Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 12, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'AXIH | ' |
Entity Common Stock, Shares Outstanding | ' | 31,018,605 |
Entity Registrant Name | 'AXION INTERNATIONAL HOLDINGS, INC. | ' |
Entity Central Index Key | '0000753048 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $599,743 | $346,905 |
Accounts receivable, net of allowance | 438,950 | 192,015 |
Inventories | 3,625,821 | 3,088,953 |
Prepaid expenses and deposits | 168,358 | 165,339 |
Total current assets | 4,832,872 | 3,793,212 |
Property and equipment, net | 3,023,131 | 2,005,215 |
Other long-term and intangible assets | 0 | 68,284 |
Total assets | 7,856,003 | 5,866,711 |
Current liabilities: | ' | ' |
Accounts payable | 1,254,422 | 890,394 |
Accrued liabilities | 653,162 | 446,434 |
Due to investor | 400,000 | 0 |
Derivative liabilities - 8% convertible promissory notes | 1,330,000 | 830,000 |
Total current liabilities | 3,637,584 | 2,166,828 |
8% convertible promissory notes, net of discounts | 7,041,112 | 5,671,162 |
Fair value of 10% convertible preferred stock warrants | 122,357 | 81,716 |
Total liabilities | 10,801,053 | 7,919,706 |
Commitments and contingencies | ' | ' |
10% convertible preferred stock, no par value; authorized 880,000 shares; 702,123 and 706,023 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively, net of discounts | 6,568,316 | 5,922,612 |
Stockholders' deficit: | ' | ' |
Common stock, no par value; authorized, 100,000,000 shares; 30,315,663 and 28,820,173 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 29,878,727 | 27,103,454 |
Accumulated deficit | -39,392,093 | -35,079,061 |
Total stockholders' deficit | -9,513,366 | -7,975,607 |
Total liabilities and stockholders' deficit | $7,856,003 | $5,866,711 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
10% Convertible Preferred Stock | 10% Convertible Preferred Stock | |||
Temporary Equity, no par value | ' | ' | $0 | $0 |
Temporary Equity, authorized | ' | ' | 880,000 | 880,000 |
Temporary Equity, issued | ' | ' | 702,123 | 706,023 |
Temporary Equity, outstanding | ' | ' | 702,123 | 706,023 |
Common stock, no par value | $0 | $0 | ' | ' |
Common stock, authorized | 100,000,000 | 100,000,000 | ' | ' |
Common stock, shares issued | 30,315,663 | 28,820,173 | ' | ' |
Common stock, shares outstanding | 30,315,663 | 28,820,173 | ' | ' |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue | $1,272,689 | $800,007 | $4,532,274 | $4,892,802 |
Costs of sales | 1,189,172 | 787,078 | 4,145,008 | 4,828,647 |
Gross margin | 83,517 | 12,929 | 387,266 | 64,155 |
Operating expenses: | ' | ' | ' | ' |
Product development, quality management and excess production capacity | 507,466 | 320,137 | 1,076,881 | 883,979 |
Marketing and sales | 202,106 | 362,851 | 703,201 | 749,913 |
General and administrative | 732,427 | 581,561 | 2,216,656 | 2,788,381 |
Total operating costs and expenses | 1,441,999 | 1,264,549 | 3,996,738 | 4,422,273 |
Loss from operations | -1,358,482 | -1,251,620 | -3,609,472 | -4,358,118 |
Other (income) expense: | ' | ' | ' | ' |
Interest expense | 190,318 | 108,395 | 542,970 | 241,944 |
Amortization of debt discount | 132,497 | 0 | 414,525 | 373,553 |
Change in fair value of derivative liabilities | -730,000 | -445,684 | -253,935 | -919,361 |
Total other income | -407,185 | -337,289 | 703,560 | -303,864 |
Net loss | -951,297 | -914,331 | -4,313,032 | -4,054,254 |
Accretion of preferred stock dividends and beneficial conversion feature | -405,936 | -438,922 | -1,218,273 | -1,262,126 |
Net loss attributable to common shareholders | ($1,357,233) | ($1,353,253) | ($5,531,305) | ($5,316,380) |
Weighted average common shares - basic and diluted | 30,307,925 | 26,766,317 | 29,583,289 | 26,157,795 |
Net loss per share - basic and diluted | ($0.04) | ($0.05) | ($0.19) | ($0.20) |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (USD $) | Total | 10% Convertible Preferred Stock | Common Shares | Common Shares | Additional Paid-in Capital and Common Stock | Additional Paid-in Capital and Common Stock | Accumulated Deficit |
USD ($) | USD ($) | 10% Convertible Preferred Stock | USD ($) | 10% Convertible Preferred Stock | USD ($) | ||
USD ($) | |||||||
Balance at Dec. 31, 2012 | ($7,975,607) | ' | ' | ' | $27,103,454 | ' | ($35,079,061) |
Balance (in shares) at Dec. 31, 2012 | ' | ' | 28,820,173 | ' | ' | ' | ' |
Shares issued upon conversion of 10% convertible preferred stock (in shares) | ' | ' | ' | 39,000 | ' | ' | ' |
Shares issued upon conversion of 10% convertible preferred stock | ' | 39,000 | ' | ' | ' | 39,000 | ' |
Shares issued for services rendered (in shares) | ' | ' | 225,000 | ' | ' | ' | ' |
Shares issued for services rendered | 139,750 | ' | ' | ' | 139,750 | ' | ' |
Shares issued for dividend payments (in shares) | ' | ' | 609,811 | ' | ' | ' | ' |
Shares issued for dividend payments | 356,579 | ' | ' | ' | 356,579 | ' | ' |
Shares issued for interest payments (in shares) | ' | ' | 621,679 | ' | ' | ' | ' |
Shares issued for interest payments | 360,005 | ' | ' | ' | 360,005 | ' | ' |
Share-based compensation | 2,904 | ' | ' | ' | 2,904 | ' | ' |
Dividend on 10% convertible preferred stock | ' | -533,569 | ' | ' | ' | -533,569 | ' |
Amortization of discounts of 10% convertible preferred stock | ' | -684,704 | ' | ' | ' | -684,704 | ' |
Recovery of shareholder short swing profit | 3,095,308 | ' | ' | ' | 3,095,308 | ' | ' |
Net loss | -4,313,032 | ' | ' | ' | ' | ' | -4,313,032 |
Balance at Sep. 30, 2013 | ($9,513,366) | ' | ' | ' | $29,878,727 | ' | ($39,392,093) |
Balance (in shares) at Sep. 30, 2013 | ' | ' | 30,315,663 | ' | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($4,313,032) | ($4,054,254) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 147,605 | 90,163 |
Amortization of convertible debt discount | -414,525 | 0 |
Amortization of preferred stock discount | 0 | 68,346 |
Change in fair value of derivative liabilities | -294,576 | -517,400 |
Change in fair value of 10% convertible preferred stock warrants | 40,641 | -401,961 |
Share-based compensation | 142,654 | 395,947 |
Change in allowance for doubtful accounts | 0 | 86,665 |
Changes in operating assets and liability: | ' | ' |
Accounts receivable | -246,935 | 243,133 |
Inventories | -536,868 | -881,689 |
Prepaid expenses and deposits | 65,265 | -127,791 |
Accounts payable | 364,028 | 158,222 |
Accrued liabilities | 389,743 | 335,880 |
Net cash used in operating activities | -3,826,950 | -4,299,533 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -1,165,521 | -1,010,701 |
Net cash used in investing activities | -1,165,521 | -1,010,701 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of demand promissory notes | 400,000 | 5,000,001 |
Recovery of shareholder short swing profits | 3,095,308 | ' |
Repayments of convertible debt | ' | -772,500 |
Repayments of revolving credit agreement | ' | -466,000 |
Net cash provided by financing activities | 5,245,309 | 5,140,378 |
Net increase (decrease) in cash | 252,838 | -169,856 |
Cash and cash equivalents at beginning of period | 346,905 | 1,982,772 |
Cash and cash equivalents at end of period | 599,743 | 1,812,916 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 1,971 | 67,834 |
Fair value of conversion option of 8% convertible promissory notes | 545,425 | 982,932 |
Redeemable common stock reclassified to permanent equity | 0 | 242,500 |
Fair value of bonus warrants granted | 0 | 57,034 |
8% Convertible promissory note | ' | ' |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of demand promissory notes | 1,750,001 | 1,378,877 |
Supplemental disclosures of cash flow information: | ' | ' |
Fair value of warrants issued | 249,151 | 427,888 |
Revolving Credit Agreement | ' | ' |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Amortization of convertible debt discount | 0 | -305,206 |
10% Convertible Preferred Stock | ' | ' |
Supplemental disclosures of cash flow information: | ' | ' |
Conversion of 10% convertible preferred stock and debt | 39,000 | 462,500 |
Dividends on 10% convertible preferred stock | 533,569 | 519,020 |
Fair value of warrants issued | 0 | 1,875,463 |
Amortization of 10% convertible preferred stock discount | $684,704 | $743,106 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Summary of Significant Accounting Policies | ' | |||||||
Note 1 - Summary of Significant Accounting Policies | ||||||||
(a) | Business and Basis of Financial Statement Presentation | |||||||
Axion International Holdings, Inc. (the “Company,” “we” or “us”) was formed in 1981. In November 2007, the Company entered into an Agreement and Plan of Merger, among the Company, Axion Acquisition Corp., a Delaware corporation and a newly created direct wholly-owned subsidiary of the Company (the “Merger Sub”), and Axion International, Inc., a Delaware corporation which incorporated on August 6, 2006 with operations commencing in November 2007 (“Axion”). On March 20, 2008 the Company consummated the merger (the “Merger”) of Merger Sub into Axion, with Axion continuing as the surviving corporation and a wholly-owned subsidiary of the Company. | ||||||||
We develop, manufacture, market and sell composite rail ties and structural building products, such as pilings, I-beams, T-beams and boards, which, based upon patented technology developed at Rutgers University, are fully derived from common recycled plastics and high-density polymers, such as polyethylene, polystyrene and polypropylene. These recycled plastics, which are combined with recycled plastic composites containing encapsulated fiberglass, achieve structural thickness and strength and are resistant to changing shape under constant stress. Our products, manufactured through an extrusion process, are eco-friendly, non-corrosive, moisture impervious, non-chemical leaching and insect and rot resistant. Our products possess superior lifecycles and generally have greater durability and require less maintenance than competitive products made from wood, steel or concrete. We market our products through two lines - ECOTRAX™, our line of rail ties, and STRUXURE™, our line of structural building products. | ||||||||
Our consolidated financial statements include the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with Rule S-X of the Securities and Exchange Commission and with the instructions to Form 10-Q, and accordingly, they do not include all of the information and footnotes which may be required by generally accepted accounting principles for complete financial statements. | ||||||||
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. However, the results from operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2012 financial statements and footnotes thereto included in the Company's Form 10-K filed with the SEC. | ||||||||
(b) | Cash and Cash Equivalents | |||||||
For purposes of our balance sheet and statement of cash flows, we consider all highly liquid debt instruments, purchased as an investment, with an original maturity of three months or less to be cash equivalents. At September 30, 2013 and December 31, 2012, we maintained all of our cash in demand or interest-bearing accounts at commercial banks. | ||||||||
(c) | Allowance for Doubtful Accounts | |||||||
We accrue a reserve on a receivable when, based upon the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. During the nine months ended September 30, 2013, we determined certain receivables which we had previously accrued a reserve for, were not collectible and wrote off the receivable balances against the reserve. We did not require an allowance for doubtful accounts at September 30, 2013, but at December 31, 2012 it was $131,996. | ||||||||
(d) | Property and Equipment | |||||||
Property and equipment are recorded at cost and depreciated and amortized using the straight-line method over estimated useful lives of two to twenty years. Costs incurred that extend the useful life of the underlying asset are capitalized and depreciated over the remaining useful life. Repairs and maintenance are charged directly to operations as incurred. | ||||||||
Our property and equipment is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Equipment | $ | 15,344 | $ | 13,754 | ||||
Machinery and equipment | 3,759,994 | 2,611,933 | ||||||
Purchased software | 145,623 | 129,753 | ||||||
Furniture and fixtures | 13,090 | 13,090 | ||||||
Subtotal – property and equipment, at cost | 3,934,051 | 2,768,530 | ||||||
Less accumulated depreciation | -910,920 | -763,315 | ||||||
Net property and leasehold improvements | $ | 3,023,131 | $ | 2,005,215 | ||||
Depreciation expense during the three and nine months ended September 30, 2013 was $75,038 and $147,605, respectively, and for the corresponding periods in 2012, was $16,972 and $90,163, respectively. Of the depreciation expense during the three and nine months ended September 30, 2013, $70,485 and $134,813, respectively was charged to production and the remainder to operating expenses. For the corresponding periods of 2012, $13,179 and $82,356, respectively was charged to production. | ||||||||
(e) | Exclusive Agreement | |||||||
In February 2007, we acquired an exclusive, royalty-bearing license in specific but broad global territories to make, have made, use, sell, offer for sale, modify, develop, import, and export products made using patent applications owned by Rutgers University (“Rutgers”). We are using these patented technologies in the production of our composite rail ties and structural building products such as pilings, I-beams, T-beams and boards of various sizes. | ||||||||
Subject to the minimum royalty pursuant to the terms of the license, royalties incurred and payable to Rutgers, for the three and nine months ended September 30, 2013 were $50,000 and $150,000, respectively. For the corresponding periods of 2012, the amounts were the same. | ||||||||
(f) | Revenue and Related Cost Recognition | |||||||
In accordance with FASB ASC 605 “Revenue Recognition”, revenue is recognized when persuasive evidence of an agreement with the customer exists, products are shipped or title passes pursuant to the terms of the agreement with the customer, the amount due from the customer is fixed or determinable, collectability is reasonably assured, and there are no significant future performance obligations. | ||||||||
We recognize revenue when a fixed commitment to purchase the products is received, title or ownership has passed to the customer and we do not have any performance obligations remaining, such that the earnings process is complete. In most cases, we receive a purchase order from our customer specifying the products requested and delivery instructions. We recognize revenue upon our delivery or shipment of the products as specified in the purchase order. | ||||||||
In other cases where we have a contract which provides for a large number of products and few actual deliveries, the revenues are recorded each month as the products are produced and the risk of ownership passes to the customer upon pre-delivery acceptance. Prior to deliveries, our customer’s products are segregated from our inventory and not available for fulfilling other orders. | ||||||||
Our costs of sales are predominately comprised of the cost of raw materials and the costs and expenses associated with the production effort of the finished product. Currently, to manufacture our products, we lease a manufacturing facility, purchase the raw materials and employ the staffing and own the equipment necessary for our production processes. Previously under other arrangements, we either purchased and supplied the raw materials to the third-party manufacturer who we paid a per-pound cost to produce the finished product, or the third-party manufacturer sourced and paid for the raw materials and we purchased the finished product from them at a cost per unit, and we were responsible for any costs of raw materials purchased by the third-party manufacturer in excess of the arrangement’s reference prices and we shared any savings for purchases below the reference prices. We believe our current manufacturing processes allow us to more efficiently control the quality and costs of production. Our costs of sales may vary significantly as a result of the variability in the cost of our raw materials and the efficiency with which we plan and execute our manufacturing processes. | ||||||||
Historically, we have not had significant warranty replacements, and do not believe we will in the future. | ||||||||
(g) | Income Taxes | |||||||
Income tax provision consists of federal and state corporate income taxes resulting from our operations in the United States. The income tax provision differs from the expected tax provisions computed by applying the U.S. Federal statutory rate to loss before income taxes primarily because we have historically maintained a full valuation allowance on our deferred tax assets and to a lesser extent because of the impact of state income taxes. As described in our Form 10-K for the year ended December 31, 2012, we maintain a full valuation allowance in accordance with ASC 740, “Accounting for Income Taxes”, on our net deferred tax assets. Until we achieve and sustain an appropriate level of profitability, we plan to maintain a valuation allowance on our net deferred tax assets. | ||||||||
In the past, we were not current with our filings of our federal and state income tax returns. Due to these delinquent filings, our income tax returns are open to examination by federal and state authorities, generally for the tax years ended September 30, 2008 and later. | ||||||||
(h) | Derivative Instruments | |||||||
For derivative instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in fair value recognized in earnings each reporting period as a charge or credit to other expenses. We use the Monte Carlo simulation, and other models, as appropriate to value the derivative instruments at inception and subsequent valuation dates and the value is re-assessed at the end of each reporting period, in accordance with FASB ASC Topic 815, “Derivatives and Hedging”. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | ||||||||
(i) | Share-Based Compensation | |||||||
We record share-based compensation for transactions in which we exchange our equity instruments (shares of common stock, options and warrants) for services of employees, consultants and others based on the fair value of the equity instruments issued on the measurement date. The fair value of common stock awards is based on the observed market value of our stock. We calculate the fair value of options and warrants using the Black-Scholes option pricing model. Expense is recognized, net of expected forfeitures, over the period of performance. When the vesting of an award is subject to performance conditions, no expense is recognized until achievement of the performance condition is deemed to be probable. Awards to consultants are marked to market at each reporting period as they vest, and the resulting value is recognized as an adjustment against our earnings for the period. | ||||||||
(j) | Loss Per Share | |||||||
Basic loss per share are computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share, includes the effects of the potential dilution of outstanding options, warrants, and convertible debt on our common stock as determined using the treasury stock method. For the three and nine months ended September 30, 2013 and 2012, there were no dilutive effects of such securities because we incurred a net loss in each period. As of September 30, 2013, we have approximately 66 million potential common shares issuable under our convertible instruments, warrant and stock option agreements. | ||||||||
(k) | Fair Value of Financial Instruments | |||||||
Fair value is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. We have categorized our financial assets and liabilities that are recurring at fair value into a three-level hierarchy in accordance with these provisions. | ||||||||
(l) | Concentration of Credit Risk | |||||||
We maintain our cash with two major U.S. domestic banks. The amount held in both of the banks exceeds the insured limit of $250,000 from time to time. The amount which exceeded the insured limit was approximately $0.3 million at September 30, 2013 and December 31, 2012. We have not incurred losses related to these deposits. | ||||||||
(m) | Use of Estimates | |||||||
The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. | ||||||||
Going_Concern
Going Concern | 9 Months Ended |
Sep. 30, 2013 | |
Going Concern [Abstract] | ' |
Going Concern | ' |
Note 2 - Going Concern | |
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates our continuation as a going concern. At September 30, 2013, we had working capital of $1.2 million, a stockholders’ deficit of $9.5 million and had accumulated losses of $39.4 million and net cash used in operations for the nine months ended September 30, 2013 was $3.8 million. This raises substantial doubt about our ability to continue as a going concern. In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon our ability to meet our financing requirements, either by raising additional capital or the success of our business plan and future operations. We may seek additional means of financing to fund our business plan. There is no assurance that we will be successful in raising sufficient funds to assure our eventual profitability. We believe that actions planned and presently being taken to revise our operating and financial requirements provide us the opportunity to continue as a going concern. The financial statements do not include any adjustments that might result from these uncertainties. | |
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventories | ' | |||||||
Note 3 - Inventories | ||||||||
Inventories are priced at the lower of cost or market and consist primarily of raw materials and finished products. | ||||||||
Our inventories consisted of: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Finished products | $ | 2,913,368 | $ | 2,509,797 | ||||
Production materials | 712,453 | 579,156 | ||||||
Total inventories | $ | 3,625,821 | $ | 3,088,953 | ||||
Since we had engage third-party contract manufacturers to produce our finished products, and in certain situations we provide them the raw materials, certain of our inventories at September 30, 2013 and December 31, 2012 were located at the third-party contract manufacturing locations, as well as our leased facility. We carry adequate insurance for loss on this inventory. | ||||||||
Accrued_Liabilities
Accrued Liabilities | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accrued Liabilities [Abstract] | ' | |||||||
Accrued Liabilities | ' | |||||||
Note 4 - Accrued Liabilities | ||||||||
The components of accrued liabilities are: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Royalties | $ | 229,045 | $ | 351,846 | ||||
10% convertible preferred stock dividends | 176,990 | - | ||||||
Interest | 181,509 | - | ||||||
Payroll | 55,790 | 77,757 | ||||||
Miscellaneous | 9,828 | 16,831 | ||||||
Total accrued liabilities | $ | 653,162 | $ | 446,434 | ||||
Derivative_Liabilities
Derivative Liabilities | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Derivative Liabilities [Abstract] | ' | ||||||||||||||||
Derivative Liabilities | ' | ||||||||||||||||
Note 5 - Derivative Liabilities | |||||||||||||||||
8% Convertible Promissory Notes – Conversion Option and Warrants | |||||||||||||||||
During the nine months ended September 30, 2013, we issued 8% convertible promissory notes (the “8% Notes”). See Note 6 for further discussion. The 8% Notes met the definition of a hybrid instrument, as defined in ASC Topic 815 “Derivatives and Hedging” (“ASC 815”). The hybrid instrument was composed of a debt instrument, as the host contract, and an option to convert the debt outstanding under the terms of the 8% Notes, into shares of our common stock. The 8% Notes were issued with a warrant to purchase shares of our common stock. Both the conversion option and the warrants are derivative liabilities. The conversion option derives its value based on the underlying fair value of the shares of our common stock which is not clearly and closely related to the underlying host debt instrument since the economic characteristics and risk associated with the conversion option derivative are based on the common stock fair value. The warrants do not qualify as equity under ASC 815. Accordingly, changes in the fair value of these warrant and conversion option derivative liabilities are immediately recognized in earnings and classified as a change in fair value in the statement of operations. | |||||||||||||||||
We determined the fair value of the conversion option and warrant derivative liabilities on the various dates of issuance and recorded these fair values as a discount to the debt and a derivative liability. The aggregate fair value of the conversion options on September 30, 2013 was $1.1 million, and the decrease in fair value of $0.5 million for the three months ended September 30, 2013 was recorded as a change in derivative liability in the statement of operations. The aggregate fair value of the warrants on September 30, 2013 was $270,000. The decrease in fair value of $270,000 for the three months ended September 30, 2013 was recorded as a change in fair value of derivative liability in the statement of operations. | |||||||||||||||||
The estimated fair values of the derivative liabilities for the conversion options on the 8% Notes issued during the nine months ended September 30, 2013 and the warrants issued therewith, were computed by a third party using Monte Carlo simulations based on the following ranges for each assumption: | |||||||||||||||||
At Issuances | September 30, | ||||||||||||||||
2013 | |||||||||||||||||
Volatility | 50 | % | 45 | % | |||||||||||||
Risk-free interest rate | 0.4 | % | 0.3 | % | |||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Expected life, in years | 2.4 to 2.6 | 1.9 | |||||||||||||||
Placement Agent Warrants | |||||||||||||||||
We issued warrants to the placement agents for the sale of our 10% convertible preferred stock, to purchase 58,352 shares of 10% convertible preferred stock at $10 per share. Since the underlying 10% convertible preferred stock is redeemable by the holder after three years from the date of purchase, we recorded the fair value of the warrants at issuance, as a liability on our balance sheet and we re-measure this warrant liability at each reporting date, with changes in fair value recognized in earnings each reporting period. We estimated the initial fair value of this derivative liability by using the Black-Scholes option pricing model with the following assumptions - (i) no dividend yield, (ii) an expected volatility of 129%, (iii) a risk-free interest rate 2.1%, and (iv) an expected life of five years. The fair value of the warrant liability at September 30, 2013 and December 31, 2012 was $122,357 and $81,716, respectively and we recognized the change in fair value of the warrant liability for the nine months ended September 30, 2013 of $40,641 in our statement of operations. | |||||||||||||||||
Accounting for Fair Value Measurements | |||||||||||||||||
We are required to disclose the fair value measurements required by Accounting for Fair Value Measurements. The derivative liabilities recorded at fair value in the balance sheet as of September 30, 2013 and December 31, 2012 is categorized based upon the level of judgment associated with the inputs used to measure its fair value. Hierarchical levels, defined by Accounting for Fair Value Measurements are directly related to the amount of subjectivity associated with the inputs to fair valuation of the liability is as follows: | |||||||||||||||||
Level 1 - | Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; | ||||||||||||||||
Level 2 - | Inputs other than Level 1 inputs that are either directly or indirectly observable; and | ||||||||||||||||
Level 3 - | Unobservable inputs, for which little or no market data exist, therefore requiring an entity to develop its own assumptions. | ||||||||||||||||
Additional Disclosures Regarding Fair Value Measurements | |||||||||||||||||
The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term maturity of those items. | |||||||||||||||||
The fair value of our debt, which approximates its carrying value, as of September 30, 2013 and December 31, 2012 was estimated at $7.9 million and $5.7 million, respectively. Factors that we considered when estimating the fair value of our debt include market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and term of debt. The level would be considered as level 2. | |||||||||||||||||
The following table summarizes the financial liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: | |||||||||||||||||
As of September 30, 2013 | |||||||||||||||||
Derivative | |||||||||||||||||
Liabilities at | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | - | $ | - | $ | 1,060,000 | $ | 1,060,000 | |||||||||
Warrants | - | - | 270,000 | 270,000 | |||||||||||||
Derivative liabilities - Current | - | - | 1,330,000 | 1,330,000 | |||||||||||||
Placement agent warrants - non-current | - | - | 122,357 | 122,357 | |||||||||||||
Derivative liabilities - Total | $ | - | $ | - | $ | 1,452,357 | $ | 1,452,357 | |||||||||
As of December 31, 2012 | |||||||||||||||||
Derivative | |||||||||||||||||
Liabilities at | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | - | $ | - | $ | 610,000 | $ | 610,000 | |||||||||
Warrants | - | - | 220,000 | 220,000 | |||||||||||||
Derivative liabilities - Current | - | - | 830,000 | 830,000 | |||||||||||||
Placement agent warrants - non-current | - | - | 81,716 | 81,716 | |||||||||||||
Derivative liabilities - Total | $ | - | $ | - | $ | 911,716 | $ | 911,716 | |||||||||
The following tables are a reconciliation of the derivative liabilities for which Level 3 inputs were used in determining fair value during the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
For the Three Months Ended September 30, 2013 | |||||||||||||||||
Credited to | |||||||||||||||||
Common | |||||||||||||||||
Balance - | Fair Value of | Stock | Balance - | ||||||||||||||
July 1, | Derivative | Change in | Upon Issuance | September 30, | |||||||||||||
2013 | Liability | Fair Value | of Warrants | 2013 | |||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | 1,520,000 | $ | - | $ | -460,000 | $ | - | $ | 1,060,000 | |||||||
Warrants | 540,000 | - | -270,000 | - | 270,000 | ||||||||||||
Derivative liabilities - current | 2,060,000 | - | -730,000 | - | 1,330,000 | ||||||||||||
Placement agent warrants - non-current | 122,357 | - | - | - | 122,357 | ||||||||||||
Derivative liabilities - total | $ | 2,182,357 | $ | - | $ | -730,000 | $ | - | $ | 1,452,357 | |||||||
For the Three Months Ended September 30, 2012 | |||||||||||||||||
Credited to | |||||||||||||||||
Common | |||||||||||||||||
Balance - | Fair Value of | Stock | Balance - | ||||||||||||||
July 1, | Derivative | Change in | Upon Issuance | September 30, | |||||||||||||
2012 | Liability | Fair Value | of Warrants | 2012 | |||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | - | $ | 982,932 | $ | -262,932 | $ | - | $ | 720,000 | |||||||
Warrants | - | 427,888 | -127,888 | - | 300,000 | ||||||||||||
Derivative liabilities - current | - | 1,410,820 | -390,820 | - | 1,020,000 | ||||||||||||
Placement agent warrants - non-current | 140,458 | - | -54,864 | - | 85,594 | ||||||||||||
Derivative liabilities - total | $ | 140,458 | $ | 1,410,820 | $ | -445,684 | $ | - | $ | 1,105,594 | |||||||
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Credited to | |||||||||||||||||
Fair Value of | Common Stock | Balance - | |||||||||||||||
Balance - | Derivative | Change in | Upon Issuance | September 30, | |||||||||||||
January 1, 2013 | Liability | Fair Value | of Warrants | 2013 | |||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | 610,000 | $ | 545,426 | $ | -95,426 | $ | - | $ | 1,060,000 | |||||||
Warrants | 220,000 | 249,151 | -199,151 | - | 270,000 | ||||||||||||
Derivative liabilities - current | 830,000 | 794,577 | -294,577 | - | 1,330,000 | ||||||||||||
Placement agent warrants - non-current | 81,716 | 40,641 | - | 122,357 | |||||||||||||
Derivative liabilities - total | $ | 911,716 | $ | 794,577 | $ | -253,936 | $ | - | $ | 1,452,357 | |||||||
For the Nine Months Ended September 30, 2012 | |||||||||||||||||
Credited to | |||||||||||||||||
Fair Value of | Common Stock | Balance - | |||||||||||||||
Balance - | Derivative | Change in | Upon Issuance | September 30, | |||||||||||||
January 1, 2012 | Liability | Fair Value | of Warrants | 2012 | |||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | - | $ | 982,932 | $ | -262,932 | $ | - | $ | 720,000 | |||||||
Warrants | - | 427,888 | -127,888 | - | 300,000 | ||||||||||||
12% convertible revolving credit agreement: | |||||||||||||||||
Conversion option | 113,271 | - | -113,271 | - | - | ||||||||||||
10% convertible preferred stock: | |||||||||||||||||
Warrants | 1,875,463 | - | - | -1,875,463 | - | ||||||||||||
10% convertible debentures: | |||||||||||||||||
Warrants | 70,343 | - | -13,309 | -57,034 | - | ||||||||||||
Derivative liabilities - current | 2,059,077 | 1,410,820 | -517,400 | -1,932,497 | 1,020,000 | ||||||||||||
Placement agent warrants - non-current | 487,555 | - | -401,961 | - | 85,594 | ||||||||||||
Derivative liabilities - total | $ | 2,546,632 | $ | 1,410,820 | $ | -919,361 | $ | -1,932,497 | $ | 1,105,591 | |||||||
8_Convertible_Promissory_Notes
8% Convertible Promissory Notes | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Convertible Debt [Abstract] | ' | |||||||||||
8% Convertible Promissory Notes | ' | |||||||||||
Note 6 – 8% Convertible Promissory Notes | ||||||||||||
The components of our convertible debt are summarized as follows: | ||||||||||||
Due | September 30, | December 31, | ||||||||||
2013 | 2012 | |||||||||||
8% convertible promissory notes | Beginning August 2017 | $ | 8,878,188 | $ | 7,128,187 | |||||||
Less debt discount | -1,837,076 | -1,457,025 | ||||||||||
Total – long term debt | $ | 7,041,112 | $ | 5,671,162 | ||||||||
During the nine months ended September 30, 2013 pursuant to the same terms of our existing 8% convertible promissory notes (the “8% Notes”), we issued and sold to Samuel Rose, Allen Kronstadt, MLTM, Lending , LLC and the Judy Lenkin Lerner Revocable Trust (see Note 14 regarding related party transactions) (i) an aggregate principal amount of $1,750,001 of our 8% Notes which are initially convertible into shares of our common stock, at a conversion price equal to $0.40 per share of common stock, subject to adjustment as provided on the terms of the 8% Notes, and (ii) associated warrants to purchase, in the aggregate, 4,375,004 shares of common stock, subject to adjustment as provided on the terms of the warrants. | ||||||||||||
The 8% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of five years from date of issuance or upon the occurrence of an Event of Default (as defined in the 8% Notes). We may prepay the 8% Notes, in whole or in part, upon 60 calendar days prior written notice to the holders thereof. Interest accrues on the 8% Notes at a rate of 8.0% per annum, payable during the first three years that the 8% Notes are outstanding in shares of common stock, valued at the weighted average price of a share of common stock for the twenty consecutive trading days prior to the interest payment date, pursuant to the terms of the 8% Notes. During the fourth and fifth years that the 8% Notes are outstanding, interest that accrues under the 8% Notes shall be payable in cash. | ||||||||||||
Accrued but unpaid interest due on September 30, 2013 for the three months ended September 30, 2013 of $181,509 was paid with 355,903 shares of common stock, in lieu of cash, which were issued subsequent to September 30, 2013. | ||||||||||||
The warrants are exercisable at an exercise price of $0.60 per share of common stock, subject to adjustment as provided for by the terms thereof, for a period commencing on the date of issuance and ending on the earlier to occur of the date that is (i) three years after the date upon which the weighted average price of a share of common stock for the 90 consecutive trading days prior to such date is at least $2.00 per share, and (ii) five years after the date on which the 8% Note to which the applicable warrant is related has been repaid in full. | ||||||||||||
The issuance costs of the 8% Notes, plus the fair values of the conversion option derivative liability and the warrants derivative liability were recorded as a discount to the 8% Notes. During the nine months ended September 30, 2013, the fair value of the conversion options and related warrants for the 8% Notes issued during this period was $794,576, which was recorded as an increase to the debt discount. This debt discount is amortized to other expenses in our statement of operations over the initial term of the 8% Notes. During the nine months ended September 30, 2013, we amortized $414,525 of the discount to other expenses in our statement of operations. There was no such transaction for the corresponding period in 2012. See Note 5 for further discussion of these derivative liabilities. | ||||||||||||
10_Convertible_Redeemable_Pref
10% Convertible Redeemable Preferred Stock | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Features Of Convertible Preferred Stock [Abstract] | ' | |||||||
10% Convertible Redeemable Preferred Stock | ' | |||||||
Note 7 - 10% Convertible Redeemable Preferred Stock | ||||||||
The components of our Preferred Stock, classified as temporary equity in our balance sheet, are summarized as follows: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
10% convertible preferred stock - face value | $ | 7,021,230 | $ | 7,060,230 | ||||
Unamortized discount | -452,914 | -1,137,618 | ||||||
10% convertible preferred stock, net of discount | $ | 6,568,316 | $ | 5,922,612 | ||||
During the year ended December 31, 2011, we designated 880,000 shares of preferred stock as 10% convertible redeemable preferred stock (the “Preferred Stock”). The Preferred Stock has a stated value (the “Stated Value”) of $10.00 per share. The Preferred Stock and any dividends thereon may be converted into shares of our common stock at any time by the holder at a conversion rate of $1.00 per share, as adjusted (the “Conversion Rate”). The holders of the Preferred Stock are entitled to receive dividends at the rate of ten percent per annum payable quarterly. Dividends shall not be declared, paid or set aside for any series or other class of stock ranking junior to the Preferred Stock, until all dividends have been paid in full on the Preferred Stock. The dividends on the Preferred Stock are payable, at our option, in cash, if permissible, or in shares of common stock. The Preferred Stock is not subject to any anti-dilution provisions other than for stock splits and stock dividends or other similar transactions. The holders of the Preferred Stock shall have the right to vote with our stockholders in any matter. The number of votes that may be cast by a holder of our Preferred Stock shall equal the Stated Value of the Preferred Stock purchased divided by the Conversion Rate. The Preferred Stock shall be redeemable for cash by the holder any time after the three-year anniversary from the initial purchase. The Preferred Stock may be converted by us, provided that the variable weighted average price of our common stock has closed at $4.00 per share or greater for sixty consecutive trading days and during such sixty-day period, the shares of common stock issuable upon conversion of the Preferred Stock have either been registered for resale or are issuable without restriction pursuant to Rule 144 of the Securities Act of 1933, as amended. | ||||||||
The Preferred Stock when issued was a hybrid instrument comprised of (i) a preferred stock, (ii) an option to convert the preferred stock into shares of our common stock (the “Conversion Option”) and (iii) a warrant to purchase shares of our common stock to be issued if a certain revenue milestone (the “Revenue Milestone”) was not achieved (the “Make Good Warrant”), as an embedded derivative liability. The Conversion Option derives its value based on the underlying fair value of the shares of our common stock as does the Preferred Stock, and therefore is clearly and closely related to the underlying preferred stock. Since, at issuance the number of shares of common stock which the Make Good Warrant would be exercisable into, was not determinable, and since the fair value of the Make Good Warrants was deemed improbable, we did not record a derivative liability. See Note 6 for further discussion on these derivative liabilities. | ||||||||
Since our Revenue Milestone for the twelve months ended December 31, 2011 was not achieved (i) the Conversion Rate was reduced to $1.00, and (ii) each holder received a Make Good Warrant to purchase a number of shares of our common stock equal to fifty percent of the number of shares of common stock issuable upon conversion of the Preferred Stock at the Conversion Rate. The Make Good Warrants expire December 31, 2015, have an initial exercise price of $1.00 per share and provide for cashless exercise at any time the underlying shares of common stock have not been registered for resale under the Securities Act of 1933 or are issuable without restriction pursuant to Rule 144 of the Securities Act. | ||||||||
During March and April 2011, we sold 759,773 shares of Preferred Stock at a price per share of $10, for gross proceeds of $7,597,730. We paid commissions, legal fees and other expenses of issuance of approximately $828,300, which has been recorded as a discount and deducted from the face value of the Preferred Stock. At issuance of the Preferred Stock, we attributed a conversion option to the Preferred Stock based upon the difference between the Conversion Rate at the time of issuance and the closing price of our common stock on the date of issuance, which was recorded as a discount and deducted from the face value of the Preferred Stock. Pursuant to the Make Good adjustment of the Conversion Rate to $1.00, at December 31, 2011 the conversion option was recalculated as if the $1.00 Conversion Rate was in effect at issuance which amounted to $2.1 million, and the amortization of the related discount was adjusted for the year ended December 31, 2011. These discounts are amortized over three years consistent with the initial redemption terms, as a charge to additional paid-in capital, due to our deficit in retained earnings. During the three and nine months ended September 30, 2013, we amortized $228,946 and $684,704, respectively to additional paid-in capital. For the corresponding periods in 2012 we amortized $268,425 and $811,452, respectively to additional paid-in capital. At September 30, 2013, the unamortized Preferred Stock discount balance was $452,914. | ||||||||
During the nine months ended September 30, 2013 and the year ended December 31, 2012, we issued 39,000 and 462,500 shares of our common stock, respectively upon conversion of 3,900 and 46,250 shares of our Preferred Stock, respectively. | ||||||||
The Preferred Stock outstanding at September 30, 2013, was convertible into 7.0 million shares of our common stock. | ||||||||
Since the Preferred Stock at September 30, 2013 may ultimately be redeemed at the option of the holder, the carrying value of the Preferred Stock, net of unamortized discount has been classified as temporary equity. | ||||||||
Our dividend payable on September 30, 2013 was paid with 347,039 shares of common stock in lieu of cash, which were issued subsequent to September 30, 2013, and with a value of $176,990. | ||||||||
Placement Agent Warrants | ||||||||
We issued warrants to the placement agents for the sale of our Preferred Stock, to purchase 58,352 shares of Preferred Stock at $10 per share. Since at issuance, the number of shares of common stock which these warrants would be exercisable into was not determinable, we recorded the fair value of the warrants at issuance, as a liability on our balance sheet and we re-value this warrant liability at each reporting date, with changes in fair value recognized in earnings each reporting period. See Note 5 for further discussion of derivative liabilities. | ||||||||
Stockholders_Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity | ' |
Note 8 - Stockholders’ Equity | |
We are authorized to issue up to 100,000,000 shares of common stock, no par value, and up to 2,500,000 shares of preferred stock, no par value. There were 30,315,663 and 28,820,173 shares of common stock issued and outstanding at September 30, 2013 and December 31, 2012, respectively. During the year ended December 31, 2011, we designated 880,000 shares of preferred stock as 10% convertible preferred stock and had issued and outstanding 702,123 and 706,023 shares of 10% convertible preferred stock at September 30, 2013 and December 31, 2012, respectively. We may issue additional shares of preferred stock, with dividend requirements, voting rights, redemption prices, liquidation preferences and premiums, conversion rights and other terms without a vote of the shareholders. | |
Common Stock Issuances for the Nine Months Ended September 30, 2013 | |
During February 2013, we issued 39,000 shares of common stock upon conversion of 3,900 shares of our 10% convertible preferred stock, with a value of $39,000. | |
During March 2013, we issued 125,000 shares of common stock to a consultant. The shares of common stock had a fair value on the date of issuance of $78,750, which was charged to general and administrative expenses in our statement of operations upon issuance. | |
During April 2013, we issued 266,954 shares of common stock as payment of our dividends on our 10% convertible preferred stock, in lieu of cash, with a fair value on the date of issue of $181,529. | |
During April 2013, we issued 252,639 shares of common stock as payment of our interest on our 8% convertible promissory notes, in lieu of cash, with a fair value on the date of issue of $171,795. | |
During May 2013, we issued 100,000 shares of common stock to a consultant. The shares of common stock had a fair value on the date of issuance of $61,000, which was charged to general and administrative expenses in our statement of operations upon issuance. | |
During July 2013, we issued 342,857 shares of common stock as payment of our dividends on our 10% convertible preferred stock, in lieu of cash, with a fair value on the date of issue of $175,050. | |
During July 2013, we issued 369,040 shares of common stock as payment of our interest on our 8% convertible promissory notes, in lieu of cash, with a fair value on the date of issue of $188,210. | |
Recovery of Stockholder Short Swing Profit | |
In April 2006, we commenced an action against Tonga Partners, L.P. (“Tonga”), Cannell Capital, L.L.C. and J. Carlo Cannell in the United States District Court of New York, for disgorgement of short-swing profits pursuant to Section 16 of the Securities Exchange Act of 1934, as amended. On November 10, 2004, Tonga converted a convertible promissory note into 1,701,341 shares of common stock, and thereafter, between November 10 and November 15, 2004, sold such shares for short-swing profits. In September 2008, the District Court granted us summary judgment against Tonga for disgorgement of short-swing profits in the amount of $5.0 million. The defendants appealed the order granting the summary judgment to the U.S. Court of Appeals for the 2nd Circuit. The three judge panel held in our favor. The defendants petitioned the Court for a full judge review. The petition was denied. The defendants’ petition to the United States Supreme Court for a writ of certiorari was denied. As a result, during the three months ended June 30, 2013, we received $3.1 million representing the disgorgement of the short-swing profits less legal fees. This amount was recorded as additional paid-in capital. | |
Sharebased_Compensation
Share-based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | |||||||||||||
Share-based Compensation | ' | |||||||||||||
Note 9 - Share-based Compensation | ||||||||||||||
Options | ||||||||||||||
We have two nonqualified stock option plans approved by shareholders with an aggregate of 950,000 shares remaining available for grant under one plan as of September 30, 2013. The other plan terminated during the three months ended September 30, 2013. The exercise price of the options are established by the Board of Directors on the date of grant and are generally equal to the market price of the stock on the grant date. The Board of Directors may determine the vesting period for each new grant. Options issued are exercisable in whole or in part for a period as determined by the Board of Directors of up to ten years from the date of grant. | ||||||||||||||
We estimate the fair value of each option award at the grant date by using the Black-Scholes option pricing model. We did not award any options during the three or nine months ended September 30, 2013. | ||||||||||||||
Certain options awarded prior to the year ended December 31, 2012 are amortized over certain future vesting periods or contained performance-based vesting terms, and consequently during the nine months ended September 30, 2013, we charged to operating expenses $5,894 for these options. | ||||||||||||||
The following table summarizes our stock option activity for the nine months ended September 30, 2013: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
Balance, January 1, 2013 | 5,710,125 | $ | 1.1 | |||||||||||
Granted | - | - | ||||||||||||
Exercised | - | - | ||||||||||||
Expired | -962,076 | 0.13 | ||||||||||||
Balance, September 30, 2013 | 4,748,049 | $ | 1.3 | |||||||||||
The following table summarizes options outstanding at September 30, 2013: | ||||||||||||||
Weighted- | Weighted- | |||||||||||||
Number | Average | Average | Aggregate | |||||||||||
of Shares | Exercise | Remaining | Intrinsic | |||||||||||
Issuable | Price | Term (Years) | Value | |||||||||||
Exercisable | 3,348,049 | $ | 1.11 | 2.4 | $ | 6,000 | ||||||||
Not vested | 1,400,000 | 1.77 | 3.8 | - | ||||||||||
Balance, September 30, 2013: | 4,748,049 | $ | 1.3 | 2.8 | $ | 6,000 | ||||||||
Warrants | ||||||||||||||
From time to time, we compensate consultants, advisors and investors with warrants to purchase shares of our common stock, in lieu of cash payments. Net share settlement is available to warrant holders. | ||||||||||||||
The following table sets forth our warrant activity during the nine months ended September 30, 2013: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
Balance, January 1, 2013 | 27,353,151 | $ | 0.76 | |||||||||||
Granted | 4,375,004 | 0.6 | ||||||||||||
Exercised | - | - | ||||||||||||
Cancelled | -400,000 | 1.79 | ||||||||||||
Balance, September 30, 2013 | 31,328,155 | $ | 0.73 | |||||||||||
The following table sets forth the warrants outstanding at September 30, 2013: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
10% convertible debenture - bonus warrants | 483,357 | $ | 0.6 | |||||||||||
10% convertible preferred stock – warrants | 3,761,365 | 1 | ||||||||||||
8% convertible promissory notes – warrants | 22,195,474 | 0.6 | ||||||||||||
Consultants | 4,887,959 | 1.12 | ||||||||||||
Total | 31,328,155 | $ | 0.73 | |||||||||||
During the nine months ended September 30, 2013, pursuant to our 8% convertible promissory notes, we issued warrants to purchase 4,375,004 shares of our common stock pursuant to our issuance and sale of our 8% convertible promissory notes, at an initial exercise price of $0.60 per share. These warrants had fair values on their dates of issuances of $249,151 which was recorded as a credit to derivative liabilities and a charge to debt discount associated with our 8% convertible promissory notes. See Notes 5 and 6 for further discussion of these warrants. The estimated fair value of the warrants was computed by a third party using Monte Carlo simulation models. | ||||||||||||||
In addition, the fair value of a previously issued warrant which is being amortized over a service period spanning multiple reporting periods, was revalued using the Black-Scholes option pricing model, at the end of each reporting period. No revaluation was necessary for the three months ended September 30, 2013 and during the nine months ended September 30, 2013, we decreased the fair value by $2,990 and recorded a credit in our statement of operations. | ||||||||||||||
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Note 11 - Income Taxes | |
The income tax provision consists of federal and state corporate income taxes resulting from our operations in the United States. The income tax provision differs from the expected tax provisions computed by applying the U.S. Federal statutory rate to loss before income taxes primarily because we have historically maintained a full valuation allowance on our deferred tax assets. We expect income tax expense to vary each reporting period depending upon taxable income fluctuations and the availability of tax benefits from net loss carryforwards. | |
As of December 31, 2012, we had U.S. federal net operating loss carryforwards of approximately $17.4 million, which, if unused, expire through 2032. We do not believe that we have had a change in control as defined by Section 382 of the Internal Revenue Code, which could potentially limit our ability to utilize these net operating losses. At December 31, 2012, we recorded a valuation allowance against the full amount of our deferred tax assets, as our management believes it is uncertain that they will be fully realized. If we determine in the future that we will be able to realize all or a portion of our net operating loss, an adjustment to our net operating loss carryforwards would increase net income in the period in which we make such a determination. | |
Business_Concentration
Business Concentration | 9 Months Ended |
Sep. 30, 2013 | |
Risks and Uncertainties [Abstract] | ' |
Business Concentration | ' |
Note 12 - Business Concentration | |
During the nine months ended September 30, 2013 and 2012, we sold our products to 20 and 12 different customers, respectively and with sales of our ECOTRAX rail ties to one customer representing approximately 53% and 73%, respectively of our total revenue. | |
During the nine months ended September 30, 2013 and 2012, we sold our products to 57 and 25 different customers, respectively and with sales of our ECOTRAX rail ties to one customer representing approximately 46% and 65%, respectively of our total revenue. | |
Our purchases of raw materials and contract manufacturing services and products, was concentrated in approximately twenty to thirty vendors, during the three and nine months ended September 30, 2013 and 2012. | |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Note 13 - Commitments and Contingencies | |
Operating leases | |
We lease our office space in New Providence, New Jersey pursuant to a three-year lease agreement for monthly lease payments of approximately $3,700. These premises serve as our corporate headquarters. The lease is currently in its second one-year extension which expires on October 31, 2014. Facility rent expense totaled approximately $11,100 and $11,300 for the three months ended September 30, 2013 and 2012, respectively, and for the nine months ended September 30, 2013 and 2012 totaled approximately $33,100 and $33,900, respectively. | |
Royalty Agreements | |
In February 2007, we acquired an exclusive, royalty-bearing license in specific but broad global territories to make, have made, use, sell, offer for sale, modify, develop, import, and export products made using patent applications owned by Rutgers. We are using these patented technologies in the production of our composite rail ties and structural building products. The term of the license agreement with Rutgers runs until the expiration of the last-to-expire issued patent within the Rutgers’ technologies licensed under this license agreement, unless terminated earlier. | |
We are obligated to pay Rutgers royalties ranging from 1.5% to 3.0% on various product sales, subject to certain minimum payments each year and to reimburse Rutgers for certain patent defense costs in the case of patent infringement claims made against the Rutgers patents. For the three months ended September 30, 2013 and 2012, we accrued royalties payable to Rutgers on product sales of $19,195 and $13,200, respectively. In addition, for the three months ended September 30, 2013 and 2012, since we did not meet the minimum royalty due pursuant to the license, we accrued $30,805 and $66,800, respectively which was charged to operating expenses in our statement of operations. We also pay annual membership dues to Rutgers Center for Advanced Materials via Immiscible Polymer Processing, or AMIPP, a department of Rutgers. The membership allows us to use AMIPP for basic research and development at no additional cost, with access to more comprehensive R&D services available to us for fees determined on a per-project basis. | |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 14 - Related Party Transactions | |
Allen Kronstadt | |
Allen Kronstadt beneficially owns in excess of 5% of our outstanding voting securities and was appointed to our Board of Directors on September 11, 2012 pursuant to the terms of the Purchase Agreement. Effective April 25, 2012, we entered into a Memorandum of Understanding with Mr. Kronstadt and several other investors and accordingly we issued to Mr. Kronstadt a demand promissory note in the principal amount of $1,666,667 with interest at a rate of 8.0% per annum. At the initial closing under the Purchase Agreement, in consideration for the issuance of the 8% convertible promissory note, (the “8% Notes”) and associated warrants to purchase Common Stock (the “8% Note Warrants”) at such closing, Mr. Kronstadt converted the aggregate principal amount outstanding, together with all accrued and unpaid interest, under the demand note and paid us in cash for the balance. | |
Pursuant to the Purchase Agreement, as of September 30, 2013, we have issued and sold to Mr. Kronstadt an aggregate principal amount of $2,959,297 of our 8% Notes and 8% Note Warrants to purchase, in the aggregate, 7,398,243 shares of Common Stock, subject to adjustment as provided on the terms of the 8% Note Warrants. As of September 30, 2013, Mr. Kronstadt has received an aggregate of 353,547 shares of Common Stock as interest payments under the 8% Notes that he holds. | |
The 8% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of five years from date of issuance or upon the occurrence of an Event of Default (as defined in the 8% Notes). We may prepay the 8% Notes, in whole or in part, upon 60 calendar days prior written notice to the holders thereof. Interest accrues on the 8% Notes at a rate of 8.0% per annum, payable during the first three years that the 8% Notes are outstanding in shares of Common Stock, valued at the weighted average price of a share of Common Stock for the twenty consecutive trading days prior to the interest payment date, pursuant to the terms of the 8% Notes. During the fourth and fifth years that the 8% Notes are outstanding, interest that accrues under the 8% Notes shall be payable in cash. | |
The 8% Note Warrants are exercisable at an exercise price of $0.60 per share of Common Stock, subject to adjustment as provided for by the terms thereof, for a period commencing on the date of issuance and ending on the earlier to occur of the date that is (i) three years after the date upon which the weighted average price of a share of Common Stock for the 90 consecutive trading days prior to such date is at least $2.00 per share, and (ii) five years after the date on which the 8% Notes to which the applicable 8% Note Warrant is related has been repaid in full. | |
In connection with the entry into the Purchase Agreement, pursuant to the terms thereof, on August 24, 2012, we granted to the Investors (i) certain demand and piggyback registration rights with respect to the registration of certain Company securities under the Securities Act and the rules and regulations promulgated thereunder, and (ii) a security interest and lien in all of our assets and rights (including a security interest in all of the assets and rights of our subsidiary, Axion International, Inc.) to secure our obligations under the 8% Notes. | |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 15 – Subsequent Events | |
$3.2 Million Funding | |
On October 21, 2013, pursuant to the Note Purchase Agreement, dated August 24, 2012, (see Note 6 – 8% Convertible Promissory Notes), we issued and sold to MLTM Lending, LLC (“MLTM”), Samuel Rose (“Rose”), and Allen Kronstadt (“Kronstadt”) (collectively, the “Investors”) an aggregate principal amount of $596,992.80 of our 8.0% convertible promissory notes (the “8% Notes”) which are initially convertible into shares of our common stock, no par value (the “Common Stock”), at a conversion price equal to $0.40 per share of Common Stock, subject to adjustment as provided on the terms of the 8% Notes, and associated warrants (the “Warrants”) to purchase, in the aggregate, 1,492,482 shares of Common Stock, subject to adjustment as provided on the terms of the Warrants. In consideration for the issuance of the 8% Notes and the Warrants, the Investors paid us cash in the aggregate amount of $596,992.80. | |
The 8% Notes and the Warrants were offered and sold to the Investors in a private placement transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D promulgated thereunder. The Investors are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act. | |
The 8% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of October 21, 2018 or upon the occurrence of an Event of Default (as defined in the 8% Notes). We may prepay the 8% Notes, in whole or in part, upon 60 calendar days prior written notice to the holders thereof. Interest accrues on the 8% Notes at a rate of 8.0% per annum, payable during the first three years that the 8% Notes are outstanding in shares of Common Stock, valued at the weighted average price of a share of Common Stock for the twenty consecutive trading days prior to the interest payment date, pursuant to the terms of the 8% Notes. During the fourth and fifth years that the 8% Notes are outstanding, interest that accrues under the 8% Notes shall be payable in cash. | |
The Warrants are exercisable at an exercise price of $0.60 per share of Common Stock, subject to adjustment as provided for by the terms thereof, for a period commencing on the date of issuance and ending on the earlier to occur of the date that is (i) three years after the date upon which the weighted average price of a share of Common Stock for the 90 consecutive trading days prior to such date is at least $2.00 per share, and (ii) five years after the date on which the 8% Note to which the applicable Warrant is related has been repaid in full. | |
In addition, on October 21, 2013 and November 6, 2013, the Investors loaned the Company an aggregate principal amount of $2,603,007.20 pursuant to our secured promissory notes (the “Secured Notes”), each of which shall be exchanged by us on a future date, when the authorized shares of capital stock of the Company are available, for an 8% Note and Warrants, on the terms set forth in the Secured Notes. In connection with the issuance of the Secured Notes, we entered into an amendment to our existing Security Agreement with the Investors to provide that our obligations under the Secured Notes are secured by a security interest and lien in all of our assets and the assets of our wholly-owned subsidiaries. | |
The Secured Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of November 29, 2013 or upon the occurrence of an Event of Default (as defined in the Secured Notes). We may prepay the Secured Notes, in whole or in part, upon 5 calendar days prior written notice to the holders thereof. Interest accrues on the Secured Notes at a rate of 8.0% per annum, payable in arrears on the date the Secured Notes are repaid or prepaid in full. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Business and Basis of Financial Statement Presentation | ' | |||||||
(a) | Business and Basis of Financial Statement Presentation | |||||||
Axion International Holdings, Inc. (the “Company,” “we” or “us”) was formed in 1981. In November 2007, the Company entered into an Agreement and Plan of Merger, among the Company, Axion Acquisition Corp., a Delaware corporation and a newly created direct wholly-owned subsidiary of the Company (the “Merger Sub”), and Axion International, Inc., a Delaware corporation which incorporated on August 6, 2006 with operations commencing in November 2007 (“Axion”). On March 20, 2008 the Company consummated the merger (the “Merger”) of Merger Sub into Axion, with Axion continuing as the surviving corporation and a wholly-owned subsidiary of the Company. | ||||||||
We develop, manufacture, market and sell composite rail ties and structural building products, such as pilings, I-beams, T-beams and boards, which, based upon patented technology developed at Rutgers University, are fully derived from common recycled plastics and high-density polymers, such as polyethylene, polystyrene and polypropylene. These recycled plastics, which are combined with recycled plastic composites containing encapsulated fiberglass, achieve structural thickness and strength and are resistant to changing shape under constant stress. Our products, manufactured through an extrusion process, are eco-friendly, non-corrosive, moisture impervious, non-chemical leaching and insect and rot resistant. Our products possess superior lifecycles and generally have greater durability and require less maintenance than competitive products made from wood, steel or concrete. We market our products through two lines - ECOTRAX™, our line of rail ties, and STRUXURE™, our line of structural building products. | ||||||||
Our consolidated financial statements include the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with Rule S-X of the Securities and Exchange Commission and with the instructions to Form 10-Q, and accordingly, they do not include all of the information and footnotes which may be required by generally accepted accounting principles for complete financial statements. | ||||||||
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. However, the results from operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated December 31, 2012 financial statements and footnotes thereto included in the Company's Form 10-K filed with the SEC. | ||||||||
Cash and Cash Equivalents | ' | |||||||
(b) | Cash and Cash Equivalents | |||||||
For purposes of our balance sheet and statement of cash flows, we consider all highly liquid debt instruments, purchased as an investment, with an original maturity of three months or less to be cash equivalents. At September 30, 2013 and December 31, 2012, we maintained all of our cash in demand or interest-bearing accounts at commercial banks. | ||||||||
Allowance for Doubtful Accounts | ' | |||||||
(c) | Allowance for Doubtful Accounts | |||||||
We accrue a reserve on a receivable when, based upon the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. During the nine months ended September 30, 2013, we determined certain receivables which we had previously accrued a reserve for, were not collectible and wrote off the receivable balances against the reserve. We did not require an allowance for doubtful accounts at September 30, 2013, but at December 31, 2012 it was $131,996. | ||||||||
Property and Equipment | ' | |||||||
(d) | Property and Equipment | |||||||
Property and equipment are recorded at cost and depreciated and amortized using the straight-line method over estimated useful lives of two to twenty years. Costs incurred that extend the useful life of the underlying asset are capitalized and depreciated over the remaining useful life. Repairs and maintenance are charged directly to operations as incurred. | ||||||||
Our property and equipment is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Equipment | $ | 15,344 | $ | 13,754 | ||||
Machinery and equipment | 3,759,994 | 2,611,933 | ||||||
Purchased software | 145,623 | 129,753 | ||||||
Furniture and fixtures | 13,090 | 13,090 | ||||||
Subtotal – property and equipment, at cost | 3,934,051 | 2,768,530 | ||||||
Less accumulated depreciation | -910,920 | -763,315 | ||||||
Net property and leasehold improvements | $ | 3,023,131 | $ | 2,005,215 | ||||
Depreciation expense during the three and nine months ended September 30, 2013 was $75,038 and $147,605, respectively, and for the corresponding periods in 2012, was $16,972 and $90,163, respectively. Of the depreciation expense during the three and nine months ended September 30, 2013, $70,485 and $134,813, respectively was charged to production and the remainder to operating expenses. For the corresponding periods of 2012, $13,179 and $82,356, respectively was charged to production. | ||||||||
Exclusive Agreement | ' | |||||||
(e) | Exclusive Agreement | |||||||
In February 2007, we acquired an exclusive, royalty-bearing license in specific but broad global territories to make, have made, use, sell, offer for sale, modify, develop, import, and export products made using patent applications owned by Rutgers University (“Rutgers”). We are using these patented technologies in the production of our composite rail ties and structural building products such as pilings, I-beams, T-beams and boards of various sizes. | ||||||||
Subject to the minimum royalty pursuant to the terms of the license, royalties incurred and payable to Rutgers, for the three and nine months ended September 30, 2013 were $50,000 and $150,000, respectively. For the corresponding periods of 2012, the amounts were the same. | ||||||||
Revenue and Related Cost Recognition | ' | |||||||
(f) | Revenue and Related Cost Recognition | |||||||
In accordance with FASB ASC 605 “Revenue Recognition”, revenue is recognized when persuasive evidence of an agreement with the customer exists, products are shipped or title passes pursuant to the terms of the agreement with the customer, the amount due from the customer is fixed or determinable, collectability is reasonably assured, and there are no significant future performance obligations. | ||||||||
We recognize revenue when a fixed commitment to purchase the products is received, title or ownership has passed to the customer and we do not have any performance obligations remaining, such that the earnings process is complete. In most cases, we receive a purchase order from our customer specifying the products requested and delivery instructions. We recognize revenue upon our delivery or shipment of the products as specified in the purchase order. | ||||||||
In other cases where we have a contract which provides for a large number of products and few actual deliveries, the revenues are recorded each month as the products are produced and the risk of ownership passes to the customer upon pre-delivery acceptance. Prior to deliveries, our customer’s products are segregated from our inventory and not available for fulfilling other orders. | ||||||||
Our costs of sales are predominately comprised of the cost of raw materials and the costs and expenses associated with the production effort of the finished product. Currently, to manufacture our products, we lease a manufacturing facility, purchase the raw materials and employ the staffing and own the equipment necessary for our production processes. Previously under other arrangements, we either purchased and supplied the raw materials to the third-party manufacturer who we paid a per-pound cost to produce the finished product, or the third-party manufacturer sourced and paid for the raw materials and we purchased the finished product from them at a cost per unit, and we were responsible for any costs of raw materials purchased by the third-party manufacturer in excess of the arrangement’s reference prices and we shared any savings for purchases below the reference prices. We believe our current manufacturing processes allow us to more efficiently control the quality and costs of production. Our costs of sales may vary significantly as a result of the variability in the cost of our raw materials and the efficiency with which we plan and execute our manufacturing processes. | ||||||||
Historically, we have not had significant warranty replacements, and do not believe we will in the future. | ||||||||
Income Taxes | ' | |||||||
(g) | Income Taxes | |||||||
Income tax provision consists of federal and state corporate income taxes resulting from our operations in the United States. The income tax provision differs from the expected tax provisions computed by applying the U.S. Federal statutory rate to loss before income taxes primarily because we have historically maintained a full valuation allowance on our deferred tax assets and to a lesser extent because of the impact of state income taxes. As described in our Form 10-K for the year ended December 31, 2012, we maintain a full valuation allowance in accordance with ASC 740, “Accounting for Income Taxes”, on our net deferred tax assets. Until we achieve and sustain an appropriate level of profitability, we plan to maintain a valuation allowance on our net deferred tax assets. | ||||||||
In the past, we were not current with our filings of our federal and state income tax returns. Due to these delinquent filings, our income tax returns are open to examination by federal and state authorities, generally for the tax years ended September 30, 2008 and later. | ||||||||
Derivative Instruments | ' | |||||||
(h) | Derivative Instruments | |||||||
For derivative instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in fair value recognized in earnings each reporting period as a charge or credit to other expenses. We use the Monte Carlo simulation, and other models, as appropriate to value the derivative instruments at inception and subsequent valuation dates and the value is re-assessed at the end of each reporting period, in accordance with FASB ASC Topic 815, “Derivatives and Hedging”. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not the net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | ||||||||
Share-Based Compensation | ' | |||||||
(i) | Share-Based Compensation | |||||||
We record share-based compensation for transactions in which we exchange our equity instruments (shares of common stock, options and warrants) for services of employees, consultants and others based on the fair value of the equity instruments issued on the measurement date. The fair value of common stock awards is based on the observed market value of our stock. We calculate the fair value of options and warrants using the Black-Scholes option pricing model. Expense is recognized, net of expected forfeitures, over the period of performance. When the vesting of an award is subject to performance conditions, no expense is recognized until achievement of the performance condition is deemed to be probable. Awards to consultants are marked to market at each reporting period as they vest, and the resulting value is recognized as an adjustment against our earnings for the period. | ||||||||
Loss Per Share | ' | |||||||
(j) | Loss Per Share | |||||||
Basic loss per share are computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share, includes the effects of the potential dilution of outstanding options, warrants, and convertible debt on our common stock as determined using the treasury stock method. For the three and nine months ended September 30, 2013 and 2012, there were no dilutive effects of such securities because we incurred a net loss in each period. As of September 30, 2013, we have approximately 66 million potential common shares issuable under our convertible instruments, warrant and stock option agreements. | ||||||||
Fair Value of Financial Instruments | ' | |||||||
(k) | Fair Value of Financial Instruments | |||||||
Fair value is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. We have categorized our financial assets and liabilities that are recurring at fair value into a three-level hierarchy in accordance with these provisions. | ||||||||
Concentration of Credit Risk | ' | |||||||
(l) | Concentration of Credit Risk | |||||||
We maintain our cash with two major U.S. domestic banks. The amount held in both of the banks exceeds the insured limit of $250,000 from time to time. The amount which exceeded the insured limit was approximately $0.3 million at September 30, 2013 and December 31, 2012. We have not incurred losses related to these deposits. | ||||||||
Use of Estimates | ' | |||||||
(m) | Use of Estimates | |||||||
The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. | ||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Property and Equipment | ' | |||||||
Our property and equipment is comprised of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Equipment | $ | 15,344 | $ | 13,754 | ||||
Machinery and equipment | 3,759,994 | 2,611,933 | ||||||
Purchased software | 145,623 | 129,753 | ||||||
Furniture and fixtures | 13,090 | 13,090 | ||||||
Subtotal – property and equipment, at cost | 3,934,051 | 2,768,530 | ||||||
Less accumulated depreciation | -910,920 | -763,315 | ||||||
Net property and leasehold improvements | $ | 3,023,131 | $ | 2,005,215 | ||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventories | ' | |||||||
Our inventories consisted of: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Finished products | $ | 2,913,368 | $ | 2,509,797 | ||||
Production materials | 712,453 | 579,156 | ||||||
Total inventories | $ | 3,625,821 | $ | 3,088,953 | ||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accrued Liabilities [Abstract] | ' | |||||||
Accrued Liabilities | ' | |||||||
The components of accrued liabilities are: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Royalties | $ | 229,045 | $ | 351,846 | ||||
10% convertible preferred stock dividends | 176,990 | - | ||||||
Interest | 181,509 | - | ||||||
Payroll | 55,790 | 77,757 | ||||||
Miscellaneous | 9,828 | 16,831 | ||||||
Total accrued liabilities | $ | 653,162 | $ | 446,434 | ||||
Derivative_Liabilities_Tables
Derivative Liabilities (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Derivative Liabilities [Abstract] | ' | ||||||||||||||||
Schedule of Assumptions Used | ' | ||||||||||||||||
The estimated fair values of the derivative liabilities for the conversion options on the 8% Notes issued during the nine months ended September 30, 2013 and the warrants issued therewith, were computed by a third party using Monte Carlo simulations based on the following ranges for each assumption: | |||||||||||||||||
At Issuances | September 30, | ||||||||||||||||
2013 | |||||||||||||||||
Volatility | 50 | % | 45 | % | |||||||||||||
Risk-free interest rate | 0.4 | % | 0.3 | % | |||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Expected life, in years | 2.4 to 2.6 | 1.9 | |||||||||||||||
Financial Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
The following table summarizes the financial liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: | |||||||||||||||||
As of September 30, 2013 | |||||||||||||||||
Derivative | |||||||||||||||||
Liabilities at | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | - | $ | - | $ | 1,060,000 | $ | 1,060,000 | |||||||||
Warrants | - | - | 270,000 | 270,000 | |||||||||||||
Derivative liabilities - Current | - | - | 1,330,000 | 1,330,000 | |||||||||||||
Placement agent warrants - non-current | - | - | 122,357 | 122,357 | |||||||||||||
Derivative liabilities - Total | $ | - | $ | - | $ | 1,452,357 | $ | 1,452,357 | |||||||||
As of December 31, 2012 | |||||||||||||||||
Derivative | |||||||||||||||||
Liabilities at | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | - | $ | - | $ | 610,000 | $ | 610,000 | |||||||||
Warrants | - | - | 220,000 | 220,000 | |||||||||||||
Derivative liabilities - Current | - | - | 830,000 | 830,000 | |||||||||||||
Placement agent warrants - non-current | - | - | 81,716 | 81,716 | |||||||||||||
Derivative liabilities - Total | $ | - | $ | - | $ | 911,716 | $ | 911,716 | |||||||||
Reconciliation of Derivative Liability Used in Determining Fair Value | ' | ||||||||||||||||
The following tables are a reconciliation of the derivative liabilities for which Level 3 inputs were used in determining fair value during the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
For the Three Months Ended September 30, 2013 | |||||||||||||||||
Credited to | |||||||||||||||||
Common | |||||||||||||||||
Balance - | Fair Value of | Stock | Balance - | ||||||||||||||
July 1, | Derivative | Change in | Upon Issuance | September 30, | |||||||||||||
2013 | Liability | Fair Value | of Warrants | 2013 | |||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | 1,520,000 | $ | - | $ | -460,000 | $ | - | $ | 1,060,000 | |||||||
Warrants | 540,000 | - | -270,000 | - | 270,000 | ||||||||||||
Derivative liabilities - current | 2,060,000 | - | -730,000 | - | 1,330,000 | ||||||||||||
Placement agent warrants - non-current | 122,357 | - | - | - | 122,357 | ||||||||||||
Derivative liabilities - total | $ | 2,182,357 | $ | - | $ | -730,000 | $ | - | $ | 1,452,357 | |||||||
For the Three Months Ended September 30, 2012 | |||||||||||||||||
Credited to | |||||||||||||||||
Common | |||||||||||||||||
Balance - | Fair Value of | Stock | Balance - | ||||||||||||||
July 1, | Derivative | Change in | Upon Issuance | September 30, | |||||||||||||
2012 | Liability | Fair Value | of Warrants | 2012 | |||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | - | $ | 982,932 | $ | -262,932 | $ | - | $ | 720,000 | |||||||
Warrants | - | 427,888 | -127,888 | - | 300,000 | ||||||||||||
Derivative liabilities - current | - | 1,410,820 | -390,820 | - | 1,020,000 | ||||||||||||
Placement agent warrants - non-current | 140,458 | - | -54,864 | - | 85,594 | ||||||||||||
Derivative liabilities - total | $ | 140,458 | $ | 1,410,820 | $ | -445,684 | $ | - | $ | 1,105,594 | |||||||
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Credited to | |||||||||||||||||
Fair Value of | Common Stock | Balance - | |||||||||||||||
Balance - | Derivative | Change in | Upon Issuance | September 30, | |||||||||||||
January 1, 2013 | Liability | Fair Value | of Warrants | 2013 | |||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | 610,000 | $ | 545,426 | $ | -95,426 | $ | - | $ | 1,060,000 | |||||||
Warrants | 220,000 | 249,151 | -199,151 | - | 270,000 | ||||||||||||
Derivative liabilities - current | 830,000 | 794,577 | -294,577 | - | 1,330,000 | ||||||||||||
Placement agent warrants - non-current | 81,716 | 40,641 | - | 122,357 | |||||||||||||
Derivative liabilities - total | $ | 911,716 | $ | 794,577 | $ | -253,936 | $ | - | $ | 1,452,357 | |||||||
For the Nine Months Ended September 30, 2012 | |||||||||||||||||
Credited to | |||||||||||||||||
Fair Value of | Common Stock | Balance - | |||||||||||||||
Balance - | Derivative | Change in | Upon Issuance | September 30, | |||||||||||||
January 1, 2012 | Liability | Fair Value | of Warrants | 2012 | |||||||||||||
8% convertible promissory notes: | |||||||||||||||||
Conversion option | $ | - | $ | 982,932 | $ | -262,932 | $ | - | $ | 720,000 | |||||||
Warrants | - | 427,888 | -127,888 | - | 300,000 | ||||||||||||
12% convertible revolving credit agreement: | |||||||||||||||||
Conversion option | 113,271 | - | -113,271 | - | - | ||||||||||||
10% convertible preferred stock: | |||||||||||||||||
Warrants | 1,875,463 | - | - | -1,875,463 | - | ||||||||||||
10% convertible debentures: | |||||||||||||||||
Warrants | 70,343 | - | -13,309 | -57,034 | - | ||||||||||||
Derivative liabilities - current | 2,059,077 | 1,410,820 | -517,400 | -1,932,497 | 1,020,000 | ||||||||||||
Placement agent warrants - non-current | 487,555 | - | -401,961 | - | 85,594 | ||||||||||||
Derivative liabilities - total | $ | 2,546,632 | $ | 1,410,820 | $ | -919,361 | $ | -1,932,497 | $ | 1,105,591 | |||||||
8_Convertible_Promissory_Notes1
8% Convertible Promissory Notes (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Convertible Debt [Abstract] | ' | |||||||||||
Debt | ' | |||||||||||
The components of our convertible debt are summarized as follows: | ||||||||||||
Due | September 30, | December 31, | ||||||||||
2013 | 2012 | |||||||||||
8% convertible promissory notes | Beginning August 2017 | $ | 8,878,188 | $ | 7,128,187 | |||||||
Less debt discount | -1,837,076 | -1,457,025 | ||||||||||
Total – long term debt | $ | 7,041,112 | $ | 5,671,162 | ||||||||
10_Convertible_Redeemable_Pref1
10% Convertible Redeemable Preferred Stock (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Features Of Convertible Preferred Stock [Abstract] | ' | |||||||
Ten Percent Convertible Redeemable Preferred Stock | ' | |||||||
The components of our Preferred Stock, classified as temporary equity in our balance sheet, are summarized as follows: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
10% convertible preferred stock - face value | $ | 7,021,230 | $ | 7,060,230 | ||||
Unamortized discount | -452,914 | -1,137,618 | ||||||
10% convertible preferred stock, net of discount | 6,568,316 | 5,922,612 | ||||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | |||||||||||||
Stock Option Activity | ' | |||||||||||||
The following table summarizes our stock option activity for the nine months ended September 30, 2013: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
Balance, January 1, 2013 | 5,710,125 | $ | 1.1 | |||||||||||
Granted | - | - | ||||||||||||
Exercised | - | - | ||||||||||||
Expired | -962,076 | 0.13 | ||||||||||||
Balance, September 30, 2013 | 4,748,049 | $ | 1.3 | |||||||||||
Options Outstanding | ' | |||||||||||||
The following table summarizes options outstanding at September 30, 2013: | ||||||||||||||
Weighted- | Weighted- | |||||||||||||
Number | Average | Average | Aggregate | |||||||||||
of Shares | Exercise | Remaining | Intrinsic | |||||||||||
Issuable | Price | Term (Years) | Value | |||||||||||
Exercisable | 3,348,049 | $ | 1.11 | 2.4 | $ | 6,000 | ||||||||
Not vested | 1,400,000 | 1.77 | 3.8 | - | ||||||||||
Balance, September 30, 2013: | 4,748,049 | $ | 1.3 | 2.8 | $ | 6,000 | ||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | ' | |||||||||||||
The following table sets forth our warrant activity during the nine months ended September 30, 2013: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
Balance, January 1, 2013 | 27,353,151 | $ | 0.76 | |||||||||||
Granted | 4,375,004 | 0.6 | ||||||||||||
Exercised | - | - | ||||||||||||
Cancelled | -400,000 | 1.79 | ||||||||||||
Balance, September 30, 2013 | 31,328,155 | $ | 0.73 | |||||||||||
The following table sets forth the warrants outstanding at September 30, 2013: | ||||||||||||||
Weighted- | ||||||||||||||
Number | Average | |||||||||||||
of Shares | Exercise | |||||||||||||
Issuable | Price | |||||||||||||
10% convertible debenture - bonus warrants | 483,357 | $ | 0.6 | |||||||||||
10% convertible preferred stock – warrants | 3,761,365 | 1 | ||||||||||||
8% convertible promissory notes – warrants | 22,195,474 | 0.6 | ||||||||||||
Consultants | 4,887,959 | 1.12 | ||||||||||||
Total | 31,328,155 | $ | 0.73 | |||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
Share data in Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Allowance for doubtful accounts | ' | ' | ' | ' | $131,996 |
Depreciation expense | 75,038 | 16,972 | 147,605 | 90,163 | ' |
Depreciation Charged To Production | 70,485 | 13,179 | 134,813 | 82,356 | ' |
Potential common shares issuable | ' | ' | 66 | ' | ' |
Cash, insured limit | 250,000 | ' | 250,000 | ' | ' |
Number of banks where cash is maintained | 2 | ' | 2 | ' | ' |
Bank One | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Cash, insured limit | 300,000 | ' | 300,000 | ' | 300,000 |
Rutgers | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Royalty Expense | $50,000 | ' | $150,000 | ' | ' |
Minimum | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '2 years | ' | ' |
Maximum | ' | ' | ' | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '20 years | ' | ' |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Property, equipment, and leasehold improvements, at cost: | ' | ' |
Equipment | $15,344 | $13,754 |
Machinery and equipment | 3,759,994 | 2,611,933 |
Purchased software | 145,623 | 129,753 |
Furniture and fixtures | 13,090 | 13,090 |
Subtotal - property and equipment, at cost | 3,934,051 | 2,768,530 |
Less accumulated depreciation | -910,920 | -763,315 |
Net property and leasehold improvements | $3,023,131 | $2,005,215 |
Going_Concern_Additional_Infor
Going Concern - Additional Information (Detail) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Going Concern [Line Items] | ' | ' | ' |
Working capital | $1,200,000 | ' | ' |
Stockholders' deficit | 9,513,366 | ' | 7,975,607 |
Accumulated deficit | 39,392,093 | ' | 35,079,061 |
Net cash used in operation | ($3,826,950) | ($4,299,533) | ' |
Inventories_Detail
Inventories (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of Inventory [Line Items] | ' | ' |
Finished products | $2,913,368 | $2,509,797 |
Production materials | 712,453 | 579,156 |
Total inventories | $3,625,821 | $3,088,953 |
Accrued_Liabilities_Detail
Accrued Liabilities (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of Accrued Liabilities [Line Items] | ' | ' |
Royalties | $229,045 | $351,846 |
Interest | 181,509 | 0 |
Payroll | 55,790 | 77,757 |
Miscellaneous | 9,828 | 16,831 |
Total accrued liabilities | 653,162 | 446,434 |
Redeemable Preferred Stock | ' | ' |
Schedule of Accrued Liabilities [Line Items] | ' | ' |
10% convertible preferred stock dividends | $176,990 | $0 |
Derivative_Liabilities_Additio
Derivative Liabilities - Additional Information (Detail) (USD $) | 9 Months Ended | 9 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Placement Agent | Issuances date | 10% Convertible Redeemable Preferred Stock | Placement Agent Warrants | Placement Agent Warrants | Conversion Options | Conversion Options | Warrant | Warrant | ||||
Issuances date | Issuances date | |||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative liability at fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,100,000 | ' | $270,000 |
Increase decrease in fair value of un hedged derivative instruments | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | 270,000 | ' |
Warrant exercise price | ' | ' | 1 | ' | ' | 10 | ' | ' | ' | ' | ' | ' |
Warrants to purchase 10% Convertible Preferred Stock | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | ' | ' | ' | 58,352 | ' | ' | ' | ' | ' | ' |
Expected life, in years | '1 year 10 months 24 days | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' |
Fair value assumptions, expected dividend rate | 0.00% | ' | ' | ' | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' |
Volatility | 45.00% | ' | ' | ' | 50.00% | 129.00% | ' | ' | ' | ' | ' | ' |
Risk-free interest rate | 0.30% | ' | ' | ' | 0.40% | 2.10% | ' | ' | ' | ' | ' | ' |
Warrants Not Settleable in Cash, Fair Value Disclosure | ' | ' | ' | ' | ' | ' | 122,357 | 81,716 | ' | ' | ' | ' |
Change in fair value of warrant liability | ' | ' | ' | 40,641 | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible debt, noncurrent | $7,041,112 | $5,671,162 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion_Option_and_Warrant_
Conversion Option and Warrant Derivative Liabilities (Detail) | 9 Months Ended |
Sep. 30, 2013 | |
Derivative [Line Items] | ' |
Volatility | 45.00% |
Risk-free interest rate | 0.30% |
Dividend yield | 0.00% |
Expected life, in years | '1 year 10 months 24 days |
Issuances date | ' |
Derivative [Line Items] | ' |
Volatility | 50.00% |
Risk-free interest rate | 0.40% |
Dividend yield | 0.00% |
Issuances date | Minimum | ' |
Derivative [Line Items] | ' |
Expected life, in years | '2 years 4 months 24 days |
Issuances date | Maximum | ' |
Derivative [Line Items] | ' |
Expected life, in years | '2 years 7 months 6 days |
Financial_Liabilities_Measured
Financial Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Dec. 31, 2011 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | $1,330,000 | ' | $830,000 | ' | ' | ' |
Derivative liability non-current | 122,357 | ' | 81,716 | ' | ' | ' |
Fair value of derivative liability | 1,452,357 | ' | 911,716 | ' | ' | ' |
Conversion Options | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 1,060,000 | 1,520,000 | 610,000 | 720,000 | 0 | 0 |
Warrant | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 270,000 | 540,000 | 220,000 | 300,000 | 0 | 0 |
Placement Agent | Warrant | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 122,357 | 122,357 | 81,716 | 85,594 | 140,458 | 487,555 |
Derivative liability non-current | 122,357 | ' | 81,716 | ' | ' | ' |
Fair Value, Inputs, Level 3 | Conversion Options | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 1,060,000 | ' | 610,000 | ' | ' | ' |
Fair Value, Inputs, Level 3 | Warrant | 8% convertible promissory notes | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 270,000 | ' | 220,000 | ' | ' | ' |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability current | 1,330,000 | ' | 830,000 | ' | ' | ' |
Fair value of derivative liability | 1,452,357 | ' | 911,716 | ' | ' | ' |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Placement Agent | Warrant | ' | ' | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative liability non-current | $122,357 | ' | $81,716 | ' | ' | ' |
Reconciliation_of_Derivative_L
Reconciliation of Derivative Liability Used in Determining Fair Value (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | $830,000 | ' |
Fair value of derivative liability | ' | ' | 294,576 | 517,400 |
Ending Balance | 1,330,000 | ' | 1,330,000 | ' |
Conversion options | 12% convertible revolving credit agreement conversion options | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | ' | 113,271 |
Fair value of derivative liability | ' | ' | ' | 0 |
Change in fair value | ' | ' | ' | -113,271 |
Credited to common stock upon issuance of warrants | ' | ' | ' | 0 |
Ending Balance | ' | 0 | ' | 0 |
Conversion options | 8% convertible promissory notes | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | 1,520,000 | 0 | 610,000 | 0 |
Fair value of derivative liability | 0 | 982,932 | 545,426 | 982,932 |
Change in fair value | -460,000 | -262,932 | -95,426 | -262,932 |
Credited to common stock upon issuance of warrants | 0 | 0 | 0 | 0 |
Ending Balance | 1,060,000 | 720,000 | 1,060,000 | 720,000 |
Warrant | 10% convertible preferred stock warrants | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | ' | 1,875,463 |
Fair value of derivative liability | ' | ' | ' | 0 |
Change in fair value | ' | ' | ' | 0 |
Credited to common stock upon issuance of warrants | ' | ' | ' | -1,875,463 |
Ending Balance | ' | 0 | ' | 0 |
Warrant | 8% convertible promissory notes | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | 540,000 | 0 | 220,000 | 0 |
Fair value of derivative liability | 0 | 427,888 | 249,151 | 427,888 |
Change in fair value | -270,000 | -127,888 | -199,151 | -127,888 |
Credited to common stock upon issuance of warrants | 0 | 0 | 0 | 0 |
Ending Balance | 270,000 | 300,000 | 270,000 | 300,000 |
Warrant | 10% convertible debenture | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | ' | 70,343 |
Fair value of derivative liability | ' | ' | ' | 0 |
Change in fair value | ' | ' | ' | -13,309 |
Credited to common stock upon issuance of warrants | ' | ' | ' | -57,034 |
Ending Balance | ' | 0 | ' | 0 |
Placement agent | Warrant | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | 122,357 | 140,458 | 81,716 | 487,555 |
Fair value of derivative liability | 0 | 0 | ' | 0 |
Change in fair value | 0 | -54,864 | 40,641 | -401,961 |
Credited to common stock upon issuance of warrants | 0 | 0 | 0 | 0 |
Ending Balance | 122,357 | 85,594 | 122,357 | 85,594 |
Derivative liabilities - current | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | 2,060,000 | 0 | 830,000 | 2,059,077 |
Fair value of derivative liability | 0 | 1,410,820 | 794,577 | 1,410,820 |
Change in fair value | -730,000 | -390,820 | -294,577 | -517,400 |
Credited to common stock upon issuance of warrants | 0 | 0 | 0 | -1,932,497 |
Ending Balance | 1,330,000 | 1,020,000 | 1,330,000 | 1,020,000 |
Derivative liabilities - total | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' |
Beginning Balance | 2,182,357 | 140,458 | 911,716 | 2,546,632 |
Fair value of derivative liability | 0 | 1,410,820 | 794,577 | 1,410,820 |
Change in fair value | -730,000 | -445,684 | -253,936 | -919,361 |
Credited to common stock upon issuance of warrants | 0 | 0 | 0 | -1,932,497 |
Ending Balance | $1,452,357 | $1,105,594 | $1,452,357 | $1,105,594 |
Debt_Detail
Debt (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | ' | ' |
Less debt discount | ($1,837,076) | ($1,457,025) |
Total - long term debt | 7,041,112 | 5,671,162 |
8% convertible promissory notes due on august 2017 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Convertible debt, due date | '2017-08 | ' |
Convertible debt | $8,878,188 | $7,128,187 |
Eight_Percent_Convertible_Prom
Eight Percent Convertible Promissory Notes - Additional Information (Detail) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Jul. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Unpaid Interest | Unpaid Interest | 8% convertible promissory notes | 8% convertible promissory notes | ||||||
Investor | |||||||||
Debt Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible debt | ' | ' | ' | ' | ' | ' | ' | ' | $1,750,001 |
Convertible debt, interest rate | ' | ' | 8.00% | 8.00% | ' | ' | ' | 8.00% | ' |
Convertible debt, conversion price | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 |
Warrants to purchase common stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | 4,375,004 |
Debt Instrument Payment Terms | ' | ' | ' | ' | ' | ' | ' | 'The 8% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of five years from date of issuance or upon the occurrence of an Event of Default (as defined in the 8% Notes). We may prepay the 8% Notes, in whole or in part, upon 60 calendar days prior written notice to the holders thereof. Interest accrues on the 8% Notes at a rate of 8.0% per annum, payable during the first three years that the 8% Notes are outstanding in shares of common stock, valued at the weighted average price of a share of common stock for the twenty consecutive trading days prior to the interest payment date, pursuant to the terms of the 8% Notes. During the fourth and fifth years that the 8% Notes are outstanding, interest that accrues under the 8% Notes shall be payable in cash. | ' |
Stock issued during period, shares, new issues | ' | ' | ' | ' | ' | ' | 355,903 | ' | ' |
Warrant exercise price | ' | ' | ' | ' | 1 | ' | ' | 0.6 | ' |
Warrant Terms | ' | ' | ' | ' | ' | ' | ' | 'for a period commencing on the date of issuance and ending on the earlier to occur of the date that is (i) three years after the date upon which the weighted average price of a share of common stock for the 90 consecutive trading days prior to such date is at least $2.00 per share, and (ii) five years after the date on which the 8% Note to which the applicable warrant is related has been repaid in full. | ' |
Amortization of convertible debt discount | 414,525 | 0 | ' | ' | ' | ' | ' | ' | 414,525 |
Accrued unpaid interest | ' | ' | ' | ' | ' | 181,509 | ' | ' | ' |
Increase Debt Discount | $794,576 | ' | ' | ' | ' | ' | ' | ' | ' |
Ten_Percent_Convertible_Redeem
Ten Percent Convertible Redeemable Preferred Stock - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 2 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||||||
Nov. 10, 2004 | Jul. 31, 2013 | Apr. 30, 2013 | Feb. 28, 2013 | Apr. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Oct. 21, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 30, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | |
Subsequent Event | Subsequent Event | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | Preferred Stock | Beneficial Conversion Feature | Beneficial Conversion Feature | Beneficial Conversion Feature | Beneficial Conversion Feature | Beneficial Conversion Feature | Minimum | |||||||||
Temporary Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 880,000 | 880,000 | 880,000 | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, stated value | ' | ' | ' | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum weighted average price of common stock for 60 consecutive trading days to convert preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4 |
10% Convertible preferred stock, conversion rate | ' | ' | ' | ' | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant exercise price | ' | ' | ' | ' | ' | ' | ' | 1 | ' | 0.6 | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, issued | ' | ' | ' | ' | 759,773 | ' | ' | ' | ' | ' | 702,123 | 706,023 | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, issuance price per share | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, gross proceeds from issuance | ' | ' | ' | ' | $7,597,730 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, unamortized discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 828,300 | 452,914 | ' | 452,914 | ' | ' | ' |
Conversion rate at issuance | ' | ' | ' | ' | ' | ' | ' | 2,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of preferred stock discount | ' | ' | ' | ' | ' | 0 | 68,346 | ' | ' | ' | ' | ' | ' | ' | 228,946 | 268,425 | 684,704 | 811,452 | ' | ' |
Common stock issued upon conversion Preferred Stock, shares | 1,701,341 | ' | ' | 39,000 | ' | ' | ' | ' | ' | ' | 39,000 | 462,500 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock shares converted | ' | ' | ' | 3,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,900 | ' | 46,250 | ' |
Common stock shares required to be issued if the remaining holders of Preferred Stock elect to convert | ' | ' | ' | ' | ' | 7,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock dividends, shares | ' | 342,857 | 266,954 | ' | ' | 347,039 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for dividend payments | ' | $175,050 | $181,529 | ' | ' | $356,579 | ' | ' | $176,990 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of stock called by warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,492,482 | 58,352 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ten_Percent_Convertible_Redeem1
Ten Percent Convertible Redeemable Preferred Stock (Detail) (Redeemable Preferred Stock, USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Redeemable Preferred Stock | ' | ' |
Temporary Equity [Line Items] | ' | ' |
10% convertible preferred stock - face value | $7,021,230 | $7,060,230 |
Unamortized discount | -452,914 | -1,137,618 |
10% convertible preferred stock, net of discount | $6,568,316 | $5,922,612 |
Stockholders_Equity_Additional
Stockholders Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 10, 2004 | Jul. 31, 2013 | 31-May-13 | Apr. 30, 2013 | Feb. 28, 2013 | Sep. 30, 2008 | Jun. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Apr. 30, 2011 | Mar. 31, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
General and Administrative Expense | Consulting Services | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | 10% Convertible Preferred Stock | |||||||||||
Stockholders Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, authorized | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | 100,000,000 | ' | ' | ' | ' | ' | ' |
Preferred stock, authorized | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | 2,500,000 | ' | ' | ' | ' | ' | ' |
Preferred stock, no par value | ' | ' | ' | ' | ' | ' | ' | $0 | $0 | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | ' | ' | ' | ' | ' | ' | ' | 30,315,663 | 28,820,173 | ' | ' | ' | ' | ' | ' |
Common stock, shares outstanding | ' | ' | ' | ' | ' | ' | ' | 30,315,663 | 28,820,173 | ' | ' | ' | ' | ' | ' |
10% Convertible preferred stock, authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 880,000 | 880,000 | 880,000 |
10% Convertible preferred stock, issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | 759,773 | ' | ' | 702,123 | 706,023 | ' |
10% Convertible preferred stock, outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 702,123 | 706,023 | ' |
Common stock issued upon conversion Preferred Stock, shares | 1,701,341 | ' | ' | ' | 39,000 | ' | ' | ' | ' | ' | ' | ' | 39,000 | 462,500 | ' |
Preferred Stock shares converted | ' | ' | ' | ' | 3,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of 10% convertible preferred stock and debt | ' | ' | ' | ' | $39,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for services | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | 125,000 | ' | ' | ' |
Value of shares Issued for services | ' | ' | 61,000 | ' | ' | ' | ' | 139,750 | ' | ' | 78,750 | ' | ' | ' | ' |
Common stock dividends, shares | ' | 342,857 | ' | 266,954 | ' | ' | ' | 347,039 | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, dividend rate, percentage | ' | 10.00% | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued for dividend payments | ' | 175,050 | ' | 181,529 | ' | ' | ' | 356,579 | ' | ' | ' | ' | ' | ' | ' |
Stock issued during period shares interest payments | ' | 369,040 | ' | 252,639 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued during period value interest payments | ' | 188,210 | ' | 171,795 | ' | ' | ' | 360,005 | ' | ' | ' | ' | ' | ' | ' |
Convertible debt, interest rate | ' | 8.00% | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from recovery of shareholder short swing profits | ' | ' | ' | ' | ' | 5,000,000 | ' | 3,095,308 | ' | ' | ' | ' | ' | ' | ' |
Short swing profits less legal fees | ' | ' | ' | ' | ' | ' | $3,100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Sharebased_Compensation_Additi
Share-based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Share-Based Compensation [Line Items] | ' | ' |
Shares available for grant | 950,000 | 950,000 |
Sharebased compensation arrangement by share based payment award options amortized expenses remaining amount | ' | $5,894 |
Warrant | ' | ' |
Share-Based Compensation [Line Items] | ' | ' |
Change in fair value of derivative | 2,990 | 2,990 |
Convertible Promissory Notes Warrants | ' | ' |
Share-Based Compensation [Line Items] | ' | ' |
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value | ' | $0.60 |
Fair value of warrants for 8% convertible promissory notes | ' | $249,151 |
Share based compensation arrangement by share-based payment award, options, grants in period, gross | ' | 4,375,004 |
Stock_Option_Activity_Detail
Stock Option Activity (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Number of Shares Issuable | ' |
Balance, Ending | 4,748,049 |
Weighted-average exercise price | ' |
Balance, Ending | $1.30 |
Stock Option | ' |
Number of Shares Issuable | ' |
Balance, Beginning | 5,710,125 |
Granted | 0 |
Exercised | 0 |
Expired | -962,076 |
Balance, Ending | 4,748,049 |
Weighted-average exercise price | ' |
Balance, Beginning | $1.10 |
Granted | $0 |
Exercised | $0 |
Expired | $0.13 |
Balance, Ending | $1.30 |
Options_Outstanding_Detail
Options Outstanding (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Exercisable, Number of Shares Issuable | 3,348,049 |
Not vested, Number of Shares Issuable | 1,400,000 |
Balance, Number of Shares Issuable | 4,748,049 |
Exercisable, Weighted-Average Exercise Price | $1.11 |
Not vested, Weighted-Average Exercise Price | $1.77 |
Balance, Weighted-Average Exercise Price | $1.30 |
Exercisable, Weighted-Average Remaining Term (Years) | '2 years 4 months 24 days |
Not vested, Weighted-Average Remaining Term (Years) | '3 years 9 months 18 days |
Balance, Weighted-Average Remaining Term (Years) | '2 years 9 months 18 days |
Exercisable, Aggregate Intrinsic Value | $6,000 |
Not vested, Aggregate Intrinsic Value | 0 |
Balance, Aggregate Intrinsic Value | $6,000 |
Warrant_Activity_Detail
Warrant Activity (Detail) (Warrant, USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Warrant | ' |
Number of Shares Issuable | ' |
Balance, Beginning | 27,353,151 |
Granted | 4,375,004 |
Exercised | 0 |
Cancelled | -400,000 |
Balance, Ending | 31,328,155 |
Weighted Average Exercise Price | ' |
Balance, Beginning | $0.76 |
Granted | $0.60 |
Exercised | $0 |
Cancelled | $1.79 |
Balance, Ending | $0.73 |
Warrrnts_Granted_Detail
Warrrnts Granted (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
10% convertible debenture - bonus warrants | ' |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 483,357 |
Weighted - Average Exercise Price | $0.60 |
10% convertible preferred stock - warrants | ' |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 3,761,365 |
Weighted - Average Exercise Price | $1 |
8% convertible promissory notes - warrants | ' |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 22,195,474 |
Weighted - Average Exercise Price | $0.60 |
Consultants | ' |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 4,887,959 |
Weighted - Average Exercise Price | $1.12 |
Warrant | ' |
Share-Based Compensation [Line Items] | ' |
Number of Shares Issuable | 31,328,155 |
Weighted - Average Exercise Price | $0.73 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Income Tax [Line Items] | ' | ' |
Operating loss carryforwards | ' | $17.40 |
Operating loss carryforwards, Expiration Dates | '2032 | ' |
Business_Concentration_Additio
Business Concentration - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Number of customer | 20 | 12 | 57 | 25 |
Minimum | Supplier Concentration Risk | ' | ' | ' | ' |
Number of vendor | 20 | 20 | 20 | 20 |
Maximum | Supplier Concentration Risk | ' | ' | ' | ' |
Number of vendor | 30 | 30 | 30 | 30 |
ECOTRAX rail ties | ' | ' | ' | ' |
Concentration risk percentage | 53.00% | 73.00% | 46.00% | 65.00% |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' |
Lease agreement, Current monthly lease payments | $3,700 | ' | $3,700 | ' | ' |
Facility rent expense | 11,100 | 11,300 | 33,100 | 33,900 | ' |
Royalty payment to Rutgers, minimum rate | 1.50% | ' | 1.50% | ' | ' |
Royalty payment to Rutgers, maximum rate | 3.00% | ' | 3.00% | ' | ' |
Royalties accrued | 229,045 | ' | 229,045 | ' | 351,846 |
Lease Expiration Date | ' | ' | 31-Oct-14 | ' | ' |
Charged to costs of sales | ' | ' | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' |
Royalties accrued | 19,195 | 13,200 | 19,195 | 13,200 | ' |
Charged to operating expenses | ' | ' | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' |
Royalties accrued | $30,805 | $66,800 | $30,805 | $66,800 | ' |
Related_Party_Transaction_Addi
Related Party Transaction - Additional Information (Detail) (USD $) | Oct. 21, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Allen Kronstadt | Allen Kronstadt | Allen Kronstadt | Allen Kronstadt | |||||
8% convertible promissory notes | 8% convertible promissory notes | 8% convertible promissory notes | ||||||
Purchase Agreement | Memorandum Of Understanding | |||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | ' | ' | ' | 353,547 | 7,398,243 | ' |
Class Of Warrant Or Right Exercise Price Of Warrants Or Rights | ' | ' | ' | 1 | ' | 0.6 | ' | ' |
Minority interest ownership percentage by noncontrolling owners | ' | ' | ' | ' | 5.00% | ' | ' | ' |
Debt issued, principal amount | $596,992.80 | ' | ' | ' | ' | ' | $2,959,297 | $1,666,667 |
Debt instrument, interest rate, stated percentage | ' | 8.00% | 8.00% | ' | ' | ' | ' | 8.00% |
Debt Instrument Payment Terms | ' | ' | ' | ' | ' | 'The 8% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of five years from date of issuance or upon the occurrence of an Event of Default (as defined in the 8% Notes). We may prepay the 8% Notes, in whole or in part, upon 60 calendar days prior written notice to the holders thereof. Interest accrues on the 8% Notes at a rate of 8.0% per annum, payable during the first three years that the 8% Notes are outstanding in shares of Common Stock, valued at the weighted average price of a share of Common Stock for the twenty consecutive trading days prior to the interest payment date, pursuant to the terms of the 8% Notes. During the fourth and fifth years that the 8% Notes are outstanding, interest that accrues under the 8% Notes shall be payable in cash. | ' | ' |
Warrant Terms | ' | ' | ' | ' | ' | 'subject to adjustment as provided for by the terms thereof, for a period commencing on the date of issuance and ending on the earlier to occur of the date that is (i) three years after the date upon which the weighted average price of a share of Common Stock for the 90 consecutive trading days prior to such date is at least $2.00 per share, and (ii) five years after the date on which the 8% Notes to which the applicable 8% Note Warrant is related has been repaid in full. | ' | ' |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | Oct. 21, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2011 | Oct. 10, 2013 | Sep. 30, 2013 | Nov. 06, 2013 | Oct. 21, 2013 | Oct. 21, 2013 |
Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | |||||
Secured Notes | |||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | $596,992.80 | ' | ' | ' | ' | ' | $2,603,007.20 | $2,603,007.20 | ' |
Convertible Debt, Conversion Price | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' |
Class Of Warrant Or Right, Number Of Securities Called By Warrants Or Rights | ' | ' | ' | ' | ' | ' | ' | 1,492,482 | ' |
Warrant Terms | ' | ' | ' | ' | ' | 'subject to adjustment as provided for by the terms thereof, for a period commencing on the date of issuance and ending on the earlier to occur of the date that is (i) three years after the date upon which the weighted average price of a share of Common Stock for the 90 consecutive trading days prior to such date is at least $2.00 per share, and (ii) five years after the date on which the 8% Note to which the applicable Warrant is related has been repaid in full. | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | 8.00% | 8.00% | ' | ' | ' | ' | ' | 8.00% |
Initial Term Of Lease | ' | ' | ' | ' | '10 years | ' | ' | ' | ' |
Cash Received from Investors | $596,992.80 | ' | ' | ' | ' | ' | ' | ' | ' |
Class Of Warrant Or Right, Exercise Price Of Warrants Or Rights | ' | ' | ' | 1 | ' | ' | ' | 0.6 | ' |
Debt Instrument, Payment Terms | ' | ' | ' | ' | ' | 'The 8% Notes, including all outstanding principal and accrued and unpaid interest, are due and payable on the earlier of October 21, 2018 or upon the occurrence of an Event of Default (as defined in the 8% Notes). We may prepay the 8% Notes, in whole or in part, upon 60 calendar days prior written notice to the holders thereof. Interest accrues on the 8% Notes at a rate of 8.0% per annum, payable during the first three years that the 8% Notes are outstanding in shares of Common Stock, valued at the weighted average price of a share of Common Stock for the twenty consecutive trading days prior to the interest payment date, pursuant to the terms of the 8% Notes. During the fourth and fifth years that the 8% Notes are outstanding, interest that accrues under the 8% Notes shall be payable in cash. | ' | ' | ' |