Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended | |
Dec. 31, 2012 | Jun. 30, 2013 | |
Document And Entity Information | ||
Entity Registrant Name | 800 Commerce, Inc. | |
Entity Central Index Key | 1558465 | |
Document Type | 10-Q | |
Document Period End Date | 30-Jun-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | Yes | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,950,000 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2013 |
Balance_Sheets
Balance Sheets (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Current Assets: | ||
Cash and cash equivalents | $21,114 | $40,618 |
Accounts receivable | 91,017 | 57,827 |
Prepaid expenses | 21,250 | |
Marketable securities | 341,023 | 152,000 |
Security deposit | 2,500 | 2,500 |
Total current assets | 455,654 | 274,195 |
Patents pending | 33,950 | 32,500 |
Computer Equipment, net | 2,710 | 979 |
Total assets | 492,314 | 307,674 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 104,073 | 71,594 |
Due to stockholder | 86,505 | 56,186 |
Convertible promssory note, net of discount $22,465 (2012) | 42,500 | 27,535 |
Derivative liability | 25,148 | 40,000 |
Total current liabilities | 258,226 | 195,315 |
Stockholders' Equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued | ||
Common stock, $.001 par value; 90,000,000 shares authorized; 19,950,000 (2013) and 19,050,000 (2012) shares issued and outstanding | 19,950 | 19,050 |
Additional paid-in capital | 1,151,873 | 1,022,450 |
Deferred equity consideration | -10,417 | -72,917 |
Accumulated comprehensive income loss | 189,987 | -38,000 |
Accumulated deficit | -1,117,305 | -818,224 |
Total stockholders' equity | 234,088 | 112,359 |
Total liabilities and stockholders' equity | $492,314 | $307,674 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 90,000,000 | 90,000,000 |
Common Stock, shares issued | 19,950,000 | 19,050,000 |
Common Stock, shares outstanding | 19,950,000 | 19,050,000 |
Statements_of_Operations
Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2012 | Jun. 30, 2013 | Jun. 30, 2012 | |
Income Statement [Abstract] | ||||
Fee revenue, net | $93,419 | $5,434 | $187,231 | $9,108 |
Cost of revenue | 118,214 | 231,467 | ||
Gross profit (loss) | -27,795 | 5,434 | -44,236 | 9,108 |
Operating expenses: | ||||
Salaries and management fees | 121,413 | 85,500 | 211,716 | 86,440 |
Rent | 5,229 | 2,157 | 10,666 | 2,694 |
Travel and entertainment | 5,365 | 5,199 | 7,771 | 5,380 |
Transfer agent and filing fees | 3,057 | 1,097 | 4,889 | 2,020 |
Professional and consulting fees | 12,900 | 39,750 | 18,862 | 39,750 |
Software development and internet expenses | 2,922 | 9,003 | 4,633 | 10,547 |
Other general and administrative | 7,829 | 10,789 | 20,489 | 11,044 |
Total operating expenses | 158,715 | 153,495 | 279,026 | 157,875 |
Operating loss | -183,510 | -148,061 | -323,262 | -148,767 |
Other income (expense): | ||||
Interest expense | -11,136 | -3,107 | -24,465 | -3,107 |
Change in fair market value of derivative liabilities | -651 | 7,265 | 10,529 | 7,265 |
Gain on sale of marketable securities | 34,943 | 38,117 | ||
Total other income, net | 23,156 | 4,158 | 24,181 | 4,158 |
Net loss | -160,354 | -143,903 | -299,081 | -144,609 |
Other Comprehensive gain (loss), net of tax: | ||||
Unrealized gain (loss) on marketable securities | -17,338 | -20,000 | 325,662 | -19,000 |
Other comprehensive gain (loss) | -17,338 | -20,000 | 325,662 | -19,000 |
Comprehensive (loss) income | ($177,692) | ($163,903) | $26,581 | ($163,609) |
Net loss per share | ($0.01) | ($0.01) | ($0.02) | ($0.01) |
Weighted average number of common shares outstanding Basic and diluted | 19,150,000 | 13,245,333 | 19,100,000 | 11,613,199 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 6 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Cash flows from operating activities: | ||
Net loss | ($299,081) | ($144,609) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 198 | 11 |
Amortization of discount on convertible note | 22,465 | 2,877 |
Amortization of deferred customer acquisition costs | 62,500 | |
Change in fair market value of derivative liabilities | -10,529 | -7,265 |
Stock based compensation | 147,250 | 67,950 |
Gains on sales of marketable securities | -38,117 | |
Change in operating assets and liabilities: | ||
Increase in prepaid assets | -1,500 | |
Increase in accounts receivable | -33,190 | -12 |
Increase in accounts payable and accrued expenses | 35,479 | 3,659 |
Increase in amounts due stockholders | 27,319 | |
Net cash used in operating activities | -85,706 | -78,889 |
Cash flows from investing activities: | ||
Proceeds from sales of marketable securities | 77,081 | |
Purchase of computer equipment | -1,939 | -1,188 |
Payment of patent cost | -1,450 | |
Net cash provided by (used in) investing activities | 73,702 | -1,188 |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 155,000 | |
Proceeds from issuance of convertible note | 5,000 | |
Rrepayments of amounts due stockholder | -1,748 | |
Repayments of convertible note | -7,500 | |
Net cash (used in) provided by financing activities | -7,500 | 203,252 |
Net (decrease) increase in cash and cash equivalents | -19,504 | 123,175 |
Cash and cash equivalents, beginning | 40,618 | 735 |
Cash and cash equivalents, ending | 21,114 | 123,910 |
Cash paid for interest | ||
Cash paid for income taxes | ||
Schedule of Non-Cash Investing and Financing Activities | ||
Issuance of common stock for prepaid consulting fees | 50,000 | |
Patent costs included in accounts payable | $4,125 | $32,500 |
1_ORGANIZATION
1 ORGANIZATION | 6 Months Ended |
Jun. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | |
NOTE 1 - ORGANIZATION | |
BUSINESS | |
800 Commerce, Inc. (the “Company” or “800 Commerce”) was formed in the State of Florida on February 10, 2010. The Company was founded for the purpose of marketing credit card processing services on behalf of merchant payment processing service providers. The Company commenced revenue producing activities based on the marketing of credit processing services in March 2010. The Company generates revenue from the marketing of credit processing services by way of fees received from merchant payment processing service providers on whose behalf the Company brokers their processing services. On August 1, 2012, the Company began to receive additional revenue pursuant to a processing service provider’s assignment to the Company of a portion of its fee income under one of its service contracts in exchange for the issuance of 500,000 shares of our common stock. | |
In addition to marketing credit card processing services, the Company also intends to engage in the development and operation of on-line portals and mobile applications offering directories of professional service providers. The Company has completed its’ initial on-line portal and mobile application dedicated to a directory of medical doctors, however the Company has not commenced revenue producing operations by way of the medical directory. The Company expects to commence the marketing of the medical directory in 2013, and hopes to commence receipt of revenue from the marketing of the medical directory in 2013. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | ||||||||||||
Jun. 30, 2013 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
BASIS OF PRESENTATION | |||||||||||||
The accompanying condensed consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present the financial position, results of operations and cash flows for the stated periods have been made. Except as described below, these adjustments consist only of normal and recurring adjustments. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed financial statements should be read in conjunction with a reading of the Company’s audited consolidated financial statements and notes thereto included in the Company’s Form S-1/A report filed with the Securities and Exchange Commission (SEC) on August 9, 2013. Interim results of operations for the six months ended June 30, 2013 are not necessarily indicative of future results for the full year. Certain amounts from the 2012 period have been reclassified to conform to the presentation used in the current period. | |||||||||||||
RESTATEMENT | |||||||||||||
The financial statements for the year ended and as of December 31, 2012 have been restated to defer the recognition of the fair value of common stock issued pursuant to the Assignment Agreement (see Note 9). The fair value of the common stock has been recorded as deferred equity consideration in the equity section of the balance sheet and is being amortized and expensed as cost of sales over the term of the Agreement. The fair value was previously recorded in its’ entirety as stock compensation expense during 2012. | |||||||||||||
All related amounts have been restated as appropriate within these financial statements. | |||||||||||||
As of December 31, 2012 | As initially reported | Adjustments | Restated | ||||||||||
Retained earnings | $ | (891,141 | ) | $ | 72,917 | $ | (818,224 | ) | |||||
Deferred equity consideration | — | (72,917 | ) | (72,917 | ) | ||||||||
EMERGING GROWTH COMPANY | |||||||||||||
We qualify as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. | |||||||||||||
USE OF ESTIMATES | |||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates. | |||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||
The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents. | |||||||||||||
ACCOUNTS RECEIVABLE | |||||||||||||
The Company records accounts receivable from amounts due from its processors. The Company charges certain merchants for processing services at a bundled rate based on a percentage of the dollar amount of each transaction and, in some instances, additional fees are charged for each transaction. The Company charges other merchant customers a flat fee per transaction, and may also charge miscellaneous fees to customers, including | |||||||||||||
fees for returns, monthly minimums, and other miscellaneous services. All the charges and collections thereon flow through processors who then remit the fee due the Company within the month following the actual charges. | |||||||||||||
MARKETABLE SECURITIES | |||||||||||||
The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income (loss), a separate component of stockholders’ equity (deficiency). Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred. | |||||||||||||
PATENTS | |||||||||||||
The Company capitalizes patent pending acquisition costs, legal fees and filing costs associated with the development and filing of its patents. Patents are generally amortized over an estimated useful life of 15 years using the straight-line method beginning on the grant date. No amortization expense was recorded during the three and six months ended June 30, 2013 and 2012, as the Company’s patents are still pending as of June 30, 2013. | |||||||||||||
REVENUE RECOGNITION | |||||||||||||
The Company recognizes revenue in accordance with FASB ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria are met (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured. The Company recognizes revenue during the month in which commissions are earned. | |||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Fair value measurements are determined under a three-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (“observable inputs”) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company primarily uses prices and other relevant information generated by market transactions involving identical or comparable assets (“market approach”). The Company also considers the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are not orderly. | |||||||||||||
The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | |||||||||||||
The three hierarchy levels are defined as follows: | |||||||||||||
Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; | |||||||||||||
Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; | |||||||||||||
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. | |||||||||||||
Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s own credit risk as observed in the credit default swap market. | |||||||||||||
The Company's financial instruments consist primarily of marketable securities. Marketable securities are adjusted to fair value each balance sheet date, based on quoted prices; which are considered level 1 inputs (see Note 5). The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows. | |||||||||||||
The Company’s derivative liability resulting from the issuance of convertible debt is adjusted to fair value based on recent sales of the underlying common stock and the use of an option pricing model, which are consistent with level 3 inputs. See Note 6. | |||||||||||||
The following table represents the Company’s financial instruments that are measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012 for each fair value hierarchy level: | |||||||||||||
Derivative | Marketable | ||||||||||||
30-Jun-13 | Liability | Securities | Total | ||||||||||
Level I | $ | — | $ | 341,203 | $ | 341,203 | |||||||
Level II | $ | — | $ | — | $ | — | |||||||
Level III | $ | 25,148 | $ | — | $ | 25,148 | |||||||
31-Dec-12 | |||||||||||||
Level I | $ | — | $ | 152,000 | $ | 152,000 | |||||||
Level II | $ | — | $ | — | $ | — | |||||||
Level III | $ | 40,000 | $ | — | $ | 40,000 | |||||||
INCOME TAXES | |||||||||||||
The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. The Company records a valuation allowance related to a deferred tax asset when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. | |||||||||||||
ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, the Company has not been assessed, nor has the Company paid, any interest or penalties. | |||||||||||||
The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. The Company’s tax years subsequent to 2010 remain subject to examination by federal and state tax jurisdictions. | |||||||||||||
EARNINGS (LOSS) PER SHARE | |||||||||||||
The Company reports earnings (loss) per share in accordance with ASC 260, "Earnings per Share." Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during | |||||||||||||
each period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Potentially dilutive securities for the six months ended June 30, 2013 are 1,886,065 consisting of 286,065 shares of common stock underlying convertible debt and options to purchase 1,600,000 shares of common stock were not included in the calculation of diluted loss per share because their impact was anti-dilutive. | |||||||||||||
ACCOUNTING FOR STOCK-BASED COMPENSATION | |||||||||||||
The Company accounts for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of the Company’s common stock and recognized as expense during the period in which services are provided. | |||||||||||||
COMPREHENSIVE INCOME | |||||||||||||
The Company has adopted ASC Topic 220, "Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Items included in the Company’s comprehensive loss consist of unrealized losses on available-for-sale securities. |
3_RECENT_ACCOUNTING_PRONOUNCEM
3 RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2013 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS | |
Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. |
4_SALES_CONCENTRATION_AND_CONC
4 SALES CONCENTRATION AND CONCENTRATION OF CREDIT RISK | 6 Months Ended |
Jun. 30, 2013 | |
Concentration Risks, Types, No Concentration Percentage [Abstract] | |
SALES CONCENTRATION AND CONCENTRATION OF CREDIT RISK | |
NOTE 4 – SALES CONCENTRATION AND CONCENTRATION OF CREDIT RISK | |
Cash | |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains cash balances at one financial institution, which is insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC insured institution insures up to $250,000 on account balances. The amounts that are not insured by FDIC limitations are held in short-term securities. The Company has not experienced any losses in such accounts. | |
Sales | |
For the three and six months ended June 30, 2013, approximately 96% of our revenues for each period, were received from one of our merchant service providers, pursuant to an Assignment Agreement (see Note 9). As of June 30, 2013 the Company had $89,932 (99% of accounts receivable) in accounts receivable from the same merchant service provider. The Company relies on a few processors to provide, on a non-exclusive basis, transaction processing and transmittal, transaction authorization and data capture, and access to various reporting tools. |
5_MARKETABLE_SECURITES
5 MARKETABLE SECURITES | 6 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Marketable Securities [Abstract] | |||||||||
MARKETABLE SECURITES | |||||||||
NOTE 5 - MARKETABLE SECURITES | |||||||||
The Company’s marketable securities consist solely of 7,949,252 and 10,000,000, as of June 30, 2013 and December 31, 2012, respectively, of shares of Mediswipe, Inc.’s common stock, issued to the Company in connection with the Company’s formation in 2010. The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred. During the three and six months ended June 30, 2013, the Company sold 1,950,748 and 2,050,748, respectively, of shares of stock and recorded gains of $34,943 and $38,117, respectively. The aggregate fair value of the Company’s holdings in Mediswipe’s common stock totaled $341,023 and $152,000 as of June 30, 2013 and December 31, 2012, respectively. | |||||||||
The following summarizes the carrying value of marketable securities as of June 30, 2013 and December 31, 2012: | |||||||||
2013 | 2012 | ||||||||
Historical cost | $ | 151,036 | $ | 190,000 | |||||
Unrealized gains included in accumulated other comprehensive income (loss) | 189,987 | (38,000 | ) | ||||||
Net carrying value | $ | 341,023 | $ | 152,000 | |||||
6_RELATED_PARTY_TRANSACTIONS
6 RELATED PARTY TRANSACTIONS | 6 Months Ended | ||||
Jun. 30, 2013 | |||||
Related Party Transactions [Abstract] | |||||
RELATED PARTY TRANSACTIONS | |||||
NOTE 6 – RELATED PARTY TRANSACTIONS | |||||
Management fees | |||||
During the three and six months ended June 30, 2013 the Company expensed management fees of $23,997 and $27,000, respectively to or on behalf of the Company’s President, B. Michael Friedman, and $9,000 and $18,000, respectively, to the Company’s Chief Financial Officer, Barry Hollander. Effective May 1, 2013, the Company agreed to compensate Mr. Canton $100,000 annually for his services as Chairman of the board of directors. Mr. Canton can elect to receive his compensation in cash or common stock of the Company. Accordingly, the Company has included $16,666 in management fees for the three and six months ended June 30, 2013. Amounts due stockholders on the balance sheet as of June 30, 2013 include Mr. Friedman ($17,898), Mr. Canton ($16,666) and Mr. Hollander ($17,000). | |||||
Amounts due Mediswipe, Inc. | |||||
As of June 30, 2013 and December 31, 2012, Mediswipe, Inc, (“Mediswipe”) owns 6,000,000 shares of the Company’s common stock, representing approximately 30% and 32%, respectively, of the Company’s outstanding common stock. Effective September 4, 2013, Mediswipe distributed the 6,000,000 shares of the Company’s common stock to their shareholders of record as of September 3, 2013 (see note 11). The Company owes Mediswipe $34,941 and $56,186 as of June 30, 2013 and December 31, 2012, respectively, as a result of advances received from Mediswipe. These advances are non-interest bearing and are due on demand and are included in amounts due shareholders on the June 30, 2013, balance sheet herein. | |||||
Convertible Promissory Note | |||||
In May 2012, the Company entered into a note agreement with Mr. Climes, our Chief Executive Officer and a member of our board of directors, for the issuance of a convertible promissory note in the amount of $50,000 (the “Note”). Among other terms the Note is due one year from its issuance date, bears interest at 8% per annum, payable in cash or shares at the Conversion Price as defined herewith, and are convertible at a conversion price (the “Conversion Price”) for each share of common stock equal to 65% of the lowest closing bid price within five days of any conversion. Additionally, there are limitations on the holder’s right to convert whereby there cannot be any conversion that would cause the holders beneficial ownership to exceed 4.9% of the total issued and outstanding common stock of the Company. Upon the occurrence of an event of default, as defined in the Note, the Company is required to pay interest at 12% per annum and the holders may at their option declare the Note, together with accrued and unpaid interest, to be immediately due and payable. In addition, the Note provides for adjustments for dividends payable other than in shares of common stock, for reclassification, exchange or substitution of the common stock for another security or securities of the Company or pursuant to a reorganization, merger, consolidation, or sale of assets, where there is a change in control of the Company. The Company may at its own option prepay the Note and must maintain sufficient authorized shares reserved for issuance under the Note. During the six months ended June 30, 2013, the Company repaid $7,500 of the Note. As of June 30, 2013, the balance of the Note is $42,500 as is past due. | |||||
The Company has determined that the conversion feature of the Note represents an embedded derivative since the Note is convertible into a variable number of shares upon conversion. Accordingly, the Note is not considered to be conventional debt under EITF 00-19 and the embedded conversion feature must be bifurcated from the debt host and accounted for as a derivative liability. Accordingly, the fair value of this derivative instrument has been recorded as a liability on the balance sheet with the corresponding amount recorded as a discount to the Note. Such discount will be accreted from the date of issuance to the maturity date of the Note. The change in the fair value of the derivative liability will be recorded in other income or expenses in the statement of operations at the end of each quarter, with the offset to the derivative liability on the balance sheet. The beneficial conversion feature included in the Note resulted in an initial debt discount of $50,000 and an initial loss on the valuation of derivative liabilities of $1,282 based on the initial fair value of the derivative liability of $51,282. | |||||
At December 31, 2012, the Company revalued the embedded derivative liability. For the period from issuance to December 31, 2012, the Company decreased the derivative liability of $51,282 by $11,282 resulting in a derivative liability of $40,000 at December 31, 2012. Based on the June 30, 2013, note balance of $42,500, and the value of the embedded derivative liability, the Company decreased the derivative liability of by $14,852 resulting in a derivative liability balance of $25,148 at June 30, 2013. | |||||
The fair value of the embedded derivative liability was calculated at June 30, 2013 utilizing the following assumptions: | |||||
Assumed Conversion Price | Risk-free | ||||
Fair Value | Term | Volatilty Percentage | Interest Rate | ||
$25,148 | 1 month | $0.16 | 171% | 0.02% |
7_STOCK_HOLDERS_EQUITY_DEFICIE
7 STOCK HOLDER'S EQUITY (DEFICIENCY) | 6 Months Ended | ||||||||||||
Jun. 30, 2013 | |||||||||||||
Stockholders' Equity: | |||||||||||||
COMMON STOCK | |||||||||||||
NOTE 7 – STOCKHOLDER’S EQUITY | |||||||||||||
Common Stock | |||||||||||||
On June 20, 2013, the Company authorized the issuance of 900,000 shares of common stock pursuant to a patent assignment agreement. The patent was assigned to the Company by James Canton, the Chairman of the Board of Directors of the Company. As of June 30, 2013 and December 31, 2012 there were 19,950,000 and 19,050,000 par value $0.001, shares of common stock outstanding, respectively. | |||||||||||||
Options | |||||||||||||
Effective August 1, 2012 the Company adopted the 2012 Equity Incentive Plan (the “2012 Plan”) whereby the Company has reserved five million shares of common stock to be available for grants pursuant to the 2012 Plan. | |||||||||||||
Effective August 1, 2012, the Company entered into two Advisory Board Agreements (“ABA”) pursuant to which, the Company granted to each of Dr. James Canton and Mr. Scott Climes a non-qualified stock option to purchase 800,000 shares of common stock of the Company at an exercise price of $0.30 per share. The options were granted under the 2012 Plan and have a three year term. Mr. Climes is now a member of the board of directors of the Company and Dr. Canton is the Chairman of the board of directors of the Company. Pursuant to each ABA, 200,000 options immediately vested and an additional 50,000 vest under each ABA at the end August 2012 and for the following eleven months, as long as Messrs. Climes and Canton remain as a director. | |||||||||||||
A summary of the activity of options for the six months ended June 30, 2013 is as follows: | |||||||||||||
Options | Weighted-Average | Weighted- Average | |||||||||||
exercise | grant date | ||||||||||||
price | fair value | ||||||||||||
1,600,000 | $ | 0.3 | $ | 0.21 | |||||||||
Balance January 1, 2013 | |||||||||||||
Options granted | — | — | — | ||||||||||
Outstanding as of June 30, 2013 | 1,600,000 | 0.3 | 0.21 | ||||||||||
Exercisable as of June 30, 2013 | 1,500,000 | 0.3 | 0.21 | ||||||||||
In July 2013, the remaining 100,000 options vested. As of June 30, 2013, the remaining term of the options is 2.23 years, and 3,400,000 options are available for future grants under the 2012 Plan. |
8_INCOME_TAXES
8 INCOME TAXES | 6 Months Ended |
Jun. 30, 2013 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | |
NOTE 8 – INCOME TAXES | |
Deferred income taxes reflect the net tax effects of operating loss and tax credit carry forwards and temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax assets, the deferred tax assets are fully offset by a valuation allowance at June 30, 2013 and December 31, 2012. | |
As of June 30, 2013, the Company had a tax net operating loss carry forward of approximately $355,000. Any unused portion of this carry forward expires in 2030. Utilization of this loss may be limited in the event of an ownership change pursuant to IRS Section 382. |
9_COMMITMENTS_AND_CONTINGENCIE
9 COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | |
NOTE 9 – COMMITMENTS AND CONTINGENCIES | |
The Company is not a party to any litigation and, to its knowledge, no action, suit or proceeding has been threatened against the Company. | |
Effective June 1, 2013, the Company began leasing office space at 407 East Fort Street, Suite 500, Detroit, Michigan, 48226. The lease is for approximately 1,722 square feet is for two years with monthly rent of $1,950 for the first year and $2,010 for the second year. The Company plans to utilize the space for corporate offices as well as a call center for marketing the Company’s directory business. | |
Other Agreements | |
Our business agreements consist primarily of banking ISO agreements and technology licensing agreements. Banking agreements are typically agreements with merchant banks which provide all direct relationships with the credit card issuing banks, PCI compliant gateways for our merchant processing clients and administrative functions. These agreements typically involve a split of the fees received between the banks and the Company based on interchange rate, agent commissions, or a fixed fee per transaction. Licensing agreements are infrastructure in nature and establish the connection to the end user that enables the Company to deliver and collect payment for the transacted media content or service application. Licensing agreements typically involve a split of the fees received between the technology provider, carriers and the Company. | |
On August 1, 2012 the Company entered into a series of agreements with Payventures, LLC (“PV”) and Payventures Tech, LLC (“PVTECH”). PV operates a business of promoting merchant services offered by certain banks, including credit and debit card transaction processing and network services (“Merchant Services”) to merchants. Pursuant to an Assignment Agreement (“PAA”) between PV and the Company PV assigned fifty percent (50%) of PV’s rights to receive residual payments from certain Assigned Customer(s), in exchange for five hundred thousand (500,000) shares of the Company’s restricted common stock. The term of the Assignment Agreement commences on the Effective Date and shall continue for a period of one (1) year after which it shall renew for successive one year terms automatically, unless terminated in accordance with the terms thereof. Either party has the right to terminate this Agreement at the end of the then current Term, upon thirty (30) days prior written notice to the other party. PV may terminate this Agreement at any time on thirty (30) days written notice to the Company provided however, that if such termination is without default or other material cause by the Company, then PV shall continue to pay the referral fees contemplated therein despite such termination, subject to the other provisions thereof that survive termination. In addition, PV may terminate the assignment of the Assigned Customer, and any obligation to pay the share of the Assigned Customer residual to the Company, upon thirty (30) days prior notice to the Company. PV may terminate the assignment of the Assigned Customer and substitute one or more comparable Assigned Customers upon thirty (30) days prior notice to the Company. PV shall not be required to replace an Assigned Customer if such Assigned Customer terminates its merchant account with PV. | |
Effective October 1, 2012, PV and the Company entered into the First Amendment to Assignment Agreement (the “Amendment”). The Amendment replaces the assignment to the Company of 50% of PV’s residuals from the initial Assigned Customer to the assignment of 30% of PV’s residual payments received from a newly Assigned Customer, and such account shall henceforth be the Assigned Customer under the Assignment Agreement. | |
PV and the Company also entered into a Consulting Agreement, whereby PV will provide services to the Company, including; coordination of mobile messaging services, customer contact, customer assistance services | |
and merchant acquisition and processing services. PV will be compensated at their standard hourly rate for such services. The term of the Consulting Agreement commences on the Effective Date and shall continue for a period of one (1) year, after which it shall renew for successive one year terms automatically, unless terminated in accordance with the terms thereof. Either Party hereto has the right to terminate the Consulting Agreement at any time on thirty (30) days written notice. | |
Also on August 1, 2012, PV and the Company executed an Agent Referral Agreement, whereby PV will compensate the Company for any customer referred to PV by the Company that subsequently utilizes PV’s | |
Merchant Services. The term of the Agent Referral Agreement is for two years and automatically renews for each year thereafter (the “Term”) unless 60 days prior written notice is given by either party. | |
PVTECH and the Company entered into a Hosted Platform License & Services Agreement (“HPLSA”) whereby PVTECH will provide the Company access to their hosted ecommerce and processing platform products, as well as related services and support. Pursuant to the terms of the agreement, the Company will pay PVTECH a monthly licensing fee of $2,500 and a transaction fee of $0.07 per transaction, that beginning in April 2013, has a minimum transaction fee of $2,500 per month. Accordingly the Company has recorded, as part of cost of sales, $7,500 and $15,000 for the hosting fees for the three and six months ended June 30, 2013respectively, and $7,500 for the minimum transaction fees for the three and six months ended June 30, 2013. The term of the HPSLA shall be for one (1) year, with automatic renewals for successive one (1) year terms thereafter (each a "Renewal Term") until either party gives written notice to terminate the HPLSA no less than three (3) calendar months prior to the commencement of a Renewal Term. Either party may terminate the HPLSA: (a) upon a material breach by the other party if such breach is not cured within thirty (30) days following written notice to the breaching party; or (b) where the other party is subject to a filed bankruptcy petition or formal insolvency proceeding that is not dismissed within thirty (30) days. | |
On August 7, 2012, the Company entered into a Client Agreement with 3Cinteractive, LLC. (“3Ci”). 3Ci will make available to the Company their “Switchblade Platform”. The Switchblade Platform enables users to send and receive SMS messages directly to and from US Mobile Operator subscribers. The service includes, web-based, API and file based interfaces to facilitate interactions between the Company and the Company’s clients. The platform provides full service SMS services including but not limited to the ability to create and manage interactive workflows, keyboard campaigns, text –to-screen, immediate or schedules broadcasts, post notification services, dynamic group management, external API access, mobile configuration and reporting. Pursuant to the agreement, the Company incurred a $2,500 set-up fee, and will be charged monthly, beginning one month from the billing activation date. The initial three months will be $1,500, $2,000 and $2,500 respectively, and beginning in the fourth month from billing activation, the Company will incur a monthly fee of $3,000 as well $1,100 for our vanity short code (800 Commerce). The “Initial Term” shall become effective as of the Effective | |
Date upon execution and delivery of this Agreement by each of the parties and expire twenty four (24) months from the Billing Activation Date (as defined therein). This Agreement will be automatically extended (“Extended Term”) for twelve (12) additional months upon the expiration of the Initial Term or any Extended Term unless either party has delivered written notice of its intent to terminate the Agreement at least sixty (60) days prior to the end of the Initial Term or then current Extended Term. | |
Additionally, the Company, through an agreement with Interactive MD, LLC (“iMD”) plans to market iMD’s telehealth services to consumers and employers. Our plan is to allow consumers and employers via a link from the my800doctor.com website to be able purchase various types of monthly memberships from iMD. If successful, 800 Commerce would receive a referral fee of $10 from iMD per member per month (“PMPM”) via the affiliate agreement, irrespective of the type of membership. | |
Pursuant to the iMD agreement, we also have a twelve month option for iMD to build a white label version of the iMD portal for My800doctor.com. The estimated one time cost of building the platform and system is $42,000 and the estimated time of completion would be ninety days. Under a license, the my800doctor.com | |
portal would be able to offer the uninsured a variety of healthcare options, including a search and appointment directory in any desired field of medicine. For consumers seeking an immediate consultation, telemedicine options will be available, thereby allowing patients to speak directly with a physician online through a HIPPA compliant “Skype Like” video platform for diagnosis and e-scribing. Additionally, we plan to offer consumers to establish and maintain their personal healthcare records. We plan for users to be able to search for doctors by specialty and other categories, read doctor reviews, view medical related video content and schedule visits electronically. We plan to charge a subscription fee of $299 a year or $19.95 a month. Consumers will be able to choose from among participating physicians, receive online consultations at a minimum cost, receive prescriptions via email and get SMS prescriptions alerts and appointment reminders. We expect these features to be desirable by cutting down on time and travel related costs associated with customary doctors’ visits and standard healthcare. Pursuant to the license we will pay iMD: | |
$1.20 PMPM for <50,000 members | |
$1.00 PMPM for <50,000 and <150,000 members | |
$0.80 PMPM for >150,000 members | |
$2.00 per consult | |
Minimum monthly guaranty $10,000 |
10_GOING_CONCERN
10 GOING CONCERN | 6 Months Ended |
Jun. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | |
NOTE 10 – GOING CONCERN | |
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2013, the Company had an accumulated deficit of approximately $1,117,305. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
Management’s Plans | |
The Company generates revenue from our marketing of credit processing services by way of fees we receive from merchant payment processing service providers on whose behalf we broker their processing services. On August 1, 2012, the Company began to receive additional revenue pursuant to a processing service provider’s assignment to us of a portion of its fee income under one of its service contracts in exchange for our issuance of 500,000 shares of our common shares. During the six months ended June 30, 2013, the Company also sold 2,050,748 shares of MediSwipe common stock it owned and has realized proceeds of approximately $77,000 from the sales. | |
The Company intends to engage in the development and operation of on-line portals and mobile applications offering directories of professional service providers. The Company has completed its’ initial on-line portal and mobile application dedicated to a directory of medical doctors, however we have not yet begun revenue producing by way of our medical directory. We expect to commence the marketing of our medical directory in 2013, and hope to commence receipt of revenue from the marketing of our medical directory in 2013. The Company is preparing to launch its second on-line portal and mobile application; a directory of lawyers. |
11_SUBSEQUENT_EVENTS
11 SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2013 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | |
NOTE 11 – SUBSEQUENT EVENTS | |
Management has evaluated subsequent events through September 3, 2013, which is the date the financial statements were available to be issued. | |
On August 9, 2013, the Securities and Exchange Commission (the “SEC”) declared effective the Company’s Registration Statement on Form S-1/A, whereby the Company has registered the six million shares of common stock owned by Mediswipe. On August 29, 2013, the Company received the approval of setting the record date of September 3, 2013, for all shareholders of MediSwipe as of that date, to receive on a pro rata basis the six million shares of the Company’s common stock. The shares were issued on September 4, 2013. | |
From July 1, 2013 through September 3, 2013, the Company sold 449,252 shares of Mediswipe common stock and received net proceeds of $18,247 from such sales. | |
Management has determined that there are no further events subsequent to the balance sheet date that should be disclosed in these financial statements. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU1
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | ||||||||||||
Jun. 30, 2013 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
BASIS OF PRESENTATION | |||||||||||||
BASIS OF PRESENTATION | |||||||||||||
The accompanying condensed consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present the financial position, results of operations and cash flows for the stated periods have been made. Except as described below, these adjustments consist only of normal and recurring adjustments. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed financial statements should be read in conjunction with a reading of the Company’s audited consolidated financial statements and notes thereto included in the Company’s Form S-1/A report filed with the Securities and Exchange Commission (SEC) on August 9, 2013. Interim results of operations for the six months ended June 30, 2013 are not necessarily indicative of future results for the full year. Certain amounts from the 2012 period have been reclassified to conform to the presentation used in the current period. | |||||||||||||
RESTATEMENT | RESTATEMENT | ||||||||||||
The financial statements as of December 31, 2012 have been restated to defer the recognition of the fair value of common stock issued pursuant to the Assignment Agreement (see Note 9). The fair value of the common stock has been recorded as deferred equity consideration in the equity section of the balance sheet and is being amortized and expensed as cost of sales over the term of the Agreement. The fair value was previously recorded in its’ entirety as stock compensation expense during 2012. | |||||||||||||
All related amounts have been restated as appropriate within these financial statements. | |||||||||||||
As of December 31, 2012 | As initially reported | Adjustments | Restated | ||||||||||
Retained earnings | $ | (891,141 | ) | $ | 72,917 | $ | (818,224 | ) | |||||
Deferred equity consideration | — | (72,917 | ) | (72,917 | ) | ||||||||
EMERGING GROWTH COMPANY | |||||||||||||
EMERGING GROWTH COMPANY | |||||||||||||
We qualify as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. | |||||||||||||
USE OF ESTIMATES | USE OF ESTIMATES | ||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates. | |||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||||
The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents. | |||||||||||||
ACCOUNTS RECEIVABLE | |||||||||||||
ACCOUNTS RECEIVABLE | |||||||||||||
The Company records accounts receivable from amounts due from its processors. The Company charges certain merchants for processing services at a bundled rate based on a percentage of the dollar amount of each transaction and, in some instances, additional fees are charged for each transaction. The Company charges other merchant customers a flat fee per transaction, and may also charge miscellaneous fees to customers, including fees for returns, monthly minimums, and other miscellaneous services. All the charges and collections thereon flow through processors who then remit the fee due the Company within the month following the actual charges. | |||||||||||||
MARKETABLE SECURITIES | |||||||||||||
MARKETABLE SECURITIES | |||||||||||||
The Company classifies its marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income (loss), a separate component of stockholders’ equity (deficiency). Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred. | |||||||||||||
PATENTS | |||||||||||||
PATENTS | |||||||||||||
The Company capitalizes patent pending acquisition costs, legal fees and filing costs associated with the development and filing of its patents. Patents are generally amortized over an estimated useful life of 15 years using the straight-line method beginning on the grant date. No amortization expense was recorded during the six months ended June 30, 2013 and 2012, as the Company’s patents are still pending as of June 30, 2013. | |||||||||||||
REVENUE RECOGNITION | |||||||||||||
REVENUE RECOGNITION | |||||||||||||
The Company recognizes revenue in accordance with FASB ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria are met (1) persuasive evidence of an arrangement exists, (2) delivery of products and services has occurred, (3) the fee is fixed or determinable and (4) collectability is reasonably assured. The Company recognizes revenue during the month in which commissions are earned. | |||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||
Fair value measurements are determined under a three-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (“observable inputs”) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company primarily uses prices and other relevant information generated by market transactions involving identical or comparable assets (“market approach”). The Company also considers the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are not orderly. | |||||||||||||
The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | |||||||||||||
The three hierarchy levels are defined as follows: | |||||||||||||
Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; | |||||||||||||
Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; | |||||||||||||
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. | |||||||||||||
Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s own credit risk as observed in the credit default swap market. | |||||||||||||
The Company's financial instruments consist primarily of marketable securities. Marketable securities are adjusted to fair value each balance sheet date, based on quoted prices; which are considered level 1 inputs (see Note 5). The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows. | |||||||||||||
The Company’s derivative liability resulting from the issuance of convertible debt is adjusted to fair value based on recent sales of the underlying common stock and the use of an option pricing model, which are consistent with level 3 inputs. See Note 6. | |||||||||||||
The following table represents the Company’s financial instruments that are measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012 for each fair value hierarchy level: | |||||||||||||
Derivative Liability | Marketable Securities | ||||||||||||
30-Jun-13 | Total | ||||||||||||
Level I | $ | — | $ | 341,023 | $ | 341,023 | |||||||
Level II | $ | — | $ | — | $ | — | |||||||
Level III | $ | 25,148 | $ | — | $ | 25,148 | |||||||
31-Dec-12 | |||||||||||||
Level I | $ | — | $ | 152,000 | $ | 152,000 | |||||||
Level II | $ | — | $ | — | $ | — | |||||||
Level III | $ | 40,000 | $ | — | $ | 40,000 | |||||||
The carrying value of accounts payable, accrued expenses and due to shareholders approximate fair value due to their short term. | |||||||||||||
INCOME TAXES | |||||||||||||
INCOME TAXES | |||||||||||||
The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. The Company records a valuation allowance related to a deferred tax asset when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. | |||||||||||||
ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, the Company has not been assessed, nor has the Company paid, any interest or penalties. | |||||||||||||
The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. The Company’s tax years subsequent to 2010 remain subject to examination by federal and state tax jurisdictions. | |||||||||||||
EARNINGS (LOSS) PER SHARE | |||||||||||||
EARNINGS (LOSS) PER SHARE | |||||||||||||
The Company reports earnings (loss) per share in accordance with ASC 260, "Earnings per Share." Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Potentially dilutive securities for the six months ended June 30, 2013 are 1,886,065 consisting of 286,065 shares of common stock underlying convertible debt and options to purchase 1,600,000 shares of common stock were not included in the calculation of diluted loss per share because their impact was anti-dilutive. | |||||||||||||
ACCOUNTING FOR STOCK-BASED COMPENSATION | |||||||||||||
ACCOUNTING FOR STOCK-BASED COMPENSATION | |||||||||||||
The Company accounts for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of the Company’s common stock and recognized as expense during the period in which services are provided. | |||||||||||||
COMPREHENSIVE INCOME | |||||||||||||
COMPREHENSIVE INCOME | |||||||||||||
The Company has adopted ASC Topic 220, "Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Items included in the Company’s comprehensive loss consist of unrealized losses on available-for-sale securities. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU2
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2013 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Restatement | As of December 31, 2012 | As initially reported | Adjustments | Restated | |||||||||
Retained earnings | $ | (891,141 | ) | $ | 72,917 | $ | (818,224 | ) | |||||
Deferred equity consideration | — | (72,917 | ) | (72,917 | ) |
2_SUMMARY_OF_SIGNIFICANT_ACCOU3
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES II (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2013 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Company's financial instruments measured at fair value on recurring basis | Derivative | Marketable | |||||||||||
30-Jun-13 | Liability | Securities | Total | ||||||||||
Level I | $ | — | $ | 341,203 | $ | 341,203 | |||||||
Level II | $ | — | $ | — | $ | — | |||||||
Level III | $ | 25,148 | $ | — | $ | 25,148 | |||||||
31-Dec-12 | |||||||||||||
Level I | $ | — | $ | 152,000 | $ | 152,000 | |||||||
Level II | $ | — | $ | — | $ | — | |||||||
Level III | $ | 40,000 | $ | — | $ | 40,000 |
5_MARKETABLE_SECURITES_Tables
5 MARKETABLE SECURITES (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Marketable Securities [Abstract] | |||||||||
Marketable securities | 2013 | 2012 | |||||||
Historical cost | $ | 151,036 | $ | 190,000 | |||||
Unrealized gains included in accumulated other comprehensive income (loss) | 189,987 | (38,000 | ) | ||||||
Net carrying value | $ | 341,023 | $ | 152,000 |
6_RELATED_PARTY_TRANSACTIONS_T
6 RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended | ||||||||||||||||||
Jun. 30, 2013 | |||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||
Fair value of the embedded derivative liability | Fair Value | Term | Assumed Conversion Price | Volatilty Percentage | Risk-free | ||||||||||||||
Interest Rate | |||||||||||||||||||
$ | 25,148 | 1 month | $ | 0.1633 | 171 | % | 0.02 | % |
7_COMMON_STOCK_Tables
7 COMMON STOCK (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2013 | |||||||||||||
Stockholders' Equity: | |||||||||||||
Summary of the activity of options | Options | Weighted-Average | Weighted- Average | ||||||||||
exercise price | grant date fair value | ||||||||||||
1,600,000 | $ | 0.3 | $ | 0.21 | |||||||||
Balance January 1, 2013 | |||||||||||||
Options granted | — | — | — | ||||||||||
Outstanding as of June 30, 2013 | 1,600,000 | 0.3 | 0.21 | ||||||||||
Exercisable as of June 30, 2013 | 1,500,000 | 0.3 | 0.21 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU4
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Company's financial instruments measured at fair value (Details) (USD $) | Jun. 30, 2013 |
Accounting Policies [Abstract] | |
Level I, Derivative Liability | |
Level I, Marketable Securities | 341,023 |
Level II, Derivative Liability | |
Level II, Marketable Securities | |
Level III, Derivative Liability | 25,148 |
Level III, Marketable Securities | |
Total Level I | 341,023 |
Total Level II | |
Total Level III | $25,148 |
5_MARKETABLE_SECURITES_Marketa
5 MARKETABLE SECURITES - Marketable securities (Details) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Marketable Securities [Abstract] | ||
Historical cost | $151,036 | $190,000 |
Unrealized losses included in accumulated other comprehensive income | 189,987 | -38,000 |
Unrealized losses included in accumulated other comprehensive income (loss) | -38,000 | |
Net carrying value | $341,023 | $152,000 |
6_RELATED_PARTY_TRANSACTIONS_D
6 RELATED PARTY TRANSACTIONS (Details) (USD $) | Jun. 30, 2013 |
Related Party Transactions [Abstract] | |
Fair Value | $25,148 |
Term | 1 month |
Assumed Conversion Price | 0.1633 |
Volatility Percentage | 171 |
Risk-free Rate | 0.02 |
7_STOCK_HOLDERS_EQUITY_Summary
7 STOCK HOLDER'S EQUITY Summary of the activity of options (Details) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | Jan. 02, 2012 |
Stockholders' Equity: | |||
Options Outstanding | 1,600,000 | 1,600,000 | 0 |
Options exercisable | 1,500,000 | 900,000 | |
Weighted Average exercise price | $0.30 | $0.30 | $0 |
Weighted Average fair value | $0.21 | $0.21 | $0 |
Weighted Average exercise price - exercisable | $0.30 | $0.30 | |
Weighted Average fair value - exercisable | $0.21 | $0.21 |
1_ORGANIZATION_Details_Narrati
1 ORGANIZATION (Details Narrative) | Aug. 02, 2012 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of shares issued in exchanged for service contracts | 500,000 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU5
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 6 Months Ended |
Jun. 30, 2013 | |
Accounting Policies [Abstract] | |
Delutive securities | $1,886,065 |
Shares of common stock | 286,065 |
Convertible debt and option to purchase shares of common stock | 1,600,000 |
4_SALES_CONCENTRATION_AND_CONC1
4 SALES CONCENTRATION AND CONCENTRATION OF CREDIT RISK (Details Narrative) (USD $) | 6 Months Ended |
Jun. 30, 2013 | |
Concentration Risks, Types, No Concentration Percentage [Abstract] | |
Maximum insurance of Federal Deposit Insurance Corporation | $250,000 |
Percentage of revenues | 0.96 |
Accounts receivable from major customer | $89,932 |
Percentage of accounts receivable | 0.99 |
5_MARKETABLE_SECURITES_Details
5 MARKETABLE SECURITES (Details Narrative) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Marketable Securities [Abstract] | ||
Mediswipe, Inc.'s common stock | 7,949,252 | 10,000,000 |
Shares sold | 2,050,748 | |
Amount gained | $34,943 | |
Unrealized gains (losses) included in accumulated other comprehensive income (loss) | 189,987 | -38,000 |
Net carrying value | $341,023 | $152,000 |
6_RELATED_PARTY_TRANSACTIONS_D1
6 RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 | 9-May-12 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 |
Michael Friedman President | Michael Friedman President | Barry Hollander CFO | Barry Hollander CFO | Mr Canton Chairman | ||||
Management fees paid | $23,997 | $27,000 | $9,000 | $18,000 | $16,666 | |||
Compensation | 100,000 | |||||||
Amount due to stockholders | -17,898 | -17,898 | -17,000 | -17,000 | -16,666 | |||
Common stock owned by Mediswipe, Inc. | 6,000,000 | 6,000,000 | ||||||
Approximately representation of Company's outstanding common stock | 0.3 | 0.32 | ||||||
Amount owed to Mediswipe | 34,941 | 56,186 | ||||||
Option vest as follows: | 50,000 | |||||||
Convertible promissory note | 50,000 | |||||||
Convertible promissory note bears an interest of: | 0.08 | |||||||
Percentage of the lowest closing bid price | 0.65 | |||||||
Limitations on holder's right for conversion - percentage | 4.9 | |||||||
Interest Rate | 12.00% | |||||||
Debt discount | 42,500 | 51,282 | 50,000 | |||||
Initial loss on valuation of derivative liabilities | 14,852 | 11,282 | 1,282 | |||||
Fair Value | $25,148 |
7_STOCK_HOLDERS_EQUITY_DEFICIE1
7 STOCK HOLDER'S EQUITY (DEFICIENCY) (Details Narrative) (USD $) | Jul. 31, 2013 | Jun. 30, 2013 | Jun. 20, 2013 | Dec. 31, 2012 | Aug. 31, 2012 | Jul. 31, 2012 |
Common stock outstanding | 19,950,000 | 19,050,000 | ||||
Common stock issued for parent company | 900,000 | |||||
Stock option granted | 800,000 | |||||
Exercise price | $0.30 | |||||
Options immediately vested | 100,000 | 50,000 | 200,000 | |||
Remaining term of options | 2.23 | |||||
Number of options availeable for future grant | 3,400,000 |
8_INCOME_TAXES_Details_Narrati
8 INCOME TAXES (Details Narrative) (USD $) | Jun. 30, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ||
Tax net operating loss carry forward | $355,000 | $319,000 |
9_COMMITMENTS_AND_CONTINGENCIE1
9 COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | 21 Months Ended | 24 Months Ended | 12 Months Ended | |||||||
Nov. 06, 2012 | Oct. 06, 2012 | Sep. 06, 2012 | Jun. 30, 2013 | Jul. 31, 2013 | Jun. 30, 2013 | Jul. 31, 2013 | 31-May-15 | 31-May-14 | Dec. 31, 2013 | Jul. 31, 2013 | Aug. 06, 2014 | Aug. 06, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
sqft | sqft | Less Than 50,000 Members | 50,000-150,000 Members | More Than 150,000 Members | ||||||||||||
Monthly rent | $2,010 | $1,950 | ||||||||||||||
Office space | 1,722 | 1,722 | ||||||||||||||
Stock issued per assignment agreement | 500,000 | |||||||||||||||
Percentage of revenue assigned | 0.3 | 0.5 | ||||||||||||||
Monthly licensing fees | 2,500 | 2,000 | 1,500 | 2,500 | 3,000 | |||||||||||
Transaction fee per transaction | 0.07 | |||||||||||||||
Minimum montly transaction fee | 2,500 | |||||||||||||||
Hosting fees | 7,500 | 15,000 | ||||||||||||||
Minimum transaction fees | 7,500 | 7,500 | ||||||||||||||
Initial set up fee | 2,500 | |||||||||||||||
Other charges | 1,100 | |||||||||||||||
Website development | 42,000 | |||||||||||||||
Income from referral per month per member | 10 | |||||||||||||||
Income from annual subscription | 299 | |||||||||||||||
Income from monthly subscription per member | 19.95 | |||||||||||||||
License fee to iMD per month per member | 1.2 | 1 | 1 | |||||||||||||
License to iMD per consult | 2 | |||||||||||||||
Minimum montly guaranty | $10,000 |
10_GOING_CONCERN_Details_Narra
10 GOING CONCERN (Details Narrative) (USD $) | 6 Months Ended |
Jun. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated deficit | $1,117,305 |
Shares sold | 2,050,748 |
Cash received | $77,000 |
11_SUBSEQUENT_EVENTS_Details_N
11 SUBSEQUENT EVENTS (Details Narrative) (USD $) | 2 Months Ended | |
Sep. 03, 2013 | Aug. 09, 2013 | |
Subsequent Events [Abstract] | ||
Registered common shares | 6,000,000 | |
Sold shares of Mediswipe | 449,252 | |
Net proceeds | $18,247 |