Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 15-May-14 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'NNAN | ' |
Entity Common Stock, Shares Outstanding | ' | 597,473,866 |
Entity Registrant Name | 'NaturalNano, Inc. | ' |
Entity Central Index Key | '0000863895 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash | $7,753 | $0 |
Accounts Receivable | 12,250 | 23,206 |
Inventory | 18,725 | 13,246 |
Prepaid expenses and other current assets | 7,040 | 7,040 |
Receivable due from MJ Enterprises | 200,000 | 0 |
Total current assets | 245,768 | 43,492 |
Total Assets | 245,768 | 43,492 |
Current liabilities: | ' | ' |
Notes Payable (See Note 2) | 4,408,435 | 4,088,425 |
Accounts payable | 414,510 | 448,127 |
Accrued expenses | 94,752 | 100,331 |
Accrued interest | 706,807 | 611,261 |
Accrued payroll | 1,000,784 | 978,340 |
Deferred revenue | 70,745 | 30,000 |
Registration rights liability (See Note 2) | 82,489 | 82,489 |
Derivative liability (see Note 4) | 58,727 | 32,419 |
Total current liabilities | 6,837,249 | 6,371,392 |
Total Liabilities | 6,837,249 | 6,371,392 |
Commitments and contingencies (See Note 7) | ' | ' |
Stockholders' Deficiency | ' | ' |
Common Stock - $.001 par value 800,000,000 authorized with 597,473,866 and 554,339,146 issued and outstanding, respectively | 597,474 | 554,339 |
Additional paid in capital | 21,248,433 | 21,176,747 |
Accumulated deficit | -28,565,931 | -28,302,351 |
Total stockholders' deficiency | -6,720,024 | -6,571,265 |
Total liabilities and stockholders' deficiency | 245,768 | 43,492 |
Series B Preferred Stock [Member] | ' | ' |
Current liabilities: | ' | ' |
Preferred Stock - $.001 par value, 10 million shares authorized | 248 | 425 |
Series C Preferred Stock [Member] | ' | ' |
Current liabilities: | ' | ' |
Preferred Stock - $.001 par value, 10 million shares authorized | 128,295 | 242,940 |
Series D Preferred Stock [Member] | ' | ' |
Current liabilities: | ' | ' |
Preferred Stock - $.001 par value, 10 million shares authorized | $0 | $0 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Preferred Stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Common Stock, par value (in dollars per share) | $0.00 | $0.00 |
Common Stock, shares authorized | 800,000,000 | 800,000,000 |
Common Stock, shares issued | 597,473,866 | 554,339,146 |
Common Stock, shares outstanding | 597,473,866 | 554,339,146 |
Series B Preferred Stock [Member] | ' | ' |
Preferred Stock, aggregate liquidation preference | $10 | $10 |
Preferred Stock, shares issued | 5,000 | 5,000 |
Preferred Stock, shares outstanding | 5,000 | 5,000 |
Series C Preferred Stock [Member] | ' | ' |
Preferred Stock, aggregate liquidation preference | $5,175 | $5,715 |
Preferred Stock, shares issued | 2,587,674 | 2,857,266 |
Preferred Stock, shares outstanding | 2,587,674 | 2,857,266 |
Series D Preferred Stock [Member] | ' | ' |
Preferred Stock, shares issued | 100 | 100 |
Preferred Stock, shares outstanding | 100 | 100 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Income: | ' | ' |
Revenue | $3,640 | $5,898 |
Cost of goods sold | 485 | 451 |
Gross profit | 3,155 | 5,447 |
Operating expenses: | ' | ' |
Research and development | 10,735 | 14,930 |
General and administrative | 94,145 | 70,301 |
Total operating expenses | 104,880 | 85,231 |
Loss from Operations | -101,725 | -79,784 |
Other expense: | ' | ' |
Interest expense, net | -95,547 | -90,122 |
Net loss on derivative liability | -26,308 | -9,834 |
Loss on modification of debt | -40,000 | -30,000 |
Other expense | -161,855 | -129,956 |
Net loss from continuing operations | -263,580 | -209,740 |
Net income from discontinued operations | 0 | 9,093 |
Consolidated net loss | ($263,580) | ($200,647) |
Continuing operations loss per common share - basic and diluted (in dollars per share) | $0 | $0 |
Discontinued operations income per common share- basic and diluted (in dollars per share) | $0 | $0 |
Weighted average shares outstanding (in shares) | 581,178,527 | 142,840,123 |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY DEFICIENCY (USD $) | Total | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Balance at Dec. 31, 2013 | ($6,571,265) | $554,339 | $0 | $21,176,747 | ($28,302,351) |
Balance (in shares) at Dec. 31, 2013 | ' | 554,339,146 | 100 | ' | ' |
Series C preferred shares converted to common stock and change in value | 114,821 | 43,135 | 0 | 71,686 | 0 |
Series C preferred shares converted to common stock and change in value (in shares) | ' | 43,134,720 | 0 | ' | ' |
Net loss for the three months ended March 31, 2014 | -263,580 | 0 | 0 | 0 | -263,580 |
Balance at Mar. 31, 2014 | ($6,720,024) | $597,474 | $0 | $21,248,433 | ($28,565,931) |
Balance (in shares) at Mar. 31, 2014 | ' | 597,473,866 | 100 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Cash flows from operating activities: | ' | ' |
Consolidated net loss | ($263,580) | ($200,647) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Fair value adjustment of derivative liabilities | 26,308 | 9,834 |
Issuance of warrants for services | 0 | 3,077 |
Loss on modification of debt | 40,000 | 30,000 |
Changes in operating assets and liabilities: | ' | ' |
Increase in inventory | -5,479 | -60 |
Decrease (increase) in accounts receivable | 10,956 | -15,500 |
Decrease in other current assets | 0 | 1,173 |
Increase in accounts payable, accrued payroll and accrued expenses | 78,803 | 115,141 |
Increase in deferred revenue | 40,745 | 0 |
Net cash used in operating activities | -72,247 | -56,982 |
Cash flows from investing activities: | ' | ' |
Receivable due from MJ Enterprises | -200,000 | 0 |
Net cash used in investing activities | -200,000 | 0 |
Cash flows from financing activities: | ' | ' |
Proceeds from senior secured Promissory Notes | 280,000 | 56,005 |
Net cash provided by financing activities | 280,000 | 56,005 |
Increase (decrease) in cash and cash equivalents | 7,753 | -977 |
Cash at beginning of period | 0 | 6,160 |
Cash at end of period | 7,753 | 5,183 |
Schedule of non-cash investing and financing activities: | ' | ' |
Common stock issued for Convertible notes | 0 | 10,013 |
Common stock issued for accrued interest | $0 | $17,325 |
PRINCIPAL_BUSINESS_ACTIVITY_AN
PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||
Mar. 31, 2014 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | ' | ||
1 | PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES | ||
Interim Financial Statements | |||
The consolidated financial statements as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 are unaudited. However, in the opinion of management of the Company, these financial statements reflect all material adjustments, consisting solely of normal recurring adjustments, necessary to present fairly the financial position and results of operations for such interim periods. The results of operations for the interim periods presented are not necessarily indicative of the results to be obtained for a full year. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, these financial statements do not include all of the information required by U.S. generally accepted accounting principles for complete financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. | |||
Liquidity and Going Concern | |||
Going Concern – The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company incurred a net loss for the three months ended March 31, 2014 of approximately $264,000 and had negative working capital of approximately $6,591,000 and a stockholders’ deficiency of $6,720,024 at March 31, 2014. Since inception the Company’s growth has been funded through a combination of convertible and non-convertible debt from private investors and from cash advances from its former parent Technology Innovations, LLC. These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations, to obtain additional financing, renegotiate the terms of existing financing obligations and ultimately to attain successful operations. The ability to successfully achieve those items is uncertain. The financial statements do not include any adjustments that might result from the uncertainty. | |||
As of March 31, 2014, the Company continued to require waivers for debt covenant violations and extensions of maturity dates. Refer to Note 2 for lenders waivers and maturity extensions received from the lenders. | |||
Basis of Consolidation | |||
The consolidated financial statements include the accounts of NaturalNano, Inc. (“NaturalNano” or the “Company”), a Nevada corporation, and its wholly owned subsidiary NaturalNano Research, Inc. (“NN Research”) a Delaware corporation. All significant inter-company accounts and transactions have been eliminated in consolidation. | |||
Description of the Business | |||
NaturalNano (the “Company”), located in Rochester, New York, is engaged in the development and commercialization of material science technologies with an emphasis on additives to polymers and other industrial and consumer products by taking advantage of technology advances developed in-house. The Company’s current activities are directed toward research, development, production and marketing of its proprietary technologies relating to the treatment and separation of nanotubes from halloysite clay and the development of related commercial applications for: | |||
• | cosmetics, health and beauty products | ||
• | polymers, plastics and composites | ||
Estimates | |||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate such estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | |||
Derivative Financial Instruments | |||
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, the Company estimated the total enterprise value based upon trending the firm value from December 2006 to March 2014 considering company specific factors including the changes in forward estimated revenues and market factors. Once the enterprise value was determined an option pricing model was used to allocate the enterprise value to the individual derivative securities in the Company’s capital structure. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | |||
Reclassifications | |||
Certain prior year amounts have been reclassified to conform to the current year presentation. | |||
Income Taxes | |||
The Company accounts for income taxes in accordance with ASC 740 which requires the recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. The Company recognizes penalties and accrued interest related to unrecognized tax benefits in income tax expense. Income tax expense was $0 for the three month periods ending March 31, 2014 and 2013. | |||
Loss Per Share | |||
Basic loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per common share gives effect to dilutive convertible preferred stock, convertible debt, options and warrants outstanding during the period. Shares to be issued upon the exercise of these instruments have not been included in the computation of diluted loss per share as their effect is anti-dilutive based on the net loss incurred. | |||
As of March 31, 2014 and 2013 there were 2,016,101,890 and 4,394,378,211 shares, respectively, underlying preferred stock, convertible debt, outstanding options and warrants that could potentially dilute future earnings. These potentially dilutive shares have been limited by certain debt and equity agreements with Platinum, Platinum Advisors, Alpha Capital and Technology Innovations LLC. These agreements provide limitations on the conversion of the dilutive instruments such that the number of shares of Common Stock that may be acquired by the holder upon conversion of such instruments shall be limited to ensure that following such conversion the total number of shares of Common Stock then beneficially owned by the holder does not exceed 4.99% of the total number of issued and outstanding shares of Common Stock. The Company does not have sufficient authorized shares to satisfy conversion of all the potentially dilutive instruments. | |||
Recent Accounting Pronouncements | |||
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted, would have a material effect on the accompanying financial statements. | |||
NOTES_PAYABLE
NOTES PAYABLE | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt Disclosure [Text Block] | ' | |||||||
2 | NOTES PAYABLE | |||||||
Notes payable consisted of the following: | ||||||||
Notes Payable | March 31, | December 31, | ||||||
2014 | 2013 | |||||||
Senior Secured Convertible Notes | $ | 3,124,403 | $ | 3,124,403 | ||||
Senior Secured Promissory Notes | 972,932 | 692,922 | ||||||
Subordinated Secured Convertible Note | 311,100 | 271,100 | ||||||
$ | 4,408,435 | $ | 4,088,425 | |||||
Senior Secured Convertible Notes and Senior Secured Promissory Notes | ||||||||
As of March 31, 2014, Notes payable on the balance sheet includes $4,097,335 ($3,817,325 at December 31, 2013) for senior secured convertible and non-convertible promissory notes. As further described below, the Company has defaulted on certain provisions of the notes. Platinum Long Term Growth and Merit Consulting, LLC (to whom Platinum Advisors has assigned their ownership interest in notes receivable from the Company) have granted waivers of default on their outstanding principal balance through June 30, 2014. Alpha Capital Anstalt (to whom Longview Special Finance has assigned its ownership interest in notes receivable to the Company) has granted a waiver of default on their outstanding principal through June 30, 2014. | ||||||||
The Loan and Security Agreement and the related underlying convertible notes issued in accordance with the Initial Note agreement had the original conversion price of $3.74 (as cited in the March 7, 2007 agreement) which was adjusted to a conversion price of $0.085 in accordance with the anti-dilution provisions of this loan and security agreement. This conversion price adjustment was triggered as a result of the issuance of the 2008 Promissory Notes (described below) on September 29, 2008 thereby resulting in a reset of (a) the conversion price of the Initial Notes, (b) the exercise price of the warrants related to the Initial Notes and (c) the number of shares that may be purchased by such warrants. As compensation for forbearance from the lenders in 2012, the conversion rate was further adjusted to 75% of the lowest VWAP for the 1, 5 or 10 days immediately prior to the conversion. | ||||||||
During the three month period ended March 31, 2013, the Company issued 9,500,000 shares of common stock to Alpha Capital Anstalt upon the conversion of $10,013 of outstanding principal due on the 8% Senior Secured Convertible Notes held by Longview Special Finance. Also during this period the Company issued 9,500,000 shares of common stock to Alpha Capital Anstalt upon the conversion of $8,550 of interest due on the 8% Senior Secured Convertible Notes held by Longview Special Finance. | ||||||||
2014 Senior Secured Promissory Notes | ||||||||
During the first quarter of 2014, the Company entered into various Senior Secured Promissory Notes aggregating to $280,000 with Platinum, Longview and Alpha (“the 2014 Senior Secured Promissory Notes”). The 2014 Senior Secured Promissory Notes are secured by, among other things, (i) the continuing security interest in certain assets of the Company pursuant to the terms of the Initial Notes dated March 7, 2007, (ii) the Pledge Agreement, as defined in the Initial Notes, and (iii) the Patent Security Agreement, dated as of March 6, 2007. The proceeds from the 2014 Senior Secured Promissory Notes are available for general working capital purposes and cannot be used to redeem or make any payment on account of any securities due to the Lenders. The 2014 Senior Secured Promissory Notes bear interest, in arrears, at a rate of 8% per annum and are payable in cash as follows: $80,000 due on June 30, 2014, and $200,000 due on February 7, 2014. The $200,000 note has been extended through a forbearance agreement and is now due and payable on June 30, 2014. | ||||||||
Subordinated Secured Convertible Note | ||||||||
Convertible Notes | ||||||||
On December 4, 2009, the Company received net proceeds of $197,500 pursuant to the terms of a subscription agreement dated as of November 30, 2009 with Cape One an accredited investor. Pursuant to the terms of the Subscription Agreement the Company issued (i) a 10% Subordinated Secured Convertible Promissory Note (“the 10% Convertible Note”) in the principal amount of $225,000 and (ii) a five-year common stock purchase warrant to purchase 2,647,059 shares, subject to certain anti-dilution provisions in the agreement of the Company’s common stock, par value $0.001 per share at an exercise price of $0.425 per share. The balance of this note as of March 31, 2014 is $311,100, a net result of increases as consideration for forbearance and conversions of principal. | ||||||||
The 10% Convertible Note had a 15-month term, bears interest at 10% per annum and is secured by certain assets of the Company pursuant to a security agreement, dated November 30, 2009. The 10% Convertible Note is convertible into Common Stock at any time prior to maturity (provided that such conversion does not result in the holder and its affiliates beneficially owning in excess of 4.99% (9.99% upon 61 days’ prior written notice) of the issued and outstanding Common Stock at $0.085 per share (the “Conversion Price”), subject to adjustment upon the occurrence of certain anti-dilution events. Interest under the Note is due quarterly in cash or if registered, in the Company’s common stock at a 20% discount in accordance with a formula set forth in the 10% Note. The 10% Note and security interest is subordinate to certain outstanding senior indebtedness of the Company held by Platinum Long Term Growth IV, LLC, Platinum Advisors LLC and Longview Special Finance Inc. (“Senior Lenders”). Upon the occurrence of Events of Default as set forth in the Note, the principal and interest due under the Note may be accelerated and the interest rate payable may be increased to 18%. The company has entered into various forbearance agreements between Cape One and the Company which extended the due date of the outstanding principal and interest. | ||||||||
During the three month periods ended March 31, 2014 and March 31, 2013, the Company entered into forbearance agreements with Cape One which extended the due dates of certain outstanding notes and accrued interest. As consideration for this forbearance, the lender increased its principal balance outstanding by $40,000 and $30,000 in the respectively periods cited above. These amounts were added to the principal balance of the Initial Notes and the Company recognized a loss on modification of debt of $40,000 and $30,000, respectively in the three month periods ended March 31, 2014 and March 31, 2013. This note has been extended through forbearance agreements and is now due and payable on May 30, 2014. | ||||||||
During three month period ended March 31, 2013, the Company issued 9,000,000 shares of common stock to Cape One in payment of $8,775 of interest expense obligations on the Subordinated Secured Convertible Note. | ||||||||
Registration Rights Agreement | ||||||||
On March 7, 2007, the Company entered into a Registration Rights Agreement with the Agent and the other investors, pursuant to which the Company agreed to prepare and file within 60 days of the March 7, 2007 agreement, a registration statement for resale under the Securities Act of 1933, the common stock issuable upon the exercise of the Warrants, in payment of interest on, or upon conversion of, the Notes. The Company further agreed to use its best efforts to cause the Registration Statement to be declared effective 120 days following the March 7, 2007 agreement date, or within 150 days if the Company receives a comment letter from the SEC, and to maintain such Registration Statement for the two year period following this date. This agreement allows for liquidated damages based on a daily amount of 0.0333% of the principal amount of the notes relating to the common stock issuable upon conversion of the Notes included in the Registration Statement. | ||||||||
As of March 31, 2014, the registration statement had not been updated with the requisite SEC filings and as such, the Company was in default of this provision of the Registration Rights Agreement. The lenders have provided the Company forbearance agreements related to this default through June 30, 2014. The Company recorded a total of $146,028 in such liquidated damages as of December 17, 2007, the date the registration statement was declared effective. As of December 31, 2007, $63,539 of this obligation was paid in cash and $82,489 was recorded as an accrued liability. The lender has the option to settle the liquidated damages in common stock valued at the average price for the five days prior to the end of a payment period. At March 31, 2014 and December 31, 2013 the outstanding balance for this obligation was $82,489. | ||||||||
DERIVATIVE_LIABILITY
DERIVATIVE LIABILITY | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | ' | |||||||
3 | DERIVATIVE LIABILITY | |||||||
For stock based derivative financial instruments, the Company estimated the total enterprise value based upon trending of the firm value from December 2006 to December 2013 considering company specific factors including the changes in forward estimated revenues and market factors. Once the enterprise value was determined an option pricing model was used to allocate the enterprise value to the individual derivative and other securities in the Company’s capital structure. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | ||||||||
The Company’s derivative liabilities as of March 31, 2014 are as follows: | ||||||||
· | The debt conversion feature embedded in the 8% Senior Secured Convertible notes entered into in March 2007 which contains anti-dilution provisions that would be triggered if the Company issued instruments with rights to the Company’s common stock at prices below this exercise price (described in Note 2.) | |||||||
· | The debt conversion feature and the 2,647,059 warrants exercisable at $0.425 per share granted in connection with the 10% Subordinated Secured Convertible debt entered into in November 2009. These agreements contain anti-dilution provisions that would be triggered if the Company issued instruments with rights to the Company’s common stock at prices below the exercise price (described in Note 2.) | |||||||
· | Derivative liabilities related to outstanding warrants and options due to the Company having insufficient authorized shares to satisfy the exercise or conversion of all outstanding instruments as of March 31, 2014. | |||||||
The fair value of the derivative liabilities as of March 31, 2014 and December 31, 2013 are as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Derivative Instrument | ||||||||
8% Notes conversion feature | $ | 44,137 | $ | 18,045 | ||||
10% Notes conversion feature | 5,920 | 3,946 | ||||||
Warrant liability | 8,670 | 10,428 | ||||||
Total | $ | 58,727 | $ | 32,419 | ||||
The increase in the fair value of the derivative liability of $26,308 was recognized as a loss on change in derivative liability in the statement of operations for the three months ended March 31, 2014. | ||||||||
Significant fluctuations in the variables used in calculating the value of the Company’s derivative liabilities could have significant impact on the fair market valuation. | ||||||||
Fair Value Valuation Hierarchy Measurement | ||||||||
ASC 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. | ||||||||
· | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. | |||||||
· | Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. | |||||||
· | Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. | |||||||
A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company’s derivative liability was determined utilizing Level 3 inputs. | ||||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS EQUITY | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||||
4 | STOCKHOLDERS EQUITY | ||||||||||
As of March 31, 2014 the Company was authorized to issue up to 800,000,000 shares of common stock and 10,000,000 shares of preferred stock. | |||||||||||
Increase in Authorized Common Stock: On July 1, 2013 the Company received a unanimous written consent in lieu of a meeting from the members of the Board of Directors and a written consent from the Series D stockholder to amend its articles of incorporation to increase the Company’s authorized common shares to 800,000,000 shares of common stock. As of March 31, 2014 there were 1,974,710,583 shares underlying preferred stock, convertible debt, outstanding options and warrants that could potentially dilute future earnings. The Company does not have sufficient authorized shares to satisfy conversion of all the potentially dilutive instruments. | |||||||||||
Preferred Stock Issuances | |||||||||||
On September 29, 2008 Platinum and Longview agreed to exchange detachable warrants to purchase 71,691,180 shares of common stock of the Company for $0.085 per share held by such Investors related to the March 6, 2007 convertible notes payable for 5,000,000 shares of preferred stock. | |||||||||||
On October 7, 2008, the Company filed a Certificate of Designation of Rights, Preferences, Designations, Qualifications and Limitations of the Series C Preferred Stock (the “Series C Designation”) with the Secretary of State of the State of Nevada, and prepared a preferred stock certificate for delivery to Platinum Long Term Growth IV, LLC, evidencing 4,250,000 shares of Series C Convertible Preferred Stock of the Company (“Series C”). On October 7, 2008, the Company also filed a Certificate of Designation of Rights, Preferences, Designations, Qualifications and Limitations of the Series B Preferred Stock (the “Series B Designation”) with the Secretary of State of the State of Nevada, and prepared a preferred stock certificate for delivery to Longview Special Funding, Inc., evidencing 750,000 shares of Series B Convertible Preferred Stock of the Company (“Series B”). The Series B and Series C have an aggregate liquidation preference of $10,000 and participate in any dividends or distributions to the common shareholders on an as converted basis. | |||||||||||
Each share of the Series B and Series C Convertible Preferred Stock is convertible into 160 shares of the Company’s common stock and votes on an as-converted basis (with each share having 160 votes). The conversion rate was reduced to 9.41 as a result of the 2012 reverse split, but was subsequently changed back to 160 as part of the consideration related to 2012 forbearance agreements. Both the Series B and Series C designations limits the holders’ rights to convert its Convertible Preferred Stock, and the aggregate voting powers, to no more than 4.99% of the votes attributable to the total outstanding common shares. Accordingly, the votes attributable to the Series B and Series C Convertible Preferred constitutes 4.99% of the aggregate votes attributable to the Company’s outstanding shares on an as converted basis and the votes Series B and Series C Convertible Preferred and the Series C Convertible Preferred, voting together represent approximately 9.98% of the aggregate votes attributable to the Company’s outstanding shares (on an as converted basis). The Series B Convertible Preferred Stock has an aggregate liquidation value of $10 and the Series C Convertible Preferred Stock has an aggregate liquidation value of $5,175. | |||||||||||
As a result of the Company not having sufficient authorized shares to satisfy the conversion of all outstanding convertible debt, convertible preferred stock, warrants and options, the Series B and C preferred shares have been moved into temporary equity classification on the balance sheet. | |||||||||||
During first quarter of 2014, Platinum elected to convert 269,592 shares of their Series C preferred shares into 43,134,720 common shares at the conversion rate of 160 common shares per each Series C share. | |||||||||||
During the first quarter of 2013, Alpha elected to convert 137,500 shares of Series B preferred shares owned by Longview into 22,000,000 common shares at the conversion rate of 160 common shares per each Series B share. During first quarter of 2013, Platinum elected to convert 508,022 shares of their Series C preferred shares into 81,283,520 common shares at the conversion rate of 160 common shares per each Series C share. | |||||||||||
Common Stock Issuances | |||||||||||
During the three months ended March 31, 2013, the Company issued an aggregate of 18,500,000 shares in satisfaction of $8,550 of interest obligations to Alpha Capital and $8,775 of interest obligations to Cape One. Also during this period, the Company issued an aggregate of 9,500,000 shares of its common stock in satisfaction of $10,013 of principal obligations to Alpha Capital. | |||||||||||
Warrants Grants | |||||||||||
The Company has issued warrants to purchase shares of its common stock to certain consultants and debt holders. As of March 31, 2014 and December 31, 2013 there were common stock warrants outstanding to purchase an aggregate of 118,235,294 shares of common stock pursuant to the warrant grant agreements. | |||||||||||
A summary of the outstanding warrants is presented below: | |||||||||||
2014 | |||||||||||
Shares | Weighted | Weighted | |||||||||
Average | Average | ||||||||||
Exercise | Remaining | ||||||||||
Price | Life-years | ||||||||||
Outstanding at January 1, 2014 | 118,235,294 | $ | 0.0142 | 5.9 | |||||||
Granted during the first quarter of 2014 | - | ||||||||||
Cancelled or forfeited | - | ||||||||||
Warrants outstanding at March 31, 2014 | 118,235,294 | $ | 0.0142 | 5.65 | |||||||
Warrants exercisable at March 31, 2014 | 118,235,294 | $ | 0.0142 | 5.65 | |||||||
INCENTIVE_STOCK_PLANS
INCENTIVE STOCK PLANS | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||||
5 | INCENTIVE STOCK PLANS | ||||||||||
A summary of the status of the outstanding incentive stock plans is presented below at March 31, 2014: | |||||||||||
Shares | Weighted | Weighted Average | |||||||||
Average | Remaining | ||||||||||
Exercise Price | Life-years | ||||||||||
Options outstanding at January 1, 2014 | 709,020 | $ | 3.57 | 2.11 | |||||||
Options granted/exercises/cancelled/forfeited | - | ||||||||||
Options outstanding at March 31, 2014 | 709,020 | $ | 3.57 | 1.86 | |||||||
Options exercisable at March 31, 2014 | 709,020 | $ | 3.57 | 1.86 | |||||||
All compensation costs for the above options have been previously recognized in operations. | |||||||||||
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended | |
Mar. 31, 2014 | ||
Discontinued Operations and Disposal Groups [Abstract] | ' | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ' | |
6 | DISCONTINUED OPERATIONS | |
In the second quarter of 2013, the Company ceased all activities associated with the Medical Board business segment. The Company assessed this segment and determined that inadequate income had been generated relative to the efforts of production and administrative support. The Statement of Operations for the three month period ended March 31, 2013 reflects the Medical Board business as a discontinued operation. The first quarter of 2013 included revenues from this discontinued operation of $13,000, cost of goods sold of $3,907 and gross margin of $9,093. In connection with this decision to exit the Medical Board business, the Company filed a Certificate of Dissolution on May 10, 2013 with the state of New York under section 1003 of the Business Corporation Law in connection with the unanimous written consent of the shareowners of Combotexs. The Nanotechnology business remains as the Company’s only reportable operating segment. | ||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended | |
Mar. 31, 2014 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events [Text Block] | ' | |
7 | SUBSEQUENT EVENTS | |
Purchase Agreement with MJ Enterprises | ||
On January 30, 2014, NaturalNano, Inc. entered into a purchase agreement to acquire all the issued and outstanding membership units of MJ Enterprises (“MJE”) from Jackson August Holdings, LLC, JFish, LLC and Adventure CNY LLC. MJE is in the business of developing, manufacturing, marketing, distributing and selling plating products through GSP LLC. a wholly owned subsidiary. In May 2014 the Company determined that the transaction should not proceed after due diligence was completed. MJE has committed to return proceeds advanced by NNAN which includes a loan of $200,000 collateralized with assets of the MJE and Personal Guarantees. | ||
8% Convertible Promissory Note- Marlin Capital Investments LLC | ||
On May 8, 2014, the Company entered into $45,000 convertible promissory note with Marlin Capital Investments LLC. The note is due on June 30, 2014, bears interest at 8% per annum and the note and interest accrued on the note are convertible into the Company’s common stock at any time prior to maturity (provided that such conversion does not result in the holder and its affiliates beneficially owning in excess of 4.99% of the issued and outstanding Common Stock) at $0.22 per share subject to adjustment upon the occurrence of certain anti-dilution events. | ||
Grant of Warrants | ||
On May 8, 2014, the Company granted 48 million warrants to certain employees and consultants with an exercise price of $0.0014 per share, a term of 5 years and which allow for cashless exercise. The Company’s stock price was $.0022 per share on the date the warrants were granted. | ||
PRINCIPAL_BUSINESS_ACTIVITY_AN1
PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | ||
Mar. 31, 2014 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||
Interim Financial Statements [Policy Text Block] | ' | ||
Interim Financial Statements | |||
The consolidated financial statements as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 are unaudited. However, in the opinion of management of the Company, these financial statements reflect all material adjustments, consisting solely of normal recurring adjustments, necessary to present fairly the financial position and results of operations for such interim periods. The results of operations for the interim periods presented are not necessarily indicative of the results to be obtained for a full year. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X for smaller reporting companies. Accordingly, these financial statements do not include all of the information required by U.S. generally accepted accounting principles for complete financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. | |||
Liquidity Disclosure [Policy Text Block] | ' | ||
Liquidity and Going Concern | |||
Going Concern – The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company incurred a net loss for the three months ended March 31, 2014 of approximately $264,000 and had negative working capital of approximately $6,591,000 and a stockholders’ deficiency of $6,720,024 at March 31, 2014. Since inception the Company’s growth has been funded through a combination of convertible and non-convertible debt from private investors and from cash advances from its former parent Technology Innovations, LLC. These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations, to obtain additional financing, renegotiate the terms of existing financing obligations and ultimately to attain successful operations. The ability to successfully achieve those items is uncertain. The financial statements do not include any adjustments that might result from the uncertainty. | |||
As of March 31, 2014, the Company continued to require waivers for debt covenant violations and extensions of maturity dates. Refer to Note 2 for lenders waivers and maturity extensions received from the lenders. | |||
Consolidation, Policy [Policy Text Block] | ' | ||
Basis of Consolidation | |||
The consolidated financial statements include the accounts of NaturalNano, Inc. (“NaturalNano” or the “Company”), a Nevada corporation, and its wholly owned subsidiary NaturalNano Research, Inc. (“NN Research”) a Delaware corporation. All significant inter-company accounts and transactions have been eliminated in consolidation. | |||
Business Description [Policy Text Block] | ' | ||
Description of the Business | |||
NaturalNano (the “Company”), located in Rochester, New York, is engaged in the development and commercialization of material science technologies with an emphasis on additives to polymers and other industrial and consumer products by taking advantage of technology advances developed in-house. The Company’s current activities are directed toward research, development, production and marketing of its proprietary technologies relating to the treatment and separation of nanotubes from halloysite clay and the development of related commercial applications for: | |||
• | cosmetics, health and beauty products | ||
• | polymers, plastics and composites | ||
Use of Estimates, Policy [Policy Text Block] | ' | ||
Estimates | |||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate such estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | |||
Derivatives, Policy [Policy Text Block] | ' | ||
Derivative Financial Instruments | |||
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, the Company estimated the total enterprise value based upon trending the firm value from December 2006 to March 2014 considering company specific factors including the changes in forward estimated revenues and market factors. Once the enterprise value was determined an option pricing model was used to allocate the enterprise value to the individual derivative securities in the Company’s capital structure. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. | |||
Reclassification, Policy [Policy Text Block] | ' | ||
Reclassifications | |||
Certain prior year amounts have been reclassified to conform to the current year presentation. | |||
Income Tax, Policy [Policy Text Block] | ' | ||
Income Taxes | |||
The Company accounts for income taxes in accordance with ASC 740 which requires the recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. The Company recognizes penalties and accrued interest related to unrecognized tax benefits in income tax expense. Income tax expense was $0 for the three month periods ending March 31, 2014 and 2013. | |||
Earnings Per Share, Policy [Policy Text Block] | ' | ||
Loss Per Share | |||
Basic loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per common share gives effect to dilutive convertible preferred stock, convertible debt, options and warrants outstanding during the period. Shares to be issued upon the exercise of these instruments have not been included in the computation of diluted loss per share as their effect is anti-dilutive based on the net loss incurred. | |||
As of March 31, 2014 and 2013 there were 2,016,101,890 and 4,394,378,211 shares, respectively, underlying preferred stock, convertible debt, outstanding options and warrants that could potentially dilute future earnings. These potentially dilutive shares have been limited by certain debt and equity agreements with Platinum, Platinum Advisors, Alpha Capital and Technology Innovations LLC. These agreements provide limitations on the conversion of the dilutive instruments such that the number of shares of Common Stock that may be acquired by the holder upon conversion of such instruments shall be limited to ensure that following such conversion the total number of shares of Common Stock then beneficially owned by the holder does not exceed 4.99% of the total number of issued and outstanding shares of Common Stock. The Company does not have sufficient authorized shares to satisfy conversion of all the potentially dilutive instruments. | |||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||
Recent Accounting Pronouncements | |||
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted, would have a material effect on the accompanying financial statements. | |||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Debt [Table Text Block] | ' | |||||||
Notes payable consisted of the following: | ||||||||
Notes Payable | March 31, | December 31, | ||||||
2014 | 2013 | |||||||
Senior Secured Convertible Notes | $ | 3,124,403 | $ | 3,124,403 | ||||
Senior Secured Promissory Notes | 972,932 | 692,922 | ||||||
Subordinated Secured Convertible Note | 311,100 | 271,100 | ||||||
$ | 4,408,435 | $ | 4,088,425 | |||||
DERIVATIVE_LIABILITY_Tables
DERIVATIVE LIABILITY (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | ' | |||||||
The fair value of the derivative liabilities as of March 31, 2014 and December 31, 2013 are as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Derivative Instrument | ||||||||
8% Notes conversion feature | $ | 44,137 | $ | 18,045 | ||||
10% Notes conversion feature | 5,920 | 3,946 | ||||||
Warrant liability | 8,670 | 10,428 | ||||||
Total | $ | 58,727 | $ | 32,419 | ||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS EQUITY (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||
Class Of Warrant Outstanding [Table Text Block] | ' | ||||||||||
A summary of the outstanding warrants is presented below: | |||||||||||
2014 | |||||||||||
Shares | Weighted | Weighted | |||||||||
Average | Average | ||||||||||
Exercise | Remaining | ||||||||||
Price | Life-years | ||||||||||
Outstanding at January 1, 2014 | 118,235,294 | $ | 0.0142 | 5.9 | |||||||
Granted during the first quarter of 2014 | - | ||||||||||
Cancelled or forfeited | - | ||||||||||
Warrants outstanding at March 31, 2014 | 118,235,294 | $ | 0.0142 | 5.65 | |||||||
Warrants exercisable at March 31, 2014 | 118,235,294 | $ | 0.0142 | 5.65 | |||||||
INCENTIVE_STOCK_PLANS_Tables
INCENTIVE STOCK PLANS (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | ||||||||||
A summary of the status of the outstanding incentive stock plans is presented below at March 31, 2014: | |||||||||||
Shares | Weighted | Weighted Average | |||||||||
Average | Remaining | ||||||||||
Exercise Price | Life-years | ||||||||||
Options outstanding at January 1, 2014 | 709,020 | $ | 3.57 | 2.11 | |||||||
Options granted/exercises/cancelled/forfeited | - | ||||||||||
Options outstanding at March 31, 2014 | 709,020 | $ | 3.57 | 1.86 | |||||||
Options exercisable at March 31, 2014 | 709,020 | $ | 3.57 | 1.86 | |||||||
PRINCIPAL_BUSINESS_ACTIVITY_AN2
PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Accounting Policies [Line Items] | ' | ' | ' |
Net loss attributable to controlling interest | ($263,580) | ($200,647) | ' |
Working Capital Deficit | 6,591,000 | ' | ' |
Total stockholders' deficiency | -6,720,024 | ' | -6,571,265 |
Weighted Average Number of Shares Outstanding, Diluted | 2,016,101,890 | 4,394,378,211 | ' |
Stock Conversion Limit Percentage | 4.99% | ' | ' |
Income Tax Expense (Benefit) | $0 | $0 | ' |
NOTES_PAYABLE_Details
NOTES PAYABLE (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | $4,408,435 | $4,088,425 |
Senior Secured Convertible Notes [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | 3,124,403 | 3,124,403 |
Senior Secured Promissory Note [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | 972,932 | 692,922 |
Subordinated Secured Convertible Notes [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | $311,100 | $271,100 |
NOTES_PAYABLE_Details_Textual
NOTES PAYABLE (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||
Mar. 07, 2007 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2007 | Dec. 31, 2013 | Nov. 30, 2009 | Dec. 17, 2007 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 04, 2009 | Nov. 30, 2009 | Mar. 31, 2014 | Nov. 30, 2009 | Feb. 07, 2014 | Mar. 31, 2014 | |
Five Year Common Stock Purchase Warrant [Member] | Cape One [Member] | Cape One [Member] | Senior Secured Convertible Promissory Notes [Member] | Senior Secured Convertible Promissory Notes [Member] | 8% Senior Secured Convertible Notes [Member] | 10% Subordinated Secured Convertible Promissory Note [Member] | 10% Subordinated Secured Convertible Promissory Note [Member] | 10% Subordinated Secured Convertible Promissory Note [Member] | Convertible Note Covenants and Other Agreements [Member] | Senior Convertible Promissory Notes 2014 [Member] | Senior Convertible Promissory Notes 2014 [Member] | ||||||||
Notes Payable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable, Total | ' | $4,408,435 | ' | ' | $4,088,425 | ' | ' | ' | ' | ' | $4,097,335 | $3,817,325 | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument Convertible Conversion Price Initial | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3.74 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.09 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'As compensation for forbearance from the lenders in 2012, the conversion rate was further adjusted to 75% of the lowest VWAP for the 1, 5 or 10 days immediately prior to the conversion. | ' | ' | ' | ' | ' | 'The 10% Convertible Note is convertible into Common Stock at any time prior to maturity (provided that such conversion does not result in the holder and its affiliates beneficially owning in excess of 4.99% (9.99% upon 61 days prior written notice) of the issued and outstanding Common Stock at $0.085 per share (the Conversion Price), subject to adjustment upon the occurrence of certain anti-dilution events. | ' | ' |
Debt Instrument Convertible Number Of Equity Instruments For Outstanding Principal | ' | ' | 9,500,000 | ' | ' | ' | ' | ' | ' | 9,000,000 | ' | ' | 9,500,000 | ' | ' | ' | ' | ' | ' |
Convertible Debt | ' | ' | 8,550 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,013 | ' | ' | ' | ' | ' | ' |
Debt Instrument Convertible Number Of Equity Instruments For Accrued Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,775 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable Interest Payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 80,000 |
Forbearance Charges Added To Principal Balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 311,100 | ' | ' | 200,000 |
Loss On Modification Notes Payable | ' | ' | ' | ' | ' | ' | ' | ' | 40,000 | 30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Secured Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 197,500 | ' | ' | ' | ' | ' |
Notes Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 225,000 | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | ' | ' | ' | ' | ' | 2,647,059 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class Of Warrant Or Right Par Value Of Securities Called By Warrants Or Rights | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | ' | ' | ' | ' | 0.425 | ' | 0.425 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Payment Percentage Payable On Default | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18.00% | ' | ' | ' | ' |
Accrued Registration Rights Obligation | ' | 82,489 | ' | 82,489 | 82,489 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | 8.00% | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Debt Instrument For Bearance Interest Rate Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 280,000 |
Debt Instrument, Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 months | ' | ' | ' | ' |
Liquidated Damage Allowed As Percentage Of Note | 0.03% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Liquidated Damages | ' | ' | ' | ' | ' | ' | 146,028 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Liquidated Damages Paid Value | ' | ' | ' | 63,539 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument For Bearance Increased Amount | ' | $40,000 | $30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
DERIVATIVE_LIABILITIES_Details
DERIVATIVE LIABILITIES (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | $58,727 | $32,419 |
Warrant liability [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | 8,670 | 10,428 |
8% Notes conversion feature [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | 44,137 | 18,045 |
10% Notes conversion feature [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | $5,920 | $3,946 |
DERIVATIVE_LIABILITIES_Details1
DERIVATIVE LIABILITIES (Details Textual) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Nov. 30, 2009 | |
Derivative [Line Items] | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ' | ' | 10.00% |
Class of Warrant or Right, Outstanding | 118,235,294 | ' | 118,235,294 | 2,647,059 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | ' | ' | 0.425 |
Unrealized Gain (Loss) On Derivatives | ($26,308) | ($9,834) | ' | ' |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS EQUITY (Details) (Warrant [Member], USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Warrant [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares Outstanding at beginning of year | 118,235,294 |
Shares Granted during the year | 0 |
Shares Cancelled or forfeited | 0 |
Shares outstanding at end of year | 118,235,294 |
Shares exercisable at end of year | 118,235,294 |
Weighted Average Exercise Price Outstanding at beginning of year | $0.01 |
Weighted Average Exercise Price outstanding at end of year | $0.01 |
Weighted Average Exercise Price exercisable at end of year | $0.01 |
Weighted Average Remaining Life-years Outstanding at beginning of year | '5 years 10 months 24 days |
Weighted Average Remaining Life years Warrants outstanding at end of year | '5 years 7 months 24 days |
Weighted Average Remaining Life years Warrants exercisable at end of year | '5 years 7 months 24 days |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS EQUITY (Details Textual) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 01, 2013 | Nov. 30, 2009 | Mar. 31, 2014 | Mar. 31, 2013 | Oct. 07, 2008 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 07, 2008 | Oct. 07, 2008 | Mar. 31, 2014 | Dec. 31, 2013 | Oct. 07, 2008 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Sep. 29, 2008 |
Convertible Preferred Stock [Member] | Convertible Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B and Series C Convertible Preferred Stock [Member] | Series C Preferred Stock [Member] | Series C Preferred Stock [Member] | Series C Preferred Stock [Member] | Platinum Partners Long Term Growth IV [Member] | Platinum Partners Long Term Growth IV [Member] | Platinum Partners Long Term Growth IV [Member] | Alpha Capital [Member] | Longview Special Financing Inc [Member] | Cape One [Member] | Platinum Partners Long Term Growth Iv and Longview Special Financing Inc [Member] | |||||
Llc Series C Convertible Preferred Stock [Member] | Series C Preferred Stock [Member] | Series C Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | ||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9.41 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Conversion Of Convertible Securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43,134,720 | 81,283,520 | 9,500,000 | 22,000,000 | ' | ' |
Stock Issued During Period, Value, Issued for Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $269,592 | $508,022 | ' | ' | ' | ' |
Conversion of Stock, Shares Converted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 137,500 | ' | ' |
Conversion of Stock, Shares Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 71,691,180 |
Debt Conversion, Converted Instrument, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,013 | ' | ' | ' |
Common Stock, shares authorized | 800,000,000 | 800,000,000 | 800,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.09 |
Stock Issued During Period, Shares, Conversion of Units | ' | ' | ' | ' | ' | ' | 750,000 | ' | ' | 160 | ' | ' | ' | 4,250,000 | 160 | 160 | ' | 160 | ' | ' |
Preferred Stock, aggregate liquidation preference | ' | ' | ' | ' | 10,000 | ' | ' | 10 | 10 | ' | ' | 5,175 | 5,715 | ' | ' | ' | ' | ' | ' | ' |
Excess Of Debt Instrument Conversion Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.99% | 9.98% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Settlement Of Interest Obligations | ' | ' | ' | ' | ' | 18,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, Settlement Of Interest Obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,550 | ' | ' | ' |
Class of Warrant or Right, Outstanding | 118,235,294 | 118,235,294 | ' | 2,647,059 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potential Equity Shares Outstanding | 1,974,710,583 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense, Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8,775 | ' |
INCENTIVE_STOCK_PLANS_Details
INCENTIVE STOCK PLANS (Details) (Incentive Stock Plans [Member], USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Incentive Stock Plans [Member] | ' |
Stock Option Plan [Line Items] | ' |
Shares Outstanding at beginning of year | 709,020 |
Shares Granted/Exercises/Cancelled/Forfeited | 0 |
Shares outstanding at end of year | 709,020 |
Shares exercisable at end of year | 709,020 |
Weighted Average Exercise Price Outstanding at beginning of year | $3.57 |
Weighted Average Exercise Price outstanding at end of year | $3.57 |
Weighted Average Exercise Price exercisable at end of year | $3.57 |
Weighted Average Remaining Life-years Outstanding at beginning of year | '2 years 1 month 10 days |
Weighted Average Remaining Life years Warrants outstanding at end of year | '1 year 10 months 10 days |
Weighted Average Remaining Life years Warrants exercisable at end of year | '1 year 10 months 10 days |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details Textual) (USD $) | 3 Months Ended |
Mar. 31, 2013 | |
Discontinued Operations [Line Items] | ' |
Gain (Loss) on Disposition of Real Estate, Discontinued Operations | $13,000 |
Disposal Group, Including Discontinued Operation, Costs of Goods Sold | 3,907 |
Disposal Group, Including Discontinued Operation, Gross Profit (Loss) | $9,093 |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (USD $) | Mar. 31, 2013 | 8-May-14 | Jan. 30, 2014 |
Share data in Millions, except Per Share data, unless otherwise specified | Subsequent Event [Member] | Subsequent Event [Member] | |
MJ Enterprises [Member] | |||
Subsequent Event [Line Items] | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | $200,000 |
Convertible Debt | $8,550 | $45,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | 48 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | ' | $0.00 | ' |
Sale of Stock, Price Per Share | ' | $0.00 | ' |
Debt Instrument, Convertible, Terms Of Conversion Feature | ' | 'The note is due on June 30, 2014, bears interest at 8% per annum and the note and interest accrued on the note are convertible into the Companys common stock at any time prior to maturity (provided that such conversion does not result in the holder and its affiliates beneficially owning in excess of 4.99% of the issued and outstanding Common Stock) at $0.22 per share subject to adjustment upon the occurrence of certain anti-dilution events. | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | ' | '5 years | ' |