XML 13 R54.htm IDEA: XBRL DOCUMENT v2.4.0.8
CONVERTIBLE DEBENTURES (Details Textual) (USD $)
0 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 9 Months Ended 9 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 9 Months Ended 12 Months Ended 1 Months Ended 9 Months Ended
Jul. 15, 2013
Sep. 30, 2014
Sep. 30, 2013
Mar. 31, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2012
Dec. 31, 2013
Dec. 31, 2013
Convertible Debt One [Member]
Feb. 29, 2012
Convertible Debt Two [Member]
Dec. 31, 2013
Convertible Debt Two [Member]
Dec. 31, 2010
Convertible Debt Two [Member]
Feb. 10, 2012
Convertible Debt Two [Member]
Nov. 06, 2014
Subsequent Event [Member]
Nov. 05, 2014
Subsequent Event [Member]
Oct. 31, 2014
Subsequent Event [Member]
Dec. 31, 2013
Convertible Debenture One [Member]
Sep. 30, 2014
Convertible Debenture Two [Member]
Dec. 31, 2013
Convertible Debenture Two [Member]
Dec. 31, 2013
Convertible Debenture Three [Member]
Sep. 30, 2014
Convertible Debenture Three [Member]
Mar. 09, 2012
Convertible Debenture Four [Member]
Oct. 31, 2012
Convertible Debenture Four [Member]
Aug. 31, 2012
Convertible Debenture Four [Member]
Jul. 31, 2012
Convertible Debenture Four [Member]
Feb. 29, 2012
Convertible Debenture Four [Member]
Sep. 30, 2012
Convertible Debenture Four [Member]
Dec. 31, 2013
Convertible Debenture Four [Member]
Dec. 31, 2012
Convertible Debenture Four [Member]
Aug. 08, 2012
Convertible Debenture Four [Member]
Dec. 31, 2013
Convertible Debenture Four [Member]
Convertible Debt One [Member]
Dec. 31, 2011
Convertible Debenture Four [Member]
Convertible Debt One [Member]
Sep. 30, 2014
Convertible Debenture Four [Member]
Convertible Debt One [Member]
Oct. 31, 2012
Convertible Debenture Four [Member]
Convertible Debt One [Member]
Oct. 31, 2012
Convertible Debenture Four [Member]
Convertible Debt Two [Member]
Dec. 31, 2013
Convertible Debenture Four [Member]
Convertible Debt Two [Member]
Dec. 31, 2011
Convertible Debenture Four [Member]
Convertible Debt Two [Member]
Sep. 30, 2014
Convertible Debenture Four [Member]
Convertible Debt Two [Member]
Dec. 31, 2013
Convertible Debenture Four [Member]
Convertible Debt Three [Member]
Dec. 31, 2011
Convertible Debenture Four [Member]
Convertible Debt Three [Member]
Mar. 09, 2011
Convertible Debenture Five [Member]
Dec. 31, 2011
Convertible Debenture Five [Member]
Dec. 31, 2013
Convertible Debenture Five [Member]
Mar. 09, 2011
Convertible Debenture Five [Member]
Warrant One [Member]
Mar. 09, 2011
Convertible Debenture Five [Member]
Warrant Two [Member]
May 03, 2011
Convertible Debenture Six [Member]
Dec. 31, 2013
Convertible Debenture Six [Member]
May 03, 2011
Convertible Debenture Six [Member]
Warrant One [Member]
May 03, 2011
Convertible Debenture Six [Member]
Warrant Two [Member]
Sep. 30, 2014
Convertible Debenture Seven [Member]
Dec. 31, 2013
Convertible Debenture Seven [Member]
Feb. 29, 2012
Convertible Debenture Eight [Member]
Sep. 30, 2014
Convertible Debenture Eight [Member]
Dec. 31, 2013
Convertible Debenture Eight [Member]
Nov. 30, 2012
Convertible Debenture Nine [Member]
Jul. 16, 2012
Convertible Debenture Nine [Member]
May 31, 2012
Convertible Debenture Nine [Member]
Feb. 29, 2012
Convertible Debenture Nine [Member]
Sep. 30, 2014
Convertible Debenture Nine [Member]
Dec. 31, 2013
Convertible Debenture Nine [Member]
Jul. 17, 2012
Convertible Debenture Nine [Member]
Feb. 10, 2012
Convertible Debenture Nine [Member]
Dec. 31, 2013
Convertible Debenture Nine [Member]
Related Party One [Member]
Sep. 30, 2014
Convertible Debenture Ten [Member]
Dec. 31, 2013
Convertible Debenture Ten [Member]
Sep. 30, 2014
Convertible Debenture Eleven [Member]
Dec. 31, 2012
Convertible Debenture Eleven [Member]
Dec. 31, 2013
Convertible Debenture Eleven [Member]
Jan. 18, 2013
Convertible Debenture Eleven [Member]
Convertible Debt One [Member]
Jan. 18, 2013
Convertible Debenture Eleven [Member]
Convertible Debt Two [Member]
Sep. 30, 2014
Convertible Debenture Eleven [Member]
Convertible Debt Three [Member]
Dec. 31, 2013
Convertible Debenture Eleven [Member]
Convertible Debt Three [Member]
Apr. 30, 2012
Convertible Debenture Twelve [Member]
Dec. 31, 2013
Convertible Debenture Twelve [Member]
Dec. 31, 2012
Convertible Debenture Twelve [Member]
Sep. 30, 2014
Convertible Debenture Twelve [Member]
Aug. 12, 2013
Convertible Debenture Thirteen [Member]
Jan. 18, 2013
Convertible Debenture Thirteen [Member]
Sep. 30, 2014
Convertible Debenture Thirteen [Member]
Dec. 31, 2013
Convertible Debenture Thirteen [Member]
Dec. 31, 2013
Convertible Debenture Thirteen [Member]
Convertible Debt One [Member]
Jan. 18, 2013
Convertible Debenture Thirteen [Member]
Convertible Debt One [Member]
Dec. 31, 2013
Convertible Debenture Thirteen [Member]
Convertible Debt Two [Member]
Jan. 18, 2013
Convertible Debenture Thirteen [Member]
Convertible Debt Two [Member]
Sep. 30, 2014
Convertible Debenture Thirteen [Member]
Convertible Debt Three [Member]
Jan. 18, 2013
Convertible Debenture Thirteen [Member]
Convertible Debt Three [Member]
Apr. 30, 2013
Convertible Debenture Fourteen [Member]
Sep. 30, 2014
Convertible Debenture Fourteen [Member]
Dec. 31, 2013
Convertible Debenture Fourteen [Member]
Apr. 08, 2013
Convertible Debenture Fourteen [Member]
Sep. 30, 2014
Convertible Debenture Fourteen [Member]
Convertible Debt One [Member]
Sep. 30, 2014
Convertible Debenture Fourteen [Member]
Convertible Debt Two [Member]
Convertible Debentures [Line Items]                                                                                                                                                                                        
Debt Instrument, Convertible, Conversion Price                                                                                                                     $ 37,125                                                                  
Debt Instrument, Convertible, Beneficial Conversion Feature                     $ 53,517                 $ 32,571       $ 27,172               $ 42,500         $ 37,500     $ 37,500                       $ 39,724 $ 39,724                         $ 37,125                         $ 58,720                          
Percentage Of Royalty On Revenue                     2.50%                                                                                                                                                                  
Percentage Of Discount On Conversion Price                     30.00%                 30.00%     39.00% 39.00% 39.00%                                 30.00%       30.00%       30.00%     30.00%                                                   59.00%               40.00%          
Research and development costs   0 12,849   1,579 28,448           71,483                                                         50,000                                                                                                      
Long-term Debt, Gross   5,500     5,500               7,500                 24,500       11,000                                               10,000         11,750   11,750       11,750 7,500 23,500 5,500         16,000 56,250 39,724 39,724             84,500           84,500 84,500       20,000    
Debt Instrument Transfer Or Assignment In Second Closing                   11,750                                                                                                                                                                    
Debt Instrument Transfer Or Assignment In Subsequent Closing                   11,750                                                                                                                                                                    
Convertible Debenture Issued                                       76,000     50,189           35,268 42,500                               300,000   300,000   4,286     17,025                                                                         13,333 7,511 20,000
Stock Issued During Period, Value, Restricted Stock Award, Gross                                       38,000                                                                                                                                                
Repayments of Debt                                       28,000                                                                                                                                                
Percentage Of Prepayment Of Debenture Minimum                                                 130.00%                                                                                                                                      
Percentage Of Prepayment Of Debenture Maximum                                                 150.00%                                                                                                                                      
Penalty For Not Timely Delivering Shares Upon Conversion Notice             2,000                                                                                                                                                                          
Debt Instrument Accrued Interest                                           1,448       3,328 1,500                                                 1,552                           2,743     1,512 4,825       202 162   8,794                     2,302        
Class of Warrant or Right, Number of Securities Called by Warrants or Rights                                                                                       50,000 100,000       600,000                                                                                      
Class of Warrant or Right, Exercise Price of Warrants or Rights                                                                                       $ 337.50 $ 472.50     $ 337.50 $ 472.50                                                                                      
Debenture Discount                                               42,500       78,500 78,500           78,500           34,472         206,832             17,025                                                                              
Convertible Debenture Issued                                                                 33,010 78,500       72,095     7,500         45,000                                           3,211                         95,000 95,000 30,500 30,500                
Maximum Conversion Percentage For Debenture At Any One Time                 4.99%                               4.99%                                         10.00%                         4.99%             4.99%                         4.99%                          
Extinguishment of Debt, Gain (Loss), Net of Tax                                                                                                             6,714 6,714 6,714 4,286                 71,577           3,700         93,826                            
Percentage Of Prepayment Of Debenture                                                                                                                     150.00%             150.00%                       44.00%                            
Origination Principal Balance                     125,000   125,000       20,635 [1] 125,000 [2] 125,000 [2] 76,000 [3] 76,000 [3]                                           37,500 [4]       37,500 [4]     42,500 [4] 42,500 [4]   78,500 [4] 78,500 [4]           78,500 [4]   125,000     50,000 [5] 300,000 [6]   300,000 [6]         16,347 10,000 [7] 16,347 10,000 [7]       39,724 [8]     95,000 30,500       5,500 [9] 42,750 [10]      
Debt Conversion, Converted Instrument, Amount       565,689                   2,710 2,940 4,520                 78,500                                                                                                             22,500                        
Interest Payable                                                                                                                                                     2,125         191                        
Debt Conversion Converted Instrument Issuance Date Description                                                                                                                                   within 90 days after the effective date at 140% multiplied by outstanding principal and accrued interest.                         2,302                          
Debt Conversion Post Closing Expenses                                                                                                                                                             1,000                          
Debt Conversion Other Expenses                                                                                                                                                             700                          
Common stock, shares authorized   5,000,000,000   5,000,000,000 5,000,000,000     5,000,000,000                                                                                                                                                                        
Stockholders Equity, Reverse Stock Split (1 -for- 1,350)     1 -for- 1,350                                                                         1 for -1,350         1 for -1,350                                         23,500                                                  
Debt Instrument Principle Amount                                                     37,500 34,055     42,500         37,500     37,500                                                                           157,446                              
Debt Instrument Amount                                                                                                                                                         166,240                              
Debt Instrument Outstanding Amount                                                                                                                                                         $ 170,000                              
Debt Instrument Accrued Interest Percentage                                                                                                                                                             10.00%                          
[1] The Company converted an accounts payable for legal services to a convertible debenture. At the option of the lender, the principal amount of the note plus any accrued interest may be converted in whole or in part into Common Stock at the conversion price per share of $.001 by written notice. The lender will be limited to maximum conversion of 4.99% of the outstanding Common Stock of the Company at any one time. The debenture and the shares referenced within the debenture may be assignable in whole or in part to a third party at any time during the term. The Company valued the beneficial conversion feature (BCF) of the convertible debenture at $20,635, the “ceiling” of its intrinsic value. The Company accreted the discount to the convertible debenture and recognized interest expense through its maturity. On the maturity date of the debenture, the lender sold and assigned the debenture to an unrelated third party for the face value of the debenture. Because the original lender asserted default against this party, the original lender re-assigned the debenture to another party. See Ref. (12) for assignment of the debenture as well as accounting treatment of the assignment.
[2] The Company purchased in exchange for convertible debenture exclusive rights for license of certain intellectual property from an unrelated party. The parties agreed to a royalty of 2.5% of net revenues generated from the sale, sub-license or use of the technology or a reasonable negotiated rate based on similar invention. The debenture was convertible to common shares of the Company at May 27, 2011, along with accrued interest at the option of the lender. Conversion price per share is 30% discount as determined from the weighted average of the preceding 12 trading days’ closing market price. The Company valued the BCF of the convertible debenture at $53,517, its intrinsic value. The Company accreted the discount to the convertible debenture and will recognize interest expense through repayment in full or conversion. Because there was no assurance of success and the invention was still in design and pre-prototype phase, the Company recorded the initial net value of the debenture, $71,483, as research and development expense during the year ended 2010. Both parties agreed to confidentiality regarding the invention during the pre-prototype stage. In addition, the Company agreed to provide the licensor with design services, as well as assist in completing the prototype and initial production at the Company’s prevailing wholesale rate for comparable services.
[3] The Company ratified a technology and license agreement with commitment for purchase of inventory related to an agreement signed in 2010, which set pricing for products if minimum quantity purchases were met. Since the Company did not purchase the minimum quantities, but desired to maintain the technology and licensing rights along with the pricing, it agreed to purchase the 2010 balance shortage in 2011, as well as the 2011 minimum quantities. The agreement required the Company issue a convertible debenture for $76,000, and 38,000 shares of restricted common stock. The lender at their option could convert all or part of the note plus accrued interest into common stock at a price of thirty percent (30%) discount as determined from the average four (4) highest closing bid prices over the preceding five (5) trading days. The Company valued the BCF of the convertible debenture at $32,571. The Company accreted the discount to the convertible debenture and will recognize interest expense through paid in full or converted. The Company repaid $28,000 of this debenture in 2011. See Note 16. COMMITMENTS AND CONTINGENCIES for discussion of litigation involving the technology and license agreement that was settled in the third quarter of 2014. On July 1, 2014, the court granted dismissal of the final remaining complaint asserted by UBS as referenced in Note 16. COMMITMENTS AND CONTINGENCIES. Associated with the dismissal, the Company reversed in the third quarter of 2014, related prepaid inventory and convertible debenture resulting in a loss on settlement of $14,850, which was accrued as of June 30, 2014.
[4] In 2011, the Company borrowed $42,500, $37,500, and $37,500, respectively, in exchange for three convertible debentures from a lender. The Company valued the related beneficial conversion features (BCF) at $42,500, 37,500 and 37,500, respectively. On February 7, 2012, the lender sold/assigned all rights and interest on the first debenture having net book value of $11,000 plus accrued interest of $3,328. On March 9, 2012, the lender sold/assigned all rights and interest in the second debenture having a net book value of $24,500, plus $1,448 of accrued interest. See reference (11) which discusses the terms and conditions surrounding the new debentures issued upon extinguishment of the two originals as well as accounting treatment of the transactions. During the third quarter of 2012, the lender converted to stock the third convertible debenture with $37,500 principal and $1,500 accrued interest outstanding in full satisfaction of the convertible debenture. The stock was issued without restrictive legend pursuant to Rule 144, as the holder acquired convertible note issued by the Company more than six months prior to the date of conversion and did not pay any additional consideration for the shares.
[5] On March 9, 2011, the Company borrowed $50,000 in exchange for a convertible debenture. The lender could at any time convert any portion of the debenture to common shares at a 30% discount of the “Market Price” of the stock based on the average of the previous ten (10) days weighted average closing prices on the date prior to the notice of conversion. The Company could have prepaid the debenture plus accrued interest at any time before maturity. In addition, as further inducement for loaning the Company the funds, the Company granted the lender 50,000 and 100,000 warrants at $337.50 and $472.50 per share (after restatement for 1 for -1,350- reverse stock split) , respectively. As a result, the Company allocated fair market value (“FMV”) to both the BCF and to the warrants, or $34,472, which was recorded as a discount against the debenture. The Company accreted the discount to the convertible debenture through its maturity and recognized interest expense until both the debenture and accrued interest were converted to stock in full satisfaction of amounts due, in the first and second quarter of 2012, respectively. Before discount, the Company determined the FMV of the warrants as $7,500 using the Black-Scholes valuation model.
[6] On May 3, 2011, the Company borrowed $300,000 in exchange for a convertible debenture. The Debenture bears 10% interest per annum. The lender may at any time convert any portion of the debenture to common shares at a 30% discount of the “Market Price” of the stock based on the average of the previous ten (10) days weighted average closing prices on the date prior to the notice of conversion. The Company may prepay the debenture plus accrued interest at any time before maturity. In addition, as further inducement for loaning the Company the funds, the Company granted the lender 300,000 and 600,000 warrants at $337.50 and $472.50 per share, respectively. As a result, the Company allocated fair market value (“FMV”) to both the BCF and to the warrants, or $206,832, which was recorded as a discount against the debenture. The Company accreted the discount to the convertible debenture through maturity and will recognize interest expense until paid in full or converted. Before discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model.
[7] The Company borrowed $10,000 in exchange for a convertible debenture. The lender at their option may convert all or part of the note plus accrued interest into common stock at a price of thirty percent (30%) discount as determined from the average four (4) highest closing bid prices over the preceding five (5) trading days. The Company valued the BCF of the convertible debenture at $4,286. The Company accreted the discount to the convertible debenture and will recognize interest expense until paid in full or converted.
[8] The Company converted a note payable and related accrued interest of $39,724 into a convertible debenture. The lender at their option may convert all or part of the note plus accrued interest into common stock at a price of thirty percent (30%) discount as determined from the average four (4) highest closing bid prices over the preceding five (5) trading days. The Company valued the BCF of the convertible debenture at $17,025. Because the debenture was issued and matured in the third quarter of 2011, the full amount of the discount, $17,025 was accreted and recognized as interest expense during the period.On February 10, 2012, the lender sold/assigned all rights and interest on the debenture having a net book value of $39,724, plus $1,552 of accrued interest. See reference (11) which discusses the terms and conditions surrounding the new debenture issued upon extinguishment of the original as well as accounting treatment of the transaction.
[9] This line is comprised of the assignment of $5,500 of the convertible debenture from reference (9) above with the same stated terms and conditions equally to four separate parties. Due to the smaller transaction amounts, these four debenture holders have been combined for presentation purposes.
[10] The Company entered a new debenture agreement upon sale/assignment of the original lender under the debenture as discussed in reference (2) above. Because the stated terms of the new debenture agreement were significantly different from the original debenture, including analysis of value of the beneficial conversion feature at the assignment/purchase date, the transaction was treated as extinguishment of the old debenture and recording of the new for accounting purposes. Because the debenture is being assigned/sold in installments, the Company is calculating and recognizing gain or loss on the extinguishment as it occurs. On February 10, 2012, the new holder (lender) purchased $7,500 of the original $125,000 principal balance, and based on this transaction, the Company recorded a $4,286 loss on extinguishment. On May 18, 2012, the lender purchased another $11,750, and the Company recorded a $6,714 loss on extinguishment related to this transaction. On July 17, 2012, the lender purchased another $11,750, and the Company recorded a $6,714 loss on extinguishment related to this transaction. On November 8, 2012, the lender purchased another $11,750, and the Company recorded a $6,714 loss on the extinguishment related to this transaction. Since that date the lender has not purchased or converted any shares pursuant to the sale/assignment agreement. The Company may prepay at any time in an amount equal to 150% of the principal and accrued interest. The conversion price under the debenture is $.37125 (adjusted for 1-for-1,350 reverse stock split), and the lender may convert at any time until the debenture plus accrued interest is paid in full. Various other fees and penalties apply if payments or conversions are not done timely by the Company. The lender will be limited to maximum conversion of 4.99% of the outstanding Common Stock of the Company at any one time. The debenture and the shares referenced within the debenture may be assignable in whole or in part to a third party at any time during the term. As of September 30, 2014 and December 31, 2013, the lender had assigned a cumulative $5,500 under the debenture to four separate parties, and $23,500 to another party. See reference (10) and (12), respectively, related to the assignments.