Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 14, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'HEALTH REVENUE ASSURANCE HOLDINGS, INC. | ' |
Entity Central Index Key | '0001514443 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 54,846,044 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Assets | ' | ' |
Cash | $778,330 | $3,053,485 |
Accounts receivable | 661,801 | 901,918 |
Accounts receivable - Related Party, net of allowance | ' | 25,000 |
Prepaid expenses | 380,462 | 1,050,210 |
Other current assets | 5,233 | 1,676 |
Total Current Assets | 1,825,826 | 5,032,289 |
Property and equipment, net | 113,654 | 184,480 |
Property held for sale | 206,932 | 197,367 |
Other assets | 13,665 | 12,665 |
Finance costs, net | 1,987 | 2,150 |
Total Other Assets | 15,652 | 14,815 |
Total Assets | 2,162,064 | 5,428,951 |
Liabilities and Stockholders' Deficit | ' | ' |
Accounts payable | 96,055 | 154,324 |
Accrued expenses | ' | 40,373 |
Accrued payroll | 262,354 | 414,684 |
Loan payable to factor | 364,765 | 542,530 |
Accrued interest | ' | 5,850 |
Line of credit | 40,075 | 44,692 |
Capital Leases, current portion | 30,989 | 32,768 |
Notes payable, current portion, net of discount | 226,704 | 380,326 |
Long term debt, current portion | 44,254 | 44,084 |
Settlement Payable | 295,731 | 7,000 |
Deferred Revenue | 145,430 | 209,033 |
Other current liabilities | 79,353 | 43,379 |
Warrant Liability | 683,267 | 5,406,000 |
Total Current Liabilities | 2,268,977 | 7,325,043 |
Capital Leases (net of current portion) | 11,503 | 26,108 |
Notes payable (net of current portion), net of discount | ' | 31,694 |
Long term debt (net of current portion) | 249,971 | 272,353 |
Total Liabilities | 2,530,451 | 7,655,198 |
Temporary Equity | ' | ' |
Commitments and Contingencies (see Note 10) | ' | ' |
Stockholders' Deficit: | ' | ' |
Common stock ($0.001 par value, 500,000,000 shares authorized, 54,846,044 shares and 54,752,294 issued and outstanding at June 30, 2014 and December 31, 2013, respectively) | 54,846 | 54,752 |
Additional paid-in capital | 6,547,058 | 6,543,224 |
Accumulated deficit | -9,666,417 | -10,752,223 |
Total Stockholders' Deficit | -3,064,513 | -4,154,247 |
Total Liabilities and Stockholders' Deficit | 2,162,064 | 5,428,951 |
Series A Preferred Stock [Member] | ' | ' |
Temporary Equity | ' | ' |
Series A 8% redeemable convertible preferred stock, ($0.001 par value, 13,500,000 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively - Redemption value of $5,569,280) | $2,696,126 | $1,928,000 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 54,846,044 | 54,752,294 |
Common Stock, Shares, Outstanding | 54,846,044 | 54,752,294 |
Series A Preferred Stock [Member] | ' | ' |
Temporary equity par value | $0.00 | $0.00 |
Temporary equity, shares issued | 13,500,000 | 13,500,000 |
Temporary equity, shares outstanding | 13,500,000 | 13,500,000 |
Temporary equity, redemption value | $5,569,280 | $5,460,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Statements of Operations [Abstract] | ' | ' | ' | ' |
Revenue | $1,517,785 | $2,067,464 | $3,395,183 | $4,224,061 |
Total Revenue | 1,517,785 | 2,067,464 | 3,395,183 | 4,224,061 |
Cost of Revenues | 882,608 | 975,632 | 2,022,325 | 1,960,952 |
Gross Profit | 635,177 | 1,091,832 | 1,372,858 | 2,263,109 |
Operating Expenses | ' | ' | ' | ' |
Selling and administrative expenses (includes net stock compensation of $3,928 and $70,048 as of June 30, 2014 and 2013, respectively) | 1,861,052 | 1,941,675 | 3,827,664 | 3,386,371 |
Depreciation and amortization | 19,886 | 19,169 | 39,707 | 44,598 |
Total Operating Expenses | 1,880,938 | 1,960,844 | 3,867,371 | 3,430,969 |
Operating Loss | -1,245,761 | -869,012 | -2,494,513 | -1,167,860 |
Other Income (Expense) | ' | ' | ' | ' |
Other income | ' | 635 | ' | 674 |
Interest expense | -185,110 | -228,684 | -374,288 | -364,702 |
Gain from change in fair value of warrant liability | 3,420,871 | ' | 4,722,733 | ' |
Total Other Income (Expense), net | 3,235,761 | -228,049 | 4,348,445 | -364,028 |
Net Income (Loss) | 1,990,000 | -1,097,061 | 1,853,932 | -1,531,888 |
Accretion of series A redeemable convertible preferred stock redemption value differential | -217,000 | ' | -547,553 | ' |
Cumulative preferred stock dividend | -112,597 | ' | -220,573 | ' |
Net Income (Loss) Allocable to Common Stockholders | $1,660,403 | ($1,097,061) | $1,085,806 | ($1,531,888) |
Net Income (Loss) Allocable to Common Stockholders Per Share | ' | ' | ' | ' |
Basic | $0.03 | ($0.02) | $0.02 | ($0.03) |
Diluted | $0.02 | ($0.02) | $0.01 | ($0.03) |
Weighted Average Number of Shares Outstanding | ' | ' | ' | ' |
Basic | 54,846,044 | 45,422,517 | 54,496,929 | 44,763,302 |
Diluted | 81,846,044 | 45,422,517 | 81,799,428 | 44,763,302 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Statements of Operations [Abstract] | ' | ' |
Stock compensation included in selling and administrative expenses | $3,928 | $70,048 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from Operating Activities: | ' | ' |
Net Income (Loss) Allocable to Common Stockholders | $1,085,806 | ($1,531,888) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Accretion of series A redeemable convertible preferred stock redemption value differential | 547,553 | ' |
Cumulative series A redeemable convertible preferred stock dividends | 220,573 | ' |
Amortization of debt discount | 203,282 | 209,915 |
Amortization of debt issue costs | 163 | ' |
Depreciation expense | 39,543 | 44,598 |
Bad debt expense | ' | 6,450 |
Amortization of prepaid shares issued for services | 689,886 | ' |
Stock option expense (recovery) | -14,822 | ' |
Shares issued for services | 18,750 | 70,048 |
Gain from change in fair market value of warrants | -4,722,733 | ' |
Loss on disposal of assets | 23,882 | ' |
Change in operating assets and liabilities: | ' | ' |
Accounts receivable,net | 54,430 | -270,326 |
Accounts receivable related party, net | 25,000 | ' |
Other assets | -4,557 | 26,924 |
Prepaid expenses | -20,138 | -12,140 |
Accounts payable | -58,270 | 130,555 |
Settlement accrual | 288,731 | ' |
Accrued liabilities | -46,222 | 239,414 |
Other accrued liabilities | 35,972 | ' |
Accrued payroll | -152,330 | ' |
Deferred revenue | -63,603 | ' |
Net Cash used in operating activities | -1,849,104 | -1,086,450 |
Cash flows from Investing Activities: | ' | ' |
Capitalization of internally developed software | ' | -681,372 |
Proceeds from sale of equipment to employees | 1,920 | ' |
Purchases of property and equipment | -4,084 | -7,732 |
Net Cash used in investing activities | -2,164 | -689,104 |
Cash flows from Financing Activities: | ' | ' |
Issuance of common stock for cash net of offering cost | ' | 618,000 |
Loan proceeds | ' | 1,220,000 |
Loan proceeds from factor, net | 7,922 | -274,636 |
Repayments of loans | -388,598 | -383,125 |
Repayment of capital lease | -16,383 | ' |
Settlement payments | ' | -92,222 |
Borrowings (repayments) on line of credit, net | -26,828 | -34,738 |
Net Cash (used in) provided by financing activities | -423,887 | 1,053,279 |
Net decrease in cash | -2,275,155 | -722,275 |
Cash at beginning of period | 3,053,485 | 893,458 |
Cash at ending of period | 778,330 | 171,183 |
Supplemental schedule of cash paid during the period for: | ' | ' |
Interest | 100,398 | 295,950 |
Income Taxes | ' | ' |
Supplemental schedule of non-cash investing and financing activities: | ' | ' |
Capital lease obligation incurred for use of equipment | ' | 28,701 |
Accretion of series A redeemable convertible preferred stock redemption value differential | 547,553 | ' |
Shares issued as a loan fee | ' | 679,353 |
Insurance premium finance contract recorded as prepaid asset | ' | 57,573 |
Shares issued for prepaid services | ' | 57,021 |
Constructive dividend | 220,573 | ' |
Reclassification of building and fixtures to property held for sale | 206,932 | ' |
Financed equipment purchases | ' | 54,105 |
Asset disposal | $25,802 | ' |
Nature_of_Business_and_Going_C
Nature of Business and Going Concern | 6 Months Ended |
Jun. 30, 2014 | |
Nature of Business and Going Concern [Abstract] | ' |
NATURE OF BUSINESS AND GOING CONCERN | ' |
1 – NATURE OF BUSINESS AND GOING CONCERN | |
Overview | |
Health Revenue Assurance Holdings, Inc. (the “Company”) is a provider of revenue cycle services to a broad range of healthcare providers. We offer our customers integrated solutions designed around their specific business needs, including revenue cycle data analysis, contract and outsourced coding, billing, coding and compliance audits, coding education, coding consulting, physician coding services and ICD-10 education and transition services. With this approach, our customers benefit from integrated service offerings that we believe enhances their revenue integrity. As a result, we believe we help our customers achieve their business objectives and patient care objectives. | |
Dream Reachers, LLC, owns the Company’s office and is the borrower on a mortgage loan related to such offices. Dream Reachers, LLC does not engage in real estate rental business. Its office is 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 consolidated financial statements for all periods presented. (See Note 2) On June 16, 2014, the Company with authorization of its board of directors listed its office for sale. Accordingly, the property and fixtures related to the Company’s office have been reclassified to property held for sale on the unaudited consolidated financial statements. | |
On February 10, 2012, HRAA entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Health Revenue Assurance Holdings, Inc. (formerly known as Anvex International, Inc., "HRAH"), a Nevada company, and its wholly-owned subsidiary Health Revenue Acquisition Corporation (“Acquisition Sub”), 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 and Acquisition Sub or HRAA. | |
Going Concern | |
As of June 30, 2014, the Company had a working capital deficiency, stockholders’ deficit and accumulated deficit of approximately $443,000, $3,065,000, and $9,666,000, respectively, for the six months ended June 30, 2014, incurred a net operating loss of approximately $2,495,000, and has used net cash in operations of approximately $1,849,000. As of June 30, 2014, the Company has a cash balance of approximately $778,000. The Company had 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. The Company’s future success is dependent upon its ability to achieve profitable operations and generate cash from operating activities, and upon additional financing. | |
The Company’s unaudited consolidated financial statements are presented on a going concern basis since its wholly owned operating subsidiary, Health Revenue Assurance Associates, Inc. filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the Southern District of Florida on August 11, 2014. (See Note 15) The unaudited 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. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Summary of Significant Accounting Policies [Abstract] | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
The accompanying unaudited 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 six months ended June 30, 2014 are not indicative of the results that may be expected for the year ending December 31, 2014 or for any other future period. These unaudited 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, 2013 filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2014 (our “10-K”). | |
Principles of Consolidation | |
The unaudited 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. | |
Reclassifications | |
Certain prior period amounts in the unaudited consolidated financial statements have been reclassified from research and development to selling and administrative expenses to conform to the current period’s presentation. Further, the Company reclassified $197,367 from the December 31, 2013 line item property and equipment to property held for sale. | |
Use of Estimates | |
The preparation of the unaudited 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 of loss on assets held for sale, valuation and amortization period of software, valuation of beneficial conversion features in convertible debt, valuation of derivatives, valuation of equity based instruments issued for other than cash, revenue recognition, and the valuation allowance on deferred tax assets. | |
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 net income for the three and six months ended June 30, 2014, we have computed basic and diluted earnings per share for both periods as required. For the three and six months ended June 30, 2014 diluted income per share, all potentially dilutive securities were excluded from the computation since the effect of including them is anti-dilutive. Dilutive securities outstanding at June 30, 2014 include 29,940,000 of warrants and Series A Preferred stock convertible into 27,000,000 shares of common stock. There were no dilutive securities outstanding at June 30, 2013 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 unaudited 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. | |
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. The update gives entities a single comprehensive model to use in reporting information about the amount and timing of revenue resulting from contracts to provide goods or services to customers. The proposed ASU, which would apply to any entity that enters into contracts to provide goods or services, would supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, the update would supersede some cost guidance included in Subtopic 605-35, Revenue Recognition – Construction-Type and Production-Type Contracts. The update removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition, the update improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. |
Accounts_Receivable
Accounts Receivable | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Accounts Receivable [Abstract] | ' | ||||||||
ACCOUNTS RECEIVABLE | ' | ||||||||
3 - ACCOUNTS RECEIVABLE | |||||||||
Accounts receivable was as follows at: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accounts receivable | $ | 661,801 | $ | 901,918 | |||||
Accounts receivable –Related party | - | 41,244 | |||||||
Allowance for doubtful accounts | - | (16,244 | ) | ||||||
Total | $ | 661,801 | $ | 926,918 | |||||
We had $0 and $6,450 in bad debt expense on trade accounts receivable for six months ended June 30, 2014 and 2013, respectively. Accounts receivable includes outstanding receivables of $452,583 and $638, 270 purchased by the factor as of June 30, 2014 and December 31, 2013, respectively. (See Note 8) | |||||||||
Property_and_Equipment
Property and Equipment | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
4 - PROPERTY AND EQUIPMENT | |||||||||
Property and equipment consists of the following: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Building and improvements | $ | - | $ | - | |||||
Furniture | 36,908 | 119,810 | |||||||
Computers and Equipment | 233,816 | 260,872 | |||||||
270,724 | 380,682 | ||||||||
Less - Accumulated depreciation | (157,070 | ) | (196,202 | ) | |||||
Total | $ | 113,654 | $ | 184,480 | |||||
Depreciation expense for the six months ended June 30, 2014 and 2013 was approximately $39,500 and $44,600, respectively. | |||||||||
On June 16, 2014, the Company listed its office condominium for sale in conjunction with cost savings initiatives. Accordingly $206,932 the net balance of related building and fixtures were reclassified to property held for sale and depreciation of the related assets was ceased. |
Research_and_Development_and_S
Research and Development and Software | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Research and Development and Software [Abstract] | ' | ||||||||
RESEARCH AND DEVELOPMENT AND SOFTWARE | ' | ||||||||
5 – RESEARCH AND DEVELOPMENT AND SOFTWARE | |||||||||
In early 2012, the Company started developing the Visualizer suite. This 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 data in its consulting services to develop pre-defined analytics targeted to address healthcare’s emerging concerns and needs. | |||||||||
The Company’s Visualizer suite offers our consultants a range of functionality. Visualizer also assists healthcare leaders with their need to understand the impacts 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. | |||||||||
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 other functionality which was included as software on the accompanying consolidated balance sheet. As of September 30, 2013, we had amortized $64,137 of the capitalized software after the general release on July 15, 2013 for the Visualizer project. | |||||||||
At the end of September 2013, the Company re-evaluated the capitalized research and development costs for the Visualizer software suite. The evaluation was based in part on the lack of cash flow and customer demand in ICD Visualizer after its general acceptance release date of July 15, 2013. In addition, the Company also considered its going concern risk 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 for the year ended December 31, 2013 that is presented as a line item entitled “asset impairment” on the consolidated statement of operations. The Company will continue to use the Visualizer suite of functionality as internally developed software to generate customized reports for revenue integrity auditing and compliance services but the Company no longer intends to market or sell internally developed software on a stand-alone basis. There was no amortization expense for software for the six months ended June 30, 2014 and 2013, respectively. | |||||||||
Software consisted of the following at: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Software | $ | - | $ | 1,011,068 | |||||
Accumulated amortization | - | (64,137 | ) | ||||||
Asset Impairment | - | (946,931 | ) | ||||||
Software, net | $ | - | $ | - | |||||
Lines_of_Credit
Lines of Credit | 6 Months Ended |
Jun. 30, 2014 | |
Lines of Credit [Abstract] | ' |
LINES OF CREDIT | ' |
6 – LINES OF CREDIT | |
Bank | |
The Company has a $150,000 revolving line of credit with a bank (the “Line of Credit”), effective in December 2008, for its general working capital needs. The line contains certain restrictive covenants including restrictions on granting liens on the Company's assets. The line is also guaranteed by certain former officers of the Company. 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. | |
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. Monthly payments of principal and interest are approximately $3,900 per month, and a new maturity date of September 19, 2017. Interest is calculated at a rate per year equal to the bank’s prime rate plus 3.5% or 6.75%. At the time of the conversion the line of credit had an outstanding balance in the amount of $133,334. (See Note 7) | |
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 June 30, 2014 and December 31, 2013 was $40,075, and $44,692, respectively, which is included in line of credit, current portion in the accompanying unaudited consolidated financial statements. |
Long_Term_Debt_and_Notes_Payab
Long Term Debt and Notes Payable | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Long Term Debt and Notes Payable [Abstract] | ' | ||||||||
LONG TERM DEBT AND NOTES PAYABLE | ' | ||||||||
7 – LONG TERM DEBT AND NOTES PAYABLE | |||||||||
Long Term debt: | |||||||||
Long Term debt consisted of the following at: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Bank term loan | $ | 122,603 | $ | 141,857 | |||||
Mortgage loan | 171,622 | 174,580 | |||||||
294,225 | 316,437 | ||||||||
Less current portion | (44,254 | ) | (44,084 | ) | |||||
Total long term portion | $ | 249,971 | $ | 272,353 | |||||
In March 2009, HRAA entered into a term loan with Bank of America which proceeds were used for general working capital needs (the “Term Loan”). The Term Loan was established as a result of a conversion of a revolving line of credit. The Term Loan is personally guaranteed by Robert Rubinowitz and Andrea Clark-Rubinowitz and contains certain restrictive covenants including restrictions on granting liens on the Company's assets. The Term Loan matured in five years and incurred interest at the rate of 6.75% per annum. | |||||||||
On September 19, 2013, HRAA consolidated the above March 2009 Term Loan with the Line of Credit. (See Note 6) The outstanding balance for the Term Loan and the Line of Credit prior to consolidation was $20,697 and $133,334, respectively. The new consolidated term loan is personally guaranteed by Robert Rubinowitz and Andrea Clark-Rubinowitz and contains restrictive covenants, and prohibits the Company from granting any security interests or liens on the assets of the Company. Payments of principal and interest are approximately $3,900 per month. The new consolidated term loan matures on September 19, 2017 and incurs interest at a rate per year equal to the bank’s prime rate plus 3.5% or 6.75% at June 30, 2014. | |||||||||
The Company’s subsidiary has a mortgage related to certain real estate, a building condominium, 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 and interest payment of approximately $129,000 becomes due. The loan is collateralized by the real estate and is personally guaranteed by Robert Rubinowitz, a former officer and stockholder of the Company. Interest is fixed at 6.625% for the first five years of the loan, and converts for the second five years to an adjustable indexed rate at the Federal Funds Rate plus 3.25%, as established by the United State Federal Reserve but under no circumstances will the effective interest rate of interest on the mortgage be less than 6.625%. 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. | |||||||||
Although the Company is current in its payments on these loans at June 30, 2014, management believes the Company may be in default of certain non-financial covenants. Default provisions were likely triggered since the Company’s wholly owned operating subsidiary, Health Revenue Assurance Associates, Inc. filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the Southern District of Florida on August 11, 2014. The banks have not notified the Company of any default. | |||||||||
Notes payable: | |||||||||
The Company has eighteen notes payable, (i) thirteen of the loans are secured by contract accounts receivable of a Company customer which security interest is subordinate to the lender under the factoring agreement, and (ii) one of the loans is secured by the stock of HRAA. | |||||||||
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 calculated on the original loan balances resulting in an effective interest rate of 24% over the term of the loans. Principal and interest is payable over 24 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 $61,900 and $114,958 as of June 30, 2014 and December 31, 2013, respectively. | |||||||||
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 24 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 11) 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 $200,298 and $350,522 as of June 30, 2014 and December 31, 2013, respectively. | |||||||||
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 interest expense for the year ended December 31, 2013. Additionally, the Company recorded a loss on conversion of $112,584 as a result of issuing stock at a discount from fair market value in 2013. | |||||||||
Although the Company is current in its payments on these notes at June 30, 2014, management believes default provisions were likely triggered since the Company’s wholly owned operating subsidiary, Health Revenue Assurance Associates, Inc. filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the Southern District of Florida on August 11, 2014. The note holders have not notified the Company of any default. | |||||||||
Notes payable consisted of the following at: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Principal amount of notes payable | $ | 488,902 | $ | 877,500 | |||||
Unamortized discount | (262,198 | ) | (465,480 | ) | |||||
Notes payable, net of discount | 226,704 | 412,020 | |||||||
Less current portion | (226,704 | ) | (380,326 | ) | |||||
Total Long term portion | $ | - | $ | 31,694 | |||||
Factoring_Agreement
Factoring Agreement | 6 Months Ended |
Jun. 30, 2014 | |
Factoring Agreement [Abstract] | ' |
FACTORING AGREEMENT | ' |
8 – 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 six months ended June 30, 2014, the Company had factored approximately $2,234,000 of receivables and had received cash advances of approximately $2,262,600. Outstanding receivables purchased by the factor as of June 30, 2014 were approximately $452,600 and are included in accounts receivable in the accompanying unaudited consolidated balance sheet, and the secured loan due to the lender was approximately $364,800. Factor fees for the three months ending June 30, 2014 and 2013 were approximately $30,000 and $138,400, respectively. Factor fees for the six months ended June 30, 2014 and 2013 were approximately $70,600 and $76,100, respectively, and are included in interest expenses. (See Note 3) | |
Although the Company is current in its financial obligations under this factoring agreement, management believes the Company may be in default under the solvency provision and certain non-financial default provisions. The Company has not been notified of any default by the factor company. |
Convertible_Promissory_Notes
Convertible Promissory Notes | 6 Months Ended |
Jun. 30, 2014 | |
Convertible Promissory Notes [Abstract] | ' |
CONVERTIBLE PROMISSORY NOTES | ' |
9 – CONVERTIBLE PROMISSORY NOTES | |
On October 7, 2013, the Company entered into a one-year original issue discount (OID) convertible promissory note with warrants in the amount of $280,000 with Tonaquint, Inc., a Utah corporation (“Tonaquint”). The purchase price for this note and the warrants was $250,000. The Company had the option to repay this note at any time on or before the date that is sixty (60) days from October 7, 2013. The Company recorded a debt discount for the OID of $25,000 and expensed $5,000. The debt was treated as stock settled debt where a put premium of $120,000 was to be recorded over the six-month period to the first conversion date. Tonaquint had 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 “Conversion Formula”). Tonaquint was granted the right to purchase at any time on or after October 7, 2013 until the date which is the last calendar day of the month in which the fifth anniversary of the “issue date” occurs, 350,000 fully paid and non-assessable shares of the Company’s common stock, par value $.001 per share, as such number may be the adjusted from time to time pursuant to the full ratchet price protection terms and conditions of the warrant. The initial “exercise price” is $0.40 per share of common stock. On November 12, 2013, the note was paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants pursuant to the Securities Purchase Agreement, dated November 12, 2013, between the Company and the investors named therein. (See Note 11) As mentioned above, the Company issued 350,000 free standing and detachable warrants related to the note. The Company accounted for these warrants issued in accordance with the 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 due to the price protection provisions. 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. (See Note 12) As a result of the November 12, 2013 financing and the full ratchet protection, the exercise price of the warrants was reduced to $0.20 per share and 350,000 additional warrants were issued to Tonaquint. | |
On October 17, 2013, the Company entered into a one-year OID convertible promissory note in the amount of $142,500 with Tonaquint. The purchase price for this note and the warrant was $125,000. The Company had the option to repay this note at any time on or before the date that is sixty (60) days from October 17, 2013. The Company recorded a debt discount for the OID of $12,500 and expensed $5,000. The debt was treated as stock settled debt where a put premium of $61,071 was to be recorded over the six-month period to the first conversion date. Tonaquint had 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 the Conversion Formula. Tonaquint was granted the right to purchase at any time on or after October 17, 2013 until the date which is the last calendar day of the month in which the fifth anniversary of the “issue date” occurs, 175,000 fully paid and non-assessable shares of the Company’s common stock, as such number may be the adjusted from time to time pursuant to the full ratchet price protection terms and conditions of the warrant. The initial “exercise price” is $0.40 per share of common stock. On November 12, 2013, the note was paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants pursuant to the Securities Purchase Agreement, dated November 12, 2013, between the Company and the investors named therein. (See Note 11) As mentioned above, the Company issued 175,000 free standing and detachable warrants related to the note. The Company accounted 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 due to the price protection provisions. 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 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. (See Note 12) As a result of the November 12, 2013 financing and the full ratchet anti-dilution provision, the exercise price of the warrants was reduced to $0.20 per share and 175,000 additional warrants were issued to Tonaquint. | |
At the time the above two notes were paid off, the Company had accreted $33,364 of the put premium and according recognized a gain on extinguishment of $33,364 relating to this put premium. Further, as only $3,459 of the discount was amortized, the Company recorded a loss on early debt extinguishment of $34,041 in 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||
COMMITMENTS AND CONTINGENCIES | ' | ||||||||
10 – COMMITMENTS AND CONTINGENCIES | |||||||||
Commitments: | |||||||||
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 $560 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, 2013, the lease has been renewed for one year with a fixed payment of approximately $5,800 per month. The commercial leased was cancelled effective June 30, 2014. The related security deposit of $8,865 was refunded to the Company on July 14, 2014. | |||||||||
Capital Leases: | |||||||||
The Company leases its equipment from Dell Financial Services L.L.C. under various capital leases. 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: | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Equipment | $ | 79,210 | $ | 79,210 | |||||
Less accumulated depreciation | (46,808 | ) | (33,607 | ) | |||||
Total | $ | 32,402 | $ | 45,603 | |||||
The lease agreement contains a bargain purchase option at the end of the lease term. The total amount due at June 30, 2014 is $42,492 of which $30,989 is included in short term liabilities. Amortization of assets held under capital leases is included with depreciation expense and is approximately $13,200 as of June 30, 2014. Although the Company is current in its payments on these leases at June 30, 2014, management believes the default provisions were likely triggered since the Company’s wholly owned operating subsidiary, Health Revenue Assurance Associates, Inc. filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the Southern District of Florida on August 11, 2014. Dell Financial Services L.L.C. has not notified the Company of any default. | |||||||||
Settlement Agreements: | |||||||||
On March 14, 2013, the Company and its former regional sales manager entered into a settlement agreement to resolve one pending lawsuits arising out of the termination of his employment. The lawsuit was initiated by the former regional sales manager against the Company in the United States District Court for the city of Denver, Colorado. Pursuant to the settlement agreement, the former regional sales manager agreed to abolish all claims and lawsuits against the Company. As part of the settlement agreement, the Company agreed to make a payment totaling $11,000 pursuant to the terms of the settlement agreement and general release of all claims executed by both parties. The settlement payments were paid in full as of June 30, 2014. | |||||||||
On April 14, 2014, the Company entered into a separation agreement (the “Separation Agreement”) with Robert Rubinowitz, its former President, Chief Operating Officer, Secretary, Treasurer and director, which provided for the termination of Mr. Rubinowitz's employment and his resignation as an officer and director of the Company, and the termination of that certain Employment Agreement dated October 1, 2013, as amended on November 12, 2013, between the Company and Mr. Rubinowitz (the “Employment Agreement”). The Separation Agreement provides that Mr. Rubinowitz will receive from the Company (i) $175,000 to be paid in equal increments of $3,365.39 on each of May 2, 2014, May 16, 2014, May 30, 2014, June 14, 2014 and June 27, 2014 and thereafter equal increments of $7,532.05 with the last payment date being April 17, 2015, and (ii) $23,557.70 in accrued and unpaid base salary, bonus and vacation earned through April 11, 2014 payable in equal installments of $1,121.80 beginning on July 11, 2014, in each case, less all applicable deductions and withholdings. As of June 30, 2014, the Company has a settlement accrued of $181,700 in connection with Mr. Rubinowitz’s Separation Agreement. | |||||||||
The Separation Agreement also requires the Company to use commercially reasonable efforts to have Mr. Rubinowitz and Andrea Clark-Rubinowitz removed as guarantors under certain of the Company's debt obligations. The Company paid an early termination fee for the early return of Mr. Rubinowitz's leased vehicle. The Company further agreed to file a Registration Statement with the SEC to register the resale of Mr. Rubinowitz's outstanding common stock as of the date of Separation Agreement. | |||||||||
The foregoing description of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Separation Agreement, a copy of which is attached as Exhibit 10.22 to the Company’s 2013 Annual Report on Form 10-K filed April 15, 2014. | |||||||||
On March 26, 2014, the Company terminated Dean Boyer’s employment as its chief technology officer. On May 15, 2014, a consulting agreement and a termination and release agreement were executed with Mr. Boyer and the Company. The agreements provide that Mr. Boyer will receive $200,000 to be paid $50,000 on May 16, 2014, and payments to be made thereafter in equal increments of $12,000 with the Company’s scheduled payrolls, and with a final payment of $6,000 date being made on November 14, 2014. All payments will be less applicable payroll tax deductions and withholdings. As of June 30, 2014, the Company accrued $114,000 payable to Mr. Boyer in connection with his agreements. | |||||||||
Employment Agreements: | |||||||||
On October 2, 2013 the Company entered into employment agreements with four (4) of our officers and directors. The Employment Agreements provided 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 June 30, 2014, no performance bonuses have been earned. The Company owed Andrea Clark-Rubinowitz $75,000. The balance due to Ms. Clark-Rubinowitz was formalized in a promissory note dated November 1, 2013. The Company also owed Robert Rubinowitz $40,000 pursuant to a promissory note dated November 1, 2013 for funds advanced in September 2013. On November 12, 2013 the promissory notes to Ms. Clark-Rubinowitz and Mr. Rubinowitz were paid in full from the net proceeds of the Securities Purchase Agreement, dated November 12, 2013, among the Company and the investors named therein. | |||||||||
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. (See Note 15) | |||||||||
The Company has not filed state tax returns and has a potential liability for unrecognized taxes relating primarily to state tax contingencies in several jurisdictions. The Company cannot predict with certainty the amount of the potential state tax liability including the associated interest and penalties. The Company also cannot predict with certainty the amount of unrecognized state tax benefits, net of federal tax benefits, that if recognized would have impacted the prior year’s effective tax rates. | |||||||||
On August 11, 2014, the Company’s wholly owned operating subsidiary, Health Revenue Assurance Associates, Inc. filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the Southern District of Florida. (See Note 15) |
Stockholders_Deficit
Stockholders' Deficit | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stockholders' Deficit [Abstract] | ' | ||||||||||||||||
STOCHOLDERS' DEFICIT | ' | ||||||||||||||||
11 – STOCKHOLDERS' DEFICIT | |||||||||||||||||
Share Based Compensation | |||||||||||||||||
The Company is in the process of establishing a non-qualified stock option plan. In advance of the actual establishment of the plan in 2013, the Company has granted a total of one million (1,000,000) stock options to an officer. 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 this grant as adoption of a stock option plan and board approval is considered a mere formality. The Company may cancel option grants and the unvested stock options are forfeited for an employee at resignation and termination. | |||||||||||||||||
Stock Options | |||||||||||||||||
During the six months ended June 30, 2014, the Company recorded pre-tax recovery of compensation expense of $14,822 related the cancellation of 1,000,000 stock options as result of an officer’s resignation. There was no unrecognized compensation expense related to stock options at June 30, 2014. There were no exercises of stock options for the six months ended June 30, 2014. | |||||||||||||||||
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model. The 1,000,000 options were valued at $221,121. Unvested stock options of 1,000,000 were forfeited and the related option grant was cancelled as result of an officer’s resignation. | |||||||||||||||||
The following table summarizes stock option activity for the six months ended June 30, 2014: | |||||||||||||||||
Options | Shares | Weighted-Average Exercise Price | Weighted-Average | Aggregate | |||||||||||||
Remaining | Intrinsic | ||||||||||||||||
Contractual Term | Value | ||||||||||||||||
$0 | |||||||||||||||||
Outstanding at January 1, 2014 | 1,000,000 | $ | 0.26 | - | - | ||||||||||||
Granted | - | - | - | - | |||||||||||||
Exercised | - | - | - | - | |||||||||||||
Forfeited or expired | (1,000,000 | ) | 0.26 | - | - | ||||||||||||
Outstanding at June 30, 2014 | - | $ | - | - | - | ||||||||||||
Common Stock | |||||||||||||||||
2013:00:00 | |||||||||||||||||
On January 15, 2013, the Company sold 46,429 shares of common stock for $13,000 at a price per share of $0.28. | |||||||||||||||||
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 7. | |||||||||||||||||
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 was recorded as a prepaid asset and is being expensed over the term of the contract. The shares were issued on April 1, 2013 to the consultant. | |||||||||||||||||
On April 1, 2013, the Company issued an aggregate of 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 sold 625,000 shares of common stock for $250,000 at a price per share of $0.40. | |||||||||||||||||
On May 24, 2013, the Company sold 125,000 shares of common stock for $50,000 at a price of $0.40 per share. | |||||||||||||||||
On June 21, 2013, the Company sold 750,000 shares of common stock for $300,000 at a price per share of $0.40. | |||||||||||||||||
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, the Company sold 500,000 shares of common stock for $200,000 at a price per share $0.40. | |||||||||||||||||
On August 7, 2013, the Company sold 500,000 shares of common stock for $200,000 at a price per share $0.40. | |||||||||||||||||
On August 21, 2013, the Company sold 100,000 shares of common stock for $25,000 at a price per share of $0.25. | |||||||||||||||||
On August 27, 2013, the Company issued 400,000 shares of common stock for $100,000 at a price per share of $0.25. | |||||||||||||||||
On August 30, 2013, the Company issued 400,000 shares of common stock for $100,000 at a price per share of $0.25 per share. | |||||||||||||||||
On August 22, 2013 and August 28, 2013, the Company converted $402,083 in unsecured promissory notes for five (5) individuals into one million six hundred eight thousand three hundred and thirty three (1,608,333) shares of common stock at a conversion price of $0.25 per share. The shares of common stock 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 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 consulting agreement with a stockholder 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 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. | |||||||||||||||||
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 is being expensed over the term of the agreement, which is six (6) months. | |||||||||||||||||
On December 31, 2013, in accordance with a 2012 employment agreement, the Company issued 75,000 shares of common stock as compensation to an employee for services rendered through December 31, 2013. The shares were valued at $0.25 per share based on the quoted trading price per share or $18,750, which was expensed. | |||||||||||||||||
2014:00:00 | |||||||||||||||||
On March 31, 2014, in accordance with a 2012 employment agreement, the Company issued 93,750 shares of common stock as compensation to an employee for services rendered through March 31, 2014. The shares were valued at $0.20 per share based on the quoted trading price per share or $18,750, which was expensed. | |||||||||||||||||
On May 19, 2014, a resolution was proposed for a grant of restricted common stock for board members Mr. Michael Brainard and Mr. Peter Russo. Under Nevada law, in order to take action through a written consent, the consent must be approved by all directors. The Company did not obtain written consents from all board of directors members and accordingly, the board of directors did not approve the restricted stock grants. The board of directors has waived any equity grants to a later date based on the Company’s future results of operations. | |||||||||||||||||
Temporary Equity – Redeemable Convertible Preferred Stock | |||||||||||||||||
On November 12, 2013, the Company entered into a Securities Purchase Agreement for the sale of Series A 8% Redeemable Convertible Preferred Stock (“Series A stock”) and warrants to purchase shares of the Company’s common stock. The Company sold 13,500,000 of Series A 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 offering costs were $4,903,652. The Series A stock is convertible into common stock on a 2 for 1 basis and is redeemable by the Company, at the option of the investor, 48 months from November 12, 2013 at the stated value of $0.40 per share or a total of $5,400,000 plus accumulated but unpaid dividends, whether declared or not. The Company accounts for these preferred stock in accordance with the US GAAP accounting guidance under ASC 480 applicable to redeemable instruments, which requires the differential between the issuance and redemption value to be accreted over the period that begins on the issuance date and ends on the redemption date. The accretion increases accumulated deficits and net loss allocable to common stockholders in calculating net loss per share. | |||||||||||||||||
Due to the redemption feature the Series A Stock is reflected as temporary equity as follows: | |||||||||||||||||
Series A sale price | $ | 5,400,000 | |||||||||||||||
Less: Reclassification of warrant fair value to liability | (5,669,837 | ) | |||||||||||||||
Offering costs | (496,348 | ) | |||||||||||||||
Plus: Deemed dividend | 2,634,185 | ||||||||||||||||
Series A dividends | 60,000 | ||||||||||||||||
Series A at December 31, 2013 | $ | 1,928,000 | |||||||||||||||
Plus: Accretion of Series A value differential | 547,553 | ||||||||||||||||
Series A dividends | 220,573 | ||||||||||||||||
Series A at June 30, 2014 | $ | 2,696,126 | |||||||||||||||
The Company also issued warrants to purchase 1,890,000 shares of common stock to a placement agent. (See Note 12) | |||||||||||||||||
The Company recorded a beneficial conversion value for the preferred stock of approximately $2.6 million in 2013 as an immediate charge to accumulated deficit as it is considered a constructive dividend to Series A preferred stockholders. As part of this equity financing transaction, the Company issued 27,000,000 five-year warrants (See Note 12) 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. Due to price protection provisions in the warrants, 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. | |||||||||||||||||
In connection with the Securities Purchase Agreement, the Company entered into a registration rights agreement with the Purchasers, pursuant to which the Company agreed to register all of the shares of common stock underlying the Series A Preferred Stock and the shares of common stock underlying the Warrants on a registration statement on Form S-1 (the “Registration Statement”) to be filed with the SEC within 30 calendar days following the Closing Date (the “Filing Deadline”) and to use its best efforts to cause the Registration Statement to be declared effective under the Securities Act within 90 calendar days following the Filing Deadline. The Registration Statement was declared effective prior to the Filing Deadline. |
Warrant_and_Fair_Value_Measure
Warrant and Fair Value Measurements | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Warrant and Fair Value Measurements [Abstract] | ' | ||||||||||||||||
WARRANTS AND FAIR VALUE MEASUREMENTS | ' | ||||||||||||||||
12 – WARRANTS AND FAIR VALUE MEASUREMENTS | |||||||||||||||||
Warrants | |||||||||||||||||
In connection with the promissory notes issued to Tonaquint on October 7, 2013 and October 17, 2013, the Company issued 350,000 and 175,000 warrants, respectively. As a result of the Series A Preferred Stock and warrant sale on November 12, 2013, the exercise price of both the 350,000 warrants and 175,000 warrants was reduced to $0.20 per share and an additional 525,000 warrants were issued to Tonaquint pursuant to full ratchet anti-dilution provisions. | |||||||||||||||||
On November 12, 2013 and in connection with the Series A Preferred Stock offering, the Company issued 27,000,000 warrants to investors and 1,890,000 warrants were issued as a fee to the placement agent all at an exercise price of $0.30 per share. | |||||||||||||||||
Warrant activity is as follows: | |||||||||||||||||
Number of | Weighted | ||||||||||||||||
Warrants | Average | ||||||||||||||||
Exercise Price | |||||||||||||||||
Outstanding at December 31, 2013 | 29,940,000 | $ | 0.3 | ||||||||||||||
Granted | - | - | |||||||||||||||
Anti-dilution issuance | - | - | |||||||||||||||
Exercised | - | - | |||||||||||||||
Forfeited | - | - | |||||||||||||||
Expired | - | - | |||||||||||||||
Outstanding at June 30, 2014 | 29,940,000 | $ | 0.3 | ||||||||||||||
Exercisable at June 30, 2014 | 29,940,000 | $ | 0.3 | ||||||||||||||
Aggregate intrinsic value | $ | - | |||||||||||||||
All warrants were issued with an exercise term of 5 years. | |||||||||||||||||
Warrants outstanding have a weighted average remaining contractual life of 4.36 years as of June 30, 2014. | |||||||||||||||||
Fair Value Measurements – Derivative liability: | |||||||||||||||||
The accounting guidance for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting guidance established a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | |||||||||||||||||
Assets and liabilities measured at fair value on a recurring and non-recurring basis consisted of the following at: | |||||||||||||||||
Carrying | Fair Value Measurements at June 30, 2014 | ||||||||||||||||
Value at | |||||||||||||||||
June 30, | |||||||||||||||||
2014 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Warrant derivative liability (29,940,000 warrants) | $ | 683,267 | $ | - | $ | - | $ | 683,267 | |||||||||
The following is a summary of activity of Level 3 liabilities: | |||||||||||||||||
Balance at December 31, 2013 | $ | 5,406,000 | |||||||||||||||
Change in fair value | (4,722,733 | ) | |||||||||||||||
Balance June 30, 2014 | $ | 683,267 | |||||||||||||||
Changes in fair value of the warrant derivative liability are included in other income (expense) in the accompanying unaudited consolidated statements of operations. | |||||||||||||||||
The Company estimates the fair value of the warrant liability utilizing the Binomial Lattice model, which is dependent upon several variables such as the expected term (based on contractual term), expected volatility of our stock price over the expected term (based on historical volatility), expected risk-free interest rate over the expected term, and the expected dividend yield rate over the expected term. The Company also used the Black-Scholes pricing model as a comparison to the Binomial Lattice method and the results were similar. The Company believes this valuation methodology is appropriate for estimating the fair value of the warrant derivative liability. The following table summarizes the assumptions the Company utilized to estimate the fair value of the embedded conversion option: | |||||||||||||||||
Assumptions | June 30, | ||||||||||||||||
2014 | |||||||||||||||||
Expected term | 0.875 | ||||||||||||||||
Expected Volatility | 131.31 | % | |||||||||||||||
Risk free rate | 1.2 | % | |||||||||||||||
Dividend Yield | 0 | % | |||||||||||||||
There were no changes in the valuation techniques during 2014. |
Concentrations
Concentrations | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Concentrations [Abstract] | ' | ||||
CONCENTRATIONS | ' | ||||
13 – CONCENTRATIONS | |||||
Sales to six hospitals represented approximately 54% of net sales for the six months ended June 30, 2014. | |||||
Hospital Customer A | 17.2 | % | |||
Hospital Customer B | 9.6 | % | |||
Hospital Customer C | 9.7 | % | |||
Hospital Customer D | 1.3 | % | |||
Hospital Customer E | 5.8 | % | |||
Hospital Customer F | 10.5 | % | |||
Total | 54.1 | % | |||
Four and three customers represented approximately 59% and 64% of the accounts receivable as of June 30, 2014 and December 31, 2013 respectively. | |||||
Related_Party_Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
14 – RELATED PARTY TRANSACTIONS | |
In March 2013, the Company entered into a contract with ResumeBear, Inc. (“ResumeBear”), a related party, to provide website development services in the amount of $302,764. Mr. Peter Russo, a member of the Company’s board of directors, is the chief executive officer and a director of ResumeBear. Mr. Michael Brainard, a member of the Company’s board of directors, is also a director of ResumeBear. No revenues were recorded by the Company from ResumeBear for the six months ended June 30, 2014 and 2013. In January 2014, the Company wrote-off approximately $108,000 of the account receivable with ResumeBear which is reflected in the December 31, 2013 consolidated financial statements as an allowance of $16,244 and a reduction of revenue of approximately $92,000. Due to cost overruns and product delivery issues relating primarily to a third party subcontractor, the Company estimates the cumulative total loss on this contract is approximately $220,200 through June 30, 2014, and $112,200 incurred for the six months ended June 30, 2014. | |
ResumeBear hired Dean Boyer, the Company’s former chief technology officer, as their chief technology officer in April 2014. (See Note 10 for severances due to former officers) |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
15 – SUBSEQUENT EVENTS | |
On July 31, 2014, the Company’s Board of Directors, after consulting with its management and reorganization attorney, directed management to file a petition under Chapter 11 of the U.S. Bankruptcy Code subject to any change in the final recommendation of the reorganization attorney. On August 11, 2014, the Company’s wholly owned subsidiary and operating entity, Health Revenue Assurance Associates filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the Southern District of Florida. Under Chapter 11, certain claims against the Company in existence before the filing of the petition for relief under the federal bankruptcy laws are stayed while the Company continues business operations as debtor-in-possession. Additional claims (liabilities subject to compromise) may arise after the filing date resulting from rejection of executory contracts, including leases, and from determination by the court of allowed claims for contingencies and other disputed amounts. Claims secured by the Company assets (secured claims) also are stayed, although the holders of such claims have the right to move the court for relief from stay. | |
On August 6, 2014, the Company and Todd Willis, the Company’s Chief Executive Officer, entered into a new two-year Employment Agreement. In accordance with the Agreement, Mr. Willis shall receive an annual base salary of $175,000. The base salary shall increase upon the Company meeting certain performance milestones. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Summary of Significant Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited 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 six months ended June 30, 2014 are not indicative of the results that may be expected for the year ending December 31, 2014 or for any other future period. These unaudited 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, 2013 filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2014 (our “10-K”). | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The unaudited 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. | |
Reclassifications | ' |
Reclassifications | |
Certain prior period amounts in the unaudited consolidated financial statements have been reclassified from research and development to selling and administrative expenses to conform to the current period’s presentation. Further, the Company reclassified $197,367 from the December 31, 2013 line item property and equipment to property held for sale. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of the unaudited 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 of loss on assets held for sale, valuation and amortization period of software, valuation of beneficial conversion features in convertible debt, valuation of derivatives, valuation of equity based instruments issued for other than cash, revenue recognition, and the valuation allowance on deferred tax assets. | |
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. | |
As the Company incurred net income for the three and six months ended June 30, 2014, we have computed basic and diluted earnings per share for both periods as required. For the three and six months ended June 30, 2014 diluted income per share, all potentially dilutive securities were excluded from the computation since the effect of including them is anti-dilutive. Dilutive securities outstanding at June 30, 2014 include 29,940,000 of warrants and Series A Preferred stock convertible into 27,000,000 shares of common stock. There were no dilutive securities outstanding at June 30, 2013 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 | |
We have implemented all new accounting standards that are in effect and that may impact our unaudited 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. | |
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. The update gives entities a single comprehensive model to use in reporting information about the amount and timing of revenue resulting from contracts to provide goods or services to customers. The proposed ASU, which would apply to any entity that enters into contracts to provide goods or services, would supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, the update would supersede some cost guidance included in Subtopic 605-35, Revenue Recognition – Construction-Type and Production-Type Contracts. The update removes inconsistencies and weaknesses in revenue requirements and provides a more robust framework for addressing revenue issues and more useful information to users of financial statements through improved disclosure requirements. In addition, the update improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. |
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Accounts Receivable [Abstract] | ' | ||||||||
Summary of accounts receivable | ' | ||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accounts receivable | $ | 661,801 | $ | 901,918 | |||||
Accounts receivable –Related party | - | 41,244 | |||||||
Allowance for doubtful accounts | - | (16,244 | ) | ||||||
Total | $ | 661,801 | $ | 926,918 | |||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
Summary of property and equipment | ' | ||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Building and improvements | $ | - | $ | - | |||||
Furniture | 36,908 | 119,810 | |||||||
Computers and Equipment | 233,816 | 260,872 | |||||||
270,724 | 380,682 | ||||||||
Less - Accumulated depreciation | (157,070 | ) | (196,202 | ) | |||||
Total | $ | 113,654 | $ | 184,480 |
Research_and_Development_and_S1
Research and Development and Software (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Research and Development and Software [Abstract] | ' | ||||||||
Schedule of software's | ' | ||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Software | $ | - | $ | 1,011,068 | |||||
Accumulated amortization | - | (64,137 | ) | ||||||
Asset Impairment | - | (946,931 | ) | ||||||
Software, net | $ | - | $ | - | |||||
Long_Term_Debt_and_Notes_Payab1
Long Term Debt and Notes Payable (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Long Term Debt and Notes Payable [Abstract] | ' | ||||||||
Schedule of long term debt | ' | ||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Bank term loan | $ | 122,603 | $ | 141,857 | |||||
Mortgage loan | 171,622 | 174,580 | |||||||
294,225 | 316,437 | ||||||||
Less current portion | (44,254 | ) | (44,084 | ) | |||||
Total long term portion | $ | 249,971 | $ | 272,353 | |||||
Schedule of notes payable | ' | ||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Principal amount of notes payable | $ | 488,902 | $ | 877,500 | |||||
Unamortized discount | (262,198 | ) | (465,480 | ) | |||||
Notes payable, net of discount | 226,704 | 412,020 | |||||||
Less current portion | (226,704 | ) | (380,326 | ) | |||||
Total Long term portion | $ | - | $ | 31,694 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||
Analysis of the leased assets included in property and equipment | ' | ||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Equipment | $ | 79,210 | $ | 79,210 | |||||
Less accumulated depreciation | (46,808 | ) | (33,607 | ) | |||||
Total | $ | 32,402 | $ | 45,603 | |||||
Stockholders_Equity_Deficit_Ta
Stockholder's Equity (Deficit) (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stockholders' Deficit [Abstract] | ' | ||||||||||||||||
Summary of stock option activity | ' | ||||||||||||||||
Options | Shares | Weighted-Average Exercise Price | Weighted-Average | Aggregate | |||||||||||||
Remaining | Intrinsic Value | ||||||||||||||||
Contractual Term | $0 | ||||||||||||||||
Outstanding at January 1, 2014 | 1,000,000 | $ | 0.26 | - | - | ||||||||||||
Granted | - | - | - | - | |||||||||||||
Exercised | - | - | - | - | |||||||||||||
Forfeited or expired | (1,000,000 | ) | 0.26 | - | - | ||||||||||||
Outstanding at March 31, 2014 | - | $ | - | - | - | ||||||||||||
Schedule of temporary equity | ' | ||||||||||||||||
Series A sale price | $ | 5,400,000 | |||||||||||||||
Less: Reclassification of warrant fair value to liability | (5,669,837 | ) | |||||||||||||||
Offering costs | (496,348 | ) | |||||||||||||||
Plus: Deemed dividend | 2,634,185 | ||||||||||||||||
Series A dividends | 60,000 | ||||||||||||||||
Series A at December 31, 2013 | $ | 1,928,000 | |||||||||||||||
Plus: Accretion of Series A value differential | 330,553 | ||||||||||||||||
Series A dividends | 107,976 | ||||||||||||||||
Series A at March 31, 2014 | $ | 2,366,529 | |||||||||||||||
Warrant_and_Fair_Value_Measure1
Warrant and Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Warrant and Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Summary of warrants activity | ' | ||||||||||||||||
Number of | Weighted | ||||||||||||||||
Warrants | Average | ||||||||||||||||
Exercise Price | |||||||||||||||||
Outstanding at December 31, 2013 | 29,940,000 | $ | 0.3 | ||||||||||||||
Granted | - | - | |||||||||||||||
Anti-dilution issuance | - | - | |||||||||||||||
Exercised | - | - | |||||||||||||||
Forfeited | - | - | |||||||||||||||
Expired | - | - | |||||||||||||||
Outstanding at June 30, 2014 | 29,940,000 | $ | 0.3 | ||||||||||||||
Exercisable at June 30, 2014 | 29,940,000 | $ | 0.3 | ||||||||||||||
Aggregate intrinsic value | $ | - | |||||||||||||||
Assets and liabilities carried at fair value measured on a recurring and non-recurring basis | ' | ||||||||||||||||
Carrying | Fair Value Measurements at June 30, 2014 | ||||||||||||||||
Value at | |||||||||||||||||
June 30, | |||||||||||||||||
2014 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Warrant derivative liability (29,940,000 warrants) | $ | 683,267 | $ | - | $ | - | $ | 683,267 | |||||||||
Summary of activity level three liablities | ' | ||||||||||||||||
Balance at December 31, 2013 | $ | 5,406,000 | |||||||||||||||
Change in fair value | (4,722,733 | ) | |||||||||||||||
Balance June 30, 2014 | $ | 683,267 | |||||||||||||||
Summary of activity liabilities | ' | ||||||||||||||||
Assumptions | June 30, | ||||||||||||||||
2014 | |||||||||||||||||
Expected term | 0.875 | ||||||||||||||||
Expected Volatility | 131.31 | % | |||||||||||||||
Risk free rate | 1.2 | % | |||||||||||||||
Dividend Yield | 0 | % |
Concentrations_Tables
Concentrations (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Concentrations [Abstract] | ' | ||||
Schedule of sales generated by hospitals | ' | ||||
Hospital Customer A | 17 | % | |||
Hospital Customer B | 7.4 | % | |||
Hospital Customer C | 7.2 | % | |||
Hospital Customer D | 1.9 | % | |||
Hospital Customer E | 11.1 | % | |||
Hospital Customer F | 9.4 | % | |||
Total | 54 | % | |||
Nature_of_Business_and_Going_C1
Nature of Business and Going Concern (Details) (USD $) | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Feb. 10, 2012 | |
Nature of Business and Going Concern (Textual) | ' | ' | ' | ' |
Shares exchange right on each share pursuant to Merger agreement | ' | ' | ' | 1,271 |
Cash | $778,330 | ' | $3,053,485 | ' |
Working capital deficiency | 443,000 | ' | ' | ' |
Total Stockholders' Equity (Deficit) | -3,064,513 | ' | -4,154,247 | ' |
Accumulated deficit | -9,666,417 | ' | -10,752,223 | ' |
Net cash in operations | -1,849,104 | -1,086,450 | ' | ' |
Operating loss | $2,495,000 | ' | ' | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Textual) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Segment | ||
Summary of Significant Accounting Policies (Textual) | ' | ' |
Number of operating segments | 1 | ' |
Series A prefered stock converted into comon stock | 27,000,000 | ' |
Property and equipment to property held for sale | $206,932 | $197,367 |
Warrant [Member] | ' | ' |
Summary of Significant Accounting Policies (Textual) | ' | ' |
Dilutive securities outstanding | 29,940,000 | ' |
Accounts_Receivable_Details
Accounts Receivable (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Summary of Accounts receivable | ' | ' |
Accounts receivable | $661,801 | $901,918 |
Accounts receivable -Related party | ' | 41,244 |
Allowance for doubtful accounts | ' | -16,244 |
Total | $661,801 | $926,918 |
Accounts_Receivable_Details_Te
Accounts Receivable (Details Textual) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Accounts Receivable (Textual) | ' | ' | ' |
Bad debt expense on trade accounts receivable | ' | $6,450 | ' |
Accounts receivable includes outstanding receivables | $452,583 | ' | $638,270 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Summary of Property and Equipment | ' | ' |
Building and improvements | ' | ' |
Furniture | 36,908 | 119,810 |
Computers and Equipment | 233,816 | 260,872 |
Property and Equipment, gross | 270,724 | 380,682 |
Less - Accumulated depreciation | -157,070 | -196,202 |
Total | $113,654 | $184,480 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Property and Equipment (Textual) | ' | ' | ' |
Depreciation expense | $39,543 | $44,598 | ' |
Net balance of property | $206,932 | ' | $197,367 |
Research_and_Development_and_S2
Research and Development and Software (Details) (Software [Member], USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Software [Member] | ' | ' |
Schedule of software's | ' | ' |
Software | ' | $1,011,068 |
Accumulated amortization | ' | -64,137 |
Asset Impairment | ' | -946,931 |
Software, net | ' | ' |
Research_and_Development_and_S3
Research and Development and Software (Details Textual) (Software [Member], USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Software [Member] | ' | ' | ' | ' |
Research and Development and Software (Textual) | ' | ' | ' | ' |
Accumulated capitalized cost | $1,011,068 | ' | ' | ' |
Software amortization expense | 64,137 | ' | ' | ' |
Loss on asset impairment | ' | ' | ' | ($946,931) |
Lines_of_Credit_Details
Lines of Credit (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 19, 2013 | Sep. 19, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Dell Business Credit Line [Member] | Dell Business Credit Line [Member] | Revolving Credit Facility One [Member] | ||||
Lines of Credit (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | $150,000 | $50,000 | ' | ' |
Line of credit maturity date | ' | ' | ' | 19-Sep-17 | 31-Dec-08 | ' | ' | 18-Dec-18 |
Line of credit renewed date | ' | ' | ' | ' | ' | ' | ' | 18-Dec-12 |
Payments of principal and interest (monthly) | ' | ' | ' | 3,900 | ' | ' | ' | ' |
Line of credit | 40,075 | 44,692 | ' | ' | ' | 40,075 | 44,692 | ' |
Loan, balances due | ' | ' | $133,334 | ' | ' | ' | ' | ' |
Interest rate terms | ' | ' | ' | 'Interest is calculated at a rate per year equal to the bank's prime rate plus 3.5% or 6.75%. | ' | ' | ' | ' |
Long_Term_Debt_and_Notes_Payab2
Long Term Debt and Notes Payable (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Summary of long term debt | ' | ' |
Total | $294,225 | $316,437 |
Less current portion | -44,254 | -44,084 |
Total long term portion | 249,971 | 272,353 |
Bank term loan [Member] | ' | ' |
Summary of long term debt | ' | ' |
Total | 122,603 | 141,857 |
Mortgage loan [Member] | ' | ' |
Summary of long term debt | ' | ' |
Total | $171,622 | $174,580 |
Long_Term_Debt_and_Notes_Payab3
Long Term Debt and Notes Payable (Details 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Summary of notes payable | ' | ' |
Principal amount of notes payable | $488,902 | $877,500 |
Unamortized discount | -262,198 | -465,480 |
Notes payable, net of discount | 226,704 | 412,020 |
Less current portion | -226,704 | -380,326 |
Total long term portion | ' | $31,694 |
Long_Term_Debt_and_Notes_Payab4
Long Term Debt and Notes Payable (Details Textual) (USD $) | 0 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 2 Months Ended | 12 Months Ended | |||||||||
Aug. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Oct. 17, 2013 | Oct. 07, 2013 | Sep. 19, 2013 | Sep. 19, 2013 | Sep. 19, 2013 | Jul. 31, 2010 | Sep. 19, 2013 | Dec. 31, 2013 | Feb. 28, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |
Investor | Revolving Credit Facility [Member] | Line of Credit [Member] | Mortgage Loans on Real Estate [Member] | Term Loan [Member] | Term Loan [Member] | Loan Agreements [Member] | Loan Agreements [Member] | Loan Agreements [Member] | Loan Agreements [Member] | Loan Agreements One [Member] | Loan Agreements One [Member] | |||||||
Long Term Debt and Notes Payable (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments of principal and interest (monthly) | ' | ' | ' | ' | ' | ' | ' | $3,900 | ' | ' | $3,900 | ' | ' | ' | ' | ' | ' | ' |
Maturity period of term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | '5 years | ' | ' | ' | ' | ' | ' |
Term loan, maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31-Jul-20 | 19-Sep-17 | ' | ' | ' | ' | ' | ' | ' |
Loan principal amount | ' | 488,902 | ' | 877,500 | ' | ' | ' | ' | ' | ' | ' | ' | 1,220,000 | 815,000 | ' | ' | ' | ' |
Debt interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.63% | ' | 6.75% | 12.00% | 12.00% | ' | ' | ' | ' |
Loan, balances due | ' | ' | ' | ' | ' | ' | 133,334 | ' | 133,334 | 192,500 | 20,697 | ' | ' | ' | ' | ' | ' | ' |
Loan interest rate terms | ' | ' | ' | ' | ' | ' | ' | 'Interest is calculated at a rate per year equal to the bank's prime rate plus 3.5% or 6.75%. | ' | ' | 'The new consolidated term loan matures on September 19, 2017 and incurs interest at a rate per year equal to the bank's prime rate plus 3.5% or 6.75% at June 30, 2014. | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertible debt, shares | 1,608,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertible debt amount | 402,083 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized discount | 128,452 | ' | ' | ' | 12,500 | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | 61,900 | 114,958 | 200,298 | 350,522 |
Number Of Investors | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest | ' | ' | ' | 5,850 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balloon principal payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 129,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on conversion of issuing stock at a discount from fair market value | ' | ' | ' | 112,584 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Converted unsecured promissory note | 402,083 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued as a loan fee | ' | ' | $679,353 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $679,500 | $343,500 | ' | ' | ' | ' |
Stock issued to lenders in lieu of loan fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,575,000 | 2,375,000 | ' | ' | ' | ' |
Fair value of stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.28 | $0.28 | ' | ' | ' | ' |
Principal and interest payable period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '24 months | '24 months | ' | ' | ' | ' |
Factoring_Agreement_Details
Factoring Agreement (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Factoring Agreement (Textual) | ' | ' | ' | ' | ' | ' |
Period of factoring agreement | '1 year | ' | ' | ' | ' | ' |
Percentage of total receivable's face value exchanged under factoring agreement | 85.00% | ' | ' | ' | ' | ' |
Aggregate amount under factoring agreement | ' | ' | ' | $2,234,000 | ' | ' |
Advance received under factoring agreement | ' | ' | ' | 2,262,600 | ' | ' |
Outstanding receivables purchased by factor | ' | 452,600 | ' | 452,600 | ' | ' |
Loan payable to factor | ' | 364,765 | ' | 364,765 | ' | 542,530 |
Factor fees | ' | $30,000 | $138,400 | $70,600 | $76,100 | ' |
Convertible_Promissory_Notes_D
Convertible Promissory Notes (Detail Textual) (USD $) | 0 Months Ended | 6 Months Ended | 0 Months Ended | 12 Months Ended | |||||
Oct. 17, 2013 | Oct. 07, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Aug. 30, 2013 | Nov. 12, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Warrant [Member] | Warrant [Member] | Convertible Debt [Member] | |||||||
ConvertiblePromissoryNotesAnd Fair Value Measurement Textual | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt discount | $12,500 | $25,000 | ' | ' | ' | $128,452 | ' | ' | ' |
Debt expense | 5,000 | 5,000 | ' | ' | ' | ' | ' | ' | ' |
Promissory note | 142,500 | 280,000 | ' | ' | ' | ' | ' | ' | ' |
Promissory note payment term | 'The debt was treated as stock settled debt where a put premium of $61,071 was to be recorded over the six-month period to the first conversion date. Tonaquint had 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 the Conversion Formula. Tonaquint was granted the right to purchase at any time on or after October 17, 2013 until the date which is the last calendar day of the month in which the fifth anniversary of the "issue date" occurs, 175,000 fully paid and non-assessable shares of the Company's common stock, as such number may be the adjusted from time to time pursuant to the full rachet price protection terms and conditions of the warrant. The initial "exercise price" is $0.40 per share of common stock. On November 12, 2013, the note was paid in full with financing received in connection with the sale and issuance of Series A Preferred Stock and warrants pursuant to the Securities Purchase Agreement, dated November 12, 2013, between the Company and the investors named therein. (See Note 12) As mentioned above, the Company issued 175,000 free standing and detachable warrants related to the note. | 'The Company had the option to repay this note at any time on or before the date that is sixty (60) days from October 7, 2013. The Company recorded a debt discount for the OID of $25,000 and expensed $5,000. The debt was treated as stock settled debt where a put premium of $120,000 was to be recorded over the six-month period to the first conversion date. Tonaquint had 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 | ' | ' | ' | ' | 350,000 | ' | ' |
Fully paid and non-assessable shares of the company common stock, par value | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' |
Warrants exercise price | ' | ' | ' | ' | ' | ' | $0.20 | ' | ' |
Put premium | ' | ' | 33,364 | ' | ' | ' | ' | ' | ' |
Loss on debt extinguishment | ' | ' | 203,282 | 209,915 | ' | ' | ' | ' | 3,459 |
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | $34,041 |
Warrant issuance | ' | ' | ' | ' | 27,000,000 | ' | 175,000 | 29,940,000 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Analysis of the leased assets included in property and equipment | ' | ' |
Equipment | $79,210 | $79,210 |
Less accumulated depreciation | -46,808 | -33,607 |
Total | $32,402 | $45,603 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 6 Months Ended | |||||
Apr. 14, 2014 | Sep. 01, 2013 | Jun. 30, 2014 | Sep. 30, 2012 | Sep. 30, 2011 | Jun. 30, 2014 | Nov. 01, 2013 | Nov. 01, 2013 | |
Mr. Dean Boyer [Member] | President [Member] | Chief Executive Officer [Member] | ||||||
Commitments and Contingencies (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Lease arrangements periodic payment per month | ' | ' | ' | $560 | ' | ' | ' | ' |
Lease arrangement payment paid per month | ' | 5,800 | ' | ' | ' | ' | ' | ' |
Security deposit | ' | ' | 8,865 | ' | ' | ' | ' | ' |
Lease expiration term | ' | ' | ' | '5 years | '1 year | ' | ' | ' |
Lease arrangements term, Description | ' | ' | ' | ' | 'One year with five successive one year renewal options. | ' | ' | ' |
Renewed period of lease arrangements | ' | '1 year | ' | ' | ' | ' | ' | ' |
Increment percentage in lease rent payment on renewal | ' | 4.00% | ' | ' | ' | ' | ' | ' |
Total minimum lease payments | ' | ' | 42,492 | ' | ' | ' | ' | ' |
Short term liabilities | ' | ' | 30,989 | ' | ' | ' | ' | ' |
Amortization of assets held under capital leases | ' | ' | 13,200 | ' | ' | ' | ' | ' |
Lawsuit settlement, amount payable | ' | ' | 11,000 | ' | ' | ' | ' | ' |
Due to officer as stated in February 2012 merger agreement | ' | ' | ' | ' | ' | ' | ' | 75,000 |
Promissory notes payable | ' | ' | ' | ' | ' | ' | 40,000 | ' |
Separation agreement description | 'The Separation Agreement provides that Mr. Rubinowitz will receive from the Company (i) $175,000 to be paid in equal increments of $3,365.39 on each of May 2, 2014, May 16, 2014, May 30, 2014, June 14, 2014 and June 27, 2014 and thereafter equal increments of $7,532.05 with the last payment date being April 17, 2015, and (ii) $23,557.70 in accrued and unpaid base salary, bonus and vacation earned through April 11, 2014 payable in equal installments of $1,121.80 beginning on July 11, 2014, in each case, less all applicable deductions and withholdings. As of June 30, 2014, the Company has a settlement accrued of $181,700 in connection with Mr. Rubinowitz's Separation Agreement. | ' | ' | ' | ' | ' | ' | ' |
Settlement accrual | ' | ' | $181,700 | ' | ' | $114,000 | ' | ' |
Employment termination agreement, description | ' | ' | ' | ' | ' | 'The agreements provide that Mr. Boyer will receive $200,000 to be paid $50,000 on May 16, 2014, and payments to be made thereafter in equal increments of $12,000 with the Company's scheduled payrolls, and with a final payment of $6,000 date being made on November 14, 2014. All payments will be less applicable payroll tax deductions and withholdings. | ' | ' |
Stockholders_Deficit_Details
Stockholders' Deficit (Details) (Stock Option [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Stock Option [Member] | ' |
Option Indexed to Issuer's Equity [Line Items] | ' |
Number of Shares, Outstanding, Beginning balance | 1,000,000 |
Number of Shares, Granted | ' |
Number of Shares, Exercised | ' |
Number of Shares, Forfeited or expired | -1,000,000 |
Number of Shares, Outstanding, Ending balance | ' |
Weighted Average Exercise Price, Beginning balance | $0.26 |
Weighted Average Exercise Price, Granted | ' |
Weighted Average Exercise Price, Exercised | ' |
Weighted Average Exercise Price, Forfeited | $0.26 |
Weighted Average Exercise Price, Ending balance | ' |
Weighted-Average Remaining Contractual Term, Granted | '0 years |
Weighted-Average Remaining Contractual Term, Exercised | '0 years |
Weighted-Average Remaining Contractual Term, Ending | '0 years |
Aggregate Intrinsic Value, Granted | ' |
Aggregate Intrinsic Value, Exercised | ' |
Aggregate Intrinsic Value, Forfeited or expired | ' |
Aggregate Intrinsic Value, Ending balance | ' |
Stockholders_Deficit_Details_1
Stockholders' Deficit (Details 1) (Series A Preferred Stock [Member], USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Series A Preferred Stock [Member] | ' | ' |
Series A sale price | $1,928,000 | $5,400,000 |
Less: Reclassification of warrant fair value to liability | ' | -5,669,837 |
Offering costs | ' | -496,348 |
Plus: Deemed dividend | ' | 2,634,185 |
Plus: Accretion of Series A value differential | 547,553 | ' |
Series A dividends | 220,573 | 60,000 |
Series A sale price | $2,696,126 | $1,928,000 |
Stockholders_Deficit_Details_T
Stockholders' Deficit (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 6 Months Ended | 6 Months Ended | 1 Months Ended | 2 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||||||||||||||
Nov. 12, 2013 | Oct. 09, 2013 | Sep. 06, 2013 | Aug. 27, 2013 | Aug. 30, 2013 | Aug. 21, 2013 | Aug. 07, 2013 | Jul. 08, 2013 | Jun. 21, 2013 | 24-May-13 | 19-May-13 | Jan. 15, 2013 | Jun. 27, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Apr. 10, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jan. 31, 2013 | Feb. 28, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Aug. 07, 2013 | Jul. 08, 2013 | Nov. 12, 2013 | Nov. 12, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Apr. 01, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 09, 2013 | |
Investor | Stock Option [Member] | Stock Option [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Director [Member] | Officer [Member] | Consultant [Member] | Private Placement [Member] | Private Placement [Member] | Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | Employee [Member] | Employee [Member] | Two Employees [Member] | Two Employees [Member] | Three Employees [Member] | Michael Ciprianni [Member] | |||||||||||||||||
Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Stockholders' Equity (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,928 | $70,048 | ' | ' | $14,822 | ' | $24,630 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $18,750 | ' | ' | ' | ' | ' |
Cancellation of stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of stock option, granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | -1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of stock option, granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 221,121 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested stock options forfeited | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued | ' | ' | 50,000 | 400,000 | 400,000 | 100,000 | 500,000 | 500,000 | 750,000 | 125,000 | 625,000 | 46,429 | ' | ' | ' | ' | ' | ' | ' | ' | 5,575,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issued, value | ' | ' | 15,000 | 100,000 | 100,000 | 25,000 | 200,000 | 200,000 | 300,000 | 50,000 | 250,000 | 13,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale price of stock, per share | ' | ' | ' | $0.25 | $0.25 | $0.25 | $0.40 | $0.40 | $0.40 | $0.40 | $0.40 | $0.28 | $0.51 | ' | ' | ' | ' | ' | $0.26 | $0.49 | ' | ' | ' | ' | ' | $0.40 | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued for services, shares | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,266 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 93,750 | 75,000 | 54,847 | 187,500 | 95,052 | 4,125,000 |
Shares issued for prepaid services | ' | 24,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 57,021 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,750 | 21,939,000 | 43,125 | 45,625 | 1,155,000 |
Share price, per share | ' | $0.24 | $0.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.35 | ' | ' | $0.22 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.20 | $0.25 | $0.40 | $0.23 | $0.48 | $0.28 |
Issuance of shares for cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 51,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,500 | 400,000 | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares for cash, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 230,000 | 1,000,000 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,500,000 | ' | ' | ' | ' | ' | ' |
Securities purchase agreement for the equity sale of convertible preferred stock | 5,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,400,000 | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, dividend percentage | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' |
Warrant issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27,000,000 | ' | ' | ' | ' | 1,890,000 | ' | ' | ' | ' | ' | 27,000,000 | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from issuance of convertible preferred stock after payment of expense | 4,322,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,903,652 | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertible debt amount | ' | ' | ' | ' | $402,083 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of convertible debt, shares | ' | ' | ' | ' | 1,608,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | ' | ' | ' | ' | $0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of investors | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible terms of conversion feature | ' | ' | ' | ' | '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. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of agreement over expensed | ' | 'six (6) months. | 'Expensed over 12 months. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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. | |||||||||||||||||||||||||||||||||||
Term of agreement | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year |
Warrants_and_Fair_Value_Measur
Warrants and Fair Value Measurements (Details) (Warrant [Member], USD $) | 6 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Warrant [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Number of Warrants, Outstanding at December 31, 2013 | 29,940,000 | ' | ' |
Number of Warrants, Granted | ' | ' | ' |
Number of Warrants, Anti-dilution issuance | ' | ' | ' |
Number of Warrants, Exercised | ' | ' | ' |
Number of Warrants, Forfeited | ' | ' | ' |
Number of Warrants, Expired | ' | ' | ' |
Number of Warrants, Outstanding at March 31, 2014 | 29,940,000 | ' | ' |
Number of Warrants, Exercisable at March 31, 2014 | 29,940,000 | ' | ' |
Weighted Average Exercise Price, Beginning balance | $0.30 | ' | ' |
Weighted Average Exercise Price, Granted | ' | ' | ' |
Weighted Average Exercise Price, Anti-dilution issuance | ' | ' | ' |
Weighted Average Exercise Price, Exercised | ' | ' | ' |
Weighted Average Exercise Price, Forfeited | ' | ' | ' |
Weighted Average Exercise Price, Expired | ' | ' | ' |
Weighted Average Exercise Price, Ending balance | $0.30 | ' | ' |
Weighted Average Exercise Price, Exercisable, Ending balance | $0.30 | $0.30 | ' |
Weighted Average Exercise Price, Aggregate intrinsic value | ' | ' | ' |
Warrants_and_Fair_Value_Measur1
Warrants and Fair Value Measurements (Details 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Fair Value Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Warrant derivative liability | $683,267 | $5,406,000 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Warrant derivative liability | ' | ' |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Warrant derivative liability | ' | ' |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' | ' |
Warrant derivative liability | $683,267 | ' |
Warrants_and_Fair_Value_Measur2
Warrants and Fair Value Measurements (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Convertible Promissory Notes [Abstract] | ' | ' | ' | ' |
Balance at December 31, 2013 | ' | ' | $5,406,000 | ' |
Gain from change in fair value of warrant liability | -3,420,871 | ' | -4,722,733 | ' |
Balance June 30, 2014 | $683,267 | ' | $683,267 | ' |
Warrants_and_Fair_Value_Measur3
Warrants and Fair Value Measurements (Details 3) | 6 Months Ended |
Jun. 30, 2014 | |
Convertible Promissory Notes [Abstract] | ' |
Expected term | '10 months 15 days |
Expected volatility | 131.31% |
Risk free rate | 1.20% |
Dividend Yield | 0.00% |
Warrant_and_Fair_Value_Measure2
Warrant and Fair Value Measurements (Detail Textuals) (USD $) | 0 Months Ended | 6 Months Ended | 0 Months Ended | 12 Months Ended | |||
Nov. 12, 2013 | Oct. 17, 2013 | Oct. 07, 2013 | Jun. 30, 2014 | Nov. 12, 2013 | Nov. 12, 2013 | Dec. 31, 2013 | |
Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Stock Option [Member] | |
Investor [Member] | Placement Agent [Member] | ||||||
Warrants and Fair Value Measurement (Textual) | ' | ' | ' | ' | ' | ' | ' |
Warrants issued | ' | 175,000 | 350,000 | ' | 27,000,000 | 1,890,000 | ' |
Additional warrants issued | 525,000 | ' | ' | ' | ' | ' | ' |
Reduced exercise price of warrants | $0.20 | ' | ' | ' | ' | ' | ' |
Warrants exercise price | $0.30 | ' | ' | ' | ' | ' | ' |
Warrants exercisable term | ' | ' | ' | '5 years | ' | ' | ' |
Warrants outstanding term | ' | ' | ' | '4 years 4 months 10 days | ' | ' | '1 year 10 months 24 days |
Concentrations_Details
Concentrations (Details) (Sales [Member]) | 6 Months Ended |
Jun. 30, 2014 | |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 54.10% |
Hospital Customer A [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 17.20% |
Hospital Customer B [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 9.60% |
Hospital Customer C [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 9.70% |
Hospital Customer D [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 1.30% |
Hospital Customer E [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 5.80% |
Hospital Customer F [Member] | ' |
Concentration Risk [Line Items] | ' |
Concentration risk percentage | 10.50% |
Concentrations_Details_Textual
Concentrations (Details Textual) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Customer | Customer | |
Accounts Receivable [Member] | ' | ' |
Concentrations (Textual) | ' | ' |
Number of major customer | 4 | 3 |
Concentration risk percentage | 59.00% | 64.00% |
Sales [Member] | ' | ' |
Concentrations (Textual) | ' | ' |
Number of major customer | 6 | ' |
Concentration risk percentage | 54.10% | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 0 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | |
Related Party Transaction (Textual) | ' | ' | ' | ' |
Accounts receivable | $661,801 | $661,801 | $901,918 | ' |
Accounts receivable - Related Party, net of allowance | ' | ' | 25,000 | ' |
Resume Bear [Member] | ' | ' | ' | ' |
Related Party Transaction (Textual) | ' | ' | ' | ' |
Website development services | ' | ' | ' | 302,764 |
Accounts receivable | ' | ' | 108,000 | ' |
Accounts receivable - Related Party, net of allowance | ' | ' | 16,244 | ' |
Reduction of revenue | ' | ' | 92,000 | ' |
Estimated contract income loss | $220,200 | $112,200 | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent Event [Member], Chief Executive Officer [Member], USD $) | 0 Months Ended |
Aug. 06, 2014 | |
Subsequent Event [Member] | Chief Executive Officer [Member] | ' |
Subsequent Event [Line Items] | ' |
Employment agreement expiration term | '2 years |
Salary | $175,000 |
Employment agreement, Description | ' |
The base salary shall increase upon the Company meeting certain performance milestones. |