Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2014 | |
Document And Entity Information | ' |
Entity Registrant Name | 'CARDAX, INC. |
Entity Central Index Key | '0001544238 |
Document Type | 'S-1 |
Document Period End Date | 30-Sep-14 |
Amendment Flag | 'true |
Amendment Description | 'Amendment No. 3 |
Entity Filer Category | 'Smaller Reporting Company |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CURRENT ASSETS | ' | ' | ' | |
Cash | $733,319 | $222,410 | $7,799 | |
Inventory | 958,575 | 986,674 | 986,674 | |
Deposits and other assets | 92,231 | 94,220 | 39,704 | |
Prepaid expenses | 64,574 | 14,380 | 11,183 | |
Total current assets | 1,848,699 | 1,317,684 | 1,045,360 | |
NON-CURRENT ASSETS | ' | ' | ' | |
PROPERTY AND EQUIPMENT, net | 22,434 | 26,041 | 1,404 | |
INTANGIBLE ASSETS, net | 422,221 | 424,757 | 435,010 | |
Total non-current assets | ' | 450,798 | 436,414 | |
TOTAL ASSETS | 2,293,354 | 1,768,482 | 1,481,774 | |
CURRENT LIABILITIES | ' | ' | ' | |
Accrued payroll and payroll related expenses | 3,575,591 | 3,774,580 | 3,696,897 | |
Notes payable, current portion, net of discount of $0, $4,592 and $65,173 as of September 30, 2014, December 31, 2013 and December 31, 2012, respectively | ' | 9,039,444 | 3,609,098 | |
Accounts payable | 528,809 | 682,319 | 712,186 | |
Accrued interest | ' | 657,092 | 673,975 | |
Fees payable to directors | 418,546 | 468,546 | 533,001 | |
Lease settlement payable, current portion | ' | ' | 251,184 | |
Employee settlement | 50,000 | 50,000 | 50,000 | |
Patent license payable, current | 10,000 | 10,000 | 15,833 | |
Other current liabilities | ' | 12,613 | 4,424 | |
Total current liabilities | 4,582,946 | 14,694,594 | 9,546,598 | |
NON-CURRENT LIABILITIES | ' | ' | ' | |
Notes payable, less current portion | ' | ' | 500,000 | |
Patent license payable, less current portion | ' | 10,000 | 20,000 | |
Total non-current liabilities | ' | 10,000 | 520,000 | |
COMMITMENTS AND CONTINGENCIES | ' | ' | ' | |
Total liabilities | 4,582,946 | 14,704,594 | 10,066,598 | |
STOCKHOLDERS' DEFICIT | ' | ' | ' | |
Common stock value | 63,636 | 33,229 | [1] | 9,488 |
Additional paid-in-capital | 46,201,645 | 19,867,961 | [1] | 19,881,825 |
Deferred compensation | -470,823 | ' | -28,536,492 | |
Accumulated deficit | -48,084,050 | -32,897,657 | ' | |
Total stockholders' deficit | -2,289,592 | -12,936,112 | -8,584,824 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 2,293,354 | 1,768,482 | 1,481,774 | |
Preferred Series A [Member] | ' | ' | ' | |
STOCKHOLDERS' DEFICIT | ' | ' | ' | |
Preferred stock value | ' | 40,118 | 40,118 | |
Preferred Series B [Member] | ' | ' | ' | |
STOCKHOLDERS' DEFICIT | ' | ' | ' | |
Preferred stock value | ' | $20,237 | $20,237 | |
[1] | December 31, 2013 retroactively adjusted to reflect effects of the reverse acquisition transaction. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Notes payable, current portion, net of discount | $0 | $4,592 | $65,173 |
Common stock, Par value | $0.00 | $0.00 | $0.00 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 | 150,000,000 |
Common Stock, Shares Issued | 63,635,930 | 33,229,093 | 9,488,227 |
Common Stock, Shares Outstanding | 63,635,930 | 33,229,093 | 9,488,227 |
Preferred Series A [Member] | ' | ' | ' |
Preferred Stock, Par value | $0.00 | $0.00 | $0.00 |
Preferred Stock, Shares authorized | 0 | 40,118,013 | 40,118,013 |
Preferred Stock, Shares Issued | 0 | 0 | 0 |
Preferred Stock, Shares outstanding | 0 | 0 | 0 |
Preferred Series B [Member] | ' | ' | ' |
Preferred Stock, Par value | $0.00 | $0.00 | $0.00 |
Preferred Stock, Shares authorized | 0 | 55,555,555 | 55,555,555 |
Preferred Stock, Shares Issued | 0 | 20,237,459 | 20,237,459 |
Preferred Stock, Shares outstanding | 0 | 20,237,459 | 20,237,459 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' | ' | ' | ' |
REVENUES | ' | ' | ' | ' | ' | $10,000 | $92,903 |
OPERATING EXPENSES: | ' | ' | ' | ' | ' | ' | ' |
Stock based compensation | 786,747 | 2,073 | 10,783,948 | 8,508 | 9,877 | 23,645 | 1,599,467 |
Research and development | 357,519 | 334,155 | 921,106 | 677,929 | 944,330 | 702,792 | 15,542,286 |
Selling, general, and administrative expenses | 724,454 | 766,065 | 3,327,010 | 1,612,530 | 2,611,184 | 979,285 | 15,030,573 |
Depreciation and amortization | 9,435 | 8,784 | 28,196 | 25,160 | 36,231 | 123,206 | 1,423,226 |
Total operating expenses | 1,878,155 | 1,111,077 | 15,060,260 | 2,324,127 | 3,591,745 | 1,805,283 | 31,996,085 |
Loss from operations | -1,878,155 | -1,111,077 | -15,060,260 | -2,324,127 | -3,591,745 | -1,795,283 | -31,903,182 |
OTHER INCOME (EXPENSES): | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | -229,335 | -117,042 | -513,995 | -741,916 | -734,168 | -4,309,379 |
Gain (loss) on sale and disposal of assets | ' | ' | 2,426 | ' | -9,230 | -1,254 | -37,878 |
Research grant income | ' | ' | ' | ' | ' | ' | 1,179,646 |
Gain on debt extinguishment | ' | ' | ' | ' | ' | ' | 786,945 |
Federal and state tax credits | ' | ' | ' | ' | ' | ' | 1,506,596 |
Dividend income | ' | ' | ' | ' | ' | ' | 55,206 |
Other expenses, net | -3,069 | -7,928 | -14,585 | -11,739 | -18,274 | -12,685 | -175,611 |
Interest income | 830 | ' | 3,068 | ' | ' | ' | ' |
Total other income (expenses) | -2,239 | -237,263 | -126,133 | -525,734 | -769,420 | -748,107 | -994,475 |
Loss before the provision for income taxes | -1,880,394 | -1,348,340 | -15,186,393 | -2,849,861 | -4,361,165 | -2,543,390 | -32,897,657 |
PROVISION FOR INCOME TAXES | ' | ' | ' | ' | ' | ' | ' |
NET LOSS | ($1,880,394) | ($1,348,340) | ($15,186,393) | ($2,849,861) | ($4,361,165) | ($2,543,390) | ($32,897,657) |
NET LOSS PER SHARE | ' | ' | ' | ' | ' | ' | ' |
Basic | ($0.03) | ($0.04) | ($0.26) | ($0.09) | ($0.46) | ($0.27) | ' |
Diluted | ($0.03) | ($0.04) | ($0.26) | ($0.09) | ($0.46) | ($0.27) | ' |
SHARES USED IN CALCULATION OF NET INCOME PER SHARE | ' | ' | ' | ' | ' | ' | ' |
Basic | 63,610,949 | 33,229,093 | 59,019,453 | 33,229,093 | 9,488,227 | 9,488,227 | ' |
Diluted | 63,610,949 | 33,229,093 | 59,019,453 | 33,229,093 | 9,488,227 | 9,488,227 | ' |
Statement_of_Changes_In_Stockh
Statement of Changes In Stockholders' Equity (Deficit) (USD $) | Common Stock [Member] | Preferred Series A [Member] | Preferred Series B [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Mar. 22, 2006 | ' | ' | ' | ' | ' | ' |
Balance, shares at Mar. 22, 2006 | ' | ' | ' | ' | ' | ' |
Issuance of common stock | 9,447 | ' | ' | 1,571,787 | ' | 1,581,234 |
Issuance of common stock, shares | 9,447,100 | ' | ' | ' | ' | ' |
Issuance of Series A Preferred stock | ' | 40,118 | ' | 6,674,742 | ' | 6,714,860 |
Issuance of Series A Preferred stock, shares | ' | 40,118,013 | ' | ' | ' | ' |
Stock based compensation | ' | ' | ' | 771,460 | ' | 771,460 |
Stock option exercise | 7 | ' | ' | 297 | ' | 304 |
Stock option exercise, shares | 6,842 | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | -4,104,289 | -4,104,289 |
Balance at Dec. 31, 2006 | 9,454 | 40,118 | ' | 9,018,286 | -4,104,289 | 4,963,569 |
Balance, shares at Dec. 31, 2006 | 9,453,942 | 40,118,013 | ' | ' | ' | ' |
Stock based compensation | ' | ' | ' | 319,019 | ' | 319,019 |
Stock option exercise | 20 | ' | ' | 1,380 | ' | 1,400 |
Stock option exercise, shares | 20,000 | ' | ' | ' | ' | ' |
Issuance of Series B preferred stock | ' | ' | 8,236 | 3,697,817 | ' | 3,706,053 |
Issuance of Series B preferred stock, shares | ' | ' | 8,235,868 | ' | ' | ' |
Issuance of Series B Preferred stock warrants | ' | ' | ' | 255,398 | ' | 255,398 |
Net loss | ' | ' | ' | ' | -7,908,993 | -7,908,993 |
Balance at Dec. 31, 2007 | 9,474 | 40,118 | 8,236 | 13,291,900 | -12,013,282 | 1,336,446 |
Balance, shares at Dec. 31, 2007 | 9,773,942 | 40,118,013 | 8,235,868 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 138,868 | ' | 138,868 |
Stock option exercise | 14 | ' | ' | 986 | ' | 1,000 |
Stock option exercise, shares | 14,285 | ' | ' | ' | ' | ' |
Issuance of Series B preferred stock | ' | ' | 5,997 | 2,692,488 | ' | 2,698,485 |
Issuance of Series B preferred stock, shares | ' | ' | 5,996,624 | ' | ' | ' |
Issuance of Series B Preferred stock warrants | ' | ' | ' | 122,436 | ' | 122,436 |
Net loss | ' | ' | ' | ' | -6,700,148 | -6,700,148 |
Balance at Dec. 31, 2008 | 9,488 | 40,118 | 14,233 | 16,246,678 | -18,713,430 | -2,402,913 |
Balance, shares at Dec. 31, 2008 | 9,488,227 | 40,118,013 | 14,232,492 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 165,949 | ' | 165,949 |
Issuance of Series B Preferred stock warrants | ' | ' | ' | 508,672 | ' | 508,672 |
Conversions of notes payable and accrued interest | ' | ' | 16,553 | 742,337 | ' | 743,990 |
Conversions of notes payable and accrued interest, shares | ' | ' | 1,653,310 | ' | ' | ' |
Net loss | ' | ' | ' | ' | -1,451,711 | -1,451,711 |
Balance at Dec. 31, 2009 | 9,488 | 40,118 | 15,886 | 17,663,636 | -20,165,141 | -2,436,013 |
Balance, shares at Dec. 31, 2009 | 9,488,227 | 40,118,013 | 15,885,802 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 123,809 | ' | 123,809 |
Issuance of Series B Preferred stock warrants | ' | ' | ' | 268,555 | ' | 268,555 |
Issuance and conversion of mandatorily convertible notes | ' | ' | 3,401 | 826,863 | ' | 830,264 |
Issuance and conversion of mandatorily convertible notes, shares | ' | ' | 3,401,329 | ' | ' | ' |
Issuance of mandatorily convertible notes | ' | ' | ' | 258,652 | ' | 258,652 |
Net loss | ' | ' | ' | ' | -3,948,021 | -3,948,021 |
Balance at Dec. 31, 2010 | 9,488 | 40,118 | 19,287 | 19,141,515 | -24,113,162 | -4,902,754 |
Balance, shares at Dec. 31, 2010 | 9,488,227 | 40,118,013 | 19,287,131 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 46,840 | ' | 46,840 |
Issuance of Series B preferred stock | ' | ' | 339 | 152,140 | ' | 152,479 |
Issuance of Series B preferred stock, shares | ' | ' | 338,843 | ' | ' | ' |
Issuance of Series B Preferred stock warrants | ' | ' | ' | 359,882 | ' | 359,882 |
Issuance and conversion of mandatorily convertible notes | ' | ' | 611 | 15,908 | ' | 16,519 |
Issuance and conversion of mandatorily convertible notes, shares | ' | ' | 611,485 | ' | ' | ' |
Net loss | ' | ' | ' | ' | -1,879,940 | -1,879,940 |
Balance at Dec. 31, 2011 | 9,488 | 40,118 | 20,237 | 19,716,285 | -25,993,102 | -6,206,974 |
Balance, shares at Dec. 31, 2011 | 9,488,227 | 40,118,013 | 20,237,459 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 23,645 | ' | 23,645 |
Stock option exercise, shares | ' | ' | ' | ' | ' | ' |
Issuance of Series B Preferred stock warrants | ' | ' | ' | 141,895 | ' | 141,895 |
Net loss | ' | ' | ' | ' | -2,543,390 | -2,543,390 |
Balance at Dec. 31, 2012 | 9,488 | 40,118 | 20,237 | 19,884,825 | -28,536,492 | -8,584,824 |
Balance, shares at Dec. 31, 2012 | 9,488,227 | 40,118,013 | 20,237,459 | ' | ' | ' |
Stock based compensation | ' | ' | ' | 9,877 | ' | 9,877 |
Stock option exercise, shares | ' | ' | ' | ' | ' | ' |
Issuance and conversion of mandatorily convertible notes, shares | ' | ' | ' | ' | ' | 14,446,777 |
Net loss | ' | ' | ' | ' | -4,361,165 | -4,361,165 |
Balance at Dec. 31, 2013 | $9,488 | $40,118 | $20,237 | $19,891,702 | ($32,897,657) | ($12,936,112) |
Balance, shares at Dec. 31, 2013 | 9,488,227 | 40,118,013 | 20,237,459 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | 12 Months Ended | 93 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Cash flows from operating activities: | ' | ' | ' | ' | ' |
Net loss | ($15,186,393) | ($2,849,861) | ($4,361,165) | ($2,543,390) | ($32,897,657) |
Adjustments to reconcile net income to net cash used in operating activities: | ' | ' | ' | ' | ' |
Depreciation and amortization | 28,196 | 25,160 | 5,622 | 92,596 | 1,007,176 |
Amortization | 22,955 | 23,553 | 30,609 | 30,610 | 168,363 |
Stock based compensation | 10,783,948 | 8,508 | 9,877 | 23,645 | 1,599,467 |
Amortization of debt discount | 4,592 | 55,843 | 60,581 | 363,858 | 1,648,452 |
Gain (loss) on sale of assets | -2,426 | ' | ' | 1,254 | -28,648 |
Loss on abandonment of patents | ' | ' | 9,340 | ' | 57,847 |
Changes in assets and liabilities: | ' | ' | ' | ' | ' |
Deposits and other assets | 1,989 | -53,922 | -54,516 | 59,572 | -94,220 |
Prepaid expenses | -50,194 | -10,387 | -3,197 | -8,088 | 505 |
Inventory | 28,099 | ' | ' | ' | -986,674 |
Accrued payroll and payroll related expenses | -198,989 | 68,892 | 77,683 | 671,270 | 3,650,771 |
Accounts payable | -153,510 | -134,399 | -29,867 | -48,173 | 682,319 |
Accrued interest | -101,553 | 227,865 | 450,555 | 363,768 | 1,124,530 |
Fees payable to directors | -50,000 | -57,372 | -64,455 | 63,000 | 468,546 |
Patent license payable | -10,000 | -833 | -15,833 | -6,667 | 20,000 |
Other current liabilities | -12,613 | 15,702 | 8,189 | -1,242 | 12,613 |
Lease settlement payable | ' | -251,184 | -251,184 | -221,250 | ' |
Employee settlement | ' | ' | ' | ' | 50,000 |
Net cash used in operating activities | -4,918,854 | -2,955,988 | -4,127,761 | -1,159,237 | -23,516,610 |
Cash flows from investing activities: | ' | ' | ' | ' | ' |
Purchases of property and equipment | -1,634 | -30,259 | -30,259 | ' | -729,163 |
Proceeds from sale of property and equipment | 2,426 | ' | ' | 4,014 | 112,759 |
Expenses related to patent development | -20,419 | -22,563 | -29,696 | -35,155 | -650,967 |
Net cash used in investing activities | -19,627 | -52,822 | -59,955 | -31,141 | -1,267,371 |
Cash flows from financing activities: | ' | ' | ' | ' | ' |
Proceeds from the issuance of common stock | 3,923,798 | ' | ' | ' | 1,581,275 |
Proceeds from the issuance of series A preferred stock | ' | ' | ' | ' | 6,714,860 |
Proceeds from the issuance of series B preferred stock | ' | ' | ' | ' | 7,259,402 |
Proceeds from the exercise of stock options | ' | ' | ' | ' | 2,663 |
Proceeds from the issuances of notes payable | 2,076,000 | 5,360,403 | 5,550,403 | 1,180,000 | 13,716,167 |
Repayment of principal on notes payable | -550,408 | -1,148,076 | -1,148,076 | -49,950 | -4,267,976 |
Net cash provided by financing activities | 5,449,390 | 4,212,327 | 4,402,327 | 1,130,050 | 25,006,391 |
NET INCREASE IN CASH | 510,909 | 1,203,517 | 214,611 | -60,328 | 222,410 |
Cash at the beginning of the year | 222,410 | 7,799 | 7,799 | 68,127 | ' |
Cash at the end of the period | 733,319 | 1,211,316 | 222,410 | 7,799 | 222,410 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ' | ' | ' | ' | ' |
Issuance of stock for property and equipment | ' | ' | ' | ' | 388,165 |
Issuance of stock for deposits and other assets | ' | ' | ' | ' | 14,885 |
Conversion of convertible notes payable to series B preferred stock | ' | ' | ' | ' | 743,990 |
Issuance of Series B Preferred stock warrants | ' | 140,592 | ' | 140,592 | 1,653,044 |
Conversion of accrued interest into notes payable | 11,125,167 | ' | 467,438 | ' | ' |
SUPPLEMENTAL DISCLOSURES: | ' | ' | ' | ' | ' |
Cash paid for interest | 188,382 | 24,743 | 234,400 | 4,500 | 273,786 |
Cash paid for income taxes | ' | ' | ' | ' | ' |
Company_Background
Company Background | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Company Background | ' | ' |
Company Background | ' | ' |
NOTE 1 – COMPANY BACKGROUND | NOTE 1 – COMPANY BACKGROUND | |
Cardax Pharmaceuticals, Inc. (“Holdings”) was incorporated in the State of Delaware on March 23, 2006. | Cardax Pharmaceuticals, Inc. (“Holdings”) was incorporated in the State of Delaware on March 23, 2006. | |
In May of 2006, Hawaii Biotech, Inc., contributed its anti-inflammatory, small molecule line of business into Holdings. Holdings issued (i) 9,447,100 shares of common stock of Holdings, (ii) 14,440,920 shares of Series A preferred stock of Holdings, (iii) 11,113,544 shares of Series B preferred stock of Holdings and (iv) 13,859,324 shares of Series C preferred stock of Holdings to Hawaii Biotech, Inc., in exchange for the assets and liabilities contributed to Holdings. The above shares were then distributed by Hawaii Biotech, Inc. to its shareholders. An additional 704,225 shares of Series C preferred stock were issued as part of the initial capitalization of Holdings. On January 30, 2007, all outstanding shares of Series A, B, and C preferred stock were converted to shares of Series A preferred stock. | In May of 2006, Hawaii Biotech, Inc., contributed its anti-inflammatory, small molecule line of business into Holdings. See Note 7 for a description of the assets contributed, liabilities assumed, and Holdings stock issued in the exchange. | |
Holdings was formed for the purpose of developing a platform of proprietary, exceptionally safe, small molecule compounds for large unmet medical needs where oxidative stress and inflammation play important causative roles. Holdings’ platform has application in arthritis, metabolic syndrome, liver disease, and cardiovascular disease, as well as macular degeneration and prostate disease. Holdings’ current primary focus is on the development of astaxanthin technologies. Astaxanthin is a naturally occurring marine compound that has robust anti-oxidant and anti-inflammatory activity. | In May of 2013, Holdings formed a 100% owned subsidiary company called Cardax Pharma, Inc. (“Pharma”). Pharma was formed to maintain Holdings’ operations going forward, leaving Holdings as a shell holding company. All references herein to the Company, refers to Holdings and Pharma, collectively. | |
In May of 2013, Holdings formed a 100% owned subsidiary company called Cardax Pharma, Inc. (“Pharma”). Pharma was formed to maintain Holdings’ operations going forward, leaving Holdings as an investment holding company. | The Company was formed for the purpose of developing a platform of proprietary, exceptionally safe, small molecule compounds for large unmet medical needs where oxidative stress and inflammation play important causative roles. The Company’s platform has application in arthritis, metabolic syndrome, liver disease, and cardiovascular disease, as well as macular degeneration and prostate disease. The Company’s current primary focus is on the development of astaxanthin technologies. Astaxanthin is a naturally occurring marine compound that has robust anti-oxidant and anti-inflammatory activity. | |
On November 29, 2013, Holdings entered into a definitive merger agreement (“Merger Agreement”) with Koffee Korner Inc., a Delaware corporation (“Koffee Korner”) (OTCQB:KOFF), and its wholly owned subsidiary (“Koffee Sub”), pursuant to which, among other matters and subject to the conditions set forth in such Merger Agreement, Koffee Sub would merge with and into Pharma. In connection with such merger agreement and related agreements, upon the consummation of such merger, Pharma would become a wholly owned subsidiary of Koffee Korner and Koffee Korner would issue shares of its common stock to Holdings. At the effective time of such merger, Holdings would own a majority of the shares of the then issued and outstanding shares of common stock of Koffee Korner. | On November 29, 2013, the Company entered into a definitive merger agreement (“Merger Agreement”) with Koffee Korner Inc., a Delaware corporation (“Koffee Korner”) (OTCBB:KOFF), and its wholly owned subsidiary (“Koffee Sub”), pursuant to which, among other matters and subject to the conditions set forth in such Merger Agreement, Koffee Sub would merge with and into Pharma. In connection with such merger agreement and related agreements, upon the consummation of such merger, Pharma would become a wholly owned subsidiary of Koffee Korner and Koffee Korner would issue shares of its common stock to Holdings. At the effective time of such merger, Holdings would own a majority of the shares of the then issued and outstanding shares of common stock of Koffee Korner. | |
On February 7, 2014, Holdings completed its merger with Koffee Korner, which was renamed to Cardax, Inc. (the “Company”) (OTCQB:CDXI). Concurrent with the merger: (i) the Company received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of the Company’s common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of the Company’s common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of the Company’s common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of the Company’s common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of the Company’s common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of the Company’s common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. | On February 7, 2014, the Company completed its merger with Koffee Korner, which was renamed to Cardax, Inc. See Note 17 for more details. | |
On August 28, 2014, the Company entered into an Agreement and Plan of Merger (the “Holdings Merger Agreement”) with its principal stockholder, Holdings, pursuant to which Holdings will merge with and into the Company (the “Holdings Merger”). There will not be any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings will receive shares of the Company’s newly issued preferred stock that will automatically convert, without charge, into an aggregate number of shares of the Company’s common stock that are held by Holdings on the date of the closing of the Holdings Merger and the Company’s restricted shares of common stock held by Holdings will be cancelled. Accordingly, there will not be any change to the Company’s capitalization due to the Holdings Merger. As of September 30, 2014, the Holdings Merger had not been completed. | Development stage entity | |
Going concern matters | The accompanying consolidated financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 915, Development Stage Entities. A development stage enterprise is one in which planned and principal operations have not commenced or, if its operations have commenced, there has been no significant revenue there from. Development stage companies report cumulative costs from the enterprise’s inception. | |
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed consolidated financial statements, the Company incurred a net loss of $1,880,394 and $15,186,393 for the three and nine-month periods ended September 30, 2014, respectively, and a net loss of $1,348,340 and $2,849,861, for the three and nine-month periods ended September 30, 2013, respectively. As a result of these and other factors, the Company’s independent registered public accounting firm has included an explanatory paragraph in their audited consolidated financial statements and footnotes in the current report on Form 8-K filed February 10, 2014 as to the substantial doubt about the Company’s ability to continue as a going concern. | The Company has primarily devoted its efforts to raising capital, obtaining financing, designing and patenting products, research and development, and administrative functions. These consolidated financial statements assume that the Company will operate as a continuing entity. Management of the Company expects to raise additional capital and financing to provide the Company with sufficient cash flow to meet its current obligations and continue as a viable business venture. | |
The Company plans to raise additional capital to carry out its business plan. The Company’s ability to raise additional capital through future equity and debt securities issuances is unknown. Obtaining additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of the uncertainties. | For the years ended December 31, 2013 and 2012 and from inception (March 23, 2006) to December 31, 2013, the Company had net losses of $4,361,165, $2,543,390, and $32,897,657, respectively. Additionally, the Company had an accumulated deficit of $32,897,657 and $28,536,492, for the years ended December 31, 2013 and 2012, respectively, and used cash in operating activities of $4,127,761, $1,159,237, and $23,516,610, for the years ended December 31, 2013 and 2012 and for the period from inception (March 23, 2006) to December 31, 2013, respectively. Those factors create an uncertainty about the Company’s ability to continue as a going concern. Although there can be no assurances, management believes that (i) the Company will be able to continue operating through 2014 with the cash received in the current quarter-to-date (described in Note 17 – Subsequent Events), and (ii) the Company will be able to obtain additional financing through debt and/or equity arrangements such that it can continue operating after such time. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
NOTE 2 – BASIS OF PRESENTATION | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. In the opinion of the Company’s management, the accompanying condensed consolidation financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2014 and 2013. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The results for the three and nine-month periods ended September 30, 2014 and 2013 are not necessarily indicative of the results to be expected for the years ending December 31, 2014 and 2013. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the current report on Form 8-K filed February 10, 2014. | |
The accompanying condensed consolidated financial statements include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Reverse acquisition accounting | |
On February 7, 2014, Koffee Sub and Pharma completed a reverse acquisition transaction (the “Acquisition”). As part of the Acquisition, the Company acquired 100% of the issued and outstanding common stock of Pharma. In addition, Holdings acquired 33,229,093 shares of the Company’s common stock, which constituted approximately 53% of the Company’s issued and outstanding common stock on a post-acquisition basis as of and immediately after the consummation of the Acquisition. | |
The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under U.S. GAAP guidance ASC 805-40, Business Combinations – Reverse Acquisitions, the Acquisition has been treated as a reverse acquisition with no adjustment to the historical book and tax basis of the Company’s assets and liabilities. | |
Reclassifications | |
The Company has made certain reclassifications to conform its prior periods’ data to the current presentation. These reclassifications had no effect on the reported results of operations. | |
Recent accounting pronouncements | |
In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, Development Stage Entities – Elimination of Certain Financial Reporting requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The provisions of ASU No. 2014-10 remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company elected to early adopt the provisions of ASU No. 2014-10 as permitted by this ASU effective its June 30, 2014, financial statements. This early adoption allowed the Company to remove the disclosures noted in items (1) to (3) above. | |
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern. The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company’s consolidated financial statements. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Accounting Policies [Abstract] | ' | |||
Summary of Significant Accounting Policies | ' | |||
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Basis of presentation | ||||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company. All significant intercompany balances and transactions have been eliminated in consolidation. | ||||
Use of estimates | ||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Estimates in these consolidated financial statements include asset valuations, estimates of future cash flows from and the economic useful lives of long-lived assets, certain accrued liabilities, income taxes and tax valuation allowances, and fair value estimates. Despite management’s intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from these estimates and assumptions. | ||||
Cash | ||||
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company held no cash equivalents at December 31, 2013 and 2012. | ||||
The Company maintains cash and cash equivalent deposit accounts at several financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance at times may exceed these limits. As of December 31, 2013 and 2012, the Company did not have any amounts in excess of federally insured limits on deposit. | ||||
Inventory | ||||
Inventory is stated at the lower of cost or market. Cost is determined using the average cost method. Market is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials and third party costs. | ||||
Management provides a reserve against inventory for known or expected inventory obsolescence. The reserve is determined by specific review of inventory items for product age and quality which may affect saleability. At December 31, 2013 and 2012, management determined that a reserve was not necessary. | ||||
Property and equipment, net | ||||
Property and equipment are recorded at cost, less accumulated depreciation. Equipment under capital lease obligations and leasehold improvements are amortized on the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Such amortization is included in depreciation and amortization in the consolidated financial statements. | ||||
Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets as follows. | ||||
Furniture and office equipment | 7 years | |||
Research and development equipment | 3 to 7 years | |||
Information technology equipment | 5 years | |||
Software | 3 years | |||
Major additions and improvements are capitalized, and routine expenditures for repairs and maintenance are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is charged to income for the period. | ||||
Impairment of long-lived assets | ||||
In accordance with ASC No. 360, Property, Plant, and Equipment, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets, as appropriate, may not be recoverable. | ||||
When the sum of the undiscounted future net cash flows expected to result from the use and the eventual disposition is less than the carrying amounts, an impairment loss would be measured based on the discounted cash flows compared to the carrying amounts. There was no impairment charge recorded for the years ended December 31, 2013 and 2012 and from inception to December 31, 2013. | ||||
Research grant income | ||||
The Company recognizes revenue on cost reimbursement grant award contracts when allowable and reimbursable expenses are incurred, and upon meeting the legal and contractual requirements of the funding source. | ||||
Fair value measurements | ||||
US GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). | ||||
The three levels of the fair value hierarchy are described below: | ||||
Level 1: | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. | |||
Level 2: | Inputs to the valuation methodology include: | |||
● | Quoted prices for similar assets or liabilities in active markets; | |||
● | Quoted prices for identical or similar assets or liabilities in inactive markets; | |||
● | Inputs other than quoted prices that are observable for the asset or liability; and | |||
● | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. | ||||
Level 3: | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. | |||
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. | ||||
As of December 31, 2013 and 2012, there were no recurring fair value measurements of assets and liabilities subsequent to initial recognition. | ||||
The fair value of the preferred stock warrants is based on unobservable inputs. Such instruments are generally classified within Level 3 of the fair value hierarchy. The Company estimated the fair value of the warrants using an option-pricing model incorporating assumptions that market participants would use in their estimates of fair value. Some of these assumptions include estimates for interest rates, expected dividends, and the fair value of the underlying preferred stock. The estimated fair value of the underlying preferred stock is itself determined using an option-pricing method. Under this method, the fair value of an enterprise’s common and preferred stock is estimated as the net value of a series of call options, representing the present value of the expected future returns to the stockholders. | ||||
The Company’s other financial instruments include borrowings under notes payable. The carrying values of its financial instruments approximate their fair values due to the fact that they are short-term in nature at December 31, 2013 and 2012 (Level 3). | ||||
Warrants | ||||
Debt instruments with detachable warrants to acquire shares that may be redeemable are accounted for in accordance with ASC No. 470, Debt. Under ASC No. 470, detachable warrants to purchase the Company’s series A preferred stock were classified as a discount on the underlying note on the consolidated balance sheets and carried at fair value. The Company initially measured the warrants at fair value on issuance. | ||||
Differences between fair value of the series B preferred stock and warrants on the date of grant were recorded as additional paid in capital. | ||||
Stock based compensation | ||||
The Company accounts for stock based compensation costs under the provisions of ASC No. 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense related to the fair value of stock based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all share based payments granted to employees based on the grant date fair value estimated in accordance with the provisions of ASC No. 718. ASC No. 718 is also applied to awards modified, repurchased, or canceled during the periods reported. | ||||
Basic and diluted net income (loss) per share | ||||
The Company’s convertible redeemable preferred stock was entitled to receive dividends of up to 8.5% at the original issue price per annum when and if dividends are declared on the common stock and thereafter participate pro rata on an as converted basis with the common stock holders on any distributions to common stockholders. They were therefore participating securities. As a result, the Company calculates the net income (loss) per share using the two-class method. Accordingly, the net income (loss) attributable to common stockholders is derived from the net income (loss) for the period and, in periods in which the Company has net income attributable to common stockholders, an adjustment is made for the noncumulative dividends and allocations of earnings to participating securities based on their outstanding shareholder rights. | ||||
Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible redeemable preferred stock as the convertible redeemable preferred stock did not have a contractual obligation to share in the Company’s losses. | ||||
The diluted net income (loss) per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method or the as-if converted method as applicable. In periods when the Company incurred a net loss attributable to common stockholders, stock options and warrants to purchase common stock were considered to be common stock equivalents, but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. | ||||
Income taxes | ||||
The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax reporting purposes, net operating loss carry-forwards, and other tax credits measured by applying currently enacted tax laws. A valuation allowance is provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. | ||||
The Company determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. | ||||
The Company files income tax returns in the United States (“U.S.”) Federal, State of Hawaii, and State of California jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. | ||||
The following represents the open tax years and jurisdictions that the Company used in its evaluation of tax positions: | ||||
Open tax years ending | ||||
December 31, | Jurisdiction | |||
2010 - 2013 | U.S. Federal | |||
2010 - 2013 | State of Hawaii | |||
2010 - 2013 | State of California | |||
The Company did not recognize any tax liabilities for income taxes associated with unrecognized tax benefits as of December 31, 2013 and 2012. It is the Company’s policy to include interest and penalties related to unrecognized tax benefits, if any, within the provision for taxes in the statements of operations. | ||||
Advertising | ||||
The Company expenses all advertising costs as incurred and are included as an element of general and administrative costs in the accompanying statements of operations. There were no advertising expenses for the years ended December 31, 2013 and 2012 and for the period from inception (March 23, 2006) to December 31, 2013. | ||||
Research and development | ||||
Research and development costs are expensed as incurred and consists primarily of salaries and wages of scientists and related personnel engaged in research and development activities, scientific consultations, manufacturing of product candidates, third-party research, laboratory supplies, rents associated with operating leased laboratory equipment, and scientific advisory boards. The focus of these costs is on the development of astaxanthin technologies. | ||||
Recently issued accounting standards | ||||
In May 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-04, Fair Value Measurements, which amends the fair value measurement guidance and includes some enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for Level 3 measurements based on unobservable inputs. The standard is effective for fiscal years beginning after December 15, 2011. The Company adopted this standard in the first quarter of 2012. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements. | ||||
In September 2011, the FASB ASU No. 2011-08, Intangibles – Goodwill and Other Testing Goodwill for Impairment, issued amendments to its accounting guidance on testing goodwill for impairment. The amendments allow entities to use a qualitative approach to test goodwill for impairment. This permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is required to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. This guidance is effective for annual and interim goodwill impairment test performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. The Company adopted this standard in the first quarter of year 2012 and the implementation thereof did not have a material impact on the Company’s consolidated financial statements. | ||||
In February 2013, the FASB ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to require reporting of the impact of significant reclassifications out of accumulated other comprehensive income or loss on the line items on the statement of operations, if a reclassification is required in its entirety in one reporting period. This ASU is effective for interim and annual periods beginning after December 15, 2012. The adoption of the ASU did not have a significant impact on the Company’s consolidated financial statements. | ||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, to specify when an unrecognized tax benefit should be presented as a liability versus an offset against a deferred tax asset. The ASU is effective prospectively for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2013. The Company is currently assessing the impact of this ASU on the Company’s consolidated financial statements. | ||||
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Inventory
Inventory | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||
Inventory Disclosure [Abstract] | ' | ' | ||||||||||||||||
Inventory | ' | ' | ||||||||||||||||
NOTE 3 – INVENTORY | NOTE 3 – INVENTORY | |||||||||||||||||
Inventory consists of the following as of: | Inventory consists of the following as of December 31: | |||||||||||||||||
September 30, 2014 | December 31, 2013 | 2013 | 2012 | |||||||||||||||
Processed materials | $ | 958,575 | $ | 986,674 | Processed materials | $ | 986,674 | $ | 986,674 | |||||||||
Total inventories | $ | 958,575 | $ | 986,674 | Total inventories | $ | 986,674 | $ | 986,674 | |||||||||
At September 30, 2014 and December 31, 2013, inventory in the amount of $924,452 is stored at one of the Company’s suppliers, which is located in Germany. | At December 31, 2013 and 2012, $924,452, in inventory was stored at one of the Company’s suppliers, which was located in Germany. | |||||||||||||||||
During the three-month period ended September 30, 2014, the Company utilized $28,099 in astaxanthin as part of commercial product research and development. |
Property_and_Equipment_Net
Property and Equipment, Net | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||
Property, Plant and Equipment [Abstract] | ' | ' | ||||||||||||||||
Property and Equipment, Net | ' | ' | ||||||||||||||||
NOTE 4 – PROPERTY AND EQUIPMENT, net | NOTE 4 – PROPERTY AND EQUIPMENT, net | |||||||||||||||||
Property and equipment, net, consists of the following as of: | Property and equipment, net, consists of the following as of December 31: | |||||||||||||||||
30-Sep-14 | 31-Dec-13 | 2013 | 2012 | |||||||||||||||
Research and development equipment | $ | - | $ | 686,673 | Research and development equipment | $ | 686,673 | $ | 686,673 | |||||||||
Leasehold improvements | - | 153,161 | Leasehold improvements | 153,161 | 153,161 | |||||||||||||
Information technology equipment | 31,892 | 105,319 | Furniture and office equipment | 78,678 | 78,678 | |||||||||||||
Furniture and office equipment | 10,161 | 78,678 | Information technology equipment | 105,319 | 75,060 | |||||||||||||
Software | - | 9,386 | Software | 9,386 | 9,386 | |||||||||||||
42,053 | 1,033,217 | 1,033,217 | 1,002,958 | |||||||||||||||
Less accumulated depreciation | (19,619 | ) | (1,007,176 | ) | Less accumulated depreciation | (1,007,176 | ) | (1,001,554 | ) | |||||||||
Total property and equipment, net | $ | 22,434 | $ | 26,041 | Total property and equipment, net | $ | 26,041 | $ | 1,404 | |||||||||
Depreciation expense was $1,783 and $5,241, for the three and nine-month periods ended September 30, 2014, respectively. Depreciation expense was $534 and $1,607, for the three and nine-month periods ended September 30, 2013, respectively. | Depreciation expense was $5,622, $92,596, and $1,007,176, for the years ended December 31, 2013 and 2012, and for the period from inception (March 23, 2006) to December 31, 2013, respectively. | |||||||||||||||||
During the three and nine month periods ended September 30, 2014, management recognized a loss of $0 related to the impairment of idle equipment and abandoned leasehold improvements and software. |
Intangible_Assets_Net
Intangible Assets, Net | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ||||||||||||||||
Intangible Assets, Net | ' | ' | ||||||||||||||||
NOTE 5 – INTANGIBLE ASSETS, net | NOTE 5 – INTANGIBLE ASSETS, net | |||||||||||||||||
Intangible assets, net, consists of the following as of: | Intangible assets, net, consists of the following as of December 31: | |||||||||||||||||
September 30, 2014 | 31-Dec-13 | 2013 | 2012 | |||||||||||||||
Patents | $ | 380,394 | $ | 380,394 | Patents | $ | 593,120 | $ | 572,764 | |||||||||
Less accumulated amortization | (191,318 | ) | (168,363 | ) | Less accumulated amortization | (168,363 | ) | (137,754 | ) | |||||||||
189,076 | 212,031 | Total intangible assets, net | $ | 424,757 | $ | 435,010 | ||||||||||||
Patents pending | 233,145 | 212,726 | ||||||||||||||||
Total intangible assets, net | $ | 422,221 | $ | 424,757 | Patents are amortized straight-line over a period of fifteen years. Amortization expense was $30,609, $30,610, and $168,363, for the years ended December 31, 2013 and 2012, and for the period from inception March 23, 2006 to December 31, 2013, respectively. | |||||||||||||
Patents are amortized straight-line over a period of fifteen years. Amortization expense was $7,652 and $22,955, for the three and nine-month periods ended September 30, 2014, respectively. Amortization expense was $8,250 and $23,553, for the three and nine-month periods ended September 30, 2013, respectively. | ||||||||||||||||||
The Company has capitalized costs for several patents that are still pending. In those instances, the Company has not recorded any amortization. The Company will commence amortization when these patents are approved. | ||||||||||||||||||
The Company owns 20 issued patents, including 13 in the United States and 7 others in China, India, Japan, and Hong Kong. These patents will expire during the years of 2023 to 2028, subject to any patent term extensions of the individual patent. The Company has 1 patent application pending in the United States and 5 foreign patent applications pending in Europe, Canada, and Brazil. |
Long_Term_Notes_Payable_Net
Long Term Notes Payable, Net | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ' | ||||||||||||||||
Long Term Notes Payable, Net | ' | ' | ||||||||||||||||
NOTE 6 – LONG-TERM NOTES PAYABLE, net | NOTE 6 – LONG-TERM CONVERTIBLE NOTES PAYABLE, net | |||||||||||||||||
The Company’s notes payable outstanding were as follows as of: | The Company’s notes payable outstanding as of December 31, 2013 and 2012, were as follows: | |||||||||||||||||
30-Sep-14 | December 31, 2013 | 2013 | 2012 | |||||||||||||||
2008 Unsecured promissory note. Originated on November 12, 2008. Principal of $100,000 with $45,000 to be repaid by June 30, 2009, with $10,000 in monthly payments thereafter until repaid in full. Required a one-time interest payment of $15,000. This note was paid in full on February 7, 2014. | $ | - | $ | 55,000 | 2008 Unsecured promissory note. Originated on November 12, 2008. Principal of $100,000 with $45,000 to be repaid by June 30, 2009, with $10,000 in monthly payments thereafter until repaid in full. Required a one-time interest payment of $15,000. This note was paid in full on February 7, 2014. | $ | 55,000 | $ | 55,000 | |||||||||
2009 Non-mandatorily convertible, unsecured note. Originated on March 31, 2009, principal of $500,000 accrues interest at 8% per annum. Principal and interest were due in full on March 31, 2014 or convertible at the option of the note holder into Series B preferred stock at a rate of $0.45 per share. A warrant to purchase 222,222 shares of preferred Series B stock was issued in conjunction with this note. This note was paid in full on February 7, 2014. | - | 500,000 | 2012 Short-term unsecured promissory notes. Originated at various dates in 2012 with maturities ranging from three months to one year and interest rates ranging from 8% to 12%. All of these notes were subsequently either converted into Bridge Loans or repaid in 2013. Warrants to purchase 224,220 shares of preferred Series B stock were issued in conjunction with these notes. | - | 829,047 | |||||||||||||
2013 Bridge Loan. Principal from existing notes in the amount of $3,180,806 (comprised of $2,621,195 in principal outstanding as of December 31, 2012 and $559,611 in new principal issued from January through April 2013) along with accrued interest of $467,438 were converted into a 2013 Bridge Loan along with $4,840,792 of new principal. These notes accrued interest at 10% per annum with outstanding principal and interest due in 2014. These notes converted into common shares as part of the February 7, 2014 reverse acquisition transaction. | - | 8,489,036 | 2009 Non-mandatorily convertible, unsecured note. Originated on March 31, 2009, principal of $500,000 accrues interest at 8% per annum. Principal and interest were due in full on March 31, 2014 or convertible at the option of the note holder into Series B preferred stock at a rate of $0.45 per share. A warrant to purchase 222,222 shares of preferred Series B stock was issued in conjunction with this note. This note was paid in full on February 7, 2014. | 500,000 | 500,000 | |||||||||||||
2014 Bridge Loan. Originated in January 2014. Principal of $2,076,000 issued in January 2014. These notes accrued interest at 10% per annum with outstanding principal and interest due in 2014. These notes converted into common shares as part of the February 7, 2014 reverse acquisition transaction. | - | - | 2010 Secured promissory notes. Principal of $549,450 originated on September 23, 2010 and $62,438 originated on November 12, 2010. Accrued interest at 10% or 14% per annum. Maturity of all notes was extended from September 23, 2012 to March 23, 2013 by majority note holder approval. Interest rate was 2% higher during the period of extension. These notes were secured by all of the Company’s intellectual property. Warrants to purchase 339,937 shares of preferred Series B stock were issued in conjunction with these notes for $612. All of these notes were subsequently either converted into the Bridge Loans or repaid in 2013. | - | 611,888 | |||||||||||||
Total notes payable | - | 9,044,036 | 2011 Secured promissory notes. Principal of $1,828,686 originated at various dates of 2011. Accrued interest at 10% per annum. Maturity of all notes was extended from September 23, 2012 to March 23, 2013 by majority note holder approval. Interest rate was 2% higher during the period of extension. These notes were secured by all of the Company’s intellectual property. Warrants to purchase 1,015,934 shares of preferred Series B stock were issued in conjunction with the debt for $1,829. All of these notes were subsequently either converted into the Bridge Loans or repaid in 2013. | - | 1,828,686 | |||||||||||||
Current maturities of long-term, net of discount | - | 9,039,444 | 2012 Secured promissory notes. Principal of $349,650 originated in February and March of 2012. Accrued interest at 10% per annum. Maturity of all notes was extended from September 23, 2012 to March 23, 2013 by majority note holder approval. Interest rate was 2% higher during the period of extension. These notes were secured by all of the Company’s intellectual property. Warrants to purchase 194,250 shares of preferred Series B stock were issued in conjunction with the debt for $350. All of these notes were subsequently either converted into the Bridge Loans or repaid in 2013. | - | 349,650 | |||||||||||||
Discount attributable to current maturities | - | 4,592 | 2013 Bridge Loan. Principal from existing notes in the amount of $3,180,806 (comprised of $2,621,195 in principal outstanding as of December 31, 2012 and $559,611 in new principal issued from January through April 2013) along with accrued interest of $467,438 were converted into a 2013 Bridge Loan along with $4,840,792 of new principal. These notes accrued interest at 10% per annum with outstanding principal and interest due in 2014. These notes converted into common shares as part of the February 7, 2014, merger with Koffee Korner at the rate of $0.625 per share. See Note 17. | 8,489,036 | - | |||||||||||||
Total notes payable | 9,044,036 | 4,174,271 | ||||||||||||||||
Total current maturities | - | 9,044,036 | ||||||||||||||||
Current maturities of long-term notes, net of discount | 9,039,444 | 3,609,098 | ||||||||||||||||
Long-term notes payable, less current maturities | $ | - | $ | - | Discount attributable to current maturities | 4,592 | 65,173 | |||||||||||
Total current maturities | 9,044,036 | 3,674,271 | ||||||||||||||||
Interest | Notes payable, less current maturities | $ | - | $ | 500,000 | |||||||||||||
Interest expense on these notes was $0 and $112,450, for the three and nine-month periods ended September 30, 2014, respectively. Interest expense on these notes was $208,305 and $458,152, for the three and nine-month periods ended September 30, 2013, respectively. | Interest | |||||||||||||||||
Interest accrued on these notes as of September 30, 2014 and December 31, 2013, was $0 and $657,092, respectively. | Interest expense on these notes was $681,335, $370,310, and $2,658,927, for the years ended December 31, 2013 and 2012, and for the period from inception (March 23, 2006) to December 31, 2013, respectively. Interest accrued on these notes as of December 31, 2013 and 2012, was $657,092 and $673,975, respectively. | |||||||||||||||||
Note conversion | Note conversions | |||||||||||||||||
Management tested the conversion of the 2012 short-term unsecured promissory notes and 2010 to 2012 secured promissory notes to bridge loans in 2013 for potential extinguishment accounting. Because the fair market value of the notes prior to conversion as compared to the fair market value of the notes subsequent the conversion was less than a 10% difference, management concluded to apply modification accounting and are accruing interest based on the new note terms. | Management tested the conversion of the 2012 short-term unsecured promissory notes and 2010 to 2012 secured promissory notes to bridge loans in 2013 for potential extinguishment accounting. Because the fair market value of the notes prior to conversion as compared to the fair market value of the notes subsequent to the conversion was less than a 10% difference, management is applying modification accounting and is accruing interest based on the new note terms. | |||||||||||||||||
Discount | Discount | |||||||||||||||||
A discount on these notes of $0 and $4,592, as of September 30, 2014 and December 31, 2013, respectively, was based on the fair value of detachable warrants issued at the time of funding. This discount is being amortized straight-line over the underlying term of the note. Interest expense of $0 and $4,592, for the three and nine-month periods ended September 30, 2014, respectively, was recognized as amortization of this discount. Interest expense of $21,030 and $55,843, for the three and nine-month periods ended September 30, 2013, respectively, was recognized as amortization of this discount. | A discount on these notes of $4,592 and $65,173, at December 31, 2013 and 2012, respectively, was based on the fair value of detachable warrants issued at the time of funding. This discount is being amortized straight-line over the term of the underlying note. Discount amortization of $60,581, $363,858, and $1,648,452 for the years ended December 31, 2013 and 2012, and from inception to December 31, 2013, respectively, was recognized as a part of interest expense. | |||||||||||||||||
A summary of the debt discount activity for the nine-month period ended September 30, 2014 and year ended December 31, 2013 is as follows: | A summary of the debt discount activity for the years ended December 31, 2013 and 2012, is as follows: | |||||||||||||||||
Balance January 1, 2013 | $ | 65,173 | Balance January 1, 2012 | $ | 288,439 | |||||||||||||
Amortization of debt discount | (60,581 | ) | Debt discount recorded on 2011 notes | 140,592 | ||||||||||||||
Balance December 31, 2013 | 4,592 | Amortization of debt discount | (363,858 | ) | ||||||||||||||
Amortization of debt discount | (4,592 | ) | Balance December 31, 2012 | 65,173 | ||||||||||||||
Balance at September 30, 2014 | $ | - | Amortization of debt discount | (60,581 | ) | |||||||||||||
Balance at December 31, 2013 | $ | 4,592 | ||||||||||||||||
Maturities | ||||||||||||||||||
As of December 31, 2013, all of the Company’s notes payables have a maturity date in 2014. |
Stockholders_Equity
Stockholder's Equity | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Stockholder's Equity | ' | ||||||||||||
NOTE 7 – STOCKHOLDERS’ EQUITY | |||||||||||||
Formation | |||||||||||||
The Company was incorporated in the State of Delaware on March 23, 2006. In May 2006, Hawaii Biotech, Inc. contributed its anti-inflammatory, small molecule line of business into the Company which consisted of the following assets and liabilities: | |||||||||||||
Cash | $ | 7,007,371 | |||||||||||
Due from Hawaii Biotech, Inc. | 1,000,000 | ||||||||||||
Prepaid expenses | 14,279 | ||||||||||||
Employee note receivable | 288,576 | ||||||||||||
Fixed assets, net of depreciation of $181,905 | 388,165 | ||||||||||||
Other assets | 606 | ||||||||||||
Total assets | 8,698,997 | ||||||||||||
Accounts and accrued expenses payable | 138,921 | ||||||||||||
Due to Hawaii Biotech, Inc. | 70,279 | ||||||||||||
Equipment leases payable | 181,203 | ||||||||||||
Total liabilities | 390,403 | ||||||||||||
Net assets transferred | $ | 8,308,594 | |||||||||||
The Company issued (i) 9,447,100 shares of common stock of the Company, (ii) 14,440,920 shares of Series A Preferred Stock of the Company, (iii) 11,113,544 shares of Series B Preferred Stock of the Company and (iv) 13,859,324 shares of Series C Preferred Stock of the Company to Hawaii Biotech, Inc., in exchange for the assets and liabilities contributed to the Company. The above shares were then distributed by Hawaii Biotech, Inc. to its shareholders. An additional 704,225 shares of Series C Preferred Stock were issued as part of the initial capitalization of the Company. | |||||||||||||
Authorized shares | |||||||||||||
On formation, the Company was authorized to issue 10,000 shares of common stock with a par value of $0.001 per share. On May 5, 2006, the Articles of Incorporation were amended and restated. As part of this amendment, the number of authorized shares increased to 219,582,802 of which 127,000,000 were designated as common stock and the remaining 92,582,802 was designated as preferred stock. The 92,582,802 of preferred stock was allocated 14,440,920 to Series A, 11,113,544 Series B, 42,028,338 to Series C with 25,000,000 undesignated. Par value for all classes of stock was $0.001. | |||||||||||||
On January 30, 2007, the Articles of Incorporation were amended and restated. As part of this amendment, the number of authorized shares increased to 245,673,568 of which 150,000,000 were designated as common stock and the remaining 95,673,568 was designated as preferred stock. The 95,673,568 of preferred stock was allocated 40,118,013 to Series A and 55,555,555 to Series B. As part of this amendment all outstanding shares of Series A, B, and C preferred stock on the date of amendment were converted to shares of Series A preferred stock. Par value for all classes of stock was $0.001. | |||||||||||||
Dividends | |||||||||||||
Subject to the rights of any series of Preferred Stock that may from time to time come into existence, the holders of Series A and Series B preferred stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, dividends at the rate of 8.5% of the original Series A Series and B issue prices, per annum, on each outstanding share of Series A and Series B preferred stock on a pari passu basis, payable in preference and priority to any payment of any dividend on common stock of the Company for such year. The right to such dividends on Preferred Stock shall not be cumulative, and no rights shall accrue to the holders of Preferred Stock by reason of the fact that the Company may have failed to declare or pay dividends on Preferred Stock in any previous fiscal year of the Company, whether or not earnings of the Company where sufficient to pay such dividends. No dividend shall be paid on common stock in any year, other than dividends payable solely in common stock, until all dividends for such year have been declared and paid on preferred stock. No dividends were accrued or paid during 2013 and 2012, or for the period from inception (March 23, 2006) to December 31, 2013. | |||||||||||||
Liquidation preference | |||||||||||||
The holders of Series A and Series B preferred stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of common stock by reason of their ownership of such stock, the amount of $0.33, the original Series A issue price, and $0.45, the original Series B issue price, (in each case adjusted for any stock dividends, combinations or splits with respect to such shares) for each share of Series A and Series B preferred stock, respectively, then held by them, and, in addition, an amount equal to all declared but unpaid dividends on Series A and Series B preferred stock, respectively, held by them. | |||||||||||||
If the assets and funds thus distributed among the holders of Series A and Series B preferred stock shall be insufficient to permit the payment to such holders of full aforesaid preferential amounts, then, subject to the rights of series of preferred stock that may from time to time come into existence, the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the holders of Series A and Series B preferred stock in the respective proportions which the aggregate preferential amount of all shares of Series A and Series B preferred stock then held by each such holder bears to the aggregate preferential amount of all shares of Series A and Series B preferred stock outstanding as of the date of the distribution upon the occurrence of such liquidation event. | |||||||||||||
After payment has been made to the holders of preferred stock of the full amounts to which they shall be entitled as aforesaid, the holders of Series A preferred stock, Series B preferred stock and common stock shall participate on a pro rata basis based on the number of Common Stock equivalent shares held by a holder in the distribution of all remaining assets of the Company legally available for distribution, with the outstanding shares of Series A and Series B preferred stock treated as though they had been converted into the appropriate number of shares of Common Stock. | |||||||||||||
Conversion rights | |||||||||||||
Each share of Series A and Series B preferred stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Company or any transfer agent for such series of Series A or Series B preferred stock into such number of fully paid and non-assessable shares of common stock as is determined by dividing $0.33 in the case of Series A preferred stock and $0.45 in the case of Series B preferred stock, by the applicable Conversion Price, in effect on the date the certificate is surrendered for conversion. The price at which shares of Common Stock shall be deliverable upon conversion of Series A or Series B preferred stock shall initially be $0.33 per share with respect to shares of Series A preferred stock and $0.45 per share with respect to shares of Series B preferred stock. | |||||||||||||
Voting rights | |||||||||||||
The holder of each share of common stock issued and outstanding shall have one vote and the holder of each share of preferred stock shall be entitled to the number of votes equal to the number of shares of common stock into which such share of preferred stock could be converted. | |||||||||||||
Exercise of stock options | |||||||||||||
The Company issued common stock pursuant to the exercise of stock options as follows: | |||||||||||||
Year | Common shares issued | Average Price | Amount Realized | ||||||||||
2006 | 6,842 | $ | 0.044 | $ | 304 | ||||||||
2007 | 20,000 | $ | 0.07 | $ | 1,400 | ||||||||
2008 | 14,285 | $ | 0.07 | $ | 1,000 |
Stock_Option_Plans
Stock Option Plans | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | |||||||||||||||||||||||||||||||
Stock Option Plans | ' | ' | |||||||||||||||||||||||||||||||
NOTE 7 – STOCK OPTION PLANS | NOTE 8 – STOCK BASED COMPENSATION | ||||||||||||||||||||||||||||||||
On May 15, 2006, the Company adopted the 2006 Stock Incentive Plan. Under this plan, the Company may issue shares of restricted stock, incentive stock options, or non-statutory stock options to employees, directors, and consultants. The aggregate number of shares which may be issued under this plan was 16,521,704, which was increased by 1,456,786 to 17,978,490 as part of the Series B Offering in 2007. This plan was terminated on February 7, 2014. | On May 15, 2006, the Company adopted the 2006 Stock Incentive Plan (the “Plan”). Under the Plan, the Company may issue shares of restricted stock, incentive stock options, or non-statutory stock options to employees, directors, and consultants. The aggregate number of shares which may be issued under the Plan is 16,521,704, which was increased by 1,456,786 to 17,978,490 as part of the Series B Offering in 2007. | ||||||||||||||||||||||||||||||||
On February 7, 2014, the Company adopted the 2014 Equity Compensation Plan. Under this plan, the Company may issue options to purchase shares of common stock to employees, directors, advisors, and consultants. The aggregate number of shares which may be issued under this plan is 30,420,148. | Incentive stock options may be granted to employees at a price per share not less than 100% of the fair market value at date of grant. If the incentive stock option is granted to a 10% stockholder, then the purchase or exercise price per share shall not be less than 110% of the fair market value per share of common stock on the grant date. Non-statutory stock options and restricted stock may be granted to employees, directors, and consultants at a price per share, not less than 100% of the fair market value at date of grant. Options granted are exercisable, unless specified differently in the grant documents, over a default term of ten years from the date of grant and generally vest over a period of four years. | ||||||||||||||||||||||||||||||||
Under the terms of the 2014 Equity Compensation Plan and the 2006 Stock Incentive Plan (collectively, the “Plans”), incentive stock options may be granted to employees at a price per share not less than 100% of the fair market value at date of grant. If the incentive stock option is granted to a 10% stockholder, then the purchase or exercise price per share shall not be less than 110% of the fair market value per share of common stock on the grant date. Non-statutory stock options and restricted stock may be granted to employees, directors, advisors, and consultants at a price per share, not less than 100% of the fair market value at date of grant. Options granted are exercisable, unless specified differently in the grant documents, over a default term of ten years from the date of grant and generally vest over a period of four years. | A summary of stock option activity is as follows: | ||||||||||||||||||||||||||||||||
A summary of stock option activity is as follows: | Options | Weighted | Weighted | Aggregate | |||||||||||||||||||||||||||||
average | average | intrinsic value | |||||||||||||||||||||||||||||||
Options | Weighted average exercise price | Weighted average remaining contractual term in years | Aggregate intrinsic value | exercise | remaining contractual | ||||||||||||||||||||||||||||
Outstanding January 1, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 358,662 | price | term in years | |||||||||||||||||||||||||
Exercisable January 1, 2013 | 14,524,861 | $ | 0.07 | 3.75 | $ | 332,052 | Outstanding January 1, 2012 | 17,933,091 | $ | 0.07 | 4.17 | $ | 358,662 | ||||||||||||||||||||
Granted | - | Exercisable January 1, 2012 | 16,602,622 | $ | 0.07 | 4.05 | $ | 332,052 | |||||||||||||||||||||||||
Exercised | - | Granted | - | - | |||||||||||||||||||||||||||||
Forfeited | - | Exercised | - | - | |||||||||||||||||||||||||||||
Outstanding December 31, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | Forfeited | (2,642,605 | ) | $ | 0.07 | ||||||||||||||||||||||
Exercisable December 31, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | Outstanding December 31, 2012 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | ||||||||||||||||||||
Canceled | (15,290,486 | ) | Exercisable December 31, 2012 | 14,524,861 | $ | 0.07 | 3.75 | $ | 290,497 | ||||||||||||||||||||||||
Granted | 27,756,821 | Granted | - | - | |||||||||||||||||||||||||||||
Exercised | (4,506 | ) | Exercised | - | - | ||||||||||||||||||||||||||||
Forfeited | - | Forfeited | - | - | |||||||||||||||||||||||||||||
Outstanding September 30, 2014 | 27,752,315 | $ | 0.51 | 8.27 | $ | 2,712,885 | Outstanding December 31, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | ||||||||||||||||||||
Exercisable September 30, 2014 | 23,762,946 | $ | 0.49 | 8.08 | $ | 2,712,885 | Exercisable December 31, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | ||||||||||||||||||||
The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price option recipients would have received if all options had been exercised on the date of issue, based on a valuation of the Company’s stock for that day. | The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price option recipients would have received if all options had been exercised on the date of issue, based on a valuation of the Company’s stock for that day. | ||||||||||||||||||||||||||||||||
A summary of the Company’s non-vested options for the nine-month period ended September 30, 2014, and for the year ended December 31, 2013, is presented below: | A summary of the Company’s non-vested options for the years ended December 31, 2013 and 2012, is presented below: | ||||||||||||||||||||||||||||||||
Non-vested at January 1, 2013 | 765,625 | 2013 | 2012 | ||||||||||||||||||||||||||||||
Granted | - | Non-vested at January 1, | 765,625 | 1,330,469 | |||||||||||||||||||||||||||||
Vested | (765,625 | ) | Granted | - | - | ||||||||||||||||||||||||||||
Forfeited | - | Vested | (765,625 | ) | (564,844 | ) | |||||||||||||||||||||||||||
Non-vested at December 31, 2013 | - | Forfeited | - | - | |||||||||||||||||||||||||||||
Granted | 27,756,821 | Non-vested at December 31, | - | 765,625 | |||||||||||||||||||||||||||||
Vested | (23,762,946 | ) | |||||||||||||||||||||||||||||||
Exercised | (4,506 | ) | As of December 31, 2013, there was no unrecognized stock-based compensation expense. | ||||||||||||||||||||||||||||||
Forfeited | - | ||||||||||||||||||||||||||||||||
Non-vested at September 30, 2014 | 3,989,369 | Under ASC No. 718, the Company estimates the fair value of stock options granted on each grant date using the Black-Scholes option valuation model and recognizes an expense ratably over the requisite service period. The range of fair value assumptions related to options outstanding as of December 31, 2013 and 2012, were as follows: | |||||||||||||||||||||||||||||||
During the three-month period ended September 30, 2014, a stock option to purchase 4,506 shares of the Company’s common stock was exercised at $0.155 per share. | 2013 | 2012 | |||||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | |||||||||||||||||||||||||||||||
As of September 30, 2014, total unrecognized stock-based compensation expense related to all unvested stock options was $797,871, which is expected to be expensed over a weighted average period of four-months. | Risk-free rate | 0.92% - 5.15% | 0.92% - 5.15% | ||||||||||||||||||||||||||||||
Expected volatility | 116% - 170% | 116% - 170% | |||||||||||||||||||||||||||||||
Under ASC No. 718, the Company estimates the fair value of stock options granted on each grant date using the Black-Scholes option valuation model and recognizes an expense ratably over the requisite service period. The range of fair value assumptions related to options outstanding as of September 30, 2014, and December 31, 2013, were as follows: | Expected term | 2.5 - 7.5 years | 2.5 - 7.5 years | ||||||||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the stock options to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. Due to a lack of historical information needed to estimate the Company’s expected term, it was estimated using the simplified method allowed under ASC No. 718. | |||||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | |||||||||||||||||||||||||||||||
Risk-free rate | 0.12% - 1.47% | 0.92% - 5.15% | As part of the requirements of ASC No. 718, the Company is required to estimate potential forfeitures of stock grants and adjust stock based compensation expense accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized in the period of change and will also impact the amount of stock based compensation expenses to be recognized in future periods. | ||||||||||||||||||||||||||||||
Expected volatility | 116% - 170% | 116% - 170% | |||||||||||||||||||||||||||||||
Expected term | 1.1 - 5.5 years | 2.5 - 7.5 years | The Company recognized $9,877, $23,645, and $1,599,467, in stock based compensation expense during the years ended December 31, 2013 and 2012, and for the period from inception (March 23, 2006) to December 31, 2013, respectively. | ||||||||||||||||||||||||||||||
The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the stock options to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. Due to a lack of historical information needed to estimate the Company’s expected term, it was estimated using the simplified method allowed under ASC No. 718. | |||||||||||||||||||||||||||||||||
As part of the requirements of ASC No. 718, the Company is required to estimate potential forfeitures of stock grants and adjust stock based compensation expense accordingly. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized in the period of change and will also impact the amount of stock based compensation expenses to be recognized in future periods. | |||||||||||||||||||||||||||||||||
The Company recognized $601,107 and $5,318,948, in stock based compensation expense during the three and nine-month periods ended September 30, 2014, respectively. The Company recognized $2,073 and $8,508, in stock based compensation expense during the three and nine-month periods ended September 30, 2013, respectively. |
Restricted_Stock_Grants
Restricted Stock Grants | 9 Months Ended |
Sep. 30, 2014 | |
Restricted Stock Grants | ' |
Restricted stock grants | ' |
NOTE 8 – RESTRICTED STOCK GRANTS | |
On June 16, 2014, the Company granted its four independent directors an aggregate of 642,200 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $597,246. These shares are subject to a risk of forfeiture and vest quarterly in arrears commencing on June 1, 2014 and will be fully vested at the end of one full year. | |
On July 14, 2014, the Company granted its four independent directors an aggregate of 134,553 shares of restricted common stock in the Company. The total fair value of this stock on the date of grant was $108,988. These shares are subject to a risk of forfeiture and vest quarterly in arrears commencing on June 1, 2014 and will be fully vested at the end of one full year. | |
The Company recognizes the expense related to these grants ratably over the requisite service period. Total stock compensation expense recognized as a result of these grants was $185,640 and $235,411 for the three and nine-month periods ended September 30, 2014. The remaining balance of $470,823 was classified as deferred compensation in equity as of September 30, 2014. |
Warrants
Warrants | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Warrants | ' | ' | |||||||||||||||||||||||||||||||
Warrants | ' | ' | |||||||||||||||||||||||||||||||
NOTE 9 – WARRANTS | NOTE 9 – WARRANTS | ||||||||||||||||||||||||||||||||
The following is a summary of the Company’s warrant activity: | The following is a summary of the Company’s warrant activity: | ||||||||||||||||||||||||||||||||
Warrants | Weighted average exercise price | Weighted average remaining contractual term in years | Aggregate intrinsic value | Warrants | Weighted | Weighted | Aggregate Intrinsic Value | ||||||||||||||||||||||||||
Outstanding January 1, 2013 | 3,693,971 | $ | 0.45 | 4.81 | $ | - | Average | Average | |||||||||||||||||||||||||
Exercisable January 1, 2013 | 3,693,971 | $ | 0.45 | 4.81 | $ | - | Exercise | Remaining Contractual | |||||||||||||||||||||||||
Granted | - | Price | Term in Years | ||||||||||||||||||||||||||||||
Exercised | - | Outstanding January 1, 2012 | 4,182,261 | $ | 0.45 | 4.77 | - | ||||||||||||||||||||||||||
Forfeited | (298,138 | ) | Exercisable January 1, 2012 | 4,182,261 | $ | 0.45 | 4.77 | - | |||||||||||||||||||||||||
Outstanding December 31, 2013 | 3,395,833 | $ | 0.45 | 5.28 | $ | - | Granted | 418,470 | $ | 0.45 | 5 | ||||||||||||||||||||||
Exercisable December 31, 2013 | 3,395,833 | $ | 0.45 | 5.28 | $ | - | Exercised | - | |||||||||||||||||||||||||
Canceled | (3,395,833 | ) | Forfeited/Cancelled | (906,760 | ) | $ | 0.45 | ||||||||||||||||||||||||||
Granted | 28,405,782 | Outstanding December 31, 2012 | 3,693,971 | $ | 0.45 | 4.81 | - | ||||||||||||||||||||||||||
Exercised | - | Exercisable December 31, 2012 | 3,693,971 | $ | 0.45 | 4.81 | - | ||||||||||||||||||||||||||
Forfeited | - | Granted | - | ||||||||||||||||||||||||||||||
Outstanding September 30, 2014 | 28,405,782 | $ | 0.653 | 4.61 | $ | - | Exercised | - | |||||||||||||||||||||||||
Exercisable September 30, 2014 | 28,405,782 | $ | 0.653 | 4.61 | $ | - | Forfeited/Cancelled | (298,138 | ) | $ | 0.45 | ||||||||||||||||||||||
Outstanding December 31, 2013 | 3,395,833 | $ | 0.45 | 5.28 | - | ||||||||||||||||||||||||||||
Under ASC No. 718, the Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. The fair value of warrants issued with debt is recorded as a debt discount and amortized over the life of the debt. The range of fair value assumptions related to warrants outstanding as of September 30, 2014 and December 31, 2013, were as follows: | Exercisable December 31, 2013 | 3,395,833 | $ | 0.45 | 5.28 | - | |||||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | Under ASC No. 718, the Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. The fair value of warrants issued with debt is recorded as a debt discount and amortized over the life of the debt. | |||||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | |||||||||||||||||||||||||||||||
Risk-free rate | 0.12% - 0.66% | 0.62% - 4.59% | The range of fair value assumptions related to warrants outstanding as of December 31, 2013 and 2012, were as follows: | ||||||||||||||||||||||||||||||
Expected volatility | 112% - 159% | 108% - 167% | |||||||||||||||||||||||||||||||
Expected term | 1.0 - 2.5 years | 2.5 - 10.0 years | 2013 | 2012 | |||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | |||||||||||||||||||||||||||||||
The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. The expected warrant term is the life of the warrant. | Risk-free rate | 0.62% - 4.59% | 0.62% - 4.59% | ||||||||||||||||||||||||||||||
Expected volatility | 108% - 167% | 108% - 167% | |||||||||||||||||||||||||||||||
The Company recognized $0 and $5,229,589, in stock based compensation expense during the three and nine-month periods ended September 30, 2014, respectively. Warrants issued prior to February 7, 2014, were issued in conjunction with the origination of notes payable and were accounted for as a discount on the related notes. See Note 6 for the expense associated with the issuance of these warrants. | Expected term | 2.5 - 10.0 years | 2.5 - 10.0 years | ||||||||||||||||||||||||||||||
The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant time frame. The expected warrant term is the life of the warrant. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' | ' |
Related Party Transactions | ' | ' |
NOTE 10 – RELATED PARTY TRANSACTIONS | NOTE 10 – RELATED PARTY TRANSACTIONS | |
Consulting agreement | Consulting agreements | |
As part of consulting agreements, a director provided consulting services to the Company. The Company incurred $64,615 and $184,615, in consulting fees to this director for the three and nine-month periods ended September 30, 2014, respectively. The Company incurred $64,615 and $73,846, in consulting fees to this director for the three and nine-month periods ended September 30, 2013, respectively. | As part of consulting agreements, a director provided consulting services to the Company. The Company incurred $129,231, $0, and $417,231 in consulting fees to this director for the years ended December 31, 2013 and 2012 and from inception to December 31, 2013, respectively. Amounts payable under these agreements were $216,000 and $288,000 as of December 31, 2013 and 2012. | |
Amounts payable under these agreements were $210,212 and $216,000, as of September 30, 2014 and December 31, 2013, respectively. |
Income_Taxes
Income Taxes | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ' | ||||||||||||||||||||||||
Income Taxes | ' | ' | ||||||||||||||||||||||||
NOTE 11 – INCOME TAXES | NOTE 11 – INCOME TAXES | |||||||||||||||||||||||||
The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. | The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. | |||||||||||||||||||||||||
The effective tax rate for the nine-month periods ended September 30, 2014 differs from the statutory rate of 34% as a result of the state taxes (net of Federal benefit) and permanent differences. | The income tax provision (benefit) is composed of the following at December 31: | |||||||||||||||||||||||||
The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (“uncertain tax positions”) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events. | 2013 | 2012 | ||||||||||||||||||||||||
Federal | State | Total | Federal | State | Total | |||||||||||||||||||||
As of September 30, 2014, there was no liability for income tax associated with unrecognized tax benefits. The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest income or expense in its consolidated condensed statements of operations, which is consistent with the recognition of these items in prior reporting periods. | Current | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Deferred | - | - | - | - | - | - | ||||||||||||||||||||
The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | $ | - | $ | - | ||||||||||||||||||||||
The Company’s valuation allowance is primarily related to its operating losses. The valuation allowance is determined in accordance with the provisions of ASC No. 740, Income Taxes, which requires an assessment of both negative and positive evidence when measuring the need for a valuation allowance. Based on the available objective evidence and the Company’s history of losses, management provides no assurance that the net deferred tax assets will be realized. As of September 30, 2014 and December 31, 2013, the Company has applied a valuation allowance against its deferred tax assets net of the expected income from the reversal of the deferred tax liabilities. | The following table presents a reconciliation of the statutory Federal rate and the Company’s effective tax rate for the years ended December 31: | |||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
Tax provision (benefit) at Federal statutory rate | (34.00 | )% | (34.00 | )% | ||||||||||||||||||||||
Accrued compensation | 1.19 | % | 9.82 | % | ||||||||||||||||||||||
Accrued interest expense | 0.34 | % | 9.73 | % | ||||||||||||||||||||||
Stock based compensation | 0.08 | % | 0.32 | % | ||||||||||||||||||||||
Depreciation and amortization | (0.21 | )% | 0.13 | % | ||||||||||||||||||||||
Other | 0.05 | % | 0.05 | % | ||||||||||||||||||||||
Change in valuation allowance | 32.55 | % | 13.96 | % | ||||||||||||||||||||||
Effective tax rate | 0 | % | 0 | % | ||||||||||||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents significant components of the Company’s deferred tax assets and liabilities for the years ended December 31: | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
Deferred tax assets: | ||||||||||||||||||||||||||
Net operating loss carryforwards | $ | 8,879,799 | $ | 7,695,899 | ||||||||||||||||||||||
Accrued compensation | 1,720,775 | 1,662,473 | ||||||||||||||||||||||||
Accrued interest | 251,167 | 257,620 | ||||||||||||||||||||||||
Credit carryforwards | 124,525 | 124,525 | ||||||||||||||||||||||||
Stock based compensation | 611,380 | 802,512 | ||||||||||||||||||||||||
Discount amortization | 630,104 | 321,301 | ||||||||||||||||||||||||
Amortization | 53,595 | 41,895 | ||||||||||||||||||||||||
Gross deferred tax assets | 12,271,345 | 10,906,224 | ||||||||||||||||||||||||
Less valuation allowance | (12,188,172 | ) | (10,844,963 | ) | ||||||||||||||||||||||
Net deferred tax assets | 83,173 | 61,261 | ||||||||||||||||||||||||
Deferred tax liabilities: | ||||||||||||||||||||||||||
Depreciation | (68,371 | ) | (46,501 | ) | ||||||||||||||||||||||
Gain on sale of assets | (14,802 | ) | (14,760 | ) | ||||||||||||||||||||||
Gross deferred tax liabilities | (83,173 | ) | (61,261 | ) | ||||||||||||||||||||||
Net deferred tax assets | $ | - | $ | - | ||||||||||||||||||||||
As of December 31, 2013, the Company had Federal net operating loss carryforward of $24,220,407. The net operating loss carryforward expires at various dates beginning in 2026 if not utilized. In addition, the Company had net operating losses for Hawaii income tax purposes of $20,776,118 as of December 31, 2013, which expire at various dates beginning in 2026 if not utilized. These amounts differ from the Company’s accumulated deficit due to permanent and temporary tax differences. | ||||||||||||||||||||||||||
The Company’s valuation allowance was primarily related to the operating losses. The valuation allowance is determined in accordance with the provisions of ASC No. 740, Income Taxes, which requires an assessment of both negative and positive evidence when measuring the need for a valuation allowance. Based on the available objective evidence and the Company’s history of losses, management provides no assurance that the net deferred tax assets will be realized. As of December 31, 2013 and 2012, the Company has applied a valuation allowance against its deferred tax assets net of the expected income from the reversal of the deferred tax liabilities. | ||||||||||||||||||||||||||
For tax years 2006 to 2010 the Company received an aggregate amount of cash totaling $1,506,596 representing federal and State of Hawaii tax credits in connection with qualified research expenditures incurred. The tax credits were created to encourage taxpayers to design, develop, and/or improve products, processes, techniques, formulas or software and intended to reward programs that pursue innovation in the State of Hawaii. The tax credits are reflected in the consolidated statements of operations. |
Research_Grant_Income
Research Grant Income | 12 Months Ended |
Dec. 31, 2013 | |
Research Grant Income | ' |
Research Grant Income | ' |
NOTE 12 – RESEARCH GRANT INCOME | |
The Company was awarded a three year government grant from the National Institutes of Health to fund research costs and support the Company’s development program by paying for inventory critical to the manufacturing of its product candidates. The grant included an allocation for indirect costs equal to 40% of the Company’s costs incurred exclusive of subcontractor costs. | |
The grant was used to pay for inventory of $752,634, subcontractor costs of $60,000, salaries and benefits allocable to research of $42,234, and $5,880 for miscellaneous costs such as supplies. Additionally, $318,898 was allocated as indirect costs. |
Basic_and_Diluted_Net_Income_L
Basic and Diluted Net Income (Loss) Per Share | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||
NET LOSS PER SHARE | ' | ' | ||||||||||||||||||||
Basic and Diluted Net Income (Loss) Per Share | ' | ' | ||||||||||||||||||||
NOTE 12 – BASIC AND DILUTED NET INCOME (LOSS) PER SHARE | NOTE 13 – BASIC AND DILUTED NET INCOME (LOSS) PER SHARE | |||||||||||||||||||||
The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for the three-month periods ended: | The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for the years ended December 31,: | |||||||||||||||||||||
Three-months ended September 30, 2014 | 2013 | 2012 | ||||||||||||||||||||
Net Loss | Shares | Per share | Net loss attributable to common shareholders, basic | $ | (4,361,165 | ) | $ | (2,543,390 | ) | |||||||||||||
(Numerator) | (Denominator) | amount | Net loss attributable to common shareholders, diluted | $ | (4,361,165 | ) | $ | (2,543,390 | ) | |||||||||||||
Basic loss per share | $ | (1,880,394 | ) | 63,610,949 | $ | (0.03 | ) | Weighted-average shares used to compute net loss per share attributable to common stockholders, basic | 9,488,227 | 9,488,227 | ||||||||||||
Effect of dilutive securities—Common stock options and warrants | - | - | - | |||||||||||||||||||
Diluted loss per share | $ | (1,880,394 | ) | 63,610,949 | $ | (0.03 | ) | Dilutive effect of common stock options | - | - | ||||||||||||
Weighted-average shares used to compute net loss per share attributable to common stockholders, diluted | 9,488,227 | 9,488,227 | ||||||||||||||||||||
Three-months ended September 30, 2013 | ||||||||||||||||||||||
Net Loss | Shares | Per share | Net loss per share attributable to common stockholders, basic | $ | (0.46 | ) | $ | (0.27 | ) | |||||||||||||
(Numerator) | (Denominator) | amount | Net loss per share attributable to common stockholders, diluted | $ | (0.46 | ) | $ | (0.27 | ) | |||||||||||||
Basic loss per share | $ | (1,348,340 | ) | 33,229,093 | $ | (0.04 | ) | |||||||||||||||
Effect of dilutive securities—Common stock options and warrants | - | - | - | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the years presented because including them would have been antidilutive: | ||||||||||||||||||
Diluted loss per share | $ | (1,348,340 | ) | 33,229,093 | $ | (0.04 | ) | |||||||||||||||
31-Dec-13 | 31-Dec-12 | |||||||||||||||||||||
The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for the nine-month periods ended: | Common stock options | 15,290,486 | 15,290,486 | |||||||||||||||||||
Nine-months ended September 30, 2014 | ||||||||||||||||||||||
Net Loss | Shares | Per share | ||||||||||||||||||||
(Numerator) | (Denominator) | amount | ||||||||||||||||||||
Basic loss per share | $ | (15,186,393 | ) | 59,019,453 | $ | (0.26 | ) | |||||||||||||||
Effect of dilutive securities—Common stock options and warrants | - | - | - | |||||||||||||||||||
Diluted loss per share | $ | (15,186,393 | ) | 59,019,453 | $ | (0.26 | ) | |||||||||||||||
Nine-months ended September 30, 2013 | ||||||||||||||||||||||
Net Loss | Shares | Per share | ||||||||||||||||||||
(Numerator) | (Denominator) | amount | ||||||||||||||||||||
Basic loss per share | $ | (2,849,861 | ) | 33,229,093 | $ | (0.09 | ) | |||||||||||||||
Effect of dilutive securities—Common stock options and warrants | - | - | - | |||||||||||||||||||
Diluted loss per share | $ | (2,849,861 | ) | 33,229,093 | $ | (0.09 | ) | |||||||||||||||
The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the years presented because including them would have been antidilutive for the three and nine-month periods ended: | ||||||||||||||||||||||
30-Sep-14 | 30-Sep-13 | |||||||||||||||||||||
Common stock options | 23,762,946 | 15,050,500 | ||||||||||||||||||||
Common stock warrants | 28,405,782 | - | ||||||||||||||||||||
Total common stock equivalents | 52,168,728 | 15,050,500 | ||||||||||||||||||||
Concentration
Concentration | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Risks and Uncertainties [Abstract] | ' | ' |
Concentration | ' | ' |
NOTE 13 – CONCENTRATION | NOTE 14 – CONCENTRATION | |
The Company purchases all of its inventory from one vendor in Germany. Although, there were no purchases from this vendor during the nine-month periods ended September 30, 2014 and 2013, outstanding payables to this vendor were $86,255 as of September 30, 2014 and December 31, 2013. | The Company purchases all of its inventory from one vendor in Germany. Although there were no purchases from this vendor for the years ended December 31, 2013 and 2012, outstanding payables to this vendor were $86,255 as of December 31, 2013 and 2012. |
Leases
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Leases [Abstract] | ' | ' |
Leases | ' | ' |
NOTE 14 – LEASES | NOTE 15 – LEASES | |
Lease settlement | Lease settlement | |
On April, 29, 2011, the Company entered into a settlement agreement with a lessor whereby the Company would make monthly payments totaling $614,934 from January 1, 2011 to October 1, 2013, in exchange of a waiver of $786,945 in late and other fees, which is recorded as a gain on debt extinguishment on the 2011 statement of operations. In the event of default, this waived amount would be payable in full in addition to the settlement amount. Total rent settlement amounts payable were $0 as of September 30, 2014 and December 31, 2013. | On April, 29, 2011, the Company entered into a settlement agreement with a lessor whereby the Company would make monthly payments totaling $614,934 from January 1, 2011 to October 1, 2013, in exchange of a waiver of $786,945 in late and other fees, which is recorded as a gain on debt extinguishment on the 2011 statement of operations. In the event of default, this waived amount would be payable in full in addition to the settlement amount. Total lease settlement amount payable was $251,184 as of December 31, 2012. | |
Although in default at the end of 2012, the Company subsequently cured and settled the obligation in full on October 1, 2013. The lessor upheld the Satisfaction of Judgment without exercising any of the default provisions. | Although in default at the end of 2012, the Company subsequently cured and settled the obligation in full on October 1, 2013. The lessor upheld the Satisfaction of Judgment without exercising any of the default provisions. | |
Hawaii Research Center | 750,000 shares of the Company’s Series B Preferred Shares were held as security for this liability and released in connection with the Satisfaction of Judgment. | |
The Company entered into a lease for laboratory and office space on May 9, 2006. This lease amended on September 7, 2011, and October 30, 2012. This lease expired on October 31, 2014 and is currently on a month-to-month basis. Total rent expense under this agreement as amended was $14,709 and $47,331, for the three and nine-month periods ended September 30, 2014, respectively. Total rent expense under this agreement as amended was $20,883 and $58,607, for the three and nine-month periods ended September 30, 2013, respectively. | Hawaii Research Center | |
Manoa Innovation Center | The Company entered into a lease for laboratory and office space on May 9, 2006. This lease was amended on September 7, 2011, October 30, 2012, and October 31, 2013. Under the terms of the October 31, 2013 lease amendment, the lease was extended for a period of one year. Total rent expense under this agreement was $63,393, $71,760, and $2,070,801, for the years ended December 31, 2013 and 2012, and from inception to December 31, 2013, respectively. | |
The Company entered into an automatically renewable month-to-month lease for office space on August 13, 2010. Under the terms of this lease, the Company must provide a written notice 45 days prior to vacating the premises. Total rent expense under this agreement as amended was $7,825 and $23,255, for the three and nine-month periods ended September 30, 2014, respectively. Total rent expense under this agreement as amended was $5,780 and $25,816, for the three and nine-month periods ended September 30, 2013, respectively. | Manoa Innovation Center | |
Maturities | The Company entered into an automatically renewable month-to-month lease for office space on August 13, 2010. Under the terms of this lease, the Company must provide a written notice 45 days prior to vacating the premises. Total rent expense under this agreement was $27,241, $23,026, and $91,199, for the years ended December 31, 2013 and 2012, and from inception to December 31, 2013, respectively. | |
Future minimum lease payments under non-cancelable operating leases were $3,063, at September 30, 2014. This amount was all due during 2014. | Maturities | |
Future minimum lease payments under non-cancelable operating leases were $30,632, at December 31, 2013. This amount was all due during 2014. |
Commitments
Commitments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
Commitments | ' | ' |
NOTE 15 – COMMITMENTS | NOTE 16 – COMMITMENTS | |
Patent payable | Patent payable | |
As part of the formation of the Company, a patent license was transferred to the Company. The original license began in 2006. Under the terms of the license the Company agreed to pay $10,000 per year through 2015 and royalties of 2% on any revenues resulting from the license. There were no revenues generated by this license during the nine-month periods ended September 30, 2014 and 2013. The remaining obligation of $10,000 and $20,000 as of September 30, 2014 and December 31, 2013, respectively, is recorded as patent license payable on the balance sheet. | As part of the formation of the Company, a patent license was transferred to the Company. The original license began in 2006. Under the terms of the license the Company agreed to pay $10,000 per year through 2015 and royalties of 2% on any revenues resulting from the license. There were no revenues generated by this license during the years ended December 31, 2013 and 2012, and from inception to December 31, 2013. The remaining obligation of $20,000 and $35,833 as of December 31, 2013 and 2012, respectively, is recorded as patent license payable on the balance sheet. | |
Employee settlement | Employee settlement | |
As of September 30, 2014 and December 31, 2013, the Company owed a former employee a settlement payable in the amount of $50,000 for accrued vacation benefits. As part of the settlement, a stock option previously granted to the former employee was fully vested and extended. | As of December 31, 2013 and 2012, the Company owed a former employee a settlement payable in the amount of $50,000 for accrued vacation benefits. As part of the settlement, a stock option previously granted to the former employee was fully vested and extended. | |
BASF agreement and license | License and agreements | |
In November 2006, the Company entered into a joint development and supply agreement with BASF SE (“BASF”). Under the agreement, the Company granted BASF an exclusive world-wide license to the Company’s rights related to the development and commercialization of astaxanthin consumer health products; the Company retains all rights related to astaxanthin pharmaceutical products. The Company is to receive specified royalties based on future net sales of such astaxanthin consumer health products. No royalties were realized from this agreement during the nine-month periods ended September 30, 2014 and 2013. The license does not prohibit the Company from purchasing astaxanthin consumer health products from BASF for consumer health applications, similar to any third-party wholesale customer. | In November 2006, the Company entered into a joint development and supply agreement with the supplier of all of its inventory. Under the agreement, the Company granted the supplier a non-exclusive world-wide license, with an option to convert the license to an exclusive license, to use the Company’s rights related to the development and commercialization of human nutraceutical astaxanthin products. In 2013, the license was converted to an exclusive license. The Company is to receive between specified royalties based on future net sales of such human nutraceutical astaxanthin products. No royalties were realized from this agreement as of December 31, 2013 or 2012. | |
Capsugel agreement | In February 2012, the Company entered into a licensing agreement granting a company worldwide exclusive rights to certain monoclonal antibodies against paclitaxel and tangible property relating to assay kits to detect various anti-cancer compounds, including manufacturing and technical know-how. The Company is to receive payments upon attaining certain milestones and royalties based on future net sales of products utilizing the licensed technology. The Company generated $10,000 of fees during 2012 from this agreement. | |
On August 18, 2014, the Company entered into a collaboration agreement with Capsugel US, LLC (“Capsugel”) for the joint commercial development of astaxanthin products for the consumer health market that contain nature-identical synthetic astaxanthin and use Capsugel’s proprietary formulation technology, which is expected to increase the oral bioavailability of astaxanthin. The agreement provides for the parties to jointly administer activities under a product development plan that will include identifying at least one mutually acceptable third party marketer who will further develop, market and distribute consumer health, nature-identical synthetic astaxanthin products developed under the collaboration. Capsugel will share revenues with the Company based on net sales of products that are developed under the collaboration. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
NOTE 17 – SUBSEQUENT EVENTS | |
The Company evaluated its December 31, 2013, consolidated financial statements for subsequent events through March 31, 2014, the date the consolidated financial statements were available to be issued and noted the following non-recognized events for disclosure. | |
On January 3, 2014, the Company issued $2,076,000 in notes payable to investors. These notes accrued interest at 10% per annum and automatically converted upon the merger as described below. | |
On February 7, 2014, the Company completed its merger with Koffee Korner, which was renamed to Cardax, Inc. (“Cardax”) (OTCBB:CDXI). Concurrent with the merger: (i) Cardax received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of Cardax common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of Cardax common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of Cardax common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of Cardax common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of Cardax common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of Cardax common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. Please refer to the Current Report on Form 8-K filed by Cardax on February 10, 2014 for a full description of the merger and related events. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Accounting Policies [Abstract] | ' | |||
Basis of presentation | ' | |||
Basis of presentation | ||||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company. All significant intercompany balances and transactions have been eliminated in consolidation. | ||||
Use of estimates | ' | |||
Use of estimates | ||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Estimates in these consolidated financial statements include asset valuations, estimates of future cash flows from and the economic useful lives of long-lived assets, certain accrued liabilities, income taxes and tax valuation allowances, and fair value estimates. Despite management’s intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from these estimates and assumptions. | ||||
Cash | ' | |||
Cash | ||||
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company held no cash equivalents at December 31, 2013 and 2012. | ||||
The Company maintains cash and cash equivalent deposit accounts at several financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance at times may exceed these limits. As of December 31, 2013 and 2012, the Company did not have any amounts in excess of federally insured limits on deposit. | ||||
Inventory | ' | |||
Inventory | ||||
Inventory is stated at the lower of cost or market. Cost is determined using the average cost method. Market is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials and third party costs. | ||||
Management provides a reserve against inventory for known or expected inventory obsolescence. The reserve is determined by specific review of inventory items for product age and quality which may affect saleability. At December 31, 2013 and 2012, management determined that a reserve was not necessary. | ||||
Property and equipment, net | ' | |||
Property and equipment, net | ||||
Property and equipment are recorded at cost, less accumulated depreciation. Equipment under capital lease obligations and leasehold improvements are amortized on the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Such amortization is included in depreciation and amortization in the consolidated financial statements. | ||||
Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets as follows. | ||||
Furniture and office equipment | 7 years | |||
Research and development equipment | 3 to 7 years | |||
Information technology equipment | 5 years | |||
Software | 3 years | |||
Major additions and improvements are capitalized, and routine expenditures for repairs and maintenance are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is charged to income for the period. | ||||
Impairment of long-lived assets | ' | |||
Impairment of long-lived assets | ||||
In accordance with ASC No. 360, Property, Plant, and Equipment, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets, as appropriate, may not be recoverable. | ||||
When the sum of the undiscounted future net cash flows expected to result from the use and the eventual disposition is less than the carrying amounts, an impairment loss would be measured based on the discounted cash flows compared to the carrying amounts. There was no impairment charge recorded for the years ended December 31, 2013 and 2012 and from inception to December 31, 2013. | ||||
Research grant income | ' | |||
Research grant income | ||||
The Company recognizes revenue on cost reimbursement grant award contracts when allowable and reimbursable expenses are incurred, and upon meeting the legal and contractual requirements of the funding source. | ||||
Fair value measurements | ' | |||
Fair value measurements | ||||
US GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). | ||||
The three levels of the fair value hierarchy are described below: | ||||
Level 1: | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. | |||
Level 2: | Inputs to the valuation methodology include: | |||
● | Quoted prices for similar assets or liabilities in active markets; | |||
● | Quoted prices for identical or similar assets or liabilities in inactive markets; | |||
● | Inputs other than quoted prices that are observable for the asset or liability; and | |||
● | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. | ||||
Level 3: | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. | |||
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. | ||||
As of December 31, 2013 and 2012, there were no recurring fair value measurements of assets and liabilities subsequent to initial recognition. | ||||
The fair value of the preferred stock warrants is based on unobservable inputs. Such instruments are generally classified within Level 3 of the fair value hierarchy. The Company estimated the fair value of the warrants using an option-pricing model incorporating assumptions that market participants would use in their estimates of fair value. Some of these assumptions include estimates for interest rates, expected dividends, and the fair value of the underlying preferred stock. The estimated fair value of the underlying preferred stock is itself determined using an option-pricing method. Under this method, the fair value of an enterprise’s common and preferred stock is estimated as the net value of a series of call options, representing the present value of the expected future returns to the stockholders. | ||||
The Company’s other financial instruments include borrowings under notes payable. The carrying values of its financial instruments approximate their fair values due to the fact that they are short-term in nature at December 31, 2013 and 2012 (Level 3). | ||||
Warrants | ' | |||
Warrants | ||||
Debt instruments with detachable warrants to acquire shares that may be redeemable are accounted for in accordance with ASC No. 470, Debt. Under ASC No. 470, detachable warrants to purchase the Company’s series A preferred stock were classified as a discount on the underlying note on the consolidated balance sheets and carried at fair value. The Company initially measured the warrants at fair value on issuance. | ||||
Differences between fair value of the series B preferred stock and warrants on the date of grant were recorded as additional paid in capital. | ||||
Stock based compensation | ' | |||
Stock based compensation | ||||
The Company accounts for stock based compensation costs under the provisions of ASC No. 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense related to the fair value of stock based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all share based payments granted to employees based on the grant date fair value estimated in accordance with the provisions of ASC No. 718. ASC No. 718 is also applied to awards modified, repurchased, or canceled during the periods reported. | ||||
Basic and diluted net income (loss) per share | ' | |||
Basic and diluted net income (loss) per share | ||||
The Company’s convertible redeemable preferred stock was entitled to receive dividends of up to 8.5% at the original issue price per annum when and if dividends are declared on the common stock and thereafter participate pro rata on an as converted basis with the common stock holders on any distributions to common stockholders. They were therefore participating securities. As a result, the Company calculates the net income (loss) per share using the two-class method. Accordingly, the net income (loss) attributable to common stockholders is derived from the net income (loss) for the period and, in periods in which the Company has net income attributable to common stockholders, an adjustment is made for the noncumulative dividends and allocations of earnings to participating securities based on their outstanding shareholder rights. | ||||
Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible redeemable preferred stock as the convertible redeemable preferred stock did not have a contractual obligation to share in the Company’s losses. | ||||
The diluted net income (loss) per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method or the as-if converted method as applicable. In periods when the Company incurred a net loss attributable to common stockholders, stock options and warrants to purchase common stock were considered to be common stock equivalents, but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. | ||||
Income taxes | ' | |||
Income taxes | ||||
The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax reporting purposes, net operating loss carry-forwards, and other tax credits measured by applying currently enacted tax laws. A valuation allowance is provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. | ||||
The Company determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. | ||||
The Company files income tax returns in the United States (“U.S.”) Federal, State of Hawaii, and State of California jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. | ||||
The following represents the open tax years and jurisdictions that the Company used in its evaluation of tax positions: | ||||
Open tax years ending | ||||
December 31, | Jurisdiction | |||
2010 - 2013 | U.S. Federal | |||
2010 - 2013 | State of Hawaii | |||
2010 - 2013 | State of California | |||
The Company did not recognize any tax liabilities for income taxes associated with unrecognized tax benefits as of December 31, 2013 and 2012. It is the Company’s policy to include interest and penalties related to unrecognized tax benefits, if any, within the provision for taxes in the statements of operations. | ||||
Advertising | ' | |||
Advertising | ||||
The Company expenses all advertising costs as incurred and are included as an element of general and administrative costs in the accompanying statements of operations. There were no advertising expenses for the years ended December 31, 2013 and 2012 and for the period from inception (March 23, 2006) to December 31, 2013. | ||||
Research and development | ' | |||
Research and development | ||||
Research and development costs are expensed as incurred and consists primarily of salaries and wages of scientists and related personnel engaged in research and development activities, scientific consultations, manufacturing of product candidates, third-party research, laboratory supplies, rents associated with operating leased laboratory equipment, and scientific advisory boards. The focus of these costs is on the development of astaxanthin technologies. | ||||
Recently issued accounting standards | ' | |||
Recently issued accounting standards | ||||
In May 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-04, Fair Value Measurements, which amends the fair value measurement guidance and includes some enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for Level 3 measurements based on unobservable inputs. The standard is effective for fiscal years beginning after December 15, 2011. The Company adopted this standard in the first quarter of 2012. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements. | ||||
In September 2011, the FASB ASU No. 2011-08, Intangibles – Goodwill and Other Testing Goodwill for Impairment, issued amendments to its accounting guidance on testing goodwill for impairment. The amendments allow entities to use a qualitative approach to test goodwill for impairment. This permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is required to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. This guidance is effective for annual and interim goodwill impairment test performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. The Company adopted this standard in the first quarter of year 2012 and the implementation thereof did not have a material impact on the Company’s consolidated financial statements. | ||||
In February 2013, the FASB ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to require reporting of the impact of significant reclassifications out of accumulated other comprehensive income or loss on the line items on the statement of operations, if a reclassification is required in its entirety in one reporting period. This ASU is effective for interim and annual periods beginning after December 15, 2012. The adoption of the ASU did not have a significant impact on the Company’s consolidated financial statements. | ||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, to specify when an unrecognized tax benefit should be presented as a liability versus an offset against a deferred tax asset. The ASU is effective prospectively for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2013. The Company is currently assessing the impact of this ASU on the Company’s consolidated financial statements. | ||||
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Schedule of Depreciation of Estimated Useful Lives | ' | ||
Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets as follows. | |||
Furniture and office equipment | 7 years | ||
Research and development equipment | 3 to 7 years | ||
Information technology equipment | 5 years | ||
Software | 3 years | ||
Schedule of Open Tax Years and Jurisdictions | ' | ||
The following represents the open tax years and jurisdictions that the Company used in its evaluation of tax positions: | |||
Open tax years ending | |||
December 31, | Jurisdiction | ||
2010 - 2013 | U.S. Federal | ||
2010 - 2013 | State of Hawaii | ||
2010 - 2013 | State of California |
Inventory_Tables
Inventory (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||
Inventory Disclosure [Abstract] | ' | ' | ||||||||||||||||
Schedule of Inventory Current | ' | ' | ||||||||||||||||
Inventory consists of the following as of: | Inventory consists of the following as of December 31: | |||||||||||||||||
September 30, 2014 | December 31, 2013 | 2013 | 2012 | |||||||||||||||
Processed materials | $ | 958,575 | $ | 986,674 | Processed materials | $ | 986,674 | $ | 986,674 | |||||||||
Total inventories | $ | 958,575 | $ | 986,674 | Total inventories | $ | 986,674 | $ | 986,674 |
Property_And_Equipment_Net_Tab
Property And Equipment, Net (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||
Property, Plant and Equipment [Abstract] | ' | ' | ||||||||||||||||
Schedule of Property and Equipment, Net | ' | ' | ||||||||||||||||
Property and equipment, net, consists of the following as of: | Property and equipment, net, consists of the following as of December 31: | |||||||||||||||||
30-Sep-14 | 31-Dec-13 | 2013 | 2012 | |||||||||||||||
Research and development equipment | $ | - | $ | 686,673 | Research and development equipment | $ | 686,673 | $ | 686,673 | |||||||||
Leasehold improvements | - | 153,161 | Leasehold improvements | 153,161 | 153,161 | |||||||||||||
Information technology equipment | 31,892 | 105,319 | Furniture and office equipment | 78,678 | 78,678 | |||||||||||||
Furniture and office equipment | 10,161 | 78,678 | Information technology equipment | 105,319 | 75,060 | |||||||||||||
Software | - | 9,386 | Software | 9,386 | 9,386 | |||||||||||||
42,053 | 1,033,217 | 1,033,217 | 1,002,958 | |||||||||||||||
Less accumulated depreciation | (19,619 | ) | (1,007,176 | ) | Less accumulated depreciation | (1,007,176 | ) | (1,001,554 | ) | |||||||||
Total property and equipment, net | $ | 22,434 | $ | 26,041 | Total property and equipment, net | $ | 26,041 | $ | 1,404 |
Intagible_Asset_Net_Tables
Intagible Asset, Net (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||
Intagible Asset Net Tables | ' | ' | ||||||||||||||||
Schedule of Intagible Asset, Net | ' | ' | ||||||||||||||||
Intangible assets, net, consists of the following as of: | Intangible assets, net, consists of the following as of December 31: | |||||||||||||||||
September 30, 2014 | 31-Dec-13 | 2013 | 2012 | |||||||||||||||
Patents | $ | 380,394 | $ | 380,394 | Patents | $ | 593,120 | $ | 572,764 | |||||||||
Less accumulated amortization | (191,318 | ) | (168,363 | ) | Less accumulated amortization | (168,363 | ) | (137,754 | ) | |||||||||
189,076 | 212,031 | Total intangible assets, net | $ | 424,757 | $ | 435,010 | ||||||||||||
Patents pending | 233,145 | 212,726 | ||||||||||||||||
Total intangible assets, net | $ | 422,221 | $ | 424,757 |
Long_Term_Notes_Payable_Net_Ta
Long Term Notes Payable, Net (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ' | ||||||||||||||||
Schedule of Notes Payable Outstanding | ' | ' | ||||||||||||||||
The Company’s notes payable outstanding were as follows as of: | The Company’s notes payable outstanding as of December 31, 2013 and 2012, were as follows: | |||||||||||||||||
30-Sep-14 | December 31, 2013 | 2013 | 2012 | |||||||||||||||
2008 Unsecured promissory note. Originated on November 12, 2008. Principal of $100,000 with $45,000 to be repaid by June 30, 2009, with $10,000 in monthly payments thereafter until repaid in full. Required a one-time interest payment of $15,000. This note was paid in full on February 7, 2014. | $ | - | $ | 55,000 | 2008 Unsecured promissory note. Originated on November 12, 2008. Principal of $100,000 with $45,000 to be repaid by June 30, 2009, with $10,000 in monthly payments thereafter until repaid in full. Required a one-time interest payment of $15,000. This note was paid in full on February 7, 2014. | $ | 55,000 | $ | 55,000 | |||||||||
2009 Non-mandatorily convertible, unsecured note. Originated on March 31, 2009, principal of $500,000 accrues interest at 8% per annum. Principal and interest were due in full on March 31, 2014 or convertible at the option of the note holder into Series B preferred stock at a rate of $0.45 per share. A warrant to purchase 222,222 shares of preferred Series B stock was issued in conjunction with this note. This note was paid in full on February 7, 2014. | - | 500,000 | 2012 Short-term unsecured promissory notes. Originated at various dates in 2012 with maturities ranging from three months to one year and interest rates ranging from 8% to 12%. All of these notes were subsequently either converted into Bridge Loans or repaid in 2013. Warrants to purchase 224,220 shares of preferred Series B stock were issued in conjunction with these notes. | - | 829,047 | |||||||||||||
2013 Bridge Loan. Principal from existing notes in the amount of $3,180,806 (comprised of $2,621,195 in principal outstanding as of December 31, 2012 and $559,611 in new principal issued from January through April 2013) along with accrued interest of $467,438 were converted into a 2013 Bridge Loan along with $4,840,792 of new principal. These notes accrued interest at 10% per annum with outstanding principal and interest due in 2014. These notes converted into common shares as part of the February 7, 2014 reverse acquisition transaction. | - | 8,489,036 | 2009 Non-mandatorily convertible, unsecured note. Originated on March 31, 2009, principal of $500,000 accrues interest at 8% per annum. Principal and interest were due in full on March 31, 2014 or convertible at the option of the note holder into Series B preferred stock at a rate of $0.45 per share. A warrant to purchase 222,222 shares of preferred Series B stock was issued in conjunction with this note. This note was paid in full on February 7, 2014. | 500,000 | 500,000 | |||||||||||||
2014 Bridge Loan. Originated in January 2014. Principal of $2,076,000 issued in January 2014. These notes accrued interest at 10% per annum with outstanding principal and interest due in 2014. These notes converted into common shares as part of the February 7, 2014 reverse acquisition transaction. | - | - | 2010 Secured promissory notes. Principal of $549,450 originated on September 23, 2010 and $62,438 originated on November 12, 2010. Accrued interest at 10% or 14% per annum. Maturity of all notes was extended from September 23, 2012 to March 23, 2013 by majority note holder approval. Interest rate was 2% higher during the period of extension. These notes were secured by all of the Company’s intellectual property. Warrants to purchase 339,937 shares of preferred Series B stock were issued in conjunction with these notes for $612. All of these notes were subsequently either converted into the Bridge Loans or repaid in 2013. | - | 611,888 | |||||||||||||
Total notes payable | - | 9,044,036 | 2011 Secured promissory notes. Principal of $1,828,686 originated at various dates of 2011. Accrued interest at 10% per annum. Maturity of all notes was extended from September 23, 2012 to March 23, 2013 by majority note holder approval. Interest rate was 2% higher during the period of extension. These notes were secured by all of the Company’s intellectual property. Warrants to purchase 1,015,934 shares of preferred Series B stock were issued in conjunction with the debt for $1,829. All of these notes were subsequently either converted into the Bridge Loans or repaid in 2013. | - | 1,828,686 | |||||||||||||
Current maturities of long-term, net of discount | - | 9,039,444 | 2012 Secured promissory notes. Principal of $349,650 originated in February and March of 2012. Accrued interest at 10% per annum. Maturity of all notes was extended from September 23, 2012 to March 23, 2013 by majority note holder approval. Interest rate was 2% higher during the period of extension. These notes were secured by all of the Company’s intellectual property. Warrants to purchase 194,250 shares of preferred Series B stock were issued in conjunction with the debt for $350. All of these notes were subsequently either converted into the Bridge Loans or repaid in 2013. | - | 349,650 | |||||||||||||
Discount attributable to current maturities | - | 4,592 | 2013 Bridge Loan. Principal from existing notes in the amount of $3,180,806 (comprised of $2,621,195 in principal outstanding as of December 31, 2012 and $559,611 in new principal issued from January through April 2013) along with accrued interest of $467,438 were converted into a 2013 Bridge Loan along with $4,840,792 of new principal. These notes accrued interest at 10% per annum with outstanding principal and interest due in 2014. These notes converted into common shares as part of the February 7, 2014, merger with Koffee Korner at the rate of $0.625 per share. See Note 17. | 8,489,036 | - | |||||||||||||
Total notes payable | 9,044,036 | 4,174,271 | ||||||||||||||||
Total current maturities | - | 9,044,036 | ||||||||||||||||
Current maturities of long-term notes, net of discount | 9,039,444 | 3,609,098 | ||||||||||||||||
Long-term notes payable, less current maturities | $ | - | $ | - | Discount attributable to current maturities | 4,592 | 65,173 | |||||||||||
Total current maturities | 9,044,036 | 3,674,271 | ||||||||||||||||
Notes payable, less current maturities | $ | - | $ | 500,000 | ||||||||||||||
Summary of Debt Discount | ' | ' | ||||||||||||||||
A summary of the debt discount activity for the nine-month period ended September 30, 2014 and year ended December 31, 2013 is as follows: | A summary of the debt discount activity for the years ended December 31, 2013 and 2012, is as follows: | |||||||||||||||||
Balance January 1, 2013 | $ | 65,173 | Balance January 1, 2012 | $ | 288,439 | |||||||||||||
Amortization of debt discount | (60,581 | ) | Debt discount recorded on 2011 notes | 140,592 | ||||||||||||||
Balance December 31, 2013 | 4,592 | Amortization of debt discount | (363,858 | ) | ||||||||||||||
Amortization of debt discount | (4,592 | ) | Balance December 31, 2012 | 65,173 | ||||||||||||||
Balance at September 30, 2014 | $ | - | Amortization of debt discount | (60,581 | ) | |||||||||||||
Balance at December 31, 2013 | $ | 4,592 |
Stockholders_Equity_Tables
Stockholder's Equity (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Schedule of Asset and Liabilities | ' | ||||||||||||
The Company was incorporated in the State of Delaware on March 23, 2006. In May 2006, Hawaii Biotech, Inc. contributed its anti-inflammatory, small molecule line of business into the Company which consisted of the following assets and liabilities: | |||||||||||||
Cash | $ | 7,007,371 | |||||||||||
Due from Hawaii Biotech, Inc. | 1,000,000 | ||||||||||||
Prepaid expenses | 14,279 | ||||||||||||
Employee note receivable | 288,576 | ||||||||||||
Fixed assets, net of depreciation of $181,905 | 388,165 | ||||||||||||
Other assets | 606 | ||||||||||||
Total assets | 8,698,997 | ||||||||||||
Accounts and accrued expenses payable | 138,921 | ||||||||||||
Due to Hawaii Biotech, Inc. | 70,279 | ||||||||||||
Equipment leases payable | 181,203 | ||||||||||||
Total liabilities | 390,403 | ||||||||||||
Net assets transferred | $ | 8,308,594 | |||||||||||
Schedule of Issued Common Stock Pursuant To Exercise Of Stock Options | ' | ||||||||||||
The Company issued common stock pursuant to the exercise of stock options as follows: | |||||||||||||
Year | Common shares issued | Average Price | Amount Realized | ||||||||||
2006 | 6,842 | $ | 0.044 | $ | 304 | ||||||||
2007 | 20,000 | $ | 0.07 | $ | 1,400 | ||||||||
2008 | 14,285 | $ | 0.07 | $ | 1,000 |
Stock_Option_Plans_Tables
Stock Option Plans (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | |||||||||||||||||||||||||||||||
Schedule of Stock Option Activity | ' | ' | |||||||||||||||||||||||||||||||
A summary of stock option activity is as follows: | A summary of stock option activity is as follows: | ||||||||||||||||||||||||||||||||
Options | Weighted average exercise price | Weighted average remaining contractual term in years | Aggregate intrinsic value | Options | Weighted | Weighted | Aggregate | ||||||||||||||||||||||||||
Outstanding January 1, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 358,662 | average | average | intrinsic value | ||||||||||||||||||||||||
Exercisable January 1, 2013 | 14,524,861 | $ | 0.07 | 3.75 | $ | 332,052 | exercise | remaining contractual | |||||||||||||||||||||||||
Granted | - | price | term in years | ||||||||||||||||||||||||||||||
Exercised | - | Outstanding January 1, 2012 | 17,933,091 | $ | 0.07 | 4.17 | $ | 358,662 | |||||||||||||||||||||||||
Forfeited | - | Exercisable January 1, 2012 | 16,602,622 | $ | 0.07 | 4.05 | $ | 332,052 | |||||||||||||||||||||||||
Outstanding December 31, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | Granted | - | - | ||||||||||||||||||||||||
Exercisable December 31, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | Exercised | - | - | ||||||||||||||||||||||||
Canceled | (15,290,486 | ) | Forfeited | (2,642,605 | ) | $ | 0.07 | ||||||||||||||||||||||||||
Granted | 27,756,821 | Outstanding December 31, 2012 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | |||||||||||||||||||||||||
Exercised | (4,506 | ) | Exercisable December 31, 2012 | 14,524,861 | $ | 0.07 | 3.75 | $ | 290,497 | ||||||||||||||||||||||||
Forfeited | - | Granted | - | - | |||||||||||||||||||||||||||||
Outstanding September 30, 2014 | 27,752,315 | $ | 0.51 | 8.27 | $ | 2,712,885 | Exercised | - | - | ||||||||||||||||||||||||
Exercisable September 30, 2014 | 23,762,946 | $ | 0.49 | 8.08 | $ | 2,712,885 | Forfeited | - | - | ||||||||||||||||||||||||
Outstanding December 31, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | |||||||||||||||||||||||||||
Exercisable December 31, 2013 | 15,290,486 | $ | 0.07 | 3.89 | $ | 305,810 | |||||||||||||||||||||||||||
Schedule of Nonvested Shares Granted Under Stock Option Plan | ' | ' | |||||||||||||||||||||||||||||||
A summary of the Company’s non-vested options for the nine-month period ended September 30, 2014, and for the year ended December 31, 2013, is presented below: | A summary of the Company’s non-vested options for the years ended December 31, 2013 and 2012, is presented below: | ||||||||||||||||||||||||||||||||
Non-vested at January 1, 2013 | 765,625 | 2013 | 2012 | ||||||||||||||||||||||||||||||
Granted | - | Non-vested at January 1, | 765,625 | 1,330,469 | |||||||||||||||||||||||||||||
Vested | (765,625 | ) | Granted | - | - | ||||||||||||||||||||||||||||
Forfeited | - | Vested | (765,625 | ) | (564,844 | ) | |||||||||||||||||||||||||||
Non-vested at December 31, 2013 | - | Forfeited | - | - | |||||||||||||||||||||||||||||
Granted | 27,756,821 | Non-vested at December 31, | - | 765,625 | |||||||||||||||||||||||||||||
Vested | (23,762,946 | ) | |||||||||||||||||||||||||||||||
Exercised | (4,506 | ) | |||||||||||||||||||||||||||||||
Forfeited | - | ||||||||||||||||||||||||||||||||
Non-vested at September 30, 2014 | 3,989,369 | ||||||||||||||||||||||||||||||||
Schedule of Fair Value Assumptions | ' | ' | |||||||||||||||||||||||||||||||
The range of fair value assumptions related to options outstanding as of September 30, 2014, and December 31, 2013, were as follows: | The range of fair value assumptions related to options outstanding as of December 31, 2013 and 2012, were as follows: | ||||||||||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | 2013 | 2012 | ||||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | Dividend yield | 0.00% | 0.00% | ||||||||||||||||||||||||||||
Risk-free rate | 0.12% - 1.47% | 0.92% - 5.15% | Risk-free rate | 0.92% - 5.15% | 0.92% - 5.15% | ||||||||||||||||||||||||||||
Expected volatility | 116% - 170% | 116% - 170% | Expected volatility | 116% - 170% | 116% - 170% | ||||||||||||||||||||||||||||
Expected term | 1.1 - 5.5 years | 2.5 - 7.5 years | Expected term | 2.5 - 7.5 years | 2.5 - 7.5 years |
Warrants_Tables
Warrants (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Schedule of Stock Warrants Activity | ' | ' | |||||||||||||||||||||||||||||||
The following is a summary of the Company’s warrant activity: | The following is a summary of the Company’s warrant activity: | ||||||||||||||||||||||||||||||||
Warrants | Weighted average exercise price | Weighted average remaining contractual term in years | Aggregate intrinsic value | Warrants | Weighted | Weighted | Aggregate Intrinsic Value | ||||||||||||||||||||||||||
Outstanding January 1, 2013 | 3,693,971 | $ | 0.45 | 4.81 | $ | - | Average | Average | |||||||||||||||||||||||||
Exercisable January 1, 2013 | 3,693,971 | $ | 0.45 | 4.81 | $ | - | Exercise | Remaining Contractual | |||||||||||||||||||||||||
Granted | - | Price | Term in Years | ||||||||||||||||||||||||||||||
Exercised | - | Outstanding January 1, 2012 | 4,182,261 | $ | 0.45 | 4.77 | - | ||||||||||||||||||||||||||
Forfeited | (298,138 | ) | Exercisable January 1, 2012 | 4,182,261 | $ | 0.45 | 4.77 | - | |||||||||||||||||||||||||
Outstanding December 31, 2013 | 3,395,833 | $ | 0.45 | 5.28 | $ | - | Granted | 418,470 | $ | 0.45 | 5 | ||||||||||||||||||||||
Exercisable December 31, 2013 | 3,395,833 | $ | 0.45 | 5.28 | $ | - | Exercised | - | |||||||||||||||||||||||||
Canceled | (3,395,833 | ) | Forfeited/Cancelled | (906,760 | ) | $ | 0.45 | ||||||||||||||||||||||||||
Granted | 28,405,782 | Outstanding December 31, 2012 | 3,693,971 | $ | 0.45 | 4.81 | - | ||||||||||||||||||||||||||
Exercised | - | Exercisable December 31, 2012 | 3,693,971 | $ | 0.45 | 4.81 | - | ||||||||||||||||||||||||||
Forfeited | - | Granted | - | ||||||||||||||||||||||||||||||
Outstanding September 30, 2014 | 28,405,782 | $ | 0.653 | 4.61 | $ | - | Exercised | - | |||||||||||||||||||||||||
Exercisable September 30, 2014 | 28,405,782 | $ | 0.653 | 4.61 | $ | - | Forfeited/Cancelled | (298,138 | ) | $ | 0.45 | ||||||||||||||||||||||
Outstanding December 31, 2013 | 3,395,833 | $ | 0.45 | 5.28 | - | ||||||||||||||||||||||||||||
Exercisable December 31, 2013 | 3,395,833 | $ | 0.45 | 5.28 | - | ||||||||||||||||||||||||||||
Schedule of Fair Value Assumptions Related To Warrants Outstanding | ' | ' | |||||||||||||||||||||||||||||||
The range of fair value assumptions related to warrants outstanding as of September 30, 2014 and December 31, 2013, were as follows: | |||||||||||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | |||||||||||||||||||||||||||||||
Risk-free rate | 0.12% - 0.66% | 0.62% - 4.59% | |||||||||||||||||||||||||||||||
Expected volatility | 112% - 159% | 108% - 167% | |||||||||||||||||||||||||||||||
Expected term | 1.0 - 2.5 years | 2.5 - 10.0 years | |||||||||||||||||||||||||||||||
Warrant [Member] | ' | ' | |||||||||||||||||||||||||||||||
Schedule of Fair Value Assumptions Related To Warrants Outstanding | ' | ' | |||||||||||||||||||||||||||||||
The range of fair value assumptions related to warrants outstanding as of December 31, 2013 and 2012, were as follows: | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | |||||||||||||||||||||||||||||||
Risk-free rate | 0.62% - 4.59% | 0.62% - 4.59% | |||||||||||||||||||||||||||||||
Expected volatility | 108% - 167% | 108% - 167% | |||||||||||||||||||||||||||||||
Expected term | 2.5 - 10.0 years | 2.5 - 10.0 years |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Income Tax Provision Benefit | ' | ||||||||||||||||||||||||
The income tax provision (benefit) is composed of the following at December 31: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Federal | State | Total | Federal | State | Total | ||||||||||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Deferred | - | - | - | - | - | - | |||||||||||||||||||
$ | - | $ | - | ||||||||||||||||||||||
Schedule of Effective Income Taxes Rate | ' | ||||||||||||||||||||||||
The following table presents a reconciliation of the statutory Federal rate and the Company’s effective tax rate for the years ended December 31: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Tax provision (benefit) at Federal statutory rate | (34.00 | )% | (34.00 | )% | |||||||||||||||||||||
Accrued compensation | 1.19 | % | 9.82 | % | |||||||||||||||||||||
Accrued interest expense | 0.34 | % | 9.73 | % | |||||||||||||||||||||
Stock based compensation | 0.08 | % | 0.32 | % | |||||||||||||||||||||
Depreciation and amortization | (0.21 | )% | 0.13 | % | |||||||||||||||||||||
Other | 0.05 | % | 0.05 | % | |||||||||||||||||||||
Change in valuation allowance | 32.55 | % | 13.96 | % | |||||||||||||||||||||
Effective tax rate | 0 | % | 0 | % | |||||||||||||||||||||
Schedule of Deferred Income Tax Assets | ' | ||||||||||||||||||||||||
The following table presents significant components of the Company’s deferred tax assets and liabilities for the years ended December 31: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||||||
Net operating loss carryforwards | $ | 8,879,799 | $ | 7,695,899 | |||||||||||||||||||||
Accrued compensation | 1,720,775 | 1,662,473 | |||||||||||||||||||||||
Accrued interest | 251,167 | 257,620 | |||||||||||||||||||||||
Credit carryforwards | 124,525 | 124,525 | |||||||||||||||||||||||
Stock based compensation | 611,380 | 802,512 | |||||||||||||||||||||||
Discount amortization | 630,104 | 321,301 | |||||||||||||||||||||||
Amortization | 53,595 | 41,895 | |||||||||||||||||||||||
Gross deferred tax assets | 12,271,345 | 10,906,224 | |||||||||||||||||||||||
Less valuation allowance | (12,188,172 | ) | (10,844,963 | ) | |||||||||||||||||||||
Net deferred tax assets | 83,173 | 61,261 | |||||||||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||||||
Depreciation | (68,371 | ) | (46,501 | ) | |||||||||||||||||||||
Gain on sale of assets | (14,802 | ) | (14,760 | ) | |||||||||||||||||||||
Gross deferred tax liabilities | (83,173 | ) | (61,261 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | - | $ | - |
Basic_and_Diluted_Net_Income_L1
Basic and Diluted Net Income (Loss) Per Share (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | |||||||||||||||||||||
NET LOSS PER SHARE | ' | ' | ||||||||||||||||||||
Schedule of Basic and Diluted Net Income (Loss) | ' | ' | ||||||||||||||||||||
The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for the three-month periods ended: | The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for the years ended December 31,: | |||||||||||||||||||||
Three-months ended September 30, 2014 | 2013 | 2012 | ||||||||||||||||||||
Net Loss | Shares | Per share | Net loss attributable to common shareholders, basic | $ | (4,361,165 | ) | $ | (2,543,390 | ) | |||||||||||||
(Numerator) | (Denominator) | amount | Net loss attributable to common shareholders, diluted | $ | (4,361,165 | ) | $ | (2,543,390 | ) | |||||||||||||
Basic loss per share | $ | (1,880,394 | ) | 63,610,949 | $ | (0.03 | ) | Weighted-average shares used to compute net loss per share attributable to common stockholders, basic | 9,488,227 | 9,488,227 | ||||||||||||
Effect of dilutive securities—Common stock options and warrants | - | - | - | |||||||||||||||||||
Diluted loss per share | $ | (1,880,394 | ) | 63,610,949 | $ | (0.03 | ) | Dilutive effect of common stock options | - | - | ||||||||||||
Weighted-average shares used to compute net loss per share attributable to common stockholders, diluted | 9,488,227 | 9,488,227 | ||||||||||||||||||||
Three-months ended September 30, 2013 | ||||||||||||||||||||||
Net Loss | Shares | Per share | Net loss per share attributable to common stockholders, basic | $ | (0.46 | ) | $ | (0.27 | ) | |||||||||||||
(Numerator) | (Denominator) | amount | Net loss per share attributable to common stockholders, diluted | $ | (0.46 | ) | $ | (0.27 | ) | |||||||||||||
Basic loss per share | $ | (1,348,340 | ) | 33,229,093 | $ | (0.04 | ) | |||||||||||||||
Effect of dilutive securities—Common stock options and warrants | - | - | - | |||||||||||||||||||
Diluted loss per share | $ | (1,348,340 | ) | 33,229,093 | $ | (0.04 | ) | |||||||||||||||
The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share for the nine-month periods ended: | ||||||||||||||||||||||
Nine-months ended September 30, 2014 | ||||||||||||||||||||||
Net Loss | Shares | Per share | ||||||||||||||||||||
(Numerator) | (Denominator) | amount | ||||||||||||||||||||
Basic loss per share | $ | (15,186,393 | ) | 59,019,453 | $ | (0.26 | ) | |||||||||||||||
Effect of dilutive securities—Common stock options and warrants | - | - | - | |||||||||||||||||||
Diluted loss per share | $ | (15,186,393 | ) | 59,019,453 | $ | (0.26 | ) | |||||||||||||||
Nine-months ended September 30, 2013 | ||||||||||||||||||||||
Net Loss | Shares | Per share | ||||||||||||||||||||
(Numerator) | (Denominator) | amount | ||||||||||||||||||||
Basic loss per share | $ | (2,849,861 | ) | 33,229,093 | $ | (0.09 | ) | |||||||||||||||
Effect of dilutive securities—Common stock options and warrants | - | - | - | |||||||||||||||||||
Diluted loss per share | $ | (2,849,861 | ) | 33,229,093 | $ | (0.09 | ) | |||||||||||||||
Schedule of Computation of Diluted Net Income Loss Per Share | ' | ' | ||||||||||||||||||||
The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the years presented because including them would have been antidilutive for the three and nine-month periods ended: | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the years presented because including them would have been antidilutive: | |||||||||||||||||||||
30-Sep-14 | 30-Sep-13 | 31-Dec-13 | 31-Dec-12 | |||||||||||||||||||
Common stock options | 23,762,946 | 15,050,500 | Common stock options | 15,290,486 | 15,290,486 | |||||||||||||||||
Common stock warrants | 28,405,782 | - | ||||||||||||||||||||
Total common stock equivalents | 52,168,728 | 15,050,500 |
Company_Background_Details_Nar
Company Background (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||||||||
Feb. 07, 2014 | Jan. 03, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2006 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Dec. 31, 2007 | Dec. 31, 2013 | 31-May-13 | 31-May-06 | Dec. 31, 2006 | 31-May-06 | 31-May-06 | 31-May-06 | 31-May-06 | Mar. 24, 2006 | |||||
Common Stock [Member] | Common Stock [Member] | Series C Preferred Stock [Member] | Preferred Series A [Member] | Preferred Series B [Member] | Series C Preferred Stock [Member] | Series C Preferred Stock [Member] | |||||||||||||||||||||
Issuance of common stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,447,100 | 9,447,100 | ' | ' | ' | ' | ' | ||||
Issuance of preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,859,324 | [1] | 14,440,920 | [1] | 11,113,544 | [1] | ' | ' | |
Issuance of preferred stock issued additional | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 704,225 | [1] | 704,225 | |||
Ownership interest | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' | ' | ||||
Proceeds from issuance of common stock and warrants | $3,923,100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Issuance of common shares for cash, Shares | 6,276,960 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Warrants issued | 6,276,960 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Warrant exercise price per share | $0.63 | $0.63 | ' | ' | ' | ' | ' | $0.63 | ' | ' | ' | ' | ' | ' | $0.63 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Proceeds from issuance of notes payable | ' | 2,076,000 | ' | ' | ' | ' | ' | 8,489,036 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Aggregate principal amount of notes payable (issued Jan. 03, 2014) converted to common stock | ' | 2,076,000 | ' | ' | ' | ' | ' | 8,489,036 | ' | ' | ' | ' | ' | ' | 8,489,036 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Outstanding principal notes repaid in full | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | 55,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Shares of common stock issued upon conversion of notes payable | ' | 3,353,437 | ' | ' | ' | ' | ' | 14,446,777 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Warrants issued upon conversion of notes payable (issued Jan. 03, 2014) | ' | 3,321,600 | ' | ' | ' | ' | ' | 14,446,777 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Stock options cancelled | 15,290,486 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Exercise price of cancelled option | $0.07 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Stock options issued in substitution of cancelled options | 6,889,555 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Stock options issued in substitution of cancelled options, price per share | $0.16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Additional stock options issued purchase number of common stock | 20,867,266 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Additional stock options issued purchase number of common stock, price per share | $0.63 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Net losses | ' | ' | 1,880,394 | 1,348,340 | 15,186,393 | 2,849,861 | 4,104,289 | 4,361,165 | 2,543,390 | 1,879,940 | 3,948,021 | 1,451,711 | 6,700,148 | 7,908,993 | 32,897,657 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Deficit accumulated during the development stage | ' | ' | 470,823 | ' | 470,823 | ' | ' | ' | 28,536,492 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Cash in operating activities | ' | ' | ' | ' | $4,918,854 | $2,955,988 | ' | $4,127,761 | $1,159,237 | ' | ' | ' | ' | ' | $23,516,610 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
[1] | These shares were subsequently converted into 40,118,013 shares of Series A Preferred Stock. |
Basis_of_Presentation_Details_
Basis of Presentation (Details Narrative) (Pharma [Member]) | 0 Months Ended |
Feb. 07, 2014 | |
Pharma [Member] | ' |
Acquired percentage of issued and outstanding common stock | 100.00% |
Shares of common stock acquired | 33,229,093 |
Percentage of shares issued and outstanding acquired on post-acquisition basis | 53.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
Federal deposit insurance | $250,000 |
Percentage of dividends received for redeemable preferred stock | 8.50% |
Summay_of_Significant_Accounti
Summay of Significant Accounting Policies - Schedule of Depreciation of Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Furniture And Office Equipment [Member] | ' |
Estimated useful lives | '7 years |
Research And Development Equipment [Member] | Minimum [Member] | ' |
Estimated useful lives | '3 years |
Research And Development Equipment [Member] | Maximum [Member] | ' |
Estimated useful lives | '7 years |
Information Technology Equipment [Member] | ' |
Estimated useful lives | '5 years |
Software [Member] | ' |
Estimated useful lives | '3 years |
Summart_of_Significant_Account
Summart of Significant Accounting Policies - Schedule of Open Tax Years and Jurisdictions (Details) | 12 Months Ended |
Dec. 31, 2013 | |
U.S. Federal [Member] | ' |
Open tax years | '2010 - 2013 |
State Of Hawaii [Member] | ' |
Open tax years | '2010 - 2013 |
State Of California [Member] | ' |
Open tax years | '2010 - 2013 |
Inventory_Details_Narrative
Inventory (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Inventory stored | $958,575 | ' | $958,575 | ' | $986,674 | $986,674 | $986,674 |
Research and development | 357,519 | 334,155 | 921,106 | 677,929 | 944,330 | 702,792 | 15,542,286 |
Commercial Product [Member] | ' | ' | ' | ' | ' | ' | ' |
Research and development | 28,099 | ' | ' | ' | ' | ' | ' |
Germany [Member] | ' | ' | ' | ' | ' | ' | ' |
Inventory stored | $924,452 | ' | $924,452 | ' | $924,452 | $924,452 | $924,452 |
Inventory_Schedule_of_Inventor
Inventory - Schedule of Inventory Current (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Inventory Disclosure [Abstract] | ' | ' | ' |
Processed materials | $958,575 | $986,674 | $986,674 |
Total inventories | $958,575 | $986,674 | $986,674 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Depreciation expense | $1,783 | $534 | $5,241 | $1,607 | $5,622 | $92,596 | $1,007,176 |
Loss on impairments of idle equipment | $0 | ' | $0 | ' | ' | ' | ' |
Property_and_Equipment_Net_Sch
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Total property and equipment, gross | $42,053 | $1,033,217 | $1,002,958 |
Less accumulated depreciation | -19,619 | -1,007,176 | -1,001,554 |
Total property and equipment, net | 22,434 | 26,041 | 1,404 |
Research And Development Equipment [Member] | ' | ' | ' |
Total property and equipment, gross | ' | 686,673 | 686,673 |
Leasehold Improvements [Member] | ' | ' | ' |
Total property and equipment, gross | ' | 153,161 | 153,161 |
Information Technology Equipment [Member] | ' | ' | ' |
Total property and equipment, gross | 31,892 | 105,319 | 75,060 |
Furniture And Office Equipment [Member] | ' | ' | ' |
Total property and equipment, gross | 10,161 | 78,678 | 78,678 |
Software [Member] | ' | ' | ' |
Total property and equipment, gross | ' | $9,386 | $9,386 |
Intangible_Asset_Net_Details_N
Intangible Asset, Net (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Units | |||||||
Patent, amortization period | ' | ' | '15 years | ' | ' | ' | ' |
Amortization expense | $7,652 | $8,250 | $22,955 | $23,553 | $30,609 | $30,610 | $168,363 |
Patents, units | ' | ' | 20 | ' | ' | ' | ' |
Patents expiration date | ' | ' | 'patents will expire during the years of 2023 to 2028. | ' | ' | ' | ' |
United States [Member] | ' | ' | ' | ' | ' | ' | ' |
Patents, units | ' | ' | 13 | ' | ' | ' | ' |
China, India, Japan And Hong Kong [Member] | ' | ' | ' | ' | ' | ' | ' |
Patents, units | ' | ' | 7 | ' | ' | ' | ' |
Intangible_Asset_Net_Schedule_
Intangible Asset, Net - Schedule of Intangible Asset, Net (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ' |
Patents | $380,394 | $380,394 | $572,764 |
Less accumulated amortization | -191,318 | -168,363 | -137,754 |
Patents, Total | 189,076 | 212,031 | ' |
Patents pending | 233,145 | 212,726 | ' |
Total intangible assets, net | $422,221 | $424,757 | $435,010 |
LongTerm_Notes_Payable_Net_Det
Long-Term Notes Payable, Net (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Interest expense | $0 | $208,305 | $112,450 | $458,152 | $681,335 | $370,210 | $2,658,927 |
Accrued interest | ' | ' | ' | ' | 657,092 | 673,975 | 657,092 |
Percentage of difference subsequent to conversion of fair value of notes | ' | ' | 10.00% | ' | ' | ' | ' |
Discount on notes payable | 0 | ' | 0 | ' | 4,592 | 65,173 | 4,592 |
Discount amortization | $0 | $21,030 | $4,592 | $55,843 | $60,581 | $363,858 | $1,648,452 |
LongTerm_Notes_Payable_Net_Sch
Long-Term Notes Payable, Net - Schedule of Notes Payable Outstanding (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Total notes payable | ' | $9,044,036 | $4,174,271 |
Current maturities of long-term, net of discount | ' | 9,039,444 | 3,609,098 |
Discount attributable to current maturities | ' | 4,592 | 65,173 |
Total current maturities | ' | 9,044,036 | 3,674,271 |
Long-term notes payable, less current maturities | ' | ' | 500,000 |
2008 Unsecured Promissory Note [Member] | ' | ' | ' |
Total notes payable | ' | 55,000 | 55,000 |
2009 Non-Mandatorily Convertible, Unsecured Note [Member] | ' | ' | ' |
Total notes payable | ' | 500,000 | 500,000 |
2013 Bridge Loan [Member] | ' | ' | ' |
Total notes payable | ' | 8,489,036 | ' |
2014 Bridge Loan [Member] | ' | ' | ' |
Total notes payable | ' | ' | ' |
2010 Secured Promissory Notes [Member] | ' | ' | ' |
Total notes payable | ' | ' | 611,888 |
2011 Secured Promissory Notes [Member] | ' | ' | ' |
Total notes payable | ' | ' | 1,828,686 |
2012 Secured Promissory Notes [Member] | ' | ' | ' |
Total notes payable | ' | ' | 349,650 |
2012 Short Term Unsecured Promissory Notes [Member] | ' | ' | ' |
Total notes payable | ' | ' | 829,047 |
2013 Bridge Loan. Principal [Member] | ' | ' | ' |
Total notes payable | ' | ' | ' |
LongTerm_Notes_Payable_Net_Sch1
Long-Term Notes Payable, Net - Schedule of Notes Payable Outstanding (Details) (Parenthetical) (USD $) | Jan. 03, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
2008 Unsecured Promissory Note [Member] | 2008 Unsecured Promissory Note [Member] | 2008 Unsecured Promissory Note [Member] | 2009 Non-Mandatorily Convertible, Unsecured Note [Member] | 2009 Non-Mandatorily Convertible, Unsecured Note [Member] | 2009 Non-Mandatorily Convertible, Unsecured Note [Member] | 2013 Bridge Loan [Member] | 2013 Bridge Loan [Member] | 2014 Bridge Loan [Member] | 2014 Bridge Loan [Member] | 2009 Non Mandatorily Convertible [Member] | 2009 Non Mandatorily Convertible [Member] | 2010 Secured Promissory Notes [Member] | 2010 Secured Promissory Notes [Member] | 2011 Secured Promissory Notes [Member] | 2011 Secured Promissory Notes [Member] | 2012 Secured Promissory Notes [Member] | 2012 Secured Promissory Notes [Member] | 2013 Bridge Loan. Principal [Member] | 2013 Bridge Loan. Principal [Member] | 2012 Short Term Unsecured Promissory Notes [Member] | 2012 Short Term Unsecured Promissory Notes [Member] | |||
Unsecured promissory note | ' | ' | $100,000 | $100,000 | $100,000 | $500,000 | $500,000 | $500,000 | ' | ' | ' | ' | $500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of unsecured debt | ' | ' | 45,000 | 45,000 | 45,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of unsecured debt by monthly payments | ' | ' | 10,000 | 10,000 | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt interest amount | ' | ' | 15,000 | 15,000 | 15,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dent maturity date | ' | ' | 7-Feb-14 | 7-Feb-14 | 7-Feb-14 | 7-Feb-14 | 7-Feb-14 | ' | ' | ' | ' | ' | ' | 7-Feb-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instruments interest rate minimum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | 8.00% | 8.00% |
Debt instruments interest rate maximum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14.00% | 14.00% | ' | ' | ' | ' | ' | ' | 12.00% | 12.00% |
Issuance of preferred stock series B for warrants purchase | ' | ' | ' | ' | ' | 222,222 | 222,222 | ' | ' | ' | ' | ' | 222,222 | 222,222 | 339,937 | 339,937 | ' | ' | 194,250 | 194,250 | ' | ' | 222,222 | 222,222 |
Percentage of accrued debt interest | ' | ' | ' | ' | ' | 8.00% | 8.00% | 8.00% | 10.00% | 10.00% | 10.00% | 10.00% | 8.00% | ' | ' | ' | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ' | ' |
Secured Promissory note | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 549,450 | 549,450 | 1,015,934 | 1,015,934 | 349,650 | 349,650 | ' | ' | ' | ' |
Secured debt current amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 62,438 | 62,438 | 1,828,686 | 1,828,686 | ' | ' | ' | ' | ' | ' |
Percentage of increase debt instrument interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | ' | ' | ' | ' |
Warrants issuance amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 612 | 612 | 1,829 | 1,829 | 350 | 350 | ' | ' | ' | ' |
Debt principal amount | 2,076,000 | 8,489,036 | ' | ' | ' | ' | ' | ' | 3,180,806 | 3,180,806 | 2,076,000 | 2,076,000 | ' | ' | ' | ' | ' | ' | ' | ' | 3,180,806 | 3,180,806 | ' | ' |
Debt outstanding amount | ' | ' | ' | ' | ' | ' | ' | ' | 2,621,195 | 2,621,195 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,621,195 | 2,621,195 | ' | ' |
Additional issuance of debt principal amount | ' | ' | ' | ' | ' | ' | ' | ' | 559,611 | 559,611 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 559,611 | 559,611 | ' | ' |
Accurued interest for debt | ' | ' | ' | ' | ' | ' | ' | ' | $4,840,792 | $4,840,792 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,840,792 | $4,840,792 | ' | ' |
Conversion price per share | ' | ' | ' | ' | ' | $0.45 | $0.45 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.63 | $0.63 | ' | ' |
LongTerm_Notes_Payable_Net_Sum
Long-Term Notes Payable, Net - Summary of Debt Discount (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Balance | ' | ' | $4,592 | $65,173 | $65,173 | $288,439 | ' |
Debt discount recorded | ' | ' | ' | ' | ' | 140,592 | ' |
Amortization of debt discount | 0 | -21,030 | -4,592 | -55,843 | -60,581 | -363,858 | -1,648,452 |
Balance | ' | ' | ' | ' | $4,592 | $65,173 | $4,592 |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2012 | Jun. 30, 2007 | 5-May-06 | Mar. 24, 2006 | 31-May-06 | 5-May-06 | Mar. 24, 2006 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2007 | 5-May-06 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2007 | 5-May-06 | 31-May-06 | Dec. 31, 2006 | Dec. 31, 2013 | Mar. 24, 2006 | Dec. 31, 2013 | ||
Series C Preferred Stock [Member] | Series C Preferred Stock [Member] | Series C Preferred Stock [Member] | Preferred Series A [Member] | Preferred Series A [Member] | Preferred Series A [Member] | Preferred Series A [Member] | Preferred Series A [Member] | Preferred Series B [Member] | Preferred Series B [Member] | Preferred Series B [Member] | Preferred Series B [Member] | Preferred Series B [Member] | Common Stock [Member] | Common Stock [Member] | Preferred Series B [Member] | Preferred Series B [Member] | Preferred Series A [Member] | ||||||||
Issuance of common stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,447,100 | 9,447,100 | ' | ' | ' | |
Issuance of preferred stock | ' | ' | ' | ' | 92,582,802 | ' | ' | 42,028,338 | 13,859,324 | 0 | 0 | 0 | ' | 14,440,920 | 0 | 20,237,459 | 20,237,459 | ' | 11,113,544 | ' | ' | ' | 11,113,544 | ' | |
Issuance of preferred stock issued additional | ' | ' | ' | ' | ' | ' | 704,225 | [1] | ' | 704,225 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares, authorized | 400,000,000 | 400,000,000 | 150,000,000 | 150,000,000 | 127,000,000 | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stock, par value | $0.00 | $0.00 | $0.00 | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Excess of shraes authorized | ' | ' | ' | 245,673,568 | 219,582,802 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Prferred stock shares authorized | ' | ' | ' | 95,673,568 | 92,582,802 | ' | ' | ' | ' | 0 | 40,118,013 | 40,118,013 | 40,118,013 | ' | 0 | 55,555,555 | 55,555,555 | 55,555,555 | ' | ' | ' | ' | ' | ' | |
Preferrd stock un issued shares | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Class of stock par value | ' | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Percentage of divident rate preferred stock series | 8.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Ownership stock price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.45 | ' | $0.33 | |
Non assessable preferred stock price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.45 | ' | $0.33 | |
Common Stock deliverable upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.45 | ' | $0.33 | |
[1] | These shares were subsequently converted into 40,118,013 shares of Series A Preferred Stock. |
Stockholders_Equity_Schedule_o
Stockholders' Equity - Schedule of Asset and Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-06 |
Hawaii Biotech, Inc [Member] | ||||
Cash | ' | ' | ' | $7,007,371 |
Due from Hawaii Biotech, Inc. | ' | ' | ' | 1,000,000 |
Prepaid expenses | ' | ' | ' | 14,279 |
Employee note receivable | ' | ' | ' | 288,576 |
Fixed assets, net of depreciation of $181,905 | ' | ' | ' | 388,165 |
Other assets | ' | ' | ' | 606 |
Total assets | 2,293,354 | 1,768,482 | 1,481,774 | 8,698,997 |
Accounts and accrued expenses payable | ' | ' | ' | 138,921 |
Due to Hawaii Biotech, Inc. | ' | ' | ' | 70,279 |
Equipment leases payable | ' | ' | ' | 181,203 |
Total liabilities | 4,582,946 | 14,704,594 | 10,066,598 | 390,403 |
Net assets transferred | ' | ' | ' | 8,308,594 |
Depreciation on fixed asset | $19,619 | $1,007,176 | $1,001,554 | $181,905 |
Stockholders_Equity_Schedule_o1
Stockholders' Equity - Schedule of Issued Common Stock Pursuant To Exercise Of Stock Options (Deatils) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Feb. 07, 2014 | Sep. 30, 2014 | Dec. 31, 2006 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2008 | Dec. 31, 2007 | |
Common shares issued | ' | -4,506 | ' | ' | ' | ' | ' |
Average Price | $0.07 | ' | ' | ' | ' | ' | ' |
Amount Realized | ' | ' | $304 | ' | ' | $1,000 | $1,400 |
2006 [Member] | ' | ' | ' | ' | ' | ' | ' |
Common shares issued | ' | ' | ' | 6,842 | ' | ' | ' |
Average Price | ' | ' | ' | 0.044 | ' | ' | ' |
Amount Realized | ' | ' | ' | 304 | ' | ' | ' |
2007 [Member] | ' | ' | ' | ' | ' | ' | ' |
Common shares issued | ' | ' | ' | 20,000 | ' | ' | ' |
Average Price | ' | ' | ' | 0.07 | ' | ' | ' |
Amount Realized | ' | ' | ' | 1,400 | ' | ' | ' |
2008 [Member] | ' | ' | ' | ' | ' | ' | ' |
Common shares issued | ' | ' | ' | 14,285 | ' | ' | ' |
Average Price | ' | ' | ' | 0.07 | ' | ' | ' |
Amount Realized | ' | ' | ' | 1,000 | ' | ' | ' |
Stock_Option_Plans_Details_Nar
Stock Option Plans (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | 0 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | 5-May-06 | 5-May-06 | 5-May-06 | Feb. 07, 2014 | |
2006 Stock Incentive Plan [Member] | 2006 Stock Incentive Plan [Member] | 2006 Stock Incentive Plan [Member] | 2014 Equity Compensation Plan [Member] | ||||||||
Minimum [Member] | Maximum [Member] | ||||||||||
Stock issuable during period to related parties | ' | ' | ' | ' | ' | ' | ' | ' | 1,456,786 | 17,978,490 | 30,420,148 |
Increase of stock issuable under plan | ' | ' | ' | ' | ' | ' | ' | 16,521,704 | ' | ' | ' |
Percentage granted to employees at a price per share | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' |
Percentage of stock option granted to stockholders | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' |
Percentage exercise price per share | ' | ' | ' | ' | ' | ' | ' | 110.00% | ' | ' | ' |
Percentage restricted stock to related parties price per share | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' |
Stock option plan purchased | ' | ' | 4,506 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option plan exercise price per share | ' | ' | $0.16 | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized stock-based compensation expense related to unvested stock options | $797,871 | ' | $797,871 | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average period | ' | ' | '4 months | ' | ' | ' | ' | ' | ' | ' | ' |
Stock based compensation expense | $601,107 | $2,073 | $5,318,948 | $8,508 | $9,877 | $23,645 | $1,599,467 | ' | ' | ' | ' |
Stock_Option_Plans_Schedule_of
Stock Option Plans - Schedule of Stock Option Activity (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' |
Options Outstanding, Beginning balance | 15,290,486 | 15,290,486 | 17,933,091 |
Options Exercisable, Beginning balance | 15,290,486 | 14,524,861 | 16,602,622 |
Options, Canceled | -15,290,486 | ' | ' |
Options, Granted | 27,756,821 | ' | ' |
Options, Exercised | -4,506 | ' | ' |
Options, Forfeited | ' | ' | -2,642,605 |
Options Outstanding, Ending balance | 27,752,315 | 15,290,486 | 15,290,486 |
Options Exercisable, Ending balance | 27,752,315 | 15,290,486 | 14,524,861 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $0.07 | $0.07 | $0.07 |
Weighted Average Exercise Price, Exercisable, Beginning balance | $0.07 | $0.07 | $0.07 |
Weighted Average Exercise Price, Canceled | ' | ' | ' |
Weighted Average Exercise Price, Granted | ' | ' | ' |
Weighted Average Exercise Price, Exercised | ' | ' | ' |
Weighted Average Exercise Price, Forfeited | ' | ' | $0.07 |
Weighted Average Exercise Price, Outstanding, Ending balance | $0.51 | $0.07 | $0.07 |
Weighted Average Exercise Price, Exercisable, Ending balance | $0.47 | $0.07 | $0.07 |
Weighted Average Remaining Contractual Terms (Years), Outstanding, | '8 years 3 months 7 days | '3 years 10 months 21 days | '3 years 10 months 21 days |
Weighted Average Remaining Contractual Terms (Years), Exercisable, | '8 years 29 days | '3 years 10 months 21 days | '3 years 9 months |
Aggregate Intrinsic Value, Outstanding Beginning balance | $305,810 | $358,662 | $358,662 |
Aggregate Intrinsic Value, Outstanding Ending balance | 2,712,885 | 305,810 | 358,662 |
Aggregate Intrinsic Value, Exercisable Beginning balance | 305,810 | 332,052 | 332,052 |
Aggregate Intrinsic Value, Exercisable Ending balance | $2,712,885 | $305,810 | $332,052 |
Stock_Option_Plans_Schedule_of1
Stock Option Plans - Schedule of Non-vested Shares Granted Under Stock Option Plan (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' |
Non-vested, Options Outstanding, Beginning balance | ' | 765,625 | 1,330,469 |
Non-vested, Options Granted | 27,756,821 | ' | ' |
Non-vested, Options Vested | -23,762,946 | -765,625 | -564,844 |
Non-vested, Options Exercised | -4,506 | ' | ' |
Non-vested, Options Forfeited | ' | ' | ' |
Non-vested, Options Outstanding, Ending balance | 3,989,369 | ' | 765,625 |
Stock_Option_Plans_Schedule_of2
Stock Option Plans - Schedule of Fair Value Assumptions (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | ' | ' | ' |
Risk-free rate | 0.12% | 0.92% | 0.92% |
Expected volatility | 116.00% | 116.00% | 116.00% |
Expected term | '1 year 1 month 6 days | '2 years 6 months | '2 years 6 months |
Maximum [Member] | ' | ' | ' |
Risk-free rate | 1.47% | 5.15% | 5.15% |
Expected volatility | 170.00% | 170.00% | 170.00% |
Expected term | '5 years 6 months | '7 years 6 months | '7 years 6 months |
Restricted_Stock_Grants_Detail
Restricted Stock Grants (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2014 | Jul. 14, 2014 | Jun. 16, 2014 | |
Directors [Member] | Directors [Member] | |||
Directors | Directors | |||
Number of independent directors | ' | ' | 4 | 4 |
Restricted common stock, shares | ' | ' | 134,553 | 642,200 |
Restricted common stock, value | ' | ' | $108,988 | $597,246 |
Stock compensation expense | 185,640 | 235,411 | ' | ' |
Deferred compensation | $470,823 | $470,823 | ' | ' |
Warrants_Details_Narrative
Warrants (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Dividend yield | ' | ' | 0.00% | ' | 0.00% | 0.00% | ' |
Stock based compensation expense | $601,107 | $2,073 | $5,318,948 | $8,508 | $9,877 | $23,645 | $1,599,467 |
Warrant [Member] | ' | ' | ' | ' | ' | ' | ' |
Dividend yield | ' | ' | 0.00% | ' | 0.00% | 0.00% | ' |
Stock based compensation expense | $0 | ' | $5,229,589 | ' | ' | ' | ' |
Warrants_Schedule_of_Stock_War
Warrants - Schedule of Stock Warrants Activity (Details) (Warrant [Member], USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Warrant [Member] | ' | ' | ' |
Warrants, Outstanding, Beginning balance | 3,395,833 | 3,693,971 | 4,182,261 |
Warrants, Exercisable, Beginning balance | 3,395,833 | 3,693,971 | 4,182,261 |
Warrants, Canceled | -3,395,833 | ' | ' |
Warrants, Granted | 28,405,782 | ' | 418,470 |
Warrants, Exercised | ' | ' | ' |
Warrants, Forfeited | ' | -298,138 | -906,760 |
Warrants, Outstanding, Ending balance | 28,405,782 | 3,395,833 | 3,693,971 |
Warrants, Exercisable, Ending balance | 28,405,782 | 3,395,833 | 3,693,971 |
Weighted Average Exercise Price, Outstanding, Beginning | $0.45 | $0.45 | $0.45 |
Weighted Average Exercise Price, Exercisable, Beginning | $0.45 | $0.45 | $0.45 |
Weighted Average Exercise Price, Canceled | ' | ' | ' |
Weighted Average Exercise Price, Granted | ' | ' | $0.45 |
Weighted Average Exercise Price, Exercised | ' | ' | ' |
Weighted Average Exercise Price, Forfeited | ' | ' | $0.45 |
Weighted Average Exercise Price, Outstanding, Ending | $0.65 | $0.45 | $0.45 |
Weighted Average Exercise Price, Exercisable, Ending | $0.65 | $0.45 | $0.45 |
Weighted Average Remaining Contractual Terms (Years), Outstanding | '4 years 7 months 10 days | '5 years 3 months 11 days | '4 years 9 months 22 days |
Weighted Average Remaining Contractual Terms (Years), Exercisable | '4 years 7 months 10 days | '5 years 3 months 11 days | '4 years 9 months 22 days |
Weighted Average Remaining Contractual Terms (Years), Granted | ' | ' | '5 years |
Aggregate Intrinsic Value, Outstanding, Beginning | ' | ' | ' |
Aggregate Intrinsic Value, Exercisable, Beginning | ' | ' | ' |
Aggregate Intrinsic Value, Outstanding, Ending | ' | ' | ' |
Aggregate Intrinsic Value, Exercisable, Ending | ' | ' | ' |
Warrants_Schedule_of_Fair_Valu
Warrants - Schedule of Fair Value Assumptions Related to Warrants Outstanding (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | ' | ' | ' |
Risk-free rate | 0.12% | 0.92% | 0.92% |
Expected volatility | 116.00% | 116.00% | 116.00% |
Expected term | '1 year 1 month 6 days | '2 years 6 months | '2 years 6 months |
Maximum [Member] | ' | ' | ' |
Risk-free rate | 1.47% | 5.15% | 5.15% |
Expected volatility | 170.00% | 170.00% | 170.00% |
Expected term | '5 years 6 months | '7 years 6 months | '7 years 6 months |
Warrant [Member] | ' | ' | ' |
Dividend yield | 0.00% | 0.00% | 0.00% |
Warrant [Member] | Minimum [Member] | ' | ' | ' |
Risk-free rate | 0.12% | 0.62% | 0.62% |
Expected volatility | 112.00% | 108.00% | 108.00% |
Expected term | '1 year | '2 years 6 months | '2 years 6 months |
Warrant [Member] | Maximum [Member] | ' | ' | ' |
Risk-free rate | 0.66% | 4.59% | 4.59% |
Expected volatility | 159.00% | 167.00% | 167.00% |
Expected term | '2 years 6 months | '10 years | '10 years |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Related Party Transactions Details Narrative | ' | ' | ' | ' | ' | ' | ' |
Consulting fees to director | $64,615 | $64,615 | $184,615 | $73,846 | $129,231 | $0 | $417,231 |
Accounts payable | $210,212 | ' | $210,212 | ' | $216,000 | $288,000 | $216,000 |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | 60 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Federal net operating loss carryforward | ' | $24,220,407 | ' | ' |
Federal net operating loss carryforward expiration date | ' | '2026 | ' | ' |
Operating loss carry forwards | ' | 20,776,118 | ' | ' |
Operating loss carry forwards expiration date | ' | '2026 | ' | ' |
Federal and state tax credit amount | ' | ' | ' | $1,506,596 |
Statutory rate | 34.00% | -34.00% | -34.00% | ' |
Income_Taxes_Schedule_of_Incom
Income Taxes - Schedule of Income Tax Provision Benifit (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Federal | ' | ' |
State | ' | ' |
Total | ' | ' |
Federal | ' | ' |
State | ' | ' |
Total | ' | ' |
Income_Taxes_Schedule_of_Effec
Income Taxes - Schedule of Effective Income Taxes Rate (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Tax provision (benefit) at Federal statutory rate | 34.00% | -34.00% | -34.00% |
Accrued compensation | ' | 1.19% | 9.82% |
Accrued interest expense | ' | 0.34% | 9.73% |
Stock based compensation | ' | 0.08% | 0.32% |
Depreciation and amortization | ' | -0.21% | 0.13% |
Other | ' | 0.05% | 0.05% |
Change in valuation allowance | ' | 32.55% | 13.96% |
Effective tax rate | ' | 0.00% | 0.00% |
Income_Taxes_Schedule_of_Defer
Income Taxes - Schedule of Deferred Income Tax Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Net operating loss carryforwards | $8,879,799 | $7,695,899 |
Accrued compensation | 1,720,775 | 1,662,473 |
Accrued interest | 251,167 | 257,620 |
Credit carryforwards | 124,525 | 124,525 |
Stock based compensation | 611,380 | 802,512 |
Discount amortization | 630,104 | 321,301 |
Amortization | 53,595 | 41,895 |
Gross deferred tax assets | 12,271,345 | 10,906,224 |
Less valuation allowance | -12,188,172 | -10,844,963 |
Net deferred tax assets | 83,173 | 61,251 |
Depreciation | -68,371 | -46,501 |
Gain on sale of assets | -14,802 | -14,760 |
Gross deferred tax liabilities | -83,173 | -61,251 |
Net deferred tax assets | ' | ' |
Research_Grant_Income_Details_
Research Grant Income (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Research Grant Income | ' |
Percentage of fund allocated for indirect cost | 40.00% |
Inventory cost | $752,634 |
Subcontractor costs | 60,000 |
Salaries and benefits allocable to research | 42,234 |
Miscellaneous costs | 5,880 |
Indirect costs | $318,898 |
Recovered_Sheet1
Basic and diluted Net Income (Loss) Per Share - Schedule of Basic and Diluted Net Income (Loss) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
NET LOSS PER SHARE | ' | ' | ' | ' | ' | ' |
Net loss (numerator) basic loss per share, basic | ($1,880,394) | ($1,348,340) | ($15,186,393) | ($2,849,861) | ($4,361,165) | ($2,543,390) |
Net loss (numerator) effect of dilutive securities-common stock options | ' | ' | ' | ' | ' | ' |
Net loss (numerator) diluted loss per share, diluted | ($1,880,394) | ($1,348,340) | ($15,186,393) | ($2,849,861) | ($4,361,165) | ($2,543,390) |
Shares (denominator) basic loss per shares , basic | 63,610,949 | 33,229,093 | 59,019,453 | 33,229,093 | 9,488,227 | 9,488,227 |
Shares (denominator) effect of dilutive securities-common stock options | ' | ' | ' | ' | ' | ' |
Shares (denominator) diluted loss per shares, diluted | 63,610,949 | 33,229,093 | 59,019,453 | 33,229,093 | 9,488,227 | 9,488,227 |
Per share amount basic loss per share, basic | ($0.03) | ($0.04) | ($0.26) | ($0.09) | ($0.46) | ($0.27) |
Per share amount effect of dilutive securities-common stock options | ' | ' | ' | ' | ' | ' |
Per share amount diluted loss per share, diluted | ($0.03) | ($0.04) | ($0.26) | ($0.09) | ($0.46) | ($0.27) |
Recovered_Sheet2
Basic and diluted Net Income (Loss) Per Share - Schedule of Computation of Diluted Net Income Loss Per Share (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Total common stock equivalents | 52,168,728 | 15,050,500 | 52,168,728 | 15,050,500 | 15,290,486 | 15,290,486 |
Warrant [Member] | ' | ' | ' | ' | ' | ' |
Total common stock equivalents | 28,405,782 | ' | 28,405,782 | ' | ' | ' |
Stock Option [Member] | ' | ' | ' | ' | ' | ' |
Total common stock equivalents | 23,762,946 | 15,050,500 | 23,762,946 | 15,050,500 | ' | ' |
Concentration_Details_Narrativ
Concentration (Details Narrative) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 |
Vendor [Member] | Vendor [Member] | Vendor [Member] | Vendor [Member] | ||||
Purchases from vendor | ' | ' | ' | ' | $0 | ' | $0 |
Outstanding payables | $528,809 | $682,319 | $712,186 | $712,186 | $86,255 | $86,255 | ' |
Leases_Details_Narrative
Leases (Details Narrative) (USD $) | 12 Months Ended | 33 Months Ended | 93 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 93 Months Ended | ||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Oct. 01, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Preferred Series B [Member] | Maturities [Member] | Hawaii Research Center [Member] | Hawaii Research Center [Member] | Hawaii Research Center [Member] | Hawaii Research Center [Member] | Hawaii Research Center [Member] | Hawaii Research Center [Member] | Hawaii Research Center [Member] | Manoa Innovation Center [Member] | Manoa Innovation Center [Member] | Manoa Innovation Center [Member] | Manoa Innovation Center [Member] | Manoa Innovation Center [Member] | Manoa Innovation Center [Member] | Manoa Innovation Center [Member] | ||||||
Lease payment amount | ' | ' | $614,934 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain loss on debt extinguishment waiver fee | ' | ' | 786,945 | 786,945 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock held secrity | ' | ' | ' | ' | ' | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rent settlement payable | 0 | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating lease rent expense | ' | ' | ' | ' | ' | ' | ' | 14,709 | 20,883 | 47,331 | 58,607 | 63,393 | 71,760 | 2,070,801 | 7,825 | 5,780 | 23,255 | 25,816 | 27,241 | 23,026 | 91,199 |
Future minimum lease payments under non-cancelable operating leases | 30,632 | ' | ' | 30,632 | ' | ' | 3,063 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total lease settlement amount payable | ' | $251,184 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_Details_Narrative
Commitments (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | 93 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' | ' | ' |
Payment for license cost | $10,000 | ' | $10,000 | ' | ' |
Percentage of royalties revenue | 2.00% | ' | 2.00% | ' | ' |
License revenue | 0 | 0 | 0 | 0 | 0 |
License payable | 10,000 | ' | 20,000 | 35,833 | 20,000 |
Employee settlement | 50,000 | ' | 50,000 | 50,000 | 50,000 |
Royalty revenue | $0 | $0 | ' | $10,000 | ' |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended | |
Feb. 07, 2014 | Jan. 03, 2014 | Dec. 31, 2013 | |
Procceds from issuance of notes payable | ' | $2,076,000 | $8,489,036 |
Proceeds from issuance of common stock and warrants | 3,923,100 | ' | ' |
Aggregate principal amount of notes payable (issued Jan. 03, 2014) converted to common stock | ' | 2,076,000 | 8,489,036 |
Issuance of common shares for cash, Shares | 6,276,960 | ' | ' |
Warrants issued | 6,276,960 | ' | ' |
Warrant exercise price per share | $0.63 | $0.63 | $0.63 |
Shares of common stock issued upon conversion of notes payable (issued jan. 03, 2014) | ' | 3,353,437 | 14,446,777 |
Warrants issued upon conversion of notes payable (issued Jan. 03, 2014) | ' | 3,321,600 | 14,446,777 |
Stock options issued in substitution of cancelled options | 6,889,555 | ' | ' |
Stock options issued in substitution of cancelled options, price per share | $0.16 | ' | ' |
Additional stock options issued | 20,867,266 | ' | ' |
Additional stock options issued, price per share | $0.63 | ' | ' |
Subsequent Event [Member] | ' | ' | ' |
Procceds from issuance of notes payable | ' | 2,076,000 | ' |
Proceeds from issuance of common stock and warrants | 3,923,100 | ' | ' |
Aggregate principal amount of notes payable (issued Jan. 03, 2014) converted to common stock | 2,076,000 | ' | ' |
Aggregate principal amount of notes payable (issued during 2013) converted to common stock | 8,489,036 | ' | ' |
Aggregate principal amount of outstanding notes payable issued in 2008 repaid in full | 55,000 | ' | ' |
Aggregate principal amount of outstanding notes payable issued in 2009 repaid in full | $500,000 | ' | ' |
Issuance of common shares for cash, Shares | 6,276,960 | ' | ' |
Warrants issued | 6,276,960 | ' | ' |
Warrant exercise price per share | $0.63 | ' | ' |
Shares of common stock issued upon conversion of notes payable (issued jan. 03, 2014) | 3,353,437 | ' | ' |
Warrants issued upon conversion of notes payable (issued Jan. 03, 2014) | 3,321,600 | ' | ' |
Warrant exercise price per share | $0.63 | ' | ' |
Shares of common stock issued upon conversion of notes payable (issued during 2013) | 14,446,777 | ' | ' |
Warrants issued upon conversion of notes payable (issued during 2013) | 14,446,777 | ' | ' |
Warrant exercise price per share | $0.63 | ' | ' |
Issuance of stock option to purchases of common stock | 15,290,486 | ' | ' |
Stock options issued in substitution of cancelled options | 6,889,555 | ' | ' |
Stock options issued in substitution of cancelled options, price per share | $0.16 | ' | ' |
Additional stock options issued | 20,867,266 | ' | ' |
Additional stock options issued, price per share | $0.63 | ' | ' |