Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 17, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Fuse Medical, Inc. | ' |
Entity Central Index Key | '0000319016 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 4,001,280 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $522,580 | $12,339 |
Accounts receivable, net of allowance of $7,715 and $0, respectively | 110,461 | 147,987 |
Accounts receivable - related parties | ' | 2,538 |
Inventories | 273,072 | 243,115 |
Advances to Golf Rounds.com, Inc. | ' | 95,000 |
Prepaid expenses and other receivables | 24,651 | 370 |
Other receivables - related parties | ' | 32,382 |
Total current assets | 930,764 | 533,731 |
Property and equipment, net | 51,561 | 1,287 |
Security deposit | 2,489 | ' |
Total assets | 984,814 | 535,018 |
Current liabilities: | ' | ' |
Accounts payable | 272,243 | 161,143 |
Accounts payable - related parties | 42,074 | 48,339 |
Accrued expenses | 60,518 | 63,400 |
Line of credit | 100,000 | 100,000 |
Notes payable, current portion | 17,250 | ' |
Total current liabilities | 492,085 | 372,882 |
Notes payable | 727,776 | ' |
Notes payable - related parties | 784,238 | 60,000 |
Total liabilities | 2,004,099 | 432,882 |
Stockholders' equity (deficit): | ' | ' |
Preferred stock, $0.01 par value; 20,000,000 shares authorized, zero shares issued and outstanding | ' | ' |
Common stock, $0.01 par value; 500,000,000 shares authorized, 4,001,280 and 3,600,000 issued and outstanding, respectively | 40,013 | 36,000 |
Additional paid-in capital | 102,081 | 79,600 |
Subscriptions receivable (0 and 81,972 shares) | ' | -500 |
Accumulated deficit | -1,161,379 | -12,964 |
Total stockholders' equity (deficit) | -1,019,285 | 102,136 |
Total liabilities and stockholders' equity (deficit) | $984,814 | $535,018 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Condensed Consolidated Balance Sheets Parenthetical | ' | ' |
Net of allowance, accounts receivable | $7,715 | $0 |
Preferred Stock Par Value (In US Dollars) | $0.01 | $0.01 |
Preferred Stock Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock Shares Issued | 0 | 0 |
Preferred Stock Shares Outstanding | 0 | 0 |
Common Stock Par Value (In US Dollars) | $0.01 | $0.01 |
Common Stock Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock Shares Issued | 4,001,280 | 3,600,000 |
Common Stock Shares Outstanding | 4,001,280 | 3,600,000 |
Subscriptions receivable, shares | 0 | 81,972 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Condensed Consolidated Statements Of Operations | ' | ' | ' | ' |
Revenues | $207,105 | $220,450 | $631,975 | $702,574 |
Cost of revenues | 72,696 | 45,375 | 236,200 | 157,475 |
Gross profit | 134,409 | 175,075 | 395,775 | 545,099 |
Operating expenses: | ' | ' | ' | ' |
General, administrative and other | 529,482 | 177,914 | 1,070,943 | 338,603 |
Merger costs | 50,955 | ' | 320,448 | ' |
Total operating expenses | 580,437 | 177,914 | 1,391,391 | 338,603 |
Operating income (loss) | -446,028 | -2,839 | -995,616 | 206,496 |
Other income (expense): | ' | ' | ' | ' |
Interest income | ' | ' | 1,177 | ' |
Interest expense | -27,392 | -414 | -58,488 | -734 |
Total other income (expense) | -27,392 | -414 | -57,311 | -734 |
Net income (loss) | ($473,420) | ($3,253) | ($1,052,927) | $205,762 |
Net income (loss) per common share - basic and diluted | ($0.12) | $0 | ($0.28) | $0.07 |
Weighted average number of common shares outstanding - basic and diluted | 3,983,699 | 2,911,142 | 3,723,464 | 2,791,712 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Common Stock | Additional Paid-In Capital | Subscriptions Receivable | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2013 | $36,000 | $79,600 | ($500) | ($12,964) | $102,136 |
Beginning Balance, Shares at Dec. 31, 2013 | 3,600,000 | ' | ' | ' | ' |
Issuance of common shares in connection with Golf Rounds.com, Inc. merger, Amount | 4,013 | -4,013 | ' | -28,411 | -28,411 |
Issuance of common shares in connection with Golf Rounds.com, Inc. merger, Shares | 401,280 | ' | ' | ' | ' |
Reclassification of undistributed earnings of Fuse Medical, LLC to Additional Paid-In Capital upon its transition from a nontaxable entity to a taxable entity | ' | 26,494 | ' | -26,494 | ' |
Distributions prior to the merger | ' | ' | ' | -40,583 | -40,583 |
Proceeds from subscriptions receivable | ' | ' | 500 | ' | 500 |
Net loss | ' | ' | ' | -1,052,927 | -1,052,927 |
Ending Balance, Amount at Sep. 30, 2014 | $40,013 | $102,081 | ' | ($1,161,379) | ($1,019,285) |
Ending Balance, Shares at Sep. 30, 2014 | 4,001,280 | ' | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net income (loss) | ($1,052,927) | $205,762 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Bad debt expense | 7,715 | ' |
Depreciation | 9,481 | 329 |
Advances to Golf Rounds.com, Inc. expensed to merger costs | 105,000 | ' |
Stock-based compensation | ' | 31,200 |
Changes in operating assets and liabilities, net of effects of acquisition: | ' | ' |
Accounts receivable | 29,811 | 153,359 |
Accounts receivable - related parties | 2,538 | ' |
Inventories | -29,957 | -100,085 |
Prepaid expenses and other receivables | -13,686 | ' |
Security deposit | -2,489 | ' |
Accounts payable | 88,834 | 2,347 |
Accounts payable - related parties | -6,265 | 10,764 |
Accrued expenses | -3,013 | ' |
Net cash provided by (used in) operating activities | -864,958 | 303,676 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -59,755 | -1,763 |
Advances to Golf Rounds.com, Inc. | -10,000 | ' |
Cash acquired in reverse merger | 641 | ' |
Net cash used in investing activities | -69,114 | -1,763 |
Cash flows from financing activities: | ' | ' |
Proceeds from line of credit, net | ' | 60,000 |
Advances to related parties | -42,611 | ' |
Repayments received from related parties | 74,993 | ' |
Proceeds from issuance of promissory notes | 727,776 | ' |
Proceeds from issuance of promissory notes to related parties | 724,238 | ' |
Capital contributions received | ' | 4,800 |
Proceeds from subscriptions receivable | 500 | ' |
Distributions prior to the merger | -40,583 | -174,622 |
Net cash provided by (used in) financing activities | 1,444,313 | -109,822 |
Net increase in cash and cash equivalents | 510,241 | 192,091 |
Cash and cash equivalents - beginning of period | 12,339 | 100,029 |
Cash and cash equivalents - end of period | 522,580 | 292,120 |
Supplemental disclosure of cash flow information: | ' | ' |
Interest paid | 1,713 | 734 |
Non-cash investing and financing activities: | ' | ' |
Assumption of net liabilities in reverse merger | 28,411 | ' |
Reclassification of undistributed earnings of Fuse Medical, LLC to Additional Paid-In Capital upon its transition from a nontaxable entity to a taxable entity | $26,494 | ' |
Nature_of_Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2014 | |
Nature Of Operations | ' |
Note 1. Nature of Operations | ' |
Overview | |
Fuse Medical, Inc. (together with its subsidiaries, the “Company” or “Fuse Medical”) was formed in Delaware on July 18, 2012 as Fuse Medical, LLC. Fuse Medical V, LP was formed in Texas on November 15, 2012 and upon formation was owned 59% by Fuse Medical, LLC. Fuse Medical VI, LP was formed in Texas on January 31, 2013 and upon formation was owned 59% by Fuse Medical, LLC. | |
On December 18, 2013, Fuse Medical, LLC entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Golf Rounds.com, Inc. (the “Registrant”), Project Fuse LLC (a wholly-owned subsidiary of Golf Rounds.com, Inc.) (“Merger Sub”), and D. Alan Meeker, solely in his capacity as the representative of the members of Fuse Medical, LLC (the “Representative”). Effective as of May 28, 2014, prior to the consummation of the Merger, Golf Rounds.com, Inc. amended its certificate of incorporation to change its name from “GolfRounds.com, Inc.” to “Fuse Medical, Inc.” On May 28, 2014, the transactions contemplated by the Merger Agreement closed wherein Merger Sub merged with and into Fuse Medical, LLC, with Fuse Medical, LLC surviving as a wholly-owned subsidiary of Fuse Medical, Inc. (the “Merger”). Accordingly, on May 28, 2014, the Company was recapitalized in a reverse merger (See Note 10). All references to the Company or Fuse Medical before May 28, 2014 are to Fuse Medical, LLC. | |
Fuse Medical distributes diversified healthcare products and supplies, including biologics, internal fixation products and bone substitute materials in several states. The Company strives to provide cost savings and clinical outcomes to its customers, which include physicians and medical facilities. | |
Basis of Presentation | |
The interim condensed consolidated financial statements included herein reflect all material adjustments (consisting of normal recurring adjustments and reclassifications and non-recurring adjustments) which, in the opinion of management, are ordinary and necessary for a fair presentation of results for the interim periods. Certain information and footnote disclosures required under generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company believes that the disclosures are adequate to make the information presented not misleading. | |
The condensed consolidated balance sheet information as of December 31, 2013 was derived from the audited consolidated financial statements included in the Company’s Report on Form 10-K/T filed with the Securities and Exchange Commission on September 5, 2014. These condensed consolidated financial statements should be read in conjunction with the audited financial statements for the four months ended December 31, 2013 and notes thereto included in the Company’s Report on Form 10-K/T for the four months ended December 31, 2013. | |
The results of operations for the three and nine months ended September 30, 2014 and 2013 are not necessarily indicative of the results to be expected for the entire fiscal year or for any other period. | |
Liquidity | |
As shown in the accompanying condensed financial statements, we have incurred a net loss of $1,052,927 for the nine months ended September 30, 2014 and used $864,958 of cash in our operating activities during the nine months ended September 30, 2014. During the period from December 31, 2013 through June 16, 2014, the Company issued several two-year promissory notes in exchange for aggregate cash proceeds of $1,512,014, of which 784,238 was received from related parties. As a result of the foregoing borrowings, as of September 30, 2014, we had $522,580 of cash and cash equivalents on hand, a stockholders’ deficit of $1,161,379 and working capital of $438,679. | |
Commencing with the fourth quarter of 2014, we expect to ramp up our revenues derived from the sale of internal fixation products, which will increase the amount of gross profit from operations. Accordingly, we shall have increased spending on payroll expenses as we increase our professional staff in this effort. Based on the funds we had available on September 30, 2014, we believe that we have sufficient capital to fund our anticipated operating expenses for at least twelve months. | |
Despite the amount of funds that we raised from the issuance of promissory notes, the estimated costs of operations while we ramp up our revenues is substantially greater than the amount of funds we had available on September 30, 2014. Therefore, while we believe that our existing cash balances will be sufficient to fund our currently planned level of operations for at least twelve months, we will have to obtain additional funds in the future to complete our development plans. We intend to seek this additional funding through various financing sources, including possible sales of our securities. No assurance can be given that such financing will be available, or if available, at rates favorable to the Company or its stockholders. Management expects that the Company will attain positive cash flow in the quarter ending June 30, 2015. |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended | ||
Sep. 30, 2014 | |||
Significant Accounting Policies | ' | ||
Note 2. Significant Accounting Policies | ' | ||
Principles of Consolidation | |||
The consolidated financial statements include the accounts of Fuse Medical, LLC, and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation. | |||
Use of Estimates | |||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates in the accompanying consolidated financial statements include the allowance for doubtful accounts and other receivables, valuation of inventories, the estimates of depreciable lives and valuation of property and equipment, and the valuation allowance on deferred tax assets. | |||
Earnings (Loss) Per Share | |||
The Company’s computation of earnings (loss) per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that would have occurred if securities or other contracts to issue common shares (e.g. warrants and options) had been exercised or converted into common shares at the beginning of the period, or issuance date, if later, and had shared in the net income (loss) of the Company. Diluted EPS is computed using the treasury stock method, which assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common shares at the average market price during the period. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. | |||
The weighted average number of common shares outstanding has been retroactively restated for: (1) the equivalent number of shares received by the accounting acquirer as a result of the reverse merger as if these shares had been outstanding as of the beginning of the earliest period presented and (2) the 14.62 to 1 reverse stock split that occurred May 28, 2014 (See Note 10). | |||
As of September 30, 2014, common stock equivalents included options to purchase 11,628 common shares. These instruments are not considered in the calculation of diluted loss per share because the effect would be anti-dilutive. As of September 30, 2013, the Company had no potentially dilutive instruments and, accordingly, basic and diluted earnings per share are the same. | |||
Fair Value Measurements | |||
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: | |||
Level 1- | Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; | ||
Level 2- | Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and | ||
Level 3- | Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. | ||
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The recorded value of notes payable approximates their fair value based upon their effective interest rates. | |||
Accounts Receivable and Allowance for Doubtful Accounts Receivable | |||
Accounts receivables are non-interest bearing and are stated at gross invoice amounts less an allowance for doubtful accounts receivable. Credit is extended to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential bad debts. | |||
The Company estimates its allowance for doubtful accounts by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations, such as bankruptcy proceedings and receivable amounts outstanding for an extended period beyond contractual terms. In these cases, the Company uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are reevaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. The Company may also record a general allowance as necessary. | |||
Accounts deemed uncollectible are written off in the period when the Company has exhausted its efforts to collect overdue and unpaid receivables or otherwise has evaluated other circumstances that indicate that the Company should abandon such efforts. Previously written-off accounts receivable subsequently collected are recognized as a reduction of bad debt expense when funds are received. | |||
Inventories | |||
Inventories are stated at the lower of cost (first-in, first-out) or market. Inventories consist entirely of finished goods and include biologics, internal fixation products, bone substitute materials, and tendon anchor systems. The Company reviews the market value of inventories whenever events and circumstances indicate that the carrying value of inventories may not be recoverable from the estimated future sales price less cost of disposal and normal gross profit. In cases where the market values are less than the carrying value, a write down is recognized equal to an amount by which the carrying value exceeds the market value of inventories. | |||
Property and Equipment | |||
Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets per the following table. | |||
Category | Amortization Period | ||
Computer equipment | 3 years | ||
Furniture and fixtures | 5 years | ||
Software | 3 years | ||
Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed and a gain or loss is recorded in the consolidated statements of operations. Repairs and maintenance costs are expensed in the period incurred. | |||
Revenue Recognition and Deferred RevenueThe Company recognizes revenue when: (i) persuasive evidence of an arrangement exists; (ii) the fees are fixed or determinable; (iii) no significant Company obligations remain; and (iv) collection of the related receivable is reasonably assured. The Company reports revenues for transactions in which it is the primary obligor on a gross basis and revenues in which it acts as an agent (earning a fixed percentage of the sale) on a net basis, (net of related costs). | |||
The following policies reflect specific criteria for the various revenue streams of the Company.Medical supply and product revenue is comprised of medical biologics, internal fixation products, bone substitute materials and other medical supplies. For customers that order products as needed (i.e. for specific cases), the Company invoices the customer on the date the product is utilized. This includes customers (i.e. certain hospitals) that maintain the Company’s products on consignment. For customers that order larger quantities of the same product (subject to minimums) at a reduced selling price, the Company invoices the customers when the products are shipped. Payment terms are net 30 days after the invoice date.Development and consulting fee revenue is recognized on a monthly basis pursuant to an agreement. This revenue is recorded in the period the services have been provided. | |||
Products that have been sold are not subject to returns unless the product is deemed defective. Credits or refunds are recognized when they are determinable and estimable. Net revenues have been reduced to account for sales returns, rebates and other incentives. | |||
Stock-Based Compensation | |||
Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. For non-employee stock-based awards, the Company calculates the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the prorata compensation expense is adjusted accordingly until such time the non-employee award is fully vested, at which time the total compensation recognized to date shall equal the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. | |||
Recent Accounting Pronouncements | |||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-08 (“ASU 2014-08”), “Presentation of Financial Statements” (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014, and interim periods within those years. The Company is currently evaluating the impact of adopting ASU 2014-08 on the Company's results of operations or financial condition. | |||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers (Topic 606)”. ASU 2014-09 will eliminate transaction-specific and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09 and has not determined the effect of the standard on our ongoing financial reporting. | |||
In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (“ASU 2014-15”), “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. | |||
We have implemented all new accounting standards that are in effect and that may impact our consolidated financial statements. Moreover, we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. |
Advances_to_Golf_Roundscom_Inc
Advances to Golf Rounds.com, Inc. | 9 Months Ended |
Sep. 30, 2014 | |
Advances To Golf Rounds.Com Inc. | ' |
Note 3. Advances to Golf Rounds.com, Inc. | ' |
On October 18, 2013, the Company advanced $39,000 to Golf Rounds.com, Inc., a publicly-held company, in exchange for a six-month promissory note receivable due April 15, 2014. On November 4, 2013, the Company advanced an additional $24,000 to Golf Rounds.com, Inc. in exchange for a six-month promissory note receivable due May 5, 2014. On December 26, 2013, the Company advanced an additional $32,000 to Golf Rounds.com, Inc. in exchange for a six-month promissory note receivable due June 26, 2014. On April 1, 2014, advances in the aggregate amount of $63,000 due from Golf Rounds.com, Inc. maturing April 15, 2014 and May 5, 2014 were amended whereby the maturity date was extended to June 26, 2014. On May 2, 2014, the Company advanced an additional $10,000 to Golf Rounds.com, Inc. in exchange for a promissory note receivable due June 26, 2014. The advances were unsecured, required interest at a rate of 3.0% per annum and would have required payment of principal and interest at maturity. | |
On May 28, 2014, as a result of the closing of the Merger, the aggregate amount of the advances of $105,000 were expensed to merger costs to acquire Golf Rounds.com, Inc. (See Notes 1 and 10). | |
During the three and nine months ended September 30, 2014, interest income of $0 and $1,177, respectively, was recognized on these advances. |
Other_Receivables_Related_Part
Other Receivables - Related Parties | 9 Months Ended |
Sep. 30, 2014 | |
Other Receivables - Related Parties | ' |
Note 4. Other Receivables - Related Parties | ' |
During the nine months ended September 30, 2014, the Company advanced an aggregate of $42,611 to and received an aggregate of $74,993 from three entities that are owned partially by the officers of the Company. The advances are unsecured, non-interest bearing and due on demand. The balance due from the three entities was $0 and $32,382 as of September 30, 2014 and December 31, 2013, respectively (See Note 12). |
Property_and_Equipment
Property and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property And Equipment | ' | ||||||||
Note 5. Property and Equipment | ' | ||||||||
Property and equipment consisted of the following at September 30, 2014 and December 31, 2013: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Computer equipment | $ | 36,240 | $ | 1,763 | |||||
Furniture and fixtures | 14,778 | - | |||||||
Software | 10,500 | - | |||||||
61,518 | 1,763 | ||||||||
Less: accumulated depreciation | (9,957 | ) | (476 | ) | |||||
Property and equipment, net | $ | 51,561 | $ | 1,287 | |||||
Depreciation expense for the nine months ended September 30, 2014 and 2013 was $9,481 and $329, respectively. |
Accrued_Expenses
Accrued Expenses | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued Expenses | ' | ||||||||
Note 6. Accrued Expenses | ' | ||||||||
Accrued expenses consisted of the following at September 30, 2014 and December 31, 2013: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Accrued interest | $ | 50,408 | $ | - | |||||
Other accrued expenses | 10,110 | - | |||||||
Accrued compensation | - | 63,400 | |||||||
Accrued expenses | $ | 60,518 | $ | 63,400 |
Line_of_Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2014 | |
Line Of Credit | ' |
Note 7. Line of Credit | ' |
Since October 10, 2012, the Company maintained a line of credit with a bank, up to a maximum credit line of $100,000. The line of credit bore interest equal to 2.25% per year based on a year of 360 days. The line of credit required minimum monthly payments consisting of interest only. The line of credit was secured by a money market account having an approximate balance of $105,000 that is: (i) owned by an individual that is both an officer and a director of the Company and his spouse and (ii) is maintained at the bank extending the line of credit. The line of credit was due on demand or, if no demand was made, all outstanding principal and accrued interest on the line of credit was due October 10, 2014. During the three and nine months ended September 30, 2014 and 2013, interest expense of $575, $414, $1,713 and $734, respectively, was recognized on the line of credit. The balance due on the line of credit as of September 30, 2014 and December 31, 2013 was $100,000. The unused amount under the line of credit available to the Company at September 30, 2014 was $0. On October 16, 2014, the line of credit was fully repaid (See Note 13). |
Notes_Payable
Notes Payable | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes Payable | ' | ||||
Note 8. Notes Payable | ' | ||||
Notes Payable | |||||
During the period from January 14, 2014 through May 23, 2014, the Company issued three two-year promissory notes in exchange for aggregate cash proceeds of $727,776 from a non-related party. The notes are unsecured, bear interest at 7.0% and require 18 monthly payments of interest only commencing at the beginning of month seven. The notes include a provision that in the event of default the interest rate would increase to the default interest rate of 18%. The first six months of interest is deferred until maturity. The outstanding principal balance along with all accrued and unpaid interest is due at maturity. | |||||
On May 28, 2014, as part of the merger with Golf Rounds.com, Inc., the Company assumed an aggregate of $17,250 of outstanding two-year promissory notes payable maturing July 29, 2015 through August 28, 2015 as well as accrued interest payable of $21. The notes are unsecured, bear interest at 3.25% and require quarterly payments of interest only. The outstanding principal balance along with all accrued and unpaid interest is due at maturity. | |||||
Notes Payable – Related Parties | |||||
During the period from January 15, 2014 through June 16, 2014, the Company issued several two-year promissory notes in exchange for aggregate cash proceeds of $724,238. The funds were received from entities controlled by officers of the Company. The officers also owned or partially owned the entities from which the funds were received. The notes are unsecured, bear interest at 7.0% and require 18 monthly payments of interest only commencing at the beginning of month seven. The notes include a provision that in the event of default the interest rate would increase to the default interest rate of 18%. The first six months of interest is deferred until maturity. The outstanding principal balance along with all accrued and unpaid interest is due at maturity (See Note 12). | |||||
During the three and nine months ended September 30, 2014, interest expense of $26,817 and $56,775, respectively, was recognized on outstanding notes payable. As of September 30, 2014, accrued interest payable was $50,408, which is included in accrued expenses on the accompanying condensed consolidated balance sheet. | |||||
Notes payable consisted of the following at September 30, 2014: | |||||
30-Sep-14 | |||||
Note payable - originating July 30, 2013; monthly interest payments required; bearing interest at 3.25%; maturing at July 29, 2015 [A] | $ | 6,000 | |||
Note payable - originating August 29, 2013; monthly interest payments required; bearing interest at 3.25%; maturing at August 28, 2015 [A] | 11,250 | ||||
Note payable - related party originating December 31, 2013; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at December 30, 2015 | 60,000 | ||||
Note payable - related party originating January 15, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at January 14, 2016 | 131,024 | ||||
Note payable - originating January 14, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at January 15, 2016 | 131,024 | ||||
Note payable - related party originating February 1, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at January 31, 2016 | 116,777 | ||||
Note payable - originating February 6, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at February 5, 2016 | 116,777 | ||||
Note payable - related party originating February 10, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at February 9, 2016 | 193,535 | ||||
Note payable - related party originating March 4, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at March 4, 2016 | 87,670 | ||||
Note payable - related party originating March 4, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at March 4, 2016 | 63,770 | ||||
Note payable - related party originating May 8, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at May 8, 2016 | 75,000 | ||||
Note payable - originating May 23, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at May 23, 2016 | 479,975 | ||||
Note payable - related party originating June16, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at June 16, 2016 | 56,462 | ||||
Total | 1,529,264 | ||||
Less: Current maturities | (17,250 | ) | |||
Amount due after one year (includes $784,238 to related parties) | $ | 1,512,014 | |||
[A] - notes payable acquired as part of merger with Golf Rounds.com, Inc. on May 28, 2014 (See Notes 1 and 10). | |||||
Future maturities of the notes payable are as follows: | |||||
Year Ending December 31, | |||||
2015 | $ | 77,250 | |||
2016 | 1,434,764 | ||||
$ | 1,512,014 |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments And Contingencies | ' |
Note 9. Commitments and Contingencies | ' |
Legal Matters | |
On January 27, 2014, M. Richard Cutler and Cutler Law Group, P.C. (the “Plaintiffs”) filed a complaint in the District Court of Harris County, Texas, 2014-03355, against Fuse, Alan Meeker, Rusty Shelton, Jonathan Brown, Robert H. Donehew and Golf Rounds.com, Inc. (the “Defendants”). On April 21, 2014, the complaint was dismissed for “want of prosecution.” The Plaintiffs had 30 days from April 21, 2014 to file a motion to reinstate the case and no timely action was taken by the Plaintiffs. However, the Plaintiffs did file a motion to reinstate on May 22, 2014 and it was granted. The Defendants argued a Motion to Dismiss before the court on July 25, 2014 and, on July 28, 2014, the court granted the motion and dismissed the Plaintiffs' (i) breach of fiduciary duty claim against all Defendants, (ii) suit on sworn account claim against all Defendants except Fuse, and (iii) quantum meruit claim against all Defendants except Fuse. The Defendants were also awarded attorneys' fees in the amount of $4,343. The Defendants believe the lawsuit to be completely without merit and are continuing to vigorously defend against the remaining claims. | |
Richard Cutler is the sole principal of Plaintiff, Cutler Law Group, which provided legal representation to its client, Craig Longhurst (“Cutler’s Client”), that was interested in engaging in a transaction with Fuse and Golf Rounds.com, Inc. (“Cutler’s Failed Transaction”). The Plaintiffs had alleged that Cutler’s Failed Transaction failed to materialize notwithstanding the efforts of Mr. Cutler and his law firm to document the transaction. The Plaintiffs further had alleged that the Defendants continued to pursue a similar transaction without Cutler’s Client or the Plaintiffs. The Plaintiffs had claimed that the Defendants were responsible for damages in the amount of (i) $46,465 plus interest because Plaintiffs were not paid their legal fees by Cutler’s Client nor receive equity in Golf Rounds.com, Inc. that Plaintiffs hoped would be issued from Cutler’s Failed Transaction; (ii) $46,465 plus interest due to Defendants being unjustly enriched from Plaintiffs’ legal services to Cutler’s Client; (iii) $1,186,000 plus interest, being the alleged value of shares that Plaintiffs claimed to be entitled from Cutler’s Failed Transaction, which amount should allegedly be tripled as exemplary damages as a result of intentional fraud and/or negligent representations that some or all of the Defendants allegedly committed and that such conduct allegedly constitutes conspiracy to commit fraud; (iv) $1,186,000, allegedly arising from a breach of a Non-Competition and Non-Disclosure Agreement to which Plaintiffs were not a party; (v) $1,000,000 for breach of fiduciary duty by the Defendants because they would have been directors and officer of the surviving corporation in Cutler’s Failed Transaction had it not failed and Defendants’ moving on to another transaction without Plaintiffs; and (vi) Plaintiffs’ attorneys fees and costs for having brought the action. | |
Operating Leases | |
Commencing January 1, 2013 through January 31, 2014, the Company occupied office space on a month-to-month basis for its corporate headquarters for $500 a month from Crestview Farm, an entity controlled by the Company’s Chief Executive Officer (“CEO”). The Company's CEO serves as the Manager of Crestview Farm. Rent expense for these facilities was $500 and $4,500 for the nine months ended September 30, 2014 and 2013, respectively (See Note 12). | |
Effective February 1, 2014, the Company entered into a two-year lease agreement for its corporate headquarters in Fort Worth, Texas. The lease agreement requires base rent payments of $2,489 per month plus common area maintenance and expires January 31, 2016. | |
During the period from April 1, 2014 through September 30, 2014, the Company reimbursed a former officer on a month-to-month basis for the occasional use of this individual’s apartment located in Fort Worth, Texas. The payments for the apartment included payments of $2,060 per month plus common area maintenance and utilities as incurred. | |
Rent expense was $32,845 and $4,500 for the nine months ended September 30, 2014 and 2013, respectively. | |
Consulting Agreements | |
On May 1, 2014, the Company entered into a one-year consulting agreement with an individual who is a director of the Company whereby the individual shall be the Company’s Podiatric Medical Director and shall receive compensation of $16,667 per month. Effective October 1, 2014, the compensation to this individual was reduced to $5,000 per month (See Note 12). | |
On May 1, 2014, the Company entered into a one-year consulting agreement with an individual whereby the individual shall be a Medical Director and shall receive compensation of $9,000 per month (See Note 12). | |
On July 1, 2014, the Company entered into a five-year consulting agreement with an individual whereby the individual shall be the Company’s General Counsel and shall receive compensation of $25,000 per month as well as a signing bonus of $61,000. |
Stockholders_Equity_Deficit
Stockholders' Equity (Deficit) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Stockholders Equity Deficit | ' | ||||||||||||||||
Note 10. Stockholders' Equity (Deficit) | ' | ||||||||||||||||
Authorized Capital | |||||||||||||||||
Effective as of May 28, 2014, prior to the consummation of the Merger, Golf Rounds.com, Inc. amended its certificate of incorporation to increase its authorized capital stock from 12,000,000 shares of common stock having a par value of $0.01 per share to 500,000,000 shares of common stock having a par value of $0.01 per share and from zero shares of preferred stock to 20,000,000 shares of preferred stock having a par value of $0.01 per share, and to expressly authorize its board of directors to issue shares of the preferred stock, in one or more series, and to fix for each such series the voting powers, designations, preferences, or other special rights and the qualifications, limitations or restrictions. | |||||||||||||||||
Reverse Stock Split | |||||||||||||||||
Effective as of May 28, 2014, prior to the consummation of the Merger, Golf Rounds.com, Inc. amended its certificate of incorporation to effect a 14.62 to 1 reverse stock split (the “Reverse Stock Split”) whereby every 14.62 issued and outstanding shares of its common stock automatically converted into one share of common stock, subject to the treatment of fractional share interests. All references to shares of common stock of the Company herein are discussed on a post-Reverse Stock Split basis for all periods presented. | |||||||||||||||||
Recapitalization | |||||||||||||||||
On May 28, 2014 (the “recapitalization date”), Fuse Medical, LLC was acquired by Fuse Medical, Inc. (formerly Golf Rounds.com, Inc.), an inactive publicly-held company, in a reverse merger transaction accounted for as a recapitalization of Fuse Medical, LLC (the “Recapitalization” or the “Reverse Merger”). All of the units reflecting membership interests in Fuse Medical, LLC that were issued and outstanding immediately prior to the effective time of the Merger were cancelled and converted into 3,600,000 shares of Fuse Medical, Inc.’s common stock (on a post-Reverse Stock Split basis), representing 90% of the Registrant’s issued and outstanding common stock after giving effect to the Merger (the “Merger Consideration”). The Merger Consideration was allocated among the members of Fuse Medical, LLC immediately prior to the effective time of the Merger (the “Holders”) in accordance with Fuse Medical’s limited liability company operating agreement. Prior to the Merger, and effective on and as of the business day immediately prior to the effective time of the Merger, the general partners in Fuse Medical V, LP and Fuse Medical VI, LP agreed to surrender their interests and the individual physicians that owned the remaining limited partnership interests in Fuse Medical V, LP and Fuse Medical VI, LP agreed to exchange their interest to corresponding interests in Fuse Medical, LLC, each becoming one of the Holders. | |||||||||||||||||
For accounting purposes, Fuse Medical, LLC is the acquirer and Fuse Medical, Inc. is the acquired company because, immediately following the completion of the transaction, Fuse Medical, LLC acquired both voting and management control of the consolidated entity. The Company is deemed to have issued 401,280 common shares to the original stockholders of the publicly-held entity. Accordingly, after completion of the recapitalization, the historical operations of the Company are those of Fuse Medical, LLC and the operations since the recapitalization date are those of Fuse Medical, LLC and Fuse Medical, Inc. The assets and liabilities of both companies are combined at historical cost on the recapitalization date. No step-up in basis or intangible assets or goodwill was recorded in this transaction. As a result of the closing of the Merger, the Company now has 500,000,000 shares of common stock, par value $0.01 per share, and 20,000,000 shares of preferred stock, par value $0.01 per share authorized. The assets acquired and liabilities assumed from the publicly-held company have been accounted for as an adjustment to accumulated deficit upon the recapitalization and were as follows (See Notes 3 and 8): | |||||||||||||||||
Cash and cash equivalents | $ | 641 | |||||||||||||||
Current assets | 10,595 | ||||||||||||||||
Liabilities assumed | (39,647 | ) | |||||||||||||||
Net | $ | (28,411 | ) | ||||||||||||||
As a result of the Merger, Fuse Medical, LLC transitioned from a nontaxable entity to a taxable entity. Accordingly, the undistributed earnings of Fuse Medical, LLC of $26,494 were reclassified from Retained earnings to Additional paid-in capital. | |||||||||||||||||
Subscriptions Receivable | |||||||||||||||||
During the period from July 18, 2014 through August 4, 2014, the Company received aggregate cash proceeds of $500 from outstanding subscriptions receivable. | |||||||||||||||||
Distributions | |||||||||||||||||
During the period from January 1, 2014 through May 28, 2014, distributions of $40,583 were made to the general partners in Fuse Medical V, LP and Fuse Medical VI, LP and the individual physicians that owned the remaining limited partnership interests in Fuse Medical V, LP and Fuse Medical VI, LP prior to the closing of the reverse merger transaction. | |||||||||||||||||
Stock Options | |||||||||||||||||
A summary of the Company’s stock option activity during the nine months ended September 30, 2014 is presented below: | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted Average Exercise Price | Average Remaining Contractual Term | ||||||||||||||||
Aggregate Intrinsic Value | |||||||||||||||||
No. of Shares | |||||||||||||||||
Balance outstanding at December 31, 2013 | - | ||||||||||||||||
Granted [A] | 22,572 | $ | 9.96 | ||||||||||||||
Exercised | - | ||||||||||||||||
Forfeited | (10,944 | ) | $ | 9.94 | |||||||||||||
Expired | - | ||||||||||||||||
Balance outstanding at September 30, 2014 | 11,628 | $ | 9.98 | 2.2 | $ | - | |||||||||||
Exercisable at September 30, 2014 | 11,628 | $ | 9.98 | 2.2 | $ | - | |||||||||||
[A] - stock options acquired as part of merger with Golf Rounds.com, Inc. on May 28, 2014 (See Note 1). |
Concentrations
Concentrations | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Concentrations | ' | ||||||||||||||||
Note 11. Concentrations | ' | ||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||
The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through September 30, 2014. On January 1, 2013, the standard insurance amount of $250,000 per depositor, per bank, became effective. As of September 30, 2014, the Company’s bank balances exceeded FDIC insured amounts by approximately $272,000. | |||||||||||||||||
Concentration of Revenues, Accounts Receivable and Suppliers | |||||||||||||||||
For the three and nine months ended September 30, 2014 and 2013, the Company had significant customers with individual percentage of total revenues equaling 10% or greater as follows: | |||||||||||||||||
For the Three | For the Three | For the Nine | For the Nine | ||||||||||||||
Months Ended | Months Ended | Months Ended | Months Ended | ||||||||||||||
30-Sep-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | ||||||||||||||
Customer 1 | 51 | % | - | 46.1 | % | - | |||||||||||
Customer 2 | 20.7 | % | 15.7 | % | 25.7 | % | 26.9 | % | |||||||||
Customer 3 | 11.6 | % | - | 11.4 | % | 14.5 | % | ||||||||||
Customer 4 | - | 36.2 | % | - | 11.4 | % | |||||||||||
Customer 5 | - | 33.7 | % | - | 10.9 | % | |||||||||||
Customer 6 | - | - | - | 10.2 | % | ||||||||||||
Totals | 83.3 | % | 85.6 | % | 83.2 | % | 73.9 | % | |||||||||
At September 30, 2014 and December 31, 2013, concentration of accounts receivable with significant customers representing 10% or greater of accounts receivable was as follows: | |||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Customer 1 | 36.8 | % | 12.8 | % | |||||||||||||
Customer 2 | 24 | % | 44.6 | % | |||||||||||||
Customer 3 | 12.4 | % | - | ||||||||||||||
Customer 4 | 11.4 | % | - | ||||||||||||||
Customer 5 | - | 10.2 | % | ||||||||||||||
Totals | 84.6 | % | 67.6 | % | |||||||||||||
For the three and nine months ended September 30, 2014 and 2013, the Company had significant suppliers representing 10% or greater of goods purchased as follows: | |||||||||||||||||
For the Three | For the Three | For the Nine | For the Nine | ||||||||||||||
Months Ended | Months Ended | Months Ended | Months Ended | ||||||||||||||
30-Sep-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | ||||||||||||||
Supplier 1 | 100 | % | 90.7 | % | 77 | % | 80.3 | % | |||||||||
Supplier 2 | - | - | 23 | % | - | ||||||||||||
Supplier 3 | - | - | - | 19.7 | % | ||||||||||||
Totals | 100 | % | 90.7 | % | 100 | % | 100 | % |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions | ' |
Note 12. Related Party Transactions | ' |
As of December 31, 2013, $2,538 was due from an entity owned by an officer of the Company. This amount is included in accounts receivable – related parties on the accompanying condensed consolidated balance sheet. | |
During the nine months ended September 30, 2014, the Company advanced an aggregate of $42,611 to and received an aggregate of $74,993 from three entities that are owned partially by the officers of the Company. The advances are unsecured, non-interest bearing and due on demand. The balance due from the three entities was $0 and $32,382 as of September 30, 2014 and December 31, 2013, respectively (See Note 4). | |
As of September 30, 2014 and December 31, 2013, $42,074 and $48,339, respectively, is owed to officers of the Company or entities controlled by officers of the Company. This amount is included in accounts payable – related parties on the accompanying condensed consolidated balance sheet. | |
During the period from January 15, 2014 through June 16, 2014, the Company issued several two-year promissory notes in exchange for aggregate cash proceeds of $724,238. The funds were received from entities controlled by officers of the Company. The officers also owned or partially owned the entities from which the funds were received. The notes are unsecured, bear interest at 7.0% and require 18 monthly payments of interest only commencing at the beginning of month seven. The notes include a provision that in the event of default the interest rate would increase to the default interest rate of 18%. The first six months of interest is deferred until maturity. The outstanding principal balance along with all accrued and unpaid interest is due at maturity (See Note 8). | |
Commencing January 1, 2013 through January 31, 2014, the Company occupied office space on a month-to-month basis for its corporate headquarters for $500 a month from Crestview Farm, an entity controlled by the Company’s Chief Executive Officer (“CEO”). The Company's CEO serves as the Manager of Crestview Farm. Rent expense for these facilities was $500 and $4,500 for the nine months ended September 30, 2014 and 2013, respectively (See Note 9). | |
On May 1, 2014, the Company entered into a one-year consulting agreement with an individual who is a director of the Company whereby the individual shall be the Company’s Podiatric Medical Director and shall receive compensation of $16,667 per month. Effective October 1, 2014, the compensation to this individual was reduced to $5,000 per month (See Note 9). | |
On May 1, 2014, the Company entered into a one-year consulting agreement with an individual whereby the individual shall be a Medical Director and shall receive compensation of $9,000 per month (See Note 9). | |
During the period from inception through September 30, 2014, several members of the Company’s management provided services at no charge to the Company. The financial statements do not include an estimate of the fair value of these services. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events | ' |
Note 13. Subsequent Events | ' |
Other Matters | |
On October 16, 2014, the line of credit in the amount of $100,000 was fully repaid (See Note 7). |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Significant Accounting Policies Policies | ' | ||
Principles of Consolidation | ' | ||
The consolidated financial statements include the accounts of Fuse Medical, LLC, and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation. | |||
Use of Estimates | ' | ||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates in the accompanying consolidated financial statements include the allowance for doubtful accounts and other receivables, valuation of inventories, the estimates of depreciable lives and valuation of property and equipment, and the valuation allowance on deferred tax assets. | |||
Earnings (Loss) Per Share | ' | ||
The Company’s computation of earnings (loss) per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that would have occurred if securities or other contracts to issue common shares (e.g. warrants and options) had been exercised or converted into common shares at the beginning of the period, or issuance date, if later, and had shared in the net income (loss) of the Company. Diluted EPS is computed using the treasury stock method, which assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common shares at the average market price during the period. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. | |||
The weighted average number of common shares outstanding has been retroactively restated for: (1) the equivalent number of shares received by the accounting acquirer as a result of the reverse merger as if these shares had been outstanding as of the beginning of the earliest period presented and (2) the 14.62 to 1 reverse stock split that occurred May 28, 2014 (See Note 10). | |||
As of September 30, 2014, common stock equivalents included options to purchase 11,628 common shares. These instruments are not considered in the calculation of diluted loss per share because the effect would be anti-dilutive. As of September 30, 2013, the Company had no potentially dilutive instruments and, accordingly, basic and diluted earnings per share are the same. | |||
Fair Value Measurements | ' | ||
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: | |||
Level 1- | Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; | ||
Level 2- | Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and | ||
Level 3- | Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. | ||
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The recorded value of notes payable approximates their fair value based upon their effective interest rates. | |||
Accounts Receivable and Allowance for Doubtful Accounts Receivable | ' | ||
Accounts receivables are non-interest bearing and are stated at gross invoice amounts less an allowance for doubtful accounts receivable. Credit is extended to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for potential bad debts. | |||
The Company estimates its allowance for doubtful accounts by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations, such as bankruptcy proceedings and receivable amounts outstanding for an extended period beyond contractual terms. In these cases, the Company uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are reevaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. The Company may also record a general allowance as necessary. | |||
Accounts deemed uncollectible are written off in the period when the Company has exhausted its efforts to collect overdue and unpaid receivables or otherwise has evaluated other circumstances that indicate that the Company should abandon such efforts. Previously written-off accounts receivable subsequently collected are recognized as a reduction of bad debt expense when funds are received. | |||
Inventories | ' | ||
Inventories are stated at the lower of cost (first-in, first-out) or market. Inventories consist entirely of finished goods and include biologics, internal fixation products, bone substitute materials, and tendon anchor systems. The Company reviews the market value of inventories whenever events and circumstances indicate that the carrying value of inventories may not be recoverable from the estimated future sales price less cost of disposal and normal gross profit. In cases where the market values are less than the carrying value, a write down is recognized equal to an amount by which the carrying value exceeds the market value of inventories. | |||
Property and Equipment | ' | ||
Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets per the following table. | |||
Category | Amortization Period | ||
Computer equipment | 3 years | ||
Furniture and fixtures | 5 years | ||
Software | 3 years | ||
Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed and a gain or loss is recorded in the consolidated statements of operations. Repairs and maintenance costs are expensed in the period incurred. | |||
Revenue Recognition and Deferred Revenue | ' | ||
The Company recognizes revenue when: (i) persuasive evidence of an arrangement exists; (ii) the fees are fixed or determinable; (iii) no significant Company obligations remain; and (iv) collection of the related receivable is reasonably assured. The Company reports revenues for transactions in which it is the primary obligor on a gross basis and revenues in which it acts as an agent (earning a fixed percentage of the sale) on a net basis, (net of related costs). | |||
The following policies reflect specific criteria for the various revenue streams of the Company.Medical supply and product revenue is comprised of medical biologics, internal fixation products, bone substitute materials and other medical supplies. For customers that order products as needed (i.e. for specific cases), the Company invoices the customer on the date the product is utilized. This includes customers (i.e. certain hospitals) that maintain the Company’s products on consignment. For customers that order larger quantities of the same product (subject to minimums) at a reduced selling price, the Company invoices the customers when the products are shipped. Payment terms are net 30 days after the invoice date.Development and consulting fee revenue is recognized on a monthly basis pursuant to an agreement. This revenue is recorded in the period the services have been provided. | |||
Products that have been sold are not subject to returns unless the product is deemed defective. Credits or refunds are recognized when they are determinable and estimable. Net revenues have been reduced to account for sales returns, rebates and other incentives. | |||
Stock-Based Compensation | ' | ||
Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. For non-employee stock-based awards, the Company calculates the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the prorata compensation expense is adjusted accordingly until such time the non-employee award is fully vested, at which time the total compensation recognized to date shall equal the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. | |||
Recent Accounting Pronouncements | ' | ||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-08 (“ASU 2014-08”), “Presentation of Financial Statements” (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014, and interim periods within those years. The Company is currently evaluating the impact of adopting ASU 2014-08 on the Company's results of operations or financial condition. | |||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers (Topic 606)”. ASU 2014-09 will eliminate transaction-specific and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09 and has not determined the effect of the standard on our ongoing financial reporting. | |||
In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (“ASU 2014-15”), “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. | |||
We have implemented all new accounting standards that are in effect and that may impact our consolidated financial statements. Moreover, we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Significant Accounting Policies Tables | ' | ||
Estimated useful lives of assets | ' | ||
Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets per the following table. | |||
Category | Amortization Period | ||
Computer equipment | 3 years | ||
Furniture and fixtures | 5 years | ||
Software | 3 years |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property And Equipment Tables | ' | ||||||||
Property and Equipment (Tables) | ' | ||||||||
Property and equipment consisted of the following at September 30, 2014 and December 31, 2013: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Computer equipment | $ | 36,240 | $ | 1,763 | |||||
Furniture and fixtures | 14,778 | - | |||||||
Software | 10,500 | - | |||||||
61,518 | 1,763 | ||||||||
Less: accumulated depreciation | (9,957 | ) | (476 | ) | |||||
Property and equipment, net | $ | 51,561 | $ | 1,287 |
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued Expenses Tables | ' | ||||||||
Accrued expenses | ' | ||||||||
Accrued expenses consisted of the following at September 30, 2014 and December 31, 2013: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Accrued interest | $ | 50,408 | $ | - | |||||
Other accrued expenses | 10,110 | - | |||||||
Accrued compensation | - | 63,400 | |||||||
Accrued expenses | $ | 60,518 | $ | 63,400 |
Notes_Payable_Tables
Notes Payable (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes Payable Tables | ' | ||||
Schedule of notes payable | ' | ||||
Notes payable consisted of the following at September 30, 2014: | |||||
30-Sep-14 | |||||
Note payable - originating July 30, 2013; monthly interest payments required; bearing interest at 3.25%; maturing at July 29, 2015 [A] | $ | 6,000 | |||
Note payable - originating August 29, 2013; monthly interest payments required; bearing interest at 3.25%; maturing at August 28, 2015 [A] | 11,250 | ||||
Note payable - related party originating December 31, 2013; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at December 30, 2015 | 60,000 | ||||
Note payable - related party originating January 15, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at January 14, 2016 | 131,024 | ||||
Note payable - originating January 14, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at January 15, 2016 | 131,024 | ||||
Note payable - related party originating February 1, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at January 31, 2016 | 116,777 | ||||
Note payable - originating February 6, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at February 5, 2016 | 116,777 | ||||
Note payable - related party originating February 10, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at February 9, 2016 | 193,535 | ||||
Note payable - related party originating March 4, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at March 4, 2016 | 87,670 | ||||
Note payable - related party originating March 4, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at March 4, 2016 | 63,770 | ||||
Note payable - related party originating May 8, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at May 8, 2016 | 75,000 | ||||
Note payable - originating May 23, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at May 23, 2016 | 479,975 | ||||
Note payable - related party originating June16, 2014; monthly interest payments required commencing in month 7; bearing interest at 7%; maturing at June 16, 2016 | 56,462 | ||||
Total | 1,529,264 | ||||
Less: Current maturities | (17,250 | ) | |||
Amount due after one year (includes $784,238 to related parties) | $ | 1,512,014 | |||
[A] - notes payable acquired as part of merger with Golf Rounds.com, Inc. on May 28, 2014 (See Notes 1 and 10). | |||||
Future maturities of the convertible notes payable | ' | ||||
Future maturities of the notes payable are as follows: | |||||
Year Ending December 31, | |||||
2015 | $ | 77,250 | |||
2016 | 1,434,764 | ||||
$ | 1,512,014 |
Stockholders_Equity_Deficit_Ta
Stockholders' Equity (Deficit) (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Stockholders Equity Deficit Tables | ' | ||||||||||||||||
The assets acquired and liabilities | ' | ||||||||||||||||
Cash and cash equivalents | $ | 641 | |||||||||||||||
Current assets | 10,595 | ||||||||||||||||
Liabilities assumed | (39,647 | ) | |||||||||||||||
Net | $ | (28,411 | ) | ||||||||||||||
Summary of the stock option activity | ' | ||||||||||||||||
A summary of the Company’s stock option activity during the nine months ended September 30, 2014 is presented below: | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted Average Exercise Price | Average Remaining Contractual Term | ||||||||||||||||
Aggregate Intrinsic Value | |||||||||||||||||
No. of Shares | |||||||||||||||||
Balance outstanding at December 31, 2013 | - | ||||||||||||||||
Granted [A] | 22,572 | $ | 9.96 | ||||||||||||||
Exercised | - | ||||||||||||||||
Forfeited | (10,944 | ) | $ | 9.94 | |||||||||||||
Expired | - | ||||||||||||||||
Balance outstanding at September 30, 2014 | 11,628 | $ | 9.98 | 2.2 | $ | - | |||||||||||
Exercisable at September 30, 2014 | 11,628 | $ | 9.98 | 2.2 | $ | - |
Concentrations_Tables
Concentrations (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |||||||||||||||||||||||||||||||||||||||||
Revenues [Member] | Accounts Receivable [Member] | Accounts Payable [Member] | |||||||||||||||||||||||||||||||||||||||||
Concentration of Revenues, Accounts Receivable and Supplier | ' | ' | ' | ||||||||||||||||||||||||||||||||||||||||
For the three and nine months ended September 30, 2014 and 2013, the Company had significant customers with individual percentage of total revenues equaling 10% or greater as follows: | At September 30, 2014 and December 31, 2013, concentration of accounts receivable with significant customers representing 10% or greater of accounts receivable was as follows: | For the three and nine months ended September 30, 2014 and 2013, the Company had significant suppliers representing 10% or greater of goods purchased as follows: | |||||||||||||||||||||||||||||||||||||||||
For the Three | For the Three | For the Nine | For the Nine | 30-Sep-14 | 31-Dec-13 | For the Three | For the Three | For the Nine | For the Nine | ||||||||||||||||||||||||||||||||||
Months Ended | Months Ended | Months Ended | Months Ended | Customer 1 | 36.8 | % | 12.8 | % | Months Ended | Months Ended | Months Ended | Months Ended | |||||||||||||||||||||||||||||||
30-Sep-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | Customer 2 | 24 | % | 44.6 | % | 30-Sep-14 | 30-Sep-13 | 30-Sep-14 | 30-Sep-13 | |||||||||||||||||||||||||||||||
Customer 1 | 51 | % | - | 46.1 | % | - | Customer 3 | 12.4 | % | - | Supplier 1 | 100 | % | 90.7 | % | 77 | % | 80.3 | % | ||||||||||||||||||||||||
Customer 2 | 20.7 | % | 15.7 | % | 25.7 | % | 26.9 | % | Customer 4 | 11.4 | % | - | Supplier 2 | - | - | 23 | % | - | |||||||||||||||||||||||||
Customer 3 | 11.6 | % | - | 11.4 | % | 14.5 | % | Customer 5 | - | 10.2 | % | Supplier 3 | - | - | - | 19.7 | % | ||||||||||||||||||||||||||
Customer 4 | - | 36.2 | % | - | 11.4 | % | Totals | 84.6 | % | 67.6 | % | Totals | 100 | % | 90.7 | % | 100 | % | 100 | % | |||||||||||||||||||||||
Customer 5 | - | 33.7 | % | - | 10.9 | % | |||||||||||||||||||||||||||||||||||||
Customer 6 | - | - | - | 10.2 | % | ||||||||||||||||||||||||||||||||||||||
Totals | 83.3 | % | 85.6 | % | 83.2 | % | 73.9 | % |
Nature_of_Operations_Details_N
Nature of Operations (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Nature Of Operations Details Narrative | ' | ' | ' | ' | ' | ' |
Net loss | ($473,420) | ($3,253) | ($1,052,927) | $205,762 | ' | ' |
Net cash provided by (used in) operating activities | ' | ' | -864,958 | 303,676 | ' | ' |
Cash and cash equivalents on hand | 522,580 | 292,120 | 522,580 | 292,120 | 12,339 | 100,029 |
Accumulated deficit | -1,161,379 | ' | -1,161,379 | ' | -12,964 | ' |
Working capital | $438,679 | ' | $438,679 | ' | ' | ' |
Significant_Accounting_Policie3
Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Computer equipment [Member] | ' |
Estimated useful lives of the assets | '3 years |
Furniture and fixtures [Member] | ' |
Estimated useful lives of the assets | '5 years |
Software [Member] | ' |
Estimated useful lives of the assets | '3 years |
Significant_Accounting_Policie4
Significant Accounting Policies (Details Narrative) | Sep. 30, 2014 |
Significant Accounting Policies Details Narrative | ' |
Common stock equivalents included options to purchase | 11,628 |
Advances_to_Golf_Roundscom_Inc1
Advances to Golf Rounds.com, Inc. (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Advances To Golf Rounds.Com Inc. Details Narrative | ' | ' | ' | ' |
Interest income | ' | ' | $1,177 | ' |
Other_Receivables_Related_Part1
Other Receivables - Related Parties (Details Narrative) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Other Receivables - Related Parties Details Narrative | ' | ' | ' |
Advances to related parties | $42,611 | ' | ' |
Repayments received from related parties | 74,993 | ' | ' |
Due from related parties | $0 | ' | $32,382 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property and equipment, gross | $61,518 | $1,763 |
Less: accumulated depreciation | -9,957 | -476 |
Property and equipment, net | 51,561 | 1,287 |
Computer equipment [Member] | ' | ' |
Property and equipment, gross | 36,240 | 1,763 |
Furniture and fixtures [Member] | ' | ' |
Property and equipment, gross | 14,778 | ' |
Software [Member] | ' | ' |
Property and equipment, gross | $10,500 | ' |
Property_and_Equipment_Details1
Property and Equipment (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Property And Equipment Details Narrative | ' | ' |
Depreciation expense | $9,481 | $329 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accrued Expenses Details | ' | ' |
Accrued interest | $50,408 | ' |
Other accrued expenses | 10,110 | ' |
Accrued compensation | ' | 63,400 |
Accrued expenses | $60,518 | $63,400 |
Line_of_Credit_Details_Narrati
Line of Credit (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Line Of Credit Details Narrative | ' | ' | ' | ' | ' |
Interest expense on the line of credit | $575 | $414 | $1,713 | $734 | ' |
Balance due on the line of credit | 100,000 | ' | 100,000 | ' | 100,000 |
Remaining balance on line of credit | $0 | ' | $0 | ' | ' |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Sep. 30, 2014 |
Total notes payble | $1,529,264 |
Less: Current maturities | -17,250 |
Amount due after one year (includes $784,238 to related parties) | 1,512,014 |
Notes Payable [Member] | ' |
Total notes payble | 6,000 |
Notes Payable 1 [Member] | ' |
Total notes payble | 11,250 |
Notes Payable 2 [Member] | ' |
Total notes payble | 60,000 |
Notes Payable 3 [Member] | ' |
Total notes payble | 131,024 |
Notes Payable 4 [Member] | ' |
Total notes payble | 131,024 |
Notes Payable 5 [Member] | ' |
Total notes payble | 116,777 |
Notes Payable 6 [Member] | ' |
Total notes payble | 116,777 |
Notes Payable 7 [Member] | ' |
Total notes payble | 193,535 |
Notes Payable 8 [Member] | ' |
Total notes payble | 87,670 |
Notes Payable 9 [Member] | ' |
Total notes payble | 63,770 |
Notes Payable 10 [Member] | ' |
Total notes payble | 75,000 |
Notes Payable 11 [Member] | ' |
Total notes payble | 479,975 |
Notes Payable 12 [Member] | ' |
Total notes payble | $56,462 |
Notes_Payable_Details_1
Notes Payable (Details 1) (USD $) | Sep. 30, 2014 |
Notes Payable Details 1 | ' |
2015 | $77,250 |
2016 | 1,434,764 |
Total convertible notes payable | $1,512,014 |
Notes_Payable_Details_Narrativ
Notes Payable (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Notes Payable Details Narrative | ' | ' |
Interest expense on notes payable | $26,817 | $56,775 |
Accrued interest payable | $50,408 | $50,408 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Commitments And Contingencies Details Narrative | ' | ' |
Rent expense for leased office space | $500 | $4,500 |
Rent expense | $19,233 | $3,000 |
Stockholders_Equity_Deficit_De
Stockholders' Equity (Deficit) (Details) (USD $) | Sep. 30, 2014 |
Stockholders Equity Deficit Details | ' |
Cash and cash equivalents | $641 |
Current assets | 10,595 |
Liabilities assumed | -39,647 |
Net | ($28,411) |
Stockholders_Equity_Deficit_De1
Stockholders' Equity (Deficit) (Details 1) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Stockholders Equity Deficit Details 1 | ' |
No. of Shares, Beginning Balance | ' |
Granted, No. Of Shares | 22,572 |
Exercised, No. Of Shares | ' |
Forfeited, No. Of Shares | -10,944 |
Expired, No. Of Shares | ' |
No. of Shares, Ending Balance | 11,628 |
Exercisable at September 30, 2014, No. Of Shares | 11,628 |
Weighted Average Exercise Price, Beginning Balance | ' |
Granted, Weighted Average Exercise Price | $9.96 |
Forfeited, Weighted Average Exercise Price | $9.94 |
Weighted Average Exercise Price, Ending Balance | $9.98 |
Exercisable, Weighted Average Exercise Price | $9.98 |
Weighted Average Remaining Contractual Term, Balance outstanding | '2 years 2 months 12 days |
Weighted Average Remaining Contractual Term, Exercisable | '2 years 2 months 12 days |
Aggregate Intrinsic Value, Balance outstanding | ' |
Aggregate Intrinsic Value, Exercisable | ' |
Concentrations_Details
Concentrations (Details) (Revenues [Member]) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Concentration of Revenues | 83.30% | 85.60% | 83.20% | 73.90% |
Customer1 [Member] | ' | ' | ' | ' |
Concentration of Revenues | 51.00% | ' | 46.10% | ' |
Customer2 [Member] | ' | ' | ' | ' |
Concentration of Revenues | 20.70% | 15.70% | 25.70% | 26.90% |
Customer3 [Member] | ' | ' | ' | ' |
Concentration of Revenues | 11.60% | ' | 11.40% | 14.50% |
Customer4 [Member] | ' | ' | ' | ' |
Concentration of Revenues | ' | 36.20% | ' | 11.40% |
Customer5 [Member] | ' | ' | ' | ' |
Concentration of Revenues | ' | 33.70% | ' | 10.90% |
Customer6 [Member] | ' | ' | ' | ' |
Concentration of Revenues | ' | ' | ' | 10.20% |
Concentrations_Details_1
Concentrations (Details 1) (Accounts Receivable [Member]) | Sep. 30, 2014 | Dec. 31, 2013 |
Concentration of accounts receivable | 84.60% | 67.60% |
Customer1 [Member] | ' | ' |
Concentration of accounts receivable | 36.80% | 12.80% |
Customer2 [Member] | ' | ' |
Concentration of accounts receivable | 24.00% | 44.60% |
Customer3 [Member] | ' | ' |
Concentration of accounts receivable | 12.40% | ' |
Customer4 [Member] | ' | ' |
Concentration of accounts receivable | 11.40% | ' |
Customer5 [Member] | ' | ' |
Concentration of accounts receivable | ' | 10.20% |
Concentrations_Details_2
Concentrations (Details 2) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Concentrations Supplier | 100.00% | 90.70% | 100.00% | 100.00% |
Supplier 1 [Member] | ' | ' | ' | ' |
Concentrations Supplier | 100.00% | 90.70% | 77.00% | 80.30% |
Supplier 2 [Member] | ' | ' | ' | ' |
Concentrations Supplier | ' | ' | 23.00% | ' |
Supplier 3 [Member] | ' | ' | ' | ' |
Concentrations Supplier | ' | ' | ' | 19.70% |
Concentrations_Details_Narrati
Concentrations (Details Narrative) (USD $) | Sep. 30, 2014 |
Concentrations Details Narrative | ' |
Exceeded FDIC insured amounts | $272,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Related Party Transactions Details Narrative | ' | ' | ' |
Due from accounts payable - related parties | $2,538 | ' | $2,538 |
Advances to related parties | 42,611 | ' | ' |
Repayments received from related parties | 74,993 | ' | ' |
Due from related parties | 0 | ' | 32,382 |
Accounts payable - related parties | 42,074 | ' | 48,339 |
Rent expense | $500 | $4,500 | ' |