Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 19, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
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 | ' | 29,055,535 |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash and cash equivalents | $0 | $28,664 |
Accounts receivable, net of allowance of $0 | 202,942 | 0 |
Prepaid expenses | 228,576 | 194,481 |
Deferred loan costs, current | 98,659 | 138,324 |
Total current assets | 530,177 | 361,469 |
Property and equipment, net of accumulated depreciation of $5,525 and $1,607 | 14,744 | 1,752 |
Deferred loan costs, net | 4,706 | 60,128 |
Total assets | 549,627 | 423,349 |
Current liabilities | ' | ' |
Bank overdraft | 11,785 | 40 |
Accounts payable | 117,205 | 89,562 |
Accrued expenses and other liabilities | 913,059 | 909,105 |
Notes payable, current portion | 195,000 | 252,274 |
Convertible notes payable, current portion, net of discounts of $145,908 and $0 | 195,592 | 30,000 |
Notes payable, related party, current portion | 10,000 | 0 |
Derivative liability | 184,934 | 46,023 |
Accrued interest | 73,938 | 113,599 |
Total current liabilities | 1,701,513 | 1,440,603 |
Convertible notes payable, net of discounts of $161,613 and $651,780 | 73,223 | 248,220 |
Total liabilities | 1,774,736 | 1,688,823 |
Stockholders' deficit | ' | ' |
Common stock, $0.00001 par value; 100,000,000 shares authorized; 24,777,724 and 11,933,666 issued; 24,727,724 and 11,933,666 outstanding at September 30, 2014 and December 31, 2013 | 248 | 119 |
Common stock subscribed | 40,000 | 0 |
Additional paid-in capital | 4,955,033 | 2,071,274 |
Treasury stock, 50,000 shares at $.084 per share | -4,200 | 0 |
Accumulated deficit | -6,216,190 | -3,336,867 |
Total stockholders' deficit | -1,225,109 | -1,265,474 |
Total liabilities and stockholders' deficit | $549,627 | $423,349 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts (in dollars) | $0 | $0 |
Net accumulated depreciation (in dollars) | 5,525 | 1,607 |
Debt Discount, unamortized Net of Discounts (in dollars) | 145,908 | 0 |
Debt Discount, unamortized (in dollars) | $161,613 | $651,780 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 24,777,724 | 11,933,666 |
Common stock, shares outstanding | 24,727,724 | 11,933,666 |
Treasury Stock, Shares | 50,000 | 50,000 |
Treasury Stock, Par Value | $0.08 | $0.08 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenue | $251,210 | $0 | $717,043 | $670,553 |
Cost of sales | 201,328 | 0 | 555,208 | 809,764 |
Gross profit | 49,882 | 0 | 161,835 | -139,211 |
Operating expenses | ' | ' | ' | ' |
Salaries and wages | 23,913 | 58,812 | 130,749 | 186,029 |
General and administrative | 434,165 | 185,052 | 1,524,204 | 571,063 |
Total operating expenses | 458,078 | 243,864 | 1,654,953 | 757,092 |
Loss from operations | -408,196 | -243,864 | -1,493,118 | -896,303 |
Other income (expense) | ' | ' | ' | ' |
(Loss) gain on extinguishment of debt | -22,112 | 0 | 96,179 | 0 |
Gain (loss) on derivative fair value adjustment | 138,011 | 27,213 | -12,052 | 10,930 |
Loss on settlement | 0 | 0 | -175,000 | 0 |
Interest expense | -502,357 | -154,658 | -1,295,332 | -316,161 |
Total other expense | -386,458 | -127,445 | -1,386,205 | -305,231 |
Loss before income taxes | -794,654 | -371,309 | -2,879,323 | -1,201,534 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | ($794,654) | ($371,309) | ($2,879,323) | ($1,201,534) |
Basic and diluted loss per common share | ($0.04) | ($0.04) | ($0.18) | ($0.12) |
Basic and diluted weighted average shares outstanding | 20,735,595 | 10,404,666 | 16,079,394 | 10,404,666 |
CONDENSED_STATEMENT_OF_CASH_FL
CONDENSED STATEMENT OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities | ' | ' |
Net loss | ($2,879,323) | ($1,201,534) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Common stock issued for services | 987,556 | 0 |
Common stock issued for penalties | 18,500 | 0 |
Common stock issued for settlement | 269,833 | 0 |
Common stock issued as loan origination fee | 0 | 6,250 |
Gain on forgiveness of debt | -96,179 | 0 |
Depreciation | 3,918 | 504 |
Amortization of deferred loan costs | 308,780 | 0 |
Amortization of loan origination fee | 159,751 | 0 |
Loss on derivative fair value adjustment | 12,052 | -10,930 |
Excess derivative liability charged to interest | 12,795 | 70,000 |
Allowance for doubtful accounts | 0 | -17,850 |
Amortization of debt discount | 738,181 | 179,117 |
Changes in operating assets and liabilities | ' | ' |
Accounts receivable | -202,942 | 275,910 |
Other receivables | 0 | 120 |
Prepaid expenses | -34,095 | 16,519 |
Deferred loan costs | 0 | -78,500 |
Accounts payable | 81,822 | 17,281 |
Accrued interest | 31,098 | 5,649 |
Accrued expenses and other liabilities | 3,954 | 15,142 |
Net cash used in operating activities | -584,299 | -722,322 |
Cash flows from investing activities | ' | ' |
Purchase of equipment | -16,910 | 0 |
Net cash used in investing activities | -16,910 | 0 |
Cash flows from financing activities | ' | ' |
Repayment of bank overdraft | 0 | -1,678 |
Proceeds from bank overdraft | 11,745 | 0 |
Proceeds from convertible notes payable | 450,000 | 785,000 |
Proceeds from notes payable | 225,000 | 0 |
Repayments of notes payable | -187,916 | -39,589 |
Proceeds from related party notes payable | 10,000 | 0 |
Proceeds from common stock subscriptions | 40,000 | 0 |
Proceeds from common stock issued for cash | 27,916 | 0 |
Purchase of treasury stock | -4,200 | 0 |
Net cash provided by financing activities | 572,545 | 743,733 |
Change in cash and cash equivalents | -28,664 | 21,411 |
Cash at beginning of period | 28,664 | 0 |
Cash at end of period | 0 | 21,411 |
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 | 602,503 | 0 |
Common stock issued as interest repayment | 45,165 | 0 |
Debt discount on convertible notes | 392,128 | 610,000 |
Initial measurements of derivative liabilities | 312,128 | 30,000 |
Exchange of note payable and accrued interest for convertible note payable | $212,526 | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 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 on April 22, 2011; IHS is a technology based intelligent highway solutions contractor. Through June 30, 2013, the Company’s primary focus was 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. Since that time, the Company has devoted its time to electrical service contracts. 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 | 9 Months Ended |
Sep. 30, 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 periods ended September 30, 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 September 30, 2014 are not necessarily indicative of the operating results for the full year. | |
GOING_CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended | |||||||
Sep. 30, 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 expense of $0 during the three and nine months ended September 30, 2014 and a bad debt recovery of $0 and $13,158 during the three and nine months ended September 30, 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 September, 2014 and December 31, 2013 were: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 1,210 | ||||||
Vehicles | 11,847 | - | ||||||
Sub Total | $ | 20,269 | $ | 3,359 | ||||
Accumulated depreciation | -5,525 | -1,607 | ||||||
Total | $ | 14,744 | $ | 1,752 | ||||
Depreciation expense for the nine months ended September 30, 2014 and 2013 was $3,918 and $504, respectively. Depreciation expense for the three months ended September 30, 2014 and 2013 was $2,071 and $168, respectively. | ||||||||
Accrued Expenses and Other Liabilities | ||||||||
Accrued expenses and other liabilities consisted of the following at September 30, 2014 and December 31, 2013: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Deferred rent payable | $ | 893 | $ | 2,673 | ||||
Payroll tax liabilities | 613,577 | 637,139 | ||||||
Other payroll accruals | 57,917 | 51,711 | ||||||
Other | 240,672 | 217,582 | ||||||
Total | $ | 913,059 | $ | 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 $201,328 and $0 for the three months ended September 30, 2014 and 2013, respectively. Cost of sales totaled $555,208 and $809,764 during the nine months ended September 30, 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 and nine months ended September 30, 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 8,903,665 such potentially dilutive shares excluded for the three and nine months ended September 30, 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 | 9 Months Ended | |||||||||||
Sep. 30, 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 September 30, 2014 and December 31, 2013: | ||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at | |||||||||
September 30, 2014 | ||||||||||||
Liabilities | ||||||||||||
Derivative Liability | - | $ | 184,934 | - | $ | 184,934 | ||||||
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 | 507,895 | |||||||||||
Change due to note conversion | -381,036 | |||||||||||
Fair value adjustment | 12,052 | |||||||||||
Balance at September 30, 2014 | $ | 184,934 | ||||||||||
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 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. During the nine months ended September 30, 2014, the Company issued a total of 200,000 shares of common stock in satisfaction of the remaining $9,000 principal on the note with accrued interest of $2,888 being forgiven. There was $0 and $9,000 in principal plus accrued interest of $0 and $2,278 due at September 30, 2014 and December 31, 2013. | |
On April 14, 2014, the Company received a loan in the amount of $90,000 from Innovest, LLC. The loan is due on August 14, 2014 with $30,000 payment due on each June 14, 2014; July 14, 2014 and August 14, 2014. The loan is unsecured and non-interest bearing. In the event of default, the note shall bear interest at 18% per annum. Additionally, the Company is obligated to issue 50,000 shares of common stock in the event of late payments. The note holder was also issued 75,000 shares of common stock as an incentive to enter into the note. The Company did not make the required principal payment on July 17, 2014 resulting in 50,000 shares of common stock being issued to Innovest and the note beginning to accrue interest at the rate of 18% per annum. Additionally, the Company did not make the required principal payment on August 17, 2014 resulting in an additional 50,000 shares of common stock being issued to Innovest. | |
On May 22, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). The notes carried a fixed interest amount of $400 and were due on June 15, 2014. If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. Additionally, the note holders each received 100,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 25,000 shares of common stock to the Company for $2,100. The notes, including the fixed interest amounts, were repaid on June 26, 2014. Additionally, each note holder exercised its right to sell back 25,000 shares of common stock each to the Company for $2,100. Late penalties yielded an additional 50,000 common shares being issued to each note holder. | |
On August 5, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). The notes carried a fixed interest amount of $800 and are due on October 4, 2014. If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. Additionally, the note holders each received 125,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 50,000 shares of common stock to the Company for $4,200. There was a total of $100,000 in principal and $1,493 of accrued interest due at September 30, 2014. | |
On April 17, 2014, the Company received a loan in the amount of $20,000 from Seton Securities. An additional $5,000 was received on July 15, 2014. The loans are unsecured, due on demand and non-interest bearing. There was $25,000 and $0 in principal and no accrued interest due at September 30, 2014 and December 31, 2013. | |
On September 25, 2014, the Company received a loan from an unrelated party totaling $10,000. The note carried a fixed interest amount of $700 and is due on October 9, 2014. The note holder is entitled to receive 10,000 shares of common stock for each week beyond the due date the note is not repaid. Additionally, the Company issued 25,000 shares of common stock as an incentive to enter into the note. There was $10,000 in principal plus accrued interest of $250 at September 30, 2014. | |
CONVERTIBLE_NOTES_PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended | |||||||||||||||
Sep. 30, 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 $6,871 and $4,627 at September 30, 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 various dates during the nine months ended September 30, 2014, the Company accepted sixteen separate partial conversions of the note resulting in a total of 2,186,992 shares of common stock being issued in exchange for $202,526 of principal. There was $136,500 in principal plus $14,544 in accrued interest due at September 30, 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. An additional $55,000 was borrowed during the three months ended June 30, 2014. 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 and become convertible 180 days after the effective date which is July 29, 2014. The note requires a minimum of two million five hundred thousand (2,500,000) 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. During the three months ended September 30, 2014, the Company accepted four separate partial conversions from the note holder resulting in 1,090,000 shares of common stock being issued in exchange for $43,080 of principal and made cash repayments of $27,917. There was $39,837 in principal plus $5,129 in interest due at September 30, 2014. | ||||||||||||||||
On September 3, 2014, the Company received a loan totaling $100,000 from an unrelated party. The note carried fixed interest of $10,000 and was due on September 11, 2014. 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. The note holder did not elect to convert any portion of the note and the principal plus fixed interest totaling $110,000 was repaid on September 11, 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 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 | ||||||||
During the nine months ended September 30, 2014, the Company entered into debt agreements with various individuals to borrow a total of $310,000 which was $305,000 in cash and $5,000 as a reduction of accounts payable. The notes accrue interest at 10% per annum and are due in are due in full between March and April 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 $310,000 which will be amortized over the lives of the notes. $20,089 of the debt discounts were recognized in interest expense during the nine months ended September 30, 2014 leaving an unamortized discount of $59,911 at September 30, 2014. Additionally, during the nine months ended September 30, 2014, the Company accepted the full conversion of nine notes and the partial conversion of another to common stock at $0.30 per share resulting in 1,733,332 shares of common stock being issued in consideration of $610,000 of principal plus 174,201 shares of common stock being issued in consideration of $55,358 of accrued interest. The following table depicts the amounts due for each note as of September 30, 2014: | ||||||||||||||||
Maturity | Principal | Debt Discount | Carrying | Accrued | ||||||||||||
Date | Amount | Interest | ||||||||||||||
Note holder 1 | 1/24/15 | $ | 50,000 | $ | - | $ | 50,000 | $ | 13,767 | |||||||
Note holder 1 | 4/24/16 | 15,000 | -11,733 | 3,267 | 653 | |||||||||||
Note holder 4 | 3/21/16 | 30,000 | -22,068 | 7,932 | 1,586 | |||||||||||
Note holder 7 | 5/9/15 | 50,000 | -15,137 | 34,863 | 6,973 | |||||||||||
Note holder 10 | 10/29/15 | 25,000 | -13,699 | 11,301 | 2,260 | |||||||||||
Note holder 11 | 7/15/24 | 50,000 | -19,726 | 30,274 | 6,055 | |||||||||||
Note holder 12 | 8/20/15 | 25,000 | -11,575 | 13,425 | 2,685 | |||||||||||
Note holder 12 | 10/18/15 | 25,000 | -13,562 | 11,438 | 2,288 | |||||||||||
Note holder 13 | 10/23/15 | 20,000 | -10,575 | 9,425 | 1,885 | |||||||||||
Note holder 16 | 12/30/15 | 45,000 | -28,110 | 16,890 | 3,378 | |||||||||||
Note holder 17 | 3/26/16 | 25,000 | -18,562 | 6,438 | 1,322 | |||||||||||
Note holder 18 | 4/4/16 | 10,000 | -7,548 | 2,452 | 490 | |||||||||||
Total | $ | 370,000 | $ | -172,295 | $ | 197,705 | $ | 43,342 | ||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 8 – 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 $0 and $2,500 during the three months ended September 30, 2014 and 2013 and $2,500 and $12,275 during the nine months ended September 30, 2014 and 2013. | |
During the nine months ended September 30, 2014, the Company received an interest free $8,000 loan from a related party to fund operations. The loan is unsecured, due on demand and as such is included in current liabilities. | |
During the nine months ended September 30, 2014, the Company received an interest free $2,000 loan from a related party to fund operations. The loan is unsecured, due on demand and as such is included in current liabilities. | |
STOCKHOLDERS_DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended |
Sep. 30, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
STOCKHOLDERS' DEFICIT | ' |
NOTE 9 – STOCKHOLDERS’ DEFICIT | |
The Company is authorized to issue up to 100,000,000 shares of $0.00001 par value common stock. During the nine months ended September 30, 2014, the Company issued a total of 5,100,000 common shares for services provided by various consultants; 7,500 common shares as settlement of a payable; 752,616 common shares as settlements of certain claims brought against the company by two separate entities; 5,510,324 common shares for total note conversions of $889,606; 174,201 common shares for total accrued interest conversions of $55,358; 199,407 common shares for total cash proceeds of $27,917; 100,000 common shares valued at $18,500 for default penalties on notes payable; 1,000,000 common shares as debt issue costs and repurchased a total of 50,000 common shares for $4,200 of cash. | |
There was 24,777,724 shares issued and 24,727,724 outstanding as of September 30, 2014. | |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
NOTE 10 – COMMITMENTS AND CONTINGENCIES | |||||
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 September 30, 2014 and December 31, 2013, the Company had accrued $613,577 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 previously had entered into twelve separate month to month leases on various vehicles which required total monthly payments of $3,971. The vehicles related to these leases were purchased by the Company in April 2014. | |||||
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 | 10,881 | ||||
2015 | 1,053 | ||||
Total annual lease commitments | $ | 11,934 | |||
DERIVATIVE_LIABILITY
DERIVATIVE LIABILITY | 9 Months Ended |
Sep. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
DERIVATIVE LIABILITY | ' |
NOTE 11 – DERIVATIVE LIABILITY | |
As of September 30, 2014 the Company had a $184,934 derivative liability balance on the balance sheet and recorded a gain from derivative liability fair value adjustment of $138,011 and a loss from derivative fair value adjustment of $12,052 during the three and nine months ended September 30, 2014. 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 September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to note and determined an aggregate fair value of $13 and recorded a gain of $13,295 and $40,920 from change in fair value of derivatives for three and nine months ended September 30, 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 289%, (3) risk-free interest rate of .02%, (4) expected life of 0.07 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 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 $368,056 was recorded as a derivative liability on the balance sheet. | |
The debt discount for the notes will be amortized over the term of the note, or one year. On September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $170,858 and recorded a $14,813 and $197,601 loss from change in fair value of derivatives for three and nine months ended September 30, 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 312%, (3) risk-free interest rate of .02%, (4) expected life of 0.41 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 per share. | |
As discussed in Note 7 – “Convertible Notes Payable”, on January 30, 2014, the Company entered into a note with an unrelated party to borrow up to $300,000. 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 and become convertible 180 days after the effective date which is July 29, 2014. 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 date the note became convertible was $95,712 which resulted in a debt discount equal to the outstanding principal at the time of $82,917 with an excess of $12,795 being charged to interest expense. The fair value of $95,712was recorded as a derivative liability on the balance sheet. | |
The debt discount for the notes will be amortized over the term of the note, or one year. On September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $14,063 and recorded a $39,484 gain from change in fair value of derivatives for three and nine months ended September 30, 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 150.57%, (3) risk-free interest rate of .13%, (4) expected life of 1.33 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 per share. | |
As discussed in Note 7 – “Convertible Notes Payable”, on September 3, 2014, the Company received a loan totaling $100,000 from an unrelated party. The note carried fixed interest of $10,000 and was due on September 11, 2014. 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. 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 on the date the note was entered into was $100,055 which resulted in a debt discount equal to the face value of the note of $100,000 an excess of $55 being charged to interest expense. The fair value of $100,055 was recorded as a derivative liability on the balance sheet. | |
The debt discount for the note was amortized over the term of the note, or one week. On September 17, 2014, the note was repaid resulting in the elimination of the derivative liability and a gain on change in fair market value of derivatives of $100,055. | |
STOCK_OPTIONS_AND_WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Stock Options And Warrants [Abstract] | ' | ||||||||||||||
STOCK OPTIONS AND WARRANTS | ' | ||||||||||||||
NOTE 12 – STOCK OPTIONS AND WARRANTS | |||||||||||||||
The following table summarizes all stock option and warrant activity for the nine month period ended September 30, 2014: | |||||||||||||||
Shares | Weighted- | ||||||||||||||
Average | |||||||||||||||
Exercise Price | |||||||||||||||
Per Share | |||||||||||||||
Outstanding, December 31, 2013 | 293,333 | $ | 0.3 | ||||||||||||
Granted | 301,666 | 0.3 | |||||||||||||
Exercised | - | - | |||||||||||||
Forfeited | - | - | |||||||||||||
Expired | - | - | |||||||||||||
Outstanding, September 30, 2014 | 594,999 | $ | 0.3 | ||||||||||||
The following table discloses information regarding outstanding and exercisable options and warrants at September 30, 2014: | |||||||||||||||
Outstanding | Exercisable | ||||||||||||||
Exercise | Number of | Weighted | Weighted | Number of | Weighted | ||||||||||
Prices | Option Shares | Average | Average | Option Shares | Average | ||||||||||
Exercise | Remaining Life | Exercise | |||||||||||||
Price | (Years) | Price | |||||||||||||
$ | 0.3 | 594,999 | $ | 0.3 | 2.89 | 494,999 | $ | 0.3 | |||||||
594,999 | $ | 0.3 | 2.89 | 494,999 | $ | 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: | |||||||||||||||
September 30, 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 | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Accounting Changes and Error Corrections [Abstract] | ' | ||||||||||
RESTATEMENT | ' | ||||||||||
NOTE 13 - RESTATEMENT | |||||||||||
The Company has restated its results for the three and nine months ended September 30, 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 September 30, 2013 are: | |||||||||||
Balance Sheet: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Total assets | $ | 87,013 | $ | 453,316 | $ | 540,329 | |||||
Total current liabilities | 1,251,938 | 735,483 | 1,987,421 | ||||||||
Common stock | 104 | 3 | 107 | ||||||||
Additional paid in capital | 826,086 | 278,599 | 1,104,685 | ||||||||
Accumulated deficit | -2,209,911 | -341,973 | -2,551,884 | ||||||||
Statement of Operations - three months ended September 30, 2013: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Revenue | $ | - | $ | - | $ | - | |||||
Cost of sales | - | - | - | ||||||||
Operating expenses | 249,149 | -5,285 | 243,864 | ||||||||
Other income (expense) | -87,082 | -40,363 | -127,445 | ||||||||
Provision for income taxes | - | - | - | ||||||||
Net loss | -336,231 | -35,078 | -371,309 | ||||||||
Net loss per common share | -0.03 | -0.01 | -0.04 | ||||||||
Weighted average shares outstanding | 10,429,666 | -25,000 | 10,404,666 | ||||||||
Statement of Operations – nine months ended September 30, 2013: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Revenue | $ | 670,553 | $ | - | $ | 670,553 | |||||
Cost of sales | 790,769 | 18,995 | 809,764 | ||||||||
Operating expenses | 818,255 | -61,163 | 757,092 | ||||||||
Other income (expense) | -244,909 | -60,322 | -305,231 | ||||||||
Provision for income taxes | - | - | - | ||||||||
Net loss | -1,183,380 | -18,154 | -1,201,534 | ||||||||
Net loss per common share | -0.11 | -0.01 | -0.12 | ||||||||
Weighted average shares outstanding | 10,413,182 | -8,516 | 10,404,666 | ||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 14 – SUBSEQUENT EVENTS | |
On various dates in October and November 2014, the Company issued a total of 857,143 common shares to three separate investors for common stock subscriptions totaling $40,000 received during the three months ended September 30, 2014. | |
On October 15, 2014, the Company accepted a subscription agreement for 500,000 common shares at a price of $0.04 per share resulting in cash proceeds of $20,000. | |
On various dates in October and November 2014, the Company accepted three separate conversion notices from an existing note holder resulting in 1,210,668 common shares being issued in exchange for a $28,369 reduction in the note payable. | |
On October 8, 2014, the Company accepted a partial conversion notice from an existing note holder to convert $11,232 of the outstanding principal balance resulting in 600,000 shares being issued. | |
On October 30, 2014, the Company accepted a partial conversion notice from an existing note holder to convert $12,150 of the outstanding principal balance resulting in 810,000 shares being issued. | |
As discussed in Note 6 – “Notes Payable”, on August 5, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. The notes were not repaid by the due date resulting in 25,000 common shares being issued to each note holder weekly beginning on October 3, 2014 (50,000 common shares total per week). The common shares were valued at the closing price of our common stock on each date of issuance resulting in a total of 350,000 common shares being issued for default penalties on notes payable of $17,815. | |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||||||
Sep. 30, 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 expense of $0 during the three and nine months ended September 30, 2014 and a bad debt recovery of $0 and $13,158 during the three and nine months ended September 30, 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 September, 2014 and December 31, 2013 were: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 1,210 | ||||||
Vehicles | 11,847 | - | ||||||
Sub Total | $ | 20,269 | $ | 3,359 | ||||
Accumulated depreciation | -5,525 | -1,607 | ||||||
Total | $ | 14,744 | $ | 1,752 | ||||
Depreciation expense for the nine months ended September 30, 2014 and 2013 was $3,918 and $504, respectively. Depreciation expense for the three months ended September 30, 2014 and 2013 was $2,071 and $168, respectively. | ||||||||
Accrued Expenses and Other Liabilities | ' | |||||||
Accrued Expenses and Other Liabilities | ||||||||
Accrued expenses and other liabilities consisted of the following at September 30, 2014 and December 31, 2013: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Deferred rent payable | $ | 893 | $ | 2,673 | ||||
Payroll tax liabilities | 613,577 | 637,139 | ||||||
Other payroll accruals | 57,917 | 51,711 | ||||||
Other | 240,672 | 217,582 | ||||||
Total | $ | 913,059 | $ | 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 $201,328 and $0 for the three months ended September 30, 2014 and 2013, respectively. Cost of sales totaled $555,208 and $809,764 during the nine months ended September 30, 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 and nine months ended September 30, 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 8,903,665 such potentially dilutive shares excluded for the three and nine months ended September 30, 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) | 9 Months Ended | |||||||
Sep. 30, 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 | ' | |||||||
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 September, 2014 and December 31, 2013 were: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 1,210 | ||||||
Vehicles | 11,847 | - | ||||||
Sub Total | $ | 20,269 | $ | 3,359 | ||||
Accumulated depreciation | -5,525 | -1,607 | ||||||
Total | $ | 14,744 | $ | 1,752 | ||||
Schedule of Accrued expenses and other liabilities | ' | |||||||
Accrued expenses and other liabilities consisted of the following at September 30, 2014 and December 31, 2013: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Deferred rent payable | $ | 893 | $ | 2,673 | ||||
Payroll tax liabilities | 613,577 | 637,139 | ||||||
Other payroll accruals | 57,917 | 51,711 | ||||||
Other | 240,672 | 217,582 | ||||||
Total | $ | 913,059 | $ | 909,105 | ||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||
Summary of liabilities measured at fair value on recurring basis | ' | |||||||||||
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 September 30, 2014 and December 31, 2013: | ||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at | |||||||||
September 30, 2014 | ||||||||||||
Liabilities | ||||||||||||
Derivative Liability | - | $ | 184,934 | - | $ | 184,934 | ||||||
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 | 507,895 | |||||||||||
Change due to note conversion | -381,036 | |||||||||||
Fair value adjustment | 12,052 | |||||||||||
Balance at September 30, 2014 | $ | 184,934 | ||||||||||
CONVERTIBLE_NOTES_PAYABLE_Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 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 | ||||||||
The following table depicts the amounts due for each note as of September 30, 2014: | ||||||||||||||||
Maturity | Principal | Debt Discount | Carrying | Accrued | ||||||||||||
Date | Amount | Interest | ||||||||||||||
Note holder 1 | 1/24/15 | $ | 50,000 | $ | - | $ | 50,000 | $ | 13,767 | |||||||
Note holder 1 | 4/24/16 | 15,000 | -11,733 | 3,267 | 653 | |||||||||||
Note holder 4 | 3/21/16 | 30,000 | -22,068 | 7,932 | 1,586 | |||||||||||
Note holder 7 | 5/9/15 | 50,000 | -15,137 | 34,863 | 6,973 | |||||||||||
Note holder 10 | 10/29/15 | 25,000 | -13,699 | 11,301 | 2,260 | |||||||||||
Note holder 11 | 7/15/24 | 50,000 | -19,726 | 30,274 | 6,055 | |||||||||||
Note holder 12 | 8/20/15 | 25,000 | -11,575 | 13,425 | 2,685 | |||||||||||
Note holder 12 | 10/18/15 | 25,000 | -13,562 | 11,438 | 2,288 | |||||||||||
Note holder 13 | 10/23/15 | 20,000 | -10,575 | 9,425 | 1,885 | |||||||||||
Note holder 16 | 12/30/15 | 45,000 | -28,110 | 16,890 | 3,378 | |||||||||||
Note holder 17 | 3/26/16 | 25,000 | -18,562 | 6,438 | 1,322 | |||||||||||
Note holder 18 | 4/4/16 | 10,000 | -7,548 | 2,452 | 490 | |||||||||||
Total | $ | 370,000 | $ | -172,295 | $ | 197,705 | $ | 43,342 | ||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | ||||
Sep. 30, 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 | 10,881 | ||||
2015 | 1,053 | ||||
Total annual lease commitments | $ | 11,934 | |||
STOCK_OPTIONS_AND_WARRANTS_Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 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 nine month period ended September 30, 2014: | |||||||||||||||
Shares | Weighted- | ||||||||||||||
Average | |||||||||||||||
Exercise Price | |||||||||||||||
Per Share | |||||||||||||||
Outstanding, December 31, 2013 | 293,333 | $ | 0.3 | ||||||||||||
Granted | 301,666 | 0.3 | |||||||||||||
Exercised | - | - | |||||||||||||
Forfeited | - | - | |||||||||||||
Expired | - | - | |||||||||||||
Outstanding, September 30, 2014 | 594,999 | $ | 0.3 | ||||||||||||
Outstanding and exercisable options and warrants | ' | ||||||||||||||
The following table discloses information regarding outstanding and exercisable options and warrants at September 30, 2014: | |||||||||||||||
Outstanding | Exercisable | ||||||||||||||
Exercise | Number of | Weighted | Weighted | Number of | Weighted | ||||||||||
Prices | Option Shares | Average | Average | Option Shares | Average | ||||||||||
Exercise | Remaining Life | Exercise | |||||||||||||
Price | (Years) | Price | |||||||||||||
$ | 0.3 | 594,999 | $ | 0.3 | 2.89 | 494,999 | $ | 0.3 | |||||||
594,999 | $ | 0.3 | 2.89 | 494,999 | $ | 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: | |||||||||||||||
September 30, 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) | 9 Months Ended | ||||||||||
Sep. 30, 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 September 30, 2013 are: | |||||||||||
Balance Sheet: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Total assets | $ | 87,013 | $ | 453,316 | $ | 540,329 | |||||
Total current liabilities | 1,251,938 | 735,483 | 1,987,421 | ||||||||
Common stock | 104 | 3 | 107 | ||||||||
Additional paid in capital | 826,086 | 278,599 | 1,104,685 | ||||||||
Accumulated deficit | -2,209,911 | -341,973 | -2,551,884 | ||||||||
Statement of Operations - three months ended September 30, 2013: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Revenue | $ | - | $ | - | $ | - | |||||
Cost of sales | - | - | - | ||||||||
Operating expenses | 249,149 | -5,285 | 243,864 | ||||||||
Other income (expense) | -87,082 | -40,363 | -127,445 | ||||||||
Provision for income taxes | - | - | - | ||||||||
Net loss | -336,231 | -35,078 | -371,309 | ||||||||
Net loss per common share | -0.03 | -0.01 | -0.04 | ||||||||
Weighted average shares outstanding | 10,429,666 | -25,000 | 10,404,666 | ||||||||
Statement of Operations – nine months ended September 30, 2013: | |||||||||||
Original | Adjustments | As Restated | |||||||||
Revenue | $ | 670,553 | $ | - | $ | 670,553 | |||||
Cost of sales | 790,769 | 18,995 | 809,764 | ||||||||
Operating expenses | 818,255 | -61,163 | 757,092 | ||||||||
Other income (expense) | -244,909 | -60,322 | -305,231 | ||||||||
Provision for income taxes | - | - | - | ||||||||
Net loss | -1,183,380 | -18,154 | -1,201,534 | ||||||||
Net loss per common share | -0.11 | -0.01 | -0.12 | ||||||||
Weighted average shares outstanding | 10,413,182 | -8,516 | 10,404,666 | ||||||||
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Furniture and fixtures [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Furniture and fixtures [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '3 years |
Machinery and equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Vehicles [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '5 years |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $20,269 | $3,359 |
Accumulated depreciation | -5,525 | -1,607 |
Total | 14,744 | 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 |
Vehicles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $11,847 | $0 |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Other Payables [Line Items] | ' | ' |
Deferred rent payable | $893 | $2,673 |
Payroll tax liabilities | 613,577 | 637,139 |
Other payroll accruals | 57,917 | 51,711 |
Other | 240,672 | 217,582 |
Total | $913,059 | $909,105 |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 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 and nine months ended September 30, 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 8,903,665 such potentially dilutive shares excluded for the three and nine months ended September 30, 2014 and 2013, respectively. | ' |
Depreciation | 2,071 | 168 | 3,918 | 504 |
Cost of Goods Sold | 201,328 | 0 | 555,208 | 809,764 |
Allowance for Loan and Lease Loss, Recovery of Bad Debts | ' | $0 | ' | $13,158 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Liabilities | ' | ' |
Derivative Liability | $184,934 | ' |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Liabilities | ' | ' |
Derivative Liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Liabilities | ' | ' |
Derivative Liability | 184,934 | 46,023 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Liabilities | ' | ' |
Derivative Liability | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | ' | ' |
Liabilities | ' | ' |
Derivative Liability | $184,934 | $46,023 |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 1) (Fair Value, Inputs, Level 3 [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Fair Value, Inputs, Level 3 [Member] | ' |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Balance | $46,023 |
Derivative liabilities recorded | 507,895 |
Change due to note conversion | -381,036 |
Fair value adjustment | 12,052 |
Balance | $184,934 |
NOTES_PAYABLE_Details_Textual
NOTES PAYABLE (Details Textual) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||||||||
Aug. 05, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | 22-May-14 | Dec. 31, 2013 | Nov. 21, 2011 | Aug. 05, 2014 | 22-May-14 | Sep. 30, 2014 | Aug. 05, 2014 | 22-May-14 | 22-May-14 | Aug. 05, 2014 | Sep. 30, 2014 | Apr. 14, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 15, 2014 | Sep. 30, 2014 | Apr. 17, 2014 | Dec. 31, 2013 | Apr. 14, 2014 | Nov. 21, 2011 | Mar. 01, 2012 | Nov. 21, 2011 | Mar. 01, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Nov. 21, 2011 | Sep. 25, 2014 | Sep. 30, 2014 | |
Note Agreements [Member] | Note Agreements [Member] | Note Agreements [Member] | Note Agreements One [Member] | Note Agreements One [Member] | Note Agreements Two [Member] | Note Agreements Two [Member] | Common Stock [Member] | Innovest LLC [Member] | Byrd & Company LLC [Member] | Byrd & Company LLC [Member] | Seton Securities [Member] | Seton Securities [Member] | Seton Securities [Member] | Seton Securities [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] | 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] | Unrelated party [Member] | Unrelated party [Member] | ||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowed amount | ' | ' | ' | $100,000 | ' | $27,000 | $100,000 | ' | ' | $50,000 | $50,000 | ' | $50,000 | ' | ' | ' | ' | ' | $25,000 | $20,000 | $0 | $90,000 | $9,000 | ' | $9,000 | ' | ' | ' | $9,000 | $10,000 | ' |
Interest rate per month | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18.00% | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable principal outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 9,000 | ' | ' | ' |
Accrued Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | 0 | 2,278 | ' | ' | ' |
Value of common stock in satisfaction of debt | ' | 602,503 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000 | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, New Issues | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,000 | ' | ' | ' | ' | ' |
Proceeds from Issuance of Common Stock | ' | 27,916 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Annual Principal Payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,803 | 3,917 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Decrease, Forgiveness | ' | -96,179 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date, Description | ' | ' | ' | ' | ' | ' | 'The notes carried a fixed interest amount of $800 and are due on October 4, 2014. | 'The notes carried a fixed interest amount of $400 and were due on June 15, 2014. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The loan is due on August 14, 2014 with $30,000 payment due on each June 14, 2014; July 14, 2014 and August 14, 2014. | ' | ' | ' | ' | ' | ' | ' | 'The note carried a fixed interest amount of $700 and is due on October 9, 2014. | ' |
Common stock incentive and right to sell description | ' | ' | ' | ' | ' | ' | 'Additionally, the note holders each received 125,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 50,000 shares of common stock to the Company for $4,200. | 'Additionally, the note holders each received 100,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 25,000 shares of common stock to the Company for $2,100. The notes, including the fixed interest amounts, were repaid on June 26, 2014. | ' | ' | ' | ' | ' | ' | 'The note holder was also issued 75,000 shares of common stock as an incentive to enter into the note. The Company did not make the required principal payment on July 17, 2014 resulting in 50,000 shares of common stock being issued to Innovest and the note beginning to accrue interest at the rate of 18% per annum. Additionally, the Company did not make the required principal payment on August 17, 2014 resulting in an additional 50,000 shares of common stock being issued to Innovest. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Additionally, the Company issued 25,000 shares of common stock as an incentive to enter into the note. | ' |
Common stock exercised and right to sell description | ' | ' | ' | ' | ' | ' | ' | 'Additionally, each note holder exercised its right to sell back 25,000 shares of common stock each to the Company for $2,100. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | 25,000 | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional shares issued for late penalties yielded | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' |
Stock Issued During Period, Shares, Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment, Principal | ' | 202,526 | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | 9,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 |
Debt Instrument, Periodic Payment, Interest | ' | ' | ' | ' | ' | ' | ' | ' | 1,493 | ' | ' | ' | ' | 2,888 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250 |
Proceeds from Loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CONVERTIBLE_NOTES_PAYABLE_Deta
CONVERTIBLE NOTES PAYABLE (Details) (USD $) | Sep. 30, 2014 | 22-May-14 | Dec. 31, 2013 | Nov. 21, 2011 | Feb. 27, 2014 | Sep. 30, 2014 | Sep. 03, 2014 | Jan. 30, 2014 | 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 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 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] | |||||
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 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 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] | Note Holder 18 [Member] | Note holder 4 [Member] | Note Holder 1 i [Member] | Note Holder 1 ii [Member] | Note Holder 10 [Member] | |||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity Date | ' | ' | ' | ' | 27-Feb-15 | ' | ' | ' | ' | ' | 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 | 9-May-15 | 7-Jun-15 | 1-Jul-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 | 4-Apr-16 | 21-Mar-16 | 24-Jan-15 | 24-Apr-16 | 29-Oct-15 |
Principal | ' | $100,000 | ' | $27,000 | $339,026 | $370,000 | $100,000 | $300,000 | $900,000 | $30,000 | $100,000 | $60,000 | $25,000 | $100,000 | $50,000 | $50,000 | $100,000 | $50,000 | $50,000 | $50,000 | $25,000 | $100,000 | $25,000 | $50,000 | $50,000 | $25,000 | $25,000 | $25,000 | $25,000 | $20,000 | $20,000 | $45,000 | $45,000 | $25,000 | $10,000 | $30,000 | $50,000 | $15,000 | $25,000 |
Debt Discount | -161,613 | ' | -651,780 | ' | ' | -172,295 | ' | ' | -589,075 | ' | 0 | -39,370 | -16,712 | -67,671 | -35,342 | -33,836 | -66,849 | -15,137 | -33,836 | -34,315 | -17,911 | -74,932 | -23,048 | -19,726 | -38,425 | -11,575 | -20,925 | -13,562 | -22,911 | -10,575 | -18,055 | -28,110 | -44,939 | -18,562 | -7,548 | -22,068 | 0 | -11,733 | -13,699 |
Carrying Amount | ' | ' | ' | ' | ' | 197,705 | ' | 335,000 | 310,925 | ' | 100,000 | 20,630 | 8,288 | 32,329 | 14,658 | 16,164 | 33,151 | 34,863 | 16,164 | 15,685 | 7,089 | 25,068 | 1,952 | 30,274 | 11,575 | 13,425 | 4,075 | 11,438 | 2,089 | 9,425 | 1,945 | 16,890 | 63 | 6,438 | 2,452 | 7,932 | 50,000 | 3,267 | 11,301 |
Accrued Interest | ' | ' | ' | ' | ' | $43,342 | ' | ' | $50,981 | ' | $8,795 | $4,126 | $1,658 | $6,466 | $2,932 | $3,233 | $6,630 | $6,973 | $3,233 | $3,137 | $1,418 | $5,014 | $390 | $6,055 | $2,315 | $2,685 | $815 | $2,288 | $418 | $1,885 | $389 | $3,378 | $12 | $1,322 | $490 | $1,586 | $13,767 | $653 | $2,260 |
CONVERTIBLE_NOTES_PAYABLE_Deta1
CONVERTIBLE NOTES PAYABLE (Details Textual) (USD $) | 9 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | 22-May-14 | Dec. 31, 2013 | Nov. 21, 2011 | Sep. 30, 2014 | Sep. 03, 2014 | Sep. 11, 2014 | Sep. 03, 2014 | Feb. 27, 2014 | Jan. 30, 2014 | Oct. 26, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Jan. 30, 2014 | Sep. 30, 2014 | |
Common Stock [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] | Third Party [Member] | Placememnt Agent [Member] | Interest Expense [Member] | Interest Expense [Member] | Convertible Notes Payable One [Member] | Convertible Notes Payable One [Member] | ||||||
Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal | ' | ' | $100,000 | ' | $27,000 | ' | $100,000 | ' | $100,000 | $339,026 | $300,000 | $30,000 | $370,000 | $370,000 | $900,000 | ' | ' | $55,664 | $83,500 | ' | ' | $50,000 | ' |
Interest rate | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | 10.00% | ' | 10.00% | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' |
Note payable, maturity description | ' | ' | ' | ' | ' | ' | 'The note carried fixed interest of $10,000 and was due on September 11, 2014. | ' | ' | ' | ' | 'original maturity date of April 26, 2013; however, the Company is in negotiations to extend the maturity date. | ' | 'full between March and April 2016 | 'full between January and December 2015 | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable principal outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55,833 | ' |
Debt Instrument, Increase, Accrued Interest | 136,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,871 | 4,627 | ' | ' | ' | ' | ' | ' | ' | 5,129 |
Conversion rates | ' | ' | ' | $0.30 | ' | $0.30 | ' | ' | ' | ' | ' | $0.30 | $0.30 | $0.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Convertible Debt | 450,000 | 785,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 760,836 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of Debt Discount (Premium) | 738,181 | 179,117 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 310,000 | 800,000 | ' | ' | ' | ' | 20,089 | 210,925 | ' | ' |
Debt Instrument, Unamortized Discount | 161,613 | ' | ' | 651,780 | ' | ' | ' | ' | ' | ' | ' | ' | 172,295 | 172,295 | 589,075 | ' | ' | ' | ' | ' | ' | ' | 59,911 |
Repayments of Debt | ' | ' | ' | ' | ' | ' | ' | 110,000 | ' | 212,526 | ' | ' | 27,917 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Issuance Cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27-Feb-15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30-Jan-16 | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | ' | ' | ' | ' | ' | ' | ' | ' | '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 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 and become convertible 180 days after the effective date which is July 29, 2014. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Gross | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 335,000 | ' | 197,705 | 197,705 | 310,925 | ' | ' | ' | ' | ' | ' | ' | 39,837 |
Debt Instrument Minimum Amount Held In Reserve | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' | ' |
Original Issue Discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,833 | ' |
Debt Instrument, Periodic Payment, Principal | 202,526 | ' | ' | ' | ' | 9,000 | ' | ' | ' | ' | ' | ' | 43,080 | 610,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment, Interest | ' | ' | ' | ' | ' | 2,888 | ' | ' | ' | ' | ' | ' | ' | 14,544 | ' | ' | 55,358 | ' | ' | ' | ' | ' | ' |
Debt Instrument Cash Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 305,000 | 305,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Reduction Of Accounts Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares, Issued | 24,777,724 | ' | ' | 11,933,666 | ' | ' | ' | ' | ' | ' | ' | ' | 2,186,992 | 2,186,992 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Unused Borrowing Capacity, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $55,000 | ' | ' | ' | ' | ' | ' | ' |
Common Stock Shares Issued One | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,733,332 | 1,733,332 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock Shares Issued Two | 174,201 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | 5,510,324 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,090,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Consulting Charges To Related Party | $0 | $2,500 | $2,500 | $12,275 |
Related Party One [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Interest Expense, Related Party | ' | ' | 8,000 | ' |
Related Party Two [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Interest Expense, Related Party | ' | ' | $2,000 | ' |
STOCKHOLDERS_DEFICIT_Details_T
STOCKHOLDERS' DEFICIT (Details Textual) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Stockholders Equity Note [Line Items] | ' | ' | ' |
Common Stock, Shares Authorized | 100,000,000 | ' | 100,000,000 |
Common Stock, Par or Stated Value Per Share | $0.00 | ' | $0.00 |
Stock Issued During Period, Shares, Issued for Services | 5,100,000 | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | 5,510,324 | ' | ' |
Debt Conversion, Converted Instrument, Amount | $889,606 | ' | ' |
Stock Repurchased During Period, Shares | 50,000 | ' | ' |
Stock Repurchased During Period, Value | 4,200 | ' | ' |
Common Stock, Shares, Issued | 24,777,724 | ' | 11,933,666 |
Common Stock, Shares, Outstanding, Ending Balance | 24,727,724 | ' | 11,933,666 |
Proceeds from Issuance of Common Stock | 27,916 | 0 | ' |
Common Stock [Member] | ' | ' | ' |
Stockholders Equity Note [Line Items] | ' | ' | ' |
Common Stock, Shares, Issued | 199,407 | ' | ' |
Proceeds from Issuance of Common Stock | 27,917 | ' | ' |
Settlement of Payable [Member] | ' | ' | ' |
Stockholders Equity Note [Line Items] | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | 7,500 | ' | ' |
Settlements of Certain Claims [Member] | ' | ' | ' |
Stockholders Equity Note [Line Items] | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | 752,616 | ' | ' |
Accrued Interest Conversions [Member] | ' | ' | ' |
Stockholders Equity Note [Line Items] | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | 174,201 | ' | ' |
Debt Conversion, Converted Instrument, Amount | 55,358 | ' | ' |
Notes Payable [Member] | ' | ' | ' |
Stockholders Equity Note [Line Items] | ' | ' | ' |
Stock Issued During Period Shares Penalties On Notes Payable | 100,000 | ' | ' |
Stock Issued During Period Value Penalties On Notes Payable | $18,500 | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (Office and Warehouse [Member], USD $) | Sep. 30, 2014 |
Office and Warehouse [Member] | ' |
Operating Leased Assets [Line Items] | ' |
2014 | $10,881 |
2015 | 1,053 |
Total annual lease commitments | $11,934 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Loss Contingencies [Line Items] | ' | ' |
Accrued payroll tax liabilities | $613,577 | $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 Companys 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 $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | 22-May-14 | Dec. 31, 2013 | Nov. 21, 2011 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2012 | Feb. 27, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jan. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 03, 2014 | Sep. 17, 2014 | Sep. 30, 2014 | |
Debt one | Debt one | Debt one | Debt two | Debt two | Debt two | Debt three | Debt three | Debt three | Debt four | Debt four | Debt four | ||||||||
DERIVATIVE LIABILITY [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative Liability | $184,934 | ' | $184,934 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on derivative fair value adjustment | 138,011 | 27,213 | -12,052 | 10,930 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Promissory Notes to unrelated party | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000 | 339,026 | ' | ' | 300,000 | ' | ' | ' | ' | ' |
Interest rate per month | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion rates | ' | ' | ' | ' | ' | $0.30 | ' | ' | ' | $0.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of derivative | ' | ' | ' | ' | ' | ' | ' | 73,451 | 73,451 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non cash interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 43,451 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of derivative liability | ' | ' | ' | ' | ' | ' | ' | 73,451 | 73,451 | ' | ' | 368,056 | 368,056 | ' | 95,712 | 95,712 | ' | ' | 100,055 |
Unrelated party maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26-Apr-13 | 27-Feb-15 | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | 0.00% | ' | ' | 0.00% | ' | ' | ' |
Expected volatility | ' | ' | ' | ' | ' | ' | ' | ' | 289.00% | ' | ' | ' | 312.00% | ' | ' | 150.57% | ' | ' | ' |
Risk-free interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 0.02% | ' | ' | ' | 0.02% | ' | ' | 13.00% | ' | ' | ' |
Expected life | ' | ' | ' | ' | ' | ' | ' | ' | '25 days | ' | ' | ' | '4 months 28 days | ' | ' | '1 year 3 months 29 days | ' | ' | ' |
Common stock price, per share | ' | ' | ' | ' | ' | ' | ' | $0.04 | $0.04 | ' | ' | $0.04 | $0.04 | ' | $0.04 | $0.04 | ' | ' | ' |
Derivative Liability, Current | 184,934 | ' | 184,934 | ' | ' | 46,023 | ' | 13 | 13 | ' | ' | 170,858 | 170,858 | ' | 14,063 | 14,063 | ' | ' | ' |
Unrealized Gain (Loss) on Derivatives | ' | ' | ' | ' | ' | ' | ' | 13,295 | 40,920 | ' | ' | 14,813 | 197,601 | ' | 39,484 | 39,484 | ' | 100,055 | ' |
Fair Value Of Derivative Liability recorded debt discount | ' | ' | ' | ' | ' | ' | ' | 30,000 | 30,000 | ' | ' | 312,128 | 312,128 | ' | 95,712 | 95,712 | ' | ' | 100,055 |
Debt Instrument, Face Amount | ' | ' | ' | ' | 100,000 | ' | 27,000 | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | 100,000 | ' | ' |
Debt Instrument, Periodic Payment, Principal | ' | ' | 202,526 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 82,917 | ' | ' | 100,000 |
Debt Instrument, Periodic Payment, Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $12,795 | ' | ' | $55 |
Debt Instrument, Maturity Date, Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The note carried fixed interest of $10,000 and was due on September 11, 2014. | ' | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '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 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 and become convertible 180 days after the effective date which is July 29, 2014. | ' | ' | '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. | ' | ' |
STOCK_OPTIONS_AND_WARRANTS_Det
STOCK OPTIONS AND WARRANTS (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Stock Options And Warrants [Line Items] | ' |
Shares Outstanding Beginning Balance | 293,333 |
Shares, Granted | 301,666 |
Shares, Exercised | 0 |
Shares, Forfeited | 0 |
Shares, Expired | 0 |
Shares Outstanding Ending Balance | 594,999 |
Weighted Average Exercise Price Per Share, Beginning Balance | $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 Balance | $0.30 |
STOCK_OPTIONS_AND_WARRANTS_Det1
STOCK OPTIONS AND WARRANTS (Details 1) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Stock Options And Warrants [Line Items] | ' | ' |
Outstanding, Number of Option Shares | 594,999 | 293,333 |
Outstanding, Weighted Average Exercise Price | $0.30 | $0.30 |
Outstanding, Weighted Average Remaining Life (Years) | '2 years 10 months 20 days | ' |
Exercisable, Number of Option Shares | 494,999 | ' |
Exercisable, Weighted Average Exercise Price | $0.30 | ' |
Exercise Price $0.30 | ' | ' |
Stock Options And Warrants [Line Items] | ' | ' |
Weighted Average Exercise Price | $0.30 | ' |
Outstanding, Number of Option Shares | 594,999 | ' |
Outstanding, Weighted Average Exercise Price | $0.30 | ' |
Outstanding, Weighted Average Remaining Life (Years) | '2 years 10 months 20 days | ' |
Exercisable, Number of Option Shares | 494,999 | ' |
Exercisable, Weighted Average Exercise Price | $0.30 | ' |
STOCK_OPTIONS_AND_WARRANTS_Det2
STOCK OPTIONS AND WARRANTS (Details 2) | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Net effect on revised statements of balance sheet and operations | ' | ' | ' | ' | ' |
Total assets | $549,627 | $540,329 | $549,627 | $540,329 | $423,349 |
Total current liabilities | 1,701,513 | 1,987,421 | 1,701,513 | 1,987,421 | 1,440,603 |
Common stock | 248 | 107 | 248 | 107 | 119 |
Additional paid in capital | 4,955,033 | 1,104,685 | 4,955,033 | 1,104,685 | 2,071,274 |
Accumulated deficit | -6,216,190 | -2,551,884 | -6,216,190 | -2,551,884 | -3,336,867 |
Revenue | 251,210 | 0 | 717,043 | 670,553 | ' |
Cost of sales | 201,328 | 0 | 555,208 | 809,764 | ' |
Operating expenses | 458,078 | 243,864 | 1,654,953 | 757,092 | ' |
Other income (expense) | ' | -127,445 | ' | -305,231 | ' |
Provision for income taxes | 0 | 0 | 0 | 0 | ' |
Net loss | -794,654 | -371,309 | -2,879,323 | -1,201,534 | ' |
Net loss per common share | ($0.04) | ($0.04) | ($0.18) | ($0.12) | ' |
Weighted average shares outstanding | 20,735,595 | 10,404,666 | 16,079,394 | 10,404,666 | ' |
Adjustments [Member] | ' | ' | ' | ' | ' |
Net effect on revised statements of balance sheet and operations | ' | ' | ' | ' | ' |
Total assets | ' | 453,316 | ' | 453,316 | ' |
Total current liabilities | ' | 735,483 | ' | 735,483 | ' |
Common stock | ' | 3 | ' | 3 | ' |
Additional paid in capital | ' | 278,599 | ' | 278,599 | ' |
Accumulated deficit | ' | -341,973 | ' | -341,973 | ' |
Revenue | ' | 0 | ' | 0 | ' |
Cost of sales | ' | 0 | ' | 18,995 | ' |
Operating expenses | ' | -5,285 | ' | -61,163 | ' |
Other income (expense) | ' | -40,363 | ' | -60,322 | ' |
Provision for income taxes | ' | 0 | ' | 0 | ' |
Net loss | ' | -35,078 | ' | -18,154 | ' |
Net loss per common share | ' | ($0.01) | ' | ($0.01) | ' |
Weighted average shares outstanding | ' | -25,000 | ' | -8,516 | ' |
Actual [Member] | ' | ' | ' | ' | ' |
Net effect on revised statements of balance sheet and operations | ' | ' | ' | ' | ' |
Total assets | ' | 87,013 | ' | 87,013 | ' |
Total current liabilities | ' | 1,251,938 | ' | 1,251,938 | ' |
Common stock | ' | 104 | ' | 104 | ' |
Additional paid in capital | ' | 826,086 | ' | 826,086 | ' |
Accumulated deficit | ' | -2,209,911 | ' | -2,209,911 | ' |
Revenue | ' | 0 | ' | 670,553 | ' |
Cost of sales | ' | 0 | ' | 790,769 | ' |
Operating expenses | ' | 249,149 | ' | 818,255 | ' |
Other income (expense) | ' | -87,082 | ' | -244,909 | ' |
Provision for income taxes | ' | 0 | ' | 0 | ' |
Net loss | ' | ($336,231) | ' | ($1,183,380) | ' |
Net loss per common share | ' | ($0.03) | ' | ($0.11) | ' |
Weighted average shares outstanding | ' | 10,429,666 | ' | 10,413,182 | ' |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 2 Months Ended | 0 Months Ended | ||||||
Aug. 05, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | 22-May-14 | Nov. 21, 2011 | Aug. 05, 2014 | 22-May-14 | Aug. 05, 2014 | 22-May-14 | Aug. 05, 2014 | Sep. 30, 2014 | Oct. 08, 2014 | Oct. 30, 2014 | Nov. 19, 2014 | Oct. 15, 2014 | |
Note Agreements [Member] | Note Agreements [Member] | Note Agreements One [Member] | Note Agreements One [Member] | Note Agreements Two [Member] | Three Seperate Investors [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||
Subscription Agreements [Member] | |||||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | $100,000 | $27,000 | $100,000 | ' | $50,000 | $50,000 | $50,000 | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | 5,510,324 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | 810,000 | 1,210,668 | ' |
Debt Conversion, Converted Instrument, Amount | ' | 889,606 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,232 | 12,150 | 28,369 | ' |
Stock Issued During Period, Value, Issued for Services | ' | -987,556 | 0 | ' | ' | ' | ' | ' | ' | ' | 40,000 | ' | ' | ' | ' |
Stock Issued During Period, Shares, Issued for Services | ' | 5,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | 857,143 | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | 25,000 | 25,000 | ' | ' | ' | ' | ' | ' | ' | 500,000 |
Sale of Stock, Price Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 |
Stock Issued During Period, Value, New Issues | $25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $20,000 |
Common Stock Issued For Late Penalties On Notes Payable Description | 'The notes were not repaid by the due date resulting in 25,000 common shares being issued to each note holder weekly beginning on October 3, 2014 (50,000 common shares total per week). The common shares were valued at the closing price of our common stock on each date of issuance resulting in a total of 350,000 common shares being issued for default penalties on notes payable of $17,815 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |