder 3 | 5/3/15 | 25,000 | -13,630 | 11,370 | 2,274 | |||||||||||
Note holder 4 | 5/9/15 | 100,000 | -29,178 | 70,822 | 8,932 | |||||||||||
Note holder 4 | 5/31/15 | 50,000 | -55,342 | -5,342 | 4,164 | |||||||||||
Note holder 4 | 3/21/16 | 30,000 | -29,589 | 411 | 82 | |||||||||||
Note holder 5 | 5/17/15 | 50,000 | -27,671 | 22,329 | 4,466 | |||||||||||
Note holder 6 | 5/30/15 | 100,000 | -54,521 | 45,479 | 9,096 | |||||||||||
Note holder 7 | 5/9/15 | 50,000 | -27,671 | 22,329 | 4,466 | |||||||||||
Note holder 8 | 5/9/15 | 50,000 | -28,151 | 21,849 | 4,370 | |||||||||||
Note holder 10 | 7/1/15 | 100,000 | -62,602 | 37,398 | 7,479 | |||||||||||
Note holder 10 | 10/29/15 | 25,000 | -19,966 | 5,034 | 1,007 | |||||||||||
Note holder 11 | 7/15/24 | 50,000 | -32,260 | 17,740 | 3,548 | |||||||||||
Note holder 12 | 8/20/15 | 25,000 | -17,842 | 7,158 | 1,432 | |||||||||||
Note holder 12 | 10/18/15 | 25,000 | -19,829 | 5,171 | 1,034 | |||||||||||
Note holder 13 | 10/23/15 | 20,000 | -15,589 | 4,411 | 882 | |||||||||||
Note holder 16 | 12/30/15 | 45,000 | -39,390 | 5,610 | 1,122 | |||||||||||
Note holder 17 | 3/26/16 | 25,000 | -24,827 | 173 | 68 | |||||||||||
Total | $ | 820,000 | $ | -498,058 | $ | 321,942 | $ | 65,682 | ||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
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 | 32,643 | ||||
2015 | 1,053 | ||||
Total annual lease commitments | $ | 33,696 | |||
STOCK_OPTIONS_AND_WARRANTS_Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Stock Options And Warrants [Abstract] | ' | |||||||||||||||||
Summarizes Of stock option and warrant activity | ' | |||||||||||||||||
The following table summarizes all stock option and warrant activity for the three month period ended March 31, 2014: | ||||||||||||||||||
Shares | Weighted- | |||||||||||||||||
Average | ||||||||||||||||||
Exercise Price | ||||||||||||||||||
Per Share | ||||||||||||||||||
Outstanding, December 31, 2013 | 293,333 | $ | 0.3 | |||||||||||||||
Granted | 201,666 | 0.3 | ||||||||||||||||
Exercised | - | - | ||||||||||||||||
Forfeited | - | - | ||||||||||||||||
Expired | - | - | ||||||||||||||||
Outstanding, March 31, 2014 | 494,999 | $ | 0.3 | |||||||||||||||
Outstanding and exercisable options and warrants | ' | |||||||||||||||||
The following table discloses information regarding outstanding and exercisable options and warrants at March 31, 2014: | ||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||
Exercise | Number of | Weighted | Weighted | Number of | Weighted | |||||||||||||
Prices | Option Shares | Average | Average | Option | Average | |||||||||||||
Exercise | Remaining Life | Shares | Exercise | |||||||||||||||
Price | (Years) | Price | ||||||||||||||||
$ | 0.3 | 494,999 | $ | 0.3 | 3.4 | 311,666 | $ | 0.3 | ||||||||||
494,999 | $ | 0.3 | 3.4 | 311,666 | $ | 0.3 | ||||||||||||
Estimated of the date of grant using the Black-Scholes option pricing model | ' | |||||||||||||||||
The assumptions used in these calculations are summarized as follows: | ||||||||||||||||||
March 31, 2014 | ||||||||||||||||||
Expected term of options granted | 2 - 5 years | |||||||||||||||||
Expected volatility range | 394 - 408 | % | ||||||||||||||||
Range of risk-free interest rates | 1.70 – 1.73 | % | ||||||||||||||||
Expected dividend yield | 0 | % | ||||||||||||||||
RESTATEMENT_Tables
RESTATEMENT (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||
Summary of restatement to prior year balance sheet and operations | ' | ||||||||||
The net effect on the revised balance sheet and statements of operations for March 31, 2013 are: | |||||||||||
Balance Sheet: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Total assets | $ | 344,601 | $ | 204,545 | $ | 549,146 | |||||
Total current liabilities | 1,355,854 | 508,786 | 1,864,640 | ||||||||
Common stock | 104 | 3 | 107 | ||||||||
Additional paid in capital | 134,836 | 35,010 | 169,846 | ||||||||
Accumulated deficit | -1,257,488 | -327,959 | -1,585,447 | ||||||||
Statement of Operations: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Revenue | $ | 621,230 | $ | -985 | $ | 620,245 | |||||
Cost of sales | 589,337 | 9,445 | 598,782 | ||||||||
Operating expenses | 248,219 | -7,444 | 240,775 | ||||||||
Other income (expense) | -14,631 | -1,154 | -15,785 | ||||||||
Provision for income taxes | - | - | - | ||||||||
Net loss | -230,957 | -4,140 | -235,097 | ||||||||
Net loss per common share | -0.02 | - | -0.02 | ||||||||
Weighted average shares outstanding | 10,404,666 | 325,000 | 10,729,666 | ||||||||
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Mar. 31, 2014 | |
Furniture and fixtures [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Life | '5 years |
Furniture and fixtures [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Life | '3 years |
Machinery and equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Life | '5 years |
Vehicles [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Life | '5 years |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $8,422 | $3,359 |
Accumulated depreciation | -1,878 | -1,607 |
Total | 6,544 | 1,752 |
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 | $6,273 | $1,210 |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Other Payables [Line Items] | ' | ' |
Deferred rent payable | $2,782 | $2,673 |
Factoring advances | 0 | 0 |
Payroll tax liabilities | 641,143 | 637,139 |
Other payroll accruals | 58,210 | 51,711 |
Other | 236,531 | 217,582 |
Total | $938,666 | $909,105 |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Significant Accounting Policies [Line Items] | ' | ' |
Allowance for Loan and Lease Losses, Write-offs | $0 | $0 |
Earnings Per Share, Potentially Dilutive Securities | 'For the three months ended March 31, 2014 and 2013, 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 5,841,603 and 137,607 such potentially dilutive shares excluded for the three months ended March 31, 2014 and 2013, respectively. | ' |
Excluded Potentially Dilutive Securities (in shares) | 5,841,603 | 137,607 |
Depreciation | 271 | 168 |
Cost of Goods Sold | $58,015 | $598,782 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Liabilities | ' | ' |
Derivative Liability | $397,641 | $46,023 |
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 | 397,641 | 46,023 |
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 $) | 3 Months Ended |
Mar. 31, 2014 | |
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, 2013 | $46,023 |
Derivative liabilities recorded | 312,130 |
Change due to note conversion | -16,366 |
Fair value adjustment | 55,854 |
Balance at March 31, 2014 | $397,641 |
NOTES_PAYABLE_Details_Textual
NOTES PAYABLE (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Feb. 27, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | Mar. 01, 2012 | Mar. 01, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | |
Byrd & Company LLC [Member] | Byrd & Company LLC [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | Notes Payable [Member] | |||||||
Byrd & Company LLC [Member] | Emerging Markets Consulting LLC [Member] | Emerging Markets Consulting LLC [Member] | Douglas S. Hackett [Member] | Douglas S. Hackett [Member] | |||||||||
Common Stock [Member] | |||||||||||||
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowed amount | $820,000 | ' | ' | $900,000 | ' | $27,000 | ' | ' | $9,000 | ' | ' | ' | ' |
Interest rate per month | ' | ' | 10.00% | ' | 10.00% | ' | ' | ' | 12.00% | ' | ' | ' | ' |
Notes Payable principal outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000 | 9,000 |
Accrued interest | 65,682 | ' | ' | 50,981 | ' | ' | ' | ' | ' | ' | ' | 2,545 | 2,278 |
Value of common stock in satisfaction of debt | 147,526 | 0 | ' | ' | ' | ' | ' | ' | ' | 9,000 | ' | ' | ' |
Stock Issued During Period, Value, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,000 | ' | ' |
Proceeds from Issuance of Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' |
Debt Instrument, Annual Principal Payment | ' | ' | ' | ' | ' | ' | 3,803 | 3,917 | ' | ' | ' | ' | ' |
Debt Instrument, Decrease, Forgiveness | ($84,073) | $0 | ' | ' | ' | ' | $1,200 | ' | ' | ' | ' | ' | ' |
CONVERTIBLE_NOTES_PAYABLE_Deta
CONVERTIBLE NOTES PAYABLE (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Nov. 21, 2011 | Feb. 27, 2014 | Mar. 31, 2014 | Jan. 30, 2014 | Dec. 31, 2013 | Oct. 26, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
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] | 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] | Convertible Notes Payable [Member] | ||||
Note holder 1 [Member] | Note holder 1 [Member] | Note holder 2 [Member] | Note holder 3 [Member] | Note holder 3 [Member] | Note holder 4 i [Member] | Note holder 4 i [Member] | Note holder 4 ii [Member] | Note holder 4 ii [Member] | Note holder 4 iii [Member] | Note holder 5 [Member] | Note holder 5 [Member] | Note holder 6 [Member] | Note holder 6 [Member] | Note holder 7 [Member] | Note holder 7 [Member] | Note holder 8 [Member] | Note holder 8 [Member] | Note holder 9 [Member] | Note holder 10 i [Member] | Note holder 10 i [Member] | Note holder 10 ii [Member] | Note holder 10 ii [Member] | Note holder 11 [Member] | Note holder 11 [Member] | Note holder 12 i [Member] | Note holder 12 i [Member] | Note holder 12 ii [Member] | Note holder 12 ii [Member] | Note holder 13 [Member] | Note holder 13 [Member] | Note holder 16 [Member] | Note holder 16 [Member] | Note holder 17 [Member] | |||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity Date | ' | ' | ' | 27-Feb-15 | 31-Mar-16 | ' | ' | ' | 24-Jan-15 | 24-Jan-15 | 26-Apr-15 | 3-May-15 | 3-May-15 | 9-May-15 | 9-May-15 | 31-May-15 | 31-May-15 | 21-Mar-16 | 17-May-15 | 17-May-15 | 30-May-15 | 30-May-15 | 9-May-15 | 9-May-15 | 9-May-15 | 9-May-15 | 7-Jun-15 | 1-Jul-15 | 1-Jul-15 | 29-Oct-15 | 29-Oct-15 | 15-Jul-24 | 15-Jul-24 | 20-Aug-15 | 20-Aug-15 | 18-Oct-15 | 18-Oct-15 | 23-Oct-15 | 23-Oct-15 | 30-Dec-15 | 30-Dec-15 | 26-Mar-16 |
Principal | $820,000 | $900,000 | $27,000 | $339,026 | $55,000 | $300,000 | $900,000 | $30,000 | $50,000 | $100,000 | $60,000 | $25,000 | $25,000 | $100,000 | $100,000 | $50,000 | $50,000 | $30,000 | $50,000 | $50,000 | $100,000 | $100,000 | $50,000 | $50,000 | $50,000 | $50,000 | $25,000 | $100,000 | $100,000 | $25,000 | $25,000 | $50,000 | $50,000 | $25,000 | $25,000 | $25,000 | $25,000 | $20,000 | $20,000 | $45,000 | $45,000 | $25,000 |
Debt Discount | -498,058 | -589,075 | ' | ' | -54,418 | ' | ' | ' | 0 | 0 | -39,370 | -13,630 | -16,712 | -29,178 | -67,671 | -55,342 | -35,342 | -29,589 | -27,671 | -33,836 | -54,521 | -66,849 | -27,671 | -33,836 | -28,151 | -34,315 | -17,911 | -62,602 | -74,932 | -19,966 | -23,048 | -32,260 | -38,425 | -17,842 | -20,925 | -19,829 | -22,911 | -15,589 | -18,055 | -39,390 | -44,939 | -24,827 |
Carrying Amount | 321,942 | 310,925 | ' | ' | ' | 335,000 | ' | ' | 50,000 | 100,000 | 20,630 | 11,370 | 8,288 | 70,822 | 32,329 | -5,342 | 14,658 | 411 | 22,329 | 16,164 | 45,479 | 33,151 | 22,329 | 16,164 | 21,849 | 15,685 | 7,089 | 37,398 | 25,068 | 5,034 | 1,952 | 17,740 | 11,575 | 7,158 | 4,075 | 5,171 | 2,089 | 4,411 | 1,945 | 5,610 | 63 | 173 |
Accrued interest | $65,682 | $50,981 | ' | ' | ' | ' | ' | ' | $11,260 | $8,795 | $4,126 | $2,274 | $1,658 | $8,932 | $6,466 | $4,164 | $2,932 | $82 | $4,466 | $3,233 | $9,096 | $6,630 | $4,466 | $3,233 | $4,370 | $3,137 | $1,418 | $7,479 | $5,014 | $1,007 | $390 | $3,548 | $2,315 | $1,432 | $815 | $1,034 | $418 | $882 | $389 | $1,122 | $12 | $68 |
CONVERTIBLE_NOTES_PAYABLE_Deta1
CONVERTIBLE NOTES PAYABLE (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | |||||||||||
Mar. 17, 2014 | Feb. 28, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Feb. 27, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | Feb. 27, 2014 | Jan. 30, 2014 | Oct. 26, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Jan. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Third Party [Member] | Placememnt Agent [Member] | Interest Expense [Member] | Interest Expense [Member] | Convertible Notes Payable One [Member] | Convertible Notes Payable One [Member] | Third note [Member] | |||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal | ' | ' | $820,000 | ' | ' | $900,000 | ' | $27,000 | $339,026 | $300,000 | $30,000 | $55,000 | $900,000 | $55,664 | $83,500 | ' | ' | $50,000 | ' | ' |
Interest rate | ' | ' | ' | ' | 10.00% | ' | 10.00% | ' | 10.00% | ' | 10.00% | 10.00% | 10.00% | ' | ' | ' | ' | 12.00% | ' | ' |
Note payable, maturity description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'original maturity date of April 26, 2013; however, the Company is in negotiations to extend the maturity date | ' | 'full between January and December 2015 | ' | ' | ' | ' | ' | ' | ' |
Notes Payable principal outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000 | ' | ' | ' | ' | ' | ' | 55,833 | ' | ' |
Debt Instrument, Increase, Accrued Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,367 | 4,627 | ' | ' | ' | ' | ' | 1,101 | ' |
Conversion rates | $0.13 | $0.21 | $0.30 | ' | ' | ' | $0.30 | ' | ' | ' | $0.30 | $0.30 | ' | ' | ' | ' | ' | ' | ' | $0.30 |
Proceeds from Convertible Debt | ' | ' | 230,000 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | 760,836 | ' | ' | ' | ' | ' | ' | ' |
Amortization of Debt Discount (Premium) | ' | ' | 190,503 | 1,154 | ' | ' | ' | ' | ' | ' | ' | 55,000 | 800,000 | ' | ' | 582 | 210,925 | ' | ' | ' |
Debt Instrument, Unamortized Discount | ' | ' | 498,058 | ' | ' | 589,075 | ' | ' | ' | ' | ' | 54,418 | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of Debt | ' | ' | ' | ' | ' | ' | ' | ' | 212,526 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Issuance Cost | ' | ' | ' | ' | ' | ' | ' | ' | 1,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Debt | ' | ' | ' | ' | ' | ' | ' | ' | 125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date | ' | ' | ' | ' | ' | ' | ' | ' | 27-Feb-15 | ' | ' | 31-Mar-16 | ' | ' | ' | ' | ' | 30-Jan-16 | ' | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | ' | ' | 'common shares, at the holders option, at the conversion 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. | ' | ' | ' | ' | ' | '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 | ' | ' | ' | ' | ' | ' | ' | ' | '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 | ' | ' |
Long-term Debt, Gross | ' | ' | 321,942 | ' | ' | 310,925 | ' | ' | ' | 335,000 | ' | ' | ' | ' | ' | ' | ' | 55,833 | ' | ' |
Debt Instrument Minimum Amount Held In Reserve | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' |
Original Issue Discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000 | ' | ' | ' | ' | ' | ' | ' | 5,833 | ' | ' |
Debt Instrument, Convertible, Beneficial Conversion Feature | 7,000 | 5,526 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued | 52,661 | 26,045 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment, Principal | ' | ' | 326,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment, Interest | ' | ' | $2,840 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (Director [Member], USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Director [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Consulting Charges To Related Party | $1,850 | $1,775 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (Office and Warehouse [Member], USD $) | Mar. 31, 2014 |
Office and Warehouse [Member] | ' |
Operating Leased Assets [Line Items] | ' |
2014 | $32,643 |
2015 | 1,053 |
Total annual lease commitments | $33,696 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Loss Contingencies [Line Items] | ' | ' |
Accrued payroll tax liabilities | $641,143 | $637,139 |
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 | ' |
DERIVATIVE_LIABILITY_Details_T
DERIVATIVE LIABILITY (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Feb. 27, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 17, 2014 | Feb. 28, 2014 | Dec. 31, 2013 | |
DERIVATIVE LIABILITY [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Derivative Liability | ' | $397,641 | ' | ' | ' | ' | $46,023 |
Gain on derivative fair value adjustment | ' | -55,854 | 0 | ' | ' | ' | ' |
Convertible Promissory Notes to unrelated party | 339,026 | ' | ' | 30,000 | ' | ' | ' |
Interest rate per month | 10.00% | ' | ' | 10.00% | ' | ' | ' |
Conversion rates | ' | $0.30 | ' | $0.30 | $0.13 | $0.21 | ' |
Fair value of derivative | ' | 73,451 | ' | ' | ' | ' | ' |
Non cash interest expense | ' | 43,451 | ' | ' | ' | ' | ' |
Fair value of derivative liability | ' | 73,451 | ' | ' | ' | ' | ' |
Unrelated party maturity date | 27-Feb-15 | ' | ' | 26-Apr-13 | ' | ' | ' |
Dividend yield | ' | 0.00% | ' | ' | ' | ' | ' |
Expected volatility | ' | 60.00% | ' | ' | ' | ' | ' |
Risk-free interest rate | ' | 7.00% | ' | ' | ' | ' | ' |
Expected life | ' | '25 days | ' | ' | ' | ' | ' |
Common stock price,per share | ' | $0.50 | ' | ' | ' | ' | ' |
Derivative Liability, Current | ' | 397,641 | ' | ' | ' | ' | 46,023 |
Unrealized Gain (Loss) on Derivatives | ' | 16,438 | ' | ' | ' | ' | ' |
Fair Value Of Derivative Liability recorded debt discount | ' | 312,128 | ' | ' | ' | ' | ' |
Amortization of Debt Discount (Premium) | ' | $190,503 | $1,154 | ' | ' | ' | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | ' | 'common shares, at the holders option, at the conversion 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. | ' | ' | ' | ' | ' |
STOCK_OPTIONS_AND_WARRANTS_Det
STOCK OPTIONS AND WARRANTS (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Stock Options And Warrants [Line Items] | ' |
Shares Outstanding Beginning | 293,333 |
Shares, Granted | 201,666 |
Shares, Exercised | 0 |
Shares, Forfeited | 0 |
Shares, Expired | 0 |
Shares Outstanding Ending | 494,999 |
Weighted Average Exercise Price Per Share, Beginning | $0.30 |
Weighted Average Exercise Price Per Share, Granted | $0.30 |
Weighted Average Exercise Price Per Share, Exercised | $0 |
Weighted Average Exercise Price Per Share, Forfeited | $0 |
Weighted Average Exercise Price Per Share, Expired | $0 |
Weighted Average Exercise Price Per Share, Ending | $0.30 |
STOCK_OPTIONS_AND_WARRANTS_Det1
STOCK OPTIONS AND WARRANTS (Details 1) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Stock Options And Warrants [Line Items] | ' | ' |
Outstanding, Number of Option Shares | 494,999 | 293,333 |
Outstanding, Weighted Average Exercise Price | $0.30 | $0.30 |
Outstanding, Weighted Average Remaining Life | '3 years 4 months 24 days | ' |
Exercisable, Number of Option Shares | 311,666 | ' |
Exercisable, Weighted Average Exercise Price | $0.30 | ' |
Exercise Price $0.3 | ' | ' |
Stock Options And Warrants [Line Items] | ' | ' |
Weighted Average Exercise Price | $0.30 | ' |
Outstanding, Number of Option Shares | 494,999 | ' |
Outstanding, Weighted Average Exercise Price | $0.30 | ' |
Outstanding, Weighted Average Remaining Life | '3 years 4 months 24 days | ' |
Exercisable, Number of Option Shares | 311,666 | ' |
Exercisable, Weighted Average Exercise Price | $0.30 | ' |
STOCK_OPTIONS_AND_WARRANTS_Det2
STOCK OPTIONS AND WARRANTS (Details 2) | 3 Months Ended |
Mar. 31, 2014 | |
Stock Options And Warrants [Line Items] | ' |
Expected volatility range, Minimum | 394.00% |
Expected volatility range, Maximum | 408.00% |
Range of risk-free interest rates, Minimum | 1.70% |
Range of risk-free interest rates, Maximum | 1.73% |
Expected dividend yield | 0.00% |
Maximum | ' |
Stock Options And Warrants [Line Items] | ' |
Expected term of options granted | '5 years |
Minimum | ' |
Stock Options And Warrants [Line Items] | ' |
Expected term of options granted | '2 years |
RESTATEMENT_Details
RESTATEMENT (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Net effect on revised statements of balance sheet and operations | ' | ' | ' |
Total assets | $322,310 | $549,146 | $423,349 |
Total current liabilities | 1,548,367 | 1,864,640 | 1,440,603 |
Common stock | 127 | 107 | 119 |
Additional paid in capital | 2,391,186 | 169,846 | 2,071,274 |
Accumulated deficit | -3,981,523 | -1,585,447 | -3,336,867 |
Revenue | 64,152 | 620,245 | ' |
Cost of sales | 58,015 | 598,782 | ' |
Operating expenses | 426,673 | 240,775 | ' |
Other income (expense) | ' | -15,785 | ' |
Provision for income taxes | 0 | 0 | ' |
Net loss | -644,656 | -235,097 | ' |
Net loss per common share | ($0.05) | ($0.02) | ' |
Weighted average shares outstanding | 12,254,099 | 10,729,666 | ' |
Adjustments [Member] | ' | ' | ' |
Net effect on revised statements of balance sheet and operations | ' | ' | ' |
Total assets | ' | 204,545 | ' |
Total current liabilities | ' | 508,786 | ' |
Common stock | ' | 3 | ' |
Additional paid in capital | ' | 35,010 | ' |
Accumulated deficit | ' | -327,959 | ' |
Revenue | ' | -985 | ' |
Cost of sales | ' | 9,445 | ' |
Operating expenses | ' | -7,444 | ' |
Other income (expense) | ' | -1,154 | ' |
Provision for income taxes | ' | 0 | ' |
Net loss | ' | -4,140 | ' |
Net loss per common share | ' | $0 | ' |
Weighted average shares outstanding | ' | 325,000 | ' |
Actual [Member] | ' | ' | ' |
Net effect on revised statements of balance sheet and operations | ' | ' | ' |
Total assets | ' | 344,601 | ' |
Total current liabilities | ' | 1,355,854 | ' |
Common stock | ' | 104 | ' |
Additional paid in capital | ' | 134,836 | ' |
Accumulated deficit | ' | -1,257,488 | ' |
Revenue | ' | 621,230 | ' |
Cost of sales | ' | 589,337 | ' |
Operating expenses | ' | 248,219 | ' |
Other income (expense) | ' | -14,631 | ' |
Provision for income taxes | ' | 0 | ' |
Net loss | ' | ($230,957) | ' |
Net loss per common share | ' | ($0.02) | ' |
Weighted average shares outstanding | ' | 10,404,666 | ' |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (USD $) | 3 Months Ended | 1 Months Ended | 2 Months Ended | |||||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 17, 2014 | Feb. 28, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2011 | 31-May-14 | Apr. 15, 2014 | Apr. 14, 2014 | Apr. 07, 2014 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||||
Separate Partial Conversions One [Member] | Separate Partial Conversions Two [Member] | Separate Partial Conversions Three [Member] | Separate Partial Conversions Four [Member] | |||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | $820,000 | ' | ' | ' | $900,000 | ' | $27,000 | ' | ' | $90,000 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14-Aug-14 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price | $0.30 | ' | $0.13 | $0.21 | ' | $0.30 | ' | ' | ' | ' | ' | ' | $0.32 | $0.23 | $0.14 | $0.18 |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | ' | ' | ' | 641,667 | ' | ' | ' | 235,255 | 47,269 | 64,049 | 69,051 | 54,886 |
Debt Conversion, Converted Instrument, Amount | ' | ' | ' | ' | ' | ' | ' | 175,000 | ' | ' | ' | 50,000 | ' | ' | ' | ' |
Debt Instrument, Increase, Accrued Interest | ' | ' | ' | ' | ' | ' | ' | 17,500 | ' | ' | ' | ' | ' | ' | ' | ' |
Development Stage Entities, Stock Issued, Shares, Issued for Noncash Consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment, Principal | 326,500 | ' | ' | ' | ' | ' | ' | ' | ' | 30,000 | ' | ' | ' | ' | ' | ' |
Debt Default Additional Common Shares Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' |
Percentage Of Unpaid Principal Balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' | ' | ' |
Shares Issued During Period In Settlement Of Claim | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, Issued for Services | -82,250 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | 75,000 | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Issued for Services | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' |
Notes Payable, Total | ' | ' | ' | ' | ' | ' | ' | $339,026 | ' | ' | ' | $339,026 | ' | ' | ' | ' |