Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 14, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'NaturalNano, Inc. | ' |
Entity Central Index Key | '0000863895 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'NNAN | ' |
Entity Common Stock, Shares Outstanding | ' | 627,473,866 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash | $18,597 | $0 |
Accounts Receivable | 7,300 | 23,206 |
Inventory | 12,076 | 13,246 |
Prepaid expenses and other current assets | 7,140 | 7,040 |
Receivable due from MJ Enterprises, net of reserve of $100,000 at September 30, 2014 and $0 at December 31, 2013 | 100,000 | 0 |
Total current assets | 145,113 | 43,492 |
Total Assets | 145,113 | 43,492 |
Current Liabilities | ' | ' |
Notes payable (Note 2) | 1,274,946 | 4,088,425 |
Accounts payable | 404,182 | 448,127 |
Accrued expenses | 123,588 | 130,331 |
Accrued interest | 192,919 | 611,261 |
Accrued payroll | 1,021,598 | 978,340 |
Registration rights liability | 12,324 | 82,489 |
Derivative liability (Note 3) | 369,551 | 32,419 |
Total current liabilities | 3,399,108 | 6,371,392 |
Total Liabilities | 3,399,108 | 6,371,392 |
Rights to reserved common shares (Note 2) | 54,289 | 0 |
Commitments and contingencies | ' | ' |
Stockholders' Deficiency | ' | ' |
Common Stock | 597,474 | 554,339 |
Additional paid in capital | 21,351,972 | 21,176,747 |
Accumulated deficit | -25,259,970 | -28,302,351 |
Total stockholders' deficiency | -3,310,524 | -6,571,265 |
Total liabilities and stockholders' deficiency | 145,113 | 43,492 |
Series B Preferred Stock [Member] | ' | ' |
Current Liabilities | ' | ' |
Preferred Stock - $.001 par value, 10 million shares authorized | 2,240 | 425 |
Series C Preferred Stock [Member] | ' | ' |
Current Liabilities | ' | ' |
Preferred Stock - $.001 par value, 10 million shares authorized | 0 | 242,940 |
Series D Common Stock [Member] | ' | ' |
Stockholders' Deficiency | ' | ' |
Common Stock | $0 | $0 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Allowance for Doubtful Receivable, Related Parties | $100,000 | $0 |
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 (in dollars) | 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 (in dollars) | $0 | $5,175 |
Preferred Stock, shares issued | 0 | 2,857,266 |
Preferred Stock, shares outstanding | 0 | 2,857,266 |
Series D Common Stock [Member] | ' | ' |
Common Stock, shares issued | 100 | 100 |
Common Stock, shares outstanding | 100 | 100 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income: | ' | ' | ' | ' |
Revenue | $89,600 | $18,674 | $135,774 | $141,992 |
Cost of goods sold | 8,279 | 3,657 | 16,913 | 27,687 |
Gross Profit | 81,321 | 15,017 | 118,861 | 114,305 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 17,082 | 14,031 | 40,076 | 41,623 |
General and administrative | 97,013 | 81,884 | 389,254 | 265,150 |
Total operating expenses | 114,095 | 95,915 | 429,330 | 306,773 |
Loss from operations | -32,774 | -80,898 | -310,469 | -192,468 |
Other income (expense): | ' | ' | ' | ' |
Interest expense (net) | -50,362 | -93,208 | -242,626 | -274,758 |
Net (loss) gain on derivative liability | 52,977 | 89,536 | -337,132 | 12,848 |
Net (loss) gain on extinguishment/modification of debt | 325,335 | 0 | 4,032,608 | -10,336 |
Provision for reserve on receivable due from MJ Enterprises | -100,000 | 0 | -100,000 | 0 |
Gain on dissolution of Combotexs | 0 | 39,373 | 0 | 39,373 |
Other income (expense) | 227,950 | 35,701 | 3,352,850 | -232,873 |
Net income (loss) from continued operations | 195,176 | -45,197 | 3,042,381 | -425,341 |
Net income from discontinued operations | 0 | 0 | 0 | 11,115 |
Loss on write-off of discontinued operations | 0 | 0 | 0 | -11,179 |
Consolidated net income (loss) | $195,176 | ($45,197) | $3,042,381 | ($425,405) |
Continuing operations income (loss) per common share - basic (in dollars per share) | $0 | $0 | $0 | $0 |
Continuing operations income (loss) per common share - diluted (in dollars per share) | ' | $0 | ' | $0 |
Discontinued operations income (loss) per common share - basic and diluted (in dollars per share) | ' | ' | ' | $0 |
Weighted average shares outstanding | ' | ' | ' | ' |
Basic (in shares) | 597,473,866 | 311,664,926 | 592,101,776 | 240,252,062 |
Fully diluted (in shares) | 3,381,857,383 | ' | 2,427,952,525 | ' |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Balance | ($6,571,265) |
Series C preferred shares converted to commons stock and change in value | 112,859 |
Warrants issued for services | 105,501 |
Net income for the nine months ended September30, 2014 | 3,042,381 |
Balance | -3,310,524 |
Common Stock [Member] | ' |
Balance | 554,339 |
Balance (in shares) | 554,339,146 |
Series C preferred shares converted to commons stock and change in value | 43,135 |
Series C preferred shares converted to common stock and change in value (in shares) | 43,134,720 |
Warrants issued for services | 0 |
Net income for the nine months ended September30, 2014 | 0 |
Balance | 597,474 |
Balance (in shares) | 597,473,866 |
Series D Preferred Stock [Member] | ' |
Balance | 0 |
Balance (in shares) | 100 |
Series C preferred shares converted to commons stock and change in value | 0 |
Series C preferred shares converted to common stock and change in value (in shares) | 0 |
Warrants issued for services | 0 |
Net income for the nine months ended September30, 2014 | 0 |
Balance | 0 |
Balance (in shares) | 100 |
Additional Paid in Capital [Member] | ' |
Balance | 21,176,747 |
Series C preferred shares converted to commons stock and change in value | 69,724 |
Warrants issued for services | 105,501 |
Net income for the nine months ended September30, 2014 | 0 |
Balance | 21,351,972 |
Retained Earnings [Member] | ' |
Balance | -28,302,351 |
Series C preferred shares converted to commons stock and change in value | 0 |
Warrants issued for services | 0 |
Net income for the nine months ended September30, 2014 | 3,042,381 |
Balance | ($25,259,970) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Consolidated net income (loss) | $3,042,381 | ($425,405) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ' | ' |
Net (gain) loss on extinguishment/modification of debt | -4,032,608 | 10,336 |
Change in fair value of derivative liabilities | 337,132 | -12,848 |
Issuance of warrants for services | 105,501 | 8,721 |
Provision for reserve on receivable from MJ Enterprises | 100,000 | 0 |
Gain on dissolution of Combotexs | 0 | -39,373 |
Changes in operating assets and liabilities: | ' | ' |
Decrease (increase) in accounts receivable | 15,906 | -20,306 |
Decrease in inventory | 1,170 | 6,229 |
Increase in other current assets | -100 | -1,844 |
Increase in accounts payable and accrued expenses | 235,205 | 329,434 |
Net cash used in operating activities | -195,413 | -145,056 |
Cash flows from investing activities | ' | ' |
Deposit on bitcoin auction | -200,000 | 0 |
Return of bitcoin deposit | 200,000 | 0 |
Receivable 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 | 714,010 | 138,906 |
Proceeds from bitcoin promissory notes | 200,000 | 0 |
Repayment of bitcoin promissory notes | -200,000 | 0 |
Payment on extinguishment of debt | -300,000 | 0 |
Net cash provided by financing activities | 414,010 | 138,906 |
Increase in cash | 18,597 | -6,150 |
Cash at beginning of period | 0 | 6,160 |
Cash at end of period | 18,597 | 10 |
Schedule of non-cash investing and financing activities: | ' | ' |
Common stock issued for convertible notes | 0 | 19,913 |
Common stock issued for accrued interest | $0 | $62,090 |
PRINCIPAL_BUSINESS_ACTIVITY_AN
PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||
Sep. 30, 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 September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 are unaudited. However, in the opinion of management of the Company, these consolidated financial statements reflect all material adjustments, consisting solely of normal recurring adjustments, necessary to present fairly the consolidated 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 consolidated 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. The Company generated net income for the nine months ended September 30, 2014 of approximately $3,042,000, primarily from a non-cash gain on the extinguishment of debt , had negative working capital of approximately $3,254,000 and a stockholders’ deficiency of approximately $3,311,000 at September 30, 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 September 30, 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 subsidiaries NaturalNano Research, Inc. (“NN Research”) a Delaware corporation and Bitcoin Bidder, Inc. a Nevada corporation. All significant inter-company accounts and transactions have been eliminated in consolidation. | |||
NaturalNano established its subsidiary, Bitcoin Bidder, Inc. in June, 2014 for the sole purpose of bidding on bitcoins which were seized by the FBI and were sold at auction June 27, 2014. Bitcoin Bidder, Inc. was not successful at the auction and is expected to be dissolved in 2014. | |||
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; and | ||
• | polymers, plastics and composites | ||
During the nine months ended September 30, 2014 and 2013 the Company derived 93% of its total revenue from one customer. | |||
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. | |||
Fair Value of Financial Instruments | |||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: | |||
· | 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 carrying amounts reported in the balance sheet of cash, accounts receivable, prepaids, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value of notes payable approximates their carrying value as the terms of this debt reflects market conditions. The Company’s derivative liability was determined utilizing Level 3 inputs. | |||
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 September 2014 considering company specific factors including the changes in forward estimated revenues and market factors, market multiples for comparable companies, and the Company’s market share price, all equally weighted. 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 nine month periods ending September 30, 2014 and 2013. | |||
Income (Loss) Per Share | |||
Basic income (loss) per common share is computed by dividing net income or loss by the weighted-average number of shares of common stock outstanding during the period. Diluted income or 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 September 30, 2014 and 2013 there were 1,682,479,014 and 6,412,911,665 shares, respectively, underlying preferred stock, convertible debt, outstanding options and warrants that could potentially dilute future earnings. In addition to these potentially dilutive shares as of September 30, 2014 were an additional 2 billion reserved shares underlying the July 23, 2014 Exchange and Right to Shares Agreement with Cape One Master Fund II LLP further described in Note 2 below. | |||
These potentially dilutive shares have been limited by certain debt and equity agreements with lenders. 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. Approximately 84 million shares were excluded from the calculation of diluted earnings per share for the quarter ended September 30, 2014 and 4.9 million shares were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2014 as their inclusion would have been anti-dilutive. | |||
Recent Accounting Pronouncements | |||
In August 2014, the FASB issued ASU 2014-15, ”Presentation of Financial Statements – Going Concern”, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity will be required to provide certain disclosures if conditions of events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2014-15 on our consolidated financial statements and have not yet determined when we will adopt the standard. | |||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” an updated standard on revenue recognition. ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods and services to customers. The updated guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either a retrospective or cumulative effect transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. We have not yet selected a transition method and we are currently evaluating the effect the updated standard will have on our consolidated financial statements and related disclosures. | |||
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt Disclosure [Text Block] | ' | |||||||
2 | NOTES PAYABLE | |||||||
Notes payable consisted of the following: | ||||||||
September 30, | December 31, | |||||||
Notes Payable | 2014 | 2013 | ||||||
Senior Secured Convertible Notes | $ | 441,988 | $ | 3,124,403 | ||||
Senior Secured Promissory Notes | 398,938 | 692,922 | ||||||
Subordinated Secured Convertible Note | - | 271,100 | ||||||
2014 Convertible Promissory Notes | 434,020 | - | ||||||
$ | 1,274,946 | $ | 4,088,425 | |||||
Senior Secured Convertible Notes and Senior Secured Promissory Notes | ||||||||
As of September 30, 2014, Notes payable on the balance sheet includes $840,926 ($3,817,325 at December 31, 2013) for senior secured convertible and non-convertible senior secured promissory notes. The conversion rate for principal and accrued interest on Senior Secured Convertible Notes is 75% of the lowest volume weighted average price (VWAP) of the Company’s common stock for the 1, 5 or 10 days immediately prior to the conversion. As further described below, the Company has defaulted on certain provisions of the notes. The Company has obtained a waiver of default on the outstanding principal through November 20, 2014. As a condition of this forbearance the interest rate on these notes has been increased to 18%. | ||||||||
2014 Senior Secured Promissory Notes | ||||||||
During the first quarter of 2014, the Company entered into various Senior Secured Convertible Promissory Notes aggregating $280,000. 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 18% per annum as a condition of forbearance and are payable in cash on dates ranging from November 20, 2014 to January 30, 2015. | ||||||||
Subordinated Secured Convertible Note and Exchange and Right to Shares Agreement – Cape One Master Fund II LP | ||||||||
On July 23, 2014, the Company and Cape One Master Fund II LLP agreed to exchange the Subordinated Secured Convertible Note and related accrued and unpaid interest totaling a combined $379,624 in exchange for 2 billion reserved shares of the Company’s common stock. The Company and Cape One agreed that a beneficial ownership limitation of 4.99% shall be maintained at all times as to the number of the shares of the common stock outstanding immediately after giving effect to the issuance of the common stock issuable under this agreement. Cape One also agreed to a Lockup provision in the agreement that specifies that Cape One will not sell, transfer or hypothecate any of the reserved shares until Alpha Capital Anstalt has received $3,500,000 from the proceeds of sales of shares obtained upon conversion of notes issued by the Company and held by Alpha as of the date of this agreement. Upon expiration of the Lockup period, Cape One shall be allowed to sell the lesser of (i) 5% of the daily trading volume of the Company’s common stock or, (ii) 10% of the reserved shares in any calendar month. The Company estimated the total enterprise value based upon a combination of the trending of the firm value from December 2006 to September 2014, market comparables and the market value of the Company’s stock 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 these 2 billion share rights and other securities in the Company’s capital structure. The fair value of these 2 billion share rights was estimated at $54,289 and the Company recognized a gain on extinguishment of debt of $325,335 during the three months ended September 30, 2014 based on the excess of the value of the instruments settled over the estimated fair market value of the 2 billion share rights. As a result of the Company not having sufficient authorized shares to satisfy the issuance of these 2 billion share rights, conversion of all outstanding convertible debt, convertible preferred stock, warrants and options, the 2 billion share rights have been presented in temporary equity classification on the balance sheet. | ||||||||
During the nine month periods ended September 30, 2014 and September 30, 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 nine month periods ended September 30, 2014 and September 30, 2013. | ||||||||
2014 Convertible Promissory Notes | ||||||||
During the third quarter of 2014 the Company sold an aggregate of $65,010 in 8% convertible promissory notes to certain accredited investors due and payable between September 27, 2014 and November 25, 2014. These notes are convertible into shares of the Company’s common stock at an initial conversion price of $0.001 per share subject to adjustment in the event of lower price issuances, subject to customary exceptions. The Company may prepay any amount due under the notes prior to the maturity date. The notes are subject to certain events of default which would cause all amounts due to become immediately payable. The Company is prohibited from effecting the conversion of the notes to the extent that as a result of such conversion, the note holders would beneficially own more than 4.99% of the issued and outstanding shares of the Company’s common stock. The Company has obtained a waiver of default on the outstanding principal through dates ranging from January 26, 2015 to January 30, 2015. As a condition of this forbearance the interest rate on these notes has been increased to 18%. | ||||||||
On June 27, 2014, the Company sold $300,000 in 8% convertible promissory notes to certain accredited investors due and payable on September 27, 2014. The Company used the proceeds from the sale of these notes for the payment described in the Payoff Agreement above with Platinum and Merit. These notes are convertible into shares of the Company’s common stock at an initial conversion price of $0.001 per share subject to adjustment in the event of lower price issuances, subject to customary exceptions. The Company may prepay any amount due under the notes prior to the maturity date. The notes are subject to certain events of default which would cause all amounts due to become immediately payable. The Company is prohibited from effecting the conversion of the notes to the extent that as a result of such conversion, the note holders would beneficially own more than 4.99% of the issued and outstanding shares of the Company’s common stock. The Company has obtained a waiver of default on the half of outstanding principal through to January 30, 2015 and the balance through January 26, 2015. As a condition of this forbearance the interest rate on these notes has been increased to 18%. | ||||||||
On May 8, 2014 the Company issued an 8% convertible promissory note in the amount of $45,000 that was due on June 30, 2014. The Company used the proceeds of this note for operating purposes. The May 8, 2014 note is convertible into shares of the Company’s common stock at a conversion price of $0.22 per share subject to adjustment in the event of lower price issuances, subject to customary exceptions. Based on the Company’s issuance of new notes subsequent to May 8, 2014, the conversion price was modified to $0.001 per share. The Company may prepay any amount due under the notes prior to the maturity date. The notes are subject to certain events of default which would cause all amounts due to become immediately payable. The Company is prohibited from effecting the conversion of the notes to the extent that as a result of such conversion, the note holders would beneficially own more than 4.99% of the issued and outstanding shares of the Company’s common stock. The Company has obtained a waiver of default on the outstanding principal through January 30, 2015. As a condition of this forbearance the interest rate on these notes has been increased to 18%. | ||||||||
On June 12, 2014 the Company issued an 8% convertible promissory note in the amount of $24,000 that is due and payable on September 27, 2014. The Company used the proceeds of this note for operating purposes. The June 12, 2014 note is convertible into shares of the Company’s common stock at a conversion price of $0.22 per share subject to adjustment in the event of lower price issuances, subject to customary exceptions. Based on the Company’s issuance of new notes subsequent to June 12, 2014 (see Note 7), the conversion price was modified to $0.001 per share. The Company may prepay any amount due under the notes prior to the maturity date. The notes are subject to certain events of default which would cause all amounts due to become immediately payable. The Company is prohibited from effecting the conversion of the notes to the extent that as a result of such conversion, the note holders would beneficially own more than 4.99% of the issued and outstanding shares of the Company’s common stock. The Company has obtained a waiver of default on the outstanding principal through January 30, 2015. As a condition of this forbearance the interest rate on these notes has been increased to 18%. | ||||||||
Payoff Agreement with Platinum Long Term Growth IV, LLC and Merit Consulting LLC | ||||||||
On June 26, 2014, the Company entered into a Payoff Agreement with two of its lenders (collectively referred to as “the holders”) where the holders agreed to surrender their outstanding promissory notes and debentures in the aggregate principal amount of $3,256,399 plus all accrued and unpaid interest amounting to $592,414 in consideration for an aggregate payment of $300,000. As further consideration, one of the lenders agreed to return its 2,587,674 shares of Series C Preferred Stock for cancellation. The Company reversed $70,165 in registration rights liabilities in connection with this Payoff Agreement. Effective upon the consummation of this Payoff Agreement, the Company had no further obligation to the holders pursuant to the terms of the preferred stock and the notes as defined in the Payoff Agreement. As a result of this Payoff Agreement, the Company recognized a gain on extinguishment of debt during the second quarter of 2014 in the amount of $3,747,273. | ||||||||
Bitcoin Promissory Notes | ||||||||
The Company established its subsidiary, Bitcoin Bidder, Inc. in June, 2014 for the sole purpose of bidding on bitcoins which had been seized by the FBI and were sold at auction June 27, 2014. In connection with this, the Company issued notes aggregating $2,150,000 under a Securities Purchase Agreement. Bitcoin Bidder, Inc. was not successful at the auction and $1,950,000 in borrowings was repaid to the lenders on June 30, 2014. The remaining $200,000 was repaid to the lenders in July, 2014 without any penalty or interest charges to NaturalNano. The Company intends to dissolve Bitcoin Bidder, Inc. in 2014. | ||||||||
DERIVATIVE_LIABILITY
DERIVATIVE LIABILITY | 9 Months Ended | |||||||
Sep. 30, 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 a combination of the trending of the firm value from December 2006 to September 2014, market comparables, and the market value of the Company’s stock, 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 September 30, 2014 and December 31, 2013 are as follows: | ||||||||
· | The debt conversion feature embedded in the Senior Secured Convertible Notes entered into in March 2007 which contain 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 Subordinated Secured Convertible Note 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.) | |||||||
· | The debt conversion feature embedded in the 2014 Convertible Promissory Notes entered into in 2014 which contain 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.) | |||||||
· | 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 September 30, 2014 and December 31, 2013. | |||||||
The fair value of the derivative liabilities as of September 30, 2014 and December 31, 2013 are as follows: | ||||||||
September 30 | December 31, | |||||||
2014 | 2013 | |||||||
Derivative Instrument | ||||||||
Senior Secured Convertible Notes conversion feature | $ | 37,549 | $ | 18,045 | ||||
Subordinated Secured Convertible Note conversion feature | - | 3,946 | ||||||
2014 Convertible Promissory Notes conversion feature | 249,683 | - | ||||||
Warrant liability | 82,319 | 10,428 | ||||||
Total | $ | 369,551 | $ | 32,419 | ||||
The increase in the fair value of the derivative liability of $337,132 was recognized as a loss on change in derivative liability in the statement of operations for the nine months ended September 30, 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 | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||||
4 | STOCKHOLDERS EQUITY | ||||||||||
As of September 30, 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 common shares. As of September 30, 2014 there were 1,682,479,014 shares underlying preferred stock, convertible debt, outstanding options and warrants that could potentially dilute future earnings. In addition to these potentially dilutive shares were an additional 2 billion reserved shares underlying the July 23, 2014 Exchange and Right to Shares Agreement with Cape One Master Fund II LLP further described in Note 2. The Company does not have sufficient authorized shares to satisfy conversion of all the potentially dilutive instruments. (See Note 7 Subsequent Events.) | |||||||||||
Preferred Stock Issuances | |||||||||||
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). 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 attributable to Series B and 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). | |||||||||||
As a result of the Company not having sufficient authorized shares to satisfy the conversion of all outstanding convertible debt, share rights, 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 the second 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. In connection with the June 27, 2014 Payoff Agreement (Note 2) all shares of the remaining Series C preferred shares were cancelled. | |||||||||||
Warrants Grants | |||||||||||
The Company has issued warrants to purchase shares of its common stock to certain consultants and debt holders. As of September 30, 2014 and December 31, 2013 there were common stock warrants outstanding to purchase an aggregate of 166,235,294 and 118,235,294 shares of common stock, respectively, pursuant to the warrant grant agreements. | |||||||||||
On May 8, 2014, the Company granted a total of 48,000,000 warrants to certain consultants, the Company’s CEO and the Company’s independent board member. These warrants, included in the summary below, grant the right to purchase one share of common stock at an exercise price of $0.0014 per share. The warrants were fully vested as of the grant date and contain a cashless exercise provision. The fair value of the warrants on the date of grant was determined using the Black-Scholes model and was measured on the date of grant at $105,501. An expected volatility assumption of 289% was used based on the volatility of the Company’s stock price utilizing a look-back basis and the risk-free interest rate of 1.63% which was derived from the U.S. treasury yields on the date of grant. The market price of the Company’s common stock on the grant date was $0.0022 per share. The expiration date used in the valuation model aligns with the warrant life of five years as indicated in the agreements. The dividend yield was assumed to be zero. | |||||||||||
A summary of the outstanding warrants is presented below: | |||||||||||
2014 | |||||||||||
Weighted | Weighted | ||||||||||
Average | Average | ||||||||||
Exercise | Remaining | ||||||||||
Shares | Price | Life-years | |||||||||
Outstanding at January 1, 2014 | 118,235,294 | $ | 0.0142 | 5.9 | |||||||
Granted | 48,000,000 | 0.0014 | |||||||||
Cancelled or forfeited | - | ||||||||||
Warrants outstanding at September 30, 2014 | 166,235,294 | $ | 0.0105 | 5 | |||||||
Warrants exercisable at September 30, 2014 | 166,235,294 | $ | 0.0105 | 5 | |||||||
INCENTIVE_STOCK_PLANS
INCENTIVE STOCK PLANS | 9 Months Ended | ||||||||||
Sep. 30, 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 September 30, 2014 and December 31, 2013: | |||||||||||
Weighted | Weighted Average | ||||||||||
Average | Remaining | ||||||||||
Shares | Exercise Price | Life-years | |||||||||
Options outstanding at January 1, 2014 | 709,020 | $ | 3.57 | 2.11 | |||||||
Options granted/exercises/cancelled/forfeited | - | ||||||||||
Options outstanding at September 30, 2014 | 709,020 | $ | 3.57 | 1.36 | |||||||
Options exercisable at September 30, 2014 | 709,020 | $ | 3.57 | 1.36 | |||||||
All compensation costs for the above options have been previously recognized in operations. | |||||||||||
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended | |
Sep. 30, 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 nine month period ended September 30, 2013 reflects the Medical Board business as a discontinued operation. The nine months ended September 30, 2013 included revenues from this discontinued operation of $14,750, cost of goods sold of $3,635 and gross margin of $11,115. 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 | 9 Months Ended | |
Sep. 30, 2014 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events [Text Block] | ' | |
7 | SUBSEQUENT EVENTS | |
ViralProtec business line | ||
On November 5, 2014 the Company announced the new business line, ViralProtec, (www.viralprotec.com) a division of NaturalNano. ViralProtec, is a reseller for Ebola personal protective equipment (PPE) and ancillary supplies. Our mission is to provide personal protective equipment for caregivers for infectious patient care that meet or exceed CDC and WHO guidelines. ViralProtec was created in response of the public concern and publicity surrounding the risk to caregivers and other responders created by the Ebola virus. The Company will maintain inventory on hand for customers to order complete protection kits from a single source instead multiple sources. | ||
8% Convertible Promissory Notes | ||
On October 20, 2014, the Company issued $260,000 in convertible promissory notes. The notes are due on January 30, 2015 bears interest at 8% per annum. The notes and the interest accrued 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 $0.001 per share subject to adjustment upon the occurrence of certain anti-dilution events. | ||
Common Stock Issued | ||
On October 30, 2014, the Company issued 30 million common shares to Alpha Capital in payment of $12,000 in accrued interest on the 8% Senior Secured Convertible Promissory Notes. | ||
Increase in Authorized Shares and Reverse Split | ||
On July 18, 2014 the holder of the Company’s preferred D shares, which controls 51% of all votes in matters subject to shareholder approval, approved an amendment to the Company’s articles of incorporation and to increase the number of authorized common and preferred shares from 800,000,000 and 10,000,000, respectively. Additionally, a reverse split was authorized for the issued and outstanding shares of common stock in a range of 100 to one to 600 to one. On November 4, 2014, the Company abandoned its July 18, 2014 proposal to increase the number of authorized shares of common stock. The increase in authorized preferred shares and the reverse split are still approved and have not been affected as of November 14, 2014. | ||
Other Events | ||
On October 20, 2014, the Company executed an agreement with ZA Capital LLC to provide strategic consulting services and public relations. The six month fee for these services of $100,000 has been paid to ZA Capital. | ||
PRINCIPAL_BUSINESS_ACTIVITY_AN1
PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||
Interim Financial Statements [Policy Text Block] | ' | ||
Interim Financial Statements | |||
The consolidated financial statements as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 are unaudited. However, in the opinion of management of the Company, these consolidated financial statements reflect all material adjustments, consisting solely of normal recurring adjustments, necessary to present fairly the consolidated 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 consolidated 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. The Company generated net income for the nine months ended September 30, 2014 of approximately $3,042,000, primarily from a non-cash gain on the extinguishment of debt , had negative working capital of approximately $3,254,000 and a stockholders’ deficiency of approximately $3,311,000 at September 30, 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 September 30, 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 subsidiaries NaturalNano Research, Inc. (“NN Research”) a Delaware corporation and Bitcoin Bidder, Inc. a Nevada corporation. All significant inter-company accounts and transactions have been eliminated in consolidation. | |||
NaturalNano established its subsidiary, Bitcoin Bidder, Inc. in June, 2014 for the sole purpose of bidding on bitcoins which were seized by the FBI and were sold at auction June 27, 2014. Bitcoin Bidder, Inc. was not successful at the auction and is expected to be dissolved in 2014. | |||
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; and | ||
• | polymers, plastics and composites | ||
During the nine months ended September 30, 2014 and 2013 the Company derived 93% of its total revenue from one customer. | |||
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. | |||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | ||
Fair Value of Financial Instruments | |||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: | |||
· | 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 carrying amounts reported in the balance sheet of cash, accounts receivable, prepaids, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value of notes payable approximates their carrying value as the terms of this debt reflects market conditions. The Company’s derivative liability was determined utilizing Level 3 inputs. | |||
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 September 2014 considering company specific factors including the changes in forward estimated revenues and market factors, market multiples for comparable companies, and the Company’s market share price, all equally weighted. 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 nine month periods ending September 30, 2014 and 2013. | |||
Earnings Per Share, Policy [Policy Text Block] | ' | ||
Income (Loss) Per Share | |||
Basic income (loss) per common share is computed by dividing net income or loss by the weighted-average number of shares of common stock outstanding during the period. Diluted income or 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 September 30, 2014 and 2013 there were 1,682,479,014 and 6,412,911,665 shares, respectively, underlying preferred stock, convertible debt, outstanding options and warrants that could potentially dilute future earnings. In addition to these potentially dilutive shares as of September 30, 2014 were an additional 2 billion reserved shares underlying the July 23, 2014 Exchange and Right to Shares Agreement with Cape One Master Fund II LLP further described in Note 2 below. | |||
These potentially dilutive shares have been limited by certain debt and equity agreements with lenders. 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. Approximately 84 million shares were excluded from the calculation of diluted earnings per share for the quarter ended September 30, 2014 and 4.9 million shares were excluded from the calculation of diluted earnings per share for the nine months ended September 30, 2014 as their inclusion would have been anti-dilutive. | |||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ||
Recent Accounting Pronouncements | |||
In August 2014, the FASB issued ASU 2014-15, ”Presentation of Financial Statements – Going Concern”, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity will be required to provide certain disclosures if conditions of events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2014-15 on our consolidated financial statements and have not yet determined when we will adopt the standard. | |||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” an updated standard on revenue recognition. ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods and services to customers. The updated guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either a retrospective or cumulative effect transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. We have not yet selected a transition method and we are currently evaluating the effect the updated standard will have on our consolidated financial statements and related disclosures. | |||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Debt [Table Text Block] | ' | |||||||
Notes payable consisted of the following: | ||||||||
September 30, | December 31, | |||||||
Notes Payable | 2014 | 2013 | ||||||
Senior Secured Convertible Notes | $ | 441,988 | $ | 3,124,403 | ||||
Senior Secured Promissory Notes | 398,938 | 692,922 | ||||||
Subordinated Secured Convertible Note | - | 271,100 | ||||||
2014 Convertible Promissory Notes | 434,020 | - | ||||||
$ | 1,274,946 | $ | 4,088,425 | |||||
DERIVATIVE_LIABILITY_Tables
DERIVATIVE LIABILITY (Tables) | 9 Months Ended | |||||||
Sep. 30, 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 September 30, 2014 and December 31, 2013 are as follows: | ||||||||
September 30 | December 31, | |||||||
2014 | 2013 | |||||||
Derivative Instrument | ||||||||
Senior Secured Convertible Notes conversion feature | $ | 37,549 | $ | 18,045 | ||||
Subordinated Secured Convertible Note conversion feature | - | 3,946 | ||||||
2014 Convertible Promissory Notes conversion feature | 249,683 | - | ||||||
Warrant liability | 82,319 | 10,428 | ||||||
Total | $ | 369,551 | $ | 32,419 | ||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS EQUITY (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||
Class Of Warrant Outstanding [Table Text Block] | ' | ||||||||||
A summary of the outstanding warrants is presented below: | |||||||||||
2014 | |||||||||||
Weighted | Weighted | ||||||||||
Average | Average | ||||||||||
Exercise | Remaining | ||||||||||
Shares | Price | Life-years | |||||||||
Outstanding at January 1, 2014 | 118,235,294 | $ | 0.0142 | 5.9 | |||||||
Granted | 48,000,000 | 0.0014 | |||||||||
Cancelled or forfeited | - | ||||||||||
Warrants outstanding at September 30, 2014 | 166,235,294 | $ | 0.0105 | 5 | |||||||
Warrants exercisable at September 30, 2014 | 166,235,294 | $ | 0.0105 | 5 | |||||||
INCENTIVE_STOCK_PLANS_Tables
INCENTIVE STOCK PLANS (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 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 September 30, 2014 and December 31, 2013: | |||||||||||
Weighted | Weighted Average | ||||||||||
Average | Remaining | ||||||||||
Shares | Exercise Price | Life-years | |||||||||
Options outstanding at January 1, 2014 | 709,020 | $ | 3.57 | 2.11 | |||||||
Options granted/exercises/cancelled/forfeited | - | ||||||||||
Options outstanding at September 30, 2014 | 709,020 | $ | 3.57 | 1.36 | |||||||
Options exercisable at September 30, 2014 | 709,020 | $ | 3.57 | 1.36 | |||||||
PRINCIPAL_BUSINESS_ACTIVITY_AN2
PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jul. 23, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cape One Master Fund II LLP [Member] | Sales Revenue, Net [Member] | Sales Revenue, Net [Member] | ||||||
Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss attributable to controlling interest | $195,176 | ($45,197) | $3,042,381 | ($425,405) | ' | ' | ' | ' |
Working Capital Deficit | 3,254,000 | ' | 3,254,000 | ' | ' | ' | ' | ' |
Total stockholders' deficiency | -3,310,524 | ' | -3,310,524 | ' | -6,571,265 | ' | ' | ' |
Weighted Average Number of Shares Outstanding, Diluted | 3,381,857,383 | ' | 2,427,952,525 | ' | ' | ' | ' | ' |
Stock Conversion Limit Percentage | ' | ' | 4.99% | ' | ' | ' | ' | ' |
Income Tax Expense (Benefit) | ' | ' | $0 | $0 | ' | ' | ' | ' |
Concentration Risk, Percentage | ' | ' | ' | ' | ' | ' | 93.00% | 93.00% |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 84,000,000 | ' | 4,900,000 | ' | ' | ' | ' | ' |
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Shares | ' | ' | ' | ' | ' | 2,000,000,000 | ' | ' |
NOTES_PAYABLE_Details
NOTES PAYABLE (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | $1,274,946 | $4,088,425 |
Senior Secured Convertible Notes [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | 441,988 | 3,124,403 |
Senior Secured Promissory Notes [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | 398,938 | 692,922 |
Subordinated Secured Convertible Notes [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | 0 | 271,100 |
2014 Convertible Promissory Notes [Member] | ' | ' |
Notes Payable [Line Items] | ' | ' |
Notes payable, Total | $434,020 | $0 |
NOTES_PAYABLE_Details_Textual
NOTES PAYABLE (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 12, 2014 | 8-May-14 | Jun. 27, 2014 | Oct. 20, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 26, 2014 | Jul. 31, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jul. 23, 2014 |
Convertible Debt Securities [Member] | Convertible Debt Securities [Member] | Convertible Debt Securities [Member] | Subsequent Event [Member] | Cape One [Member] | Cape One [Member] | Platinum Long Term Growth IV LLC And Merit Consulting LLC [Member] | Bitcoin Bidder Inc [Member] | Bitcoin Bidder Inc [Member] | Subordinated Secured Convertible Note [Member] | Senior Secured Convertible Promissory Notes [Member] | Senior Secured Convertible Promissory Notes [Member] | Convertible Notes Payable [Member] | Senior Convertible Promissory Notes 2014 [Member] | Senior Convertible Promissory Notes 2014 [Member] | Subordinated Secured Convertible Notes [Member] | Subordinated Secured Convertible Notes [Member] | Subordinated Secured Convertible Notes [Member] | Subordinated Secured Convertible Notes [Member] | ||||||
Cape One Master Fund II LLP [Member] | Investor [Member] | Scenario, Forecast [Member] | Cape One Master Fund II LLP [Member] | |||||||||||||||||||||
Notes Payable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable, Total | $1,274,946 | ' | $1,274,946 | ' | $4,088,425 | ' | ' | ' | ' | ' | ' | $3,256,399 | ' | ' | ' | $840,926 | $3,817,325 | ' | ' | ' | $0 | ' | $271,100 | $379,624 |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | $0.22 | $0.22 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' |
Loss On Modification Notes Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000 | 30,000 | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | 8.00% | 8.00% | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' |
Debt Instrument For Bearance Interest Rate Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18.00% | ' | 18.00% | 18.00% | ' | ' | ' |
Debt Instrument For Bearance Increased Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000 | 30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 280,000 | ' | ' | ' | ' | ' |
Interest Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 592,414 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reversal Of Registration Rights Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70,165 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gains (Losses) on Extinguishment of Debt, Total | 325,335 | 0 | 4,032,608 | -10,336 | ' | ' | ' | ' | ' | ' | ' | 3,747,273 | ' | ' | 325,335 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Notes Payable | ' | ' | 200,000 | 0 | ' | 24,000 | 45,000 | 300,000 | ' | ' | ' | ' | ' | 2,150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of Financing and Stock Issuance Costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Value, Outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,587,674 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | ' | ' | ' | ' | ' | 4.99% | 4.99% | 4.99% | 4.99% | ' | ' | ' | ' | ' | ' | ' | ' | 4.99% | ' | ' | ' | ' | ' | 4.99% |
Repayments of Notes Payable | ' | ' | 200,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 1,950,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000 |
DebtInstrument Convertible Modified Conversion Price1 | ' | ' | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds Receivable From Sale Of Shares Obtained | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,500,000 |
Rights Not Settleable in Cash Fair Value Disclosure | 54,289 | ' | 54,289 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 54,289 |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $65,010 | ' | ' | ' | ' | ' | ' |
Sale of Shares Obtained Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Upon expiration of the Lockup period, Cape One shall be allowed to sell the lesser of (i) 5% of the daily trading volume of the Companys common stock or, (ii) 10% of the reserved shares in any calendar month. |
Debt Instrument, Maturity Date, Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'due and payable between September 27, 2014 and November 25, 2014. | ' | ' | ' | ' | ' | ' |
DERIVATIVE_LIABILITY_Details
DERIVATIVE LIABILITY (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | $369,551 | $32,419 |
Warrant liability [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | 82,319 | 10,428 |
Senior Secured Convertible Notes [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | 37,549 | 18,045 |
Subordinated Secured Convertible Note [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | 0 | 3,946 |
2014 Convertible Promissory Notes [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Liability, Fair Value, Net | $249,683 | $0 |
DERIVATIVE_LIABILITY_Details_T
DERIVATIVE LIABILITY (Details Textual) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Nov. 30, 2009 | |
Derivative [Line Items] | ' | ' | ' |
Class of Warrant or Right, Outstanding | ' | ' | 2,647,059 |
Unrealized Gain (Loss) On Derivatives | ($337,132) | $12,848 | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | ' | $0.43 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS EQUITY (Details) (Warrant [Member], USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
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 | 48,000,000 | ' |
Shares, Cancelled or forfeited | 0 | ' |
Shares, Outstanding at end of year | 166,235,294 | 118,235,294 |
Shares, Exercisable at end of year | 166,235,294 | ' |
Weighted Average Exercise Price, Outstanding at beginning of year | $0.01 | ' |
Weighted Average Excercise Price, Granted | $0.00 | ' |
Weighted Average Exercise Price, Outstanding at end of year | $0.01 | $0.01 |
Weighted Average Exercise Price, Exercisable at end of year | $0.01 | ' |
Weighted Average Remaining Life-years, Outstanding (in years) | '5 years | '5 years 10 months 24 days |
Weighted Average Remaining Life years, Exercisable at end of year (in years) | '5 years | ' |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS EQUITY (Details Textual) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Jul. 02, 2013 | Jul. 23, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 |
Cape One Master Fund II LLP [Member] | Series B and Series C Convertible Preferred Stock [Member] | Series C Preferred Stock [Member] | Platinum Partners Long Term Growth Iv and Longview Special Financing Inc [Member] | Management [Member] | ||||
Series C Preferred Stock [Member] | ||||||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Conversion Of Convertible Securities | ' | ' | ' | ' | ' | ' | 43,134,720 | ' |
Common Stock, shares authorized | 800,000,000 | 800,000,000 | 800,000,000 | ' | ' | ' | ' | ' |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Conversion of Units | ' | ' | ' | ' | 160 | ' | 160 | ' |
Excess Of Debt Instrument Conversion Percentage | ' | ' | ' | ' | 4.99% | 9.98% | ' | ' |
Potential Equity Shares Outstanding | 1,682,479,014 | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Issued for Services | ' | ' | ' | ' | ' | ' | 269,592 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | ' | ' | ' | ' | ' | ' | ' | 48,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | ' | ' | ' | ' | ' | ' | ' | $105,501 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | ' | ' | ' | ' | ' | ' | ' | 289.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | ' | ' | ' | ' | ' | ' | ' | 1.63% |
Share Price | ' | ' | ' | ' | ' | ' | ' | $0.00 |
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Shares | ' | ' | ' | 2,000,000,000 | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | ' | ' | ' | ' | ' | ' | ' | $0.00 |
INCENTIVE_STOCK_PLANS_Details
INCENTIVE STOCK PLANS (Details) (Incentive Stock Plans [Member], USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
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 | 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 | $3.57 |
Weighted Average Exercise Price, Exercisable at end of year | $3.57 | ' |
Weighted Average Remaining Life-years, Outstanding (in years) | '1 year 4 months 10 days | '2 years 1 month 10 days |
Weighted Average Remaining Life years, Exercisable at end of year (in years) | '1 year 4 months 10 days | ' |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details Textual) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Discontinued Operations [Line Items] | ' |
Disposal Group, Including Discontinued Operation, Revenue | $14,750 |
Disposal Group, Including Discontinued Operation, Costs of Goods Sold | 3,635 |
Disposal Group, Including Discontinued Operation, Gross Profit (Loss) | $11,115 |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (USD $) | Sep. 30, 2014 | Jul. 18, 2014 | Dec. 31, 2013 | Jul. 02, 2013 | Oct. 30, 2014 | Oct. 20, 2014 | Oct. 30, 2014 | Oct. 20, 2014 |
Alpha Capital Anstalt [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||
Alpha Capital Anstalt [Member] | ZA Capital LLC [Member] | |||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Debt | ' | ' | ' | ' | ' | $260,000 | ' | ' |
Debt Instrument, Convertible, Terms Of Conversion Feature | ' | ' | ' | ' | ' | 'The notes are due on January 30, 2015 bears interest at 8% per annum. The notes and the interest accrued 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 $0.001 per share subject to adjustment upon the occurrence of certain anti-dilution events. | ' | ' |
Equity Method Investment, Ownership Percentage | ' | 51.00% | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized | 800,000,000 | ' | 800,000,000 | 800,000,000 | ' | ' | ' | ' |
Preferred Stock, Shares Authorized | 10,000,000 | ' | 10,000,000 | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | ' | ' | 30,000,000 | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | ' | ' | ' | ' | ' | 4.99% | ' | ' |
Debt Conversion, Original Debt, Amount | ' | ' | ' | ' | 12,000 | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | 8.00% | ' | ' | ' |
Service Management Costs | ' | ' | ' | ' | ' | ' | ' | $100,000 |