Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | ||
Document and Entity Information [Abstract] | ' | |
Entity Registrant Name | 'HEALTH REVENUE ASSURANCE HOLDINGS, INC. | |
Entity Central Index Key | '0001514443 | |
Amendment Flag | 'true | |
Amendment Description | ' | |
EXPLANATORY NOTE | ||
This Registration Statement contains one prospectus as set forth below: | ||
● | Resale Prospectus. A prospectus to be used for the resale by selling stockholders of up to 5,125,000 shares of common stock issued in exchange for compensation to consultants for services performed for the company. | |
Document Type | 'S-1 | |
Document Period End Date | 30-Sep-13 | |
Entity Filer Category | 'Smaller Reporting Company |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Assets | ' | ' | ' |
Cash | $185,600 | $893,458 | $198,500 |
Accounts receivable | 1,011,929 | 1,246,814 | 143,557 |
Accounts receivable - Related Party, net of allowance $117,632 and $0, respectively | ' | ' | ' |
Prepaid expenses | 1,181,321 | 3,600 | 24,512 |
Other current assets | 70,020 | 688 | 5,842 |
Total Current Assets | 2,448,870 | 2,144,560 | 372,411 |
Property and Equipment, net | 400,126 | 365,017 | 352,499 |
Software, net | ' | 258,933 | ' |
Other assets | 8,865 | 8,871 | 8,865 |
Finance costs, net | 2,232 | 2,477 | 2,803 |
Total Other Assets | 11,097 | 270,281 | 11,668 |
Total Assets | 2,860,093 | 2,779,858 | 736,578 |
Liabilities and Stockholders' Equity (Deficit) | ' | ' | ' |
Accounts payable | 520,054 | 207,741 | 195,901 |
Due to officers | 115,000 | 75,000 | ' |
Accrued expenses | 103,142 | 64,077 | 23,266 |
Accrued payroll | 693,826 | 412,186 | 73,685 |
Loan payable to factor | 443,648 | 827,075 | ' |
Accrued interest | ' | 4,524 | ' |
Line of credit, current portion | 46,166 | 25,000 | 98,500 |
Capital Leases, current portion | 32,768 | 16,923 | ' |
Notes payable, current portion, net of discount | 372,161 | 202,557 | ' |
Long term debt, current portion | 43,956 | 37,513 | 283,640 |
Advances on convertible promissory notes | ' | ' | 170,000 |
Settlement Payable | ' | 115,278 | ' |
Unearned revenue | ' | ' | 32,988 |
Other current liabilities | 51,257 | ' | ' |
Total Current Liabilities | 2,421,978 | 1,987,874 | 877,980 |
Capital Leases (net of current portion) | 34,300 | 23,974 | ' |
Line of credit (net of current portion) | ' | 125,000 | ' |
Notes payable (net of current portion), net of discount | 124,054 | 273,751 | ' |
Long term debt (net of current portion) | 286,549 | 181,457 | 218,417 |
Total Liabilities | 2,866,881 | 2,592,056 | 1,096,397 |
Commitments and Contingencies (see Note 8) | ' | ' | ' |
Stockholders' Equity (Deficit): | ' | ' | ' |
Preferred stock ($0.001 par value, 25,000,000 shares authorized, none issued or outstanding) | ' | ' | ' |
Common stock ($0.001 par value, 500,000,000 shares authorized, 54,577,294 shares and 39,054,867 issued and outstanding at September 30, 2013 and December 31, 2012, respectively) | 54,577 | 39,055 | 16,499 |
Additional paid-in capital | 6,616,797 | 2,738,545 | 751,010 |
Subscription receivable | ' | -5,000 | ' |
Accumulated deficit | -6,678,162 | -2,584,798 | -1,127,328 |
Total Stockholders' Equity (Deficit) | -6,788 | 187,802 | -359,819 |
Total Liabilities and Stockholders' Equity (Deficit) | $2,860,093 | $2,779,858 | $736,578 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Balance Sheets | ' | ' | ' |
Allowance for doubtful accounts | $117,632 | ' | ' |
Preferred stock, par value | $0.00 | $0.00 | ' |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | ' |
Preferred stock, shares issued | ' | ' | ' |
Preferred stock, shares outstanding | ' | ' | ' |
Common Stock, par value | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 75,000,000 |
Common Stock, shares issued | 54,577,294 | 39,054,867 | 16,499,021 |
Common Stock, shares outstanding | 54,577,294 | 39,054,867 | 16,499,021 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Statements of Operations [Abstract] | ' | ' | ' | ' | ' | ' |
Revenue | $1,790,825 | $1,985,516 | $5,787,811 | $3,619,611 | ' | ' |
Revenue - Related Party | 60,552 | ' | 287,626 | ' | ' | ' |
Total Revenue | 1,851,377 | 1,985,516 | 6,075,437 | 3,619,611 | 5,806,848 | 1,432,773 |
Cost of Revenues | 1,088,442 | 758,267 | 3,049,394 | 1,642,619 | 2,830,008 | 473,719 |
Gross Profit | 762,935 | 1,227,249 | 3,026,043 | 1,976,992 | 2,976,840 | 959,054 |
Operating Expenses | ' | ' | ' | ' | ' | ' |
Selling and administrative expenses (includes stock compensation of $290,162; $0; $0 and $818,595 as of September 30, 2013, 2012 and December 31, 2012, 2011, respectively) | 1,898,595 | 1,069,870 | 5,284,354 | 2,726,475 | 3,853,820 | 1,976,655 |
Research and development | ' | 926 | 289 | 54,059 | 64,386 | 93,489 |
Asset Impairment | 946,931 | ' | 946,931 | ' | ' | ' |
Depreciation and amortization | 19,616 | 14,007 | 64,214 | 36,758 | 50,765 | 31,362 |
Total Operating Expenses | 2,865,142 | 1,084,803 | 6,295,788 | 2,817,292 | 3,968,971 | 2,101,506 |
Operating Income (Loss) | -2,102,207 | 142,446 | -3,269,745 | -840,300 | -992,131 | -1,142,453 |
Other Income (Expense) | ' | ' | ' | ' | ' | ' |
Other income | 10,442 | 5,359 | 10,793 | 9,451 | 10 | ' |
Interest expense | -357,127 | -377,954 | -721,829 | -392,888 | -465,349 | -29,468 |
Loss on extinguishment of debt | -112,583 | ' | -112,583 | ' | ' | ' |
Total Other Income (Expense), net | -459,268 | -372,595 | -823,619 | -383,437 | -465,339 | -29,468 |
Income (Loss) before provision for income taxes | -2,561,475 | -230,149 | -4,093,364 | -1,223,737 | -1,457,470 | -1,171,921 |
Provision for income taxes | ' | ' | ' | ' | ' | ' |
Net Income (Loss) | ($2,561,475) | ($230,149) | ($4,093,364) | ($1,223,737) | ($1,457,470) | ($1,171,921) |
Net Loss Per Share | ' | ' | ' | ' | ' | ' |
basic and diluted | ($0.05) | ($0.01) | ($0.09) | ($0.04) | ($0.04) | ($0.08) |
Weighted Average Number of Shares Outstanding | ' | ' | ' | ' | ' | ' |
basic and diluted | 49,438,329 | 32,843,413 | 46,239,643 | 31,468,471 | 32,730,809 | 14,450,235 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Statements of Operations [Abstract] | ' | ' | ' | ' | ' |
Stock compensation included in Selling and administrative expenses | $563,000 | $290,162 | ' | ' | $818,595 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (USD $) | Total | Common Stock | Additional Paid-in Capital | Subscription Receivable | Accumulated Deficit |
Beginning Balance at Dec. 31, 2010 | $131,002 | $13,199 | $73,210 | ' | $44,593 |
Beginning Balance, shares at Dec. 31, 2010 | ' | 13,199,206 | ' | ' | ' |
Issuance of stock for services to officer | 818,595 | 3,300 | 815,295 | ' | ' |
Issuance of stock for services to officer, shares | ' | 3,299,815 | ' | ' | ' |
S-corp distributions | -137,495 | ' | -137,495 | ' | ' |
Shares issued to lender as fees | ' | ' | ' | ' | ' |
Net loss | -1,171,921 | ' | ' | ' | -1,171,921 |
Balance at Dec. 31, 2011 | -359,819 | 16,499 | 751,010 | ' | -1,127,328 |
Balance, shares at Dec. 31, 2011 | ' | 16,499,021 | ' | ' | ' |
Recapitalization | ' | 13,499 | -13,499 | ' | ' |
Recapitalization, shares | ' | 13,499,226 | ' | ' | ' |
2011 bridge note converted in 2012 related to reverse merger | 250,000 | 1,344 | 248,656 | ' | ' |
2011 bridge note converted in 2012 related to reverse merger, shares | ' | 1,343,729 | ' | ' | ' |
Issuance of common stock for cash | 1,056,094 | 4,352 | 1,051,742 | ' | ' |
Issuance of common stock for cash, shares | ' | 4,352,312 | ' | ' | ' |
Repayment of advances with shares | 313,908 | 1,266 | 312,642 | ' | ' |
Repayment of advances with shares, shares | ' | 1,265,381 | ' | ' | ' |
Value of beneficial conversion feature in convertible debt | 300,000 | ' | 300,000 | ' | ' |
Repurchase of shares pursuant to settlement agreement | -232,500 | -3,300 | -229,200 | ' | ' |
Repurchase of shares pursuant to settlement agreement, shares | ' | -3,299,802 | ' | ' | ' |
Conversion of convertible debt | 300,000 | 3,000 | 297,000 | ' | ' |
Conversion of convertible debt, shares | ' | 3,000,000 | ' | ' | ' |
Shares issued to lender as fees | 343,500 | 2,375 | 341,125 | ' | ' |
Shares issued to lender as fees, shares | ' | 2,375,000 | ' | ' | ' |
Offering costs paid | -325,911 | ' | -325,911 | ' | ' |
Subscription receivable | ' | 20 | 4,980 | -5,000 | ' |
Subscription receivable, shares | ' | 20,000 | ' | ' | ' |
Net loss | -1,457,470 | ' | ' | ' | -1,457,470 |
Balance at Dec. 31, 2012 | $187,802 | $39,055 | $2,738,545 | ($5,000) | ($2,584,798) |
Balance, shares at Dec. 31, 2012 | ' | 39,054,867 | ' | ' | ' |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash flows from Operating Activities: | ' | ' | ' | ' |
Net loss | ($4,093,364) | ($1,223,737) | ($1,457,470) | ($1,171,921) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' | ' |
Depreciation and amortization | 128,351 | 36,758 | 50,765 | 31,362 |
Stock issued for compensation | 290,162 | ' | ' | 818,595 |
Amortization of debt discount | 322,476 | 300,000 | 304,808 | ' |
Asset Impairment | 946,931 | ' | ' | ' |
Loss on early extinguishment of debt | 112,583 | ' | ' | ' |
Bad debt expense | 124,082 | ' | ' | ' |
Change in operating assets and liabilities: | ' | ' | ' | ' |
Accounts receivable, net | 110,803 | -332,604 | -1,103,257 | 50,693 |
Prepaid expenses | 51,444 | 17,997 | 20,912 | -24,512 |
Other assets | -69,332 | -3,211 | 5,146 | -7,389 |
Accounts Payable Related Party | ' | ' | 75,000 | ' |
Accounts payable | 312,313 | 40,149 | 53,783 | 204,618 |
Unearned revenue | ' | -32,988 | -32,988 | 32,988 |
Accrued liabilities | 309,871 | 325,479 | 383,835 | ' |
Net Cash used in operating activities | -1,453,680 | -872,157 | -1,699,466 | -65,566 |
Cash flows from Investing Activities: | ' | ' | ' | ' |
Capitalization of internally developed software | -752,135 | -92,727 | -258,933 | ' |
Purchases of property and equipment | -8,979 | -9,639 | -20,985 | -47,016 |
Net Cash used in investing activities | -761,114 | -102,366 | -279,918 | -47,016 |
Cash flows from Financing Activities: | ' | ' | ' | ' |
Shareholder Loan | 40,000 | ' | ' | ' |
Borrowings (Repayments) on line of credit,net | -24,606 | 51,500 | 51,500 | 262,500 |
Payment for repurchase of common stock | ' | -25,000 | -94,165 | ' |
Settlement payments | -115,278 | ' | ' | ' |
Loan proceeds | 1,220,000 | 443,908 | 1,193,908 | ' |
Loan proceeds from factor, net | -383,427 | ' | 827,075 | ' |
Repayments of debt obligations | -472,753 | -31,786 | -33,087 | -38,715 |
Proceeds from convertible promissory notes | ' | ' | ' | 170,000 |
Issuance of stock for cash net of offering cost | 1,243,000 | 394,583 | 730,183 | ' |
Payments on Capital Leases | ' | ' | -1,072 | ' |
Payments of stockholder distributions | ' | ' | ' | -137,495 |
Net Cash provided by (used in) financing activities | 1,506,936 | 833,205 | 2,674,342 | 256,290 |
Net Increase (decrease) in cash | -707,858 | -141,318 | 694,958 | 143,708 |
Cash at beginning of year | 893,458 | 198,500 | 198,500 | 54,792 |
Cash at end of year | 185,600 | 57,182 | 893,458 | 198,500 |
Supplemental schedule of cash paid during the year for: | ' | ' | ' | ' |
Interest | 376,539 | 25,827 | 36,156 | 24,407 |
Income Taxes | ' | ' | ' | ' |
Supplemental schedule of non-cash investing and financing activities: | ' | ' | ' | ' |
Issuance of stock to repay debt | 514,667 | 563,908 | 563,908 | ' |
Capital lease obligation incurred for use of equipment | 90,099 | 38,704 | 38,704 | ' |
Beneficial conversion feature on convertible debt charged to additional paid in capital | ' | 300,000 | 300,000 | ' |
Conversion of $300,000 notes to common stock | ' | 300,000 | 300,000 | ' |
Shares issued as loan fee | 679,353 | ' | 343,500 | ' |
Financed Equipment purchases | ' | ' | ' | ' |
Insurance premium finance contract recorded as prepaid asset | 57,573 | ' | ' | ' |
Prepaid common stock issued for services | 1,278,021 | ' | ' | ' |
Transfer of accounts payable to notes payable | ' | ' | 65,000 | ' |
Reclassification line of credit to note payable | $133,333 | ' | ' | ' |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Statements of Cash Flows | ' | ' |
Notes conversion | $300,000 | $300,000 |
Nature_of_Business_and_Going_C
Nature of Business and Going Concern | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Nature of Business and Going Concern [Abstract] | ' | ' |
NATURE OF BUSINESS AND GOING CONCERN | ' | ' |
1 – NATURE OF BUSINESS AND GOING CONCERN | 1 – NATURE OF BUSINESS AND GOING CONCERN | |
Overview | Overview | |
Health Revenue Assurance Holdings, Inc. (the “Company”) is a trusted source of timely, accurate and critical resources, technology and information that supports the performance of revenue integrity in assuring the existence of healthcare organizations. The Company and its subsidiaries’ products and services include business intelligence technology solutions, contract coding, billing, coding and compliance audits, education, revenue cycle consulting, physician services and ICD-10 transition services. The Company provides customized solutions to its clients with the highest regard for ethical standards and responsibility. | Health Revenue Assurance Holdings, Inc. (the “Company”) is a trusted source of timely, accurate and critical resources, technology and information that supports the performance of revenue integrity in assuring the existence of healthcare organizations. The company and its subsidiaries’ products and services include business intelligence technology solutions, contract coding, billing, coding and compliance audits, education, revenue cycle consulting, physician services and ICD-10 transition services. The Company provides customized solutions to its clients with the highest regard for ethical standards and responsibility. | |
Dream Reachers, LLC, owns the Company’s offices and is the borrower on a mortgage loan related to such offices. Dream Reachers, LLC does not engage in real estate rental business. Its offices are occupied by Health Revenue Assurance Associates, Inc. (“HRAA”) at no cost and HRAA pays the related mortgage’s principal and interest, taxes and maintenance. The Company’s subsidiary HRAA is the sole member effective May 2011. Dream Reachers has been treated as a Subsidiary for accounting purposes in the Company’s unaudited condensed consolidated financial statements for all periods presented. (see Note 2) | On August 15, 2011, Health Revenue Assurance Associates, Inc. (HRAA) the Company's subsidiary, entered into an Agreement and Plan of Merger with HRM, LLC, a Colorado limited liability corporation. HRAA was the surviving entity with HRM, LLC ceasing to exist. HRM, LLC was inactive with no assets or liabilities and accordingly the shares issued to the owner of HRM, LLC were accounted for as compensation under an employment agreement with that owner. | |
Going Concern | Dream Reachers, LLC, owns the Company’s offices and is the borrower on a mortgage loan related to such offices. Dream Reachers, LLC does not engage in real estate rental business. Its offices are occupied by HRAA at no cost and HRAA pays the related mortgage’s principal and interest, taxes and maintenance. The Company’s subsidiary HRAA is the sole member effective May 2011. Dream Reachers has been treated as a Subsidiary for accounting purposes in the Company’s consolidated financial statements for all periods presented. (see Note 2) | |
The Company’s future success is dependent upon its ability to achieve profitable operations and generate cash from operating activities, and upon additional financing, Management believes they can raise the appropriate funds needed to support their business plan and develop an operating company which is cash flow positive. | On February 10, 2012, HRAA entered into a Merger agreement with Health Revenue Assurance Holdings, Inc. (formerly known as Anvex International, Inc.) "HRAH" (a Nevada incorporated publicly-held company) and its subsidiary Health Revenue Acquisition Corporation (Acquisition Subsidiary) which was treated for accounting purposes as a reverse recapitalization with HRAA considered the accounting acquirer. Each share of HRAA's common stock was exchanged for the right to receive approximately 1,271 shares of HRAH’s common stock. Before their entry into the Merger Agreement, no material relationship existed between HRAH or Acquisition Sub and HRAA. (see Note 11) | |
However, as of September 30, 2013, the Company has an accumulated deficit and for the three and nine months ended September 30, 2013, incurred net losses, and has used net cash in operations. The Company has not been able to generate sufficient cash from operating activities to fund its on-going operations. There is no guarantee that the Company will be able to generate enough revenue and/or raise capital to support its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. | On April 13, 2012, the Company’s Board of Directors unanimously approved a change in the Company’s name from Anvex International, Inc. to Health Revenue Assurance Holdings, Inc. | |
The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern. | On April 13, 2012, the Company’s Board of Directors authorized a 12.98 for 1 split of its common stock to stockholders of record as of April 13, 2012. Shares resulting from the split were issued on April 26, 2012. In connection therewith, the Company transferred $32,747 from additional paid in capital to common stock, representing the par value of additional shares issued. As a result of the stock split, fractional shares were rounded up. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the stock split. (see Note 12) | |
As of September 30, 2013, the Company has a cash balance of approximately $186,000. The Company is currently addressing the going concern and liquidity issues. The Company expects an increase in cash flow as the result of a growing customer demand for medical billing, IT consulting, training, education and services. In addition, the Company is evaluating financing opportunities through either equity or debt financing or a combination of both. | Going Concern | |
On November 12, 2013, the Company entered into a Securities Purchase Agreement for the equity sale of $5.4 million in Series A 8% convertible preferred stock (the “Series A Preferred Stock”) and warrants to purchase shares of the Company’s common stock. The net proceeds to the Company after commissions, professional fees, and payment of shareholder loans is $4,322,000. The net raise is sufficient to fund on-going operations for the next several months. However, the funding is not sufficient to alleviate the on-going concern issue. (see Note 11) | The Company’s future success is dependent upon its ability to achieve profitable operations and generate cash from operating activities, and upon additional financing, management believes they can raise the appropriate funds needed to support their business plan and develop an operating company which is cash flow positive. | |
However, as of December 31, 2012, the Company has a stockholders' deficit and for the year-ended ended December 31, 2012, incurred substantial net losses, and has used net cash in operations. The Company has not been able to generate sufficient cash from operating activities to fund its ongoing operations. There is no guarantee that the Company will be able to generate enough revenue and/or raise capital to support its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. | ||
The consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern. | ||
As of December 31, 2012 the Company has a cash balance of approximately $894,000, of which $815,000 was received from new loans in December 2012. In January and February 2013, the Company received an additional $1,220,000 in loan proceeds from various investors. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ' | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | |||||||||
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||
Basis of Presentation | Principles of Consolidation | ||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Health Revenue Assurance Associates, Inc. and Dream Reachers, LLC. All significant inter-company transactions and balances are eliminated in consolidation. | ||||||||||
Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2013 are not indicative of the results that may be expected for the year ending December 31, 2013 or for any other future period. These unaudited condensed consolidated financial statements and the unaudited notes thereto should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2013 (our “10-K”). | Consolidation of Variable Interest Entities | ||||||||||
Principles of Consolidation | Effective January 1, 2010, the Company adopted new provisions of the consolidation guidance included in Accounting Standards Codification 810, Consolidations, that amended the consolidation guidance applicable to VIEs and the definition of a VIE, and requires enhanced disclosures to provide more information about an enterprise's involvement in a VIE. Under the consolidation guidance, the Company must make an evaluation of these entities to determine if they meet the definition of a VIE. Generally, a VIE is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about an entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. Dream Reachers became a wholly owned subsidiary in May 2011 but previously was treated as a VIE. The carrying amount and classification of the assets and liabilities of Dream Reachers, LLC included in the Consolidated Balance Sheets are approximately: | ||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Health Revenue Assurance Associates, Inc. and Dream Reachers, LLC. All significant inter-company transactions and balances are eliminated in consolidation. | December 31, | ||||||||||
2012 | 2011 | ||||||||||
Use of Estimates | Total assets | $ | 211,000 | $ | 230,000 | ||||||
Total liabilities | $ | 182,000 | $ | 185,000 | |||||||
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements include valuation of accounts receivable, valuation of property and equipment, valuation and amortization period of software, valuation of beneficial conversion features in convertible debt, valuation of equity based instruments issued for other than cash, revenue recognition, and the valuation allowance on deferred tax assets. | |||||||||||
Use of Estimates | |||||||||||
Cash | |||||||||||
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements include valuation of accounts receivable, valuation of property and equipment, valuation and amortization period of software, valuation of beneficial conversion features in convertible debt, valuation of equity based instruments issued for other than cash, revenue recognition, and the valuation allowance on deferred tax assets. | |||||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash balances are maintained at various banks that are insured by the Federal Deposit Insurance Corporation subject to certain limitations. | |||||||||||
Cash | |||||||||||
Accounts Receivable and Factoring | |||||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash balances are maintained at various banks that are insured by the Federal Deposit Insurance Corporation subject to certain limitations. | |||||||||||
Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded using a specific identification method based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that an allowance in the amount of $117,632 is required as of September 30, 2013. The allowance arises from a website development project contracted with ResumeBear, a related party. The Company accounts for its factoring arrangements as either a sale or a secured financing based on the criteria in ASC 860 "Transfers and Servicing". Estimates of allowances for doubtful accounts are reflected as a recourse obligation, a liability, for factor arrangements treated as a sale with recourse or as a contra asset accounts receivable allowance account for arrangements accounted for as a secured financing. | |||||||||||
Accounts Receivable and Factoring | |||||||||||
Software | |||||||||||
Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded using a specific identification method based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that no allowance is required at December 31, 2012 and December 31, 2011. The Company accounts for its factoring arrangements as either a sale or a secured financing based on the criteria in ASC 860 "Transfers and Servicing". Estimates of allowances for doubtful accounts are reflected as a recourse obligation, a liability, for factor arrangements treated as a sale with recourse or as a contra asset accounts receivable allowance account for arrangements accounted for as a secured financing. | |||||||||||
Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market and capitalization ceases after the general release of the software. Amortization of capitalized software development costs begins upon initial product shipment after general release. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months) using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. | |||||||||||
Property and Equipment | |||||||||||
Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations. On July 15, 2013 the Company issued a general release for one of its products Visualizer™. After the general release, the Company recorded approximately $64,000 in amortization expense in the accompanying unaudited consolidated financial statements as of September 30, 2013. At the end of September, 2013, the Company has written off the capitalized research and development costs for the visualizer software suite of multiple offerings and the OMC Initiater after an evaluation based in part on the lack of cash flow and customer demand in ICD Visualizer after the general acceptance release date of July 15, 2013. In addition, the Company’s going concern opinion and cash liquidity concerns restrained the ability to make a capital investment in research and development to complete existing products in the pipeline as the available cash is needed to fund normal operating expenses. The resulting loss of $946,931 is presented as a line item entitled “asset impairment” on the consolidated statement of operations. | |||||||||||
Property and equipment is recorded at cost. Depreciation is computed using the straight-line method over estimated useful asset lives, which range from 5 to 39 years. Repairs and maintenance are expensed, while additions and betterments are capitalized. The cost and related accumulated depreciation of assets sold or retired are eliminated from the accounts and any gains or losses are reflected in earnings. | |||||||||||
Share Based Compensation | |||||||||||
Leases | |||||||||||
Compensation expense for all stock-based employee and director compensation awards granted is based on the grant date fair value estimated in accordance with the provisions of ASC Topic 718, Stock Compensation (“ASC Topic 718”). The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. Vesting terms vary based on the individual grant terms. | |||||||||||
We perform a review of newly acquired leases to determine whether a lease should be treated as a capital or operating lease. Capital lease assets are capitalized and depreciated over the term of the initial lease. A liability equal to the present value of the aggregated lease payments is recorded utilizing the stated lease interest rate. If an interest rate is not stated, we will determine an estimated cost of capital and utilize that rate to calculate the present value. If the lease has an increasing rate over time, and (or) is an operating lease, all leasehold incentives, rent holidays, or other incentives will be considered in determining if a deferred rent liability is required. Leasehold incentives are capitalized and depreciated over the initial term of the lease. | |||||||||||
The Company estimates the fair value of stock-based compensation awards on the date of grant using the Black-Scholes-Merton (“BSM”) option pricing model, which was developed for use in estimating the value of traded options that have no vesting restrictions and are freely transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. The BSM option pricing model considers, among other factors, the expected term of the award and the expected volatility of the Company’s stock price. Expected terms are calculated using the Simplified Method, volatility is determined based on the Company's historical stock price trends and the discount rate is based upon treasury rates with instruments of similar expected terms. Warrants granted to non-employees are accounted for in accordance with the measurement and recognition criteria of ASC Topic 505-50, Equity Based Payments to Non-Employees. | |||||||||||
Software | |||||||||||
Fair Value Measurements and Fair Value of Financial Instruments | |||||||||||
Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market and capitalization ceases after the general release of the software. Amortization of capitalized software development costs begins upon initial product shipment. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months) using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. | |||||||||||
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: | |||||||||||
Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations. No amortization expense was recorded in the accompanying consolidated financial statements as the software had yet to be placed in service. | |||||||||||
● | Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; | ||||||||||
Long-Lived Assets | |||||||||||
● | Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and | ||||||||||
The Company reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying values may no longer be appropriate. Recoverability of carrying values is assessed by estimating future net cash flows from the assets. Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact management's assumptions as to sales prices, rental rates, costs, holding periods or other factors that may result in changes in the Company’s estimates of future cash flows. Although management believes the assumptions used in testing for impairment are reasonable, changes in any one of the assumptions could produce a significantly different result. | |||||||||||
● | Level 3—Unobservable inputs that are supported by little or no market activity that is significant to the fair value of assets or liabilities. | ||||||||||
Fair Value Measurements and Fair Value of Financial Instruments | |||||||||||
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. | |||||||||||
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: | |||||||||||
Revenue Recognition | |||||||||||
● | Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; | ||||||||||
The Company recognizes services revenue based on the proportional performance method of recognizing revenue. | |||||||||||
● | Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and | ||||||||||
A portion of the Company’s revenue is generated from medical coding audit services. Auditing revenue is invoiced in accordance with the contract, generally at three benchmark time periods which coincide with when specific, obligatory field work services have been rendered and completed, the value of this portion of the contract price has been predetermined and agreed upon, and the client has received benefit or value in the form of the independent identification of system weaknesses and risk analysis. Further, collectability is reasonably assured due to the existence of a fixed fee contract and the size and financial health of the Company’s clients. Below is a description of the general benchmarks and work phases associated with the Company’s audit services: | |||||||||||
● | Level 3—Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. | ||||||||||
● | Planning Phase - work commences prior to and as soon as the contract is signed and includes setting the audit scope, scheduling of the job, assignment of audit staff, understanding the client and their systems, determination of sample size and sampling methods to be employed, and other specific items as outlined in the contract. The planning phase includes the determination of deliverables as defined in the contract, generally consisting of a listing of errors, training and a final report. The Company generally invoices and recognizes 50% of the contract value at the completion of the Planning Phase. Although all of the contracts contain a clause making the first 50% of the engagement fee due and non-refundable at this point, the Company does not deem this initial fee to be recognized as deferred revenue under SAB 104 due to the extensive amount of work to be done prior to accepting the contract. | ||||||||||
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. | |||||||||||
● | Field Work Phase – is performed at the client location and generally lasts one week and encompasses actual testing of sample claims preselected in the Planning Phase. The auditor generally preloads the selected claims into the Company’s proprietary software and audits the claim records by reviewing actual medical records. The software assists the auditor in determining proper classifications and allows the auditor to compare the proper classification against what was filed in the submission made by the client to Medicare. Notes and comments are recorded and audit reports are generated. The Company generally invoices and recognizes 40% of the contract value at the completion of the Field Work Phase. | ||||||||||
Revenue Recognition | |||||||||||
● | Reporting Phase – includes a summary of audit findings, exit conference with clients, and any other specific deliverables as determined by the contract. The Company generally invoices and recognizes the remaining 10% of the contract value at the completion of the Report Phase. | ||||||||||
The Company recognizes services revenue based on the proportional performance method of recognizing revenue. | |||||||||||
A portion of the Company’s revenue is derived from consulting, training and coding services provided. Revenue from these revenue streams is recognized after services are performed based on the quoted and agreed upon fee contained in its contracts. | |||||||||||
A portion of the Company’s revenue is generated from medical coding audit services. Auditing revenue is invoiced in accordance with the contract, generally at three benchmark time periods which coincide with when specific, obligatory field work services have been rendered and completed, the value of this portion of the contract price has been predetermined and agreed upon, and the client has received benefit or value in the form of the independent identification of system weaknesses and risk analysis. Further, collectability is reasonably assured due to the existence of a fixed fee contract and the size and financial health of the Company’s clients. Below is a description of the general benchmarks and work phases associated with the Company’s audit services: | |||||||||||
For our education products sold on a self-study standalone basis or in multiple element contracts which include training and the product and training are separable elements (see below) revenue is recognized for the product upon passing of title which occurs once the end user is granted access to our online curriculum courses. | |||||||||||
● | Planning Phase - work commences prior to and as soon as the contract is signed and includes setting the audit scope, scheduling of the job, assignment of audit staff, understanding the client and their systems, determination of sample size and sampling methods to be employed, and other specific items as outlined in the contract. The planning phase includes the determination of deliverables as defined in the contract, generally consisting of a listing of errors, training and a final report. The Company generally invoices and recognizes 50% of the contract value at the completion of the Planning Phase. Although all of the contracts contain a clause making the first 50% of the engagement fee due and non-refundable at this point, the Company does not deem this initial fee to be recognized as deferred revenue under SAB 104 due to the extensive amount of work to be done prior to accepting the contract. | ||||||||||
On July 15, 2013 the Company issued a general release for one of its products Visualizer™. Software sales on a standalone basis will be recognized upon delivery of the software when evidence of the purchase arrangement exists and the price is determinable, and when collectability is reasonably assured. | |||||||||||
● | Field Work Phase – is performed at the client location and generally lasts one week and encompasses actual testing of sample claims preselected in the Planning Phase. The auditor generally preloads the selected claims into the Company’s proprietary software and audits the claim records by reviewing actual medical records. The software assists the auditor in determining proper classifications and allows the auditor to compare the proper classification against what was filed in the submission made by the client to Medicare. Notes and comments are recorded and audit reports are generated. The Company generally invoices and recognizes 40% of the contract value at the completion of the Field Work Phase. | ||||||||||
Arrangements with customers may involve multiple elements including software products, education products, training, software product maintenance, coding services, coding audit services and other consulting services. Training on education products will occur after the education product sale. Education products are sold and may be used as a self-study product, although most of our customers elect to purchase our training services and therefore most of our contracts to date are multiple element contracts including one price for the education product and related training. We allocate the selling price to each element as discussed below. Training and maintenance on software products will generally occur after the software product sale. Other services may occur before or after the product sales and may not relate to the products. Revenue recognition for multiple element arrangement is as follows: | |||||||||||
● | Reporting Phase – includes a summary of audit findings, exit conference with clients, and any other specific deliverables as determined by the contract. The Company generally invoices and recognizes the remaining 10% of the contract value at the completion of the Report Phase. | ||||||||||
Each element is accounted for separately when each element has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the general and specific criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company has historically sold its services with established rates which it believes is Company specific objective evidence of selling price. For the new software products, management has established selling prices which qualifies as Company specific objective evidence of selling price. Generally all elements in multiple element arrangements with Company customers qualify as separate units of account for revenue recognition purposes. | |||||||||||
A portion of the Company’s revenue is derived from consulting, training and coding services provided. Revenue from these revenue streams is recognized after services are performed based on the quoted and agreed upon fee contained in its contracts. | |||||||||||
Cost of Revenues | |||||||||||
The Company intends a general release of its first software product in early 2013. Software sales on a standalone basis will be recognized upon delivery of the software when evidence of the purchase arrangement exists and the price is determinable, and when collectability is reasonably assured. | |||||||||||
Cost of revenues includes labor costs for services and education development costs. Amortization costs in 2013 of approximately $64,000 were allocable to cost of sales related to software amortization. In future periods, additional amortization of capitalized software costs may be included in costs of revenues. | |||||||||||
Arrangements with customers may involve multiple elements including software sales, training, software product maintenance, coding services, coding audit services and other consulting services. Training and maintenance on software products will generally occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. Revenue recognition for multiple element arrangement is as follows: | |||||||||||
Earnings Per Share | |||||||||||
Each element is accounted for separately when each element has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the general and specific criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company has historically sold its services with established rates which it believes is Company specific objective evidence of selling price. For the new software products, management has established selling prices which qualifies as Company specific objective evidence of selling price. Generally all elements in multiple element arrangements with Company customers qualify as separate units of account for revenue recognition purposes. | |||||||||||
The Company computes and presents earnings or losses per share in accordance with FASB ASC Topic 260, Earnings per share. Basic earnings or losses per share are computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings or loss per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options and warrants using the average market prices during the period. | |||||||||||
Cost of Revenues | |||||||||||
As the Company incurred a net loss in all periods presented, all potentially dilutive securities were excluded from the computation of diluted loss per share since the effect of including them is anti-dilutive. There were no dilutive securities outstanding at September 30, 2013 and 2012 respectively. | |||||||||||
Cost of revenues includes labor costs. There were no depreciation or amortization costs in 2012 or 2011 that were allocable to cost of sales. In future periods, amortization of capitalized software costs will be included in costs of revenues. | |||||||||||
Recent Accounting Pronouncements | |||||||||||
Stock-Based Compensation | |||||||||||
We have implemented all new accounting standards that are in effect and that may impact our unaudited condensed consolidated financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. | |||||||||||
Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. For non-employee stock-based awards, the Company calculates the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the prorata compensation expense is adjusted accordingly until such time the non-employee award is fully vested, at which time the total compensation recognized to date shall equal the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. | |||||||||||
Research and Development Costs | |||||||||||
In accordance with ASC 730-10, Research and development costs are expensed when incurred. Total research and development costs for the years ended December 31, 2012 and 2011 were $64,386 and $93,489 respectively. | |||||||||||
Advertising | |||||||||||
The cost of advertising is expensed as incurred. Advertising and marketing expenses amounted to approximately $130,000 and $116,000 for the year ended December 31, 2012 and 2011, respectively and is included in selling and administrative expenses. | |||||||||||
Income Taxes | |||||||||||
The Company elected to convert from a Subchapter S corporation for Federal income tax purposes to a C corporation effective October 21, 2011. Upon our C coloration election, we began to use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized. | |||||||||||
The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | |||||||||||
Earnings Per Share | |||||||||||
The Company computes and presents earnings or losses per share in accordance with FASB ASC Topic 260, Earnings per share. Basic earnings or losses per share are computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings or loss per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options and warrants using the average market prices during the period. | |||||||||||
As the Company incurred a net loss in all periods presented, all potentially dilutive securities were excluded from the computation of diluted loss per share since the effect of including them is anti-dilutive. There were no dilutive securities outstanding at December 31, 2012 and 2011 respectively. | |||||||||||
Segment Reporting | |||||||||||
Financial Accounting Standards Board (“FASB”) ASC Topic 280, Segment Reporting (“ASC 280”), establishes standards for the way public business enterprises report information about operating segments. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company has determined that based on these criteria it only operates one segment, consulting services, as all other services do not meet the minimum threshold for separate reporting of a segment. | |||||||||||
Contingencies | |||||||||||
We accrue for contingent obligations, including legal costs and restructuring costs, when the obligation is probable and the amount can be reasonably estimated. As facts concerning contingencies become known we reassess our position and make appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters that are subject to change as events evolve and additional information becomes available. | |||||||||||
Recent Accounting Pronouncements | |||||||||||
We have implemented all new accounting standards that are in effect and that may impact our consolidated financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. |
Accounts_Receivable
Accounts Receivable | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Accounts Receivable [Abstract] | ' | ' | ||||||||||||||||
ACCOUNTS RECEIVABLE | ' | ' | ||||||||||||||||
3 - ACCOUNTS RECEIVABLE | ||||||||||||||||||
3 - ACCOUNTS RECEIVABLE | ||||||||||||||||||
Accounts receivable at December 31, 2012 and 2011 was as follows: | ||||||||||||||||||
Accounts receivable at September 30, 2013 and December 31, 2012 was as follows: | ||||||||||||||||||
2012 | 2011 | |||||||||||||||||
September 30, | December 31, | Accounts receivable | $ | 1,246,814 | $ | 143,557 | ||||||||||||
2013 | 2012 | Allowance for doubtful accounts | - | - | ||||||||||||||
Accounts receivable | $ | 1,011,929 | $ | 1,246,814 | Total | $ | 1,246,814 | $ | 143,557 | |||||||||
Accounts receivable –Related party | 117,632 | - | ||||||||||||||||
Allowance for doubtful accounts | (117,632 | ) | - | Bad debt expense on trade accounts receivable for 2012 and 2011 was $0, respectively. (See Note 9). | ||||||||||||||
Total | $ | 1,011,929 | $ | 1,246,814 | ||||||||||||||
We had $124,082 and $0 in bad debt expense on trade accounts receivable for nine months ended September 30, 2013 and 2012, respectively. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
4 - PROPERTY AND EQUIPMENT | |||||||||
Property and equipment consists of the following: | |||||||||
December 31, | |||||||||
2012 | 2011 | ||||||||
Building and improvements | $ | 227,603 | $ | 227,603 | |||||
Furniture | 119,810 | 118,187 | |||||||
Computers and Equipment | 160,469 | 99,316 | |||||||
507,882 | 445,106 | ||||||||
Less - Accumulated depreciation | (142,865 | ) | (92,607 | ) | |||||
Total | $ | 365,017 | $ | 352,499 | |||||
Depreciation expense for the years ended December 31, 2012 and 2011 was approximately $51,000 and $31,000, respectively. |
Research_and_Developement_and_
Research and Developement and Software | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Research and Development and Software [Abstract] | ' | ' | ||||||||||||||||
RESEARCH AND DEVELOPMENT AND SOFTWARE | ' | ' | ||||||||||||||||
4 – RESEARCH AND DEVELOPMENT AND SOFTWARE | 5 – RESEARCH AND DEVELOPMENT AND SOFTWARE | |||||||||||||||||
In Early 2012, the Company started developing the Visualizer™ suite. This intuitive and easy to use business intelligence product is designed to meet the emerging need for healthcare analytics. Customer data is infused into the suite, and the Company uses this to develop pre-defined analytics targeted to address healthcare’s emerging concerns and needs. | Early 2012, the Company started developing the Visualizer™ suite. This intuitive and easy to use business intelligence product is designed to meet the emerging need for healthcare analytics. Customer data is infused into the suite, and the Company uses this to develop pre-defined analytics targeted to address healthcare’s emerging concerns and needs. | |||||||||||||||||
HRAA’s Visualizer™ suite encompasses multiple offerings. The first project is ICD Visualizer™, which assists healthcare leaders with their need to understand the exponential impact of the transition to ICD-10 including work flow, productivity, process changes and documentation and reimbursement risks. The application helps to visualize the reimbursement and operational effects of transitioning organizations to ICD-10 and identify where to focus education and documentation issues. It enables clients to develop a custom work plan to mitigate risks from the highest areas of exposure to the least. | HRAA’s Visualizer™ suite will encompass multiple offerings. The first project currently under development is ICD Visualizer™, which assists healthcare leaders with their need to understand the exponential impact of the transition to ICD-10 including work flow, productivity, process changes and documentation and reimbursement risks. The application helps to visualize the reimbursement and operational effects of transitioning organizations to ICD-10 and identify where to focus education and documentation issues. It enables clients to develop a custom work plan to mitigate risks from the highest areas of exposure to the least. | |||||||||||||||||
The transition to ICD-10 is causing a paradigm shift in healthcare. In response, we have developed a new product called OMC Initiator (Outsourced Medical Coding) for processing healthcare claims within hospitals. This product captures data from the physician or the hospital’s financial systems and correlates the data in a manner that expedites the processing of a claim. To validate our new product, our team of Emergency Department Coders (ED Coders) is continuously evaluating the process of coding claims in order to enhance our product. | At December 31, 2012, the Company had accumulated $258,933 of capitalized costs related to the development of the Visualizer™ suite which is included as Software on the accompanying consolidated balance sheet. | |||||||||||||||||
At September 30, 2013, the Company had accumulated a total of $1,011,068 in capitalized costs related to the development of the Visualizer™ suite and the OMC Initiater which was included as Software on the accompanying consolidated balance sheet. As of September 30, 2013 we amortized $64,137 of the capitalized software after the general release on July 15, 2013 for the Visualizer project. | Amortization expense for software, for the years ended December 31, 2012 and 2011 was $0, respectively as there has not been a general release of the software for sale as of December 31, 2012. Software consisted of the following at December 31, 2012 and 2011: | |||||||||||||||||
At the end of September 2013, the Company re-evaluated the capitalized research and development costs for the Visualizer software suite of multiple offerings and the OMC Initiater after an evaluation based in part on the lack of cash flow and customer demand in ICD Visualizer after the general acceptance release date of July 15, 2013. In addition, the Company also considered its going concern opinion and cash liquidity concerns that restrain the ability to make capital investments in research and development to complete existing products in the pipeline as the available cash is needed to fund normal operating expenses. As a result of this evaluation, the Company recorded a loss of $946,931 that is presented as a line item entitled “asset impairment” on the consolidated statement of operations. | 31-Dec-12 | 31-Dec-11 | ||||||||||||||||
Software | $ | 258,933 | $ | - | ||||||||||||||
Amortization expense for software, for the three months ended September 30, 2013 and 2012 was $64,137 and $0, respectively. Software consisted of the following at September 30, 2013 and December 31, 2012: | Accumulated amortization | - | - | |||||||||||||||
Software, net | $ | 258,933 | $ | - | ||||||||||||||
September 30, | December 31, | |||||||||||||||||
2013 | 2012 | The following is a schedule of estimated future amortization expense of software at December 31, 2012 (assumes amortization begins January 1, 2013): | ||||||||||||||||
Software | $ | 1,011,068 | $ | 258,933 | ||||||||||||||
Accumulated amortization | (64,137 | ) | - | Estimated amortization expense of software is as follows: | ||||||||||||||
Asset Impairment | (946,931 | ) | - | |||||||||||||||
Software, net | $ | - | $ | 258,933 | Year Ending December 31, | |||||||||||||
2013 | $ | 86,311 | ||||||||||||||||
2014 | 86,311 | |||||||||||||||||
2015 | 86,311 | |||||||||||||||||
Total | $ | 258,933 | ||||||||||||||||
Line_of_Credit
Line of Credit | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Line of Credit Facility [Abstract] | ' | ' |
LINE OF CREDIT | ' | ' |
5 – LINES OF CREDIT | 6 – LINE OF CREDIT | |
Bank | The Company has a $150,000 revolving line of credit with a bank, effective in December 2008, for its general working capital needs. The line of credit is secured by all business assets, collateral, and personal guarantees. The line of credit matured on December 18, 2009 and was renewed and was due on December 18, 2012. The revolving line was modified on December 18, 2012 so that the loan no longer has an expiration date of December 18, 2012, but instead, a final maturity date of December 18, 2018. The interest rate per year is equal to the Bank’s Prime Rate plus 6.50 percent. The Bank’s prime rate of interest at December 31, 2012 was 3.25%. The balance due at December 31, 2012 was $150,000 with $25,000 reflected as a current portion. The first of seventy-two payments, being $2,083 was due January 18, 2013. | |
The Company had a $150,000 revolving line of credit with a bank, effective in December 2008, for its general working capital needs. The line of credit is secured by all business assets, collateral, and personal guarantees. The line of credit had a maturity date of December 18, 2018. On September 19, 2013 the Company converted the Line of Credit to a Term Note. The Company consolidated the line of credit and an existing bank term loan into a Consolidated Term Loan with a monthly payment in the amount of $3,209 with a new maturity date of September 17, 2017. At the time of the conversion the line of credit had an outstanding balance in the amount of $133,334. (see Note 6) | ||
Dell | ||
The Company maintains a Dell Business Credit line of up to $50,000. Interest rates vary under the line based on difference types of payment plans. The balance due under the line as of September 30, 2013 was $46,166, which is included in line of credit, current portion in the accompanying unaudited condensed consolidated financial statements. |
Long_Term_Debt_and_Notes_Payab
Long Term Debt and Notes Payable | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Long Term Debt and Notes Payable [Abstract] | ' | ' | ||||||||||||||||
LONG TERM DEBT AND NOTES PAYABLE | ' | ' | ||||||||||||||||
6 – LONG TERM DEBT AND NOTES PAYABLE | 7 – LONG TERM DEBT AND NOTES PAYABLE | |||||||||||||||||
Long Term debt: | Long Term debt: | |||||||||||||||||
Long Term debt consisted of the following at September 30, 2013: | Long Term debt consisted of the following at December 31, 2012: | |||||||||||||||||
September 30, | December 31, | December 31, | December 31, | |||||||||||||||
2013 | 2012 | 2012 | 2011 | |||||||||||||||
Bank term loan | $ | 154,030 | $ | 38,897 | Bank term loan | $ | 38,897 | $ | 66,245 | |||||||||
Mortgage loan | 176,475 | 180,073 | Convertible Bridge Loan | - | 250,000 | |||||||||||||
330,505 | 218,970 | Mortgage loan | 180,073 | 185,812 | ||||||||||||||
Less current portion | (43,956 | ) | (37,513 | ) | 218,970 | 502,057 | ||||||||||||
Total long term portion | $ | 286,549 | $ | 181,457 | Less current portion | (37,513 | ) | (283,640 | ) | |||||||||
Total long term portion | $ | 181,457 | $ | 218,417 | ||||||||||||||
On September 19, 2013, the Company consolidated the existing bank term loan with an existing line of credit. The outstanding balance for the bank term loan and the bank credit line prior to consolidation was $20,697 and $133,334, respectively. The original term loan was established in March 2009 as a result of a conversion of a revolving line of credit. The new consolidated term loan is personally guaranteed by one of the Company’s stockholders and is collateralized by the assets of the Company. Payments of principal and interest are approximately $3,200 per month. The new consolidated term loan matures in four years and incurs interest at a rate per year equal to the bank’s prime rate plus 3.5%. The balance due as of September 30, 2013 for the new consolidated Term loan was approximately $154,030. | ||||||||||||||||||
On August 23, 2011, the Company entered into a Letter of Intent agreement with a private equity group relating to a possible equity transaction. On September, 13, 2011, in connection with this contemplated transaction, the Company received a $150,000 bridge loan (the “Initial Bridge Loan”) from the private equity group. The Initial Bridge Loan is secured by a promissory note for the amount of the loan, incurs interest at 12% per annum and matures on December 31, 2014. On October 21, 2011, the Initial Bridge Loan was repaid. | ||||||||||||||||||
The Company has a mortgage related to certain real estate, which houses the Company’s main offices in Plantation, Florida. The loan originated July, 2010 in the amount of $192,500 and matures July 2020, when a balloon principal payment of approximately $129,000 becomes due. The loan is collateralized by the real estate and is personally guaranteed by a principal stockholder of the Company. Interest is fixed at 6.625% for the first five years of the loan, and converts to an adjustable rate for the second five years at the Federal Funds Rate plus 3.25%, as established by the United State Federal Reserve. The balance under this mortgage loan as of September 30, 2013 was approximately $176,500 and is allocated to the current and long term debt line items in the accompanying unaudited condensed consolidated balance sheet. Monthly payments for principal and interest are approximately $1,500 until July 2015, when the total monthly payment may vary due to the adjustable interest rate provision in the note. | ||||||||||||||||||
On October 21, 2011, the Company entered into a second Bridge Loan agreement (the“Bridge Loan”) in the amount of $250,000 with a third party lender. The primary purpose is to repay the Initial Bridge Loan and to pay for certain professional fees in connection with a reverse merger with a Public Company. The Bridge Loan incurs interest at the rate of 12% per annum which will be due only in the event the contemplated equity transaction does not materialize. Upon the closing of the transaction, all interest accrued but not paid shall be deemed cancelled and paid in full and the entire principal amount of the note shall be automatically converted into an aggregate of 1,343,749 shares of common stock at a conversion price of $0.19 per share which is equal to a discount of 25% of to the Purchase Price. The loan was converted to stock in February 2012 (See Note 12). | ||||||||||||||||||
Notes payable: | The Company has a term loan with a bank whose proceeds were used for general working capital needs (the “Term Loan”). The Term Loan was established in March 2009 as a result of a conversion of a revolving line of credit. The Term Loan is personally guaranteed by one of the Company’s stockholders and is collateralized by the assets of the Company. Payments of principal and interest are approximately $2,700 per month. The Term Loan matures in five years and incurs interest at the rate of 6.75% per annum. Balances due as of December 31, 2012 was approximately $39,000 and is allocated to the current and long term debt line items in the accompanying consolidated balance sheet. | |||||||||||||||||
In December 2012, the Company entered into loan agreements with various investors and issued promissory notes upon receipt of $815,000. The loan agreements have an interest rate of 12% per annum. Principal and interest is payable over 26 months. Additionally, in connection with the financing, the Company issued 2,375,000 shares of common stock to the lenders as loan fees. The fair value per share of $0.28 (based on recent cash sales prices) was used to compute the relative fair value of the shares in accordance with ASC 470-20 which totaled $343,500 which was recorded as a debt discount with a credit to additional paid-in-capital and such discount is being amortized over the term of the loans. The unamortized discount was $141,484 as of September 30, 2013. | The Company has a mortgage related to certain real estate which houses the Company’s main offices in Plantation, Florida. The loan originated July, 2010 in the amount of $192,500 and matures July 2020, when a balloon principal payment of approximately $129,000 becomes due. The loan is collateralized by the real estate and is personally guaranteed by the stockholder of the Company. Interest is fixed at 6.625% for the first five years of the loan, and converts to an adjustable rate for the second five years at the Federal Funds Rate plus 3.25%, as established by the United State Federal Reserve. The balance under this mortgage loan as of December 31, 2012 was approximately $180,000 and is allocated to the current and long term debt line items in the accompanying consolidated balance sheet. Monthly payments for principal and interest are approximately $1,500 until July 2015, when the total monthly payment may vary due to the adjustable interest rate provision in the note. | |||||||||||||||||
In January and February 2013, the Company entered into loan agreements with various investors and issued promissory notes upon receipt of $1,220,000. The loan agreements have an interest rate of 12% per annum. Principal and interest is payable over 26 months. Additionally, in connection with the financing, the Company issued 5,575,000 shares of common stock to the lenders as loan fees (See note 9). The fair value per share of $0.28 (based on recent cash sales prices) was used to compute the relative fair value of the shares in accordance with ASC 470-20 which totaled approximately $679,500 which was recorded as a debt discount with a credit to additional paid-in-capital and such discount is being amortized over the term of the loans. The unamortized discount was $425,634 as of September 30, 2013. | Notes payable: | |||||||||||||||||
The Company began paying principal and interest on the above mentioned notes in early 2013 in accordance with the payment terms. On August 2013, the Company converted $402,083 in unsecured investor promissory notes for five (5) individuals into one million six hundred eight thousand three hundred and thirty three (1,608,333) common shares at a conversion price of $0.25 per share. As a result of the conversion the Company expensed $128,452 of the unamortized discount as a finance expense. | In December 2012, the Company entered into loan agreements with various investors and issued promissory notes upon receipt of $815,000. The loan agreements have an interest rate of 12% per annum. Principal and interest is payable over 26 months. Additionally, in connection with the financing, the Company issued 2,375,000 shares of common stock to the lenders as loan fees (See note 12). The fair value per share of $0.28 (based on recent cash sales prices) was used to compute the relative fair value of the shares in accordance with ASC 470-20 which totaled $343,500 which was recorded as a debt discount with a credit to additional paid-in-capital and such discount is being amortized over the term of the loans. The unamortized discount was $338,692 as of December 31, 2012 and the Company recorded $4,524 in accrued interest. | |||||||||||||||||
Notes payable consisted of the following at December 31, 2012: | ||||||||||||||||||
Notes payable consisted of the following at September 30, 2013: | ||||||||||||||||||
31-Dec-12 | ||||||||||||||||||
30-Sep-13 | Principal amount of notes payable | $ | 815,000 | |||||||||||||||
Principal amount of notes payable | $ | 1,063,333 | Unamortized discount | (338,692 | ) | |||||||||||||
Unamortized discount | (567,118 | ) | Notes payable, net of discount | 476,308 | ||||||||||||||
Notes payable, net of discount | 496,215 | Less current portion | (202,557 | ) | ||||||||||||||
Less current portion | (372,161 | ) | Total long term portion | $ | 273,751 | |||||||||||||
Total Long term portion | $ | 124,054 | ||||||||||||||||
Future annual principal payments on long term debt as of December 31, 2012 are as follows: | ||||||||||||||||||
2013 | $ | 375,564 | ||||||||||||||||
2014 | 420,954 | |||||||||||||||||
2015 | 74,321 | |||||||||||||||||
2016 | 6,848 | |||||||||||||||||
2017 | 7,322 | |||||||||||||||||
Thereafter | 148,961 | |||||||||||||||||
Total | $ | 1,033,970 |
Capital_Leases
Capital Leases | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Capital Leases [Abstract] | ' | ||||
CAPITAL LEASES | ' | ||||
8 – CAPITAL LEASES | |||||
The Company leases its property and equipment from Dell Financial Services L.L.C. under a capital lease. The economic substance of the lease is that the Company is financing the acquisition of the assets through the lease and accordingly, it is recorded in the Company’s assets and liabilities. | |||||
The following is an analysis of the leased assets included in Property and Equipment: | |||||
December 31, | |||||
2012 | |||||
Equipment | 41,969 | ||||
Less accumulated depreciation | (5,926 | ) | |||
Total | $ | 36,043 | |||
The lease agreement contains a bargain purchase option at the end of the lease term. | |||||
The following is a schedule by years of future minimum payments required under the lease together with their present value as of December 31, 2012: | |||||
Year Ending December 31: | |||||
2013 | $ | 16,923 | |||
2014 | 16,923 | ||||
2015 | 11,282 | ||||
Total minimum lease payments | 45,128 | ||||
Less amount representing interest | (4,231 | ) | |||
Present value of minimum lease payments | $ | 40,897 | |||
Amortization of assets held under capital leases is included with depreciation expense and is approximately $9,000 and $0 for the year ended December 2012 and 2011, respectively. |
Factoring_Agreement
Factoring Agreement | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Factoring Agreement [Abstract] | ' | ' |
FACTORING AGREEMENT | ' | ' |
7 – FACTORING AGREEMENT | 9 – FACTORING AGREEMENT | |
In June 2012, the Company entered into a one-year factoring agreement with a finance company. The agreement automatically renews annually unless terminated by either party. Under the terms of the agreement, the Company, at its discretion, assigns the collection rights of its receivables to the finance company in exchange for an advance rate of 85% of face value. The assignments are transacted with recourse only at the option of the finance company in the event of non-payment. The Company's obligations under the factor agreement are secured by substantially all assets of the Company. In accordance with ASC 860 "Transfers and Servicing" regarding transfers of receivables with recourse, this factoring arrangement is accounted for as a secured financing. For the three months ended September 30, 2013, the Company had factored approximately $1,108,000 of receivables and had received cash advances of approximately $1,090,309. Outstanding receivables purchased by the factor as of September 30, 2013 were approximately $522,000 and are included in accounts receivable in the accompanying unaudited condensed consolidated balance sheet, and the secured loan due to the lender was approximately $444,000. Factor fees for the three and nine months ending September 30, 2013 were approximately $35,500 and $104,000, respectively and are included in interest expenses. (See Note 3) | In June 2012, the Company entered into a one-year factoring agreement with a finance company. The agreement automatically renews annually unless terminated by either party. Under the terms of the agreement, the Company, at its discretion, assigns the collection rights of its receivables to the finance company in exchange for an advance rate of 85% of face value. The assignments are transacted with recourse only at the option of the finance company in the event of non-payment. The Company's obligations under the factor agreement are secured by substantially all assets of the Company. In accordance with ASC 860 "Transfers and Servicing" regarding transfers of receivables with recourse, this factoring arrangement is accounted for as a secured financing. During 2012, the Company had factored approximately $3,850,000 of receivables and had received cash advances of approximately $3,272,000. Outstanding receivables purchased by the factor as of December 31, 2012 were approximately $950,000 and included in accounts receivable in the accompanying consolidated balance sheet, and the secured loan due to the lender was $827,075. Factor fees in 2012 were approximately $119,000, and are included in interest expenses. (See Note 3) |
Convertible_Promissory_Notes
Convertible Promissory Notes | 12 Months Ended |
Dec. 31, 2012 | |
Convertible Promissory Notes [Abstract] | ' |
CONVERTIBLE PROMISSORY NOTES | ' |
10 – CONVERTIBLE PROMISSORY NOTES | |
In December 2011, the Company received a deposit of $170,000. This deposit was an advance on three convertible promissory notes totaling approximately $314,000 signed on February 2, 2012, automatically convertible into future securities sold at 100% of the sale price and non-interest bearing. These loans qualify as stock settled debt under ASC 480 with a fixed monetary amount of $314,000. These loans were to mature in August 2012 but were converted into common stock in February 2012. (See Note 12) | |
In May 2012, the Company received $300,000 related to five convertible notes. The term of each note is 12 months. Interest is computed at 6% based on a 360 day year and is payable on the maturity date, and the conversion rate is $0.10 per share. Interest is due and payable only if the notes are repaid in cash. These notes were converted to common stock at their contractual conversion rate of $0.10 per share on July 15, 2012. (See Note 12) | |
At the note origination date, the Company recorded a debt discount for the beneficial conversion feature value related to the above referenced convertible note in the amount of $300,000 which is based on the intrinsic value between the fair market value of the Company’s stock and the conversion price. The discount is being amortized to interest expense over the term of the note. In accordance with ASC 470-20-40, upon conversion, the remaining unamortized portion of the beneficial conversion feature value was expensed. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||
Commitments and Contingencies [Abstract] | ' | ' | ||||||||
COMMITMENTS AND CONTINGENCIES | ' | ' | ||||||||
8 – COMMITMENTS AND CONTINGENCIES | 11 – COMMITMENTS AND CONTINGENCIES | |||||||||
Commitments | Commitments | |||||||||
Leases: | Leases: | |||||||||
In September 2012, the Company started a non-cancellable operating lease for office equipment. The lease term is 5 years. Lease payments during the five years are approximately $500 per month. | Until August 2012, the Company leased certain office equipment under non-cancelable operating lease arrangements. Monthly payments under the lease agreements were approximately $600 per month. The lease expired in August 2012. In September 2012, the Company started a new non-cancelable operating lease to replace the office equipment. The lease term is 5 years. Lease payments during the five years are approximately $500 per month. | |||||||||
On September 1, 2011, the Company entered into a commercial lease agreement for additional office space. The lease term is one year with five successive one year renewal options. Starting September 1, 2012, the lease has been renewed for one year with a fixed payment of approximately $5,008 per month. For each year thereafter of the initial year, the rent will be subject to an increment of 4%. | On September 1, 2011, the Company entered into a commercial lease agreement for additional office space. The lease term is one year with five successive one year renewal options. Lease payments during the first year were approximately $2,500 for one month and $4,400 for the remaining eleven months. Starting September 1, 2012, the lease has been renewed for one year with a fixed payment of approximately $5,008 per month. For each year thereafter of the initial year, the rent will be subject to an increment of 4%. | |||||||||
Capital Leases: | Future minimum lease payments under these leases are as follows: | |||||||||
The Company leases its property and equipment from Dell Financial Services L.L.C. under a capital lease. The economic substance of the lease is that the Company is financing the acquisition of the assets through the lease and accordingly, it is recorded in the Company’s assets and liabilities. | Years Ending December 31: | |||||||||
The following is an analysis of the leased assets included in Property and Equipment: | Years Ending December 31: | |||||||||
2013 | $ | 51,432 | ||||||||
September 30, | 2014 | 6,360 | ||||||||
2013 | 2015 | 6,360 | ||||||||
Equipment | $ | 79,210 | 2016 | 6,360 | ||||||
Less accumulated depreciation | (27,006 | ) | Total | $ | 70,512 | |||||
Total | $ | 52,204 | ||||||||
Settlement Agreement: | ||||||||||
The lease agreement contains a bargain purchase option at the end of the lease term. The total amount due at September 30, 2013 is $67,068 of which $32,768 is included in short term liabilities. | ||||||||||
On May 8, 2012, the Company terminated the employment of our Chief Marketing Officer (CMO) and subsequently amended its complaint to enforce certain non-competition clauses contained in the employment agreement. The Company sought a declaration of its obligations to pay severance under the terms of its then-existing employment agreement with the CMO. | ||||||||||
The following is a schedule by years of future minimum payments required under the lease together with their present value as of September 30, 2013: | ||||||||||
On July 9, 2012, the Company and the former CMO entered into a Settlement Agreement to resolve two pending lawsuits arising out of the termination of his employment agreement. The lawsuit was initiated by the Company against the former CMO in the United States District Court for the Southern District of Florida. In addition, the former CMO sued the Company in the United States District Court of the District of Colorado. | ||||||||||
Year Ending December 31: | ||||||||||
2013 | $ | 8,193 | Pursuant to the Settlement Agreement, the former CMO agreed to abolish all claims and lawsuits against the Company and its CEO and COO and resigned any and all positions which he had or presently may have had with the Company. As part of the Settlement Agreement, the Company agreed to make eleven (11) payments totaling $232,500 pursuant to the terms of his prior employment agreement. Additionally, the CMO agreed to transfer his 3,299,802 shares to an officer of the Company (see Note 12). These payments commenced July 2012, and the outstanding balance as of December 31, 2012 was $115,278. In addition, the Company has agreed to abolish all claims and lawsuits against the former CMO. The Settlement Agreement has a seven (7) day grace period for payments to the former CMO, after which time, he may seek court intervention to enforce the payments. The Company's Chief Executive Officer and Chief Operating Officer, respectively, have personally guaranteed the payments of the Settlement Agreement. As a result of the Settlement Agreement, both parties are dismissing their respective filings and have agreed to not enter any more lawsuits concerning the scope of this matter. | |||||||
2014 | 32,768 | |||||||||
2015 | 22,527 | Employment Agreements: | ||||||||
2016 | 3,580 | |||||||||
From time to time, the Company enters into employment agreements with certain of its employees. These agreements typically include bonuses, some of which are performance-based in nature. As of December 31, 2012, no performance bonuses have been earned. The Company owes its CEO $75,000 as stated in the February 2012 merger agreement, which is accrued in the accompanying consolidated Financial Statements as Due to officer. | ||||||||||
Total minimum lease payments | 67,068 | |||||||||
Less amount representing interest | (11,386 | ) | Contingencies | |||||||
Present value of minimum lease payments | $ | 55,672 | ||||||||
From time to time, the Company is involved in litigation matters relating to claims arising from the ordinary course of business. While the results of such claims and legal actions cannot be predicted with certainty, the Company’s management does not believe that there are claims or actions, pending or threatened against the Company, the ultimate disposition of which would have a material adverse effect on our business, results of operations, financial condition or cash flows. | ||||||||||
Amortization of assets held under capital leases is included with depreciation expense and is approximately $27,000 as of September 30, 2013. | ||||||||||
Settlement Agreement: | ||||||||||
On May 8, 2012, the Company terminated the employment of our Chief Marketing Officer (“CMO”) and subsequently amended its complaint to enforce certain non-competition clauses contained in the employment agreement. The Company sought a declaration of its obligations to pay severance under the terms of its then-existing employment agreement with the CMO. | ||||||||||
On July 9, 2012, the Company and the former CMO entered into a Settlement Agreement to resolve two pending lawsuits arising out of the termination of his employment agreement. The lawsuit was initiated by the Company against the former CMO in the United States District Court for the Southern District of Florida. In addition, the former CMO sued the Company in the United States District Court of the District of Colorado. | ||||||||||
Pursuant to the Settlement Agreement, the former CMO agreed to abolish all claims and lawsuits against the Company and its CEO and COO and resigned any and all positions which he had or presently may have had with the Company. As part of the Settlement Agreement, the Company agreed to make eleven (11) payments totaling $232,500 pursuant to the terms of his prior employment agreement. Additionally, the CMO agreed to transfer his 3,299,802 shares to an officer of the Company in 2012. These payments commenced July 2012 and the final payment in the amount of $23,056 was disbursed on July 29, 2013. In addition, the Company has agreed to abolish all claims and lawsuits against the former CMO. The Settlement Agreement has a seven (7) day grace period for payments to the former CMO, after which time, he may seek court intervention to enforce the payments. The Company's Chief Executive Officer and Chief Operating Officer, respectively, have personally guaranteed the payments of the Settlement Agreement. As a result of the Settlement Agreement, both parties are dismissing their respective filings and have agreed to not enter any more lawsuits concerning the scope of this matter. | ||||||||||
Employment Agreements: | ||||||||||
On October 2, 2013 the Company entered into employment agreements with four (4) of our officers and directors. The Employment agreements provide for severance benefits, change in control provisions, accrued but unpaid wages and bonuses, accrued but unpaid vacation time, incentive awards, equity and stock options, and other benefits. These four (4) employment agreements were amended on November 12, 2013. As of September 30, 2013, no performance bonuses have been earned. The Company owes its CEO $75,000 as stated in the February 2012 merger agreement, which is accrued in the accompanying unaudited condensed consolidated Financial Statements as Due to officer. The balance due to the Company’s CEO was formalized in a promissory note in November 1, 2013. In Addition, the Company owes its President $40,000 for a promissory note dated November 1, 2013 for funds advanced in September 2013. On November 12, 2013, the promissory notes for the CEO and the president were paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants to purchase shares of the Company’s common stock pursuant to the Securities Purchase Agreement dated and signed on November 12, 2013 with Great Point Partners, LLC. (see Note 11) | ||||||||||
Contingencies | ||||||||||
From time to time, the Company is involved in litigation matters relating to claims arising from the ordinary course of business. While the results of such claims and legal actions cannot be predicted with certainty, the Company’s management does not believe that there are claims or actions, pending or threatened against the Company, the ultimate disposition of which would have a material adverse effect on our business, results of operations, financial condition or cash flows. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||
Stockholders' Equity [Abstract] | ' | ' | |||||||||||
STOCKHOLDERS' EQUITY | ' | ' | |||||||||||
9 – STOCKHOLDERS' EQUITY | 12 – STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||||
Share Based Compensation | Recapitalization and Deemed Common Stock Issuance | ||||||||||||
The Company is in the process of establishing a non-qualified stock option plan in advance of the actual establishment of the plan the Company has granted a total of six hundred thirty six thousand (636,000) stock options to several directors and officers. The grant date is that which an employer and its employee reach a mutual understanding of the key terms and conditions of a share-based payment arrangement. This is the date on which the employer becomes contingently obligated to issue equity instruments or transfer assets to the employee who renders the requisite service. The Company is obligated for these grants as adoption of a stock option plan and board approval is considered a mere formality. | On February 10, 2012, HRAA entered into a Merger agreement with Health Revenue Assurance Holdings, Inc. "HRAH" (a Nevada incorporated publicly-held company) and its subsidiary Health Revenue Acquisition Corporation (Acquisition Subsidiary) which was treated for accounting purposes as a reverse recapitalization with HRAA considered the accounting acquirer since the shareholders of HRAA obtained voting and management control of HRAH. Each share of HRAA's common stock was exchanged for the right to receive approximately 1,271 shares of HRAH’s common stock. Before their entry into the Merger Agreement, no material relationship existed between HRAH or Acquisition Sub and HRAA. As part of the recapitalization, the Company is deemed to have issued 13,499,226 shares of common stock which represents the common shares outstanding in HRAH just prior to the merger. There were no recorded assets or liabilities in HRAH just prior to the merger. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the recapitalization. | ||||||||||||
Stock Options | Forward Stock Split | ||||||||||||
During the three months ended September 30, 2013, the Company recorded pre-tax compensation expense of $24,935 related to the Company’s stock option shares. As of September 30, 2013, there was approximately $62,313 of unrecognized compensation expense related to stock options, which will be recognized over the weighted-average remaining requisite service period of 1.7 years. There were no exercises of stock options for the three months ended September 30, 2013. | On April 13, 2012, the Company’s Board of Directors authorized a 12.98 for 1 split of its common stock to stockholders of record as of April 13, 2012. Shares resulting from the split were issued on April 26, 2012. In connection therewith, the Company transferred $32,747 from additional paid in capital to common stock, representing the par value of additional shares issued. As a result of the stock split, fractional shares were rounded up. All share and per share amounts for all periods presented have been retroactively adjusted to reflect the stock split. | ||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The 636,000 options were valued at $87,249. The weighted-average estimated value of stock options granted during the three months ended September 30, 2013 was $0.42 per share, using the following weighted-average assumptions: | Common Stock | ||||||||||||
2013 | 2011:00:00 | ||||||||||||
Dividend yield (1) | 0 | % | |||||||||||
Expected volatility (2) | 118 | % | The Company hired a Chief Marketing Officer and granted 3,299,815 unrestricted shares of Common Stock for his future services. Accordingly, the Company treated the issuance of the shares to its Chief Marketing Officer as Stock Compensation. At the time of the transaction the Company valued the stock based on current knowledge of the board and during the third quarter of 2011, the board estimated the fair value at approximately $256,000. Subsequently the Company was able to raise capital at a higher valuation. As a result of the Private Placement completed in February 2012, and since the grant of stock was within six months of this transaction the Board determined to revalue the stock at the price per share of the private placement and record additional compensation during the fourth quarter of 2011 of approximately $563,000 for total compensation of approximately $819,000. | ||||||||||
5 Year Bond interest rate (3) | 1.2 | % | |||||||||||
Expected life (4) | 1.5 | 2012:00:00 | |||||||||||
(1) Represents cash dividends paid as a percentage of the share price on the date of grant. | On February 10, 2012, upon closing of the reverse merger, a $250,000 convertible bridge loan was automatically converted into an aggregate of 1,343,749 shares of common stock at the contractual conversion price of $0.19 per share. | ||||||||||||
(2) Based on historical volatility of the Company’s common stock over the expected life of the options. | |||||||||||||
(3) Represents the U.S. Treasury STRIP rates over maturity periods matching the expected term of the options at the time of grant. | On February 10, 2012, concurrently with the closing of the reverse merger, the Company sold 1,410,874 shares of the Company’s common stock for gross proceeds of $350,000 at a purchase price of $0.25 per share in a private placement offering. | ||||||||||||
(4) The period of time that options granted are expected to be outstanding based upon historical evidence. | |||||||||||||
On February 10, 2012 concurrently with the closing of the reverse merger, convertible promissory notes totaling $313,908 obtained on February 2, 2012 were converted into 1,265,381 shares of common stock or $0.25 per share based on the contractual conversion rate. | |||||||||||||
The following table summarizes stock option activity for the three months ended September 30, 2013: | |||||||||||||
In April 2012, the Company sold 1,394,909 common shares for approximately $349,000 or $0.25 per share. | |||||||||||||
Options | Shares | Weighted-Average | Weighted-Average | Aggregate | |||||||||
Exercise Price | Remaining | Intrinsic Value | In May 2012, the Company recorded $300,000 to additional paid-in capital for the beneficial conversion value of convertible debt (see Note 10). | ||||||||||
Contractual Term | $0 | ||||||||||||
Outstanding at January 1, 2013 | - | - | In July 2012, pursuant to a settlement agreement (see Note 11), the Company agreed to pay $232,500 and 3,299,802 common shares were returned to the Company. The Company charged equity for the $232,500 in accordance with the settlement provisions of ASC 718 “Stock Compensation”. | ||||||||||
Granted | 636,000 | - | 1.7 yrs. | ||||||||||
Exercised | - | - | In July 2012, in connection with the settlement agreement discussed in Note 11, upon return of the 3,299,802 shares to the transfer agent, the shares were simultaneously reissued to delegees of the CEO, however, such shares were unvested and subsequently cancelled as a null and void issuance. | ||||||||||
Forfeited or expired | - | - | |||||||||||
Outstanding at September 30, 2013 | 636,000 | $ | 0.4225 | 1.7 yrs. | - | On July 15, 2012, the holders of the five convertible notes issued by the Company in May 2012 exercised their rights under the agreement and converted $300,000 into 3,000,000 shares of common stock at the contractual conversion rate of $0.10 per share. | |||||||
Exercisable at September 30, 2013 | - | - | - | - | |||||||||
In August 2012, the company raised approximately $22,000 with the sale of 77,743 shares of common stock at $0.28 per share. | |||||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of 2013 and the exercise price, multiplied by the number of in-the-money options). | |||||||||||||
During the period from October 2012 through December 2012, the Company sold 1,468,786 common shares for $335,600 at prices per share between $0.20 and $0.28. | |||||||||||||
Non-Vested Equity Shares | |||||||||||||
In December 2012, the Company issued 2,375,000 shares of common stock in connection with a financing transaction as more fully described in note 7. | |||||||||||||
The Company calculates compensation cost for restricted stock grants to employees and non-employee directors by using the fair market value of its Common Stock at the date of grant and the number of shares issued. This compensation cost is amortized over the applicable vesting period. During the three months ended September 30, 2013, the Company recorded pre-tax compensation expense of $24,935, related to the Company’s non-vested equity shares. As of September 30, 2013, there was approximately $62,313 of unrecognized compensation expense related to stock options, which will be recognized over the weighted-average remaining requisite service period of 1.7 years. | |||||||||||||
During 2012, the company incurred approximately $326,000 in offering costs that were charged to additional paid-in capital. | |||||||||||||
The following table details the status and changes in non-vested equity shares for the three months ended September 30, 2013: | |||||||||||||
Weighted-Average | |||||||||||||
Shares | Grant Date | ||||||||||||
Fair Value | |||||||||||||
Non-vested equity shares, January 1, 2013 | - | - | |||||||||||
Granted | 636,000 | - | |||||||||||
Vested | - | - | |||||||||||
Forfeited | - | - | |||||||||||
Non-vested equity shares, September 30, 2013 | 636,000 | - | |||||||||||
Common Stock | |||||||||||||
On January 15, 2013, the Company raised $13,000 through the issuance of 46,429 shares of common stock at a price per share of $0.28 per share. | |||||||||||||
On January 31, 2013, the Company issued 50,266 shares of common stock as compensation to an employee for services rendered through March 31, 2013. The shares were valued at $0.49 per share based on the quoted trading price per share or $24,630 which was expensed. | |||||||||||||
In February 2013, the Company issued 5,575,000 shares of common stock in connection with a financing transaction as more fully described in note 6. | |||||||||||||
In March 2013, the Company entered into a one-year agreement with a consultant for 230,000 vested shares and cash consideration. The shares were valued on the agreement date which was the measurement date at $0.35, based on the quoted trading price and the $80,500 is being expensed over the term of the contract. The shares were issued on April 4, 2013 to the consultant. During the three months ending June 30, 2013, the company expensed an additional $20,125 and recorded $57,021 as prepaid expense in connection with this transaction. | |||||||||||||
On April 1, 2013, the Company issued 54,847 shares of common stock as compensation to two employees for services rendered through March 31, 2013. The shares were valued at $0.40 per share based on recent cash sales by the Company or $21,939 which was expensed. | |||||||||||||
On May 19, 2013, the Company raised $250,000 through the issuance of 625,000 shares of common stock at a price per share of $0.40 per share. | |||||||||||||
On May 24, 2013 and June 21, 2013, the Company raised $50,000 and $300,000 through the issuance of 125,000 and 750,000 shares of common stock at a price of $0.40 per share. | |||||||||||||
On June 27, 2013, the Company entered into a financial advisor and agent placement agreement whereby the Company had the option to pay in cash or issue 100,000 shares of common stock. The shares were valued on the agreement date which was the measurement date at $0.51 per share based on the quoted trading price and the $51,000 is being expensed over the term of the contract. The Company issued the shares in September 2013. | |||||||||||||
On July 8, 2013 and August 7, 2013 pursuant to private placements, the Company issued 1,000,000 shares of common stock in exchange for cash of $400,000 with a per share price of $0.40. | |||||||||||||
On August 21, 2013, August 27, and August 30, 2013, the Company raised $25,000, $100,000 and $100,000 through the issuance of 100,000, 400,000, and 400,000 shares of common stock at a price of $0.25 per share. | |||||||||||||
On August 22, 2013 and August 28, 2013, the Company converted $402,083 in unsecured investor promissory notes for five (5) individuals into one million six hundred eight thousand three hundred and thirty three (1,608,333) common shares at a conversion price of $0.25 per share. The shares were valued at $514,666 based on the quoted trading price of $0.32 and accordingly, the company recorded a loss on conversion of $112,583. | |||||||||||||
In September, 2013, the Company issued 95,052 shares of common stock as compensation to three (3) employees for services rendered through June 30, 2013. The shares were valued at $0.48 per share based on the quoted trading price per share or $45,625 which was expensed. | |||||||||||||
On September 6, 2013, the Company entered into a three year agreement with a company to provide consulting and recruiting services. Upon execution of the agreement, the Company issued 50,000 shares of common stock valued at $0.30 per share based on the quoted trading price, in consideration of their services to be rendered for the first year of the agreement. The $15,000 is being expensed over 12 months. | |||||||||||||
On September 9, 2013, the Company entered into a one year Material Consulting Agreement with Mr. Michael Ciprianni to provide certain consulting services related to the Company’s business in exchange for four million one hundred twenty five thousand (4,125,000) shares of common stock in consideration of the services to be rendered. The shares were valued on the agreement date which was the measurement date at $0.28 per share based on the quoted trading price and the $1,155,000 is being expensed over the term of the contract. | |||||||||||||
On September 30, 2013, the Company issued 187,500 shares of common stock as compensation to two (2) employees for services rendered through September 30, 2013. The shares were valued at $0.23 per share based on the quoted trading price per share or $43,125 which was expensed. |
Concentrations
Concentrations | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Concentrations [Abstract] | ' | ' |
CONCENTRATIONS | ' | ' |
10 – CONCENTRATIONS | 13 – CONCENTRATIONS | |
Sales to six hospitals represented approximately 52% of net sales for the three months ended September 30, 2013. | Sales to thirteen hospitals represented approximately 89% of net sales for the year ended December 31, 2012Wherein, seven and six hospitals respectively are part of two larger health systems. The company has direct relationships with both the individual hospitals and the health systems. As such, the strength of the relationship is driven by the individual hospitals. | |
Four and three vendors represented approximately 42% and 68% of the outstanding accounts payable balance as of September 30, 2013 and December 31, 2012, respectively. | Sales to two customers were approximately 32% for the year ended December 31, 2011. | |
Four customers represented approximately 55% and 62% of the accounts receivable as of September 30, 2013 and December 31, 2012 respectively. | Three vendors represented approximately 68% of the outstanding accounts payable balance as of December 31, 2011. | |
One customer represented approximately 62% of the accounts receivable as of December 31, 2012. Three customers represented approximately 60% of the accounts receivable as of December 31, 2011. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
INCOME TAXES | ' | ||||||||
14 - INCOME TAXES | |||||||||
The Company has elected to convert from a Subchapter S corporation for Federal income tax purposes to a C corporation effective October 21, 2011. Accordingly, the Company's income or losses are passed through to the shareholders of HRAA for the period January 1 to October 21, 2011. The Company will absorb the tax effects of any income or losses subsequent to the date of conversion to a C Corporation and in future years. | |||||||||
The Company has incurred aggregate cumulative net operating losses of approximately $1,558,862 for C corporation income tax purposes through December 31, 2012. The net operating loss carries forward for income taxes, purposes and may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, starting in 2031 through 2032. Management believes that the realization of the benefits from these losses appears not more likely than not due to the Company’s limited operating history and continuing losses for income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management will review this valuation allowance periodically and make adjustments as warranted. | |||||||||
The Company’s income tax expense (benefit) differs from the “expected” tax expense for Federal income tax purposes computed by applying a Federal corporate tax rate of 34% to loss before income taxes as follows: | |||||||||
Year ended December 31, | Year ended December 31, | ||||||||
2012 | 2011 | ||||||||
U.S. Federal “expected” income tax | $ | (495,540 | ) | $ | (398,453 | ) | |||
State income tax | (52,906 | ) | (58,596 | ) | |||||
Non-deductible beneficial conversion interest | 102,000 | - | |||||||
Non-deductible items | 24,769 | - | |||||||
Stock compensation | - | 319,252 | |||||||
S Corp non-deductible/taxable items | - | (31,703 | ) | ||||||
Change in valuation allowance | 421,677 | 169,500 | |||||||
Total provision for income taxes | $ | - | $ | - | |||||
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2012 and 2011 are as follows: | |||||||||
2012 | 2011 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forward | $ | 586,600 | $ | 169,500 | |||||
Accrued salary and other | 35,821 | - | |||||||
Total gross deferred tax assets | 622,421 | 169,500 | |||||||
Deferred tax liabilities: | |||||||||
Depreciation | (31,244 | ) | - | ||||||
Total gross deferred tax liabilities | (31,244 | ) | 169,500 | ||||||
Less valuation allowance | (591,177 | ) | (169,500 | ) | |||||
Net deferred tax assets | $ | - | $ | - | |||||
A deferred tax asset of approximately $169,500 results from the C Corporation taxable losses totaling $434,509 from the period October 22, 2011 through December 31, 2011. The valuation allowance at December 31, 2011 was $169,500. The increase during 2012 was $421,677. | |||||||||
The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, 2012, tax years 2012 and 2011 remain open for IRS audit. The Company has received no notice of audit from the Internal Revenue Service for any of the open tax years. |
Subsequent_Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Subsequent Events | ' | ' |
SUBSEQUENT EVENTS | ' | ' |
11 – SUBSEQUENT EVENTS | 15 – SUBSEQUENT EVENTS | |
On October 2, 2013 the Company entered into employment agreements with four (4) of our officers and directors. The Employment agreements provide for severance benefits, change in control provisions, accrued but unpaid wages and bonuses, accrued but unpaid vacation time, incentive awards, equity and stock options, and other benefits. These four (4) employment agreements were amended on November 12, 2013. | Through March 2013, the company raised approximately $13,000 through the issuance of 46,429 shares of common stock at a price per share of $0.28. | |
On October 7, 2013, the Company entered into a one-year OID (Original Issue Discount) promissory note in the amount of $280,000 with a Utah corporation, (the “lender”). The purchase price for this note and the warrant is $250,000. The Company has the option to repay this note at any time on or before the date that is sixty (60) days from October 7, 2013 (the “effective date”). The Company will record a debt discount for the OID of $30,000. The debt will be treated as stock settled debt where a put premium of $120,000 will be recorded over the six month period to the first conversion date. The Lender has the right at any time after the date that is six (6) months from the effective date, at its election, to convert all or any part of the outstanding balance of the note into shares of fully paid and non-assessable common stock of the company based upon a formula that is seventy (70%) percent of the average of the two (2) lowest intra-day trade prices in the fifteen (15) trading days immediately preceding the conversion. The lender was granted the right to purchase at any time on or after October 7, 2013 (the “issue date”) until the date which is the last calendar day of the month in which the fifth anniversary of the “issue date” occurs (the “Expiration date”), 350,000 fully paid and non-assessable shares (the “warrant shares”) of the company’s common stock, par value $.001 per share (the “Common Stock”), as such number may be the adjusted from time to time pursuant to the price protection terms and conditions of this warrant to purchase shares of common stock. The initial “exercise price” is $0.40 per share of common stock, as the same may be adjusted from time to time pursuant to the terms and conditions of the warrant. On November 12, 2013, the OID promissory note was paid in full with financing received in connection with the sale and issuance of Preferred Stock and Series A Warrants pursuant to the Securities Purchase Agreement dated and signed on November 12, 2013 with certain funds and accounts as to which Great Point Partners, LLC Acts as an investment manager. As mentioned above, the Company issued 350,000 free standing and detachable warrants related to the convertible promissory note. The Company will account for these warrants issued in accordance with the US GAAP accounting guidance under ASC 815 applicable to derivative instruments, which requires every derivative instrument within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. Based on this guidance, the Company determined that the Company's warrants do not meet the criteria for classification as equity. Accordingly, the Company classified the warrants as current liabilities. The warrants are subject to re-measurement at each balance sheet date, with any change in fair value recognized as a component of other income (expense), net in the statements of operations. We will estimate the fair value of these warrants at the respective balance sheet dates, based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates and expected dividends on and expected volatility of the price of the underlying common stock. | In January and February 2013, the Company entered into loan agreements with various investors and issued promissory notes upon receipt of $1,220,000. The loan agreements have an interest rate of 12% per annum payable over 26 months. Additionally, in connection with the financing, the Company issued 5,575,000 shares of common stock to the lenders as loan fees. The fair value per share of $0.28 (based on recent cash sales prices) was used to compute the relative fair value in accordance with ASC 470-20 and was recorded as a debt discount with a credit to additional paid-in-capital and such discount is being amortized over the term of the loans. | |
On October 8, 2013, the Company amended its articles of incorporation by increasing the number of authorized shares of common stock from 75,000,000 to 500,000,000. This amendment has been retroactively disclosed on the Balance Sheet. | In January 2013, the company issued 50,266 shares of common stock vesting on July 31, 2013 as compensation to an employee. The shares were valued at $0.28 per share or $14,075 based on recent cash sales prices and such amount will be expensed over the vesting period. | |
On October 9, 2013, the Company issued 100,000 shares of common stock as compensation to a consultant to provide services. The shares were valued at $0.24 per share based on the quoted trading price per share or $24,000, which was recorded as prepaid and will be expensed over the term of the agreement, which is six (6) months. | ||
On October 17, 2013, the Company amended its articles of incorporation to create a new class of stock by the authorization of 25,000,000 preferred shares of stock. This amendment has been retroactively disclosed on the Balance Sheet. | ||
On October 17, 2013, the Company entered into a one-year OID (Original Issue Discount) promissory note in the amount of $142,500 with a Utah corporation, (the “Lender”). The purchase price for this note and the warrant is $125,000. The Company has the option to repay this note at any time on or before the date that is sixty (60) days from October 17, 2013 (the “effective date”). The Company will record a debt discount for the OID of $17,500. The remaining debt will be treated as stock settled debt where a put premium of $61,071 will be recorded over the six month period to the first conversion date. The Lender has the right at any time after the date that is six (6) months from the effective date, at its election, to convert all or any part of the outstanding balance of the note into shares of fully paid and non-assessable common stock of the company based upon a formula that is seventy (70%) percent of the average of the two (2) lowest intra-day trade prices in the fifteen (15) trading days immediately preceding the conversion. The lender was granted the right to purchase at any time on or after October 17, 2013 (the “issue date”) until the date which is the last calendar day of the month in which the fifth anniversary of the “issue date” occurs (the “Expiration Date”), 175,000 fully paid and non-assessable shares (the “warrant shares”) of the Company’s common stock, par value $.001 per share (the “Common Stock”), as such number may be the adjusted from time to time pursuant to the price protection terms and conditions of this warrant to purchase shares of common stock. The initial “exercise price” is $0.40 per share of common stock, as the same may be adjusted from time to time pursuant to the terms and conditions of the warrant. On November 12, 2013, the OID promissory note was paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants to purchase shares of the Company’s Common Stock pursuant to the Securities Purchase Agreement dated and signed on November 12, 2013 with certain funds and accounts as to which Great Point Partners, LLC acts as an investment manager. As mentioned above, the Company issued 175,000 free standing and detachable warrants related to the convertible promissory note. The Company will account for these warrants issued in accordance with the US GAAP accounting guidance under ASC 815 applicable to derivative instruments, which requires every derivative instrument within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. Based on this guidance, the Company determined that the Company's warrants do not meet the criteria for classification as equity. Accordingly, the Company classified the warrants as current liabilities. The warrants are subject to re-measurement at each balance sheet date, with any change in fair value recognized as a component of other income (expense), net in the statements of operations. We will estimate the fair value of these warrants at the respective balance sheet dates, based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates and expected dividends on and expected volatility of the price of the underlying common stock. | ||
On November 12, 2013, the Company entered into a Securities Purchase Agreement (SPA) for the equity sale of Series A Convertible Preferred Stock and warrants to purchase shares of the Company’s common stock. The Company sold 13,500,000 of Series A 8% Convertible Preferred stock and warrants to purchase 27,000,000 shares of the Company’s common stock for gross proceeds of $5,400,000. The net proceeds to the Company after debt offering costs are $4,885,000. The preferred stock is convertible into Common on a 2 for 1 basis. The Company recorded a beneficial conversion value for the preferred stock of approximately $2.6 million as an immediate charge to accumulated deficit as it is considered a constructive dividend to Series A preferred stockholders. The net raise is sufficient to fund on-going operations for the next several months. However, the funding is not sufficient to alleviate the going concern issue. As part of this equity financing transaction, the Company issued 27,000,000 warrants with immediate vesting rights to convert into common shares at an initial exercise price of $0.30 per share under price protection provisions. The warrants also contain cashless exercise provisions. The Company will account for these warrants issued in accordance with the US GAAP accounting guidance under ASC 815 applicable to derivative instruments, which requires every derivative instrument within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. Based on this guidance, the Company determined that the Company's warrants do not meet the criteria for classification as equity. Accordingly, the Company classified the warrants as current liabilities. The warrants are subject to re-measurement at each balance sheet date, with any change in fair value recognized as a component of other income (expense), net in the statements of operations. We estimated the fair value of these warrants at the issuance date at approximately $2,820,000 which will be reclassified from equity. The warrants will be revalued on the respective balance sheet dates, based on the estimated market value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, risk-free interest rates and expected dividends on and expected volatility of the price of the underlying common stock. The SPA contains registration rights requiring registration within 30 days of the funding date and effectiveness within 90 days of the filing date. The registration rights agreement contains a liquidated damage provision whereby the Company must pay 1% per month of the investment amount if not filed or effective within stipulated time frames. | ||
The Company owes its CEO $75,000 as stated in the February 2012 merger agreement, which is accrued in the accompanying unaudited condensed consolidated Financial Statements as Due to officer. The balance due to the Company’s CEO was formalized in a promissory note in November 1, 2013. In Addition, the Company owes its President $40,000 for a promissory note dated November 1, 2013 for funds advanced in September 2013. On November 12, 2013, the promissory notes for the CEO and the president were paid in full from the net proceeds of the Securities Purchase Agreement; no interest was accrued for the notes, as it was immaterial. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ' | |||||||||
Basis of Presentation | ' | ' | |||||||||
Basis of Presentation | |||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. | |||||||||||
Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2013 are not indicative of the results that may be expected for the year ending December 31, 2013 or for any other future period. These unaudited condensed consolidated financial statements and the unaudited notes thereto should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2013 (our “10-K”). | |||||||||||
Principles of Consolidation | ' | ' | |||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Health Revenue Assurance Associates, Inc. and Dream Reachers, LLC. All significant inter-company transactions and balances are eliminated in consolidation. | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Health Revenue Assurance Associates, Inc. and Dream Reachers, LLC. All significant inter-company transactions and balances are eliminated in consolidation. | ||||||||||
Consolidation of Variable Interest Entities | ' | ' | |||||||||
Consolidation of Variable Interest Entities | |||||||||||
Effective January 1, 2010, the Company adopted new provisions of the consolidation guidance included in Accounting Standards Codification 810, Consolidations, that amended the consolidation guidance applicable to VIEs and the definition of a VIE, and requires enhanced disclosures to provide more information about an enterprise's involvement in a VIE. Under the consolidation guidance, the Company must make an evaluation of these entities to determine if they meet the definition of a VIE. Generally, a VIE is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about an entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. Dream Reachers became a wholly owned subsidiary in May 2011 but previously was treated as a VIE. The carrying amount and classification of the assets and liabilities of Dream Reachers, LLC included in the Consolidated Balance Sheets are approximately: | |||||||||||
December 31, | |||||||||||
2012 | 2011 | ||||||||||
Total assets | $ | 211,000 | $ | 230,000 | |||||||
Total liabilities | $ | 182,000 | $ | 185, | |||||||
Use of Estimates | ' | ' | |||||||||
Use of Estimates | Use of Estimates | ||||||||||
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements include valuation of accounts receivable, valuation of property and equipment, valuation and amortization period of software, valuation of beneficial conversion features in convertible debt, valuation of equity based instruments issued for other than cash, revenue recognition, and the valuation allowance on deferred tax assets. | The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements include valuation of accounts receivable, valuation of property and equipment, valuation and amortization period of software, valuation of beneficial conversion features in convertible debt, valuation of equity based instruments issued for other than cash, revenue recognition, and the valuation allowance on deferred tax assets. | ||||||||||
Cash | ' | ' | |||||||||
Cash | Cash | ||||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash balances are maintained at various banks that are insured by the Federal Deposit Insurance Corporation subject to certain limitations. | For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash balances are maintained at various banks that are insured by the Federal Deposit Insurance Corporation subject to certain limitations. | ||||||||||
Accounts Receivable and Factoring | ' | ' | |||||||||
Accounts Receivable and Factoring | Accounts Receivable and Factoring | ||||||||||
Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded using a specific identification method based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that an allowance in the amount of $117,632 is required as of September 30, 2013. The allowance arises from a website development project contracted with ResumeBear, a related party. The Company accounts for its factoring arrangements as either a sale or a secured financing based on the criteria in ASC 860 "Transfers and Servicing". Estimates of allowances for doubtful accounts are reflected as a recourse obligation, a liability, for factor arrangements treated as a sale with recourse or as a contra asset accounts receivable allowance account for arrangements accounted for as a secured financing. | Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded using a specific identification method based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that no allowance is required at December 31, 2012 and December 31, 2011. The Company accounts for its factoring arrangements as either a sale or a secured financing based on the criteria in ASC 860 "Transfers and Servicing". Estimates of allowances for doubtful accounts are reflected as a recourse obligation, a liability, for factor arrangements treated as a sale with recourse or as a contra asset accounts receivable allowance account for arrangements accounted for as a secured financing. | ||||||||||
Property and Equipment | ' | ' | |||||||||
Property and Equipment | |||||||||||
Property and equipment is recorded at cost. Depreciation is computed using the straight-line method over estimated useful asset lives, which range from 5 to 39 years. Repairs and maintenance are expensed, while additions and betterments are capitalized. The cost and related accumulated depreciation of assets sold or retired are eliminated from the accounts and any gains or losses are reflected in earnings. | |||||||||||
Leases | ' | ' | |||||||||
Leases | |||||||||||
We perform a review of newly acquired leases to determine whether a lease should be treated as a capital or operating lease. Capital lease assets are capitalized and depreciated over the term of the initial lease. A liability equal to the present value of the aggregated lease payments is recorded utilizing the stated lease interest rate. If an interest rate is not stated, we will determine an estimated cost of capital and utilize that rate to calculate the present value. If the lease has an increasing rate over time, and (or) is an operating lease, all leasehold incentives, rent holidays, or other incentives will be considered in determining if a deferred rent liability is required. Leasehold incentives are capitalized and depreciated over the initial term of the lease. | |||||||||||
Software | ' | ' | |||||||||
Software | Software | ||||||||||
Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market and capitalization ceases after the general release of the software. Amortization of capitalized software development costs begins upon initial product shipment after general release. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months) using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. | Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market and capitalization ceases after the general release of the software. Amortization of capitalized software development costs begins upon initial product shipment. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months) using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. | ||||||||||
Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations. On July 15, 2013 the Company issued a general release for one of its products Visualizer™. After the general release, the Company recorded approximately $64,000 in amortization expense in the accompanying unaudited consolidated financial statements as of September 30, 2013. At the end of September, 2013, the Company has written off the capitalized research and development costs for the visualizer software suite of multiple offerings and the OMC Initiater after an evaluation based in part on the lack of cash flow and customer demand in ICD Visualizer after the general acceptance release date of July 15, 2013. In addition, the Company’s going concern opinion and cash liquidity concerns restrained the ability to make a capital investment in research and development to complete existing products in the pipeline as the available cash is needed to fund normal operating expenses. The resulting loss of $946,931 is presented as a line item entitled “asset impairment” on the consolidated statement of operations. | Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations. No amortization expense was recorded in the accompanying consolidated financial statements as the software had yet to be placed in service. | ||||||||||
Long-Lived Assets | ' | ' | |||||||||
Long-Lived Assets | |||||||||||
The Company reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying values may no longer be appropriate. Recoverability of carrying values is assessed by estimating future net cash flows from the assets. Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact management's assumptions as to sales prices, rental rates, costs, holding periods or other factors that may result in changes in the Company’s estimates of future cash flows. Although management believes the assumptions used in testing for impairment are reasonable, changes in any one of the assumptions could produce a significantly different result. | |||||||||||
Fair Value Measurements and Fair Value of Financial Instruments | ' | ' | |||||||||
Fair Value Measurements and Fair Value of Financial Instruments | Fair Value Measurements and Fair Value of Financial Instruments | ||||||||||
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: | Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: | ||||||||||
● | Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; | ● | Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; | ||||||||
● | Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and | ● | Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and | ||||||||
● | Level 3—Unobservable inputs that are supported by little or no market activity that is significant to the fair value of assets or liabilities. | ● | Level 3—Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. | ||||||||
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. | The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. | ||||||||||
Revenue Recognition | ' | ' | |||||||||
Revenue Recognition | Revenue Recognition | ||||||||||
The Company recognizes services revenue based on the proportional performance method of recognizing revenue. | The Company recognizes services revenue based on the proportional performance method of recognizing revenue. | ||||||||||
A portion of the Company’s revenue is generated from medical coding audit services. Auditing revenue is invoiced in accordance with the contract, generally at three benchmark time periods which coincide with when specific, obligatory field work services have been rendered and completed, the value of this portion of the contract price has been predetermined and agreed upon, and the client has received benefit or value in the form of the independent identification of system weaknesses and risk analysis. Further, collectability is reasonably assured due to the existence of a fixed fee contract and the size and financial health of the Company’s clients. Below is a description of the general benchmarks and work phases associated with the Company’s audit services: | A portion of the Company’s revenue is generated from medical coding audit services. Auditing revenue is invoiced in accordance with the contract, generally at three benchmark time periods which coincide with when specific, obligatory field work services have been rendered and completed, the value of this portion of the contract price has been predetermined and agreed upon, and the client has received benefit or value in the form of the independent identification of system weaknesses and risk analysis. Further, collectability is reasonably assured due to the existence of a fixed fee contract and the size and financial health of the Company’s clients. Below is a description of the general benchmarks and work phases associated with the Company’s audit services: | ||||||||||
● | Planning Phase - work commences prior to and as soon as the contract is signed and includes setting the audit scope, scheduling of the job, assignment of audit staff, understanding the client and their systems, determination of sample size and sampling methods to be employed, and other specific items as outlined in the contract. The planning phase includes the determination of deliverables as defined in the contract, generally consisting of a listing of errors, training and a final report. The Company generally invoices and recognizes 50% of the contract value at the completion of the Planning Phase. Although all of the contracts contain a clause making the first 50% of the engagement fee due and non-refundable at this point, the Company does not deem this initial fee to be recognized as deferred revenue under SAB 104 due to the extensive amount of work to be done prior to accepting the contract. | ● | Planning Phase - work commences prior to and as soon as the contract is signed and includes setting the audit scope, scheduling of the job, assignment of audit staff, understanding the client and their systems, determination of sample size and sampling methods to be employed, and other specific items as outlined in the contract. The planning phase includes the determination of deliverables as defined in the contract, generally consisting of a listing of errors, training and a final report. The Company generally invoices and recognizes 50% of the contract value at the completion of the Planning Phase. Although all of the contracts contain a clause making the first 50% of the engagement fee due and non-refundable at this point, the Company does not deem this initial fee to be recognized as deferred revenue under SAB 104 due to the extensive amount of work to be done prior to accepting the contract. | ||||||||
● | Field Work Phase – is performed at the client location and generally lasts one week and encompasses actual testing of sample claims preselected in the Planning Phase. The auditor generally preloads the selected claims into the Company’s proprietary software and audits the claim records by reviewing actual medical records. The software assists the auditor in determining proper classifications and allows the auditor to compare the proper classification against what was filed in the submission made by the client to Medicare. Notes and comments are recorded and audit reports are generated. The Company generally invoices and recognizes 40% of the contract value at the completion of the Field Work Phase. | ● | Field Work Phase – is performed at the client location and generally lasts one week and encompasses actual testing of sample claims preselected in the Planning Phase. The auditor generally preloads the selected claims into the Company’s proprietary software and audits the claim records by reviewing actual medical records. The software assists the auditor in determining proper classifications and allows the auditor to compare the proper classification against what was filed in the submission made by the client to Medicare. Notes and comments are recorded and audit reports are generated. The Company generally invoices and recognizes 40% of the contract value at the completion of the Field Work Phase. | ||||||||
● | Reporting Phase – includes a summary of audit findings, exit conference with clients, and any other specific deliverables as determined by the contract. The Company generally invoices and recognizes the remaining 10% of the contract value at the completion of the Report Phase. | ● | Reporting Phase – includes a summary of audit findings, exit conference with clients, and any other specific deliverables as determined by the contract. The Company generally invoices and recognizes the remaining 10% of the contract value at the completion of the Report Phase. | ||||||||
A portion of the Company’s revenue is derived from consulting, training and coding services provided. Revenue from these revenue streams is recognized after services are performed based on the quoted and agreed upon fee contained in its contracts. | A portion of the Company’s revenue is derived from consulting, training and coding services provided. Revenue from these revenue streams is recognized after services are performed based on the quoted and agreed upon fee contained in its contracts. | ||||||||||
For our education products sold on a self-study standalone basis or in multiple element contracts which include training and the product and training are separable elements (see below) revenue is recognized for the product upon passing of title which occurs once the end user is granted access to our online curriculum courses. | The Company intends a general release of its first software product in early 2013. Software sales on a standalone basis will be recognized upon delivery of the software when evidence of the purchase arrangement exists and the price is determinable, and when collectability is reasonably assured. | ||||||||||
On July 15, 2013 the Company issued a general release for one of its products Visualizer™. Software sales on a standalone basis will be recognized upon delivery of the software when evidence of the purchase arrangement exists and the price is determinable, and when collectability is reasonably assured. | Arrangements with customers may involve multiple elements including software sales, training, software product maintenance, coding services, coding audit services and other consulting services. Training and maintenance on software products will generally occur after the software product sale while other services may occur before or after the software product sale and may not relate to the software product. Revenue recognition for multiple element arrangement is as follows: | ||||||||||
Arrangements with customers may involve multiple elements including software products, education products, training, software product maintenance, coding services, coding audit services and other consulting services. Training on education products will occur after the education product sale. Education products are sold and may be used as a self-study product, although most of our customers elect to purchase our training services and therefore most of our contracts to date are multiple element contracts including one price for the education product and related training. We allocate the selling price to each element as discussed below. Training and maintenance on software products will generally occur after the software product sale. Other services may occur before or after the product sales and may not relate to the products. Revenue recognition for multiple element arrangement is as follows: | Each element is accounted for separately when each element has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the general and specific criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company has historically sold its services with established rates which it believes is Company specific objective evidence of selling price. For the new software products, management has established selling prices which qualifies as Company specific objective evidence of selling price. Generally all elements in multiple element arrangements with Company customers qualify as separate units of account for revenue recognition purposes. | ||||||||||
Each element is accounted for separately when each element has value to the customer on a standalone basis and there is Company specific objective evidence of selling price of each deliverable. For revenue arrangements with multiple deliverables, the Company allocates the total customer arrangement to the separate units of accounting based on their relative selling prices as determined by the price of the items when sold separately. Once the selling price is allocated, the revenue for each element is recognized using the general and specific criteria under GAAP as discussed above for elements sold in non-multiple element arrangements. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement are combined with the other applicable undelivered items within the arrangement. The allocation of arrangement consideration and the recognition of revenue is then determined for those combined deliverables as a single unit of accounting. The Company has historically sold its services with established rates which it believes is Company specific objective evidence of selling price. For the new software products, management has established selling prices which qualifies as Company specific objective evidence of selling price. Generally all elements in multiple element arrangements with Company customers qualify as separate units of account for revenue recognition purposes. | |||||||||||
Cost of Revenues | ' | ' | |||||||||
Cost of Revenues | Cost of Revenues | ||||||||||
Cost of revenues includes labor costs for services and education development costs. Amortization costs in 2013 of approximately $64,000 were allocable to cost of sales related to software amortization. In future periods, additional amortization of capitalized software costs may be included in costs of revenues. | Cost of revenues includes labor costs. There were no depreciation or amortization costs in 2012 or 2011 that were allocable to cost of sales. In future periods, amortization of capitalized software costs will be included in costs of revenues. | ||||||||||
Stock-Based Compensation | ' | ' | |||||||||
Share Based Compensation | Stock-Based Compensation | ||||||||||
Compensation expense for all stock-based employee and director compensation awards granted is based on the grant date fair value estimated in accordance with the provisions of ASC Topic 718, Stock Compensation (“ASC Topic 718”). The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. Vesting terms vary based on the individual grant terms. | Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. For non-employee stock-based awards, the Company calculates the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the prorata compensation expense is adjusted accordingly until such time the non-employee award is fully vested, at which time the total compensation recognized to date shall equal the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. | ||||||||||
The Company estimates the fair value of stock-based compensation awards on the date of grant using the Black-Scholes-Merton (“BSM”) option pricing model, which was developed for use in estimating the value of traded options that have no vesting restrictions and are freely transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. The BSM option pricing model considers, among other factors, the expected term of the award and the expected volatility of the Company’s stock price. Expected terms are calculated using the Simplified Method, volatility is determined based on the Company's historical stock price trends and the discount rate is based upon treasury rates with instruments of similar expected terms. Warrants granted to non-employees are accounted for in accordance with the measurement and recognition criteria of ASC Topic 505-50, Equity Based Payments to Non-Employees. | |||||||||||
Research and Development Costs | ' | ' | |||||||||
Research and Development Costs | |||||||||||
In accordance with ASC 730-10, Research and development costs are expensed when incurred. Total research and development costs for the years ended December 31, 2012 and 2011 were $64,386 and $93,489 respectively. | |||||||||||
Advertising | ' | ' | |||||||||
Advertising | |||||||||||
The cost of advertising is expensed as incurred. Advertising and marketing expenses amounted to approximately $130,000 and $116,000 for the year ended December 31, 2012 and 2011, respectively and is included in selling and administrative expenses. | |||||||||||
Income Taxes | ' | ' | |||||||||
Income Taxes | |||||||||||
The Company elected to convert from a Subchapter S corporation for Federal income tax purposes to a C corporation effective October 21, 2011. Upon our C coloration election, we began to use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized. | |||||||||||
The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. | |||||||||||
Earnings Per Share | ' | ' | |||||||||
Earnings Per Share | Earnings Per Share | ||||||||||
The Company computes and presents earnings or losses per share in accordance with FASB ASC Topic 260, Earnings per share. Basic earnings or losses per share are computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings or loss per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options and warrants using the average market prices during the period. | The Company computes and presents earnings or losses per share in accordance with FASB ASC Topic 260, Earnings per share. Basic earnings or losses per share are computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. Diluted earnings or loss per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares and common stock equivalents outstanding, calculated on the treasury stock method for options and warrants using the average market prices during the period. | ||||||||||
As the Company incurred a net loss in all periods presented, all potentially dilutive securities were excluded from the computation of diluted loss per share since the effect of including them is anti-dilutive. There were no dilutive securities outstanding at September 30, 2013 and 2012 respectively. | As the Company incurred a net loss in all periods presented, all potentially dilutive securities were excluded from the computation of diluted loss per share since the effect of including them is anti-dilutive. There were no dilutive securities outstanding at December 31, 2012 and 2011 respectively. | ||||||||||
Segment Reporting | ' | ' | |||||||||
Segment Reporting | |||||||||||
Financial Accounting Standards Board (“FASB”) ASC Topic 280, Segment Reporting (“ASC 280”), establishes standards for the way public business enterprises report information about operating segments. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company has determined that based on these criteria it only operates one segment, consulting services, as all other services do not meet the minimum threshold for separate reporting of a segment. | |||||||||||
Contingencies | ' | ' | |||||||||
Contingencies | |||||||||||
We accrue for contingent obligations, including legal costs and restructuring costs, when the obligation is probable and the amount can be reasonably estimated. As facts concerning contingencies become known we reassess our position and make appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters that are subject to change as events evolve and additional information becomes available. | |||||||||||
Recent Accounting Pronouncements | ' | ' | |||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||
We have implemented all new accounting standards that are in effect and that may impact our unaudited condensed consolidated financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. | We have implemented all new accounting standards that are in effect and that may impact our consolidated financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Summary of assets and liabilities of the Company Variable Interest Entities | ' | ||||||||
December 31, | |||||||||
2012 | 2011 | ||||||||
Total assets | $ | 211,000 | $ | 230,000 | |||||
Total liabilities | $ | 182,000 | $ | 185,000 |
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Accounts Receivable [Abstract] | ' | ' | ||||||||||||||||
Summary of Accounts receivable | ' | ' | ||||||||||||||||
September 30, | December 31, | 2012 | 2011 | |||||||||||||||
2013 | 2012 | Accounts receivable | $ | 1,246,814 | $ | 143,557 | ||||||||||||
Accounts receivable | $ | 1,011,929 | $ | 1,246,814 | Allowance for doubtful accounts | - | - | |||||||||||
Accounts receivable –Related party | 117,632 | - | Total | $ | 1,246,814 | $ | 143,557 | |||||||||||
Allowance for doubtful accounts | (117,632 | ) | - | |||||||||||||||
Total | $ | 1,011,929 | $ | 1,246,814 | ||||||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
Summary of property and equipment | ' | ||||||||
December 31, | |||||||||
2012 | 2011 | ||||||||
Building and improvements | $ | 227,603 | $ | 227,603 | |||||
Furniture | 119,810 | 118,187 | |||||||
Computers and Equipment | 160,469 | 99,316 | |||||||
507,882 | 445,106 | ||||||||
Less - Accumulated depreciation | (142,865 | ) | (92,607 | ) | |||||
Total | $ | 365,017 | $ | 352,499 |
Research_and_Developement_and_1
Research and Developement and Software (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Research and Development and Software [Abstract] | ' | ' | ||||||||||||||||
Schedule of software's | ' | ' | ||||||||||||||||
September 30, | December 31, | 31-Dec-12 | 31-Dec-11 | |||||||||||||||
2013 | 2012 | Software | $ | 258,933 | $ | - | ||||||||||||
Software | $ | 1,011,068 | $ | 258,933 | Accumulated amortization | - | - | |||||||||||
Accumulated amortization | (64,137 | ) | - | Software, net | $ | 258,933 | $ | - | ||||||||||
Asset Impairment | (946,931 | ) | - | |||||||||||||||
Software, net | $ | - | $ | 258,933 | ||||||||||||||
Schedule of estimated future amortization expense of software | ' | ' | ||||||||||||||||
Year Ending December 31, | ||||||||||||||||||
2013 | $ | 86,311 | ||||||||||||||||
2014 | 86,311 | |||||||||||||||||
2015 | 86,311 | |||||||||||||||||
Total | $ | 258,933 |
Recovered_Sheet1
Long Term Debt and Notes payable (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Long Term Debt and Notes Payable [Abstract] | ' | ' | ||||||||||||||||
Schedule of Long Term debt | ' | ' | ||||||||||||||||
December 31, | December 31, | |||||||||||||||||
September 30, | December 31, | 2012 | 2011 | |||||||||||||||
2013 | 2012 | Bank term loan | $ | 38,897 | $ | 66,245 | ||||||||||||
Bank term loan | $ | 154,030 | $ | 38,897 | Convertible Bridge Loan | - | 250,000 | |||||||||||
Mortgage loan | 176,475 | 180,073 | Mortgage loan | 180,073 | 185,812 | |||||||||||||
330,505 | 218,970 | 218,970 | 502,057 | |||||||||||||||
Less current portion | (43,956 | ) | (37,513 | ) | Less current portion | (37,513 | ) | (283,640 | ) | |||||||||
Total long term portion | $ | 286,549 | $ | 181,457 | Total long term portion | $ | 181,457 | $ | 218,417 | |||||||||
Schedule of Notes payable | ' | ' | ||||||||||||||||
30-Sep-13 | ||||||||||||||||||
Principal amount of notes payable | $ | 1,063,333 | 31-Dec-12 | |||||||||||||||
Unamortized discount | (567,118 | ) | Principal amount of notes payable | $ | 815,000 | |||||||||||||
Notes payable, net of discount | 496,215 | Unamortized discount | (338,692 | ) | ||||||||||||||
Less current portion | (372,161 | ) | Notes payable, net of discount | 476,308 | ||||||||||||||
Total Long term portion | $ | 124,054 | Less current portion | (202,557 | ) | |||||||||||||
Total long term portion | $ | 273,751 | ||||||||||||||||
Summary of future annual principal payments | ' | ' | ||||||||||||||||
2013 | $ | 375,564 | ||||||||||||||||
2014 | 420,954 | |||||||||||||||||
2015 | 74,321 | |||||||||||||||||
2016 | 6,848 | |||||||||||||||||
2017 | 7,322 | |||||||||||||||||
Thereafter | 148,961 | |||||||||||||||||
Total | $ | 1,033,970 |
Capital_Leases_Tables
Capital Leases (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Capital Leases [Abstract] | ' | ||||
Schedule of Capital Leased Assets [Table Text Block] | ' | ||||
September 30, | |||||
2013 | |||||
Equipment | $ | 79,210 | |||
Less accumulated depreciation | (27,006 | ) | |||
Total | $ | 52,204 | |||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | ' | ||||
Year Ending December 31: | |||||
2013 | $ | 8,193 | |||
2014 | 32,768 | ||||
2015 | 22,527 | ||||
2016 | 3,580 | ||||
Total minimum lease payments | 67,068 | ||||
Less amount representing interest | (11,386 | ) | |||
Present value of minimum lease payments | $ | 55,672 | |||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||
Commitments and Contingencies [Abstract] | ' | ' | ||||||||
Future minimum lease payments under leases | ' | ' | ||||||||
Years Ending December 31: | ||||||||||
2013 | $ | 51,432 | ||||||||
2014 | 6,360 | |||||||||
2015 | 6,360 | |||||||||
2016 | 6,360 | |||||||||
Total | $ | 70,512 | ||||||||
Analysis of the leased assets included in Property and Equipment | ' | ' | ||||||||
September 30, | ||||||||||
2013 | ||||||||||
Equipment | $ | 79,210 | ||||||||
Less accumulated depreciation | (27,006 | ) | ||||||||
Total | $ | 52,204 | ||||||||
Schedule by years of future minimum payments required under the lease | ' | ' | ||||||||
Year Ending December 31: | ||||||||||
2013 | $ | 8,193 | ||||||||
2014 | 32,768 | |||||||||
2015 | 22,527 | |||||||||
2016 | 3,580 | |||||||||
Total minimum lease payments | 67,068 | |||||||||
Less amount representing interest | (11,386 | ) | ||||||||
Present value of minimum lease payments | $ | 55,672 | ||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Stockholders' Equity [Abstract] | ' | ||||||||||||
Summary of weighted-average assumptions | ' | ||||||||||||
2013 | |||||||||||||
Dividend yield (1) | 0 | % | |||||||||||
Expected volatility (2) | 118 | % | |||||||||||
5 Year Bond interest rate (3) | 1.2 | % | |||||||||||
Expected life (4) | 1.5 | ||||||||||||
(1) Represents cash dividends paid as a percentage of the share price on the date of grant. | |||||||||||||
(2) Based on historical volatility of the Company’s common stock over the expected life of the options. | |||||||||||||
(3) Represents the U.S. Treasury STRIP rates over maturity periods matching the expected term of the options at the time of grant. | |||||||||||||
(4) The period of time that options granted are expected to be outstanding based upon historical evidence. | |||||||||||||
Summary of stock option activity | ' | ||||||||||||
Options | Shares | Weighted-Average Exercise Price | Weighted-Average | Aggregate | |||||||||
Remaining | Intrinsic Value | ||||||||||||
Contractual Term | $0 | ||||||||||||
Outstanding at January 1, 2013 | - | - | |||||||||||
Granted | 636,000 | - | 1.7 yrs. | ||||||||||
Exercised | - | - | |||||||||||
Forfeited or expired | - | - | |||||||||||
Outstanding at September 30, 2013 | 636,000 | $ | 0.4225 | 1.7 yrs. | - | ||||||||
Exercisable at September 30, 2013 | - | - | - | - | |||||||||
Summary of changes in non-vested equity shares | ' | ||||||||||||
Weighted-Average | |||||||||||||
Shares | Grant Date | ||||||||||||
Fair Value | |||||||||||||
Non-vested equity shares, January 1, 2013 | - | - | |||||||||||
Granted | 636,000 | - | |||||||||||
Vested | - | - | |||||||||||
Forfeited | - | - | |||||||||||
Non-vested equity shares, September 30, 2013 | 636,000 | - | |||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Summary of income tax expense (benefit) | ' | ||||||||
Year ended December 31, | Year ended December 31, | ||||||||
2012 | 2011 | ||||||||
U.S. Federal “expected” income tax | $ | (495,540 | ) | $ | (398,453 | ) | |||
State income tax | (52,906 | ) | (58,596 | ) | |||||
Non-deductible beneficial conversion interest | 102,000 | - | |||||||
Non-deductible items | 24,769 | - | |||||||
Stock compensation | - | 319,252 | |||||||
S Corp non-deductible/taxable items | - | (31,703 | ) | ||||||
Change in valuation allowance | 421,677 | 169,500 | |||||||
Total provision for income taxes | $ | - | $ | - | |||||
Summary of deferred tax assets and liabilities | ' | ||||||||
2012 | 2011 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forward | $ | 586,600 | $ | 169,500 | |||||
Accrued salary and other | 35,821 | - | |||||||
Total gross deferred tax assets | 622,421 | 169,500 | |||||||
Deferred tax liabilities: | |||||||||
Depreciation | (31,244 | ) | - | ||||||
Total gross deferred tax liabilities | (31,244 | ) | 169,500 | ||||||
Less valuation allowance | (591,177 | ) | (169,500 | ) | |||||
Net deferred tax assets | $ | - | $ | - | |||||
Nature_of_Business_and_Going_C1
Nature of Business and Going Concern (Details) (USD $) | 1 Months Ended | 2 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Dec. 31, 2012 | Apr. 30, 2012 | Feb. 28, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Feb. 10, 2012 | Dec. 31, 2011 | Nov. 12, 2013 | |
Subsequent Event [Member] | ||||||||
Nature of Business and Going Concern (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Shares exchange right on each share pursuant to Merger agreement | ' | ' | ' | ' | ' | 1,271 | ' | ' |
Authorized shares of common stock, stock split conversion ratio | ' | '12.98 for 1. | ' | '12.98 for 1. | ' | ' | ' | ' |
Amount transferred from additional paid in capital to common stock | ' | $32,747 | ' | ' | ' | ' | ' | ' |
Cash | 893,458 | ' | ' | 893,458 | 185,600 | ' | 198,500 | ' |
Proceed from new loans | 815,000 | ' | 1,220,000 | ' | ' | ' | ' | ' |
Proceeds from Issuance of Convertible Preferred Stock | ' | ' | ' | ' | ' | ' | ' | 5,400,000 |
Convertible preferred stock, dividend percentage | ' | ' | ' | ' | ' | ' | ' | 8.00% |
Net proceeds from issuance of convertible preferred stock after payment of expense | ' | ' | ' | ' | ' | ' | ' | $4,885,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of assets and liabilities of the Company Variable Interest Entities | ' | ' |
Total assets | '211000 | '230000 |
Total liabilities | '182000 | '185000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Segment | ||||||
Summary of significant accounting policies (Textual) | ' | ' | ' | ' | ' | ' |
Allowance for doubtful accounts receivable | $117,632 | ' | $117,632 | ' | $0 | $0 |
Amortization expense | ' | ' | 64,000 | ' | ' | ' |
Asset Impairment | 946,931 | ' | 946,931 | ' | ' | ' |
Estimated useful asset lives | ' | ' | ' | ' | '5 to 39 years. | ' |
Percentage of contract value that is recognized at the completion of the planning phase | ' | ' | 50.00% | ' | 50.00% | ' |
Percentage of engagement fee due and non-refundable as per clause | ' | ' | 50.00% | ' | 50.00% | ' |
Percentage of contract value recognized at completion of field work phase | ' | ' | 40.00% | ' | 40.00% | ' |
Remaining percentage of contract value that recognize at completion of report phase | ' | ' | 10.00% | ' | 10.00% | ' |
Research and development | ' | 926 | 289 | 54,059 | 64,386 | 93,489 |
Advertising and marketing expenses | ' | ' | ' | ' | $130,000 | $116,000 |
Number of operating segments | ' | ' | ' | ' | 1 | ' |
Accounts_Receivable_Details
Accounts Receivable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of Accounts receivable | ' | ' | ' |
Accounts receivable | $1,011,929 | $1,246,814 | $143,557 |
Accounts receivable - Related party | ' | ' | ' |
Allowance for doubtful accounts | -117,632 | ' | ' |
Total | $1,011,929 | $1,246,814 | $143,557 |
Accounts_Receivable_Details_Te
Accounts Receivable (Details Textual) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Accounts Receivable (Textual) | ' | ' | ' | ' |
Bad debt expense on trade accounts receivable | $124,082 | ' | ' | ' |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of Property and Equipment | ' | ' | ' |
Building and improvements | ' | $227,603 | $227,603 |
Furniture | ' | 119,810 | 118,187 |
Computers and Equipment | ' | 160,469 | 99,316 |
Property and Equipment, gross | ' | 507,882 | 445,106 |
Less - Accumulated depreciation | ' | -142,865 | -92,607 |
Total | $400,126 | $365,017 | $352,499 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Property and Equipment (Textual) | ' | ' | ' | ' | ' | ' |
Depreciation expense | $19,616 | $14,007 | $64,214 | $36,758 | $50,765 | $31,362 |
Research_and_Developement_and_2
Research and Developement and Software (Details) (Software [Member], USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Software [Member] | ' | ' | ' |
Schedule of software's | ' | ' | ' |
Software | $1,011,068 | $258,933 | ' |
Accumulated amortization | -64,137 | ' | ' |
Asset Impairment | -946,931 | ' | ' |
Software, net | ' | $258,933 | ' |
Research_and_Developement_and_3
Research and Developement and Software (Details 1) (Software [Member], USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Software [Member] | ' | ' |
Schedule of estimated future amortization expense of software | ' | ' |
2013 | $86,311 | ' |
2014 | 86,311 | ' |
2015 | 86,311 | ' |
Software, net | $258,933 | ' |
Research_and_Developement_and_4
Research and Developement and Software (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Software [Member] | Software [Member] | Software [Member] | Software [Member] | Software [Member] | |||||
Research and Development (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated capitalized cost | ' | ' | ' | ' | $1,011,068 | ' | $1,011,068 | $258,933 | ' |
Software amortization expense | ' | ' | ' | ' | 64,137 | 0 | ' | ' | ' |
Asset Impairment | 946,931 | ' | 946,931 | ' | ' | ' | 946,931 | ' | ' |
Accumulated amortization | ' | ' | ' | ' | $64,137 | ' | $64,137 | ' | ' |
Line_of_Credit_Details
Line of Credit (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 19, 2013 | Jan. 18, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Dell Business Credit Line [Member] | ||||
Payment | ||||||||
Line of Credit (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | ' | $150,000 | $150,000 | $50,000 |
Line of credit maturity date | ' | ' | ' | 17-Sep-17 | ' | 18-Dec-18 | 18-Dec-18 | ' |
Line of credit renewed date | ' | ' | ' | ' | ' | ' | 18-Dec-12 | ' |
Rate of interest above prime rate | ' | ' | ' | ' | ' | ' | 6.50% | ' |
Prime rate of interest | ' | ' | ' | ' | ' | ' | 3.25% | ' |
Outstanding balance | ' | ' | ' | 133,334 | ' | ' | 150,000 | ' |
Revolving line of credit with a bank | 46,166 | 25,000 | 98,500 | ' | ' | 25,865 | 25,000 | 46,166 |
Number Of Payments Due | ' | ' | ' | ' | 72 | ' | ' | ' |
Revolving line of credit, first payment due amount | ' | ' | ' | $3,209 | $2,083 | ' | ' | ' |
Long_Term_Debt_and_Notes_Payab1
Long Term Debt and Notes Payable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of Long Term debt | ' | ' | ' |
Total | $330,505 | $218,970 | $502,057 |
Less current portion | -43,956 | -37,513 | -283,640 |
Total long term portion | 286,549 | 181,457 | 218,417 |
Bank term loan [Member] | ' | ' | ' |
Summary of Long Term debt | ' | ' | ' |
Total | 154,030 | 38,897 | 66,245 |
Convertible Bridge Loan [Member] | ' | ' | ' |
Summary of Long Term debt | ' | ' | ' |
Total | ' | ' | 250,000 |
Mortgage loan [Member] | ' | ' | ' |
Summary of Long Term debt | ' | ' | ' |
Total | $176,475 | $180,073 | $185,812 |
Long_Term_Debt_and_Notes_Payab2
Long Term Debt and Notes Payable (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of notes payable | ' | ' | ' |
Principal amount of notes payable | $1,063,333 | $815,000 | ' |
Unamortized discount | -567,118 | -338,692 | ' |
Notes payable, net of discount | 496,215 | 476,308 | ' |
Less current portion | -372,161 | -202,557 | ' |
Total long term portion | $124,054 | $273,751 | ' |
Long_Term_Debt_and_Notes_Payab3
Long Term Debt and Notes Payable (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of future annual principal payments | ' | ' | ' |
2013 | ' | $375,564 | ' |
2014 | ' | 420,954 | ' |
2015 | ' | 74,321 | ' |
2016 | ' | 6,848 | ' |
2017 | ' | 7,322 | ' |
Thereafter | ' | 148,961 | ' |
Total | $330,505 | $218,970 | $502,057 |
Long_Term_Debt_and_Notes_Payab4
Long Term Debt and Notes Payable (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||||||||||||
Aug. 22, 2013 | Aug. 28, 2013 | Aug. 22, 2013 | Jul. 31, 2010 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 15, 2012 | 31-May-12 | Feb. 10, 2012 | Sep. 30, 2011 | Sep. 13, 2011 | Oct. 31, 2011 | Oct. 21, 2011 | Sep. 19, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Feb. 28, 2013 | Dec. 31, 2012 | Feb. 28, 2013 | Dec. 31, 2012 | Sep. 19, 2013 | |
Investor | Investor | Bridge Loan One [Member] | Bridge Loan One [Member] | Bridge Loan Two [Member] | Bridge Loan Two [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Loan Agreements [Member] | Loan Agreements [Member] | Loan Agreements [Member] | Line of Credit [Member] | ||||||||||
Long Term Debt and Notes Payable (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount received under loan facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $815,000 | ' |
Principal amount of notes payable | ' | ' | ' | ' | 1,063,333 | ' | 815,000 | ' | ' | ' | ' | ' | 150,000 | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | 12.00% | ' | 6.75% | ' | 12.00% | 12.00% | 12.00% | 12.00% | ' |
Debt maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31-Dec-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertible debt, shares | ' | ' | 1,608,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,343,749 | ' | ' | ' | ' | ' | ' | 1,220,000 | ' | ' |
Conversion of convertible debt amount | 402,083 | 514,666 | 402,083 | ' | ' | 300,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | $0.25 | $0.32 | $0.25 | ' | ' | ' | ' | ' | $0.10 | $0.10 | $0.19 | ' | ' | ' | $0.19 | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion Price, description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Conversion price of $0.19 per share which is equal to a discount of 25% of to the Purchase Price. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments of principal and interest (Monthly) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,200 | 2,700 | ' | ' | ' | ' | ' | ' |
Maturity period of term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | '5 years | ' | ' | ' | ' | ' | ' |
Term loan, balances due | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,697 | 39,000 | 154,030 | ' | ' | ' | ' | 133,334 |
Received promissory note | ' | ' | ' | ' | 496,215 | ' | 476,308 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 815,000 | 1,220,000 | 815,000 | ' |
Shares issued as loan fee | ' | ' | ' | ' | 679,353 | ' | 343,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 343,500 | 679,500 | 343,500 | ' |
Stock issued to lenders in lieu of loan fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,375,000 | 5,575,000 | 2,375,000 | ' |
Fair value of stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.28 | $0.28 | $0.28 | ' |
Accrued interest | ' | ' | ' | ' | ' | ' | 4,524 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,524 | ' | 4,524 | ' |
Principal and interest payable period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '26 months | '26 months | ' | ' |
Number Of Investors | 5 | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized discount | 128,452 | ' | 128,452 | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | 425,634 | 338,692 | 425,634 | 338,692 | ' |
Term loan interest rate terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The new consolidated term loan matures in four years and incurs interest at a rate per year equal to the bank's prime rate plus 3.5 | ' | ' | ' | ' | ' | ' | ' |
Mortgage loan, face amount related to certain real estate | ' | ' | ' | 192,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mortgage loans on real estate, Maturity Date | ' | ' | ' | 31-Jul-20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balloon principal payment | ' | ' | ' | 129,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mortgage loan fixed interest rate | ' | ' | ' | 6.63% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity loan related to certain real estate Interest rate description | ' | ' | ' | 'Interest is fixed at 6.625% for the first five years of the loan, and converts to an adjustable rate for the second five years at the Federal Funds Rate plus 3.25%, as established by the United State Federal Reserve. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance under mortgage loan | ' | ' | ' | ' | 176,500 | ' | 180,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mortgage loans on real estate periodic payment (Monthly) | ' | ' | ' | $1,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Promissory note duration | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital_Leases_Details
Capital Leases (Details ) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule by years of future minimum payments required under the lease | ' | ' |
2013 | $32,768 | $16,923 |
2014 | 22,527 | 16,923 |
2015 | 3,580 | 11,282 |
Total minimum lease payments | 67,068 | 45,128 |
Less amount representing interest | -11,386 | -4,231 |
Present value of minimum lease payments | $55,672 | $40,897 |
Capital_Leases_Details_1
Capital Leases (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Analysis of the leased assets included in property and equipment | ' | ' |
Equipment | $79,210 | $41,969 |
Less accumulated depreciation | -27,006 | -5,926 |
Total | $52,204 | $36,043 |
Capital_Leases_Details_Textual
Capital Leases (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Capital Leases (Textual) | ' | ' |
Depreciation expense of assets held under Capital Lease | $9,000 | $0 |
Factoring_Agreement_Details
Factoring Agreement (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Factoring Agreement (Textual) | ' | ' | ' | ' | ' |
Period of factoring agreement | '1 year | ' | ' | '1 year | ' |
Percentage of total receivable's face value exchanged under factoring agreement | 85.00% | ' | ' | 85.00% | ' |
Aggregate amount under factoring agreement | ' | $1,108,000 | ' | $3,850,000 | ' |
Advance received under factoring agreement | ' | 1,090,309 | ' | 3,272,000 | ' |
Factor fees | ' | 35,500 | 104,000 | 119,000 | ' |
Outstanding receivables purchased by factor | ' | 522,000 | 522,000 | 950,000 | ' |
Loan payable to factor | ' | $443,648 | $443,648 | $827,075 | ' |
Convertible_Promissory_Notes_D
Convertible Promissory Notes (Details) (USD $) | 1 Months Ended | |||||||
31-May-12 | Dec. 31, 2011 | Sep. 30, 2013 | Aug. 28, 2013 | Aug. 22, 2013 | Dec. 31, 2012 | Jul. 15, 2012 | Feb. 10, 2012 | |
ConvertibleNote | ConvertibleNote | |||||||
Convertible promissory notes (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Advances on convertible promissory notes | $300,000 | $170,000 | ' | ' | ' | ' | ' | ' |
Number of convertible notes issued | 5 | 3 | ' | ' | ' | ' | ' | ' |
Convertible promissory notes | ' | 314,000 | ' | ' | ' | ' | ' | ' |
Sale price of future securities | ' | '100% of the sale price. | ' | ' | ' | ' | ' | ' |
Convertible debt payable | 300,000 | ' | ' | ' | ' | ' | 300,000 | ' |
Convertible notes payable maturity period | '12 months | ' | ' | ' | ' | ' | ' | ' |
Interest percentage payable on notes, Description | '6% based on a 360 day year. | ' | ' | ' | ' | ' | ' | ' |
Convertible notes conversion price | $0.10 | ' | ' | $0.32 | $0.25 | ' | $0.10 | $0.19 |
Debt discount | $300,000 | ' | ' | ' | $128,452 | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Analysis of the leased assets included in property and equipment | ' | ' |
Equipment | $79,210 | $41,969 |
Less accumulated depreciation | -27,006 | -5,926 |
Total | $52,204 | $36,043 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of future minimum payments required under lease | ' | ' |
2013 | $8,193 | ' |
2014 | 32,768 | 16,923 |
2015 | 22,527 | 16,923 |
2016 | 3,580 | 11,282 |
Total minimum lease payments | 67,068 | 45,128 |
Less amount representing interest | -11,386 | -4,231 |
Present value of minimum lease payments | $55,672 | $40,897 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 2) (USD $) | Dec. 31, 2012 |
Future minimum lease payments under leases | ' |
2013 | $51,432 |
2014 | 6,360 |
2015 | 6,360 |
2016 | 6,360 |
Total | $70,512 |
Commitments_and_Contingencies_4
Commitments and Contingencies (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2012 | Aug. 31, 2012 | Jul. 31, 2012 | Sep. 30, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | Jul. 29, 2013 | Dec. 31, 2011 | Nov. 01, 2013 | |
Lawsuit | President [Member] | ||||||||
Subsequent Event [Member] | |||||||||
Commitments (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease expire date | ' | 31-Aug-12 | ' | ' | ' | ' | ' | ' | ' |
Lease arrangements periodic payment per month | $500 | $500 | ' | ' | $600 | ' | ' | ' | ' |
Lease arrangement payment paid per month | 5,008 | ' | ' | ' | ' | ' | ' | ' | ' |
Lease expiration term | '5 years | ' | ' | '1 year | '5 years | ' | ' | ' | ' |
Lease arrangements term, Description | ' | ' | ' | 'One year with five successive one year renewal options. | ' | ' | ' | ' | ' |
Lease arrangements, payment for first month | ' | ' | ' | 2,500 | ' | ' | ' | ' | ' |
Lease arrangements periodic payments for remaining eleven months | ' | ' | ' | 4,400 | ' | ' | ' | ' | ' |
Renewed period of lease arrangements | '1 year | ' | ' | ' | ' | ' | ' | ' | ' |
Increment percentage in lease payment on renewal | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Total minimum lease payments | ' | ' | ' | ' | 45,128 | 67,068 | ' | ' | ' |
Short term liabilities | ' | ' | ' | ' | 16,923 | 32,768 | ' | ' | ' |
Amortization of assets held under capital leases | ' | ' | ' | ' | ' | 27,000 | ' | ' | ' |
Number of pending lawsuits resolved | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Lawsuit settlement, amount payable | ' | ' | 232,500 | ' | ' | ' | ' | ' | ' |
Terms of payment to Siddel for settlement of lawsuits | ' | ' | 'Eleven (11) payments totaling $232,500 pursuant to the terms of prior employment agreement. | ' | ' | ' | ' | ' | ' |
Number of shares agreed to be transferred to company officer | ' | ' | 3,299,802 | ' | ' | ' | ' | ' | ' |
Grace period for due payments under Settlement Agreement | ' | ' | '7 days | ' | ' | ' | ' | ' | ' |
Settlement Payable | ' | ' | ' | ' | 115,278 | ' | 23,056 | ' | ' |
Due to officers | ' | ' | ' | ' | 75,000 | 115,000 | ' | ' | ' |
Promissory notes payable | ' | ' | ' | ' | ' | ' | ' | ' | $40,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Summary of weighted-average assumptions | ' |
Dividend yield | 0.00% |
Expected volatility | 118.00% |
5 Year Bond interest rate | 1.20% |
Expected life | '1 year 6 months |
Stockholders_Equity_Details_1
Stockholders' Equity (Details 1) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' |
Number of Shares, Outstanding, Beginning balance | ' |
Number of Shares, Granted | 636,000 |
Number of Shares, Exercised | ' |
Number of Shares, Forfeited or expired | ' |
Number of Shares, Outstanding, Ending balance | 636,000 |
Number of Shares, Exercisable, Ending balance | ' |
Weighted Average Exercise Price, Beginning balance | ' |
Weighted Average Exercise Price, Granted | ' |
Weighted Average Exercise Price, Exercised | ' |
Weighted Average Exercise Price, Forfeited or expired | ' |
Weighted Average Exercise Price, Ending balance | $0.42 |
Weighted Average Exercise Price, Exercisable, Ending balance | ' |
Weighted-Average Remaining Contractual Term, Granted | '1 year 8 months 12 days |
Weighted-Average Remaining Contractual Term, Ending | '1 year 8 months 12 days |
Weighted-Average Remaining Contractual Term, Exercisable, Ending | '0 years |
Aggregate Intrinsic Value, Ending balance | ' |
Aggregate Intrinsic Value, Exercisable, Ending balance | ' |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Schedule of nonvested share activity | ' |
Number of Non-vested equity Shares, Beginning balance | ' |
Number of Non-vested equity Shares, Granted | 636,000 |
Number of Non-vested equity Shares, Vested | ' |
Number of Non-vested equity Shares, Forfeited | ' |
Number of Non-vested equity Shares, Ending balance | 636,000 |
Weighted-Average Grant Date Fair Value, Beginning balance | ' |
Weighted-Average Grant Date Fair Value, Granted | ' |
Weighted-Average Grant Date Fair Value, Vested | ' |
Weighted-Average Grant Date Fair Value, Forfeited | ' |
Weighted-Average Grant Date Fair Value, Ending balance | ' |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||
Oct. 09, 2013 | Sep. 06, 2013 | Aug. 30, 2013 | Aug. 27, 2013 | Aug. 21, 2013 | Jun. 27, 2013 | Jun. 21, 2013 | 24-May-13 | 19-May-13 | Apr. 01, 2013 | Jan. 15, 2013 | Aug. 22, 2013 | Aug. 28, 2013 | Aug. 22, 2013 | Mar. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2012 | Jul. 31, 2012 | Apr. 30, 2012 | Feb. 29, 2012 | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 15, 2012 | 31-May-12 | Apr. 13, 2012 | Feb. 10, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 09, 2013 | Jul. 08, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | |
Investor | Investor | Two Employees [Member] | Three Employees [Member] | Michael Ciprianni [Member] | Private Placement [Member] | Non Vesting Equity [Member] | Non Vesting Equity [Member] | Stock Option [Member] | Stock Option [Member] | Minimum [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||
Stockholders' Equity (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares exchange right on each share pursuant to Merger agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,271 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued pursuant to Merger agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,499,226 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized shares of common stock, stock split conversion ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '12.98 for 1. | ' | ' | ' | ' | ' | ' | '12.98 for 1. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock granted to Chief Marketing Officer for future services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,299,815 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued for compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $563,000 | $290,162 | ' | ' | $818,595 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount transferred from additional paid in capital to common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,747 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible bridge loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock aggregate conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | 1,343,749 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.25 | $0.32 | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.10 | $0.10 | ' | $0.19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, gross proceeds | ' | ' | ' | ' | ' | ' | 300,000 | 50,000 | 250,000 | ' | 13,000 | ' | ' | ' | ' | ' | ' | ' | 22,000 | ' | 349,000 | 350,000 | ' | 335,600 | ' | 1,243,000 | 394,583 | 730,183 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 87,249 | ' | ' |
Common stock shares issued | 100,000 | ' | ' | ' | ' | ' | 750,000 | 125,000 | 625,000 | ' | 46,429 | ' | ' | ' | ' | 5,575,000 | ' | 2,375,000 | 77,743 | ' | 1,394,909 | 1,410,874 | ' | 1,468,786 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | 636,000 | ' | ' |
Sale price of stock, per share | $0.24 | ' | $0.25 | $0.25 | $0.25 | $0.51 | $0.40 | $0.40 | $0.40 | ' | $0.28 | ' | ' | ' | ' | ' | $0.49 | ' | $0.28 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.25 | $0.25 | ' | ' | ' | $0.40 | ' | ' | $0.42 | $0.42 | $0.20 | $0.28 |
Stock issuance expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,630 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' |
Stock issued for compensation, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,266 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock based compensation settlement payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 232,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional paid-in capital for the beneficial conversion value of convertible debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional expense in connection with financing transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,125 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid expense in connection with financing transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 57,021 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares for cash | ' | ' | 100,000 | 100,000 | 25,000 | 51,000 | ' | ' | ' | ' | ' | ' | ' | ' | 80,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,056,094 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for cash, shares | ' | ' | 400,000 | 400,000 | 100,000 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | 230,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued for services, shares | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | 54,847 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 187,500 | 95,052 | 4,125,000 | ' | ' | ' | ' | ' | ' | ' |
Common stock issued for services, amount | ' | 15,000 | ' | ' | ' | ' | ' | ' | ' | 21,939 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 818,595 | ' | ' | ' | ' | 43,125 | 45,625 | 1,155,000 | ' | ' | ' | ' | ' | ' | ' |
Cancellation of common share under settlement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,299,802 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertible debt, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,608,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,265,381 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan converted to stock, loan amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 313,908 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Offering costs charged to additional paid-in capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 326,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share price, per share | ' | $0.30 | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | $0.35 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.23 | $0.48 | $0.28 | ' | ' | ' | ' | ' | ' | ' |
Pre-tax compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,935 | ' | 24,935 | ' | ' | ' |
Unrecognized compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 62,313 | ' | 62,313 | ' | ' |
Weighted-average remaining requisite service period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year 8 months 12 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year 8 months 12 days | ' | '1 year 8 months 12 days | ' | ' |
Number of investors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertible debt amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 402,083 | 514,666 | 402,083 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $112,583 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentrations_Details
Concentrations (Details) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Hospital | Hospital | Sales Revenue, Net [Member] | Sales Revenue, Net [Member] | Sales Revenue, Net [Member] | Accounts Payable [Member] | Accounts Payable [Member] | Accounts Payable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | |
Customer [Member] | Customer [Member] | Customer [Member] | Vendor [Member] | Vendor [Member] | Vendor [Member] | Customer [Member] | Customer [Member] | Customer [Member] | |||
Customer | Customer | Customer | Vendor | Vendor | Vendor | Customer | Customer | Vendor | |||
Concentrations (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of major customer | ' | ' | 4 | 2 | 2 | ' | ' | ' | 4 | 4 | ' |
Number of major vendors | ' | ' | ' | ' | ' | 4 | 3 | 3 | ' | 1 | 3 |
Concentration risk, percentage | ' | ' | ' | 89.00% | 32.00% | 42.00% | 68.00% | 68.00% | 55.00% | 62.00% | 60.00% |
Number of hospitals | 6 | 13 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of sales generated by 13 hospitals | 52.00% | 89.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of income tax expense (benefit) | ' | ' | ' | ' | ' |
U.S. Federal "expected" income tax | ' | ' | ' | ($495,540) | ($398,453) |
State income tax | ' | ' | ' | -52,906 | -58,596 |
Non-deductible beneficial conversion interest | ' | ' | ' | 102,000 | ' |
Non-deductible items | ' | ' | ' | 24,769 | ' |
Stock issued for compensation | 563,000 | 290,162 | ' | ' | 818,595 |
S Corp non-deductible/taxable items | ' | ' | ' | ' | -31,703 |
Change in valuation allowance | ' | ' | ' | 421,677 | 169,500 |
Total provision for income taxes | ' | ' | ' | ' | ' |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Deferred tax assets: | ' | ' |
Net operating loss carry forward | $586,600 | $169,500 |
Accrued salary and other | 35,821 | ' |
Total gross deferred tax assets | 622,421 | 169,500 |
Deferred tax liabilities: | ' | ' |
Depreciation | -31,244 | ' |
Total gross deferred tax liabilities | -31,244 | 169,500 |
Less valuation allowance | -591,177 | -169,500 |
Net deferred tax assets | ' | ' |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Taxes (Textual) | ' | ' | ' |
Operating losses | ' | $1,558,862 | ' |
Valuation allowance on deferred tax asset | ' | 100.00% | ' |
Federal corporate tax rate | ' | 34.00% | ' |
Expiration date of losses, description | ' | 'Carry forwards will expire, if not utilized, starting in 2031 through 2032 | ' |
Total gross deferred tax assets | 169,500 | 622,421 | 169,500 |
Taxable Income (loss), total | 434,509 | ' | ' |
Valuation allowance | -169,500 | -591,177 | -169,500 |
Change in valuation allowance | ' | $421,677 | $169,500 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 2 Months Ended | ||||||||||||||||||||||||
Oct. 09, 2013 | Jun. 21, 2013 | 24-May-13 | 19-May-13 | Jan. 15, 2013 | Feb. 28, 2013 | Dec. 31, 2012 | Aug. 31, 2012 | Apr. 30, 2012 | Feb. 29, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 06, 2013 | Aug. 30, 2013 | Aug. 27, 2013 | Aug. 21, 2013 | Jun. 27, 2013 | Apr. 01, 2013 | Mar. 31, 2013 | Jan. 31, 2013 | Apr. 13, 2012 | Feb. 10, 2012 | Dec. 31, 2011 | Nov. 12, 2013 | Oct. 17, 2013 | Oct. 07, 2013 | Mar. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Nov. 01, 2013 | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
President [Member] | ||||||||||||||||||||||||||||||
Subsequent Events (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued during period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $13,000 | ' | ' | ' |
Stock issued during period, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 46,429 | ' | ' | ' |
Common stock issued as compensation to an employee, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,266 | ' |
Common stock issued vesting as compensation to an employee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,075 | ' |
Common stock share price, per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.30 | ' | ' | ' | ' | $0.40 | $0.35 | ' | ' | ' | ' | ' | ' | ' | $0.28 | $0.28 | $0.28 | ' |
Received promissory note | ' | ' | ' | ' | ' | ' | 476,308 | ' | ' | ' | 476,308 | 496,215 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,220,000 | ' | ' |
Percentage rate on notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' |
Description of loan agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The loan agreements have an interest rate of 12% per annum payable over 26 months. | ' | ' |
Additional common stock shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,575,000 | ' | ' |
Promissory note | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 142,500 | 280,000 | ' | ' | ' | ' |
Promissory note payment term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The Company has the option to repay this note at any time on or before the date that is sixty (60) days from October 17, 2013 (the "effective date"). The Company will record a debt discount for the OID of $17,500. the remaining debt will be treated as stock settled debt where a put premium of $61,071 will be recorded over the six month period to the first conversion date. The Lender has the right at any time after the date that is six (6) months from the effective date, at its election, to convert all or any part of the outstanding balance of the note into shares of fully paid and non-assessable common stock of the company based upon a formula that is seventy (70%) percent of the average of the two (2) lowest intra-day trade prices in the fifteen (15) trading days immediately preceding the conversion | 'The Company has the option to repay this note at any time on or before the date that is sixty (60) days from October 7, 2013 (the "effective date"). The Company will record a debt discount for the OID of $30,000. The debt will be treated as stock settled debt where a put premium of $120,000 will be recorded over the six month period to the first conversion date. The Lender has the right at any time after the date that is six (6) months from the effective date, at its election, to convert all or any part of the outstanding balance of the note into shares of fully paid and non-assessable common stock of the company based upon a formula that is seventy (70%) percent of the average of the two (2) lowest intra-day trade prices in the fifteen (15) trading days immediately preceding the conversion | ' | ' | ' | ' |
Warrants issued price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125,000 | 250,000 | ' | ' | ' | ' |
Fully paid and non-assessable shares of the company common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 175,000 | 350,000 | ' | ' | ' | ' |
Fully paid and non-assessable shares of the company common stock, par value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' |
Warrants exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | $0.40 | ' | ' | ' | ' |
Securities purchase agreement for the equity sale of convertible preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,400,000 | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, dividend percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' |
Common stock shares issued | 100,000 | 750,000 | 125,000 | 625,000 | 46,429 | 5,575,000 | 2,375,000 | 77,743 | 1,394,909 | 1,410,874 | 1,468,786 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued, value | 24,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale price of stock, per share | $0.24 | $0.40 | $0.40 | $0.40 | $0.28 | ' | ' | $0.28 | ' | ' | ' | ' | ' | $0.25 | $0.25 | $0.25 | $0.51 | ' | ' | $0.49 | $0.25 | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from issuance of convertible preferred stock after payment of expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,885,000 | ' | ' | ' | ' | ' | ' |
Due to officers | ' | ' | ' | ' | ' | ' | 75,000 | ' | ' | ' | 75,000 | 115,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Promissory notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $40,000 |
Convertible Preferred Stock Beneficial Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The preferred stock is convertible into Common on a 2 for 1 basis. The Company recorded a beneficial conversion value for the preferred stock of approximately $2.6 million as an immediate charge to accumulated deficit as it is considered a constructive dividend to Series A preferred stockholders. The net raise is sufficient to fund on-going operations for the next several months | ' | ' | ' | ' | ' | ' |
Registration Payment Arrangement, Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The SPA contains registration rights requiring registration within 30 days of the funding date and effectiveness within 90 days of the filing date. The registration rights agreement contains a liquidated damage provision whereby the Company must pay 1% per month of the investment amount | ' | ' | ' | ' | ' | ' |