Note Payable Shareholders (Shareholders [Member])

12 Months Ended

Dec. 31, 2013

Shareholders [Member]

Short-term Debt [Line Items]

NOTE PAYABLE - SHAREHOLDERS

8.  NOTE PAYABLE - SHAREHOLDERS

As of December 31, 2011, the Company had recorded $169,306 in notes payable to directors. During 2012, multiple directors advanced $778,300 on short-term notes bearing 12% interest rates and mature on September 30, 2012. Four directors agreed to amend their notes by $320,000 which were reclassified as long-term debt upon issuance of 2012 Convertible Debenture Series C, see note 9. During the same year, $115,000 in notes was repaid in cash and $21,075 in accrued interest was reclassified as note payable. The total amount due to multiple directors of $533,681, including accrued interest, was rolled over into new notes dated September 30, 2012. The new notes are secured by the unencumbered 75% of patent settlement license fees and provide for accrued interest at 6% payable on maturity at January 1, 2015. The total balance due at December 31, 2013 and 2012 is $533,681. The accrued interest at December 31, 2013, 2012 is $40,092 and $8,177, respectively.

The Company analyzed the modification of the term under ASC 470-60 “Trouble Debt Restructurings” and ASC 470-50 “Extinguishment of Debt”. The Company determined the modification is substantial and the transaction should be accounted for as an extinguishment with the old debt written off and the new debt initially  recorded at fair value with a new effective interest rate. The Company also determined that the fair value of the new debt is the same as the fair value of the old debt. Thus no gain or loss was recognized upon the extinguishment.