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STOCKHOLDERS' DEFICIENCY | 12 Months Ended
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Dec. 31, 2013
Stockholders Equity Note [Abstract] |
Stockholders' Equity Note Disclosure [Text Block] | Note 6 – Stockholders’ Deficiency Authorized Capital The Company is authorized to issue 200,000,000 shares of common stock with a $0.001 par value and 5,000,000 shares of preferred stock with a $0.001 par value, of which 3,500,000 shares have been designated as Series A Cumulative Convertible Preferred Stock and 50,000 shares have been designated as Series B Cumulative Convertible Preferred Stock. The holders of the Company’s common stock are entitled to one vote per share. Subject to the rights of holders of preferred stock, if any, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. Subject to the rights of holders of preferred stock, if any, upon liquidation, dissolution or winding down of the Company, holders of common stock are entitled to share ratably in all assets of the Company that are legally available for distribution. Preferred Stock Series A Preferred Stock Each share of Series A Preferred Stock will accrue cumulative dividends at a rate of 8% per annum. All dividends will be paid in shares of common stock having a fair market value at the time of issuance equal to the amount of dividends to be paid. Such dividends shall compound annually and be fully cumulative, and shall accumulate from the date of original issuance of the Series A Preferred Stock until paid. As of December 31, 2013 and 2012, accrued dividends for the Series A Preferred Stock was $358,056 and $183,812, respectively. Upon any liquidation of the Company, the holders of the Series A Preferred Stock will be entitled to be paid, prior to the common stock or any other securities that by their terms are junior to the Series A Preferred Stock, the original issue price of the Series A Preferred Stock, plus all accrued and unpaid dividends. To the extent the proceeds of liquidation are insufficient to pay such amounts in full, the proceeds available will be allocated pro-rata among the shares of Series A Preferred Stock. As of December 31, 2013, the liquidation value of the Series A Preferred Stock was $2,457,269. Series B Preferred Stock On October 10, 2012, the Company sold 3,099 shares of its Series B Cumulative Convertible Preferred Stock (the “Series B Preferred Stock”) and five-year common stock purchase warrants to purchase 309,900 shares of the Company’s common stock at an initial exercise price of $2.62 per share (the “Series B Warrants”) in a private placement to accredited investors (the “October 2012 Private Placement”) for aggregate cash proceeds of $542,325. At any time prior to the third anniversary of the initial date of issuance, any holder of the Series B Preferred Stock may convert all or a portion of their shares into shares of the Company’s common stock. The conversion price of each share of Series B Preferred Stock is equal to the sum of the “stated value” of the Series B Preferred Stock being converted ($175.00) divided by the conversion price then in effect (initially $1.75 per share, currently $1.00 per share). Upon the third anniversary of the date of issuance, each share of Series B Preferred Stock still outstanding, unless there is an event of default (as defined), will automatically convert into shares of Common Stock at the then effective conversion ratio. The “conversion price” of the Series B Preferred Stock is subject to adjustment upon the occurrence of certain events, including, among others, a stock split, reverse stock split, stock dividend or combination of the Company's common stock, as well as certain protection for subsequent issuances of convertible or equity securities at prices more favorable than the stipulated conversion price. Since the host Convertible Preferred instrument is deemed to be an equity instrument, the conversion option is considered have economic characteristics and risks that are clearly and closely related to the host contract and the embedded conversion option has not been bifurcated from the host instrument. The exercise price of the Series B Warrants is subject to adjustment upon the occurrence of certain events, including, among others, a stock split, reverse stock split, stock dividend or combination of the Company's common stock, as well as certain protection for subsequent issuances of equity securities at prices more favorable than the stipulated exercise price. The Company determined that the warrants, as originally issued, did not contain fixed settlement provisions because the exercise price was subject to adjustment based on certain subsequent equity issuances. As such, the Company was required to record the warrants which do not have fixed settlement provisions as liabilities and mark to market all such derivatives to fair value each reporting period through December 31, 2013. The Company valued the Series B Warrants issued in connection with the Private Placement and accordingly, recorded a $83,673 liability relating to the fair value of the warrants on the date of issuance. The fair value of these warrants on the issuance date was calculated using a compound option model that includes characteristics of both a binomial lattice and the Black-Scholes formula with the following weighted average assumptions:
Dividend Yield |  |  | 0.00 | %
Volatility |  |  | 95.00 | %
Risk-free Interest Rate |  |  | 0.66-0.72 | %
Expected Lives |  |  | 4.78 years |
Weighted Average Fair Value per Warrant |  |  | 0.25 | %
Warrants Issued |  |  | 309,900 |
Aggregate Grant Date Fair Value |  | $ | 83,673 |
Each share of Series B Preferred Stock will accrue, on a pari passu basis with holders of the Series A Preferred Stock, cumulative dividends at a rate of 12% per annum. All dividends will be paid in shares of common stock having a fair market value at the time of issuance equal to the amount of dividends to be paid. Such dividends shall compound annually and be fully cumulative, and shall accumulate from the date of original issuance of the Series B Preferred Stock until paid. As of December 31, 2013 and 2012, accrued dividends for the Series B Preferred Stock was $81,454, and $14,620, respectively. Upon any liquidation of the Company, the holders of the Series B Preferred Stock will be entitled to be paid on a pari passu basis with holders of the Series A Preferred Stock, prior to the common stock or any other securities that by their terms are junior to the Series B Preferred Stock, the original issue price of the Series B Preferred Stock, plus all accrued and unpaid dividends. To the extent the proceeds of liquidation are insufficient to pay such amounts in full, the proceeds available will be allocated pro-rata among the shares of Series B Preferred Stock on a pari passu basis with holders of the Series A Preferred Stock. As of December 31, 2013, the liquidation value of the Series B Preferred Stock was $623,779. During the year ended December 31, 2013, the Company issued Senior Secured Convertible Notes with an initial conversion price of $1.00 per share (see Note 5). Due to certain ratchet provisions relating to the Company’s Series B Convertible Preferred Stock, the Company reduced the per share conversion price of certain previously issued shares of Series B Convertible Preferred Stock from $1.75 to $1.00. As of December 31, 2013, the Company’s issued and outstanding shares of Series B Convertible Preferred Stock are convertible into 542,325 shares of common stock. In addition, as of December 31, 2013, the Company recorded accrued dividends convertible into 81,454 shares of common stock resulting in an aggregate of 623,779 shares of common stock. Since the Company’s Certificate of Designations setting for the relative rights and preferences of the Series B Convertible Preferred Stock (the “Certificate of Designations”) was deemed to be an equity instrument, the conversion option was considered to have economic characteristics and risks that are clearly and closely related to the Certificate of Designations and the embedded conversion option was not bifurcated from the Certificate of Designations. In connection with the Series B Preferred Stock, the Company incurred costs with third-parties of approximately $28,222, which were netted against the proceeds received. Common Stock In August 2012, the Company entered into a six-month agreement with a consultant to provide investor relations services. Pursuant to the agreement the Company agreed to issue 35,000 common stock shares as part of the compensation to the consultant. A s of December 31, 2013, the Company recorded an expense relating to the shares of $20,650 as General and Administrative Expenses in the accompanying consolidated statement of operations. In October 2012, the Company entered into an agreement with a consultant to provide investor relations services. Pursuant to the agreement the Company agreed to issue 10,000 common stock shares as part of the compensation to the consultant. During the year ended December 31, 2012, the Company recorded an expense relating to the shares of $5,800 as General and Administrative Expenses in the accompanying consolidated statement of operations. In July 2013, pursuant to the terms of the Company’s Series A Cumulative Convertible Preferred Stock, the Company issued 109,728 shares of common stock as the result of a conversion of 100,000 shares of Series A Cumulative Convertible Preferred Stock, and accumulated dividends of $9,728. Options In April 2012, the Company granted to certain Directors options to purchase an aggregate of 100,000 shares of the Company’s common stock at an exercise price of $2.30 per share, of which 50,000 options vested on the date of grant and 50,000 options shall vest on the first anniversary of the date of grant, provided such directors are currently serving as board members on such date. The options shall expire on the fourth anniversary of the applicable vesting date. The fair value of these options is $1,190 based on the Black-Scholes option pricing model.
In June 2012, the Company granted to a Director, an option to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.97 per share, of which 25,000 options vested on the date of grant and 25,000 options shall vest on the first anniversary of the date of grant, provided such director is currently serving as a board member on such date. The options shall expire on the fourth anniversary of the applicable vesting date. The fair value of this option is $905 based on the Black-Scholes option pricing model. In August 2012, the Company granted to a Director, an option to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.88 per share, of which 25,000 options vested on the date of grant and 25,000 options shall vest on the first anniversary of the date of grant, provided such director is currently serving as a board member on such date. The options shall expire on the fourth anniversary of the applicable vesting date. The fair value of this option is $1,022 based on the Black-Scholes option pricing model. In August 2012, the Company granted to certain Advisory Board Members, options to purchase an aggregate of 100,000 shares of the Company’s common stock at an exercise price of $1.82 per share, of which 50,000 options vested on the date of grant and 50,000 options shall vest on the first anniversary of the date of grant, provided such Advisory Board Members are currently serving as board advisory members on such date. The options shall expire on the fourth anniversary of the applicable vesting date. The fair value of these options is $7,587 based on the Black-Scholes option pricing model. In October 2012, as part of an employment agreement entered into with the Company’s President, Chief Executive Officer and Chief Financial Officer (see Note 7), the Company issued stock options to purchase an aggregate of 1,700,000 shares of the Company’s common stock at an exercise price of $1.55 per share, which was the closing sale price of the Company’s common stock on the date the agreement was executed; 250,000 of such options were fully vested upon execution of the agreement, 250,000 options vested on December 31, 2012 and the remaining options were to vest based upon the Company meeting certain Performance Measurements as defined in the agreement. Each option is exercisable for a period of four years from the date of vesting of the options. The fair value of the vested options not subject to performance criteria are $76,392 based on the Black-Scholes option pricing model. During the year ended December 31, 2013, the Company granted an aggregate of 75,000 options to purchase common stock to certain directors with exercise prices between $0.11 and $0.52 per share. The options have a 5 year term, vest on the one-year anniversary of the date of grant if such individual continues to serve as a director of the Company on such date and have an aggregate grant date fair value of $5,310 based on the Black-Scholes option pricing model.
As of December 31, 2013, stock options to purchase an aggregate of 1,262,500 shares of the Company’s common stock were forfeited by a former executive officer and certain directors and advisory board members as the result of their resignations. The Company recorded $5,625, $133,295 and $138,920 of stock based compensation expense for the years ended December 31, 2013 and 2012, and for the period from August 4, 2011 (Inception) to December 31, 2013, respectively. As of December 31, 2013, there was $1,550 of total unrecognized compensation expense related to unvested employee stock options not subject to performance criteria. This expense is expected to be recognized over a remaining weighted-average period of approximately 0.5 year. The Company has computed the fair value of options granted using the Black-Scholes option pricing model. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate will be adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate, when it is material. The expected term of options granted represents the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” option grants. Since the Company’s stock has not been publicly traded for a long period of time, the Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of these options, of similarly positioned public companies within its industry. The Company estimated forfeitures related to option grants at an annual rate of 0% per year for options granted during the years ended December 31, 2013 and 2012. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the options. The following assumptions were used in estimating the fair value of stock options granted during the years ended December 31, 2013 and 2012:
|  | 2013 |  |  | 2012 |
Weighted Average Exercise Price |  | $ | 0.37 |  |  | $ | 1.62 |
Expected Life |  |  | 2 years |  |  |  | 2-5 years |
Volatility |  |  | 125.0 | % |  |  | 50.0 | %
Dividend Yield |  |  | 0 | % |  |  | 0 | %
Risk-free interest rate |  |  | 0.30% - 1.62 | % |  |  | 0.41 | %
Weighted Average Grant Date Fair Value of Options Issued |  | $ | 0.37 |  |  | $ | 1.70 |
A summary of the Company’s options outstanding and exercisable is presented below:
|  |  |  |  |  | Weighted |  |  |  |
|  |  |  |  |  | Average |  |  |  |
|  |  |  | Weighted |  | Remaining |  |  |  |
|  |  |  | Average |  | Contractual |  | Aggregate |
|  | Number of |  | Exercise |  | Life |  | Intrinsic |
|  | Shares |  | Price |  | (Years) |  | Value |
Balance – January 1, 2012 |  | - |  | - |  | - |  |  |  |
Granted |  | 2,000,000 |  | 1.62 |  | 5.18 |  |  |  |
Exercised |  | - |  |  |  |  |  |  |  |
Cancelled |  | - |  |  |  |  |  |  |  |
Balance – December 31, 2012 |  | 2,000,000 |  | 1.62 |  | 5.18 |  | $ | — |
Granted |  | 75,000 |  | 0.37 |  | 4.48 |  |  |  |
Exercised |  | - |  |  |  |  |  |  |  |
Cancelled |  | 1,262,500 |  | 1.57 |  | - |  |  |  |
Balance – December 31, 2013 |  | 812,500 |  | 1.58 |  | 3.04 |  | $ | — |
Balance – December 31, 2013 (exercisable) |  | 737,500 |  | 1.70 |  | 2.89 |  | $ | — |
Options outstanding at December 31, 2013 have an exercise price of $0.11 to $2.30 per share. Warrants The following table summarizes the Company’s warrant activity through December 31, 2013:
|  |  |  |  |  | Weighted |  |  |
|  |  |  |  |  | Average |  |  |
|  |  |  | Weighted |  | Remaining |  |  |
|  |  |  | Average |  | Contractual |  | Aggregate |
|  | Number of |  | Exercise |  | Life |  | Intrinsic |
|  | Shares |  | Price |  | (Years) |  | Value |
Warrants outstanding at January 1, 2012 |  | 2,320,000 |  | $ | 1.00 |  | 2.96 |  |  |  |
Granted |  | 309,900 |  | $ | 1.00 |  | 3.78 |  |  |  |
Warrants outstanding at December 31, 2012 |  | 2,629,900 |  | $ | 1.00 |  | 3.06 |  |  |  |
Granted |  | 7,800,000 |  | $ | 1.00 |  | 4.43 |  |  |  |
Expired |  | — |  |  | — |  | — |  |  |  |
Exercised |  | — |  |  | — |  | — |  |  |  |
Warrants outstanding at December 31, 2013 |  | 10,429,900 |  | $ | 1.00 |  | 4.08 |  | $ | — |
Warrants outstanding at December 31, 2013 (exercisable) |  | 10,429,900 |  | $ | 1.00 |  | 4.08 |  | $ | — |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.29-31) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 29, 30, 31 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 4.E) -URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB TOPIC 4.C) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Article 4 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section C Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section E Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(d),(e)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Preferred Stock -URI http://asc.fasb.org/extlink&oid=6521494 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 3 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph d -Article 4 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656 + Details
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