ACQUISITION OF SLEEPHEALTH, LLC

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

NOTE 3 ACQUISITON OF SLEEPHEALTH, LLC

On September 13, 2012, Vystar Corporation entered into an LLC Ownership Interest Purchase Agreement (the “Agreement”) to purchase all the outstanding membership and ownership interests of SleepHealth, LLC , a Georgia limited liability company (“SleepHealth”) and on the same date completed such purchase (the “Purchase”). This strategic acquisition was expected to be mutually beneficial by providing each company with new expansion options. As a result of the substantive changes to the projected future results of the SleepHealth segment, management determined there to be a triggering event and accordingly completed an evaluation of the carrying value of goodwill. This evaluation resulted in impairment to goodwill of $67,355, leaving the goodwill balance at $640 as of June 30, 2013. The impairment charge was netted against a Notes Payable due the previous owner of SleepHealth.

Based on the timing of the acquisition, the Company, for comparability purposes, has disclosed the pro-forma earnings information for the six months ended June 30, 2012, as if the acquisition had occurred effective January 1, 2012. As such, the actual and pro-forma earnings information for the six months ended June 30, 2013 and June 30, 2012 was as follows:

	Six Months Ended June 30, 2013						Six Months Ended June 30, 2012
	Vystar		SleepHealth		Consolidated		Vystar		SleepHealth		Consolidated
Revenues, net	$	15,339	$	519,112	$	534,451	$	144,447	$	579,080	$	723,527
Cost of revenues		4,167		407,112		411,279		143,483		399,734		543,217
Gross profit (loss)		11,172		112,000		123,172		964		179,346		180,310
Operating expenses
Sales and marketing		135,331		-		135,331		214,344		355		214,699
General and administrative		881,814		226,617		1,108,431		759,182		203,388		962,570
Research and development		19,634		-		19,634		23,075		-		23,075
Total operating expenses		1,036,779		226,617		1,263,396		996,601		203,743		1,200,344
Loss from operations		(1,025,607)		(114,617)		(1,140,224)		(995,637)		(24,397)		(1,020,034)
Other income (expense)
Other income		(60)		2,500		2,440		5,250		-		5,250
Interest income		7		6,534		6,541		300		-		300
Interest expense		(311,079)		(8,054)		(319,133)		(279,430)		(8,463)		(287,893)
Net loss	$	(1,336,739)	$	(113,637)		(1,450,376)	$	(1,269,517)	$	(32,860)	$	(1,302,377)
Loss per Share	$	(0.05)	$	(0.01)		(0.06)	$	(0.07)	$	(0.00)	$	(0.07)
Basic and Diluted Weighted Average     Number of Common Shares     Outstanding						24,822,740						19,627,397

The 2012 supplemental pro forma earnings were adjusted to include $6,732 of amortization costs related to $48,000 in recorded intangible assets and a depreciation adjustment of $2,904. The shares outstanding used in calculating the loss per share for 2012 was adjusted to include the 636,098 shares issued as part of the purchase price assuming they had been issued on January 1, 2012.