Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 28, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | INFINITE GROUP INC | ||
Entity Central Index Key | 884650 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Smaller Reporting Company | ||
Trading Symbol | IMCI | ||
Entity Common Stock, Shares Outstanding | 26,561,883 | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $950,000 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash | $7,768 | $16,947 |
Accounts receivable, net of allowances of $70,000 | 359,599 | 592,045 |
Prepaid expenses and deferred charges, net | 43,654 | 22,512 |
Total current assets | 411,021 | 631,504 |
Property and equipment, net | 60,039 | 46,120 |
Investment | 109,000 | 247,000 |
Deposits and deferred charges, net | 36,956 | 2,318 |
Total assets | 617,016 | 926,942 |
Current liabilities: | ||
Accounts payable | 341,977 | 316,873 |
Accrued payroll | 148,918 | 364,120 |
Accrued interest payable | 503,014 | 451,160 |
Accrued retirement | 208,449 | 200,316 |
Accrued expenses - other | 58,888 | 41,933 |
Current maturities of long-term obligations | 14,388 | 21,186 |
Current maturities of long-term obligations- related party | 8,172 | 0 |
Note payable | 30,000 | 30,000 |
Notes payable - related parties | 129,000 | 142,000 |
Total current liabilities | 1,442,806 | 1,567,588 |
Notes payable: | ||
Banks and other | 1,509,018 | 1,523,406 |
Related parties | 664,828 | 501,324 |
Total liabilities | 3,616,652 | 3,592,318 |
Commitments (Note 13) | ||
Stockholders' deficiency: | ||
Common stock, $.001 par value, 60,000,000 shares authorized; 26,561,883(25,961,883 - 2013) shares issued and outstanding | 26,561 | 25,961 |
Additional paid-in capital | 30,422,242 | 30,259,102 |
Accumulated deficit | -33,448,439 | -32,950,439 |
Total stockholders' deficiency | -2,999,636 | -2,665,376 |
Total liabilities and stockholders' deficiency | $617,016 | $926,942 |
BALANCE_SHEETS_PARENTHETICAL
BALANCE SHEETS (PARENTHETICAL) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Consolidated Balance Sheets [Parenthetical] [Abstract] | ||
Allowances for accounts receivable (in dollars) | $70,000 | $70,000 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 26,561,883 | 25,961,883 |
Common stock, shares outstanding | 26,561,883 | 25,961,883 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||
Sales | $8,567,736 | $8,712,617 |
Cost of sales | 6,386,182 | 6,383,978 |
Gross profit | 2,181,554 | 2,328,639 |
Costs and expenses: | ||
General and administrative | 1,302,329 | 1,022,356 |
Selling | 930,897 | 865,656 |
Total costs and expenses | 2,233,226 | 1,888,012 |
Operating(loss) income | -51,672 | 440,627 |
Loss on investment | -168,000 | -23,000 |
Interest expense: | ||
Related parties | -48,735 | -46,816 |
Other | -229,593 | -262,311 |
Total interest expense | -278,328 | -309,127 |
Net (loss) income | ($498,000) | $108,500 |
Net (loss) income per share - basic and diluted | ($0.02) | $0 |
Weighted average number of shares outstanding: | ||
Weighted average shares outstanding - basic | 26,012,842 | 25,961,883 |
Weighted average shares outstanding - diluted | 26,012,842 | 46,360,387 |
STATEMENTS_OF_STOCKHOLDERS_EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2012 | $25,961 | $30,164,403 | ($33,058,939) | ($2,868,575) |
Balance (in shares) at Dec. 31, 2012 | 25,961,883 | |||
Stock based compensation | 0 | 94,699 | 0 | 94,699 |
Net (loss) income | 0 | 0 | 108,500 | 108,500 |
Balance at Dec. 31, 2013 | 25,961 | 30,259,102 | -32,950,439 | -2,665,376 |
Balance (in shares) at Dec. 31, 2013 | 25,961,883 | |||
Stock based compensation | 0 | 110,340 | 0 | 110,340 |
Shares issued as origination fee | 600 | 29,400 | 0 | 30,000 |
Shares issued as origination fee (in shares) | 600,000 | |||
Stock options issued as origination fee | 0 | 23,400 | 0 | 23,400 |
Stock options issued as origination fee (in shares) | 0 | |||
Net (loss) income | 0 | 0 | -498,000 | -498,000 |
Balance at Dec. 31, 2014 | $26,561 | $30,422,242 | ($33,448,439) | ($2,999,636) |
Balance (in shares) at Dec. 31, 2014 | 26,561,883 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net (loss) income | ($498,000) | $108,500 |
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities: | ||
Stock based compensation | 110,340 | 94,699 |
Depreciation and amortization | 26,490 | 21,074 |
Loss on investment | 168,000 | 23,000 |
(Increase) decrease in assets: | ||
Accounts receivable | 232,446 | -120,890 |
Prepaid expenses and other assets | -3,823 | 1,615 |
Increase (decrease) in liabilities: | ||
Accounts payable | 25,104 | 35,856 |
Accrued expenses | -146,393 | 32,235 |
Accrued retirement obligations | 8,133 | -20,467 |
Net cash (used) provided by operating activities | -77,703 | 175,622 |
Cash flows from investing activities: | ||
Purchases of property and equipment | -38,966 | -29,132 |
Investment in equity securities | -30,000 | -155,833 |
Net cash used by investing activities | -68,966 | -184,965 |
Cash flows from financing activities: | ||
Repayments of notes payable | -21,186 | -22,868 |
Proceeds from note payable - related party | 200,000 | 0 |
Repayments of notes payable - related parties | -41,324 | -7,000 |
Net cash provided(used)by financing activities | 137,490 | -29,868 |
Net decrease in cash | -9,179 | -39,211 |
Cash - beginning of year | 16,947 | 56,158 |
Cash - end of year | 7,768 | 16,947 |
Supplemental Disclosures of Cash Flow Information: | ||
Interest | 234,266 | 264,417 |
Income taxes | $0 | $0 |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | The accompanying financial statements consist of the financial statements of Infinite Group, Inc. (the Company). |
The Company operates in one segment, the field of information technology (IT) consulting services, with all operations based in the United States. There were no sales from customers in foreign countries during 2014 and 2013 and all assets are located in the United States. Certain projects required employees to travel to foreign countries during 2014 and 2013. |
MANAGEMENT_PLANS
MANAGEMENT PLANS | 12 Months Ended | |
Dec. 31, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
MANAGEMENT PLANS | The Company reported net (loss) income of $(498,000) in 2014 and $108,500 in 2013 and stockholders’ deficiencies at December 31, 2014 and 2013. The Company’s business strategy is summarized as follows. | |
On October 1, 2014, the Company hired an executive officer, Chief Administrative Officer and Senior Vice President of Business Development, who is responsible for working with other key executives to develop and implement the Company’s strategic direction and marketing plans and improve performance through collaboration between sales and service delivery functions. | ||
During 2014, the Company performed vulnerability and security configurations scans against internal and external networks using proprietary software. In February 2015, the Company purchased this software known as UberScan and hired a Director of CyberSecurity who has expertise in designing, developing, marketing, and selling network security assessment software and project assessments using UberScan (see Note 16). The Company provides technical and executive summary reports of ongoing risks, identifies and prioritizes security vulnerabilities and communicates remediation recommendations. | ||
The Company plans include continuing to provide cloud related IT managed services and solutions and continuing to expand into the commercial sector including the small and medium sized businesses (SMB) space. The Company also reviews potential acquisitions of IT assets and businesses. The Company is committed to remaining on the leading edge of technologies and trends in the IT service sector. The Company’s ability to succeed may depend on how successful it is in differentiating itself from competition at a time when competition in these markets is on the rise. | ||
The Company strategy has been to bid for contract vehicles that facilitate Federal and State government procurement requirements which allow the Company to compete further on task orders issued under the contract vehicles. The uncertainty in the Federal process along with a lack of socio-economic advantage makes it difficult for the Company to compete in the government market. The Company’s strategy is to establish partnerships to create a better competitive advantage. | ||
In addition, the Company's strategy is to build its business by delivering a wide range of IT solutions and services that address challenges common to many U.S. Government agencies, state and local governments and commercial companies including SMBs. The Company believes that its core strengths position the Company to respond to the long-term trends and changing demands of the IT markets. | ||
The Company has established several areas of specific focus with the objective of increasing its sales, which include the following: | ||
· | Cloud computing; | |
· | Managed services that include managing leading edge operations and implementing complex programs in advanced server management; | |
· | Remote desktop and remote server monitoring and remediation; | |
· | Help desk and call center services; | |
· | Third party data storage; | |
· | Cyber security services; and | |
· | Project management. | |
Continue to Improve Operations and Capital Resources | ||
The Company's goal is to increase sales and generate cash flow from operations on a consistent basis. The Company used ISO 9001-2008 practices as a tool for improvement that has aided expense reduction and internal performance. Since 2013, the Company realized expense reductions associated with less travel and other selling expenses due to maintaining fewer business development positions and utilizing more virtual meetings, webinars and conference calls. Beginning in late 2013, the company hired new sales employees with the objective of increasing sales. | ||
The Company believes the capital resources available under its factoring line of credit, cash from additional related party loans and cash generated by improving the results of its operations provide sources to fund its ongoing operations and to support the internal growth the Company expects to achieve for at least the next 12 months. However, if the Company does not continue to maintain or improve the results of its operations in future periods, the Company expects that additional working capital will be required to fund its business. | ||
On December 1, 2014, the Company entered into an unsecured line of credit financing agreement (the “LOC Agreement”) with a member of its board of directors. The LOC Agreement provides for working capital of up to $400,000 through December 31, 2017. Although the Company has no assurances, the Company believes that related parties, who have previously provided working capital, will continue to provide working capital loans on similar terms, as in the past, as may be necessary to fund its on-going operations for at least the next 12 months. | ||
If the Company experiences significant growth in its sales, the Company believes that this may require it to increase its financing line, finance additional accounts receivable, or obtain additional working capital from other sources to support its sales growth. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Accounts Receivable - Credit is granted to substantially all customers throughout the United States. The Company carries its accounts receivable at invoice amount, less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts, based on a history of past write-offs and collections and current credit conditions. The Company’s policy is to not accrue interest on past due receivables. Management determined that an allowance of $70,000 for doubtful accounts was reasonably stated at December 31, 2014 and 2013. | ||||||||
Concentration of Credit Risk - Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in financial institutions. The cash accounts occasionally exceed the federally insured deposit amount; however, management does not anticipate nonperformance by financial institutions. Management reviews the financial viability of these institutions on a periodic basis. | |||||||||
Loan Origination Fees – The Company capitalizes the costs of loan origination fees and amortizes the fees as interest expense over the contractual life of each agreement. | |||||||||
Sale of Certain Accounts Receivable - The Company has available a financing line with a financial institution (the Purchaser). In connection with this line of credit the Company adopted FASB ASC 860 “Transfers and Servicing”. FASB ASC 860 provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings. The Company has a factoring line with the Purchaser which enables the Company to sell selected accounts receivable invoices to the Purchaser with full recourse against the Company. | |||||||||
These transactions qualify for a sale of assets since (1) the Company has transferred all of its right, title and interest in the selected accounts receivable invoices to the financial institution, (2) the Purchaser may pledge, sell or transfer the selected accounts receivable invoices, and (3) the Company has no effective control over the selected accounts receivable invoices since it is not entitled to or obligated to repurchase or redeem the invoices before their maturity and it does not have the ability to unilaterally cause the Purchaser to return the invoices. Under FASB ASC 860, after a transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished. | |||||||||
Pursuant to the provisions of FASB ASC 860, the Company reflects the transactions as a sale of assets and establishes an accounts receivable from the Purchaser for the retained amount less the costs of the transaction and less any anticipated future loss in the value of the retained asset. In April 2014, the Company completed a revised financing agreement with the Purchaser. The retained amount was revised to 15% of the total accounts receivable invoice sold to the Purchaser. Previously the retained amount was 20%. The fee for the initial purchase is .466% of the invoice. The fee is charged at prime plus 4% (effective rate of 7.25% at December 31, 2014) against the average daily outstanding balance of funds advanced. Previously, the fee for the first 30 days was 1% and additional fees were charged against the average daily balance of net outstanding funds at the prime rate, which was 3.25% per annum as of December 31, 2014. The estimated future loss reserve for each receivable included in the estimated value of the retained asset is based on the payment history of the accounts receivable customer and is included in the allowance for doubtful accounts, if any. As collateral, the Company granted the Purchaser a first priority interest in accounts receivable and a blanket lien, which may be junior to other creditors, on all other assets. | |||||||||
The financing line provides the Company the ability to finance up to $2,000,000 of selected accounts receivable invoices, which includes a sublimit for one of the Company’s customers of $1,500,000. During the year ended December 31, 2014, the Company sold approximately $8,299,000 ($8,132,000 - 2013) of its accounts receivable to the Purchaser. As of December 31, 2014, $874,458 ($799,381 - 2013) of these receivables remained outstanding. Additionally, as of December 31, 2014, the Company had approximately $140,000 available under the financing line with the financial institution ($220,000 – 2013). After deducting estimated fees and advances from the Purchaser, the net receivable from the Purchaser amounted to $149,573 at December 31, 2014 ($187,258 - 2013), and is included in accounts receivable in the accompanying balance sheets as of that date. | |||||||||
There were no gains or losses on the sale of the accounts receivable because all were collected. The cost associated with the financing line totaled approximately $144,000 for the year ended December 31, 2014 ($176,000 - 2013). These financing line fees are classified on the statements of operations as interest expense. | |||||||||
Property and Equipment - Property and equipment are recorded at cost and are depreciated over their estimated useful lives for financial statement purposes. The cost of improvements to leased properties is amortized over the shorter of the lease term or the life of the improvement. Maintenance and repairs are charged to expense as incurred while improvements are capitalized. | |||||||||
Accounting for the Impairment or Disposal of Long-Lived Assets - The Company follows provisions of FASB ASC 360 “Property, Plant and Equipment” in accounting for the impairment of disposal of long-lived assets. This standard specifies, among other things, that long-lived assets are to be reviewed for potential impairment whenever events or circumstances indicate that the carrying amounts may not be recoverable. The Company determined that there was no impairment of long-lived assets during 2014 and 2013. | |||||||||
Revenue Recognition - The Company’s revenues are generated under both time and material and fixed price agreements. Consulting revenue is recognized when the associated costs are incurred, which coincides with the consulting services being provided. Time and materials service agreements are based on hours worked and are billed at agreed upon hourly rates for the respective position plus other billable direct costs. Fixed price service agreements are based on a fixed amount of periodic billings for recurring services of a similar nature performed according to the contractual arrangements with clients. Under both types of agreements, the delivery of services occurs when an employee works on a specific project or assignment as stated in the contract or purchase order. Based on historical experience, the Company believes that collection is reasonably assured. | |||||||||
During 2014, sales to one client, including sales under subcontracts for services to several entities, accounted for 60.2% of total sales (68.9% - 2013) and 27.8% of accounts receivable at December 31, 2014 (56.4% - 2013). Sales to another client, which consisted of sales under subcontracts, accounted for 30.7% of sales in 2014 (25.0% - 2013) and 49.6% of accounts receivable at December 31, 2014 (37.0% - 2013). | |||||||||
Equity Instruments - For equity instruments issued to consultants and vendors in exchange for goods and services the Company follows the provisions of FASB ASC 718 “Compensation – Stock Compensation.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | |||||||||
Stock Options - The Company recognizes compensation expense related to stock based payments over the requisite service period based on the grant date fair value of the awards. The Company uses the Black-Scholes option pricing model to determine the estimated fair value of the awards. | |||||||||
Income Taxes - The Company accounts for income tax expense in accordance with FASB ASC 740 “Income Taxes.” Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||
The Company reviews tax positions taken to determine if it is more likely than not that the position would be sustained upon examination resulting in an uncertain tax position. The Company did not have any material unrecognized tax benefit at December 31, 2014 or 2013. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2014 and 2013, the Company recognized no interest and penalties. | |||||||||
The Company files U.S. federal tax returns and tax returns in various states. The tax years 2011 through 2014 remain open to examination by the taxing jurisdictions to which the Company is subject. | |||||||||
Fair Value of Financial Instruments - The Company has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. | |||||||||
Level 1 uses observable inputs such as quoted prices in active markets; | |||||||||
Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and | |||||||||
Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Company to develop its own assumptions. | |||||||||
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). | |||||||||
The carrying amounts of cash, accounts receivable and accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. Based on the borrowing rates currently available to the Company for loans similar to its term debt and notes payable, the fair value approximates its carrying amount. | |||||||||
Earnings Per Share - Basic earnings per share is based on the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is based on the weighted average number of common shares outstanding, as well as dilutive potential common shares which, in the Company’s case, comprise shares issuable under convertible notes payable and stock options. The treasury stock method is used to calculate dilutive shares, which reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options and warrants assumed to be exercised. In a loss year, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive. | |||||||||
The following table sets forth the computation of basic and diluted (loss) income per share as of December 31, 2014 and 2013: | |||||||||
Year ended December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator for basic net (loss) income per share: | |||||||||
Net (loss) income | $ | (498,000 | ) | $ | 108,500 | ||||
Denominator for basic net (loss) income per share: | |||||||||
Weighted average common shares outstanding | 26,012,842 | 25,961,883 | |||||||
Basic net (loss) income per share | $ | (.02 | ) | $ | 0 | ||||
Numerator for diluted net (loss) income per share: | |||||||||
Net (loss) income | $ | (498,000 | ) | $ | 108,500 | ||||
Effect of dilutive securities - common stock options and | |||||||||
convertible notes payable | 0 | 50,879 | |||||||
Diluted net (loss) income per share - available to common | |||||||||
stockholders with assumed conversions | (498,000 | ) | 159,379 | ||||||
Denominator for diluted net (loss) income per share: | |||||||||
Weighted average common shares outstanding | 26,012,842 | 25,961,883 | |||||||
Effect of dilutive securities - common stock options and | |||||||||
convertible notes payable | 0 | 20,398,504 | |||||||
Shares used in computing diluted net (loss) income per | |||||||||
share | 26,012,842 | 46,360,387 | |||||||
Diluted net (loss) income per share | $ | (.02 | ) | $ | 0 | ||||
Anti-dilutive shares excluded from net (loss) income share | |||||||||
calculation | 30,556,892 | 6,092,500 | |||||||
Certain common shares issuable under stock options and convertible notes payable have been omitted from the diluted net (loss) income per share calculation because their inclusion is considered anti-dilutive because the exercise prices were greater than the average market price of the common shares or their inclusion would have been anti-dilutive. | |||||||||
Equity Investments - The Company accounts for investments in equity securities of other entities under the cost method of accounting if investments in voting equity interests of the investee are less than 20%. The equity method of accounting is used if the Company’s investment in voting stock is greater than or equal to 20% but less than a majority. In considering the accounting method for investments less than 20%, the Company also considers other factors such as its ability to exercise significant influence over operating and financial policies of the investee. If certain factors are present, the Company could account for investments for which it has less than a 20% ownership under the equity method of accounting. | |||||||||
Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||
Recent Accounting Pronouncements Not Yet Adopted - In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers. The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or 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. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. | |||||||||
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
PROPERTY AND EQUIPMENT | Property and equipment consists of: | |||||||||
Depreciable | December 31, | |||||||||
Lives | 2014 | 2013 | ||||||||
Software | 3 to 5 years | $ | 29,004 | $ | 10,881 | |||||
Equipment | 3 to 10 years | 155,039 | 142,846 | |||||||
Furniture and fixtures | 5 to 7 years | 17,735 | 13,735 | |||||||
Leasehold improvements | 3 years | 5,874 | 1,224 | |||||||
207,652 | 168,686 | |||||||||
Accumulated depreciation | (147,613 | ) | (122,566 | ) | ||||||
$ | 60,039 | $ | 46,120 | |||||||
Depreciation expense was $25,047 and $21,074 for the years ended December 31, 2014 and 2013, respectively. |
INVESTMENT
INVESTMENT | 12 Months Ended |
Dec. 31, 2014 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT | During 2014 and 2013, the Company purchased 300,000 shares of the authorized but unissued shares of Series A Convertible Preferred Stock (“Series A stock”), $.001 par value, of Sudo.me Corporation (goSudo) for an aggregate purchase price of $300,000 pursuant to the terms and conditions of a preferred stock purchase agreement. goSudo is a customer of the Company. As a result, at December 31, 2014, the Company owns approximately 9.4% of the total outstanding shares of goSudo. The initial and subsequent investments during 2013 included settlement of accounts receivable of $114,167 which is considered a non-cash investing activity. |
The investment is accounted for using the equity method since Company management exercises significant influence over the operating and financial policies of goSudo. Beginning in 2012 certain officers and directors of the Company made loans to goSudo and converted loans to Series A stock. In addition, one former Company employee, whose employment extended through June 30, 2014, is one of four members of the board of directors of goSudo and, was active in managing goSudo's business. The Company’s chief executive officer is a member of the board of directors and is President of goSudo. As a result of the foregoing, the Company is deemed to have significant influence upon goSudo's policy and operating decisions. During the year ended December 31, 2014, the investment was written down by $168,000 consisting of $68,000 equity interest in the loss of goSudo and an impairment loss of $100,000 ($23,000 equity interest in the loss of goSudo - 2013). The investment has a carrying value of $109,000 at December 31, 2014 ($247,000 - 2013). | |
The Series A stock votes together with all other classes of stock as a single class on all actions to be taken by the stockholders. Series A stock dividends accrue at the rate of $.10 per year on each share from the date of issuance. Each Series A share entitles the holder to such number of votes per share based on the number of shares of common stock it is convertible into. At the option of the holder, each share and accrued and unpaid dividends are convertible into shares of common stock at a rate of the quotient of (i) preferred shares plus unpaid dividends divided by (ii) the number of preferred shares. Shares of Series A stock are automatically converted to shares of common stock upon a firm commitment underwritten public offering of common stock yielding gross proceeds of at least $10 million at a minimum price of $3 per share. | |
Unaudited financial information for goSudo as of and for the year ended December 31, 2014 reflects total assets of $10,639, total liabilities of $753,305, and a net loss of $781,300. goSudo is a development stage enterprise and has no revenues for the years ended December 31, 2014 and 2013. |
LOAN_ORIGINATION_FEES
LOAN ORIGINATION FEES | 12 Months Ended |
Dec. 31, 2014 | |
Loan Origination Fees | |
LOAN ORIGINATION FEES | On December 1, 2014, the Company entered into an unsecured line of credit financing agreement with a member of its board of directors. The Company paid an origination fee consisting of (i) 600,000 shares of its common stock valued at $30,000 and (ii) options to purchase 600,000 shares of its common stock at an exercise price of $.05 valued at $23,400 using the Black-Scholes option-pricing model all of which were immediately vested. At December 31, 2014, the Company has deferred origination fees of $53,400 less accumulated amortization expenses of $1,443 incurred in 2014. The Company will amortize the remaining balance at the rate of $17,319 annually in 2015, 2016 and 2017. |
NOTES_PAYABLE_CURRENT
NOTES PAYABLE - CURRENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
NOTES PAYABLE - CURRENT | Note payable at December 31, 2014 and 2013 consists of an unsecured demand note payable of $30,000 with interest at 10%. | ||||||||
Notes payable - related parties consist of: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Convertible demand note payable to employee, 11% (A) | $ | 59,000 | $ | 59,000 | |||||
Demand note payable to director, 10%, unsecured | 30,000 | 30,000 | |||||||
Convertible demand note payable to director, 12%, unsecured (B) | 40,000 | 40,000 | |||||||
Demand note payable to director, 18%, unsecured | 0 | 13,000 | |||||||
$ | 129,000 | $ | 142,000 | ||||||
(A) Convertible demand note payable to employee, 11% - At December 31, 2014 and 2013, the Company was obligated to an employee for $59,000 with interest at 11%. The note is secured by a subordinate lien on all of the Company's assets. The principal and accrued interest are convertible at the option of the holder into shares of common stock at $.16 per share. | |||||||||
(B) Convertible demand note payable to director, 12%, - At December 31, 2014 and 2013, the Company was obligated to a director for $40,000 with interest at 12%. The note is unsecured and the principal is convertible at the option of the holder into shares of common stock at $.11 per share. |
LONGTERM_OBLIGATIONS
LONG-TERM OBLIGATIONS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
LONG-TERM OBLIGATIONS | Notes Payable - Banks and Other | ||||||||
Term notes payable - banks and other consist of: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Note payable, 10%, secured, due January 1, 2018 | $ | 265,000 | $ | 265,000 | |||||
Convertible term note payable,12%, secured, due January 1, 2016 | 175,000 | 175,000 | |||||||
Convertible notes payable, 6%, due January 1, 2016 | 150,000 | 150,000 | |||||||
Term note payable - PBGC, 6%, secured | 261,000 | 273,000 | |||||||
Obligation to PBGC based on free cash flow | 569,999 | 569,999 | |||||||
Convertible term note payable, 7%, secured, due October 3, 2016 | 100,000 | 100,000 | |||||||
Term notes payable - banks, secured | 2,407 | 11,593 | |||||||
1,523,406 | 1,544,592 | ||||||||
Less current maturities | 14,388 | 21,186 | |||||||
$ | 1,509,018 | $ | 1,523,406 | ||||||
Note payable, 10%, secured, due January 1, 2018 - During the years ended December 31, 2004 and 2003, the Company issued secured notes payable aggregating $265,000. All of these borrowings bear interest at 10% and are due, as modified during 2014, on January 1, 2018. The notes are secured by a first lien on accounts receivable that are not otherwise used by the Company as collateral for other borrowings and by a second lien on accounts receivable. | |||||||||
Convertible term note payable, 12%, secured, due January 1, 2016 - The Company entered into a secured loan agreement during 2008 for working capital. The loan bears interest at 12%, which is payable monthly and is due, as modified during 2012, on January 1, 2016 for an aggregate of $175,000. During 2009, the note was modified for its conversion into common shares at $.25 per share, which was the closing price of the Company’s common stock on the date of the modification. The note is secured by a subordinate lien on all assets of the Company. | |||||||||
Convertible notes payable, 6%, due January 1, 2016 - At December 31, 2014, the Company was obligated to unrelated third parties for $150,000 ($150,000 - 2013). The principal is convertible at the option of the holder into shares of common stock at $.05 per share. The notes bear interest at 6.0% at December 31, 2014 (6.0% - 2013). The Notes are convertible into shares of common stock subject to the following limitations. The Notes are not convertible to the extent that shares of common stock issuable upon the proposed conversion would result in a change in control of the Company which would limit the use of its net operating loss carryforwards; provided, however if the Company closes a transaction with another third party or parties that results in a change of control which will limit the use of its net operating loss carryforwards, then the foregoing limitation shall lapse. Prior to any conversion by a requesting note holder, each note holder holding a note which is then convertible into 5% or more of the Company’s common stock shall be entitled to participate on a pari passu basis with the requesting note holder and upon any such participation the requesting note holder shall proportionately adjust his conversion request such that, in the aggregate, a change of control, which will limit the use of the Company’s net operating loss carryforwards, does not occur. | |||||||||
Term note payable - PBGC, 6%, secured - On October 17, 2011, in accordance with of the Settlement Agreement dated September 6, 2011 (the “Settlement Agreement”), the Company issued a secured promissory note in favor of the Pension Benefit Guaranty Corporation (the “PBGC”) for $300,000 bearing interest at 6% per annum amortizing in quarterly payments over a seven year period with a balloon payment of $219,000 due on September 15, 2018. | |||||||||
Obligation to PBGC based on free cash flow - On October 17, 2011, in accordance with the Settlement Agreement, the Company became obligated to make annual future payments to the PBGC through December 31, 2017 equal to a portion of the Company’s “Free Cash Flow” as defined in the Settlement Agreement, not to exceed $569,999. The annual obligation is contingent upon the Company earning free cash flow in excess of defined amounts which vary by year. The annual amount is due fifteen days after the issuance of the Company’s audited financial statements relating to the previous year. The Settlement Agreement contains specific events of default and provisions for remedies upon default. No amounts have been owed or paid on this obligation as of December 31, 2014 or 2013. | |||||||||
Convertible term note payable, 7%, secured - In accordance with the Settlement Agreement, the Company repurchased 500,000 shares of its common stock from the previously terminated defined benefit retirement plan for $130,000 which was funded from the proceeds of a convertible note in the principal amount of $100,000 to a non-affiliated accredited investor on October 4, 2011 and $30,000 of the Company's working capital. The note bears interest at the rate of 7% per annum, payable monthly, matures on October 3, 2016 and is secured by a subordinate lien on all of the Company’s assets. The note's principal is convertible at the option of the holder into shares of the Company’s common stock at $.10 per share, which was the price of the Company's common stock on the closing date of the agreement. | |||||||||
Term notes payable - banks, secured - The Company renewed a loan agreement during 2010 for the secured financing of a vehicle. The loan was paid off during 2014 and had a balance of $5,993 at December 31, 2013. The Company entered into capital lease agreements during 2012 and 2010 for the secured financing of office and technology equipment. The remaining capital lease bears interest at 14.9% and is due in monthly installments of $318 through August 2015. | |||||||||
Notes Payable - Related Parties | |||||||||
Notes payable – related parties consist of: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Convertible notes payable, 6%, due January 1, 2016 | $ | 473,000 | $ | 501,324 | |||||
Note payable, line of credit, 6.1%, unsecured | 200,000 | 0 | |||||||
673,000 | 501,324 | ||||||||
Less current maturities | 8,172 | 0 | |||||||
$ | 664,828 | $ | 501,324 | ||||||
Convertible notes payable, 6%, due January 1, 2016 - The Company has various notes payable to related parties totaling $473,000 at December 31, 2014 ($501,324 – 2013) which mature on January 1, 2016 with principal and accrued interest convertible at the option of the holder into shares of common stock at $.05 per share. The notes bear interest at 6.0% at December 31, 2014 (6.0% - 2013). The interest rate is adjusted annually, on January 1st of each year, to a rate equal to the prime rate in effect on December 31st of the immediately preceding year, plus one and one quarter percent, and in no event, shall the interest rate be less than 6% per annum. | |||||||||
The Company executed collateral security agreements with the note holders providing for a subordinate security interest in all of the Company’s assets. Generally, upon notice, prior to the note maturity date, the Company can prepay all or a portion of the outstanding notes. | |||||||||
The Notes are convertible into shares of common stock subject to the following limitations. The Notes are not convertible to the extent that shares of common stock issuable upon the proposed conversion would result in a change in control of the Company which would limit the use of its net operating loss carryforwards; provided, however, if the Company closes a transaction with another third party or parties that results in a change of control which will limit the use of its net operating loss carryforwards, then the foregoing limitation shall lapse. Prior to any conversion by a requesting note holder, each note holder holding a note which is then convertible into 5% or more of the Company’s common stock shall be entitled to participate on a pari passu basis with the requesting note holder and upon any such participation the requesting note holder shall proportionately adjust his conversion request such that, in the aggregate, a change of control, which will limit the use of the Company’s net operating loss carryforwards, does not occur. | |||||||||
Note payable, line of credit, 6.1%, unsecured - On December 1, 2014, the Company entered into an unsecured line of credit financing agreement with a member of its board of directors. The LOC Agreement provides for working capital of up to $400,000 through December 31, 2017. The Company is required to provide the lender with a report stating the use of proceeds for each pending draw under the line of credit. Borrowings of $100,000 or more bear interest at the prime rate plus 2.85% (effective rate of 6.10% at December 31, 2014). Principal and interest are paid monthly using an amortization schedule for a fifteen year fully amortizing loan with all outstanding amounts due on December 31, 2017. | |||||||||
Long-Term Obligations | |||||||||
Minimum future annual payments of long-term obligations as of December 31, 2014 are as follows: | |||||||||
2015 | $ | 22,560 | |||||||
2016 | 918,632 | ||||||||
2017 | 765,214 | ||||||||
2018 | 490,000 | ||||||||
Total long-term obligations | $ | 2,196,406 |
STOCKHOLDERS_DEFICIENCY
STOCKHOLDERS' DEFICIENCY | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIENCY | Preferred Stock - The Company’s certificate of incorporation authorizes its board of directors to issue up to 1,000,000 shares of preferred stock. The stock is issuable in series that may vary as to certain rights and preferences, as determined upon issuance, and has a par value of $.01 per share. As of December 31, 2014 and 2013 there were no preferred shares issued or outstanding. |
Common Stock - On December 1, 2014, as payment of a portion of an origination fee under the LOC Agreement, the Company issued 600,000 shares of its common stock at .$05 per share. |
STOCK_OPTION_PLANS_AND_AGREEME
STOCK OPTION PLANS AND AGREEMENTS | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
STOCK OPTION PLANS AND AGREEMENTS | The Company’s board of directors and stockholders have approved stock option plans adopted in 1993, 1994, 1995, 1996, 1997, 1998, 1999, and 2005, which have authority to grant options to purchase up to an aggregate of 3,937,833 common shares at December 31, 2014 (4,088,833 – 2013). No further grants may be made from the 1993, 1994, 1995, 1996, 1997, 1998, and 1999 plans. | |||||||||||||
2005 Plan - As of December 31, 2014, 142,833 options to purchase shares remain unissued under the 2005 plan. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. The 2005 plan expired on March 4, 2015. | ||||||||||||||
2009 Plan - During 2009, the Company’s board of directors approved the 2009 stock option plan, which grants options to purchase up to an aggregate of 4,000,000 common shares. As of December 31, 2014, 470,500 options to purchase shares remain unissued under the 2009 plan. Options issued to date are nonqualified since the Company has decided not to seek stockholder approval of the 2009 Plan. | ||||||||||||||
Option Agreements - During 2014 and 2013, the Company's board of directors approved stock option agreements with consultants and employees of which options for an aggregate of 3,575,500 common shares are outstanding at December 31, 2014 with an average exercise price of $.13 per share. At December 31, 2014, options for 1,225,000 shares are vested; options for 2,050,000 shares vest based on achieving specific sales performance criteria for the Company and options for 300,000 shares vest over three years. | ||||||||||||||
Origination Fee - On December 1, 2014, as payment of a portion of an origination fee under the LOC Agreement, the Company issued options to purchase 600,000 shares of its common stock at an exercise price of $.05, all of which were immediately vested. | ||||||||||||||
The Company grants stock options to its key employees and independent service providers as it deems appropriate. Employee stock options are exercisable as long as the optionee continues to be an employee of the Company and for thirty days subsequent to employee termination. | ||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model based on the following assumptions. | ||||||||||||||
Volatility is based on the Company’s historical volatility. The expected life of the options was assumed to be 3.25 or 5.75 years using the simplified method for plain vanilla options as stated in FASB ASC 718 to improve the accuracy of this assumption while simplifying record keeping requirements until more detailed information about the Company’s exercise behavior is available. The risk-free rate for the life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were used for the years ended December 31, 2014 and 2013. | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | .77% - 1.98% | . 34% - 2.15% | ||||||||||||
Expected dividend yield | 0% | 0% | ||||||||||||
Expected stock price volatility | 100% | 75% | ||||||||||||
Expected life of options | 3.25 - 5.75 years | 3.25 - 5.75 years | ||||||||||||
The following is a summary of stock option activity, including qualified and non-qualified options for the years ended December 31, 2014 and 2013: | ||||||||||||||
Number of Options Outstanding | Weighted Average Exercise Price | Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||
Outstanding at December 31, 2012 | 6,884,500 | $ | 0.2 | |||||||||||
Granted | 3,587,500 | $ | 0.15 | |||||||||||
Expired | (1,124,833 | ) | $ | 0.09 | ||||||||||
Forfeited | (126,667 | ) | $ | 0.1 | ||||||||||
Outstanding at December 31, 2013 | 9,220,500 | $ | 0.18 | |||||||||||
Granted | 3,030,000 | $ | 0.09 | |||||||||||
Expired | (517,667 | ) | $ | 0.15 | ||||||||||
Forfeited | (833,333 | ) | $ | 0.13 | ||||||||||
Outstanding at December 31, 2014 | 10,899,500 | $ | 0.16 | 5.0 years | $ | 6,000 | ||||||||
Vested or expected to vest at | ||||||||||||||
December 31, 2014 | 8,549,500 | $ | 0.15 | 5.5 years | $ | 6,000 | ||||||||
Exercisable at December 31, 2014 | 7,309,500 | $ | 0.18 | 4.9 years | $ | 2,300 | ||||||||
At December 31, 2014, there was approximately $79,000 of total unrecognized compensation cost related to outstanding non-vested options, which excludes non-vested options which are performance based for which the option expense cannot be presently quantified. This cost is expected to be recognized over a weighted average period of approximately two years. The total fair value of shares vested during the year ended December 31, 2014 was approximately $130,000. | ||||||||||||||
The weighted average fair value of options granted was $.07 and $.08 per share for the years ended December 31, 2014 and 2013, respectively. The exercise price for all options granted equaled or exceeded the market value of the Company’s common stock on the date of grant. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
INCOME TAXES | The components of income tax expense (benefit) follows: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred: | |||||||||
Federal | $ | (135,000 | ) | $ | -61,000 | ||||
State | 90,000 | 4,000 | |||||||
(45,000 | ) | -57,000 | |||||||
Change in valuation allowance | 45,000 | 57,000 | |||||||
$ | 0 | $ | 0 | ||||||
At December 31, 2014, the Company had federal net operating loss carryforwards of approximately $6,800,000 ($6,500,000 – 2013) and various state net operating loss carryforwards of approximately $2,200,000 ($3,900,000 – 2013) which expire from 2018 through 2034. These carryforwards exclude federal net operating loss carryforwards from inactive subsidiaries of approximately $6,600,000 ($6,600,000 – 2013), as well as net operating loss carryforwards from states that the Company does not presently operate in. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenues Code and similar state provisions. The annual limitation may result in the expiration of the net operating loss carryforwards before utilization. | |||||||||
At December 31, 2014, a net deferred tax asset, representing the future benefit attributed primarily to the available net operating loss carryforwards and defined benefit pension plan expenses, in the amount of approximately $3,145,000 ($3,100,000 - 2013), had been fully offset by a valuation allowance because management believes that the statutory limitations on utilization of the operating losses and concerns over achieving profitable operations diminish the Company’s ability to demonstrate that it is more likely than not that these future benefits will be realized before they expire. | |||||||||
The following is a summary of the Company's temporary differences and carryforwards which give rise to deferred tax assets and liabilities. | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryforwards | $ | 2,423,000 | $ | 2,447,000 | |||||
Defined benefit pension liability | 331,000 | 336,000 | |||||||
Reserves and accrued expenses payable | 391,000 | 317,000 | |||||||
Gross deferred tax asset | 3,145,000 | 3,100,000 | |||||||
Deferred tax asset valuation allowance | (3,145,000 | ) | (3,100,000 | ) | |||||
Net deferred tax asset | $ | 0 | $ | 0 | |||||
The differences between the U.S. statutory federal income tax rate and the effective income tax rate in the accompanying statements of operations are as follows | |||||||||
. | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Statutory U.S. federal tax rate | 34 | % | 34 | % | |||||
State income taxes | (18.0 | ) | 4.3 | ||||||
Change in valuation allowance | (9.1 | ) | 51.2 | ||||||
Stock-based compensation expense | (4.5 | ) | 2.7 | ||||||
Expired stock-based compensation | (1.8 | ) | 13.5 | ||||||
Other permanent non-deductible items | (.6 | ) | 3.9 | ||||||
Deferred tax asset adjustment | .0 | (109.6 | ) | ||||||
Effective income tax rate | 0.0 | % | 0.0 | % |
EMPLOYEE_RETIREMENT_PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE RETIREMENT PLANS | Simple IRA Plan - Through December 31, 2012, the Company offered a simple IRA plan as a retirement plan for eligible employees who earned at least $5,000 of annual compensation. Eligible employees could elect to contribute a percentage of their compensation up to a maximum of $11,500. The accrued liability for the simple IRA plan, including interest, was $208,449 and $200,316, as of December 31, 2014 and 2013, respectively. |
401(k) Plan - Effective, January 1, 2013, the Company began offering a defined contribution 401(k) plan in place of the simple IRA plan. For 2014, 401(k) employee contribution limits are $17,500 plus a catch up contribution for those over age 50 of $5,500. The Company can elect to make a discretionary contribution to the Plan. No discretionary contribution was approved for 2014 or 2013. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | Lease Commitments - The Company leases its headquarters facility under an operating lease agreement that expires in May 2016. Rent expense under the operating lease for the year ended December 31, 2014 was approximately $39,200 ($30,400 - 2013). Future minimum payments required under the lease are $64,668 in 2015 and $26,945 in 2016. Beginning in June 2014, the Company subleases a portion of its office space to a related party with future minimum rent of $18,097 in 2015 and $7,530 in 2016. |
RELATED_PARTY_ACCOUNTS_RECEIVA
RELATED PARTY ACCOUNTS RECEIVABLE AND ACCRUED INTEREST PAYABLE | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
RELATED PARTY ACCOUNTS RECEIVABLE AND ACCRUED INTEREST PAYABLE | Accounts Receivable – Certain officers or directors of the Company have made loans to goSudo, a customer of the Company, and can influence the management of this company. Included in accounts receivable are amounts due from this related party of $66,885 at December 31, 2014 ($269 - 2013). |
Accrued Interest Payable – Included in accrued interest payable is accrued interest payable to related parties of $378,731 at December 31, 2014 ($358,698 - 2013). |
SUPPLEMENTAL_CASH_FLOW_INFORMA
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | On December 1, 2014, as payment of an origination fee under the LOC Agreement, the Company issued 600,000 shares of its common stock at $.05 per share valued at $30,000 and issued an options to purchase 600,000 shares of its common stock at an exercise price of $.05 valued at $23,400. |
During 2013, non-cash investing and financing transactions, including non-monetary exchanges, consisted of an investment of $114,167 in equity securities of goSudo. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On February 6, 2015, the Company acquired all rights to cyber security network vulnerability assessment software (the “Software”). Under the purchase agreement, the Company agreed to pay the seller the base purchase price of $180,000, of which $100,000 was paid in cash at the closing and the remaining $80,000 of which was paid by delivery at the closing of the Company’s secured promissory note in the principal amount of $80,000. The principal amount of the promissory note is due and payable on April 7, 2015, without interest. As security for its obligations under the promissory note, the Company granted the Seller a security interest in the Software. |
Under the purchase agreement, in addition to the base purchase price, the Company also agreed to pay the seller: (i) a percentage of the licensing fees paid to the Company within three years after the closing date; provided, that the maximum amount payable to the seller with respect to that three-year period is $800,000; plus (ii) a percentage of the licensing fees paid to the Company during the three years beginning on the date, if any, on which the aggregate amount of the licensing fees paid to seller with respect to the initial three-year period equals $800,000. The royalties are payable quarterly within 30 days after the end of each calendar quarter. | |
The purchase agreement also provides that the Company will pay the seller one half of the amount by which the total software development costs incurred by the Company in connection with upgrading the Software to include specific functional specifications is less than $500,000. | |
To finance the portion of the base purchase price paid in cash at the closing under the purchase agreement, the Company borrowed $100,000 under its LOC agreement (see Note 8). | |
In connection with closing, the Company entered into an employment agreement with one of the seller’s principals to employ him as Director of CyberSecurity for three years. | |
On February 12, 2015, an executive officer loaned the Company $25,000 with interest at 7%. The note is unsecured and matures on March 31, 2018 with principal convertible at the option of the holder into shares of common stock at $.10 per share. | |
On March 13, 2014, the PBGC modified the Company’s note payable by deferring a principal payment of $75,000 that was due on March 15, 2015 to September 15, 2018. | |
Subsequent to year end and through March 31, 2015, the Company issued to certain of its employees common stock options for an aggregate of 120,000 shares exercisable at $.05 per share which vest on June 30, 2015. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Accounts Receivable | Accounts Receivable - Credit is granted to substantially all customers throughout the United States. The Company carries its accounts receivable at invoice amount, less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts, based on a history of past write-offs and collections and current credit conditions. The Company’s policy is to not accrue interest on past due receivables. Management determined that an allowance of $70,000 for doubtful accounts was reasonably stated at December 31, 2014 and 2013. | ||||||||
Concentration of Credit Risk | Concentration of Credit Risk - Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in financial institutions. The cash accounts occasionally exceed the federally insured deposit amount; however, management does not anticipate nonperformance by financial institutions. Management reviews the financial viability of these institutions on a periodic basis. | ||||||||
Loan Origination Fees | Loan Origination Fees – The Company capitalizes the costs of loan origination fees and amortizes the fees as interest expense over the contractual life of each agreement. | ||||||||
Sale of Certain Accounts Receivable | Sale of Certain Accounts Receivable - The Company has available a financing line with a financial institution (the Purchaser). In connection with this line of credit the Company adopted FASB ASC 860 “Transfers and Servicing”. FASB ASC 860 provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings. The Company has a factoring line with the Purchaser which enables the Company to sell selected accounts receivable invoices to the Purchaser with full recourse against the Company. | ||||||||
These transactions qualify for a sale of assets since (1) the Company has transferred all of its right, title and interest in the selected accounts receivable invoices to the financial institution, (2) the Purchaser may pledge, sell or transfer the selected accounts receivable invoices, and (3) the Company has no effective control over the selected accounts receivable invoices since it is not entitled to or obligated to repurchase or redeem the invoices before their maturity and it does not have the ability to unilaterally cause the Purchaser to return the invoices. Under FASB ASC 860, after a transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished. | |||||||||
Pursuant to the provisions of FASB ASC 860, the Company reflects the transactions as a sale of assets and establishes an accounts receivable from the Purchaser for the retained amount less the costs of the transaction and less any anticipated future loss in the value of the retained asset. In April 2014, the Company completed a revised financing agreement with the Purchaser. The retained amount was revised to 15% of the total accounts receivable invoice sold to the Purchaser. Previously the retained amount was 20%. The fee for the initial purchase is .466% of the invoice. The fee is charged at prime plus 4% (effective rate of 7.25% at December 31, 2014) against the average daily outstanding balance of funds advanced. Previously, the fee for the first 30 days was 1% and additional fees were charged against the average daily balance of net outstanding funds at the prime rate, which was 3.25% per annum as of December 31, 2014. The estimated future loss reserve for each receivable included in the estimated value of the retained asset is based on the payment history of the accounts receivable customer and is included in the allowance for doubtful accounts, if any. As collateral, the Company granted the Purchaser a first priority interest in accounts receivable and a blanket lien, which may be junior to other creditors, on all other assets. | |||||||||
The financing line provides the Company the ability to finance up to $2,000,000 of selected accounts receivable invoices, which includes a sublimit for one of the Company’s customers of $1,500,000. During the year ended December 31, 2014, the Company sold approximately $8,299,000 ($8,132,000 - 2013) of its accounts receivable to the Purchaser. As of December 31, 2014, $874,458 ($799,381 - 2013) of these receivables remained outstanding. Additionally, as of December 31, 2014, the Company had approximately $140,000 available under the financing line with the financial institution ($220,000 – 2013). After deducting estimated fees and advances from the Purchaser, the net receivable from the Purchaser amounted to $149,573 at December 31, 2014 ($187,258 - 2013), and is included in accounts receivable in the accompanying balance sheets as of that date. | |||||||||
There were no gains or losses on the sale of the accounts receivable because all were collected. The cost associated with the financing line totaled approximately $144,000 for the year ended December 31, 2014 ($176,000 - 2013). These financing line fees are classified on the statements of operations as interest expense. | |||||||||
Property and Equipment | Property and Equipment - Property and equipment are recorded at cost and are depreciated over their estimated useful lives for financial statement purposes. The cost of improvements to leased properties is amortized over the shorter of the lease term or the life of the improvement. Maintenance and repairs are charged to expense as incurred while improvements are capitalized. | ||||||||
Accounting for the Impairment or Disposal of Long-Lived Assets | Accounting for the Impairment or Disposal of Long-Lived Assets - The Company follows provisions of FASB ASC 360 “Property, Plant and Equipment” in accounting for the impairment of disposal of long-lived assets. This standard specifies, among other things, that long-lived assets are to be reviewed for potential impairment whenever events or circumstances indicate that the carrying amounts may not be recoverable. The Company determined that there was no impairment of long-lived assets during 2014 and 2013. | ||||||||
Revenue Recognition | Revenue Recognition - The Company’s revenues are generated under both time and material and fixed price agreements. Consulting revenue is recognized when the associated costs are incurred, which coincides with the consulting services being provided. Time and materials service agreements are based on hours worked and are billed at agreed upon hourly rates for the respective position plus other billable direct costs. Fixed price service agreements are based on a fixed amount of periodic billings for recurring services of a similar nature performed according to the contractual arrangements with clients. Under both types of agreements, the delivery of services occurs when an employee works on a specific project or assignment as stated in the contract or purchase order. Based on historical experience, the Company believes that collection is reasonably assured. | ||||||||
During 2014, sales to one client, including sales under subcontracts for services to several entities, accounted for 60.2% of total sales (68.9% - 2013) and 27.8% of accounts receivable at December 31, 2014 (56.4% - 2013). Sales to another client, which consisted of sales under subcontracts, accounted for 30.7% of sales in 2014 (25.0% - 2013) and 49.6% of accounts receivable at December 31, 2014 (37.0% - 2013). | |||||||||
Equity Instruments | Equity Instruments - For equity instruments issued to consultants and vendors in exchange for goods and services the Company follows the provisions of FASB ASC 718 “Compensation – Stock Compensation.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | ||||||||
Stock Options | Stock Options - The Company recognizes compensation expense related to stock based payments over the requisite service period based on the grant date fair value of the awards. The Company uses the Black-Scholes option pricing model to determine the estimated fair value of the awards. | ||||||||
Income Taxes | Income Taxes - The Company accounts for income tax expense in accordance with FASB ASC 740 “Income Taxes.” Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | ||||||||
The Company reviews tax positions taken to determine if it is more likely than not that the position would be sustained upon examination resulting in an uncertain tax position. The Company did not have any material unrecognized tax benefit at December 31, 2014 or 2013. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2014 and 2013, the Company recognized no interest and penalties. | |||||||||
The Company files U.S. federal tax returns and tax returns in various states. The tax years 2011 through 2014 remain open to examination by the taxing jurisdictions to which the Company is subject. | |||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments - The Company has determined the fair value of debt and other financial instruments using a valuation hierarchy. The hierarchy, which prioritizes the inputs used in measuring fair value, consists of three levels. | ||||||||
Level 1 uses observable inputs such as quoted prices in active markets; | |||||||||
Level 2 uses inputs other than quoted prices in active markets that are either directly or indirectly observable; and | |||||||||
Level 3, which is defined as unobservable inputs in which little or no market data exists, requires the Company to develop its own assumptions. | |||||||||
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). | |||||||||
The carrying amounts of cash, accounts receivable and accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. Based on the borrowing rates currently available to the Company for loans similar to its term debt and notes payable, the fair value approximates its carrying amount. | |||||||||
Earnings Per Share | Earnings Per Share - Basic earnings per share is based on the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is based on the weighted average number of common shares outstanding, as well as dilutive potential common shares which, in the Company’s case, comprise shares issuable under convertible notes payable and stock options. The treasury stock method is used to calculate dilutive shares, which reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options and warrants assumed to be exercised. In a loss year, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive. | ||||||||
The following table sets forth the computation of basic and diluted (loss) income per share as of December 31, 2014 and 2013: | |||||||||
Year ended December 31, | |||||||||
2014 | 2013 | ||||||||
Numerator for basic net (loss) income per share: | |||||||||
Net (loss) income | $ | (498,000 | ) | $ | 108,500 | ||||
Denominator for basic net (loss) income per share: | |||||||||
Weighted average common shares outstanding | 26,012,842 | 25,961,883 | |||||||
Basic net (loss) income per share | $ | (.02 | ) | $ | 0 | ||||
Numerator for diluted net (loss) income per share: | |||||||||
Net (loss) income | $ | (498,000 | ) | $ | 108,500 | ||||
Effect of dilutive securities - common stock options and | |||||||||
convertible notes payable | 0 | 50,879 | |||||||
Diluted net (loss) income per share - available to common | |||||||||
stockholders with assumed conversions | (498,000 | ) | 159,379 | ||||||
Denominator for diluted net (loss) income per share: | |||||||||
Weighted average common shares outstanding | 26,012,842 | 25,961,883 | |||||||
Effect of dilutive securities - common stock options and | |||||||||
convertible notes payable | 0 | 20,398,504 | |||||||
Shares used in computing diluted net (loss) income per | |||||||||
share | 26,012,842 | 46,360,387 | |||||||
Diluted net (loss) income per share | $ | (.02 | ) | $ | 0 | ||||
Anti-dilutive shares excluded from net (loss) income share | |||||||||
calculation | 30,556,892 | 6,092,500 | |||||||
Certain common shares issuable under stock options and convertible notes payable have been omitted from the diluted net (loss) income per share calculation because their inclusion is considered anti-dilutive because the exercise prices were greater than the average market price of the common shares or their inclusion would have been anti-dilutive. | |||||||||
Equity Investments | Equity Investments - The Company accounts for investments in equity securities of other entities under the cost method of accounting if investments in voting equity interests of the investee are less than 20%. The equity method of accounting is used if the Company’s investment in voting stock is greater than or equal to 20% but less than a majority. In considering the accounting method for investments less than 20%, the Company also considers other factors such as its ability to exercise significant influence over operating and financial policies of the investee. If certain factors are present, the Company could account for investments for which it has less than a 20% ownership under the equity method of accounting. | ||||||||
Use of Estimates | Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted - In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers. The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or 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. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. | ||||||||
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of Earnings Per Share, Basic and Diluted | Year ended December 31, | ||||||||
2014 | 2013 | ||||||||
Numerator for basic net (loss) income per share: | |||||||||
Net (loss) income | $ | (498,000 | ) | $ | 108,500 | ||||
Denominator for basic net (loss) income per share: | |||||||||
Weighted average common shares outstanding | 26,012,842 | 25,961,883 | |||||||
Basic net (loss) income per share | $ | (.02 | ) | $ | 0 | ||||
Numerator for diluted net (loss) income per share: | |||||||||
Net (loss) income | $ | (498,000 | ) | $ | 108,500 | ||||
Effect of dilutive securities - common stock options and | |||||||||
convertible notes payable | 0 | 50,879 | |||||||
Diluted net (loss) income per share - available to common | |||||||||
stockholders with assumed conversions | (498,000 | ) | 159,379 | ||||||
Denominator for diluted net (loss) income per share: | |||||||||
Weighted average common shares outstanding | 26,012,842 | 25,961,883 | |||||||
Effect of dilutive securities - common stock options and | |||||||||
convertible notes payable | 0 | 20,398,504 | |||||||
Shares used in computing diluted net (loss) income per | |||||||||
share | 26,012,842 | 46,360,387 | |||||||
Diluted net (loss) income per share | $ | (.02 | ) | $ | 0 | ||||
Anti-dilutive shares excluded from net (loss) income share | |||||||||
calculation | 30,556,892 | 6,092,500 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
Property, Plant and Equipment | Depreciable | December 31, | ||||||||
Lives | 2014 | 2013 | ||||||||
Software | 3 to 5 years | $ | 29,004 | $ | 10,881 | |||||
Equipment | 3 to 10 years | 155,039 | 142,846 | |||||||
Furniture and fixtures | 5 to 7 years | 17,735 | 13,735 | |||||||
Leasehold improvements | 3 years | 5,874 | 1,224 | |||||||
207,652 | 168,686 | |||||||||
Accumulated depreciation | (147,613 | ) | (122,566 | ) | ||||||
$ | 60,039 | $ | 46,120 |
NOTES_PAYABLE_CURRENT_Tables
NOTES PAYABLE - CURRENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Related Party Transactions | December 31, | ||||||||
2014 | 2013 | ||||||||
Convertible demand note payable to employee, 11% (A) | $ | 59,000 | $ | 59,000 | |||||
Demand note payable to director, 10%, unsecured | 30,000 | 30,000 | |||||||
Convertible demand note payable to director, 12%, unsecured (B) | 40,000 | 40,000 | |||||||
Demand note payable to director, 18%, unsecured | 0 | 13,000 | |||||||
$ | 129,000 | $ | 142,000 |
LONGTERM_OBLIGATIONS_Tables
LONG-TERM OBLIGATIONS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Accounts Payable and Accrued Liabilities | December 31, | ||||||||
2014 | 2013 | ||||||||
Note payable, 10%, secured, due January 1, 2018 | $ | 265,000 | $ | 265,000 | |||||
Convertible term note payable,12%, secured, due January 1, 2016 | 175,000 | 175,000 | |||||||
Convertible notes payable, 6%, due January 1, 2016 | 150,000 | 150,000 | |||||||
Term note payable - PBGC, 6%, secured | 261,000 | 273,000 | |||||||
Obligation to PBGC based on free cash flow | 569,999 | 569,999 | |||||||
Convertible term note payable, 7%, secured, due October 3, 2016 | 100,000 | 100,000 | |||||||
Term notes payable - banks, secured | 2,407 | 11,593 | |||||||
1,523,406 | 1,544,592 | ||||||||
Less current maturities | 14,388 | 21,186 | |||||||
$ | 1,509,018 | $ | 1,523,406 | ||||||
Schedule of Notes Payable Related Parties | December 31, | ||||||||
2014 | 2013 | ||||||||
Convertible notes payable, 6%, due January 1, 2016 | $ | 473,000 | $ | 501,324 | |||||
Note payable, line of credit, 6.1%, unsecured | 200,000 | 0 | |||||||
673,000 | 501,324 | ||||||||
Less current maturities | 8,172 | 0 | |||||||
$ | 664,828 | $ | 501,324 | ||||||
Contractual Obligation, Fiscal Year Maturity Schedule | 2015 | $ | 22,560 | ||||||
2016 | 918,632 | ||||||||
2017 | 765,214 | ||||||||
2018 | 490,000 | ||||||||
Total long-term obligations | $ | 2,196,406 |
STOCK_OPTION_PLANS_AND_AGREEME1
STOCK OPTION PLANS AND AGREEMENTS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | .77% - 1.98% | . 34% - 2.15% | ||||||||||||
Expected dividend yield | 0% | 0% | ||||||||||||
Expected stock price volatility | 100% | 75% | ||||||||||||
Expected life of options | 3.25 - 5.75 years | 3.25 - 5.75 years | ||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | Number of Options Outstanding | Weighted Average Exercise Price | Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||
Outstanding at December 31, 2012 | 6,884,500 | $ | 0.2 | |||||||||||
Granted | 3,587,500 | $ | 0.15 | |||||||||||
Expired | (1,124,833 | ) | $ | 0.09 | ||||||||||
Forfeited | (126,667 | ) | $ | 0.1 | ||||||||||
Outstanding at December 31, 2013 | 9,220,500 | $ | 0.18 | |||||||||||
Granted | 3,030,000 | $ | 0.09 | |||||||||||
Expired | (517,667 | ) | $ | 0.15 | ||||||||||
Forfeited | (833,333 | ) | $ | 0.13 | ||||||||||
Outstanding at December 31, 2014 | 10,899,500 | $ | 0.16 | 5.0 years | $ | 6,000 | ||||||||
Vested or expected to vest at | ||||||||||||||
December 31, 2014 | 8,549,500 | $ | 0.15 | 5.5 years | $ | 6,000 | ||||||||
Exercisable at December 31, 2014 | 7,309,500 | $ | 0.18 | 4.9 years | $ | 2,300 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Components of Income Tax Expense (Benefit) | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred: | |||||||||
Federal | $ | (135,000 | ) | $ | -61,000 | ||||
State | 90,000 | 4,000 | |||||||
(45,000 | ) | -57,000 | |||||||
Change in valuation allowance | 45,000 | 57,000 | |||||||
$ | 0 | $ | 0 | ||||||
Schedule of Deferred Tax Assets and Liabilities | December 31, | ||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryforwards | $ | 2,423,000 | $ | 2,447,000 | |||||
Defined benefit pension liability | 331,000 | 336,000 | |||||||
Reserves and accrued expenses payable | 391,000 | 317,000 | |||||||
Gross deferred tax asset | 3,145,000 | 3,100,000 | |||||||
Deferred tax asset valuation allowance | (3,145,000 | ) | (3,100,000 | ) | |||||
Net deferred tax asset | $ | 0 | $ | 0 | |||||
Schedule of Effective Income Tax Rate Reconciliation | December 31, | ||||||||
2014 | 2013 | ||||||||
Statutory U.S. federal tax rate | 34 | % | 34 | % | |||||
State income taxes | (18.0 | ) | 4.3 | ||||||
Change in valuation allowance | (9.1 | ) | 51.2 | ||||||
Stock-based compensation expense | (4.5 | ) | 2.7 | ||||||
Expired stock-based compensation | (1.8 | ) | 13.5 | ||||||
Other permanent non-deductible items | (.6 | ) | 3.9 | ||||||
Deferred tax asset adjustment | .0 | (109.6 | ) | ||||||
Effective income tax rate | 0.0 | % | 0.0 | % |
MANAGEMENT_PLANS_Details_Narra
MANAGEMENT PLANS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net (loss) income | ($498,000) | $108,500 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator for basic net (loss) income per share: | ||
Net (loss) income | ($498,000) | $108,500 |
Denominator for basic net (loss) income per share: | ||
Weighted average common shares outstanding | 26,012,842 | 25,961,883 |
Basic net (loss) income per share | ($0.02) | $0 |
Numerator for diluted net (loss) income per share: | ||
Net (loss) income | -498,000 | 108,500 |
Effect of dilutive securities - common stock options and convertible notes payable | 0 | 50,879 |
Diluted net (loss) income per share - available to common stockholders with assumed conversions | ($498,000) | $159,379 |
Denominator for diluted net (loss) income per share: | ||
Weighted average common shares outstanding | 26,012,842 | 25,961,883 |
Effect of dilutive securities - common stock options and convertible notes payable | 0 | 20,398,504 |
Shares used in computing diluted net (loss) income per share | 26,012,842 | 46,360,387 |
Diluted net (loss) income per share | ($0.02) | $0 |
Anti-dilutive shares excluded from net (loss) income share calculation | 30,556,892 | 6,092,500 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting policies [Line Items] | ||
Allowance for Doubtful Accounts Receivable, Current | $70,000 | $70,000 |
Accounts Receivable, Factoring Retained Amount, Percentage | 15.00% | 20.00% |
Accounts Receivable, effective rate | 7.25% | |
Accounts Receivable, Factoring Fee for First Thirty Days, Percentage | 1.00% | |
Accounts Receivable, Factoring Additional Fee on Average Daily Balance of Net Outstanding Funds Prime Rate, Percentage | 3.25% | 3.25% |
Accounts Receivable, Factoring Agreement, Non Recourse Receivables | 2,000,000 | |
Accounts Receivable, Factoring Agreement, Non Recourse Receivables Sublimit for Single Customer Receivable | 1,500,000 | |
Proceeds from Sale of Finance Receivables | 8,299,000 | 8,132,000 |
Trade Receivables Held-for-sale, Amount | 874,458 | 799,381 |
Additional Accounts Receivable with Financial Institution | 140,000 | 220,000 |
Receivable from Purchaser, Net of Fees and Advances | 149,573 | 187,258 |
Interest Expense, Financing Receivable Fee | $144,000 | $176,000 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Accounting policies [Line Items] | ||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 20.00% | |
Equity Method Investment, Ownership Percentage | 20.00% | |
Maximum [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||
Accounting policies [Line Items] | ||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 20.00% | |
Minimum [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||
Accounting policies [Line Items] | ||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 20.00% | |
Customer A [Member] | ||
Accounting policies [Line Items] | ||
Sales Revenue Net, Percentage | 60.20% | 68.90% |
Accounts Receivable, Percentage | 27.80% | 56.40% |
Customer B [Member] | ||
Accounting policies [Line Items] | ||
Sales Revenue Net, Percentage | 30.70% | 25.00% |
Accounts Receivable, Percentage | 49.60% | 37.00% |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $207,652 | $168,686 |
Accumulated depreciation | -147,613 | -122,566 |
Property and equipment, net | 60,039 | 46,120 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 29,004 | 10,881 |
Software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives (in years) | 3 years | |
Software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives (in years) | 5 years | |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 155,039 | 142,846 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives (in years) | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives (in years) | 10 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 17,735 | 13,735 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives (in years) | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Lives (in years) | 7 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $5,874 | $1,224 |
Depreciable Lives (in years) | 3 years |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $25,047 | $21,074 |
INVESTMENT_Details_Narrative
INVESTMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Investments, Debt And Equity Securities [Line Items] | ||
Preferred Stock, Par or Stated Value Per Share | $0.01 | |
Assets | $617,016 | $926,942 |
Liabilities | 3,616,652 | 3,592,318 |
Net (loss) income | -498,000 | 108,500 |
Sudo Me Corporation [Member] | ||
Investments, Debt And Equity Securities [Line Items] | ||
Percentage of Outstanding Shares Owned | 9.40% | |
Noncash Investing Activity | 114,167 | 114,167 |
Investment Write Down | 168,000 | |
Equity interest in the loss | 68,000 | 23,000 |
Impairment loss | 100,000 | |
Equity Method Investments | 109,000 | 247,000 |
Assets | 10,639 | |
Liabilities | 753,305 | |
Net (loss) income | 781,300 | |
IPO [Member] | ||
Investments, Debt And Equity Securities [Line Items] | ||
Proceeds from Issuance of Common Stock | 10,000,000 | |
Minimum Price of Converted Common Stock Par Value | $3 | |
Series A Preferred Stock [Member] | Sudo Me Corporation [Member] | ||
Investments, Debt And Equity Securities [Line Items] | ||
Purchase of Series A Convertible Preferred Stock (in shares) | 300,000 | 300,000 |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Aggregate Purchase Price of Series A Convertible Preferred Stock | $300,000 | $300,000 |
Series A Stock [Member] | ||
Investments, Debt And Equity Securities [Line Items] | ||
Series A Dividends Accrue Rate Per Share | $0.10 |
LOAN_ORIGINATION_FEES_Details_
LOAN ORIGINATION FEES (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Loan Origination Fees Details Narrative | |
Deferred origination fees | $53,400 |
Accumulated amortization expenses | $1,443 |
NOTES_PAYABLE_CURRENT_Details
NOTES PAYABLE - CURRENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Short-term Debt [Line Items] | ||
Notes Payable, Related Parties, Current | $129,000 | $142,000 |
Convertible Demand Note Payable To Employee Eleven Percentage [Member] | ||
Short-term Debt [Line Items] | ||
Notes Payable, Related Parties, Current | 59,000 | 59,000 |
Demand Note Payable To Director Ten Percentage Unsecured [Member] | ||
Short-term Debt [Line Items] | ||
Notes Payable, Related Parties, Current | 30,000 | 30,000 |
Convertible Demand Note Payable To Director Twelve Percentage Unsecured [Member] | ||
Short-term Debt [Line Items] | ||
Notes Payable, Related Parties, Current | 40,000 | 40,000 |
Demand Note Payable To Director Eighteen Percentage Unsecured [Member] | ||
Short-term Debt [Line Items] | ||
Notes Payable, Related Parties, Current | $0 | $13,000 |
NOTES_PAYABLE_CURRENT_Details_
NOTES PAYABLE - CURRENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Short-term Debt [Line Items] | ||
Proceeds from Unsecured Notes Payable | $30,000 | $30,000 |
Debt Instrument, Interest Rate During Period | 10.00% | 10.00% |
Eleven Percentage Interest On Convertible Notes Payable [Member] | ||
Short-term Debt [Line Items] | ||
Convertible Notes Payable | 59,000 | 59,000 |
Debt Instrument, Interest Rate, Effective Percentage | 11.00% | 11.00% |
Convertible Common Stock Price | 0.16 | 0.16 |
Twelve Percentage Interest On Convertible Notes Payable [Member] | ||
Short-term Debt [Line Items] | ||
Convertible Notes Payable | $40,000 | $40,000 |
Debt Instrument, Interest Rate, Effective Percentage | 12.00% | 12.00% |
Convertible Common Stock Price | 0.11 | 0.11 |
LONGTERM_OBLIGATIONS_Details
LONG-TERM OBLIGATIONS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ||
Long-term Debt | $1,523,406 | $1,544,592 |
Less current maturities | 14,388 | 21,186 |
Long-term Debt, Excluding Current Maturities | 1,509,018 | 1,523,406 |
Note Payable Secured Due January 1, 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 265,000 | 265,000 |
Convertible Term Note Payable Secured Due January 1, 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 175,000 | 175,000 |
Convertible Notes Payable Due January 1, 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 150,000 | 150,000 |
Term Note Payable PBGC Secured [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 261,000 | 273,000 |
Obligation to PBGC Based on Free Cash Flow [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 569,999 | 569,999 |
Convertible Term Note Payable Secured Due October 3, 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 100,000 | 100,000 |
Term Notes Payable Banks Secured [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $2,407 | $11,593 |
LONGTERM_OBLIGATIONS_Details_1
LONG-TERM OBLIGATIONS (Details 1) (USD $) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Notes Payable - Related Parties | $673,000 | $501,324 |
Less current maturities | 8,172 | 0 |
Notes Payable - Related Parties, Excluding Current Maturities | 664,828 | 501,324 |
Convertible Notes Payable Due January 1, 2016 [Member] | ||
Notes Payable - Related Parties | 473,000 | 501,324 |
Note payable, line of credit [Member] | ||
Notes Payable - Related Parties | $200,000 | $0 |
LONGTERM_OBLIGATIONS_Details_2
LONG-TERM OBLIGATIONS (Details 2) (USD $) | Dec. 31, 2014 |
Debt Disclosure [Abstract] | |
2015 | $22,560 |
2016 | 918,632 |
2017 | 765,214 |
2018 | 490,000 |
Total long-term obligations | $2,196,406 |
LONGTERM_OBLIGATIONS_Details_N
LONG-TERM OBLIGATIONS (Details Narrative) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |
Oct. 04, 2011 | Dec. 31, 2014 | Oct. 17, 2011 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ||||
Long-term Debt | $1,523,406 | $1,544,592 | ||
Notes Payable, Related Parties, Noncurrent | 664,828 | 501,324 | ||
Convertible Term Note Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |||
Debt Instrument, Maturity Date | 3-Oct-16 | |||
Debt Instrument, Convertible, Conversion Price | $0.10 | |||
Stock Repurchased During Period, Shares | 500,000 | |||
Stock Repurchased During Period, Value | 130,000 | |||
Working Capital Surplus | 30,000 | |||
Notes Payable, Related Parties, Noncurrent | 100,000 | |||
Notes Payable, Other Payables [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Face Amount | 300,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||
Secured Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Face Amount | 265,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||
Debt Instrument, Maturity Date | 1-Jan-18 | |||
Related Party Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 6.00% | ||
Debt Instrument, Maturity Date | 1-Jan-16 | |||
Debt Instrument, Convertible, Conversion Price | $0.05 | $0.05 | ||
Notes Payable, Related Parties, Noncurrent | 473,000 | 501,324 | ||
Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Face Amount | 150,000 | 150,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | 6.00% | ||
Debt Instrument, Convertible, Conversion Price | $0.05 | |||
Obligation to PBGC Based on Free Cash Flow [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 569,999 | |||
Debt Due in Year 2018 [Member] | Notes Payable, Other Payables [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Maturity Date | 30-Sep-18 | |||
Debt Instrument Periodic Payment Terms Balloon Payment Amount | 219,000 | |||
Term Notes Payable Banks Secured [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 2,407 | 11,593 | ||
Convertible Term Note Payable Secured Due October 3, 2016 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 100,000 | 100,000 | ||
Obligation to PBGC Based on Free Cash Flow [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 569,999 | 569,999 | ||
Term Note Payable PBGC Secured [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 261,000 | 273,000 | ||
Convertible Notes Payable Due January 1, 2016 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 150,000 | 150,000 | ||
Convertible Term Note Payable Secured Due January 1, 2016 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||
Debt Instrument, Maturity Date | 1-Jan-16 | |||
Debt Instrument, Convertible, Conversion Price | $0.25 | |||
Long-term Debt | 175,000 | 175,000 | ||
Note Payable Secured Due January 1, 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 265,000 | 265,000 | ||
Note payable, line of credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 6.10% | |||
Debt Instrument, Maturity Date | 31-Dec-17 | |||
Long-term Debt | 100,000 | |||
Working Capital Surplus | 400,000 | |||
Interest bearing rate | 2.85% | |||
Vehicle Financing [Member] | ||||
Debt Instrument [Line Items] | ||||
Secured Debt | 0 | 5,993 | ||
Vehicle Financing [Member] | Monthly Installments through Dec 2014 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Maturity Date | 31-Aug-15 | |||
Proceeds from Convertible Debt | $318 | |||
Office and Technology Equipment [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 14.90% |
STOCKHOLDERS_DEFICIENCY_Detail
STOCKHOLDERS' DEFICIENCY (Details Narrative) (USD $) | Dec. 31, 2014 |
Stockholders' Equity Note [Abstract] | |
Preferred Stock, Shares Authorized | 1,000,000 |
Preferred Stock, Par or Stated Value Per Share | $0.01 |
STOCK_OPTION_PLANS_AND_AGREEME2
STOCK OPTION PLANS AND AGREEMENTS (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, Minimum | 0.77% | 0.34% |
Risk-free interest rate, Maximum | 1.98% | 2.15% |
Expected dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 100.00% | 75.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life of options | 3 years 3 months | 3 years 3 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life of options | 5 years 9 months | 5 years 9 months |
STOCK_OPTION_PLANS_AND_AGREEME3
STOCK OPTION PLANS AND AGREEMENTS (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number of Option Outstanding, Begining Balance | 9,220,500 | 6,884,500 |
Number of Options, Options Granted (in shares) | 3,030,000 | 3,587,500 |
Number of Options, Options Expired (in shares) | -517,667 | -1,124,833 |
Number of Options, Options Forfeited (in shares) | -833,333 | -126,667 |
Number of option Outstanding, Ending Balance | 10,899,500 | 9,220,500 |
Number of option, Vested or expected to vest at December 31, 2014 | 8,549,500 | |
Number of Option Outstanding, Excercisable at December 31, 2014 | 7,309,500 | |
Weighted Average Exercise Price, Outstanding, Begining Balance | $0.18 | $0.20 |
Weighted Average Exercise Price, Options Granted (in dollars per share) | $0.09 | $0.15 |
Weighted Average Exercise Price, Options Expired (in dollars per share) | $0.15 | $0.09 |
Weighted Average Exercise Price, Options Forfeited (in dollars per share) | $0.13 | $0.10 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $0.16 | $0.18 |
Weighted Average Exercise Price, Vested or expected to vest at December 31, 2014 | $0.15 | |
Weighted Average Exercise Price, Excercisable at December 31, 2014 | $0.18 | |
Weighted-Average Remaining Contractual Term, Outstanding at December 31, 2014 | 5 years | |
Weighted-Average Remaining Contractual Term, Vested or expected to vest at December 31, 2014 | 5 years 6 months | |
Weighted-Average Remaining Contractual Term, Exercisable at December 31, 2014 | 4 years 10 months 24 days | |
Aggregate Intrinsic Value, Outstanding (in dollars) at December 31, 2014 | $6,000 | |
Aggregate Intrinsic Value, Vested or expected to vest at December 31, 2014 | 6,000 | |
Aggregate Intrinsic Value, Exercisable (in dollars) at December 31, 2014 | $2,300 |
Disclosure_STOCK_OPTION_PLANS_
Disclosure - STOCK OPTION PLANS AND AGREEMENTS (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,937,833 | 4,088,833 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Outstanding | 10,899,500 | 9,220,500 | 6,884,500 |
Vested Options | 8,549,500 | ||
Total unrecognized compensation cost | $79,000 | ||
Period for recognition of compensation cost not yet recognized | 2 years | ||
Fair value of shares vested during year | $130,000 | ||
Stock Option Plan Year 2009 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Issuance | 470,500 | ||
Stock Option Agreements with consultants and employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Outstanding | 3,575,500 | ||
Vested Options | 1,225,000 | ||
Stock Option Plan Year 2005 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Issuance | 142,833 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred: | ||
Federal | ($135,000) | ($61,000) |
State | 90,000 | 4,000 |
Deferred Income Tax Expense (Benefit) | -45,000 | -57,000 |
Change in valuation allowance | 45,000 | 57,000 |
Income Tax Expense (Benefit) | $0 | $0 |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Net operating loss carryforwards | $2,423,000 | $2,447,000 |
Defined benefit pension liability | 331,000 | 336,000 |
Reserves and accrued expenses payable | 391,000 | 317,000 |
Gross deferred tax asset | 3,145,000 | 3,100,000 |
Deferred tax asset valuation allowance | -3,145,000 | -3,100,000 |
Net deferred tax asset | $0 | $0 |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $6,800,000 | $6,500,000 |
State Operating Loss Carryforwards, Expiration Dates | expire from 2018 through 2034 | |
Excluded Federal Net Operating Loss Carryforward Attributable to Inactive Subsidiaries | 6,600,000 | 6,600,000 |
Deferred Tax Assets, Valuation Allowance | 3,145,000 | 3,100,000 |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $2,200,000 | $3,900,000 |
EMPLOYEE_RETIREMENT_PLANS_Deta
EMPLOYEE RETIREMENT PLANS (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Eligibility to Participate in Retirement Plan Earnings | $5,000 | ||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Amount | 17,500 | 11,500 | |
Defined Contribution Plan, Accrued Liability | 208,449 | 200,316 | |
Pension Plan Age 50 years [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Additional Catch up Contribution Per Employee Amount | $5,500 |
COMMITMENTS_Details_Narrative
COMMITMENTS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leased Assets [Line Items] | ||
Operating Lease Carryforwards, Expiration Date | May-16 | |
Operating Leases, Rent Expense, Net | $39,200 | $30,400 |
Future minimum payments, 2015 | 64,668 | |
Operating Leases, Future Minimum Payments, Due Thereafter | 26,945 | |
Spaceto [Member] | ||
Operating Leased Assets [Line Items] | ||
Future minimum payments, 2015 | 18,097 | |
Operating Leases, Future Minimum Payments, Due Thereafter | $7,530 |
RELATED_PARTY_ACCOUNTS_RECEIVA1
RELATED PARTY ACCOUNTS RECEIVABLE AND ACCRUED INTEREST PAYABLE (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Related Party Transactions [Abstract] | ||
Accrued Interest Payable, Related Parties, Current | $378,731 | $358,698 |
Accounts Receivable, Related Parties, Current | $66,885 | $269 |
SUPPLEMENTAL_CASH_FLOW_INFORMA1
SUPPLEMENTAL CASH FLOW INFORMATION (Details Narrative) (Sudo Me Corporation [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Sudo Me Corporation [Member] | ||
Noncash or Part Noncash Acquisitions [Line Items] | ||
Noncash or Part Noncash Acquisition, Investments Acquired | $114,167 | $114,167 |