Document and Entity
Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Aug. 06, 2013
|
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2013 | |
Entity Registrant Name | VIRTUAL PIGGY, INC. | |
Entity Central Index Key | 0001437283 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2013 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 111,352,268 |
Balance Sheets (Parenthetical)
(USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Balance Sheets [Abstract] | ||
Patents and trademarks, accumulated amoritization | $ 25,577 | $ 13,678 |
Preferred stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 111,352,268 | 101,417,508 |
Common stock, shares outstanding | 111,352,268 | 101,417,508 |
Statements of Operations (USD
$)
|
3 Months Ended | 6 Months Ended | 65 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
|
Statements of Operations [Abstract] | |||||
SALES | $ 58 | $ 19 | $ 146 | $ 1,187 | $ 5,285 |
OPERATING EXPENSES | |||||
Payroll | 1,302,376 | 647,761 | 2,396,355 | 905,276 | 5,556,424 |
Consulting | 607,787 | 3,538,276 | 897,531 | 4,180,125 | 9,201,210 |
Marketing | 287,095 | 118,647 | 574,728 | 319,625 | 1,441,054 |
Research and development | 258,338 | 80,773 | 433,482 | 167,379 | 1,845,234 |
Travel | 196,364 | 156,369 | 443,843 | 244,137 | 1,884,324 |
Professional fees | 164,112 | 97,399 | 396,007 | 242,312 | 1,998,964 |
General and administrative | 564,235 | 411,571 | 925,455 | 501,232 | 3,096,225 |
Total operating expenses | 3,380,307 | 5,050,796 | 6,067,401 | 6,560,086 | 25,023,435 |
OTHER INCOME (EXPENSE) | |||||
Interest income | 2,825 | 1,221 | 6,314 | 1,538 | 14,969 |
Interest expense | (53,454) | (90,560) | (531,834) | ||
Total other income (expense) | 2,825 | (52,233) | 6,314 | (89,022) | (516,865) |
NET LOSS | $ (3,377,424) | $ (5,103,010) | $ (6,060,941) | $ (6,647,921) | $ (25,535,015) |
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $ (0.03) | $ (0.06) | $ (0.06) | $ (0.09) | |
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 106,261,607 | 84,681,306 | 104,027,058 | 77,332,126 |
Statement of Changes in
Stockholders' Equity (Deficit) (Parenthetical) (USD $)
|
1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 4 Months Ended | 2 Months Ended | 12 Months Ended | 2 Months Ended | 12 Months Ended | 1 Months Ended | 2 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | 5 Months Ended | 12 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2009
Issuance of Shares of Common Stock [Member]
|
Sep. 30, 2009
Issuance of Shares of Common Stock [Member]
|
Jun. 30, 2009
Issuance of Shares of Common Stock [Member]
|
Apr. 30, 2009
Issuance of Shares of Common Stock [Member]
|
Feb. 29, 2008
Issuance of Shares of Common Stock [Member]
|
May 31, 2013
Warrant [Member]
|
Dec. 31, 2011
Warrant [Member]
|
Feb. 29, 2008
Warrant [Member]
|
Mar. 31, 2013
Warrant [Member]
|
Sep. 30, 2008
Warrant [Member]
|
Jun. 30, 2012
Warrant [Member]
|
Dec. 31, 2012
Warrant [Member]
|
May 31, 2013
Issuance of Shares of Common Stock and Warrants Through
Private Placement [Member]
|
Dec. 31, 2011
Issuance of Shares of Common Stock and Warrants Through
Private Placement [Member]
|
Feb. 29, 2008
Issuance of Shares of Common Stock and Warrants Through
Private Placement [Member]
|
Mar. 31, 2013
Issuance of Shares of Common Stock and Warrants Through
Private Placement [Member]
|
Sep. 30, 2008
Issuance of Shares of Common Stock and Warrants Through
Private Placement [Member]
|
Jun. 30, 2012
Issuance of Shares of Common Stock and Warrants Through
Private Placement [Member]
|
Dec. 31, 2012
Issuance of Shares of Common Stock and Warrants Through
Private Placement [Member]
|
Mar. 31, 2008
Employee Options Issued for Services Transaction One
[Member]
|
Jun. 30, 2013
Employee Options Issued for Services Transaction One
[Member]
Minimum [Member]
|
Dec. 31, 2012
Employee Options Issued for Services Transaction One
[Member]
Minimum [Member]
|
Jun. 30, 2013
Employee Options Issued for Services Transaction One
[Member]
Maximum [Member]
|
Dec. 31, 2012
Employee Options Issued for Services Transaction One
[Member]
Maximum [Member]
|
Dec. 31, 2012
Employee Options Issued for Services Transaction Two
[Member]
Minimum [Member]
|
Dec. 31, 2012
Employee Options Issued for Services Transaction Two
[Member]
Maximum [Member]
|
Jan. 31, 2011
Nonemployee Options Issued for Services Transaction One
[Member]
|
Aug. 31, 2009
Nonemployee Options Issued for Services Transaction One
[Member]
|
Jun. 30, 2008
Nonemployee Options Issued for Services Transaction One
[Member]
|
Mar. 31, 2008
Nonemployee Options Issued for Services Transaction One
[Member]
|
Nov. 30, 2010
Nonemployee Options Issued for Services Transaction One
[Member]
|
Aug. 31, 2011
Nonemployee Options Issued for Services Transaction One
[Member]
Minimum [Member]
|
Dec. 31, 2012
Nonemployee Options Issued for Services Transaction One
[Member]
Minimum [Member]
|
Aug. 31, 2011
Nonemployee Options Issued for Services Transaction One
[Member]
Maximum [Member]
|
Dec. 31, 2012
Nonemployee Options Issued for Services Transaction One
[Member]
Maximum [Member]
|
Dec. 31, 2012
Nonemployee Options Issued for Services Transaction Two
[Member]
Minimum [Member]
|
Dec. 31, 2012
Nonemployee Options Issued for Services Transaction Two
[Member]
Maximum [Member]
|
May 31, 2013
Exercise of Options Transaction One [Member]
|
May 31, 2012
Exercise of Options Transaction One [Member]
|
Apr. 30, 2012
Exercise of Options Transaction One [Member]
|
Dec. 31, 2010
Exercise of Options Transaction One [Member]
|
Jan. 31, 2010
Exercise of Options Transaction One [Member]
|
Dec. 31, 2009
Exercise of Options Transaction One [Member]
|
Sep. 30, 2009
Exercise of Options Transaction One [Member]
|
Jul. 31, 2009
Exercise of Options Transaction One [Member]
|
Jan. 31, 2009
Exercise of Options Transaction One [Member]
|
Sep. 30, 2008
Exercise of Options Transaction One [Member]
|
May 31, 2008
Exercise of Options Transaction One [Member]
|
May 31, 2013
Exercise of Options Transaction Two [Member]
|
May 31, 2013
Exercise of Options Transaction Three [Member]
|
Jun. 30, 2008
Options Issued for Services [Member]
|
Aug. 31, 2008
Issuance of Shares of Common Stock to Investors [Member]
|
May 31, 2013
Exercise of Warrants Transaction One [Member]
|
Dec. 31, 2010
Exercise of Warrants Transaction One [Member]
|
Apr. 30, 2010
Exercise of Warrants Transaction One [Member]
|
Mar. 31, 2010
Exercise of Warrants Transaction One [Member]
|
Feb. 28, 2010
Exercise of Warrants Transaction One [Member]
|
Dec. 31, 2009
Exercise of Warrants Transaction One [Member]
|
Oct. 31, 2009
Exercise of Warrants Transaction One [Member]
|
Aug. 31, 2009
Exercise of Warrants Transaction One [Member]
|
Sep. 30, 2008
Exercise of Warrants Transaction One [Member]
|
Jun. 30, 2013
Exercise of Warrants Transaction One [Member]
|
Dec. 31, 2009
Exercise of Warrants Transaction Two [Member]
|
May 31, 2012
Issuance of Shares of Common Stock for Future Services
[Member]
|
Jun. 30, 2011
Issuance of Shares of Common Stock for Future Services
[Member]
|
Nov. 30, 2010
Issuance of Shares of Common Stock for Future Services
[Member]
|
Oct. 31, 2009
Issuance of Shares of Common Stock for Future Services
[Member]
|
Dec. 31, 2010
Issuance of Shares of Common Stock for Retirement of Options
[Member]
|
Mar. 31, 2013
Issuance of Shares of Common Stock Through Private Placement
Transaction One [Member]
|
Dec. 31, 2010
Issuance of Shares of Common Stock Through Private Placement
Transaction One [Member]
|
Dec. 31, 2012
Issuance of Shares of Common Stock Through Private Placement
Transaction One [Member]
|
Dec. 31, 2012
Issuance of Shares of Common Stock Through Private Placement
Transaction Two [Member]
|
Nov. 30, 2010
Issuance of Shares of Common Stock for Conversion of Notes
Payable [Member]
|
Dec. 31, 2012
Issuance of Shares of Common Stock and Warrants to Discharge
Notes Payable and Accrued Interest [Member]
|
Dec. 31, 2012
Issuance of Shares of Common Stock with Respect to Settlement
Agreement [Member]
|
Jun. 30, 2013
Common Stock Subscription for Units Through Private Placement
[Member]
|
Dec. 31, 2012
Common Stock Subscription for Units Through Private Placement
[Member]
|
Jun. 30, 2013
Nonemployee Options/Warrants Issued for Services
[Member]
Minimum [Member]
|
Jun. 30, 2013
Nonemployee Options/Warrants Issued for Services
[Member]
Maximum [Member]
|
Dec. 31, 2011
Fair Value of Revalued Warrants [Member]
Minimum [Member]
|
Dec. 31, 2011
Fair Value of Revalued Warrants [Member]
Maximum [Member]
|
Jun. 30, 2013
Fair Value of Revalued Options [Member]
|
|
Equity issuance, number securities issued for cash | 1,436,277 | 625,000 | 14,285,716 | 93,750 | 614,286 | 10,213,474 | 1,500,000 | 285,714 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity issuance, price or exercise price per security issued | $ 1.00 | $ 1.00 | $ 2.00 | $ 1.00 | $ 0.001 | $ 1.80 | $ 0.80 | $ 0.035 | $ 0.80 | $ 0.75 | $ 0.70 | $ 0.80 | $ 0.02 | $ 0.22 | $ 0.11 | $ 0.67 | $ 0.53 | $ 0.14 | $ 0.42 | $ 0.20 | $ 0.31 | $ 0.01 | $ 0.02 | $ 0.01 | $ 0.10 | $ 0.11 | $ 0.19 | $ 0.95 | $ 0.17 | $ 0.40 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.35 | $ 0.75 | $ 0.07 | $ 1.00 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.50 | $ 0.04 | $ 2.43 | $ 0.49 | $ 0.90 | $ 1.00 | $ 0.25 | $ 0.75 | $ 0.20 | $ 0.70 | $ 0.75 | $ 0.70 | $ 0.85 | $ 0.80 | $ 0.80 | $ 0.09 | $ 1.44 | $ 0.09 | $ 0.76 | $ 1.07 | ||||||||
Retirement of options, shares | 400,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of notes payable, price per share | $ 0.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Units subscribed | 62,500 | 62,500 |
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Nature of the Business
Virtual Piggy, Inc. (the "Company" or "Virtual Piggy") is a
development stage enterprise incorporated in the state of Delaware
on February 11, 2008. Virtual Piggy is a
technology company that delivers an online e-commerce solution for
the family. Its system allows parents and their children to manage,
allocate funds and track their expenditures, savings and charitable
giving online. Its system is designed to allow the child to
transact online without a credit card by gaining the parent's
permission ahead of time and allowing the parent to set up the
rules of use and authorized spending limits.
The Virtual Piggy product enables online businesses to interact and
transact with the "Under 18" market in a manner consistent with the
Children's Online Privacy Protection Act ("COPPA") and other
similar international children's privacy laws. The
Virtual Piggy product offering was launched in the United States in
2012 and was launched in European markets in the first quarter of
2013.
The Company has secured merchant agreements with 115 merchants,
19 partners and 36 gift card providers in the United States
and Europe to deploy Virtual Piggy on their
websites. Approximately 26 of these merchants are using
Virtual Piggy live with their e-commerce systems and the Company is
in the process of integrating the other signed merchants. The
Company is continuing to add merchants. In addition, Virtual Piggy
has the capability to offer and deliver digital gift cards.
Basis of Presentation
The financial statements are presented in accordance with Financial
Accounting Standards Board Accounting Standards Codification ("FASB
ASC") 915 for development stage entities.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
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
these estimates.
Comprehensive Income
The Company follows FASB ASC 220 in reporting comprehensive
income. Comprehensive income is a more inclusive
financial reporting methodology that includes disclosure of certain
financial information that historically has not been recognized in
the calculation of net income. Since the Company has no
items of other comprehensive income (loss), comprehensive income
(loss) is equal to net income (loss).
Fair Value of Financial Instruments
The Company's financial instruments consist of cash, accounts
receivable and accounts payable and accrued
expenses. The carrying value of cash, accounts
receivable and accounts payable and accrued expenses approximate
fair value, because of their short maturity.
Concentration of Credit Risk Involving Cash
The Company may have deposits with a financial institution which at
times exceed Federal Depository Insurance coverage of
$250,000.
Cash and Cash Equivalents
For purposes of reporting cash flows, the Company considers all
cash accounts, which are not subject to withdrawal restrictions or
penalties, and certificates of deposit and commercial paper with
original maturities of 90 days or less to be cash or cash
equivalents.
Property and Equipment
Property and equipment are stated at cost less accumulated
depreciation and any impairment losses. Expenditures for
new equipment and major expenditures for existing equipment are
capitalized and depreciated using the straight-line method at rates
sufficient to depreciate such costs over the estimated productive
lives. All other ordinary repair and maintenance costs
are expensed as incurred.
The Company's depreciation and amortization policies on property
and equipment are as follows:
Recoverability of Long-Lived Assets
In accordance with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") 360-10-35 "Impairment or Disposal
of Long-lived Assets", long-lived assets to be held and used
are analyzed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not
be fully recoverable or that the useful lives of those assets are
no longer appropriate. The Company evaluates at each balance sheet
date whether events and circumstances have occurred that indicate
possible impairment.
The Company determines the existence of such impairment by
measuring the expected future cash flows (undiscounted and without
interest charges) and comparing such amount to the carrying amount
of the assets. An impairment loss, if one exists, is then measured
as the amount by which the carrying amount of the asset exceeds the
discounted estimated future cash flows. Assets to be disposed of
are reported at the lower of the carrying amount or fair value of
such assets less costs to sell. Asset impairment charges are
recorded to reduce the carrying amount of the long-lived asset that
will be sold or disposed of to their estimated fair values. Charges
for the asset impairment reduce the carrying amount of the
long-lived assets to their estimated salvage value in connection
with the decision to dispose of such assets.
For the six month periods ended June 30, 2013 and 2012, the Company
determined that no impairment was required after going through the
impairment testing to the operating long-lived assets (property and
equipment and patents and trademarks).
Revenue Recognition
In accordance with Securities and Exchange Commission ("SEC") Staff
Accounting Bulletin ("SAB") No. 104, Revenue
Recognition (Codified in FASB ASC 605), the Company will
recognize revenue when (i) persuasive evidence of a customer or
distributor arrangement exists or acceptance occurs, (ii) a
retailer, distributor or wholesaler receives the goods, (iii) the
price is fixed or determinable, and (iv) collectability of the
sales revenues is reasonably assured. Subject to these criteria,
the Company will generally recognize revenue at the time of the
sale of the associated product.
Income Taxes
The Company follows FASB ASC 740 when accounting for income taxes,
which requires an asset and liability approach to financial
accounting and reporting for income taxes. Deferred
income tax assets and liabilities are computed annually for
temporary differences between the financial statements and tax
bases of assets and liabilities that will result in taxable or
deductible amounts in the future based on enacted tax laws and
rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances
are established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is
the tax payable or refundable for the period plus or minus the
change during the period in deferred tax assets and
liabilities. Tax years from 2008 through 2012 remain
subject to examination by major tax jurisdictions.
Loss Per Share
The Company follows FASB ASC 260 when reporting Earnings Per Share
resulting in the presentation of basic and diluted earnings per
share. Because the Company reported a net loss for the
six months ended June 30, 2013 and 2012, common stock equivalents,
including stock options and warrants were anti-dilutive; therefore,
the amounts reported for basic and dilutive loss per share were the
same.
Start-up Costs
In accordance with FASB ASC 720, start-up costs
are expensed as incurred.
Research and Development Costs
In accordance with FASB ASC 730, research and development costs are
expensed when incurred.
Recently Adopted Accounting Pronouncements
As of June 30, 2013 and for the period then ended, there were no
recently adopted accounting pronouncements that had a material
effect on the Company's financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
As of June 30, 2013, there are no recently issued accounting
standards not yet adopted which would have a material effect on the
Company's financial statements.
Reclassifications
Certain amounts in the 2012 financial statements have been
reclassified in order for them to be in conformity with the 2013
presentation.
|
GOING CONCERN
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
GOING CONCERN [Abstract] | |
GOING CONCERN |
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The
Company has not yet begun to generate meaningful revenues, has
incurred significant losses and has experienced negative cash flow
from operations during the development stage. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
Since inception, the Company has focused on developing and
implementing its business plan. The Company
believes that its existing cash resources will not be sufficient to
sustain operations during the next twelve months. The
Company currently needs to generate revenue in order to sustain its
operations. In the event that the Company cannot
generate sufficient revenue to sustain its operations, the Company
will need to reduce expenses or obtain financing through the sale
of debt and/or equity securities. The issuance of
additional equity would result in dilution to existing
shareholders. If the Company is unable to obtain
additional funds when they are needed or if such funds cannot be
obtained on terms acceptable to the Company, the Company may be
unable to execute upon the business plan or pay costs and expenses
as they are incurred, which would have a material, adverse effect
on the business, financial condition and results of
operations.
The Company's current monetization model is to derive a percentage
of all revenues generated by online merchants using the Virtual
Piggy service. Merchants are billed at the end of each month for
all transactions that have been processed by the Company on their
behalf in the prior month. As the merchant base and
consumer base grows, and as the trend to higher online spending
levels continues, the Company expects to generate additional
revenue to support operations.
If sufficient revenues are not generated to sustain operations or
additional funding cannot be obtained in the short-term, the
Company will need to reduce monthly expenditures to a level that
will enable the Company to continue until such funds can be
obtained. The Company raised $6,070,595, net of stock
issuance costs of $395,221 through private placements of its equity
securities from January 1, 2013 through June 30, 2013.
The Company also raised $185,000 from the exercise of options and
$1,410,343 from the exercise of warrants in May and June
2013.
The Company is in the development stage at June 30,
2013. Successful completion of the Company's development
program, and the attainment of profitable operations are dependent
upon future events, including obtaining adequate financing to
fulfill its development activities and achieving a level of
revenues adequate to support the Company's cost
structure. However, there can be no assurances that the
Company will be able to secure additional equity investment or
achieve an adequate revenue level.
|
PATENTS
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
PATENTS [Abstract] | |
PATENTS |
NOTE 3 - PATENTS
The Company continues to apply for patents. Accordingly,
costs associated with the registration of these patents have been
capitalized and are amortized on a straight-line basis over the
estimated lives of the patents (20 years). At June 30,
2013 and 2012, unamortized capitalized patent costs were $553,183
and $362,496. Amortization expense for patents was
$6,530 and $11,899 for the three and six months ended June 30, 2013
and $3,117 and $4,171 for the three and six months ended June 30,
2012.
|
NOTES PAYABLE
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
NOTES PAYABLE [Abstract] | |
NOTES PAYABLE |
NOTE 4 - NOTES PAYABLE
In September 2011, the Company commenced a private placement of up
to 10 units at a price of $50,000 per unit to accredited
investors. One unit consisted of a demand note payable
in the amount of $50,000 due November 12, 2012, warrants to
purchase 15,000 shares of common stock at an exercise price of $.50
per share with a term expiring November 12, 2012, and 15,000 shares
of common stock. In December 2011, the Company completed
the private placement and raised $500,000. The warrants
were valued at $20,930, fair value, using the Black-Scholes option
pricing model to calculate the grant-date fair value of the
warrants, with the following assumptions: no dividend yield,
expected volatility of 39.8% to 62.8%, risk free interest rate of
.1% and expected option life of 1.2 years. The shares of
common stock were valued at $82,655 or $.45 to $.70 per share, fair
value. Both the warrant value and the shares of common
stock were treated as a discount to the value of the note payable
in accordance with FASB ASC 835-30-25, Recognition and
were being accreted over the term of the note payable for financial
statement purposes. During the years ended December 31,
2012 and 2011, $65,560 and $38,035 of interest was accreted on the
notes payable. As of December 31, 2011, $150,000 of the
$500,000 was repaid.
On February 8, 2012, February 27, 2012, and April 10, 2012,
$100,000, $50,000, and $25,000 respectively, of the notes payable
were repaid.
On April 26, 2012, the remaining balance of the notes payable and
accrued interest of $25,000 was converted into 571,428 shares of
the Company's common stock and warrants to purchase 285,714 shares
of the Company's common stock with a term of two years and an
exercise price of $.50 per share.
|
INCOME TAXES
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
INCOME TAXES [Abstract] | |
INCOME TAXES |
NOTE 5 - INCOME TAXES
Income tax expense was $0 for the three and six months ended June
30, 2013 and 2012.
As of January 1, 2013, the Company had no unrecognized tax
benefits, and accordingly, the Company did not recognize interest
or penalties during 2013 related to unrecognized tax
benefits. There has been no change in unrecognized tax
benefits during the six months ended June 30, 2013, and there was
no accrual for uncertain tax positions as of June 30,
2013. Tax years from 2009 through 2012 remain subject to
examination by major tax jurisdictions.
There is no income tax benefit for the losses for the three and six
months ended June 30, 2013 and 2012, since management has
determined that the realization of the net tax deferred asset is
not assured and has created a valuation allowance for the entire
amount of such benefits.
|
LITIGATION SETTLEMENT
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
LITIGATION SETTLEMENT [Abstract] | |
LITIGATION SETTLEMENT |
NOTE 6 - LITIGATION SETTLEMENT
In December 2012, the Company entered into a settlement agreement
with an investor, whereby the Company agreed to pay the investor
$450,000 in return for the investor returning warrants issued to
the investor. The Company received $75,000 from its
insurance carrier with respect to this litigation and the $450,000
settlement was paid in January 2013.
|
STOCKHOLDERS' EQUITY
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY |
NOTE 7 - STOCKHOLDERS' EQUITY
In December 2011, the Company commenced a private placement of up
to $5,000,000 consisting of up to 12,500,000 shares of the
Company's common stock and warrants to purchase up to 6,250,000
shares of the Company's common stock. The shares and
warrants were sold in units with each unit comprised of two shares
and one warrant, with a term of two years and an exercise price of
$.50 per share, at a purchase price of $.80 per
unit. During December 2011, the Company sold 625,000
units and raised $500,000. On January 11, 2012, the
Company amended the Securities Purchase Agreement dated December 1,
2011, by reducing the price per unit from $.80 to
$.70. This increased the number of units to be sold from
6,250,000 units to 7,142,858 units. It also required the
Company to issue to one investor an additional 89,286 units,
consisting of 178,572 shares common stock and warrants to purchase
an additional 89,286 shares of common stock. During the
three months ended March 31, 2012, the Company issued an additional
3,922,356 units and raised $2,717,650, net of stock issuance costs
of $28,000.
On April 5, 2012, the Company commenced a private placement of up
to $3,500,000 consisting of up to 10,000,000 shares of the
Company's common stock and warrants, with a term of two years and
an exercise price of $.50 per share, to purchase up to 5,000,000
shares of the Company's common stock.. The shares and
warrants were sold in units with each unit comprised of two shares
and one warrant at a purchase price of $.70 per unit. In
accordance with the terms of the offering documents, the offering
amount was increased to $4 million. From April 5, 2012 to
June 30, 2012, the Company sold 6,201,831 units and raised
$4,341,282.
On April 2, 2012, the Company entered into a settlement agreement
with a former consultant of the Company. In connection with the
settlement, the Company made a settlement payment to the consultant
of $30,000 and issued the consultant 350,000 shares of the
Company's common stock, which were valued at $297,500, fair value,
or $.85 per share.
On April 10, 2012, a company owned by the Secretary of the Company
and his wife exercised 250,000 options resulting in proceeds of
$10,000.
On May 2, 2012, the Company entered into a securities purchase
agreement with a non-U.S. person, pursuant to which the Company
issued and sold 187,500 units at a purchase price of $.80 per unit,
in consideration of gross proceeds of $150,000. Each
unit consisted of: (i) two shares of the Company's common stock,
(ii) a warrant to purchase one share of the Company's common stock
at an exercise price of $.50 per share for a term of two years, and
(iii) a warrant to purchase one half share of the Company's common
stock at an exercise price of $1.00 per share for a term of three
years. Pursuant to the securities purchase agreement,
the purchaser also agreed to purchase an additional $850,000 of
units by November 1, 2012. The Company has received
$1,000,000 under this agreement.
On May 21, 2012, the Company issued five consultants an aggregate
of 1,363,185 shares of the Company's common stock for services,
which were valued in the aggregate at $3,312,537, fair value or
$2.43 per share, which was the stock price on the day of
issuance.
On May 25, 2012, an investor exercised 350,000 options resulting in
proceeds of $14,000.
On July 5, 2012, the Company commenced a private placement of up to
$100,000 consisting of up to 125,000 shares of the Company's common
stock and warrants to purchase up to 62,500 shares of the Company's
common stock at an exercise price of $.50 per share with a term of
two years ("Series A Warrants") and warrants to purchase up to
31,250 shares of the Company's commons stock at an exercise price
of $1.00 per share with a term of three years ("Series B
Warrants"). The shares and warrants were sold in units
with each unit comprised of two shares and one Series A Warrant and
one Series B Warrant at a purchase price of $.80 per
unit. The Company has received gross proceeds of
$100,000 under this private placement.
During November and December 2012, the Company entered into private
placements for shares of the Company's common stock. The
shares were sold at a purchase price of $.70 per
share. Through December 31, 2012, 7,942,858 shares were
sold raising $5,560,000.
In December 2012, the Company entered into private placements for
shares of the Company's common stock. The shares were sold at a
purchase price of $.75 per share. Through December 31,
2012, 666,667 shares were sold raising $500,000.
During the first quarter of 2013, the Company entered into private
placements for shares of the Company's common stock. The shares
were sold at a purchase price of $.75 per share. Through
March 31, 2013, 1,133,334 shares were sold raising
$850,000. Issuance costs related to this private
placement were $60,783.
On April 15, 2013, the Company issued 26,521 shares of the
Company's common stock to five members of the Board of Directors,
which were valued at $49,071, fair value. In conjunction
with this, the five members of the Board also received, in the
aggregate, options to purchase 1,050,000 shares of the Company's
common stock. These options were valued at $519,080, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 29.0%, risk free interest rate of .69% and expected option life
of five years. The options expire five years from the
date of issuance. Options granted will be expensed over
the three year vesting term.
On May 28, 2013, we entered into a Securities Purchase Agreement
with accredited investors, pursuant to which we issued and sold an
aggregate of 2,572,553 units at a purchase price of $1.80 per unit
(the "Offering"), with each unit being comprised of one (1) share
of the Company's common stock and a warrant to purchase one-half
(0.5) of a share of common stock at an exercise price of $3.00 per
share for a period of three years. On May 29, 2013, we
issued and sold an additional 300,000 units pursuant to the
Offering. The Company retained a placement agent in
connection with the Offering. The Company paid the placement
agent aggregate placement agent fees in the amount of $151,408 plus
$155,118 as an expense allowance. In addition, the
placement agent received three-year warrants to purchase an
aggregate of 287,255 shares of the Company's common stock at
an exercise price of $1.80 per share (See Note 8-
Stock Options and Warrants). Net proceeds of the
Offering to us, after the expense allowance and other expenses,
were approximately $4,836,157.
During May 2013, 750,000 options were exercised at $0.04 per share,
300,000 options were exercised at $0.35 per share, and 66,667
options were exercised at $0.75, resulting in proceeds of
$185,000.
During May and June 2013, 2,000,000 warrants were exercised at $.04
per share and 2,660,685 warrants were exercised at $0.50 per share,
resulting in proceeds of $1,410,343.
|
STOCK OPTIONS AND WARRANTS
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK OPTIONS AND WARRANTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK OPTIONS AND WARRANTS |
NOTE 8 - STOCK OPTIONS AND WARRANTS
During 2008, the Board of Directors ("Board") of the Company
adopted an Equity Incentive Plan ("Plan") that was approved by the
shareholders. Under the Plan, the Company is authorized
to grant options to purchase up to 25,000,000 shares of common
stock to any officer, other employee or director of, or any
consultant or other independent contractor who provides services to
the Company. The Plan is intended to permit stock
options granted to employees under the Plan to qualify as incentive
stock options under Section 422 of the Internal Revenue Code of
1986, as amended ("Incentive Stock Options"). All
options granted under the Plan, which are not intended to qualify
as Incentive Stock Options are deemed to be non-qualified options
("Non-Statutory Stock Options"). As of June 30, 2013,
13,883,333 options have been issued and are unexercised, and
681,667 options are available to be issued under the
Plan.
During 2013, the Board of Directors ("Board") of the Company
adopted an 2013 Equity Incentive Plan ("2013
Plan"). Under the 2013 Plan, the Company is authorized
to grant restricted stock, restricted stock units, options, and
other equity-linked securities to purchase up to 5,000,000 shares
of common stock to any officer, other employee or director of, or
any consultant or other independent contractor who provides
services to the Company. The 2013 Plan is intended to
permit stock options granted to employees under the 2013 Plan to
qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended ("Incentive Stock
Options"). All options granted under the 2013 Plan,
which are not intended to qualify as Incentive Stock Options are
deemed to be non-qualified options ("Non-Statutory Stock
Options"). As of June 30, 2013, 3,662,500 options have
been issued and are unexercised, and 1,337,500 shares are available
to be issued under the 2013 Plan.
The plans are administered by the Board, which determines the
persons to whom awards will be granted, the number of awards to be
granted, and the specific terms of each grant, including the
vesting thereof, subject to the terms of the applicable plan.
In connection with Incentive Stock Options, the exercise price of
each option may not be less than 100% of the fair market value of
the common stock on the date of the grant (or 110% of the fair
market value in the case of a grantee holding more than 10% of the
outstanding stock of the Company).
Volatility in all instances presented is the Company's estimate of
volatility that is based on the volatility of other public
companies that are in closely related industries to the
Company.
On January 27, 2012, the Company issued an employee an option to
purchase 30,000 shares of the Company's common stock at $.52 per
share. These options have been valued at $3,718, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 25.4%, risk free interest rate of 0.8% and expected option life
of five years. The options expire five years from the
date of issuance. Options granted are expensed over the
three year vesting term.
On February 28, 2012, the Company issued an employee an option to
purchase 25,000 shares of the Company's common stock at $.58 per
share. These options have been valued at $3,120, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 25.0%, risk free interest rate of .8% and expected option life
of five years. The options expire five years from the
date of issuance. Options granted are expensed over the
three year vesting term.
On March 2, 2012, the Company issued a Board member an option to
purchase 250,000 shares of the Company's common stock at $.58 per
share. These options have been valued at $33,975, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 25.9%, risk free interest rate of .9% and expected option life
of five years. The options expire five years from the
date of issuance and were expensed immediately.
On March 5, 2012, the Company issued an employee an option to
purchase 25,000 shares of the Company's common stock at $.58 per
share. These options have been valued at $2,680, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 25.0%, risk free interest rate of .9% and expected option life
of five years. The options expire five years from the
date of issuance. Options granted are expensed over the
three year vesting term.
On March 31, 2012, the Company issued five employees, options to
purchase 4,010,000 shares in the aggregate of the Company's common
stock at $.65 per share. These options have been valued
at $759,810, fair value. The Company uses the
Black-Scholes option pricing model to calculate the grant-date fair
value of the options, with the following assumptions: no dividend
yield, expected volatility of 31.2%, risk free interest rate of
1.04% and expected option life of five years. The
options expire five years from the date of
issuance. Options granted are expensed over the three
year vesting term.
In April 2012, the Company issued six employees options to purchase
an aggregate of 80,000 shares of the Company's common stock at
exercise prices ranging from $.65 to $.97 per
share. These options were valued at $17,310 fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 30.2% to 33.4%, risk free interest rate of .82% to 1.04% and
expected option life of five years. The options expire
five years from the date of issuance. Options granted
are expensed over the three year vesting term.
In June 2012, the Company issued three employees and one Board
member options to purchase an aggregate of 470,000 shares of the
Company's common stock at exercise prices ranging from $1.53 to
$1.82 per share. These options were valued at $217,293,
fair value. The Company uses the Black-Scholes option
pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 30.3% to 35.5%, risk free interest rate of
.68% to .72% and expected option life of five years. The
options expire five years from the date of
issuance. Options granted are expensed over the three
year vesting term.
In July 2012, the Company issued one employee options to purchase
an aggregate of 15,000 shares of the Company's common stock at an
exercise price of $1.23 per share. These options were
valued at $5,493 fair value. The Company uses the
Black-Scholes option pricing model to calculate the grant-date fair
value of the options, with the following assumptions: no dividend
yield, expected volatility of 32.9%, risk free interest rate of
.61% and expected option life of five years. The options
expire five years from the date of issuance. Options
granted are expensed over the three year vesting term.
In August 2012, the Company issued seven employees options to
purchase an aggregate of 380,000 shares of the Company's common
stock at exercise prices ranging from $1.26 to $1.43 per
share. These options were valued at $123,381, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 23.5% to 29.1%, risk free interest rate of .63% to .69% and
expected option life of five years. The options expire
five years from the date of issuance. Options granted
are expensed over the three year vesting term.
In September 2012, the Company issued one employee options to
purchase 75,000 shares of the Company's common stock at an exercise
price of $1.54 per share. These options were valued at
$26,303, fair value. The Company uses the Black-Scholes
option pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 24.5%, risk free interest rate of .62% and
expected option life of five years. The options expire
five years from the date of issuance. Options granted
are expensed over the three year vesting term.
In October 2012, the Company issued one employee options to
purchase 75,000 shares of the Company's common stock at an exercise
price of $1.35 per share. These options were valued at
$23,263 fair value. The Company uses the Black-Scholes
option pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 24.5%, risk free interest rate of .70% and
expected option life of five years. The options expire
five years from the date of issuance. Options granted
are expensed over the three year vesting term.
In November 2012, the Company issued fourteen employees options to
purchase an aggregate of 1,295,000 shares of the Company's common
stock at exercise prices between $1.01 and $1.35 per
share. These options were valued at $371,313, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
between 26.1% and 29.3%, risk free interest rate between .76% and
.83% and expected option life of five years. The options
expire five years from the date of issuance. Options
granted are expensed over the three year vesting term.
In March 2008, the Company issued 4,500,000 options to three
directors. On January 24, 2013, the expiration date for
unexpired and unexercised options of 4,250,000 was extended from
March 3, 2013 to March 3, 2015. The incremental increase in
value was $1,253, which was expensed immediately.
In January 2013, the Company issued eighteen employees options to
purchase an aggregate of 260,000 shares of the Company's common
stock at exercise prices between $0.99 and $1.05 per
share. These options were valued at $62,662 fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
between 23.3% and 26.1%, risk free interest rate between .78% and
.89% and expected option life of five years. The options
expire five years from the date of issuance. Options
granted are expensed over the three year vesting term.
In February 2013, the Company issued four employees options to
purchase an aggregate of 760,000 shares of the Company's common
stock at exercise prices between $1.07 and $1.21 per
share. These options were valued at $199,843 fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
between 22.5% and 25.1%, risk free interest rate between .78% and
.88% and expected option life of five years. The options
expire five years from the date of issuance. Options
granted are expensed over the three year vesting term.
In March 2013, the Company issued an employee options to purchase
2,500 shares of the Company's common stock at an exercise price of
$1.36 per share. These options were valued at $728 fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 22.5%, risk free interest rate of .76% and expected option life
of five years. The options expire five years from the
date of issuance. Options granted are expensed over the
three year vesting term.
In April 2013, the Company issued an employee options to purchase
200,000 shares of the Company's common stock at an exercise price
of $1.56 per share. These options were valued at
$74,159, fair value. The Company uses the Black-Scholes
option pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 25.3%, risk free interest rate of .76% and
expected option life of five years. The options expire
five years from the date of issuance. Options granted
are expensed over the three year vesting term.
In May 2013, the Company issued two employees options to purchase
an aggregate of 55,000 shares of the Company's common stock at an
exercise price of $2.16 and $2.29 per share. These
options were valued at $26,954, fair value. The Company
uses the Black-Scholes option pricing model to calculate the
grant-date fair value of the options, with the following
assumptions: no dividend yield, expected volatility of 23.5% to
25.3%, risk free interest rate of .84% to .85% and expected option
life of five years. The options expire five years from
the date of issuance. Options granted are expensed over
the three year vesting term.
In June 2013, the Company issued two employees options to purchase
an aggregate of 250,000 shares of the Company's common stock at an
exercise price of $2.40 and $2.92 per share. The vesting
of 50,000 of these options is predicated on meeting certain
milestones, which have not been met as of June 30, 2013, therefore
the 50,000 options have not been valued. The 200,000
options were valued at $129,343, fair value. The Company
uses the Black-Scholes option pricing model to calculate the
grant-date fair value of the options, with the following
assumptions: no dividend yield, expected volatility of 23.6% to
26.3%, risk free interest rate of 1.03% to 1.48% and expected
option life of five years. The options expire five years
from the date of issuance. Options granted are expensed
over the three year vesting term.
Cumulatively and for the three and six months ended June 30, 2013,
the Company expensed $1,236,403, $203,477 and $336,396 and for the
three and six months ended June 30, 2012, the Company expensed
$154,519 and $154,886 relative to employee options/warrants
granted. As of June 30, 2013, there was $1,834,664 of
unrecognized compensation expense related to employee non-vested
market-based share awards.
A summary of stock option/warrant transactions for employees from
December 31, 2012 to June 30, 2013 is as follows:
On January 2, 2012, the Company issued a consultant an option to
purchase 250,000 shares of the Company's common stock at $.50 per
share. These options have been valued at $51,692 fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 29.2%, risk free interest rate of 0.9% and expected option life
of five years. The options expire five years from the
date of issuance. Options granted are expensed over the
term of the agreement.
On January 17, 2012, the Company issued a consultant an option to
purchase 200,000 shares of the Company's common stock at $.50 per
share. These options have been valued at $31,437, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 28.0%, risk free interest rate of 0.8% and expected option life
of five years. The options expire five years from the
date of issuance. Options granted were expensed
immediately.
On March 31, 2012, the Company issued two consultants options to
purchase 100,000 shares in the aggregate of the Company's common
stock at $.65 per share. These options have been valued
at $18,947, fair value. The Company uses the
Black-Scholes option pricing model to calculate the grant-date fair
value of the options, with the following assumptions: no dividend
yield, expected volatility of 31.2%, risk free interest rate of
1.04% and expected option life of five years. The
options expire five years from the date of
issuance. Options granted were expensed
immediately.
On April 1, 2012, the Company issued a company owned by the former
manager of corporate development an option to purchase 250,000
shares of the Company's common stock at $.70 per share pursuant to
an agreement that also required a cash payment of
$150,000. These options have been valued at $43,028,
fair value. The Company uses the Black-Scholes option
pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 31.2%, risk free interest rate of 1.04% and
expected option life of five years. The options expire
five years from the date of issuance. Options granted were expensed
through May 31, 2013, the term of the agreement.
In May 2012, the Company issued a consultant options to purchase an
aggregate of 100,000 shares of the Company's common stock at an
exercise price of $2.17 per share. These options were
valued at $79,978 fair value. The Company uses the
Black-Scholes option pricing model to calculate the grant-date fair
value of the options, with the following assumptions: no dividend
yield, expected volatility of 31.2%, risk free interest rate of
.75% and expected option life of five years. The options
expire five years from the date of issuance. Options
granted were expensed immediately.
In July 2012, the Company issued a consultant options to purchase
an aggregate of 100,000 shares of the Company's common stock at an
exercise price of $1.55 per share. These options were
valued at $40,373 fair value. The Company uses the
Black-Scholes option pricing model to calculate the grant-date fair
value of the options, with the following assumptions: no dividend
yield, expected volatility of 29.3%, risk free interest rate of
.64% and expected option life of five years. The options
expire five years from the date of issuance. Options
granted are expensed over the term of the consulting
agreement.
In August 2012, the Company issued two consultants options to
purchase an aggregate of 400,000 shares of the Company's common
stock at exercise prices ranging from $.35 to $1.11 per
share. These options were valued at $321,221, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 27.1% to 30.5%, risk free interest rate of .27% to .67% and
expected option lives of from two to five years. The
options expire between two and five years from the date of
issuance. Options granted are expensed over the term of
the consulting agreement.
In September 2012, the Company issued a consultant options to
purchase 100,000 shares of the Company's common stock at an
exercise price of $.75 per share. These options were
valued at $81,697, fair value. The Company uses the
Black-Scholes option pricing model to calculate the grant-date fair
value of the options, with the following assumptions: no dividend
yield, expected volatility of 25.6%, risk free interest rate of
.27% and expected option life of two years. The options
expire two years from the date of issuance. Options
granted are expensed over the term of the consulting
agreement.
In October 2012, the Company issued a consultant options to
purchase 50,000 shares of the Company's common stock at an exercise
price of $1.14 per share. These options were valued at
$5,381, fair value. The Company uses the Black-Scholes
option pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 23.5%, risk free interest rate of .19% and
expected option life of one year. The options expire one
year from the date of issuance. The options granted are
expensed over the term of the consulting agreement.
In November 2012, the Company issued four consultants options to
purchase an aggregate of 765,000 shares of the Company's common
stock at an exercise price of $1.01 per share. These
options were valued at $188,830, fair value. The Company
uses the Black-Scholes option pricing model to calculate the
grant-date fair value of the options, with the following
assumptions: no dividend yield, expected volatility of 26.1%, risk
free interest rate of .76% and expected option life of five
years. The options expire five years from the date of
issuance. Options granted were expensed
immediately.
In December 2012, the Company issued a consultant warrants to
purchase 500,000 shares of the Company's common stock at an
exercise price of $1.15 per share. These options were
valued at $195,318, fair value. The vesting of these
warrants is predicated on meeting certain milestones. As
of December 31, 2012, the first milestone was met resulting in the
vesting of 150,000 warrants. The fair value of the
vested warrants was $58,595, which was expensed
immediately. The Company uses the Black-Scholes option
pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 24.7%, risk free interest rate of .76% and
expected option life of one year. The options expire
five years from the date of issuance. The remaining
unvested warrants will be expensed when it is probable that the
milestones will be achieved.
In January 2013, the Company issued a consultant options to
purchase 5,000 shares of the Company's common stock at an exercise
price of $1.00 per share. These options were valued at
$1,106 fair value. The Company uses the Black-Scholes
option pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 23.3%, risk free interest rate of .78% and
expected option life of five years. The options expire
five years from the date of issuance. Options granted
are expensed over the term of the consulting agreement.
In March 2013, the Company issued two consultants options to
purchase 1,130,000 shares of the Company's common stock at exercise
prices of $0.75 and $1.34 per share. 130,000 of these
options vested immediately and were valued at $54,228, fair
value. The vesting of the remaining 1 million options is
predicated on meeting certain milestones, which were not met as of
June 30, 2013. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 22.6% and 25.5%, risk free interest rate of .25% and .80% and
expected option life of two to five years. The options
expire two to five years from the date of issuance. The
vested options granted, were expensed immediately. The
remaining unvested options will be expensed when it is probable
that the milestones will be achieved.
In April 2013, the Company issued a consultant options to purchase
100,000 shares of the Company's common stock at an exercise price
of $2.04 per share. These options were valued at
$44,603, fair value. The Company uses the Black-Scholes
option pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield,
expected volatility of 26.5%, risk free interest rate of .68% and
expected option life of five years. The options expire
five years from the date of issuance. Options granted
were expensed immediately.
In May 2013, the Company issued two consultants options to purchase
125,000 shares in the aggregate of the Company's common stock at
exercise prices of $3.05 and $3.28 per share. These
options were valued at $51,869, fair value. The Company
uses the Black-Scholes option pricing model to calculate the
grant-date fair value of the options, with the following
assumptions: no dividend yield, expected volatility of 23.1% and
%23.2, risk free interest rate of .29% and .31% and expected option
life of two years. The options expire two years from the
date of issuance. Options granted are expensed over the
terms of the consulting agreements.
In May 2013, the Company as part of the cost of the private
placement issued the placement agent options to purchase 287,255
shares of the Company's common stock at an exercise price of $1.80
per share. These options were valued at $409,749, fair
value. The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of the options, with
the following assumptions: no dividend yield, expected volatility
of 23.4% and 23.7%, risk free interest rate of .49% and expected
option life of three years. The options expire three
years from the date of issuance. Options granted were
recorded as stock issuance costs.
Cumulatively and for the three and six months ended June 30, 2013
and 2012, the Company expensed $1,116,620, $74,419 and $78,357
and for the three and six months ended June 30, 2012 the Company
expensed $10,171 and $61,507 relative to non-employee
options/warrants granted. As of June 30, 2013, there was
$98,040 of unrecognized compensation expense related to
non-employee non-vested market-based share awards.
The following table summarizes non-employee stock options/warrants
of the Company from December 31, 2012 to June 30, 2013 as
follows:
|
OPERATING LEASES
|
6 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
||||||||||||||||||||||||||
OPERATING LEASES [Abstract] | ||||||||||||||||||||||||||
OPERATING LEASES |
NOTE 9 - OPERATING LEASES
For the three and six months ended June 30, 2013,total rent expense
under leases amounted to $71,223 and $126,871 and for the three and
six months ended June 30, 2012, total rent expense under leases
amounted to $49,946 and $58,749. At June 30, 2013, the
Company was obligated under various non-cancelable operating lease
arrangements for property as follows:
|
RELATED PARTY TRANSACTIONS
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS |
NOTE 10 - RELATED PARTY TRANSACTIONS
During the three and six months ended June 30, 2013 and 2012, a
consultant and beneficial owner of the Company, owning more than
five percent of the outstanding common shares of the Company, was
paid for consulting and travel expenses for providing strategic
advice to the Company. Expenses totaling $105,000 and
$169,106 were incurred and reimbursed during the three and six
months ended June 30, 2013, and $75,223 and $57,276 were incurred
and reimbursed during the three and six months ended June 30,
2012. On January 1, 2013, the Company entered into an
agreement with this consultant, whereby the Company will pay the
consultant $12,500 per month beginning January 1, 2013 for a term
of one year. In June 2013, this contract was
terminated.
During the three and six months ended June 30, 2013 and 2012, a
marketing company owned by the Company's Secretary and his spouse
was paid $0 and $14,560.
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Policies)
|
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||
Basis of Presentation |
Basis of Presentation
The financial statements are presented in accordance with Financial
Accounting Standards Board Accounting Standards Codification ("FASB
ASC") 915 for development stage entities.
|
||||||||||||||||||||
Use of Estimates |
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
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
these estimates.
|
||||||||||||||||||||
Comprehensive Income |
Comprehensive Income
The Company follows FASB ASC 220 in reporting comprehensive
income. Comprehensive income is a more inclusive
financial reporting methodology that includes disclosure of certain
financial information that historically has not been recognized in
the calculation of net income. Since the Company has no
items of other comprehensive income (loss), comprehensive income
(loss) is equal to net income (loss).
|
||||||||||||||||||||
Fair Value of Financial Instruments |
Fair Value of Financial Instruments
The Company's financial instruments consist of cash, accounts
receivable and accounts payable and accrued
expenses. The carrying value of cash, accounts
receivable and accounts payable and accrued expenses approximate
fair value, because of their short maturity.
|
||||||||||||||||||||
Concentration of Credit Risk Involving Cash |
Concentration of Credit Risk Involving Cash
The Company may have deposits with a financial institution which at
times exceed Federal Depository Insurance coverage of
$250,000.
|
||||||||||||||||||||
Cash and Cash Equivalents |
Cash and Cash Equivalents
For purposes of reporting cash flows, the Company considers all
cash accounts, which are not subject to withdrawal restrictions or
penalties, and certificates of deposit and commercial paper with
original maturities of 90 days or less to be cash or cash
equivalents.
|
||||||||||||||||||||
Property and Equipment |
Property and Equipment
Property and equipment are stated at cost less accumulated
depreciation and any impairment losses. Expenditures for
new equipment and major expenditures for existing equipment are
capitalized and depreciated using the straight-line method at rates
sufficient to depreciate such costs over the estimated productive
lives. All other ordinary repair and maintenance costs
are expensed as incurred.
The Company's depreciation and amortization policies on property
and equipment are as follows:
|
||||||||||||||||||||
Recoverability of Long-Lived Assets |
Recoverability of Long-Lived Assets
In accordance with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") 360-10-35 "Impairment or Disposal
of Long-lived Assets", long-lived assets to be held and used
are analyzed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not
be fully recoverable or that the useful lives of those assets are
no longer appropriate. The Company evaluates at each balance sheet
date whether events and circumstances have occurred that indicate
possible impairment.
The Company determines the existence of such impairment by
measuring the expected future cash flows (undiscounted and without
interest charges) and comparing such amount to the carrying amount
of the assets. An impairment loss, if one exists, is then measured
as the amount by which the carrying amount of the asset exceeds the
discounted estimated future cash flows. Assets to be disposed of
are reported at the lower of the carrying amount or fair value of
such assets less costs to sell. Asset impairment charges are
recorded to reduce the carrying amount of the long-lived asset that
will be sold or disposed of to their estimated fair values. Charges
for the asset impairment reduce the carrying amount of the
long-lived assets to their estimated salvage value in connection
with the decision to dispose of such assets.
For the six month periods ended June 30, 2013 and 2012, the Company
determined that no impairment was required after going through the
impairment testing to the operating long-lived assets (property and
equipment and patents and trademarks).
|
||||||||||||||||||||
Revenue Recognition |
Revenue Recognition
In accordance with Securities and Exchange Commission ("SEC") Staff
Accounting Bulletin ("SAB") No. 104, Revenue
Recognition (Codified in FASB ASC 605), the Company will
recognize revenue when (i) persuasive evidence of a customer or
distributor arrangement exists or acceptance occurs, (ii) a
retailer, distributor or wholesaler receives the goods, (iii) the
price is fixed or determinable, and (iv) collectability of the
sales revenues is reasonably assured. Subject to these criteria,
the Company will generally recognize revenue at the time of the
sale of the associated product.
|
||||||||||||||||||||
Income Taxes |
Income Taxes
The Company follows FASB ASC 740 when accounting for income taxes,
which requires an asset and liability approach to financial
accounting and reporting for income taxes. Deferred
income tax assets and liabilities are computed annually for
temporary differences between the financial statements and tax
bases of assets and liabilities that will result in taxable or
deductible amounts in the future based on enacted tax laws and
rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances
are established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is
the tax payable or refundable for the period plus or minus the
change during the period in deferred tax assets and
liabilities. Tax years from 2008 through 2012 remain
subject to examination by major tax jurisdictions.
|
||||||||||||||||||||
Loss Per Share |
Loss Per Share
The Company follows FASB ASC 260 when reporting Earnings Per Share
resulting in the presentation of basic and diluted earnings per
share. Because the Company reported a net loss for the
six months ended June 30, 2013 and 2012, common stock equivalents,
including stock options and warrants were anti-dilutive; therefore,
the amounts reported for basic and dilutive loss per share were the
same.
|
||||||||||||||||||||
Start-up Costs |
Start-up Costs
In accordance with FASB ASC 720, start-up costs
are expensed as incurred.
|
||||||||||||||||||||
Research and Development Costs |
Research and Development Costs
In accordance with FASB ASC 730, research and development costs are
expensed when incurred.
|
||||||||||||||||||||
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted |
Recently Adopted Accounting Pronouncements
As of June 30, 2013 and for the period then ended, there were no
recently adopted accounting pronouncements that had a material
effect on the Company's financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
As of June 30, 2013, there are no recently issued accounting
standards not yet adopted which would have a material effect on the
Company's financial statements.
|
||||||||||||||||||||
Reclassifications |
Reclassifications
Certain amounts in the 2012 financial statements have been
reclassified in order for them to be in conformity with the 2013
presentation.
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Tables)
|
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||
Schedule of Property and Equipment, Useful Life |
The Company's depreciation and amortization policies on property
and equipment are as follows:
|
STOCK OPTIONS AND WARRANTS
(Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK OPTIONS AND WARRANTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Options and Warrant Transactions for Employees |
A summary of stock option/warrant transactions for employees from
December 31, 2012 to June 30, 2013 is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Non-Employee Stock Options and Warrants |
The following table summarizes non-employee stock options/warrants
of the Company from December 31, 2012 to June 30, 2013 as
follows:
|
OPERATING LEASES (Tables)
|
6 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
||||||||||||||||||||||||||
OPERATING LEASES [Abstract] | ||||||||||||||||||||||||||
Schedule of Future Minimum Rental Commitments Under Non-Cancelable Operating Lease Arrangements |
At June 30, 2013, the Company was obligated under various
non-cancelable operating lease arrangements for property as
follows:
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Details) (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Number of merchant agreements with merchants to deploy technology on their websites | 115 |
Number of merchant agreements with partners to deploy technology on their websites | 19 |
Number of merchant agreements with gift card providers to deploy technology on their websites | 36 |
Number of merchants using technology in live use | 26 |
FDIC insured limit | $ 250,000 |
Computer equipment [Member] | Minimum [Member]
|
|
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Computer equipment [Member] | Maximum [Member]
|
|
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Furniture and fixtures [Member]
|
|
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
GOING CONCERN (Details) (USD
$)
|
6 Months Ended | 65 Months Ended | |
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
|
GOING CONCERN [Abstract] | |||
Amount raised from private placement | $ 6,070,595 | ||
Stock issuance costs | 395,221 | 28,000 | 488,221 |
Proceeds from exercise of options | 185,000 | 24,000 | 569,000 |
Proceeds from exercise of warrants | $ 1,410,343 | $ 1,856,057 |
PATENTS (Details) (Patents
[Member], USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Patents [Member]
|
||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization period | 20 years | |||
Unamortized capitalized patent costs | $ 553,183 | $ 362,496 | $ 553,183 | $ 362,496 |
Amortization expense for patents | $ 6,530 | $ 3,117 | $ 11,899 | $ 4,171 |
NOTES PAYABLE (Details) (USD
$)
|
6 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Apr. 30, 2012
Private Placement, September 2011 to December 2011
[Member]
|
Feb. 29, 2012
Private Placement, September 2011 to December 2011
[Member]
|
Feb. 08, 2012
Private Placement, September 2011 to December 2011
[Member]
|
Dec. 31, 2011
Private Placement, September 2011 to December 2011
[Member]
|
Sep. 30, 2011
Private Placement, September 2011 to December 2011
[Member]
|
Dec. 31, 2012
Private Placement, September 2011 to December 2011
[Member]
|
Dec. 31, 2011
Private Placement, September 2011 to December 2011
[Member]
|
Dec. 31, 2011
Private Placement, September 2011 to December 2011
[Member]
Warrant [Member]
|
Sep. 30, 2011
Private Placement, September 2011 to December 2011
[Member]
Warrant [Member]
|
Dec. 31, 2011
Private Placement, September 2011 to December 2011
[Member]
Common Stock [Member]
|
Sep. 30, 2011
Private Placement, September 2011 to December 2011
[Member]
Common Stock [Member]
|
|
Notes Payable Equity Issuance [Line Items] | |||||||||||||
Units authorized | 10 | ||||||||||||
Price per unit | $ 50,000 | ||||||||||||
Note payable included per unit | $ 50,000 | ||||||||||||
Note payable maturity date | Nov. 12, 2012 | ||||||||||||
Number of shares entitled by warrants | 15,000 | ||||||||||||
Exercise price of warrants | 0.50 | 0.50 | |||||||||||
Warrants/Options expiration date | Nov. 12, 2012 | ||||||||||||
Common shares issued per unit | 111,352,268 | 101,417,508 | 15,000 | ||||||||||
Amount raised from private placement | 6,070,595 | 500,000 | |||||||||||
Fair value of issued equity | 20,930 | 82,655 | |||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes option pricing model | ||||||||||||
Dividend yield | |||||||||||||
Expected volatility, minimum | 39.80% | ||||||||||||
Expected volatility, maximum | 62.80% | ||||||||||||
Risk free interest rate | 0.10% | ||||||||||||
Expected life | 2 years | 1 year 2 months 12 days | |||||||||||
Fair value per share, common stock, minimum | $ 0.45 | ||||||||||||
Fair value per share, common stock, maximum | $ 0.70 | ||||||||||||
Accreted interest on notes payable | 65,560 | 38,035 | |||||||||||
Repayments of notes payable | 25,000 | 50,000 | 100,000 | 150,000 | |||||||||
Accrued interest payable | $ 25,000 | ||||||||||||
Common shares issued for notes payable conversion | 571,428 | ||||||||||||
Fair value of warrants issued as discount for notes payable | 285,714 |
INCOME TAXES (Details) (USD
$)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
INCOME TAXES [Abstract] | ||||
Income tax expense |
LITIGATION SETTLEMENT (Details)
(USD $)
|
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
LITIGATION SETTLEMENT [Abstract] | |
Cash payment for settlement | $ 450,000 |
Proceeds from insurance carrier | $ 75,000 |
STOCKHOLDERS' EQUITY (Details)
(USD $)
|
6 Months Ended | 12 Months Ended | 65 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 2 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Jun. 30, 2013
|
Jan. 31, 2012
December 2011 Private Placement [Member]
|
Dec. 31, 2011
December 2011 Private Placement [Member]
|
Mar. 31, 2012
December 2011 Private Placement [Member]
|
Apr. 30, 2012
April 5, 2012 Private Placement [Member]
|
Jun. 30, 2012
April 5, 2012 Private Placement [Member]
|
Apr. 30, 2012
April 2, 2012 Issuance [Member]
|
Apr. 30, 2012
April 10, 2012 Issuance [Member]
|
May 31, 2012
May 2, 2012 Issuance [Member]
|
May 31, 2012
May 2, 2012 Issuance [Member]
Warrant Type One [Member]
|
May 31, 2012
May 2, 2012 Issuance [Member]
Warrant Type Two [Member]
|
May 31, 2012
May 21, 2012 Issuance [Member]
|
May 31, 2012
May 25, 2012 Issuance [Member]
|
Jul. 31, 2012
July 5th, 2012 Issuance [Member]
|
Jul. 31, 2012
July 5th, 2012 Issuance [Member]
Warrant Type One [Member]
|
Jul. 31, 2012
July 5th, 2012 Issuance [Member]
Warrant Type Two [Member]
|
Dec. 31, 2012
November and December 2012 Issuance [Member]
|
Dec. 31, 2012
December 2012 Issuance [Member]
|
Mar. 31, 2013
Q1 2013 Issuance [Member]
|
Apr. 30, 2013
April 15, 2013 Issuance [Member]
|
May 31, 2013
May 2013 Securities Purchase Agreement [Member]
|
May 31, 2013
May 2013 Securities Purchase Agreement [Member]
Warrant Type One [Member]
|
May 31, 2013
May 2013 Securities Purchase Agreement [Member]
Warrant Type Two [Member]
|
May 31, 2013
May 2013 Options Exercised [Member]
|
May 31, 2013
May 2013 Options Exercised Transaction One [Member]
|
May 31, 2013
May 2013 Options Exercised Transaction Two [Member]
|
May 31, 2013
May 2013 Options Exercised Transaction Three [Member]
|
Jun. 30, 2013
May and June 2013 Warrants Exercised [Member]
|
Jun. 30, 2013
May and June 2013 Warrants Exercised Transaction One
[Member]
|
Jun. 30, 2013
May and June 2013 Warrants Exercised Transaction Two
[Member]
|
|
Equity Issued [Line Items] | |||||||||||||||||||||||||||||||||
Issuance of shares of common stock, shares | 178,572 | 1,363,185 | 26,521 | ||||||||||||||||||||||||||||||
Issuance of shares of common stock, value | $ 3,312,537 | $ 49,071 | |||||||||||||||||||||||||||||||
Equity issuance, price or exercise price per security issued | $ 0.70 | $ 0.80 | $ 0.70 | $ 0.85 | $ 0.80 | $ 2.43 | $ 0.80 | $ 0.70 | $ 0.75 | $ 0.75 | $ 1.80 | $ 0.04 | $ 0.35 | $ 0.75 | |||||||||||||||||||
Proceeds from equity issuance | 2,717,650 | 150,000 | 100,000 | 5,560,000 | 500,000 | 850,000 | |||||||||||||||||||||||||||
Units authorized | 7,142,858 | 6,250,000 | |||||||||||||||||||||||||||||||
Shares per unit | 2 | 2 | 2 | 2 | |||||||||||||||||||||||||||||
Warrants per unit | 1 | 1 | 1 | 1 | |||||||||||||||||||||||||||||
Number of shares entitled by warrants | 6,250,000 | 5,000,000 | 1 | 0.5 | 62,500 | 31,250 | 0.5 | 287,255 | |||||||||||||||||||||||||
Exercise price of warrants | 0.50 | 0.50 | 0.50 | 1.00 | 0.50 | 1.00 | 3.00 | 1.80 | 0.04 | 0.50 | |||||||||||||||||||||||
Expected life | 2 years | 2 years | 2 years | 3 years | 2 years | 3 years | 5 years | ||||||||||||||||||||||||||
Equity issuance, number securities issued for cash | 625,000 | 3,922,356 | 6,201,831 | 350,000 | 250,000 | 187,500 | 350,000 | 125,000 | 7,942,858 | 666,667 | 1,133,334 | 2,572,553 | 300,000 | 750,000 | 300,000 | 66,667 | |||||||||||||||||
Amount raised from private placement | 6,070,595 | 500,000 | 4,341,282 | 297,500 | 10,000 | 850,000 | 14,000 | 100,000 | 4,836,157 | ||||||||||||||||||||||||
Warrants issued | 89,286 | ||||||||||||||||||||||||||||||||
Proceeds from exercise of options | 185,000 | 24,000 | 569,000 | 185,000 | |||||||||||||||||||||||||||||
Warrants exercised | 2,000,000 | 2,660,685 | |||||||||||||||||||||||||||||||
Proceeds from exercise of warrants | 1,410,343 | 1,856,057 | 1,410,343 | ||||||||||||||||||||||||||||||
Stock issuance costs including commisions | 395,221 | 28,000 | 488,221 | 28,000 | 60,783 | ||||||||||||||||||||||||||||
Common stock subscription | 50,000 | ||||||||||||||||||||||||||||||||
Common stock authorized in private placement, value | 5,000,000 | 3,500,000 | 4,000,000 | ||||||||||||||||||||||||||||||
Common stock authorized in private placement, shares | 12,500,000 | 10,000,000 | |||||||||||||||||||||||||||||||
Warrants authorized in private placement | 6,250,000 | ||||||||||||||||||||||||||||||||
Cash payment for settlement | 450,000 | 30,000 | |||||||||||||||||||||||||||||||
Value of shares covered in agreement | 1,000,000 | ||||||||||||||||||||||||||||||||
Options issued | 1,050,000 | ||||||||||||||||||||||||||||||||
Fair value of issued equity | 519,080 | ||||||||||||||||||||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes option pricing model | ||||||||||||||||||||||||||||||||
Dividend yield | |||||||||||||||||||||||||||||||||
Expected volatility | 29.00% | ||||||||||||||||||||||||||||||||
Risk free interest rate | 0.69% | ||||||||||||||||||||||||||||||||
Vesting period | 3 years | ||||||||||||||||||||||||||||||||
Expiration period after issuance | 5 years | ||||||||||||||||||||||||||||||||
Placement agent fees | 151,408 | ||||||||||||||||||||||||||||||||
Expense allowance | $ 155,118 |
STOCK OPTIONS AND WARRANTS
(Details) (USD $)
|
6 Months Ended | 3 Months Ended | 6 Months Ended | 65 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 65 Months Ended | 1 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2013
2008 Equity Incentive Plan [Member]
|
Dec. 31, 2008
2008 Equity Incentive Plan [Member]
|
Jun. 30, 2013
2013 Equity Incentive Plan [Member]
|
Jun. 30, 2013
Incentive Stock Options [Member]
|
Dec. 31, 2012
Incentive Stock Options [Member]
|
Jun. 30, 2013
Incentive Stock Options [Member]
Options issued to employees [Member]
|
Jun. 30, 2012
Incentive Stock Options [Member]
Options issued to employees [Member]
|
Jun. 30, 2013
Incentive Stock Options [Member]
Options issued to employees [Member]
|
Jun. 30, 2012
Incentive Stock Options [Member]
Options issued to employees [Member]
|
Jun. 30, 2013
Incentive Stock Options [Member]
Options issued to employees [Member]
|
Jan. 31, 2012
Incentive Stock Options [Member]
January 27, 2012 Options Issued to Employees [Member]
|
Feb. 29, 2012
Incentive Stock Options [Member]
February 28, 2012 Options Issued to Employees [Member]
|
Mar. 31, 2012
Incentive Stock Options [Member]
March 2, 2012 Options Issued to Employees [Member]
|
Mar. 31, 2012
Incentive Stock Options [Member]
March 5, 2012 Options Issued to Employees [Member]
|
Mar. 31, 2012
Incentive Stock Options [Member]
March 31, 2012 Options Issued to Employees [Member]
|
Apr. 30, 2012
Incentive Stock Options [Member]
April 2012 Options Issued to Employees [Member]
|
Jun. 30, 2012
Incentive Stock Options [Member]
June 2012 Options Issued to Employees [Member]
|
Jul. 31, 2012
Incentive Stock Options [Member]
July 2012 Options Issued to Employees [Member]
|
Aug. 31, 2012
Incentive Stock Options [Member]
August 2012 Options Issued to Employees [Member]
|
Sep. 30, 2012
Incentive Stock Options [Member]
September 2012 Options Issued to Employees [Member]
|
Oct. 31, 2012
Incentive Stock Options [Member]
October 2012 Options Issued to Employees [Member]
|
Nov. 30, 2012
Incentive Stock Options [Member]
November 2012 Options Issued to Employees [Member]
|
Jan. 31, 2013
Incentive Stock Options [Member]
March 2008 Options Issued to Directors [Member]
|
Mar. 31, 2008
Incentive Stock Options [Member]
March 2008 Options Issued to Directors [Member]
|
Jan. 31, 2013
Incentive Stock Options [Member]
January 2013 Options Issued to Employees [Member]
|
Feb. 28, 2013
Incentive Stock Options [Member]
February 2013 Options Issued to Employees [Member]
|
Mar. 31, 2013
Incentive Stock Options [Member]
March 2013 Options Issued to Employees [Member]
|
Apr. 30, 2013
Incentive Stock Options [Member]
April 2013 Options Issued To Employees [Member]
|
May 31, 2013
Incentive Stock Options [Member]
May 2013 Options Issued To Employees [Member]
|
Jun. 30, 2013
Incentive Stock Options [Member]
June 2013 Options Issued To Employees [Member]
|
Jun. 30, 2013
Non-Statutory Stock Options [Member]
|
Dec. 31, 2012
Non-Statutory Stock Options [Member]
|
Jun. 30, 2013
Non-Statutory Stock Options [Member]
Options issued to non-employees [Member]
|
Jun. 30, 2012
Non-Statutory Stock Options [Member]
Options issued to non-employees [Member]
|
Jun. 30, 2013
Non-Statutory Stock Options [Member]
Options issued to non-employees [Member]
|
Jun. 30, 2012
Non-Statutory Stock Options [Member]
Options issued to non-employees [Member]
|
Jun. 30, 2013
Non-Statutory Stock Options [Member]
Options issued to non-employees [Member]
|
Jan. 31, 2012
Non-Statutory Stock Options [Member]
January 2, 2012 Options Issued to Consultants [Member]
|
Jan. 31, 2012
Non-Statutory Stock Options [Member]
January 17, 2012 Options Issued to Consultants [Member]
|
Mar. 31, 2012
Non-Statutory Stock Options [Member]
March 31, 2012 Options Issued to Consultants [Member]
|
Apr. 30, 2012
Non-Statutory Stock Options [Member]
April 1, 2012 Options Issued to Consultants [Member]
|
May 31, 2012
Non-Statutory Stock Options [Member]
May 2012 Options Issued to Consultants [Member]
|
Jul. 31, 2012
Non-Statutory Stock Options [Member]
July 2012 Options Issued to Consultants [Member]
|
Aug. 31, 2012
Non-Statutory Stock Options [Member]
August 2012 Options Issued to Consultants [Member]
|
Aug. 31, 2012
Non-Statutory Stock Options [Member]
August 2012 Options Issued to Consultants [Member]
Minimum [Member]
|
Aug. 31, 2012
Non-Statutory Stock Options [Member]
August 2012 Options Issued to Consultants [Member]
Maximum [Member]
|
Sep. 30, 2012
Non-Statutory Stock Options [Member]
September 2012 Options Issued to Consultants [Member]
|
Oct. 31, 2012
Non-Statutory Stock Options [Member]
October 2012 Options Issued to Consultants [Member]
|
Nov. 30, 2012
Non-Statutory Stock Options [Member]
November 2012 Options Issued to Consultants [Member]
|
Dec. 31, 2012
Non-Statutory Stock Options [Member]
December 2012 Options Issued To Consultants [Member]
|
Jan. 31, 2013
Non-Statutory Stock Options [Member]
January 2013 Options Issued to Consultants [Member]
|
Mar. 31, 2013
Non-Statutory Stock Options [Member]
March 2013 Options Issued To Consultants [Member]
|
Mar. 31, 2013
Non-Statutory Stock Options [Member]
March 2013 Options Issued To Consultants [Member]
Minimum [Member]
|
Mar. 31, 2013
Non-Statutory Stock Options [Member]
March 2013 Options Issued To Consultants [Member]
Maximum [Member]
|
Apr. 30, 2013
Non-Statutory Stock Options [Member]
April 2013 Options Issued To Consultants [Member]
|
May 31, 2013
Non-Statutory Stock Options [Member]
May 2013 Options Issued To Consultants [Member]
|
May 31, 2013
Non-Statutory Stock Options [Member]
May 2013 Options Issued for Private Placement [Member]
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options authorized | 25,000,000 | 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding options | 13,883,333 | 3,662,500 | 16,454,477 | 17,258,644 | 4,250,000 | 15,728,036 | 16,531,438 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Options available to be issued | 681,667 | 1,337,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percent of fair market value of common stock the exercise price of options may not exceed | 100.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percent of fair market value of common stock the exercise price may not exceed, when grantee holds greater than 10% shares outstanding | 110.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grantee ownership percentage considered in determination of options exercise price | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options issued | 30,000 | 25,000 | 250,000 | 25,000 | 4,010,000 | 80,000 | 470,000 | 15,000 | 380,000 | 75,000 | 75,000 | 1,295,000 | 4,500,000 | 260,000 | 760,000 | 2,500 | 200,000 | 55,000 | 200,000 | 250,000 | 200,000 | 100,000 | 250,000 | 100,000 | 100,000 | 400,000 | 100,000 | 50,000 | 765,000 | 500,000 | 5,000 | 130,000 | 100,000 | 125,000 | 287,255 | |||||||||||||||||||||||
Minimum option exercise price | $ 0.65 | $ 1.53 | $ 1.26 | $ 1.01 | $ 0.99 | $ 1.07 | $ 2.16 | $ 2.40 | $ 0.35 | $ 0.75 | $ 3.05 | |||||||||||||||||||||||||||||||||||||||||||||||
Option exercise price | $ 0.52 | $ 0.58 | $ 0.58 | $ 0.58 | $ 0.65 | $ 1.23 | $ 1.54 | $ 1.35 | $ 1.36 | $ 1.56 | $ 0.50 | $ 0.50 | $ 0.65 | $ 0.70 | $ 2.17 | $ 1.55 | $ 0.75 | $ 1.14 | $ 1.01 | $ 1.15 | $ 1.00 | $ 2.04 | $ 1.80 | |||||||||||||||||||||||||||||||||||
Maximum option exercise price | $ 0.97 | $ 1.82 | $ 1.43 | $ 1.35 | $ 1.05 | $ 1.21 | $ 2.29 | $ 2.92 | $ 1.11 | $ 1.34 | $ 3.28 | |||||||||||||||||||||||||||||||||||||||||||||||
Fair value of issued equity | $ 203,477 | $ 154,519 | $ 336,396 | $ 154,886 | $ 1,236,403 | $ 3,718 | $ 3,120 | $ 33,975 | $ 2,680 | $ 759,810 | $ 17,310 | $ 217,293 | $ 5,493 | $ 123,381 | $ 26,303 | $ 23,263 | $ 371,313 | $ 62,662 | $ 199,843 | $ 728 | $ 74,159 | $ 26,954 | $ 129,343 | $ 74,419 | $ 10,171 | $ 78,357 | $ 61,507 | $ 1,116,620 | $ 51,692 | $ 31,437 | $ 18,947 | $ 43,028 | $ 79,978 | $ 40,373 | $ 321,221 | $ 81,697 | $ 5,381 | $ 188,830 | $ 195,318 | $ 1,106 | $ 54,228 | $ 44,603 | $ 51,869 | $ 409,749 | ||||||||||||||
Pricing model used in calculation of grant-date fair value | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | Black-Scholes option pricing model | ||||||||||||||||||||||||
Dividend yield | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected volatility | 25.40% | 25.00% | 25.90% | 25.00% | 31.20% | 32.90% | 24.50% | 24.50% | 22.50% | 25.30% | 29.20% | 28.00% | 31.20% | 31.20% | 31.20% | 29.30% | 25.60% | 23.50% | 26.10% | 24.70% | 23.30% | 26.50% | ||||||||||||||||||||||||||||||||||||
Risk free interest rate | 0.80% | 0.80% | 0.90% | 0.90% | 1.04% | 0.61% | 0.62% | 0.70% | 0.76% | 0.76% | 0.90% | 0.80% | 1.04% | 1.04% | 0.75% | 0.64% | 0.27% | 0.19% | 0.76% | 0.76% | 0.78% | 0.68% | 0.49% | |||||||||||||||||||||||||||||||||||
Expected life | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 2 years | 5 years | 2 years | 1 year | 5 years | 1 year | 5 years | 2 years | 5 years | 5 years | 2 years | 3 years | ||||||||||||||||||||||
Expiration period after issuance | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | 2 years | 5 years | 2 years | 1 year | 5 years | 5 years | 5 years | 2 years | 5 years | 5 years | 2 years | 3 years | ||||||||||||||||||||||
Senior Vice President of Marketing and Licensing annual compensation | 150,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting period | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | |||||||||||||||||||||||||||||||||||||||||
Expected volatility, minimum | 30.20% | 30.30% | 23.50% | 26.10% | 23.30% | 22.50% | 23.50% | 23.60% | 27.10% | 22.60% | 23.10% | 23.40% | ||||||||||||||||||||||||||||||||||||||||||||||
Expected volatility, maximum | 33.40% | 35.50% | 29.10% | 29.30% | 26.10% | 25.10% | 25.30% | 26.30% | 30.50% | 25.50% | 23.20% | 23.70% | ||||||||||||||||||||||||||||||||||||||||||||||
Risk free rate, minimum | 0.82% | 0.68% | 0.63% | 0.76% | 0.78% | 0.78% | 0.84% | 1.03% | 0.27% | 0.25% | 0.29% | |||||||||||||||||||||||||||||||||||||||||||||||
Risk free rate, maximum | 1.04% | 0.72% | 0.69% | 0.83% | 0.89% | 0.88% | 0.85% | 1.48% | 0.67% | 0.80% | 0.31% | |||||||||||||||||||||||||||||||||||||||||||||||
Unrecognized compensation expense | 1,834,664 | 1,834,664 | 1,834,664 | 98,040 | 98,040 | 98,040 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Incremental increase in value | 1,253 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants vested | 150,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Value of vested warrants | $ 58,595 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate options issued | 250,000 | 1,130,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options issued, excluded from valuation | 50,000 | 1,000,000 |
OPERATING LEASES (Details) (USD
$)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
OPERATING LEASES [Abstract] | ||||
Total rent expense under leases | $ 71,223 | $ 49,946 | $ 126,871 | $ 58,749 |
OPERATING LEASES (Schedule of
Non Cancelable Operating Lease Arrangements) (Details) (USD
$)
|
Jun. 30, 2013
|
---|---|
OPERATING LEASES [Abstract] | |
2013 | $ 179,622 |
2014 | 132,854 |
2015 | 39,688 |
Total | $ 352,164 |
RELATED PARTY TRANSACTIONS
(Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Related Party Transaction [Line Items] | ||||
Related party expenses | $ 105,000 | $ 75,223 | $ 169,106 | $ 57,276 |
Monthly payment for consulting services per agreement | 12,500 | |||
Marketing Company Owned by Secretary [Member]
|
||||
Related Party Transaction [Line Items] | ||||
Related party expenses | $ 14,560 | $ 14,560 |