Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 25, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'TRUNITY HOLDINGS, INC. | ' |
Entity Central Index Key | '0000802257 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer | 'No | ' |
Is Entity a Voluntary Filer | 'No | ' |
Is Entity's Reporting Status Current | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 54,665,631 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash | $9,089 | $812,064 |
Accounts receivable | 24,082 | 2,729 |
Prepaid expenses and other assets | 127,721 | 41,636 |
Total current assets | 160,892 | 856,429 |
Property and equipment | ' | ' |
Fixtures and equipment | 210,172 | 210,172 |
Less accumulated depreciation | -184,190 | -164,226 |
Total property and equipment, net | 25,982 | 45,946 |
Capitalized software development costs | ' | ' |
Costs incurred | 4,125,801 | 3,634,029 |
Less accumulated amortization | -3,319,069 | -2,917,866 |
Total capitalized software development costs, net | 806,732 | 716,163 |
Other assets | ' | ' |
Debt issuance costs and other assets | 12,895 | 32,022 |
TOTAL ASSETS | 1,006,501 | 1,650,560 |
Current liabilities | ' | ' |
Accounts payable | 879,119 | 394,325 |
Accrued interest and other liabilities | 314,384 | 279,465 |
Debentures Series A, B, C, and D, carrying value | 1,357,516 | 991,501 |
Notes payable - related parties | 4,062 | 252 |
Convertible note payable, carrying value | 41,402 | ' |
Deferred revenue | 281,883 | 315,850 |
Total current liabilities | 2,878,366 | 1,981,393 |
Long-term liabilities | ' | ' |
Deferred rent, long-term portion | ' | 2,515 |
Total long-term liabilities | ' | 2,515 |
Total Liabilities | 2,878,366 | 1,983,908 |
Commitments and Contingencies | ' | ' |
STOCKHOLDERS' (DEFICIT) EQUITY | ' | ' |
Preferred stock, $0.0001 par value - 50,000,000 shares authorized; None issued and outstanding | ' | ' |
Common stock, $0.0001 par value - 200,000,000 shares authorized; 54,665,631 and 46,697,891 shares issued and outstanding, respectively | 5,467 | 4,670 |
Additional paid-in capital | 13,727,747 | 12,396,355 |
Other comprehensive loss | 11,656 | 3,649 |
Accumulated Deficit | -15,616,735 | -12,738,022 |
Total stockholders' deficit | -1,871,865 | -333,348 |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | $1,006,501 | $1,650,560 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock par value | $0.00 | $0.00 |
Preferred stock shares authorized | 50,000,000 | 50,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 54,665,631 | 46,697,891 |
Common stock shares outstanding | ' | 46,697,891 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Net Sales | $110,219 | $67,899 | $195,539 | $152,400 |
Cost of sales | 82,398 | 23,465 | 151,332 | 67,153 |
Gross Profit | 27,821 | 44,434 | 44,207 | 85,247 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 222,934 | 191,378 | 666,217 | 593,979 |
Selling, general and administrative | 526,535 | 583,023 | 1,915,052 | 1,625,476 |
Total operating expenses | 749,469 | 774,401 | 2,581,269 | 2,219,455 |
Loss from Operations | -721,648 | -729,967 | -2,537,062 | -2,134,208 |
Other expense: | ' | ' | ' | ' |
Interest expense, net | -84,097 | -95,236 | -275,782 | -300,545 |
Loss on debt extinguishment | 65,869 | ' | 65,869 | ' |
Net loss | -871,614 | -825,203 | -2,878,713 | -2,434,753 |
Other Comprehensive Gain, Net of Tax: | ' | ' | ' | ' |
Foreign currency translation adjustments | 126 | 3,251 | 8,007 | 10,033 |
Comprehensive Loss | ($871,488) | ($821,952) | ($2,870,706) | ($2,424,720) |
Net Loss per Share - Basic and Diluted | ($0.02) | ($0.02) | ($0.06) | ($0.06) |
Weighted Average Number of Shares - Basic and Diluted | 50,856,901 | 46,591,469 | 48,895,940 | 41,483,924 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Changes in Stockholders' Deficit (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Gain | Retained Earnings | Total |
Balance beginning at Dec. 31, 2013 | $4,670 | $12,396,355 | $3,649 | $12,738,022 | ($333,348) |
Balance beginning, Shares at Dec. 31, 2013 | 46,697,891 | ' | ' | ' | 46,697,891 |
Sale of common stock, net of issuance costs and treasury repurchase | 447 | 758,253 | ' | ' | 758,700 |
Sale of common stock, net of issuance costs and treasury repurchase, Shares | 4,467,740 | ' | ' | ' | ' |
Shares issued for services | 350 | 69,650 | ' | ' | 70,000 |
Shares issued for services, Shares | 3,500,000 | ' | ' | ' | ' |
Warrants issued for services | ' | 20,752 | ' | ' | 20,752 |
Common stock issued upon conversion of notes payable | 61 | 99,939 | ' | ' | 100,000 |
Common stock issued upon conversion of notes payable, Shares | 606,061 | ' | ' | ' | ' |
Employee stock-based compensation | ' | 372,181 | ' | ' | 372,181 |
Discount on convertible debt for beneficial conversion feature and detachable warrants | ' | 44,687 | ' | ' | 44,687 |
Loss on debt extinguishment | ' | 65,869 | ' | ' | 65,869 |
Foreign currency translation gain | ' | ' | 8,007 | ' | 8,007 |
Net loss | ' | ' | ' | -2,878,713 | -2,878,713 |
Balance ending at Sep. 30, 2014 | $5,467 | $13,727,747 | $11,656 | ($15,616,735) | ($1,871,865) |
Balance ending, Shares at Sep. 30, 2014 | 54,665,631 | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows from Operating Activities: | ' | ' |
Net Loss | ($2,878,713) | ($2,434,753) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 421,167 | 367,167 |
Stock compensation expense | 372,181 | 98,006 |
Accretion for debt discounts and issuance costs | 202,690 | 202,725 |
Shares issued in exchange for services | 70,000 | ' |
Loss on debt extinguishment | 65,869 | ' |
Warrants issued in exchange for services | 20,752 | 31,144 |
Shares issued as a conversion of payables | ' | 57,500 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -21,353 | -1,789 |
Prepaid expenses and other assets | -86,085 | -12,700 |
Accounts payable | 484,797 | -167,864 |
Accrued interest and other liabilities | 86,860 | -51 |
Deferred revenue | -33,967 | 306,833 |
Deposits | -2,895 | ' |
Deferred rent | -2,515 | -5,287 |
Net Cash Used in Operating Activities | -1,301,212 | -1,559,069 |
Cash Flows From Investing Activities: | ' | ' |
Purchase of fixed assets, net of disposal | ' | -26,488 |
Payment of patent application | ' | -5,000 |
Payment of platform development costs | -491,772 | -378,330 |
Net Cash Used in Investing Activities | -491,772 | -409,818 |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from issuance of debenture | 175,000 | ' |
Proceeds from notes payable related parties | 4,061 | 122,204 |
Repayments on notes payable related parties | -252 | -192,965 |
Payment of convertible note, net of proceeds | ' | -20,106 |
Proceeds from issuance of convertible note payable | 152,500 | ' |
Proceeds from exercise of stock options | ' | 38,532 |
Sale of common stock, net of issuance costs | 658,700 | 3,573,100 |
Net Cash Provided by Financing Activities | 990,009 | 3,520,765 |
Net (decrease) increase in cash and cash equivalents | -802,975 | 1,551,878 |
Cash and cash equivalents, beginning of period | 812,064 | 13,724 |
Cash and cash equivalents, end of period | 9,089 | 1,565,602 |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Cash paid during the period for interest | 9,603 | 22,141 |
Discount cost related to issuance of debentures and warrants | 110,557 | ' |
Conversion of debt to common stock shares | ' | $32,006 |
Note_1_Organization_Basis_of_P
Note 1 - Organization, Basis of Presentation and Nature of Operations | 9 Months Ended |
Sep. 30, 2014 | |
Note 1 - Organization Basis Of Presentation And Nature Of Operations | ' |
Note 1 - Organization, Basis of Presentation and Nature of Operations | ' |
NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND NATURE OF OPERATIONS | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission (the “Commission”) for interim financial information. Accordingly, they do not include all of the information required by accounting principles generally accepted in the United States of America for complete financial statement presentation and should be read in conjunction with the audited consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “2013 Annual Report”), filed with the Commission on April 15, 2014. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. | |
The accompanying consolidated financial statements include the accounts of Trunity Holdings, Inc. (“Trunity” or the “Company”) and its wholly owned subsidiary Trunity, Inc. (“Trunity, Inc.” or the “Company”), as of September 30, 2014 and December 31, 2013 and for the three and nine months ended September 30, 2014 and 2013. All intercompany accounts have been eliminated in the consolidation. Certain amounts reported in prior periods have been reclassified to conform to the current presentation. | |
The Company is a Delaware corporation headquartered in Portsmouth, New Hampshire. The Company was formed on July 28, 2009 through the acquisition of certain intellectual property by its three founders to develop a cloud-based knowledge-sharing platform that focuses on e-learning, virtual textbooks, customer experience and the education marketplace. It has developed a collaborative knowledge management, publishing and education delivery platform which provides an end-to-end solution for the rapidly growing e-textbook, e-learning, enterprise training, and education marketplaces. As a result of the platform’s innovative multi-tenant cloud-based architecture, Trunity enables a unique integration of academic content with learning management systems. All content powered by Trunity is seamlessly integrated with learning management, social collaboration, standards and measurement tagging, real-time analytics and royalty tracking functionality. The content is available to be purchased or shared via the Trunity Knowledge Exchange or within private communities powered by the Trunity eLearning Platform. | |
On January 24, 2012, Trunity Holdings, Inc., Trunity, Inc. and Trunity Acquisition Corporation (“TAC”), a wholly-owned subsidiary of Trunity Holdings, Inc., all Delaware corporations, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, on January 24, 2012, TAC merged with and into Trunity, Inc., with Trunity, Inc. remaining as the surviving corporation and a wholly-owned subsidiary of Trunity (the “Merger”). In order to facilitate the reverse merger transaction, immediately prior to execution of the Merger Agreement, Trunity acquired a 90.1% interest in Brain Tree International, Inc., a Utah corporation (“BTI”). As part of the transaction, on January 24, 2012, immediately prior to the Merger, BTI reincorporated in Delaware and changed its name from Brain Tree International, Inc. to Trunity Holdings, Inc. | |
On March 20, 2013, the Company executed a five-year licensing agreement with the Ukraine Government’s Open World National Project to use the Trunity eLearning Platform in exchange for a license fee of $400,000. Upon signing, the initial payment of $100,000 was received and the remaining payment of $300,000 was received in April 2013. The impact of this transaction was a $400,000 payment that was reflected in the Company’s 2013 Annual Report on Form 10-K for the period ended December 31, 2013 as deferred revenue of $315,850 for the portion representing the remaining professional hours and license term on the agreement. | |
On June 5, 2013, the Company entered into a Memorandum of Understanding (“MOU”) with its new institutional investor, Pan-African Investment Company, LLC (“PIC”), whereby PIC will assist with the introduction and marketing of the Trunity eLearning Platform in African nations seeking to improve the quality of education for their citizens. Pursuant to the terms and conditions of the MOU, PIC has been granted a seven-year exclusive right to introduce Trunity’s products and services to the governments of each of the countries on the African continent with a goal of improving, modernizing and providing these countries with a sustainable education platform. | |
On January 21, 2014, the Company entered into a Memorandum of Understanding (“MOU”) with Houghton Mifflin Harcourt (NASDAQ:HMHC) (HMH), a global education leader to offer select HMH digital content via the Trunity Knowledge Exchange to Pre-K-12 schools, as well as to government agencies and entities responsible for the selection or purchase of educational materials. The MOU was followed by a non-exclusive license and distribution agreement executed on July 21, 2014 that resulted in the Company’s first sale of 6,610 units of HMH’s Holt McDougal Chemistry & Physics ©2012 Online Interactive Content via the Trunity eLearning Platform resulting in revenue of $17,582 over a 4 year subscription period. As of September 30, 2014, the remaining deferred revenue for this transaction represented $17,033. |
Note_2_Summary_of_Significant_
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended | |
Sep. 30, 2014 | ||
Note 2 - Summary Of Significant Accounting Policies | ' | |
Note 2 - Summary of Significant Accounting Policies | ' | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Accounting -The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires our management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of financial statements. | ||
Development Stage Operations - The Company had operated as a development stage enterprise since its inception by devoting substantially all of its efforts to business development. The Company emerged from development stage operations during the first quarter of 2013. | ||
Going Concern - The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred net losses and had negative operating cash flow since its inception. To the extent the Company experiences negative cash flows in the future, it will continue to require additional capital to fund operations. The Company has historically obtained additional capital investments under various debt and common stock issuances. Although management continues to pursue its financing plans, there is no assurance that the Company will be successful in generating sufficient revenues to provide positive cash flow or that financing at acceptable terms, if at all. In addition, the Company has defaulted on lease and debt obligations as of September 30, 2014. Although the Company is currently in negotiations related to these defaults, there is no assurance that any negotiations will be successful in reducing the Company’s liabilities under default. Based on these factors, the Company may be unable to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | ||
Website Development –The Company has adopted the provisions of FASB Accounting Standards Codification No. 350 Intangible-Goodwill and Other. Research and development costs incurred in the planning stage of a website are expensed, while development costs of the website to be sold, leased, or otherwise marketed are subject are capitalized and amortized over the estimated three year life of the asset. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Therefore, costs incurred subsequent to achievement of technological feasibility are usually not significant, and generally most software development costs have been expensed as incurred. For the three months and nine months ended September 30, 2014, the Company incurred and capitalized $163,053 and $491,773, respectively, in platform development costs as compared to the three and nine months ended September 30, 2013, of $114,531 and $378,330, respectively. Amortization for these costs recorded during the three and nine months ended September 30, 2014 was $129,961 and $401,204, respectively. In the comparable prior periods as of September 30, 2013, amortization expense was $104,455 and $338,280, respectively. | ||
Revenue Recognition – The Company’s revenue model consists of Software as a Service (SaaS) licensing and hosting revenue, as well as revenues generated from consulting, revenue sharing with our authors, publishers and advertising. All SaaS revenue is recognized ratably over the contract period. | ||
Consulting revenues are earned for web site development services and are recognized on a time and materials basis, billed in accordance with contractual milestones negotiated with the customer. Revenues are recognized as the services are performed and amounts are earned in accordance with FASB ASC Topic 605 Revenue Recognition. We consider amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is probable. In certain contracts, revenue is earned upon achievement of certain milestones indicated in the client agreements. | ||
Services under these contracts are typically provided in less than a year and represent the contractual milestones or output measure, which reflect the earnings pattern. | ||
Digital content book revenues are earned and recognized as transactions are entered on the Trunity eLearning Platform by customers purchasing digital content through the Trunity Knowledge Exchange website. | ||
Advertising revenue is earned from search engine providers based on search activity for sites hosted by the Company. | ||
Billings in excess of revenues recognized are recorded as Deferred Revenue (a liability) until revenue recognition criteria are met. Client prepayments are deferred and recognized over future periods as services are delivered or performed. | ||
Derivative Financial Instruments – The Company assesses whether it has embedded derivatives in accordance with ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities. The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. | ||
For derivative instruments that hedge the exposure to changes in the fair value of an asset or a liability and that are designated as fair value hedges, both the net gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in earnings in the current period. Derivatives that do not qualify as hedges must be adjusted to fair value through current income. The Company currently does not engage in fair value hedges. | ||
Stock-Based Compensation – We recognize compensation costs to employees under ASC Topic 718, Compensation – Stock Compensation. Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options is estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share based compensation arrangements may include stock options, restricted share plans, performance based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. | ||
Equity instruments issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC Topic 505, Equity Based Payments to Non-Employees. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification. | ||
Common Stock Purchase Warrants – The Company accounts for common stock purchase warrants in accordance with ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities. As is consistent with its handling of stock compensation and embedded derivative instruments, the Company’s cost for warrants is estimated at the grant date based on each option’s fair-value as calculated by the BSM option-pricing model value method for valuing the impact of the expense associated with these warrants. | ||
Financial Instruments and Fair Values – The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use various valuation methodologies and prioritize the use of observable inputs. We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market: | ||
Level 1 — inputs include exchange quoted prices for identical instruments and are the most observable. | ||
Level 2 — inputs include brokered and/or quoted prices for similar assets and observable inputs such as interest rates. | ||
Level 3 — inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the asset or liability. | ||
The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our hierarchy assessment. The carrying amount of cash, trade receivables and other assets approximates fair value due to the short-term maturities of these instruments. Because cash and cash equivalents are readily liquidated, management classifies these values as Level 1. The fair values of all other financial instruments, including debt, approximate their book values as the instruments are short-term in nature or contain market rates of interest. Because there is no ready market or observable transactions, management classifies all other financial instruments as Level 3. | ||
Reclassifications – Certain reclassifications have been made to the prior period presentation to conform to the current period presentation. | ||
Recent Accounting Pronouncements– In June 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance related to stock compensation. The new standard requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. Early adoption is permitted. The Company does not believe the adoption of this new accounting standard will impact the consolidated financial statements. | ||
In May 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective beginning January 1, 2017 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of adopting this new accounting standard to its consolidated financial statements. | ||
In April 2014, the FASB issued new guidance related to reporting discontinued operations. This new standard raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The new standard is effective for fiscal years beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. The Company is in the process of evaluating the impact, if any, of adopting this new accounting standard on its consolidated financial statements. |
Note_3_Intangible_Assets
Note 3 - Intangible Assets | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Note 3 - Intangible Assets | ' | ||||||||||||||
Note 3 - Intangible Assets | ' | ||||||||||||||
NOTE 3 – INTANGIBLE ASSETS | |||||||||||||||
Intangible assets are recorded at cost and consist of the Trunity eLearning Platform software development costs. Amortization is computed using the straight-line method over three years. We annually assess intangible and other long-lived assets for impairment. There was no impairment loss for the nine months ended September 30, 2014 and 2013. Intangible assets were comprised of the following at September 30, 2014: | |||||||||||||||
Trunity eLearning Platform | Estimated | Gross Cost | Accumulated Amortization | Net Book Value | |||||||||||
Life | |||||||||||||||
Assets acquired from Trunity, LLC | 3 years | $ | 1,775,000 | $ | (1,775,000 | ) | $ | — | |||||||
Internal costs capitalized for period from July 28, 2009 (inception) to December 31, 2009 | 3 years | 121,820 | (121,820 | ) | — | ||||||||||
Internal costs capitalized for the twelve months ended December 31, 2010 | 3 years | 342,345 | (342,345 | ) | — | ||||||||||
Internal costs capitalized for the twelve months ended December 31, 2011 | 3 years | 327,100 | (327,100 | ) | — | ||||||||||
Internal costs capitalized for the twelve months ended December 31, 2012 | 3 years | 548,031 | (437,375 | ) | 110,656 | ||||||||||
Internal costs capitalized for the twelve months ended December 31, 2013 | 3 years | 519,733 | (235,684 | ) | 284,049 | ||||||||||
Internal costs capitalized for the nine months ended September 30, 2014 | 3 years | 491,772 | (79,745 | ) | $ | 412,027 | |||||||||
Carrying value as of September 30, 2014 | $ | 806,732 | |||||||||||||
Estimated future amortization expense is as follows for the following periods: | |||||||||||||||
Remainder of 2014 | $ | 129,961 | |||||||||||||
2015 | 402,155 | ||||||||||||||
2016 | 231,418 | ||||||||||||||
2017 | 43,198 | ||||||||||||||
Total future amortization expense | $ | 806,732 | |||||||||||||
The Trunity eLearning Platform technology was acquired from a related company, Trunity, LLC, and was valued at management’s best estimate of its value at that time of the transaction. Trunity, LLC was wholly owned by the three founders of the Company. Subsequent internal costs capitalized consist of direct labor, including taxes and benefits related to the continual development and enhancements of the platform for version 3.0 and mobile apps. Amortization of three years is based on management’s best estimate of useful life of current technology in this industry. |
Note_4_Significant_Transaction
Note 4 - Significant Transactions With Related Parties | 9 Months Ended |
Sep. 30, 2014 | |
Note 4 - Significant Transactions With Related Parties | ' |
Note 4 - Significant Transactions With Related Parties | ' |
NOTE 4 – SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | |
The Company’s three founders, Terry Anderton, Les Anderton and Joakim Lindblom and Officers have a number of transactions that warrant disclosure per ASC 850, Related Party Disclosures. | |
Credit Agreements – The Company has credit agreements with Terry Anderton and Les Anderton that allow the Company to borrow up to $0.9 million, as needed, to fund working capital needs. These agreements carry an interest rate of 10% and have been amended with board consent until December 31, 2014 subsequent to the initial expiration date. As of September 30, 2014, Terry Anderton and Les Anderton have shareholder receivables/loans that are comprised of $0 balances. | |
Transactions with Officers –The Company’s current Interim CEO and CFO, Nicole Fernandez-McGovern, is one of the managing principals of both RCM Financial and Premier Financial Filings, companies that have provided contracted financial services to Trunity. For the nine months ended September 30, 2014, RCM Financial Inc., a financial consulting firm, provided outside accounting and tax professional services that resulted in accrued fees of $17,886. Premier Financial Filings, a full service financial printer, was accrued $9,021 in fees related to services for the nine months ended September 30, 2014. | |
The Company’s current Interim CEO and CFO, Nicole Fernandez-McGovern has also invested in the Company’s recent equity private placement by investing $24,000 resulting in 153,110 shares and 40,298 warrants at $0.50. In addition, Mrs. Fernandez-McGovern also was issued, in exchange for $35,000 of consideration, a Series D Convertible Debenture and in exchange for $7,500 of consideration a July 2014 Convertible Note (See Note 5 for further detail of terms of debenture and promissory note). | |
The Company’s Chief Education Officer Cutler Cleveland currently authors on the Trunity platform. In his capacity as an author, he has accrued royalties for the nine months ended September 30, 2014 based on sale transactions for the books he authors of $25,986. | |
Transactions with Board Members –In addition, two Directors made the following investments: 159,490 shares which were purchased by Les and Debra Anderton for a total consideration of $25,000 and 303,030 shares were purchased by the Maytiv Foundation, of which Ivan Berkowitz is the president, for a total consideration of $50,000. Each investor also received a five-year warrant to purchase one share of common stock for every four shares purchased at an exercise price of $0.50 per share. |
Note_5_Convertible_Debt
Note 5 - Convertible Debt | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Note 5 - Convertible Debt | ' | ||||||||||||||||
Note 5 - Convertible Debt | ' | ||||||||||||||||
NOTE 5 – CONVERTIBLE DEBT | |||||||||||||||||
July 2012 Convertible Debentures (Series A) – In July 2012, the Company issued convertible debentures (“July Notes”) with an aggregate face value of $215,300 Canadian Dollars ($197,344 as of June 30, 2014). The July Notes matured in July 2014, bear interest at an annual rate of 10% through July 2014 and 12% thereafter, and are convertible at the option of the holders into Units, each consisting of a) one share of common stock and b) one warrant to purchase one share of common stock at 0.40 Canadian Dollars per share (“Unit”). The number of Units issuable upon conversion of the July Notes is determined by dividing the then outstanding principal and accrued but unpaid interest by a) 0.35 Canadian Dollars if a Liquidity Event, as defined in the debenture agreements, occurs within six months of the closing of the offering of the notes, or b) 0.32 Canadian Dollars if a Liquidity Event does not occur within six months of the closing of the offering of the July Notes. In July 2014, the holder of a July Note exchanged the July Note with a face value of $25,000 Canadian Dollars ($23,360 US),and accrued interest of $3,336 Canadian Dollars ($3,117 US) for a Series D Convertible Debenture with a face amount of $26,477(US). The Company recorded a loss on early extinguishment of debt of $6,728, primarily related to fair value of the warrants in relation to the debt (relative fair value) on the debt exchange transaction. | |||||||||||||||||
In 2012, the Company recorded a beneficial conversion feature based on the intrinsic value of the conversion feature equal to the excess of the fair value of one Unit over the conversion rate of 0.32 Canadian Dollars. The fair value of one Unit was estimated based on the most recent sale of common stock in a private placement immediately preceding the issuance of the July Notes and, for the warrant contained in one Unit, using a Black-Scholes valuation model and the following assumptions: volatility – 50.50%, risk free rate – 0.22%, dividend rate – 0.00%. The Company recorded a discount against the debt for the beneficial conversion feature totaling $84,788, which is being amortized into interest expense through the maturity dates of the July Notes. For the three and nine months ended September 30, 2014, the Company recorded amortization of the discount of $3,533 and $24,730, respectively. As of September 30, 2014, the net carrying value of the July Notes totaled $173,858, and no unamortized discount remains. For the three and nine months ended September 30, 2014, interest expense on the July Notes of $5,192 and $15,009, respectively, was recorded. For the three and nine months ended September 30, 2013, interest expense on the July Notes of $5,179 and $15,883, respectively, was recorded. | |||||||||||||||||
In connection with the issuance of the July Notes, the Company paid transactions fees to brokers consisting of cash of $85,237, and warrants to purchase 43,497 shares of common stock over a two-year period at an exercise price of 0.40 Canadian Dollars. The Company estimated the fair value of the warrants using a Black-Scholes valuation model and the following assumptions: volatility – 50.49%, risk free rate – 0.22%, dividend rate – 0.00%. | |||||||||||||||||
The Company allocated a portion of the fair value of the consideration totaling $52,869 to debt issuance costs, which was capitalized and is being amortized into interest expense over the two-year terms of the July Notes. The remaining portion of the fair value of the transactions costs, totaling $36,126, was allocated to equity, treated as equity issuance costs, and recorded against additional paid-in capital. Amortization of debt issuance costs on the July Notes of $6,609 was recorded for both the three months ended September 30, 2014 and 2013, respectively. For the nine months ended September 30, 2014 and 2013 amortization of debt issuance costs on the July Notes of $15,420 and $19,826 was recorded, respectively. | |||||||||||||||||
August and September 2012 Convertible Debentures (Series B) – In August and September 2012, the Company issued convertible debentures (“August and September Notes”) with an aggregate face value of $330,900. The August and September Notes matured in August and September 2014, bore interest at an annual rate of 10%, and were convertible at the option of the holders into Units, each consisting of a) one share of common stock and b) one warrant to purchase one share of common stock at $0.40 per share (“Unit”). The number of units issuable upon conversion of the August and September Notes was determined by dividing the then outstanding principal and accrued but unpaid interest by a) $0.35 if a Liquidity Event, as defined in the debenture agreements, occurs within six months of the closing of the offering of the August and September Notes, or b) $0.32 if a Liquidity Event does not occur within six months of the closing of the offering of the August and September Notes. In September 2014, all of the holders of the August and September Notes exchanged the August and September Notes with an aggregate face value of $330,900 and accrued interest of $66,000 for Series D convertible debentures with an aggregate face value of $397,080. The Company recorded a loss on early extinguishment of debt of $59,041, primarily related to fair value of the warrants in relation to the debt (relative fair value) on the debt exchange transaction. | |||||||||||||||||
In 2012, the Company recorded a beneficial conversion feature based on the intrinsic value of the conversion feature equal to the excess of the fair value of one Unit over the conversion rate of $0.32. The fair value of one Unit was estimated based on the most recent sale of common stock in a private placement immediately preceding the issuance of the August and September Notes and, for the warrant contained in one Unit, using a Black-Scholes valuation model and the following assumptions: volatility – 50.50%, risk free rate – 0.22%, dividend rate – 0.00%. The Company recorded a discount against the debt for the beneficial conversion feature totaling $115,712, which was being amortized into interest expense through the maturity dates of the August and September Notes. For the three and nine months ended September 30, 2014, the Company recorded amortization of the discount of $9,643 and $38,571, respectively. For the three and nine months ended September 30, 2013, the Company recorded amortization of the discount of $14,464 and $43,392, respectively. | |||||||||||||||||
As of September 30, 2014, there was no remaining balance outstanding on the August and September Notes. | |||||||||||||||||
In connection with the issuance of the August and September Notes, the Company paid cash transactions fees to brokers totaling $30,456. The Company allocated a portion of the transaction fees totaling $19,806, to debt issuance costs, which was capitalized and is being amortized into interest expense over the two-year terms of the August and September Notes. The remaining portion of the fair value of the transactions costs, totaling $10,650 was allocated to equity, treated as equity issuance costs, and recorded against additional paid-in capital. Amortization of debt issuance costs on the August and September Notes of $1,650 and 2,476 was recorded for the three months ended September 30, 2014 and 2013, respectively. For the nine months ended September 30, 2014 and 2013 amortization of debt issuance costs on the July Notes of $7,427 and $6,602 was recorded, respectively. | |||||||||||||||||
October and November 2012 Convertible Debentures (Series B) – In October and November 2012, the Company issued convertible debentures (“October and November Notes”) with an aggregate face value of $624,372 of which $565,372 represented a conversion of notes payable-related parties to the Founders. In 2013, two of the founders sold a portion of their debenture totaling $141,800 of their aggregate face to third parties. The October and November Notes mature in October and November 2014, bear interest at an annual rate of 10%, and are convertible at the option of the holders into Units, each consisting of a) one share of common stock and b) one warrant to purchase one share of common stock at $0.40 per share (“Unit”). The number of Units issuable upon conversion of the October and November Notes is determined by dividing the then outstanding principal and accrued but unpaid interest by a) $0.35 if a Liquidity Event, as defined in the debenture agreements, occurs within six months of the closing of the offering of the October and November Notes, or b) $0.32 if a Liquidity Event does not occur within six months of the closing of the offering of the October and November Notes. | |||||||||||||||||
The Company recorded a beneficial conversion feature based on the intrinsic value of the conversion feature equal to the excess of the fair value of one Unit over the conversion rate of $0.32. The fair value of one Unit was estimated based on the most recent sale of common stock in a private placement immediately preceding the issuance of the October and November Notes and, for the warrant contained in one Unit, using a Black-Scholes valuation model and the following assumptions: volatility – 50.50%, risk free rate – 0.22%, dividend rate – 0.00%. The Company recorded a discount against the debt for the beneficial conversion feature totaling $254,004, which is being amortized into interest expense through the maturity dates of the October and November Notes. For the three months ended September 30, 2014 and 2013, the Company recorded amortization of the discount of $28,867 and $31,750, respectively. For the nine months ended September 30, 2014 and 2013, the Company recorded amortization of the discount of $92,368 and $95,251, respectively. As of September 30, 2014, the net carrying value of the October and November Notes totaled $611,047, net of unamortized discount of $13,326. For both the three months and nine ended September 30, 2014 and 2013, interest expense on the October and November Notes of $15,609 and $46,828, respectively, was recorded. In connection with the issuance of the October and November Notes, the Company paid no cash transactions fees to brokers. | |||||||||||||||||
August 2014 Convertible Debentures (Series C) – In August 2014, the Company issued Series C convertible debentures with an aggregate face value of $240,000 in exchange for the cancellation of Series B convertible debenture with outstanding principal and accrued interest of $240,000. The Series C convertible debentures accrue interest at an annual rate of 10%, mature on July 31, 2015, and are convertible into the Company’s common stock at a conversion rate of $0.20 per share. The holders of the Series C convertible debt also received warrants to acquire 1,000,000 shares of common stock for an exercise price of $0.20 per share, exercisable over 5 years. The Company allocated the face value of the Series C convertible debentures to the warrants and the debentures based on their relative fair values, and allocated $35,016 to the warrants, which was recorded as a discount against the Series C convertible debentures, with offsetting entry to additional paid in capital. The fair value of the warrants using a Black-Scholes valuation model and the following assumptions: volatility – 43.99% to 44.08%, risk free rate – 1.60 to 1.74% %, dividend rate – 0.00%. The discount is being amortized into interest expense over the term of the Series C convertible dentures. During the three and nine months ended September 30, 2014, the Company recorded debt extinguishment costs related to the Series C Debentures of $35,016. As of September 30, 2014, the carrying value of the Series C convertible debentures is $240,000. For both the three months and nine ended September 30, 2014, interest expense of $5,772 was recorded for the Series C convertible debentures. | |||||||||||||||||
September 2014 Convertible Debentures (Series D) – During the three months ended September 30, 2014, the Company issued Series D convertible debentures with an aggregate face value of $360,275 in exchange for $176,718 of cash ($35,000 was provided by the interim CEO and CFO), in settlement of a Series A convertible debenture with outstanding principal and accrued interest of $26,477, and in settlement of Series B convertible debentures with aggregate outstanding principal and accrued interest of $157,080 of which $35,000 represented a conversion of notes payable-related parties to the Founders. The Series D convertible debentures accrue interest at an annual rate of 12%, mature on August 31, 2015, and are convertible into the Company’s common stock at a conversion rate of $0.165 per share. The holders of the Series D convertible debt also received warrants to acquire 1,519,800 shares of common stock for an exercise price of $0.20 per share, exercisable over 5 years. The Company allocated the face value of the Series D convertible debentures to the warrants and the debentures based on their relative fair values, allocated $52,212 to the warrants, and determined that there were aggregate beneficial conversion features of $8,699. The fair value of the warrants using a Black-Scholes valuation model and the following assumptions: volatility – 43.99% to 44.08%, risk free rate – 1.60 to 1.74% %, dividend rate – 0.00%. The amount allocated to the warrants and beneficial conversion features totaling $60,911 was recorded as a discount against the Series D convertible debentures, with offsetting entry to additional paid in capital. The discounts are being amortized into interest expense over the term of the Series D convertible dentures. During the three and nine months ended September 30, 2014, the Company recorded amortization of the discount related to the Series D Notes of $2,395. As of September 30, 2014, the carrying value of the Series D convertible notes is $332,612, net of unamortized discounts of $30,058. For both the three months and nine ended September 30, 2014, interest expense of $3,441 was recorded for the Series D convertible debenture. | |||||||||||||||||
July 2014 Convertible Notes – In July 2014, the Company issued convertible notes with an aggregate face value of $52,500 for cash ($27,500 was provided by the interim CEO and CFO and two board members). The convertible notes accrue interest at an annual rate of 10%, mature in July 2015, and are convertible into the Company’s common stock at a conversion rate of $0.165 per share. The holders of the convertible notes also received warrants to acquire 318,182 shares of common stock for an exercise price of $0.50 per share, exercisable over 5 years. The Company allocated the proceeds from the convertible notes to the warrants and the notes based on their relative fair values, allocated $6,117 to the warrants, and determined that there were aggregate beneficial conversion features of $8,512. The fair value of the warrants using a Black-Scholes valuation model and the following assumptions: volatility – 43.99% to 44.08%, risk free rate – 1.60 to 1.74% %, dividend rate – 0.00%. The amount allocated to the warrants and beneficial conversion features; totaling $14,629 was recorded as a discount against the convertible notes, with offsetting entry to additional paid in capital. The discounts are being amortized into interest expense over the term of the convertible notes. For the three and nine months ended September 30, 2014, the Company recorded amortization of the discount of $3,531. During the three and nine months ended September 30, 2014, the Company recorded interest expense of $1,260. As of September 30, 2014, the carrying value of the convertible notes is $41,402, net of unamortized discounts of $11,098. | |||||||||||||||||
See “Note 11– Subsequent Events” for current status of Debentures. | |||||||||||||||||
Convertible Promissory Note – In March 2014, the Company borrowed $100,000 from an accredited investor pursuant to a six-month convertible promissory note (the “Note”) bearing interest at 10% per year. The Note is convertible at $.165 per share. The Company incurred $5,000 of debt issuance costs representing commission paid to broker-dealers who assisted this transaction. The entire principal balance of this Note, together with all unpaid interest accrued thereon, and shall be due and payable on September 24, 2014 (the “Maturity Date”). Upon payment in full of all principal and interest payable hereunder, this Note shall be surrendered to the Company for cancellation. The principal amount of this Note may be converted in increments of $10,000 into common stock of the Company at a price of $.165 per share (the “Conversion Shares”). Upon conversion, the Holder shall receive, in addition to certificates for the Conversion Shares, a five-year warrant to purchase at $.50 per share an amount of shares of common stock equal to 25% of the number of Conversion Shares. For the three and nine months ended September 30, 2014, interest expense on the Note of $2,685 was recorded. The note was converted effective July 1, 2014 to 606,061 shares of common stock and 500,000 warrants that were issued to the holder. | |||||||||||||||||
The following is a summary of convertible debentures outstanding as of September 30, 2014: | |||||||||||||||||
Face Value | Initial Discount | Accumulated Amortization | Carrying Value | ||||||||||||||
July Notes (Series A) | $ | 173,858 | $ | (84,788 | ) | $ | 84,788 | $ | 173,858 | ||||||||
October and November Notes (Series B) | 624,372 | (254,004 | ) | 240,678 | 611,046 | ||||||||||||
August Notes (Series C) | 240,000 | — | — | 240,000 | |||||||||||||
September Notes (Series D) | 360,275 | (30,058 | ) | 2,395 | 332,612 | ||||||||||||
July 2014 Convertible Notes | 52,500 | (14,629 | ) | 3,531 | 41,402 | ||||||||||||
Total | $ | 1,451,005 | $ | (383,479 | ) | $ | 331,392 | $ | 1,398,918 |
Note_6_Derivatives
Note 6 - Derivatives | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Note 6 - Derivatives | ' | ||||||||||||||||||||
Note 6 - Derivatives | ' | ||||||||||||||||||||
NOTE 6 – DERIVATIVES | |||||||||||||||||||||
The Company’s convertible debt issued in November 2012 with a face value of $42,500 provides for conversion of the note into the Company’s common stock at a conversion rate equal to the average of the lowest three trading prices during the ten trading days immediately preceding the conversion date. Because of the uncertainty regarding the number of common shares that may be issuable upon the conversion of the convertible debt, the embedded conversion option is required to be accounted for separately and presented as a derivative liability on the Company’s balance sheet, with subsequent changes in fair value reported in the Company’s statement of operations. The Company determined the fair value of derivative liabilities using Monte Carlo simulations. The Company used the following assumptions in estimating the fair value of the derivative liabilities on the issuance date through the conversion dates of the debt. | |||||||||||||||||||||
Issuance Date | December 31, 2012 | March 30, 2013 | May 22, 2013 | June 19, 2013 | |||||||||||||||||
Expected Volatility | 51 | % | 52.67 | % | 40.55 | % | 38.46 | % | 25.09 | % | |||||||||||
Expected Term | 0.75 Years | 0.6 Years | 0.3 Years | 0.16 Years | 0.1 Years | ||||||||||||||||
Risk Free Interest Rate | 0.2 | % | 0.16 | % | 0.07 | % | 0.04 | % | 0.05 | % | |||||||||||
Dividend Rate | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||
The Company recorded an initial derivative liability of $32,622 with an offsetting discount against the convertible debt to be amortized into interest expense through the maturity of the convertible debt. From the date of issuance to the date of conversion into 166,744 shares of common stock, the fair value of the derivative liability changed to $32,007, resulting in expense of $616 and a reclassification to additional paid-in capital of $31,990 during the three months ended June 30, 2013, the period the transaction settled. | |||||||||||||||||||||
The Company’s convertible debt issued in January 2013 with a face value of $37,500 provides for conversion of the note into the Company’s common stock at a conversion rate equal to the average of the lowest three trading prices during the ten trading days immediately preceding the conversion date. Because of the uncertainty regarding the number of common shares that may be issuable upon the conversion of the convertible debt, the embedded conversion option is required to be accounted for separately and presented as a derivative liability on the Company’s balance sheet, with subsequent changes in fair value reported in the Company’s statement of operations. The Company determined the assumptions in estimating the fair value of the derivative liabilities on the issuance date and as of June 24, 2013. | |||||||||||||||||||||
Issuance | March 31, | June 24, | |||||||||||||||||||
Date | 2013 | 2013 | |||||||||||||||||||
Expected Volatility | 51 | % | 49.82 | % | 29.43 | % | |||||||||||||||
Expected Term | 0.75 Years | 0.45 Years | 0.16 Years | ||||||||||||||||||
Risk Free Interest Rate | 0.11 | % | 0.11 | % | 0.06 | % | |||||||||||||||
Dividend Rate | 0 | % | 0 | % | 0 | % | |||||||||||||||
The Company recorded an initial derivative liability of $28,603 with an offsetting discount against the convertible debt to be amortized into interest expense through the maturity of the convertible debt. From the date of issuance until the full payment of $57,606 was made, the fair value of the derivative liability changed to $18,733 resulting in derivative income of $9,870 that was recorded during the three months ended June 30, 2013, the period the transaction settled. |
Note_7_StockBased_Compensation
Note 7 - Stock-Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Note 7 - Stock-Based Compensation | ' | ||||||||||||||||
Note 7 - Stock-Based Compensation | ' | ||||||||||||||||
NOTE 7 – STOCK-BASED COMPENSATION | |||||||||||||||||
In 2009, the Company approved the 2009 Employee, Director and Consultant Stock Option Plan (the “2009 Plan”) and authorized an option pool of 5,500,000 shares that was subject to a 3-for-1 reverse stock split, resulting in an authorized option pool of 1,833,333. Stock options typically vest over a three-year period and have a life of ten years from the date granted. In 2009, the Company accelerated the option vesting of certain employees who terminated their employment, but agreed to work in a consulting capacity. In exchange for the accelerated vesting, the employees agreed to shorter expiration periods for their options. As of September 30, 2014 there were 239,567 shares available for awards under this plan. | |||||||||||||||||
In 2012, the Company approved the 2012 Employee, Director and Consultant Stock Option Plan (the “2012 Plan”) and authorized an option pool of 7,500,000 shares. Stock options typically vest over a three year period and have a life of ten years from the date granted. As of September 30, 2014, there were 4,617,703 shares available for awards under this plan. | |||||||||||||||||
During the nine months ended September 30, 2014 and 2013, the Company granted 1,329,000 and 960,000 options, respectively, to acquire shares of common stock to employees, directors or consultants. | |||||||||||||||||
On February 12, 2014, Arol Buntzman resigned from his positions as Chairman, Director and Chief Executive Officer (CEO) of the Company. The Company’s Board of Directors has commenced a search for a permanent CEO and has appointed Nicole Fernandez-McGovern, the Company’s Chief Financial Officer, as interim CEO to serve until a permanent CEO is hired. | |||||||||||||||||
As a result of Mr. Buntzman’s resignation pursuant to the December 2013 non-qualified stock option agreement between him and the Company, which granted to him options to purchase up to 4,000,000 shares of common stock outside of the Company’s 2009 and 2012 stock option plans (the “Option Agreement”), options to purchase 1,500,000 shares of stock were automatically cancelled. These options covered the tranches of 500,000 shares each at an exercise price of $0.40, $0.60 and $0.70, respectively. The Company believes that some or all of the remaining options under the Option Agreement, representing 1,500,000 shares in three tranches of 500,000 shares each at exercise prices of $0.40, $0.60 and $0.70, respectively, should be cancelled based on the circumstances of Mr. Buntzman’ s resignation. Mr. Buntzman disputes the Company’s position. If the dispute is not settled, the matter is subject to binding arbitration. No demand for arbitration has been filed by either party. | |||||||||||||||||
The grant-date fair value of options is estimated using the Black-Scholes option pricing model. The per share weighted average fair value of stock options granted during the period ended September 30, 2014 was $0.15, $0.23 and $0.30 and was determined using the following assumptions: expected price volatility ranging between 46.7% to 50.3%, risk-free interest rate ranging from 1.38% to 2.23%, zero expected dividend yield, and six to ten years expected life of options. The expected term of options granted is based on the simplified method in accordance with Securities and Exchange Commission Staff Accounting Bulletin 107, and represents the period of time that options granted are expected to be outstanding. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of peers with similar attributes. In addition, the Company determines the risk free rate by selecting the U.S. Treasury with maturities similar to the expected terms of grants, quoted on an investment basis in effect at the time of grant for that business day. | |||||||||||||||||
In August 2014, the Company’s board of directors approved the modification of outstanding options to acquire 3,206,666 shares, reducing the then-applicable exercise prices ranging from $0.23 to $0.35 per share, to $0.11 per share. The Company compared the fair value of the options immediately prior to the modification to their fair value immediately after the modification and determined that the option holders received incremental compensation of $93,630, of which $26,237 was related to fully vested options and recognized as expense on the date of modification, and $67,939 will be recognized as stock based compensation expense over remaining vesting periods through April 2017. | |||||||||||||||||
As of September 30, 2014, there was approximately $262,377 of total unrecognized stock compensation expense, related to unvested stock options under the both Plans. This expense is expected to be recognized over the remaining weighted average vesting periods of the outstanding options of 1.02 years. | |||||||||||||||||
A summary of options issued, exercised and cancelled for the nine months ended September 30, 2014 are as follows: | |||||||||||||||||
Shares | Weighted- Average Exercise Price ($) | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value ($) | ||||||||||||||
Outstanding at December 31, 2013 | 8,315,958 | $ | 0.42 | 9.09 | — | ||||||||||||
Granted | 1,329,000 | 0.25 | 9.24 | — | |||||||||||||
Exercised | — | — | — | — | |||||||||||||
Cancelled | (2,668,895 | ) | 0.47 | — | — | ||||||||||||
Outstanding at September 30, 2014 | 6,976,063 | $ | 0.26 | 8.34 | — | ||||||||||||
Exercisable at September 30, 2014 | 5,968,002 | $ | 0.36 | 8.58 | — | ||||||||||||
Note_8_Warrants_to_Purchase_Co
Note 8 - Warrants to Purchase Common Stock | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Note 8 - Warrants To Purchase Common Stock | ' | ||||||||||||
Note 8 - Warrants to Purchase Common Stock | ' | ||||||||||||
NOTE 8 – WARRANTS TO PURCHASE COMMON STOCK | |||||||||||||
During the quarter ended September 30, 2014, the Company issued, in connection with restructuring of debentures and private placement offerings for the sale of common stock, warrants to purchase 2,837,982 shares of the Company’s common stock at exercise prices of $0.20 and $0.50. During the quarter ended June 30, 2014, the Company issued, in connection with private placement offerings for the sale of common stock, warrants to purchase 1,596,361 shares of the Company’s common stock at exercise prices of $0.50 and $0.90. All warrants outstanding as of September 30, 2014 are scheduled to expire at various dates through 2019. A summary of warrants issued, exercised and expired for the nine months ended September 30, 2014 follows: | |||||||||||||
Shares | Weighted- Average Exercise Price ($) | Weighted-Average Remaining Contractual Term | |||||||||||
Outstanding at December 31, 2013 | 10,486,066 | $ | 0.98 | 0.83 | |||||||||
Granted | 4,434,343 | 0.4 | 4.73 | ||||||||||
Exercised | — | — | — | ||||||||||
Expired | (61,397 | ) | 3 | — | |||||||||
Outstanding at September 30, 2014 | 14,859,012 | $ | 0.8 | 1.84 | |||||||||
Exercisable at September 30, 2014 | 14,859,012 | $ | 0.8 | 1.84 | |||||||||
Note_9_Stockholders_Equity
Note 9 - Stockholder's Equity | 9 Months Ended |
Sep. 30, 2014 | |
Note 9 - Stockholders Equity | ' |
Note 9 - Stockholders' Equity | ' |
NOTE 9 – STOCKHOLDER’S EQUITY | |
During the nine months ended September 30, 2014, the Company raised gross proceeds of $661,025 through the sale of 7,967,740 shares of its Common Stock to accredited investors in private placement transactions at a price of $0.165 per share. Each investor also received a five-year warrant to purchase one share of common stock for every four shares purchased at an exercise price of $0.50 per share. In addition, in March 2014, the Company borrowed $100,000 from an accredited investor pursuant to a six-month convertible promissory note bearing interest at 10% per year. This note was converted effective July 1, 2015 for 606,061 common shares at $.165 per share with the same warrant consideration as for the shares privately sold as set forth above. Also in September 2014, the Company raised gross proceeds of $100,000 through the sale of 606,061 shares of its Common Stock to an accredited investor under the same terms as those set forth above. The Company incurred $25,451 of securities and debt issuance costs and issued 127,256 warrants representing commissions paid to broker-dealers who assisted with these transactions and repurchased 768,712 shares of common stock for $76,871 from the former CEO in connection with these transactions. |
Note_10_Legal_Proceedings
Note 10 - Legal Proceedings | 9 Months Ended |
Sep. 30, 2014 | |
Note 10 - Legal Proceedings | ' |
Note 10 - Legal Proceedings | ' |
NOTE 10 – LEGAL PROCEEDINGS | |
In February 2012, Trunity and the Company’s former CEO Terry Anderton were served with a complaint filed by an ex-Trunity, employee, William Horn, in the Nashua, New Hampshire, Superior Court. The plaintiff served as Executive Vice President of Marketing & Business Development from March until August 2011 at an annual salary of $100,000. He asserted whistleblower status and alleged that he was wrongfully terminated because of his allegations that the Company had violated securities, tax and employment laws. The complaint sought unspecified damages under the New Hampshire Whistleblower Act and common law, including reinstatement, back pay and attorney’s fees and costs. In May 2012, the Company responded to the complaint by denying all material allegations and filing a counterclaim against the plaintiff for breach of contract, tortious interference with contractual and business relations, breach of fiduciary duty and violation of the Uniform Trade Secrets Act. Substantial discovery was taken. | |
On June 13, 2013, the Court granted the Company Motion to Dismiss Terry Anderton, in his individual capacity, from the case. Therefore, Trunity remained the sole defendant in this matter. | |
Trial of the case was scheduled for the weeks of June 16 and June 23, 2014. | |
On April 14, 2014, the parties mediated the case and settlement terms reached. On May 8, 2014, following mediation, Mr. Horn signed a Confidential Settlement Agreement and General Release, which became effective on the eighth day following his signature. The case was settled based on Trunity’s agreement to pay $60,000 to Mr. Horn, less applicable withholding and taxes, as well as confidentiality provisions, non-disparagement, and the parties exchanging mutual releases. The settlement payment was made by the insurance company, which has paid all costs of the litigation above the $50,000 deductible. The parties filed Docket Markings bringing the case to conclusion. |
Note_11_Subsequent_Events
Note 11 - Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Note 11 - Subsequent Events | ' |
Note 11 - Subsequent Events | ' |
NOTE 11 – SUBSEQUENT EVENTS | |
The Company has defaulted on its obligation to pay the October and November Notes of $624,372 principal amount of debentures due October and November 2014. The total amount due on these debentures, including interest, is $749,246. The Company has negotiated restructured terms with the majority of the debenture holders and is attempting to complete the formal restructuring of these debt obligations. | |
On October 24, 2014, the Company signed a Hosted API License Agreement (the “Agreement”) with Visual Collaboration Innovations, Inc. (“VCI”) of Phoenix, Arizona to grant a limited, nonexclusive, nontransferable and renewable license for a two year-term to utilize the Trunity Application Programming Interfaces (APIs) documentation and Trunity Backend APIs hosted by the Company to manage and deliver VCI’s content to end users in the healthcare market. The Company received an upfront license fee of $65,000 upon execution of the Agreement. The Agreement is renewable for up to two-years provided VCI reaches its revenue described within the agreement. | |
On November 6, 2014, the Company entered into a Securities Purchase Agreement with Peak One Opportunity Fund, L.P. (“Peak”) pursuant to which the Company sold to Peak for $112,500 a convertible debenture (the “Peak Debenture”) in the principal amount of $125,000. (the “Principal Amount”) due on November 6, 2017 (the “Maturity Date”). Pursuant to the Peak Debenture, the Company agreed to pay interest on the Principal Amount outstanding from time to time in arrears (i) upon conversion or (ii) on the Maturity Date, at the rate of 5% per annum. The Company has the option to redeem the Peak Debenture prior to the Maturity Date at any time or from time to time by paying the Principal Amount plus accrued interest. Beginning 91 days after the issue date, Peak may convert the principal and accrued interest (the “Conversion Amount”) into shares of Common Stock, at a conversion price for each share of Common Stock (the “Conversion Price”) equal to 65% of the lowest closing bid price (as reported by Bloomberg LP) of Common Stock for the 20)trading days immediately preceding the date of conversion of the Debenture (subject to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events). In connection with the Peak Agreement the Company paid issuance costs of $10,000 and issued 137,500 shares of Restricted Stock to cover the expenses incurred and analysis performed by Peak in connection with the transaction. | |
In October and November 2014, the Company borrowed from accredited investors and related parties $110,000, pursuant to an Unsecured Redeemable Debenture that will pay interest during the Debenture term in the amount of 15% of the principal amount. The Company will issue to the Investor a four-year warrant to purchase common shares of the Company’s Common Stock (one Initial Warrant Share for every dollar of the Investment Amount) at a price of $0.15 per share resulting 110,000 warrants. In addition, the Company will issue to Investor a warrant (the “2015 Warrant”) to purchase shares 110,000 warrants (the “2015 Warrant Shares”) of the Company’s common stock at a price per 2015 Warrant Share to be determined. The Company incurred no commission costs in connection with these transactions. | |
In August 2013, the Company executed a lease for 8,713 square feet for its former corporate offices located in Portsmouth, New Hampshire. The lease commenced on August 9, 2013 and had a five-year term ending on September 8, 2018. The monthly rental payments for the first year were $10,165 per month and were scheduled to increase on each anniversary at a rate of 3% per annum. The Company was required to pay its proportionate share of the building’s common area maintenance (“CAM”), real estate taxes, utilities serving the premises and the cost of premises janitorial service estimated to be $5,210 on a monthly basis. | |
On August 11, 2014, the landlord of our former corporate offices in Portsmouth, NH declared the Company in default based on its failure to pay rent and other charges due since July 2014. The Company vacated the premises on August 22, 2014, and moved its office to smaller, less expensive premises in the neighboring area. Past due amounts owed on the lease through the date of surrender of the premises total approximately $51,000. Total payments from surrender through the end of the lease would be approximately $900,000. The Company is attempting to negotiate a settlement of the lease with the landlord based on an offset for the fair market rental value of the premises and a discount to present value, as well as a discount based on the Company’s precarious financial condition, No legal demands have been filed by either party. The Company has recorded total liability of $100,000 to cover its exposure based on the lease, an amount equal to its pending settlement offer to the landlord. There can be no assurance that settlement of this lease will not have a material adverse effect on the Company. |
Note_2_Summary_of_Significant_1
Note 2 - Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |
Sep. 30, 2014 | ||
Note 2 - Summary Of Significant Accounting Policies Policies | ' | |
Basis of Accounting | ' | |
Basis of Accounting -The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires our management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of financial statements. | ||
Development Stage Operations | ' | |
Development Stage Operations - The Company had operated as a development stage enterprise since its inception by devoting substantially all of its efforts to business development. The Company emerged from development stage operations during the first quarter of 2013. | ||
Going Concern | ' | |
Going Concern - The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred net losses and had negative operating cash flow since its inception. To the extent the Company experiences negative cash flows in the future, it will continue to require additional capital to fund operations. The Company has historically obtained additional capital investments under various debt and common stock issuances. Although management continues to pursue its financing plans, there is no assurance that the Company will be successful in generating sufficient revenues to provide positive cash flow or that financing at acceptable terms, if at all. In addition, the Company has defaulted on lease and debt obligations as of September 30, 2014. Although the Company is currently in negotiations related to these defaults, there is no assurance that any negotiations will be successful in reducing the Company’s liabilities under default. Based on these factors, the Company may be unable to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | ||
Website Development | ' | |
Website Development –The Company has adopted the provisions of FASB Accounting Standards Codification No. 350 Intangible-Goodwill and Other. Research and development costs incurred in the planning stage of a website are expensed, while development costs of the website to be sold, leased, or otherwise marketed are subject are capitalized and amortized over the estimated three year life of the asset. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Therefore, costs incurred subsequent to achievement of technological feasibility are usually not significant, and generally most software development costs have been expensed as incurred. For the three months and nine months ended September 30, 2014, the Company incurred and capitalized $163,053 and $491,773, respectively, in platform development costs as compared to the three and nine months ended September 30, 2013, of $114,531 and $378,330, respectively. Amortization for these costs recorded during the three and nine months ended September 30, 2014 was $129,961 and $401,204, respectively. In the comparable prior periods as of September 30, 2013, amortization expense was $104,455 and $338,280, respectively. | ||
Revenue Recognition | ' | |
Revenue Recognition – The Company’s revenue model consists of Software as a Service (SaaS) licensing and hosting revenue, as well as revenues generated from consulting, revenue sharing with our authors, publishers and advertising. All SaaS revenue is recognized ratably over the contract period. | ||
Consulting revenues are earned for web site development services and are recognized on a time and materials basis, billed in accordance with contractual milestones negotiated with the customer. Revenues are recognized as the services are performed and amounts are earned in accordance with FASB ASC Topic 605 Revenue Recognition. We consider amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is probable. In certain contracts, revenue is earned upon achievement of certain milestones indicated in the client agreements. | ||
Services under these contracts are typically provided in less than a year and represent the contractual milestones or output measure, which reflect the earnings pattern. | ||
Digital content book revenues are earned and recognized as transactions are entered on the Trunity eLearning Platform by customers purchasing digital content through the Trunity Knowledge Exchange website. | ||
Advertising revenue is earned from search engine providers based on search activity for sites hosted by the Company. | ||
Billings in excess of revenues recognized are recorded as Deferred Revenue (a liability) until revenue recognition criteria are met. Client prepayments are deferred and recognized over future periods as services are delivered or performed. | ||
Derivative Financial Instruments | ' | |
Derivative Financial Instruments – The Company assesses whether it has embedded derivatives in accordance with ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities. The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. | ||
For derivative instruments that hedge the exposure to changes in the fair value of an asset or a liability and that are designated as fair value hedges, both the net gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in earnings in the current period. Derivatives that do not qualify as hedges must be adjusted to fair value through current income. The Company currently does not engage in fair value hedges. | ||
Stock-Based Compensation | ' | |
Stock-Based Compensation – We recognize compensation costs to employees under ASC Topic 718, Compensation – Stock Compensation. Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options is estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share based compensation arrangements may include stock options, restricted share plans, performance based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. | ||
Equity instruments issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC Topic 505, Equity Based Payments to Non-Employees. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification. | ||
Common Stock Purchase Warrants | ' | |
Common Stock Purchase Warrants – The Company accounts for common stock purchase warrants in accordance with ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities. As is consistent with its handling of stock compensation and embedded derivative instruments, the Company’s cost for warrants is estimated at the grant date based on each option’s fair-value as calculated by the BSM option-pricing model value method for valuing the impact of the expense associated with these warrants. | ||
Financial Instruments and Fair Values | ' | |
Financial Instruments and Fair Values – The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use various valuation methodologies and prioritize the use of observable inputs. We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market: | ||
Level 1 — inputs include exchange quoted prices for identical instruments and are the most observable. | ||
Level 2 — inputs include brokered and/or quoted prices for similar assets and observable inputs such as interest rates. | ||
Level 3 — inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the asset or liability. | ||
The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our hierarchy assessment. The carrying amount of cash, trade receivables and other assets approximates fair value due to the short-term maturities of these instruments. Because cash and cash equivalents are readily liquidated, management classifies these values as Level 1. The fair values of all other financial instruments, including debt, approximate their book values as the instruments are short-term in nature or contain market rates of interest. Because there is no ready market or observable transactions, management classifies all other financial instruments as Level 3. | ||
Reclassifications | ' | |
Reclassifications – Certain reclassifications have been made to the prior period presentation to conform to the current period presentation. | ||
Recent Accounting Pronouncements | ' | |
Recent Accounting Pronouncements– In June 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance related to stock compensation. The new standard requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. Early adoption is permitted. The Company does not believe the adoption of this new accounting standard will impact the consolidated financial statements. | ||
In May 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective beginning January 1, 2017 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of adopting this new accounting standard to its consolidated financial statements. | ||
In April 2014, the FASB issued new guidance related to reporting discontinued operations. This new standard raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The new standard is effective for fiscal years beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in financial statements previously issued. The Company is in the process of evaluating the impact, if any, of adopting this new accounting standard on its consolidated financial statements. |
Note_3_Intangible_Assets_Table
Note 3 - Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Note 3 - Intangible Assets Tables | ' | ||||||||||||||
Intangible assets | ' | ||||||||||||||
Intangible assets were comprised of the following at September 30, 2014: | |||||||||||||||
Trunity eLearning Platform | Estimated | Gross Cost | Accumulated Amortization | Net Book Value | |||||||||||
Life | |||||||||||||||
Assets acquired from Trunity, LLC | 3 years | $ | 1,775,000 | $ | (1,775,000 | ) | $ | — | |||||||
Internal costs capitalized for period from July 28, 2009 (inception) to December 31, 2009 | 3 years | 121,820 | (121,820 | ) | — | ||||||||||
Internal costs capitalized for the twelve months ended December 31, 2010 | 3 years | 342,345 | (342,345 | ) | — | ||||||||||
Internal costs capitalized for the twelve months ended December 31, 2011 | 3 years | 327,100 | (327,100 | ) | — | ||||||||||
Internal costs capitalized for the twelve months ended December 31, 2012 | 3 years | 548,031 | (437,375 | ) | 110,656 | ||||||||||
Internal costs capitalized for the twelve months ended December 31, 2013 | 3 years | 519,733 | (235,684 | ) | 284,049 | ||||||||||
Internal costs capitalized for the nine months ended September 30, 2014 | 3 years | 491,772 | (79,745 | ) | $ | 412,027 | |||||||||
Carrying value as of September 30, 2014 | $ | 806,732 | |||||||||||||
Estimated future amortization expense | ' | ||||||||||||||
Estimated future amortization expense is as follows for the following periods: | |||||||||||||||
Remainder of 2014 | $ | 129,961 | |||||||||||||
2015 | 402,155 | ||||||||||||||
2016 | 231,418 | ||||||||||||||
2017 | 43,198 | ||||||||||||||
Total future amortization expense | $ | 806,732 |
Note_5_Convertible_Debt_Tables
Note 5 - Convertible Debt (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Note 5 - Convertible Debt Tables | ' | ||||||||||||||||
Summary of convertible debentures outstanding | ' | ||||||||||||||||
The following is a summary of convertible debentures outstanding as of September 30, 2014: | |||||||||||||||||
Face Value | Initial Discount | Accumulated Amortization | Carrying Value | ||||||||||||||
July Notes (Series A) | $ | 173,858 | $ | (84,788 | ) | $ | 84,788 | $ | 173,858 | ||||||||
October and November Notes (Series B) | 624,372 | (254,004 | ) | 240,678 | 611,046 | ||||||||||||
August Notes (Series C) | 240,000 | — | — | 240,000 | |||||||||||||
September Notes (Series D) | 360,275 | (30,058 | ) | 2,395 | 332,612 | ||||||||||||
July 2014 Convertible Notes | 52,500 | (14,629 | ) | 3,531 | 41,402 | ||||||||||||
Total | $ | 1,451,005 | $ | (383,479 | ) | $ | 331,392 | $ | 1,398,918 |
Note_6_Derivatives_Tables
Note 6 - Derivatives (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Note 6 - Derivatives Tables | ' | ||||||||||||||||||||
Fair value of this derivative liability | ' | ||||||||||||||||||||
The Company used the following assumptions in estimating the fair value of the derivative liabilities on the issuance date through the conversion dates of the debt. | |||||||||||||||||||||
Issuance Date | December 31, 2012 | March 30, 2013 | May 22, 2013 | June 19, 2013 | |||||||||||||||||
Expected Volatility | 51 | % | 52.67 | % | 40.55 | % | 38.46 | % | 25.09 | % | |||||||||||
Expected Term | 0.75 Years | 0.6 Years | 0.3 Years | 0.16 Years | 0.1 Years | ||||||||||||||||
Risk Free Interest Rate | 0.2 | % | 0.16 | % | 0.07 | % | 0.04 | % | 0.05 | % | |||||||||||
Dividend Rate | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||
The Company determined the assumptions in estimating the fair value of the derivative liabilities on the issuance date and as of June 24, 2013. | |||||||||||||||||||||
Issuance | March 31, | June 24, | |||||||||||||||||||
Date | 2013 | 2013 | |||||||||||||||||||
Expected Volatility | 51 | % | 49.82 | % | 29.43 | % | |||||||||||||||
Expected Term | 0.75 Years | 0.45 Years | 0.16 Years | ||||||||||||||||||
Risk Free Interest Rate | 0.11 | % | 0.11 | % | 0.06 | % | |||||||||||||||
Dividend Rate | 0 | % | 0 | % | 0 | % |
Note_7_StockBased_Compensation1
Note 7 - Stock-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Note 7 - Stock-Based Compensation Tables | ' | ||||||||||||||||
Summary of options issued, exercised and cancelled | ' | ||||||||||||||||
A summary of options issued, exercised and cancelled for the nine months ended September 30, 2014 are as follows: | |||||||||||||||||
Shares | Weighted- Average Exercise Price ($) | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value ($) | ||||||||||||||
Outstanding at December 31, 2013 | 8,315,958 | $ | 0.42 | 9.09 | — | ||||||||||||
Granted | 1,329,000 | 0.25 | 9.24 | — | |||||||||||||
Exercised | — | — | — | — | |||||||||||||
Cancelled | (2,668,895 | ) | 0.47 | — | — | ||||||||||||
Outstanding at September 30, 2014 | 6,976,063 | $ | 0.26 | 8.34 | — | ||||||||||||
Exercisable at September 30, 2014 | 5,968,002 | $ | 0.36 | 8.58 | — |
Note_8_Warrants_to_Purchase_Co1
Note 8 - Warrants to Purchase Common Stock (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Note 8 - Warrants To Purchase Common Stock Tables | ' | ||||||||||||
Summary of warrants issued, exercised and expired | ' | ||||||||||||
A summary of warrants issued, exercised and expired for the nine months ended September 30, 2014 follows: | |||||||||||||
Shares | Weighted- Average Exercise Price ($) | Weighted-Average Remaining Contractual Term | |||||||||||
Outstanding at December 31, 2013 | 10,486,066 | $ | 0.98 | 0.83 | |||||||||
Granted | 4,434,343 | 0.4 | 4.73 | ||||||||||
Exercised | — | — | — | ||||||||||
Expired | (61,397 | ) | 3 | — | |||||||||
Outstanding at September 30, 2014 | 14,859,012 | $ | 0.8 | 1.84 | |||||||||
Exercisable at September 30, 2014 | 14,859,012 | $ | 0.8 | 1.84 |
Note_1_Organization_Basis_of_P1
Note 1 - Organization, Basis of Presentation and Nature of Operations (Details) (USD $) | 1 Months Ended | |||
Apr. 30, 2013 | Mar. 20, 2013 | Sep. 30, 2014 | Jan. 24, 2012 | |
Note 1 - Organization Basis Of Presentation And Nature Of Operations Details | ' | ' | ' | ' |
Percentage of Business Acquired | ' | ' | ' | 90.10% |
License fee | ' | $400,000 | ' | ' |
License fee recieved | 300,000 | 100,000 | ' | ' |
Deferred revenue | ' | ' | $17,033 | ' |
Note_2_Summary_of_Significant_2
Note 2 - Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Note 2 - Summary Of Significant Accounting Policies Details | ' | ' | ' | ' |
Development costs | $163,053 | $114,531 | $491,773 | $378,330 |
Amortization expense | $129,961 | $104,455 | $401,204 | $338,280 |
Note_3_Intangible_Assets_Detai
Note 3 - Intangible Assets (Details) (USD $) | 59 Months Ended |
Sep. 30, 2014 | |
Carrying value | $806,732 |
Internal costs capitalized for period from July 28, 2009 (inception) to December 31, 2009 | ' |
Estimated Life | '3 years |
Gross Cost | 121,820 |
Accumulated Amortization | -121,820 |
Internal costs capitalized for the twelve months ended December 31, 2010 | ' |
Estimated Life | '3 years |
Gross Cost | 342,345 |
Accumulated Amortization | -342,345 |
Internal costs capitalized for the twelve months ended December 31, 2011 | ' |
Estimated Life | '3 years |
Gross Cost | 327,100 |
Accumulated Amortization | -327,100 |
Internal costs capitalized for the twelve months ended December 31, 2012 | ' |
Estimated Life | '3 years |
Gross Cost | 548,031 |
Accumulated Amortization | -437,375 |
Net Book Value | 110,656 |
Internal costs capitalized for the twelve months ended December 31, 2013 | ' |
Estimated Life | '3 years |
Gross Cost | 519,733 |
Accumulated Amortization | -235,684 |
Net Book Value | 284,049 |
Internal costs capitalized for the nine months ended June 30, 2014 | ' |
Estimated Life | '3 years |
Gross Cost | 491,772 |
Accumulated Amortization | -79,745 |
Net Book Value | 412,027 |
Assets acquired from Trunity, LLC | ' |
Estimated Life | '3 years |
Gross Cost | 1,775,000 |
Accumulated Amortization | ($1,775,000) |
Note_3_Intangible_Assets_Detai1
Note 3 - Intangible Assets (Details 1) (USD $) | Sep. 30, 2014 |
Note 3 - Intangible Assets Details 1 | ' |
Remainder of 2014 | $129,961 |
2015 | 402,155 |
2016 | 231,418 |
2017 | 43,198 |
Total future amortization expense | $806,732 |
Note_4_Significant_Transaction1
Note 4 - Significant Transactions With Related Parties (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Professional fees accrued | $17,886 |
Accured Printing fees | 9,021 |
Royalty fees | 25,986 |
CEO [Member] | ' |
Value of Common shares and warrants issued thrugh private placement | 24,000 |
Common shares issued thrugh private placement | 153,110 |
Warrants issued thrugh private placement | 40,298 |
Exercise price per share | $0.50 |
Les Anderton [Member] | ' |
Shareholder receivables/loans | 0 |
Terry Anderton [Member] | ' |
Shareholder receivables/loans | $0 |
Note_5_Convertible_Debt_Detail
Note 5 - Convertible Debt (Details) (USD $) | Sep. 30, 2014 |
Convertible Notes Payable | $1,451,005 |
Debt Instrument, Unamortized Discount | -383,479 |
Convertible Debentures, Accumulated Amortization | 331,392 |
Convertible Debentures, Carrying Value | 1,398,918 |
July Notes | ' |
Convertible Notes Payable | 173,858 |
Debt Instrument, Unamortized Discount | -84,788 |
Convertible Debentures, Accumulated Amortization | 84,788 |
Convertible Debentures, Carrying Value | 173,858 |
October and November Notes | ' |
Convertible Notes Payable | 624,372 |
Debt Instrument, Unamortized Discount | -254,004 |
Convertible Debentures, Accumulated Amortization | 240,678 |
Convertible Debentures, Carrying Value | 611,046 |
August Notes | ' |
Convertible Notes Payable | 240,000 |
Debt Instrument, Unamortized Discount | ' |
Convertible Debentures, Accumulated Amortization | ' |
Convertible Debentures, Carrying Value | 240,000 |
September Notes | ' |
Convertible Notes Payable | 360,275 |
Debt Instrument, Unamortized Discount | -30,058 |
Convertible Debentures, Accumulated Amortization | 2,395 |
Convertible Debentures, Carrying Value | 332,612 |
July 2014 Convertible Notes | ' |
Convertible Notes Payable | 52,500 |
Debt Instrument, Unamortized Discount | -14,629 |
Convertible Debentures, Accumulated Amortization | 3,531 |
Convertible Debentures, Carrying Value | $41,402 |
Note_5_Convertible_Debt_Detail1
Note 5 - Convertible Debt (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | |
July Notes | ' | ' | ' | ' | ' |
July 2012 Notes Face Value | ' | ' | ' | ' | $197,344 |
July 2012 Notes Initial Discount | 84,788 | ' | 84,788 | ' | ' |
July 2012 Notes Amortization | 3,533 | ' | 24,730 | ' | ' |
July 2012 Notes Carrying Value | 173,858 | ' | 173,858 | ' | ' |
July 2012 Notes Unamortized Discount | 0 | ' | 0 | ' | ' |
Maturity date | ' | ' | 31-Jul-14 | ' | ' |
Interest rate | ' | ' | 10.00% | ' | ' |
Interest Expense | 5,192 | 5,179 | 15,009 | 15,883 | ' |
Amortization of Debt Issuance Cost | 6,609 | 6,609 | 15,420 | 19,826 | ' |
Valuation model used | ' | ' | 'Black Scholes | ' | ' |
Volatility | ' | ' | 50.50% | ' | ' |
Risk free interest rate | ' | ' | 0.22% | ' | ' |
Dividend rate | ' | ' | 0.00% | ' | ' |
August and September 2012 Notes | ' | ' | ' | ' | ' |
September 2012 Notes Face Value | 330,900 | ' | 330,900 | ' | ' |
September 2012 Notes Initial Discount | 115,712 | ' | 115,712 | ' | ' |
September 2012 Notes Amortization | 9,643 | 14,464 | 38,571 | 43,392 | ' |
Maturity date | ' | ' | 30-Sep-14 | ' | ' |
Interest rate | ' | ' | 10.00% | ' | ' |
Amortization of Debt Issuance Cost | 1,650 | 2,476 | 7,427 | 6,602 | ' |
Valuation model used | ' | ' | 'Black Scholes | ' | ' |
Volatility | ' | ' | 50.50% | ' | ' |
Risk free interest rate | ' | ' | 0.22% | ' | ' |
Dividend rate | ' | ' | 0.00% | ' | ' |
October and November Notes | ' | ' | ' | ' | ' |
October and November Notes Face Value | 624,372 | ' | 624,372 | ' | ' |
October and November Notes conversion of notes payable-related parties | 565,372 | ' | 565,372 | ' | ' |
October and November Notes debenture sold by founders | 141,800 | ' | 141,800 | ' | ' |
October and November Notes Initial Discount | 254,004 | ' | 254,004 | ' | ' |
October and November Notes Amortization | 28,867 | 31,750 | 92,368 | 95,251 | ' |
October and November Notes Carrying value | 611,047 | ' | 611,047 | ' | ' |
October and November Notes Unamortized Discount | 13,326 | ' | 13,326 | ' | ' |
Maturity date | ' | ' | 30-Nov-14 | ' | ' |
Interest rate | ' | ' | 10.00% | ' | ' |
Interest Expense | 15,609 | 15,609 | 46,828 | 46,828 | ' |
Valuation model used | ' | ' | 'Black Scholes | ' | ' |
Volatility | ' | ' | 50.50% | ' | ' |
Risk free interest rate | ' | ' | 0.22% | ' | ' |
Dividend rate | ' | ' | 0.00% | ' | ' |
August 2014 Convertible Debentures | ' | ' | ' | ' | ' |
August 2014 Convertible Debentures outstanding principal and accrued interest | 240,000 | ' | 240,000 | ' | ' |
August 2014 Convertible Debentures amortization of discount | 5,772 | ' | 5,772 | ' | ' |
August 2014 Convertible Debentures, carrying value | 210,756 | ' | 210,756 | ' | ' |
August 2014 Convertible Debentures Unamortized discount | 29,244 | ' | 29,244 | ' | ' |
Maturity date | ' | ' | 31-Jul-15 | ' | ' |
Interest rate | ' | ' | 10.00% | ' | ' |
Interest Expense | 4,000 | 4,000 | 4,000 | 4,000 | ' |
Valuation model used | ' | ' | 'Black Scholes | ' | ' |
Dividend rate | ' | ' | 0.00% | ' | ' |
Volatility, Minimum | ' | ' | 43.99% | ' | ' |
Volatility, maximum | ' | ' | 44.08% | ' | ' |
Risk free interest rate, Minimum | ' | ' | 1.60% | ' | ' |
Risk free interest rate, Maximum | ' | ' | 1.74% | ' | ' |
September 2014 Convertible Debentures | ' | ' | ' | ' | ' |
Debentures issued in conversion, exchange | ' | ' | 360,275 | ' | ' |
Debentures issued in conversion, cash | ' | ' | 176,718 | ' | ' |
September 2014 Convertible Debentures, Face value | 157,080 | ' | 157,080 | ' | ' |
September 2014 Convertible Debentures conversion of notes payable related- parties | 35,000 | ' | 35,000 | ' | ' |
September 2014 Convertible Debentures amortization of discount | 2,395 | ' | 2,395 | ' | ' |
September 2014 Convertible Debentures, carrying value | 332,612 | ' | 332,612 | ' | ' |
September 2014 Convertible Debentures Unamortized discount | 30,058 | ' | 30,058 | ' | ' |
Maturity date | ' | ' | 31-Aug-15 | ' | ' |
Interest rate | ' | ' | 12.00% | ' | ' |
Interest Expense | 3,441 | 3,441 | 3,441 | 3,441 | ' |
Valuation model used | ' | ' | 'Black Scholes | ' | ' |
Dividend rate | ' | ' | 0.00% | ' | ' |
Volatility, Minimum | ' | ' | 43.99% | ' | ' |
Volatility, maximum | ' | ' | 44.08% | ' | ' |
Risk free interest rate, Minimum | ' | ' | 1.60% | ' | ' |
Risk free interest rate, Maximum | ' | ' | 1.74% | ' | ' |
July 2014 Convertible Notes | ' | ' | ' | ' | ' |
July 2014 Convertible Notes, Face value | 52,500 | ' | 52,500 | ' | ' |
July 2014 Convertible Notes, amortization of discount | 3,531 | ' | 3,531 | ' | ' |
July 2014 Convertible Notes, carrying value | 41,402 | ' | 41,402 | ' | ' |
July 2014 Convertible Notes, Unamortized discount | 11,098 | ' | 11,098 | ' | ' |
Maturity date | ' | ' | 31-Jul-15 | ' | ' |
Interest rate | ' | ' | 10.00% | ' | ' |
Interest Expense | 1,260 | ' | 1,260 | ' | ' |
Valuation model used | ' | ' | 'Black Scholes | ' | ' |
Dividend rate | ' | ' | 0.00% | ' | ' |
Volatility, Minimum | ' | ' | 43.99% | ' | ' |
Volatility, maximum | ' | ' | 44.08% | ' | ' |
Risk free interest rate, Minimum | ' | ' | 1.60% | ' | ' |
Risk free interest rate, Maximum | ' | ' | 1.74% | ' | ' |
Convertible Promissory Note | ' | ' | ' | ' | ' |
Interest Expense | $2,685 | ' | $2,685 | ' | ' |
Note_6_Derivatives_Details
Note 6 - Derivatives (Details) (November Convertible Debt) | 9 Months Ended |
Sep. 30, 2014 | |
Issuance Date | ' |
Assumptions in estimating the fair value of the derivative liabilities | ' |
Expected Volatility | 51.00% |
Expected Term | '9 months |
Risk Free Interest Rate | 0.20% |
Dividend Rate | 0.00% |
31-Dec-12 | ' |
Assumptions in estimating the fair value of the derivative liabilities | ' |
Expected Volatility | 52.67% |
Expected Term | '7 months 6 days |
Risk Free Interest Rate | 0.16% |
Dividend Rate | 0.00% |
30-Mar-13 | ' |
Assumptions in estimating the fair value of the derivative liabilities | ' |
Expected Volatility | 40.55% |
Expected Term | '3 months 18 days |
Risk Free Interest Rate | 0.07% |
Dividend Rate | 0.00% |
22-May-13 | ' |
Assumptions in estimating the fair value of the derivative liabilities | ' |
Expected Volatility | 38.46% |
Expected Term | '1 month 28 days |
Risk Free Interest Rate | 0.04% |
Dividend Rate | 0.00% |
19-Jun-13 | ' |
Assumptions in estimating the fair value of the derivative liabilities | ' |
Expected Volatility | 25.09% |
Expected Term | '1 month 6 days |
Risk Free Interest Rate | 0.05% |
Dividend Rate | 0.00% |
Note_6_Derivatives_Details_1
Note 6 - Derivatives (Details 1) (January2013ConvertibleDebtMember) | 9 Months Ended |
Sep. 30, 2014 | |
Issuance Date | ' |
Assumptions in estimating the fair value of the derivative liabilities | ' |
Expected Volatility | 51.00% |
Expected Term | '9 months |
Risk Free Interest Rate | 0.11% |
Dividend Rate | 0.00% |
31-Mar-13 | ' |
Assumptions in estimating the fair value of the derivative liabilities | ' |
Expected Volatility | 49.82% |
Expected Term | '5 months 12 days |
Risk Free Interest Rate | 0.11% |
Dividend Rate | 0.00% |
24-Jun-13 | ' |
Assumptions in estimating the fair value of the derivative liabilities | ' |
Expected Volatility | 29.43% |
Expected Term | '1 month 28 days |
Risk Free Interest Rate | 0.06% |
Dividend Rate | 0.00% |
Note_6_Derivatives_Details_Nar
Note 6 - Derivatives (Details Narrative) (USD $) | Sep. 30, 2014 |
January2013ConvertibleDebtMember | ' |
Convertible Debt | $37,500 |
Derivative Liability, Fair Value, Gross Liability | 28,603 |
November Convertible Debt | ' |
Convertible Debt | 42,500 |
Derivative Liability, Fair Value, Gross Liability | $32,622 |
Note_7_Stock_Based_Compensatio
Note 7 - Stock Based Compensation (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Note 7 - Stock Based Compensation Details | ' |
Option outstanding, Begining balance | 8,315,958 |
Option Granted | 1,329,000 |
Option Exercised | ' |
Option Cancelled | -2,668,895 |
Option outstanding, Ending balance | 6,976,063 |
Options exercisable at End | 5,968,002 |
Outstanding at Beginning, Weighted-Average Exercise Price | $0.42 |
Weighted- Average Exercise Price, Granted | $0.25 |
Weighted- Average Exercise Price, Exercised | ' |
Weighted- Average Exercise Price, Cancelled | $0.47 |
Outstanding at Ending, , Weighted-Average Exercise Price | $0.26 |
Weighted- Average exercisable at End | $0.36 |
Weighted- Average Remaining Contractual Term, Beginning balance | '9 years 1 month 2 days |
Weighted- Average Remaining Contractual Term, Granted | '9 years 2 months 27 days |
Weighted- Average Remaining Contractual Term, Ending Balance | '8 years 4 months 2 days |
Weighted- Average Remaining Contractual Term, exercisable at End | '8 years 6 months 29 days |
Note_7_StockBased_Compensation2
Note 7 - Stock-Based Compensation (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Number of option granted | 1,329,000 | 960,000 |
Exercise price of option granted | ' | ' |
Unrecognized stock compensation expense | $262,377 | ' |
Unrecognized stock compensation expense recognition period | '1 year 7 days | ' |
Maximum [Member] | ' | ' |
Expected Volatility | 50.30% | ' |
Expected Term | '10 years | ' |
Risk Free Interest Rate | 2.23% | ' |
Minimum [Member] | ' | ' |
Expected Volatility | 46.70% | ' |
Expected Term | '6 years | ' |
Risk Free Interest Rate | 1.38% | ' |
Mr. Buntzman's | ' | ' |
Number of option granted | 4,000,000 | ' |
Shares Cancelled | 1,500,000 | ' |
Mr. Buntzman's | Tranche 3 | ' | ' |
Shares Cancelled | 500,000 | ' |
Exercise price | $0.70 | ' |
Mr. Buntzman's | Tranche 2 | ' | ' |
Shares Cancelled | 500,000 | ' |
Exercise price | $0.60 | ' |
Mr. Buntzman's | Tranche 1 | ' | ' |
Shares Cancelled | 500,000 | ' |
Exercise price | $0.40 | ' |
2009 Employee, Director and Consultant Stock Option Plan (the " 2009 Plan") | ' | ' |
Number of shares authorized | 5,500,000 | ' |
Stock option description | 'Stock options typically vest over a 3 year period and have a life of 10 years from the date granted. | ' |
Shares available for awards | 239,567 | ' |
2012 Employee, Director and Consultant Stock Option Plan (the "2012 Plan") | ' | ' |
Number of shares authorized | 7,500,000 | ' |
Stock option description | 'Stock options typically vest over a 3 year period and have a life of 10 years from the date granted. | ' |
Shares available for awards | 4,617,703 | ' |
Note_8_Warrants_to_Purchase_Co2
Note 8 - Warrants to Purchase Common Stock (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Option outstanding, Begining balance | 8,315,958 |
Option Granted | 1,329,000 |
Option Exercised | ' |
Option Cancelled | -2,668,895 |
Option outstanding, Ending balance | 6,976,063 |
Options exercisable at End | 5,968,002 |
Outstanding at Beginning, Weighted-Average Exercise Price | $0.42 |
Weighted- Average Exercise Price, Granted | $0.25 |
Weighted- Average Exercise Price, Exercised | ' |
Weighted- Average Exercise Price, Cancelled | $0.47 |
Outstanding at Ending, , Weighted-Average Exercise Price | $0.26 |
Weighted- Average exercisable at End | $0.36 |
Weighted- Average Remaining Contractual Term, Beginning balance | '9 years 1 month 2 days |
Weighted- Average Remaining Contractual Term, Granted | '9 years 2 months 27 days |
Weighted- Average Remaining Contractual Term, Ending Balance | '8 years 4 months 2 days |
Weighted- Average Remaining Contractual Term, exercisable at End | '8 years 6 months 29 days |
Warrant [Member] | ' |
Option outstanding, Begining balance | 10,486,066 |
Option Granted | 4,434,343 |
Option Exercised | ' |
Option Cancelled | -61,397 |
Option outstanding, Ending balance | 14,859,012 |
Options exercisable at End | 14,859,012 |
Outstanding at Beginning, Weighted-Average Exercise Price | $0.98 |
Weighted- Average Exercise Price, Granted | $0.40 |
Weighted- Average Exercise Price, Exercised | ' |
Weighted- Average Exercise Price, Cancelled | $3 |
Outstanding at Ending, , Weighted-Average Exercise Price | $0.80 |
Weighted- Average exercisable at End | $0.80 |
Weighted- Average Remaining Contractual Term, Beginning balance | '9 months 29 days |
Weighted- Average Remaining Contractual Term, Granted | '4 years 8 months 23 days |
Weighted- Average Remaining Contractual Term, Ending Balance | '1 year 10 months 2 days |
Weighted- Average Remaining Contractual Term, exercisable at End | '1 year 10 months 2 days |
Note_8_Warrants_to_Purchase_Co3
Note 8 - Warrants to Purchase Common Stock (Details Narrative) (Warrant [Member], USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | |
Warrants issued to purchase shares | 2,837,982 | 1,596,361 | ' |
Warrants expires through | ' | ' | 31-Dec-19 |
Maximum [Member] | ' | ' | ' |
Exercise Price | 0.5 | 0.9 | ' |
Minimum [Member] | ' | ' | ' |
Exercise Price | 0.2 | 0.5 | ' |
Note_9_Stockholders_Equity_Det
Note 9 - Stockholder's Equity (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Proceeds from Sale of common stock | $658,700 | $3,573,100 |
Warrant [Member] | ' | ' |
Securities and debt issuance costs | 25,451 | ' |
Warrants issued to broker dealer | 127,256 | ' |
Common Stock | ' | ' |
Sale of common stock (in Shares) | 7,967,740 | ' |
Proceeds from Sale of common stock | 661,025 | ' |
Sale of common stock price per share | $0.17 | ' |
Common stock repurchased, shares | 768,712 | ' |
Common stock repurchased, value | $76,871 | ' |
Note_11_Subsequent_Events_Deta
Note 11 - Subsequent Events (Details Narrative) (Subsequent Event [Member], USD $) | 1 Months Ended | |||
Nov. 30, 2014 | Aug. 31, 2013 | Nov. 06, 2014 | Aug. 11, 2013 | |
Aggregate prinicple amount of debenture | $125,000 | ' | ' | ' |
Convertible debentures sold to Peak | ' | ' | 112,500 | ' |
Interest rate on convertible promissary note | 5.00% | ' | ' | ' |
Maturity Date | 6-Nov-17 | ' | ' | ' |
Common stock trading days | '20 days | ' | ' | ' |
Notes payable defaulted obligation to pay | 624,372 | ' | ' | ' |
Notes payable defaulted obligation to pay interest | 749,246 | ' | ' | ' |
License fees received | 65,000 | ' | ' | ' |
Amount borrowed from an accredited investor | 110,000 | ' | ' | ' |
Debenture interest rate | 15.00% | ' | ' | ' |
Issuance of common stock price per share | $0.15 | ' | ' | ' |
Lease area | ' | '8,713 | ' | ' |
Lease term | ' | '5 years | ' | ' |
Lease commenced date | ' | 9-Aug-13 | ' | ' |
Lease expiration date | ' | 8-Sep-18 | ' | ' |
Lease rental payments monthly | ' | 10,165 | ' | ' |
Percentage of increase annually lease rent | ' | 3.00% | ' | ' |
Cost of premises janitorial service | ' | 5,210 | ' | ' |
Past due amounts owed | ' | ' | ' | 51,000 |
Total payments from surrender through the end of the lease | ' | ' | ' | 900,000 |
Shares issued against options to purchase, shares | ' | 222,100 | ' | ' |
Shares issued against options to purchase, value | ' | 175,425 | ' | ' |
Exercise price | ' | ' | ' | $0.35 |
2015 Warrant [Member] | ' | ' | ' | ' |
Issuance of warrants | $110,000 | ' | ' | ' |