Document and Entity Information
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Document and Entity Information
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9 Months Ended | |
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Sep. 30, 2013
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Nov. 13, 2013
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| Document And Entity Information | ||
| Entity Registrant Name | MamaMancini's Holdings, Inc. | |
| Entity Central Index Key | 0001520358 | |
| Document Type | 10-Q | |
| Document Period End Date | Sep. 30, 2013 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Current Reporting Status | Yes | |
| Entity Filer Category | Smaller Reporting Company | |
| Entity Common Stock, Shares Outstanding | 24,187,000 | |
| Document Fiscal Period Focus | Q3 | |
| Document Fiscal Year Focus | 2013 |
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
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Sep. 30, 2013
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Dec. 31, 2012
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| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value | $ 0.00001 | $ 0.00001 |
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
| Preferred stock, shares issued | ||
| Preferred stock, shares outstanding | ||
| Common stock, par value | $ 0.00001 | $ 0.00001 |
| Common stock, shares authorized | 250,000,000 | 250,000,000 |
| Common stock, shares issued | 23,625,334 | 20,054,000 |
| Common stock, shares outstanding | 23,625,334 | 20,054,000 |
Condensed Consolidated Statements of Operations (Unaudited)
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Condensed Consolidated Statements of Operations (Unaudited) (USD $)
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3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2013
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Sep. 30, 2012
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Sep. 30, 2013
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Sep. 30, 2012
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| Income Statement [Abstract] | ||||
| Sales - net of slotting fees and discounts | $ 2,167,517 | $ 969,414 | $ 5,640,069 | $ 3,381,378 |
| Cost of sales | 1,543,029 | 712,888 | 4,011,017 | 2,366,854 |
| Gross profit | 624,488 | 256,526 | 1,629,052 | 1,014,524 |
| Operating expenses | ||||
| Research and development | 5,212 | 24,027 | 12,350 | 65,070 |
| General and administrative expenses | 1,108,072 | 687,600 | 3,466,183 | 2,259,183 |
| Total operating Expenses | 1,113,284 | 711,627 | 3,478,533 | 2,324,253 |
| Loss from operations | (488,796) | (455,101) | (1,849,481) | (1,309,729) |
| Other income (expenses) | ||||
| Interest expense | (4,772) | (8,547) | (10,047) | |
| Miscellaneous income | 225 | |||
| Total other income (expense) | (4,772) | 225 | (8,547) | (10,047) |
| Net loss | $ (493,568) | $ (454,876) | $ (1,858,028) | $ (1,319,776) |
| Net loss per common share - basic and diluted | $ (0.02) | $ (0.03) | $ (0.09) | $ (0.08) |
| Weighted average common shares outstanding - basic and diluted | 22,424,957 | 18,161,717 | 21,313,077 | 16,702,635 |
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
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Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (USD $)
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Common Stock [Member]
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Additional Paid-In Capital [Member]
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Accumulated Deficit [Member]
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Total
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| Balance at Dec. 31, 2011 | $ 150 | $ 1,401,573 | $ (1,352,410) | $ 49,313 |
| Balance, shares at Dec. 31, 2011 | 15,000,000 | |||
| Common stock issued for cash | 51 | 5,053,949 | 5,054,000 | |
| Common stock issued for cash, shares | 5,054,000 | |||
| Warrants issued for services | 438,122 | 438,122 | ||
| Stock issuance costs | (1,088,964) | (1,088,964) | ||
| Net loss | (1,999,623) | (1,999,623) | ||
| Balance at Dec. 31, 2012 | 201 | 5,804,680 | (3,352,033) | 2,452,848 |
| Balance, shares at Dec. 31, 2012 | 20,054,000 | |||
| Common stock issued for cash | 28 | 4,156,972 | 4,157,000 | |
| Common stock issued for cash, shares | 2,771,334 | |||
| Recapitalization | 8 | (295,008) | (295,000) | |
| Recapitalization, shares | 800,000 | |||
| Stock options issued for services | 156,533 | 156,533 | ||
| Warrants issued for services | 505,973 | 505,973 | ||
| Stock issuance costs | (1,123,498) | (1,123,498) | ||
| Net loss | (1,858,028) | (1,858,028) | ||
| Balance at Sep. 30, 2013 | $ 236 | $ 9,205,653 | $ (5,210,061) | $ 3,995,828 |
| Balance, shares at Sep. 30, 2013 | 23,625,334 |
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nature of Operations and Basis of Presentation
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Nature of Operations and Basis of Presentation
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9 Months Ended |
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Sep. 30, 2013
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| Nature Of Operations And Basis Of Presentation | |
| Nature of Operations and Basis of Presentation |
Note 1 Nature of Operations and Basis of Presentation
Nature of Operations
MamaMancini’s Holdings, Inc. (the “Company”), (formerly known as Mascot Properties, Inc.) was organized on July 22, 2009 as a Nevada corporation.
Current Business of the Company
The Company is a manufacturer and distributor of a line of beef meatballs with sauce, turkey meatballs with sauce, Italian sausage with sauce and other similar Italian meats with sauces. The Company’s customers are located throughout the United States, with a large concentration in the Northeastern and Southeastern United States regions.
Mergers
On January 24, 2013, the Company, Mascot Properties Acquisition Corp, a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), MamaMancini’s, Inc., a privately-held Delaware Corporation headquartered in New Jersey (“MamaMancini’s”) and an individual (the “Majority Shareholder”), entered into an Acquisition Agreement and Plan of Merger (the “Agreement”) pursuant to which the Merger Sub was merged with and into MamaMancini’s, with MamaMancini’s surviving as a wholly-owned subsidiary of the Company (the “Merger”). The Company acquired, through a reverse triangular merger, all of the outstanding capital stock of MamaMancini’s in exchange for issuing MamaMancini’s shareholders (the “MamaMancini’s Shareholders”), pro-rata, a total of 20,054,000 shares of the Company’s common stock. Immediately after the Merger was consummated, and further to the Agreement, the majority shareholders and certain affiliates of the Company cancelled a total of 103,408,000 shares of the Company’s common stock held by them (the “Cancellation”). In consideration of the Cancellation of such common stock, the Company paid the Majority Shareholder in aggregate of $295,000 and 800,000 shares of common stock and released the other affiliates from certain liabilities. In addition, the Company has agreed to spinout to the Majority Shareholder all assets related to the Company’s real estate management business within 30 days after the closing. As a result of the Merger and the Cancellation, the MamaMancini’s Shareholders became the majority shareholders of the Company.
The consolidated financial statements presented for all periods through and including September 30, 2013 are those of MamaMancini’s. As a result of this Merger, the equity sections of MamaMancini’s for all prior periods presented reflect the recapitalization described above and are consistent with the September 30, 2013 balance sheet presented for the Company.
Since the transaction is considered a reverse acquisition and recapitalization, the presentation of pro-forma financial information was not required.
Basis of Presentation
The condensed consolidated financial statements and accompanying footnotes are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.
The unaudited financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2012 filed on April 16, 2013. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the year ended December 31, 2012 has been omitted. The results of operations for the interim periods presented are not necessarily indicative of results for the entire year ending December 31, 2013. |
Summary of Significant Accounting Policies
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Summary of Significant Accounting Policies
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Sep. 30, 2013
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies |
Note 2 Summary of Significant Accounting Policies
Principles of consolidation
All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: allowance for bad debt, inventory obsolescence, the fair value of share-based payments.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.
Risks and uncertainties
The Company operates in an industry that is subject to intense competition and change in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure.
The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the grocery industry, (ii) general economic conditions in the various local markets in which the Company competes, including the general downturn in the economy, and (iii) the volatility of prices pertaining to food and beverages in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis.
Reclassifications
Certain amounts in the prior year have been reclassified to conform to the current year presentation.
Cash
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at September 30, 2013 and December 31, 2012.
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.
Accounts receivable and allowance for doubtful accounts
Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of September 30, 2013 and December 31, 2012, the Company had reserves of $2,000.
Inventories
Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at September 30, 2013 and December 31, 2012:
Depreciation
Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives.
Asset lives for financial statement reporting of depreciation are:
Fair Value of Financial Instruments
For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short term financial instruments approximates fair value due to the relatively short period to maturity for these instruments.
Stock Issuance Costs
Stock Issuance costs are capitalized as incurred. Upon the completion of the offering, the stock issuance costs are reclassified to equity. Offering costs recorded to equity for the nine months ended September 30, 2013 and year ended December 31, 2012 were $1,123,498 and $1,088,964, respectively.
Research and Development
Research and development is expensed as incurred. Research and development expenses for the nine months ended September 30, 2013 and 2012 were $12,350 and $65,070, respectively.
Shipping and Handling Costs
The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of sales.
Revenue Recognition
The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products.
The Company meets these criteria upon shipment.
Expenses such as slotting fees and sales discounts are accounted for as a direct reduction of revenues as follows:
Cost of sales
Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include product development, freight, packaging, and print production costs.
Advertising
Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Producing and communicating advertising expenses for the nine months ended September 30, 2013 and 2012 were$1,267,035 and $906,814, respectively.
Stock-based compensation
The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Accounting for Stock-Based Compensation” (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. The Company accounts for compensation cost for stock option plans in accordance with ASC 718. The Company accounts for share based payments to non-employees in accordance with ASC 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services”.
The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest.
Share based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the Statement of Operations. For the nine months ended September 30, 2013 and 2012 share based compensation amounted to $662,506 and $293,898, respectively. $505,973 of the $662,506 recorded for the nine months ended September 30, 2013 was a direct cost of a stock offering and has been recorded as a reduction in additional paid in capital. The $293,898 recorded for the nine months ended September 30, 2012 was a direct cost of a stock offering and has been recorded as a reduction in additional paid in capital.
For the nine months ended September 30, 2013, when computing fair value of share based payments, the Company has considered the following variables:
● The risk-free interest rate assumption is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The risk free rate used had a range of 0.68%-1.71%.
● The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. Therefore the expected dividend rate was $0.
● The expected option term is computed using the “simplified” method as permitted under the provisions of Staff Accounting Bulletin (“SAB”) 110.
● The expected warrant term is the life of the warrant.
● The expected volatility was benchmarked against similar companies in a similar industry. The expected volatility used had a range of 144%-145%.
● The forfeiture rate is based on the historical forfeiture rate for the Company’s unvested stock options, which was 0%.
For the nine months ended September 30, 2012, when computing fair value of share based payments, the Company has considered the following variables:
● The risk-free interest rate assumption is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The risk free rate used had a range of 0.63%-1.01%.
● The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. Therefore the expected dividend rate was $0.
● The expected option term is computed using the “simplified” method as permitted under the provisions of Staff Accounting Bulletin (“SAB”) 110.
● The expected warrant term is the life of the warrant.
● Given the Company was privately held, expected volatility was benchmarked against similar companies in a similar industry. The expected volatility used was 128%.
● The forfeiture rate is based on the historical forfeiture rate for the Company’s unvested stock options, which was 0%.
Earnings per share
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible shares, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
The Company had the following potential common stock equivalents at September 30, 2013:
The Company had the following potential common stock equivalents at September 30, 2012:
Since the Company reflected a net loss during the three and nine months ended September 30, 2013 and 2012, the effect of considering any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.
Income Taxes
Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Penalties and interest assessed by income taxing authorities are included in general and administrative expenses.
Recent accounting pronouncements
There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements. |
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Going Concern
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Going Concern
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9 Months Ended |
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Sep. 30, 2013
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| Going Concern | |
| Going Concern |
Note 3 Going Concern
As reflected in the accompanying consolidated financial statements, the Company has a net loss and net cash used in operations of $1,858,028 and $2,580,463, respectively, for the nine months ended September 30, 2013.
The ability of the Company to continue its operations is dependent on Management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence.
The Company may require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future if it does not receive the anticipated additional funding. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. These conditions raise substantial doubt about our ability to continue as a going concern. In that event, the Company would be required to change its growth strategy and seek funding on that basis, if at all.
The accompanying 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. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
Property Plant and Equipment
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Property Plant and Equipment
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Sep. 30, 2013
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Plant and Equipment |
Note 4 Property, Plant and Equipment:
Property, plant and equipment on September 30, 2013 and December 31, 2012 are as follows:
Depreciation expense charged to income for the nine months ended September 30, 2013 and 2012 amounted to $20,662 and $9,304 respectively. |
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Credit Line
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Credit Line
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9 Months Ended |
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Sep. 30, 2013
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| Debt Disclosure [Abstract] | |
| Credit Line |
Note 5 Credit Line
On October 13, 2010 the Company signed a revolving note (the “Note”) with Provident Bank (the “Bank”). The outstanding balance of this Note is currently limited to $500,000 (originally $1,000,000) and expired August 31, 2012. On November 16, 2012, the maturity date of the Note was extended to January 1, 2013, on January 7, 2013 was further extended to May 1, 2013, on May 1, 2013 was further extended to July 1, 2013 with a reduction of Note principal limited to $500,000 and on July 3, 2013 was further extended to September 1, 2013 with a reduction of Note principal limited to $400,000. The outstanding balance accrues interest at a variable rate of 1.00% over the Wall Street Journal prime rate with a floor of 4.50% per annum. (Starting July 2013 the interest rate floor increased to 5%) Interest is payable monthly and the rate as of June 30, 2013 and December 31, 2012 was 4.50% and 4.50%, respectively.
Advances are limited to 80% of eligible receivables (75 days from invoice) and 35% of finished goods inventory. (Starting July 2013 advances are limited to 70% of eligible receivables) Inventory advances shall be capped at $250,000. Concentrations from any one customer exceeding 30% of total accounts receivable will be excluded from the borrowing base availability. The note is secured by accounts receivable, inventory, financial instruments, equipment, general intangibles and investment property and personal and unconditional guarantees of two of the shareholders of the Company.
The balance outstanding on the revolving note at September 30, 2013 and December 31, 2012 was $0 and $200,000, respectively. On September 9, 2013 the Note was repaid and cancelled. |
Investment in LLC
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Investment in LLC
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Sep. 30, 2013
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| Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment in LLC |
Note 6 Investment in LLC
During 2010, the Company advanced $20,090 to an individual. There was an implied agreement that the advance would convert into an equity interest in a new entity.
During 2011 the Company acquired a 34.62% interest in Meatball Obsession, LLC (“MO”) for a total investment of $27,032, which includes the conversion of the $20,090 advance above. This investment is accounted for using the equity method of accounting. Accordingly, investments are recorded at acquisition cost plus the Company’s equity in the undistributed earnings or losses of the entity. At December 31, 2011 the investment was brought down to $0 due to losses incurred by MO.
During 2012 the Company’s ownership interest in MO fell to 28% due to dilution.
During 2013 the Company’s ownership interest in MO fell to 24% due to dilution.
During the nine months ending September 30, 2013 and 2012, sales to MO were $84,978 and $50,721, respectively. At September 30, 2013 and December 31, 2012 the accounts receivable balance from MO was $43,466 and $13,893.
During the six months ended June 30, 2013, the Company loaned MO $30,000 for working capital purposes. The loan is non-interest bearing, unsecured and was due on June 19, 2013. The loan was paid in full on July 8, 2013.
Summarized financial information for Meatball Obsession, LLC is as follows:
Balance Sheet Data
Statement of Operations Data
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Related Party Transactions
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Related Party Transactions
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Sep. 30, 2013
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| Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions |
Note 7 Related Party Transactions
Supply Agreement
On March 1, 2010, the Company entered into a five year agreement with a Manufacturer (the “Manufacturer”) who is a related party. The Manufacturer is owned by the CEO and President of the Company. Under the terms of the agreement, the Company grants to the Manufacturer a revocable license to use the Company’s recipes, formulas, methods and ingredients for the preparation and production of Company’s products, for manufacturing the Company’s product and all future improvements, modifications, substitutions and replacements developed by the Company. The Manufacturer in turn grants the Company the exclusive right to purchase the product. Under the terms of the agreement the Manufacturer agrees to manufacture, package, and store the Company’s products and the Company has the right to purchase products from one or more other manufacturers, distributors or suppliers. The agreement contains a perpetual automatic renewal clause for a period of one year after the expiration of the initial term. During the renewal period either party may cancel the contract with written notice nine months prior to the termination date.
Under the terms of the agreement if the Company specifies any change in packaging or shipping materials which results in the manufacturer incurring increased expense for packaging and shipping materials or in the Manufacturer being unable to utilize obsolete packaging or shipping materials in ordinary packaging or shipping, the Company agrees to pay as additional product cost the additional cost for packaging and shipping materials and to purchase at cost such obsolete packaging and shipping materials. If the Company requests any repackaging of the product, other than due to defects in the original packaging, the Company will reimburse the Manufacturer for any labor costs incurred in repackaging. Per the agreement, all product delivery shipping costs are the expense of the Company.
During the nine months ended September 30, 2013 and 2012, the Company purchased substantially all of it’s inventory from the Manufacturer. At September 30, 2013 and December 31, 2012, the Company has a deposit on inventory in the amount of $202,728 and $192,956, respectfully, to this Manufacturer.
Due (to) from Manufacturer
During the nine months ended September 30, 2013 and year ending December 31, 2012,the Manufacturer received payments on behalf of the Company for the Company’s customer invoices and the Manufacturer incurred expenses on behalf of the Company for shared administrative expenses and salary expenses. At September 30, 2013 and December 31, 2012 the amount due from the Manufacturer is as follows:
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Concentrations
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Concentrations
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Sep. 30, 2013
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| Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Concentrations |
Note 8 Concentrations
Revenues For the nine months ended September 30, 2013 and 2012, the Company had the following concentrations of revenues with customers:
Accounts Receivable
As of September 30, 2013 and December 31, 2012, the Company had the following concentrations of accounts receivable with customers:
Cost of Sales
For the nine months ended September 30, 2013 and 2012, the Company had the following concentrations of purchases from vendors:
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Stockholders' Equity
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Stockholders' Equity
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Sep. 30, 2013
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity |
Note 9 Stockholders’ Equity
(A) Common Stock Transactions
2013
As a result of the reverse merger (see Note 1) the Company had a deemed issuance of 800,000 shares of common stock.
From July 1, 2013 through September 30, 2013, the Company issued 2,771,334 shares of common stock to investors in exchange for $4,157,000 in proceeds in connection with the private placement of the Company’s stock. The Company incurred $1,123,498 in stock issuance costs in conjunction with the placement.
(B) Options
The following is a summary of the Company’s option activity:
At September 30, 2013 and December 31, 2012, the total intrinsic value of options outstanding and exercisable was $541,404 and $0, respectively.
(C) Warrants
The following is a summary of the Company’s warrant activity:
At September 30, 2013 and December 31, 2012, the total intrinsic value of warrants outstanding and exercisable was $643,967 and $0, respectively. |
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Commitments and Contingencies
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Commitments and Contingencies
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9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2013
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies |
Note 10 Commitments and Contingencies
Litigations, Claims and Assessments
From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results.
Licensing and Royalty Agreements
On March 1, 2010, the Company was assigned a Development and License agreement (“the Agreement”). Under the terms of the Agreement the Licensor shall develop for the Company a line of beef meatballs with sauce, Italian sausage with sauce and other similar Italian meats with sauces for commercial manufacture, distribution and sale (each a “Licensor Product” and collectively the “Licensor Products”). Licensor shall work with Licensee to develop Licensor Products that are acceptable to Licensee. Upon acceptance of a Licensor Product by Licensee, Licensor’s trade secret recipes, formulas methods and ingredients for the preparation and production of such Licensor Products (the “Recipes”) shall be subject to this Development and License Agreement.
The term of the Agreement (the “Term”) shall consist of the Exclusive Term and the Non-Exclusive Term. The 12-month period beginning on each January 1 and ending on each December 31 is referred to herein as an “Agreement Year.”
The Exclusive Term began on January 1, 2009 (the “Effective Date”) and ends on the 50th anniversary of the Effective Date, unless terminated or extended as provided herein. Licensor, at its option, may terminate the Exclusive Term by notice in writing to Licensee, delivered between the 60th and the 90th day following the end of any Agreement Year if, on or before the 60th day following the end of such Agreement Year, Licensee has not paid Licensor Royalties with respect to such Agreement Year at least equal to the minimum royalty (the “Minimum Royalty”) for such Agreement Year. Subject to the foregoing sentence, and provided Licensee has not breached this Agreement and failed to cure such breach in accordance herewith, Licensee may extend the Exclusive Term for an additional twenty five (25) years, by notice in writing to Licensor, delivered on or before the 50th anniversary of the Effective Date.
The Non-Exclusive Term begins upon expiration of the Exclusive Term and continues indefinitely thereafter, until terminated by Licensor due to a material breach hereof by Licensee that remains uncured after notice and opportunity to cure in accordance herewith, or until terminated by Licensee.
Either party may terminate this Agreement in the event that the other party materially breaches its obligations and fails to cure such material breach within sixty (60) days following written notice from the non-breaching party specifying the nature of the breach. The following termination rights are in addition to the termination rights provided elsewhere in this
Under the terms of the Agreement the Company is required to pay quarterly royalty fees as follows:
During the Exclusive Term and the Non-Exclusive Term the Company will pay a royalty equal to the royalty rate (the “Royalty Rate”), multiplied by Company’s “Net Sales”. As used herein, “Net Sales” means gross invoiced sales of Products, directly or indirectly to unrelated third parties, less (a) discounts (including cash discounts), and retroactive price reductions or allowances actually allowed or granted from the billed amount (collectively “Discounts”); (b) credits, rebates, and allowances actually granted upon claims, rejections or returns, including recalls (voluntary or otherwise) (collectively, “Credits”); (c) freight, postage, shipping and insurance charges; (d) taxes, duties or other governmental charges levied on or measured by the billing amount, when included in billing, as adjusted for rebates and refunds; and (e) provisions for uncollectible accounts determined in accordance with reasonable accounting methods, consistently applied.
The Royalty Rate shall be: 6% of net sales up to $500,000 of net sales for each Agreement year; 4% of Net Sales from $500,000 up to $2,500,000 of Net Sales for each Agreement year; 2% of Net Sales from $2,500,000 up to $20,000,000 of Net Sales for each Agreement year; and 1% of Net Sales in excess of $20,000,000 of Net Sales for each Agreement year.
In order to continue the Exclusive term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows:
The Company incurred $156,743 and $119,777 of royalty expenses for the nine months ended September 30, 2013 and 2012, respectively. Royalty expenses are included in general and administrative expenses on the Statement of Operations.
Agreements with Placement Agents and Finders
The Company entered into a Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective December 1, 2011 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, Spartan will act as the Company’s exclusive financial advisor and placement agent to assist the Company in connection with a best efforts private placement (the “Financing”) of up to $6 million of the Company’s equity and/or debt securities and/or convertible instruments (the “Securities”).
The Company upon closing of the Financing shall pay consideration to Spartan, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the Financing. The Company shall grant and deliver to Spartan at the closing of the Financing, for nominal consideration, five year warrants (the “Warrants”) to purchase a number of shares of the Company’s Common Stock equal to 10% of the number of shares of Common Stock (and/or shares of Common Stock issuable upon exercise of securities or upon conversion or exchange of convertible or exchangeable securities) sold at such closing. The Warrants shall be exercisable at any time during the five year period commencing on the closing to which they relate at an exercise price equal to the purchase price per share of Common Stock paid by investors in the Financing or, in the case of exercisable, convertible, or exchangeable securities, the exercise, conversion or exchange price thereof. If the Financing is consummated by means of more than one closing, Spartan shall be entitled to the fees provided herein with respect to each such closing.
Along with the above fees, the Company shall pay up to $40,000 for expenses incurred by Spartan in connection with this Financing, together with cost of background checks on the officers and directors of the Company.
During the year ended 2012 the Company paid to Spartan fees of $505,400 and issued Spartan 505,400 five year warrants with an exercise price of $1.00.
The Company entered into a second Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective May 2, 2013 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, Spartan will act as the Company’s exclusive financial advisor and placement agent to assist the Company in connection with a best efforts private placement (the “Financing”) of up to $5 million of the Company’s equity and/or debt securities and/or convertible instruments (the “Securities”).
The Company upon closing of the Financing shall pay consideration to Spartan, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the Financing and 3% of the aggregate gross proceeds raised in the Financing for expenses incurred by Spartan. The Company shall grant and deliver to Spartan at the closing of the Financing, for nominal consideration, five year warrants (the “Warrants”) to purchase a number of shares of the Company’s Common Stock equal to 10% of the number of shares of Common Stock (and/or shares of Common Stock issuable upon exercise of securities or upon conversion or exchange of convertible or exchangeable securities) sold at such closing. The Warrants shall be exercisable at any time during the five year period commencing on the closing to which they relate at an exercise price equal to the purchase price per share of Common Stock paid by investors in the Financing or, in the case of exercisable, convertible, or exchangeable securities, the exercise, conversion or exchange price thereof. If the Financing is consummated by means of more than one closing, Spartan shall be entitled to the fees provided herein with respect to each such closing.
The Company shall pay to Spartan a non-refundable monthly fee of $10,000 over a twelve to twenty four month period upon Spartan’s satisfaction of certain thresholds (raising of aggregate gross proceeds of $4.0 mil- $5.0 mil) outlined in the Spartan Advisory Agreement. On October 29, 2013 the company entered into an amendment to the Agreement and the $10,000 monthly fee was cancelled.
During the nine months ended September 30, 2013 the Company paid to Spartan fees of $540,410 and issued Spartan 277,133 five year warrants with an exercise price of $1.50.
Supply Agreement
On October 3, 2011, the Company entered into a five year agreement with a non-related party manufacturer. Under the terms of the agreement, the Company grants to the manufacturer a revocable license to use the Company’s recipes, formulas, methods and ingredients for the preparation and production of Company’s products, for manufacturing the Company’s product and all future improvements, modifications, substitutions and replacements developed by the Company. The manufacturer in turn grants the Company the exclusive right to purchase the product. Under the terms of the agreement the manufacturer agrees to manufacture, package, and store the Company’s products and the Company has the right to purchase products from one or more other manufacturers, distributors or suppliers. The agreement contains a perpetual automatic renewal clause for a period of year after the expiration of the initial term. During the renewal period either party may cancel the contract with written notice nine months prior to the termination date.
Under the terms of the agreement if the Company specifies any change in packaging or shipping materials which results in the manufacturer incurring increased expense for packaging and shipping materials or in the manufacturer being unable to utilize obsolete packaging or shipping materials in ordinary packaging or shipping, the Company agrees to pay as additional product cost the additional cost for packaging and shipping materials and to purchase at cost such obsolete packaging and shipping materials. If the Company requests any repackaging of the product, other than due to defects in the original packaging, the Company will reimburse the manufacturer for any labor costs incurred in repackaging. Per the agreement all product delivery shipping costs are the expense of the Company.
Under the terms of the agreement, the Company is required to acquire and install production equipment at the manufacturer’s facility to be used solely for the manufacturing of the Company’s products. The manufacturer will bear all costs of operating and maintaining the production equipment during the period in which the manufacturer is manufacturing products pursuant to the agreement. The production equipment shall be owned by the Company.
In March 2012, the agreement was terminated and production equipment held by the manufacturer was returned to the Company. |
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Subsequent Event
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Subsequent Event
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9 Months Ended |
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Sep. 30, 2013
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| Subsequent Events [Abstract] | |
| Subsequent Event |
Note 11 Subsequent Event
The Company has evaluated all events that occurred after the balance sheet date through the date when the consolidated financial statements were issued to determine if they must be reported. The Management of the Company determined that there were certain reportable subsequent events to be disclosed as follow.
On October 16, 2013, the Company issued 562,000 shares of common stock to investors in exchange for $843,000 in proceeds in connection with the private placement of the Company’s stock. The Company incurred approximately $109,590 in stock issuance costs in conjunction with the placement and issued Spartan 56,200 five year warrants with an exercise price of $1.50.
The Company entered into a third Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective October 22, 2013 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, Spartan will act, for a minimum of twenty-four months from the date of the agreement, as the Company’s exclusive financial advisor and placement agent to assist the Company in connection with a best efforts private placement (the “Financing”) of up to $2.5 million of the Company’s equity and/or debt securities and/or convertible instruments (the “Securities”).
The Company upon closing of the Financing shall pay consideration to Spartan, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the Financing and 3% of the aggregate gross proceeds raised in the Financing for expenses incurred by Spartan. The Company shall grant and deliver to Spartan at the closing of the Financing, for nominal consideration, five year warrants (the “Warrants”) to purchase a number of shares of the Company’s Common Stock equal to 10% of the number of shares of Common Stock (and/or shares of Common Stock issuable upon exercise of securities or upon conversion or exchange of convertible or exchangeable securities) sold at such closing. The Warrants shall be exercisable at any time during the five year period commencing on the closing to which they relate at an exercise price equal to the purchase price per share of Common Stock paid by investors in the Financing or, in the case of exercisable, convertible, or exchangeable securities, the exercise, conversion or exchange price thereof. If the Financing is consummated by means of more than one closing, Spartan shall be entitled to the fees provided herein with respect to each such closing.
The Company shall pay to Spartan a non-refundable monthly fee of $10,000 for the term of the agreement. Such monthly fee shall survive any termination of the Agreement. |
Summary of Significant Accounting Policies (Policies)
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Summary of Significant Accounting Policies (Policies)
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9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2013
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Principles of consolidation |
Principles of consolidation
All significant intercompany accounts and transactions have been eliminated in consolidation. |
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| Use of Estimates |
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: allowance for bad debt, inventory obsolescence, the fair value of share-based payments.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates. |
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| Risks and Uncertainties |
Risks and uncertainties
The Company operates in an industry that is subject to intense competition and change in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure.
The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the grocery industry, (ii) general economic conditions in the various local markets in which the Company competes, including the general downturn in the economy, and (iii) the volatility of prices pertaining to food and beverages in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. |
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| Reclassifications |
Reclassifications
Certain amounts in the prior year have been reclassified to conform to the current year presentation. |
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| Cash |
Cash
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at September 30, 2013 and December 31, 2012.
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. |
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| Accounts Receivable and Allowance for Doubtful Accounts |
Accounts receivable and allowance for doubtful accounts
Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of September 30, 2013 and December 31, 2012, the Company had reserves of $2,000. |
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| Inventories |
Inventories
Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at September 30, 2013 and December 31, 2012:
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| Depreciation |
Depreciation
Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives.
Asset lives for financial statement reporting of depreciation are:
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| Fair Value of Financial Instruments |
Fair Value of Financial Instruments
For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. |
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| Stock Issuance Costs |
Stock Issuance Costs
Stock Issuance costs are capitalized as incurred. Upon the completion of the offering, the stock issuance costs are reclassified to equity. Offering costs recorded to equity for the nine months ended September 30, 2013 and year ended December 31, 2012 were $1,123,498 and $1,088,964, respectively. |
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| Research and Development |
Research and Development
Research and development is expensed as incurred. Research and development expenses for the nine months ended September 30, 2013 and 2012 were $12,350 and $65,070, respectively. |
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| Shipping and Handling Costs |
Shipping and Handling Costs
The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of sales. |
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| Revenue Recognition |
Revenue Recognition
The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products.
The Company meets these criteria upon shipment.
Expenses such as slotting fees and sales discounts are accounted for as a direct reduction of revenues as follows:
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| Cost of Sales |
Cost of sales
Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include product development, freight, packaging, and print production costs. |
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| Advertising |
Advertising
Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Producing and communicating advertising expenses for the nine months ended September 30, 2013 and 2012 were$1,267,035 and $906,814, respectively. |
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| Stock-Based Compensation |
Stock-based compensation
The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Accounting for Stock-Based Compensation” (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. The Company accounts for compensation cost for stock option plans in accordance with ASC 718. The Company accounts for share based payments to non-employees in accordance with ASC 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services”.
The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest.
Share based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the Statement of Operations. For the nine months ended September 30, 2013 and 2012 share based compensation amounted to $662,506 and $293,898, respectively. $505,973 of the $662,506 recorded for the nine months ended September 30, 2013 was a direct cost of a stock offering and has been recorded as a reduction in additional paid in capital. The $293,898 recorded for the nine months ended September 30, 2012 was a direct cost of a stock offering and has been recorded as a reduction in additional paid in capital.
For the nine months ended September 30, 2013, when computing fair value of share based payments, the Company has considered the following variables:
● The risk-free interest rate assumption is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The risk free rate used had a range of 0.68%-1.71%.
● The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. Therefore the expected dividend rate was $0.
● The expected option term is computed using the “simplified” method as permitted under the provisions of Staff Accounting Bulletin (“SAB”) 110.
● The expected warrant term is the life of the warrant.
● The expected volatility was benchmarked against similar companies in a similar industry. The expected volatility used had a range of 144%-145%.
● The forfeiture rate is based on the historical forfeiture rate for the Company’s unvested stock options, which was 0%.
For the nine months ended September 30, 2012, when computing fair value of share based payments, the Company has considered the following variables:
● The risk-free interest rate assumption is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The risk free rate used had a range of 0.63%-1.01%.
● The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. Therefore the expected dividend rate was $0.
● The expected option term is computed using the “simplified” method as permitted under the provisions of Staff Accounting Bulletin (“SAB”) 110.
● The expected warrant term is the life of the warrant.
● Given the Company was privately held, expected volatility was benchmarked against similar companies in a similar industry. The expected volatility used was 128%.
● The forfeiture rate is based on the historical forfeiture rate for the Company’s unvested stock options, which was 0%. |
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| Earnings Per Share |
Earnings per share
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible shares, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
The Company had the following potential common stock equivalents at September 30, 2013:
The Company had the following potential common stock equivalents at September 30, 2012:
Since the Company reflected a net loss during the three and nine months ended September 30, 2013 and 2012, the effect of considering any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. |
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| Income Taxes |
Income Taxes
Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Penalties and interest assessed by income taxing authorities are included in general and administrative expenses. |
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| Recent Accounting Pronouncements |
Recent accounting pronouncements
There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements. |
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Summary of Significant Accounting Policies (Tables)
|
Summary of Significant Accounting Policies (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2013
|
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventories |
Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at September 30, 2013 and December 31, 2012:
|
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| Schedule of Property and Equipment Estimated Useful Lives |
Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives.
Asset lives for financial statement reporting of depreciation are:
|
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| Schedule of Expenses of Slotting Fees and Sales Discount Accounted for Direct Revenue Reduction |
Expenses such as slotting fees and sales discounts are accounted for as a direct reduction of revenues as follows:
|
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| Schedule of Common Stock Equivalents |
The Company had the following potential common stock equivalents at September 30, 2013:
The Company had the following potential common stock equivalents at September 30, 2012:
|
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Property Plant and Equipment (Tables)
|
Property Plant and Equipment (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2013
|
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property, Plant and Equipment |
Property, plant and equipment on September 30, 2013 and December 31, 2012 are as follows:
|
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Investment in LLC (Tables)
|
Investment in LLC (Tables) (Meatball Obsession, LLC [Member])
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
Sep. 30, 2013
|
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|
Meatball Obsession, LLC [Member]
|
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| Summary of Financial Information |
Summarized financial information for Meatball Obsession, LLC is as follows:
Balance Sheet Data
Statement of Operations Data
|
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Related Party Transactions (Tables)
|
Related Party Transactions (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2013
|
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| Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Amount Due from Manufacturer |
At September 30, 2013 and December 31, 2012 the amount due from the Manufacturer is as follows:
|
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Concentrations (Tables)
|
Concentrations (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2013
|
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| Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Revenue |
For the nine months ended September 30, 2013 and 2012, the Company had the following concentrations of revenues with customers:
|
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| Schedule of Accounts Receivable |
Accounts Receivable
As of September 30, 2013 and December 31, 2012, the Company had the following concentrations of accounts receivable with customers:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Cost of Sales |
Cost of Sales
For the nine months ended September 30, 2013 and 2012, the Company had the following concentrations of purchases from vendors:
|
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Stockholders' Equity (Tables)
|
Stockholders' Equity (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2013
|
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Option Activity |
The following is a summary of the Company’s option activity:
|
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| Summary of Option Outstanding and Exercisable |
|
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| Schedule of Warrants Activity |
The following is a summary of the Company’s warrant activity:
|
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| Schedule of Warrants Outstanding and Exercisable |
|
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Commitments and Contingencies (Tables)
|
Commitments and Contingencies (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2013
|
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| Schedule of Royalty Minimum Payment by Preceding Agreement Year |
In order to continue the Exclusive term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows:
|
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Nature of Operations and Basis of Presentation (Details Narrative)
|
Nature of Operations and Basis of Presentation (Details Narrative) (USD $)
|
0 Months Ended |
|---|---|
|
Jan. 24, 2013
|
|
| Nature Of Operations And Basis Of Presentation | |
| Number of shares issued in exchange for acquisition | 20,054,000 |
| Number of shares cancelled | 103,408,000 |
| Aggregate amount paid in cancellation to majority shareholders | $ 295,000 |
| Stock issued for consideration of common stock cancellation for majority shareholders | 800,000 |
Summary of Significant Accounting Policies (Details Narrative)
Summary of Significant Accounting Policies - Schedule of Inventories (Details)
|
Summary of Significant Accounting Policies - Schedule of Inventories (Details) (USD $)
|
Sep. 30, 2013
|
Dec. 31, 2012
|
|---|---|---|
| Accounting Policies [Abstract] | ||
| Finished goods | $ 51,037 | $ 76,570 |
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details)
|
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details)
|
9 Months Ended |
|---|---|
|
Sep. 30, 2013
|
|
|
Minimum [Member] | Machinery And Equipment [Member]
|
|
| Property and equipment estimated useful lives | 2 years |
|
Minimum [Member] | Vehicles [Member]
|
|
| Property and equipment estimated useful lives | 3 years |
|
Maximum [Member] | Machinery And Equipment [Member]
|
|
| Property and equipment estimated useful lives | 7 years |
|
Maximum [Member] | Vehicles [Member]
|
|
| Property and equipment estimated useful lives | 5 years |
Summary of Significant Accounting Policies - Schedule of Expenses of Slotting Fees and Sales Discount Accounted for Direct Revenue Reduction (Details)
|
Summary of Significant Accounting Policies - Schedule of Expenses of Slotting Fees and Sales Discount Accounted for Direct Revenue Reduction (Details) (USD $)
|
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|
| Accounting Policies [Abstract] | ||||
| Gross Sales | $ 6,033,622 | $ 3,606,759 | ||
| Less: Slotting, Discounts, Allowances | 393,553 | 225,381 | ||
| Net Sales | $ 2,167,517 | $ 969,414 | $ 5,640,069 | $ 3,381,378 |
Summary of Significant Accounting Policies - Schedule of Common Stock Equivalents (Details)
|
Summary of Significant Accounting Policies - Schedule of Common Stock Equivalents (Details)
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|---|---|---|
| Accounting Policies [Abstract] | ||
| Common stock warrants, exercise price of $1.00- $1.50 | 782,534 | 345,400 |
| Common stock options, exercise price of $1.00 | 420,923 | 223,404 |
| Total common stock equivalents | 1,203,457 | 568,804 |
Summary of Significant Accounting Policies - Schedule of Common Stock Equivalents (Details) (Parenthetical)
|
Summary of Significant Accounting Policies - Schedule of Common Stock Equivalents (Details) (Parenthetical) (USD $)
|
9 Months Ended | 12 Months Ended | |
|---|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Dec. 31, 2012
|
|
| Common stock warrants, exercise price range | $ 1.00 | ||
| Common stock options, exercise price | $ 1.00 | $ 1.00 | $ 1.00 |
|
Minimum [Member]
|
|||
| Common stock warrants, exercise price range | $ 1.00 | ||
|
Maximum [Member]
|
|||
| Common stock warrants, exercise price range | $ 1.50 | ||
Going Concern (Details Narrative)
|
Going Concern (Details Narrative) (USD $)
|
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Dec. 31, 2012
|
|
| Going Concern | |||||
| Net loss | $ 493,568 | $ 454,876 | $ 1,858,028 | $ 1,319,776 | $ 1,999,623 |
| Net cash used in operations | $ 2,580,463 | $ 1,400,638 | |||
Property Plant and Equipment (Details Narrative)
|
Property Plant and Equipment (Details Narrative) (USD $)
|
9 Months Ended | |
|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | $ (20,662) | $ (9,304) |
Schedule of Property Plant and Equipment (Details)
|
Schedule of Property Plant and Equipment (Details) (USD $)
|
Sep. 30, 2013
|
Dec. 31, 2012
|
|---|---|---|
| Property, plant and equipment | $ 485,005 | $ 39,627 |
| Less: Accumulated Depreciation | 42,838 | 22,176 |
| Property, plant and equipment, net | 442,167 | 17,451 |
|
Machinery And Equipment [Member]
|
||
| Property, plant and equipment | 466,116 | 39,627 |
|
Vehicles [Member]
|
||
| Property, plant and equipment | $ 18,889 |
Credit Line (Details Narrative)
|
Credit Line (Details Narrative) (USD $)
|
0 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|---|---|
|
Jul. 03, 2013
|
May 01, 2013
|
Jan. 07, 2013
|
Nov. 16, 2012
|
Oct. 13, 2010
|
Jun. 30, 2013
|
Sep. 30, 2013
|
Dec. 31, 2012
|
|
| Debt Disclosure [Abstract] | ||||||||
| Maximum limit of the notes outstanding balance | $ 1,000,000 | $ 500,000 | ||||||
| Expired date of the note | Sep. 01, 2013 | Jul. 01, 2013 | May 01, 2013 | Jan. 01, 2013 | Aug. 31, 2012 | |||
| Note principal limited after reduction | 400,000 | |||||||
| Variable rate of accrued interest on the outstanding balance | 1.00% | |||||||
| Line of credit facility, floor rate | 5.00% | 4.50% | 4.50% | 4.50% | ||||
| Monthly payable interest rate | 4.50% | 4.50% | ||||||
| Percentage of eligible receivables for which advances are limited | 70.00% | 80.00% | ||||||
| Percentage of finished goods inventory for which advances are limited | 35.00% | |||||||
| Maximum limit for inventory advances | 250,000 | |||||||
| Customers exceeding thirty percent of the accounts receivables excluded from borrowing capacity | 30.00% | |||||||
| Line of credit, balance outstanding | $ 0 | $ 200,000 | ||||||
Investment in LLC (Details Narrative)
|
Investment in LLC (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jul. 08, 2013
|
Dec. 31, 2011
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2010
|
Jun. 30, 2013
Meatball Obsession, LLC [Member]
|
Sep. 30, 2013
Meatball Obsession, LLC [Member]
|
Sep. 30, 2012
Meatball Obsession, LLC [Member]
|
Dec. 31, 2012
Meatball Obsession, LLC [Member]
|
Dec. 31, 2011
Meatball Obsession, LLC [Member]
|
|
| Advances made to individual | $ 20,090 | ||||||||||||
| Percentage of equity interest acquired in business combination | 34.62% | ||||||||||||
| Total investment in Meatball Obsession, LLC | 27,032 | ||||||||||||
| Reduction in investment due to losses in affiliates | 0 | ||||||||||||
| Reduction in ownership percentage | 24.00% | 28.00% | |||||||||||
| Reduction in ownership interest in affiliates | 24.00% | 28.00% | |||||||||||
| Sales revenue | 2,167,517 | 969,414 | 5,640,069 | 3,381,378 | 84,978 | 50,721 | |||||||
| Accounts receivable | 13,893 | 43,466 | |||||||||||
| Loan to affiliates for working capital purpose | 30,000 | ||||||||||||
| Loan due date | Jun. 19, 2013 | ||||||||||||
| Repayment of debt | $ 30,000 | ||||||||||||
Summary of Financial Information (Details)
|
Summary of Financial Information (Details) (USD $)
|
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
| Cash | $ 1,918,221 | $ 1,249,528 | $ 1,918,221 | $ 1,249,528 | $ 2,008,161 | $ 16,505 |
| Accounts receivable | 1,059,786 | 1,059,786 | 463,565 | |||
| Inventory | 51,037 | 51,037 | 76,570 | |||
| Property & equipment, net | 442,167 | 442,167 | 17,451 | |||
| Total Assets | 4,403,247 | 4,403,247 | 2,982,081 | |||
| Total Current Liabilities | 407,419 | 407,419 | 529,233 | |||
| Members' Equity | 3,995,828 | 3,995,828 | 2,452,848 | 49,313 | ||
| Total Liabilities and Members' Equity | 4,403,247 | 4,403,247 | 2,982,081 | |||
| Expenses | 1,113,284 | 711,627 | 3,478,533 | 2,324,253 | ||
| Net operating loss | (488,796) | (455,101) | (1,849,481) | (1,309,729) | ||
| Other income (expenses) | (4,772) | 225 | (8,547) | (10,047) | ||
| Net loss | (493,568) | (454,876) | (1,858,028) | (1,319,776) | (1,999,623) | |
|
Meatball Obsession, LLC [Member]
|
||||||
| Cash | 5,380 | 5,380 | 117,777 | |||
| Accounts receivable | 6,698 | 6,698 | 5,234 | |||
| Inventory | 12,532 | 12,532 | 14,935 | |||
| Property & equipment, net | 155,922 | 155,922 | 75,861 | |||
| Other assets | 55,121 | 55,121 | 60,370 | |||
| Total Assets | 235,653 | 235,653 | 274,177 | |||
| Accounts payable | 72,867 | 72,867 | 25,731 | |||
| Other current liabilities | 69,256 | 69,256 | 8,354 | |||
| Total Current Liabilities | 142,123 | 142,123 | 34,085 | |||
| Members' Equity | 93,530 | 93,530 | 240,092 | |||
| Total Liabilities and Members' Equity | 235,653 | 235,653 | 274,177 | |||
| Revenues | 408,724 | 214,360 | ||||
| Cost of goods sold | 157,871 | 94,175 | ||||
| Expenses | 542,958 | 480,404 | ||||
| Net operating loss | (292,105) | (360,219) | ||||
| Other income (expenses) | (4,457) | (688) | ||||
| Net loss | $ (296,562) | $ (360,907) | ||||
Related Party Transactions (Details Narrative)
|
Related Party Transactions (Details Narrative) (USD $)
|
Sep. 30, 2013
|
Dec. 31, 2012
|
|---|---|---|
| Related Party Transactions [Abstract] | ||
| Deposit in inventory with manufacturer | $ 202,728 | $ 192,956 |
Related Party Transactions - Schedule of Amount Due from Manufacturer (Details)
|
Related Party Transactions - Schedule of Amount Due from Manufacturer (Details) (USD $)
|
9 Months Ended | 12 Months Ended |
|---|---|---|
|
Sep. 30, 2013
|
Dec. 31, 2012
|
|
| Related Party Transactions [Abstract] | ||
| Customer receipts collected by Manufacturer on behalf of Company | $ 575,255 | $ 301,447 |
| Loan to Manufacturer | 100,000 | |
| Shared expenses paid by Manufacturer on behalf of the Company | (229,876) | (142,247) |
| Due (to) from Manufacturer | $ 445,379 | $ 159,200 |
Concentrations - Schedule of Revenue (Details)
|
Concentrations - Schedule of Revenue (Details)
|
9 Months Ended | |
|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|
|
Customer A [Member]
|
||
| Concentrations of Revenues | 15.00% | 15.00% |
|
Customer B [Member]
|
||
| Concentrations of Revenues | 19.00% | 8.00% |
|
Customer C [Member]
|
||
| Concentrations of Revenues | 19.00% | 39.00% |
|
Customer D [Member]
|
||
| Concentrations of Revenues | 13.00% | 3.00% |
|
Customer E [Member]
|
||
| Concentrations of Revenues | 9.00% | 13.00% |
Concentrations - Schedule of Accounts Receivable (Details)
|
Concentrations - Schedule of Accounts Receivable (Details)
|
9 Months Ended | |
|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|
|
Customer A [Member]
|
||
| Concentration of Accounts Receivable | 9.00% | 13.00% |
|
Customer B [Member]
|
||
| Concentration of Accounts Receivable | 15.00% | 30.00% |
|
Customer C [Member]
|
||
| Concentration of Accounts Receivable | 8.00% | 20.00% |
|
Customer D [Member]
|
||
| Concentration of Accounts Receivable | 30.00% | 0.00% |
Concentrations - Schedule of Purchases From Major Vendors (Details)
|
Concentrations - Schedule of Purchases From Major Vendors (Details) (Vendor A [Member])
|
9 Months Ended | |
|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|
|
Vendor A [Member]
|
||
| Percentage of purchases from major vendors | 100.00% | 100.00% |
Stockholders' Equity (Details Narrative)
|
Stockholders' Equity (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|---|
|
Oct. 22, 2013
|
May 02, 2013
|
Dec. 01, 2011
|
Sep. 30, 2013
|
Sep. 30, 2013
|
Dec. 31, 2012
|
|
| Equity [Abstract] | ||||||
| Issuance of common stock shares in reverse merger | 800,000 | |||||
| Common stock shares issued in private placement | 2,771,334 | |||||
| Proceed from common stock shares issued in private placement | $ 2,500,000 | $ 5,000,000 | $ 6,000,000 | $ 4,157,000 | ||
| Stock issuance costs relating to private placement | 1,123,498 | |||||
| Total intrinsic value of options outstanding and exercisable | 541,404 | 541,404 | 0 | |||
| Total intrinsic value of warrants outstanding and exercisable | $ 643,967 | $ 643,967 | $ 0 | |||
Stockholders' Equity - Summary of Option Activity (Details)
|
Stockholders' Equity - Summary of Option Activity (Details) (USD $)
|
9 Months Ended | 12 Months Ended | |
|---|---|---|---|
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Dec. 31, 2012
|
|
| Equity [Abstract] | |||
| Options Outstanding, Beginning balance | 223,404 | ||
| Options, Granted | 318,000 | 223,404 | |
| Options, Exercised | |||
| Options, Forfeited/Cancelled | |||
| Options Outstanding, Ending balance | 541,404 | 223,404 | |
| Options Exercisable, Beginning balance | 223,404 | ||
| Options Exercisable, Ending balance | 420,923 | 223,404 | |
| Options Outstanding, Weighted Average Exercise Price, Beginning balance | $ 1.00 | ||
| Weighted Average Exercise Price, Granted | $ 1.00 | $ 1.00 | $ 1.00 |
| Weighted Average Exercise Price, Exercised | |||
| Weighted Average Exercise Price, Forfeited/Cancelled | |||
| Options Outstanding, Weighted Average Exercise Price, Ending balance | $ 1.00 | $ 1.00 | |
| Options Exercisable, Weighted Average Exercise Price, Beginning balance | $ 1.00 | ||
| Options Exercisable, Weighted Average Exercise Price, Ending balance | $ 1.00 | $ 1.00 | |
Stockholders' Equity - Summary of Option Outstanding and Exercisable (Details)
|
Stockholders' Equity - Summary of Option Outstanding and Exercisable (Details) (USD $)
|
9 Months Ended | ||
|---|---|---|---|
|
Sep. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
| Equity [Abstract] | |||
| Range of exercise price | $ 1.00 | ||
| Number of Options Outstanding | 541,404 | 223,404 | |
| Weighted Average Remaining Contractual Life (in years), Options Outstanding | 4 years 1 month 6 days | ||
| Weighted Average Exercise Price, Options Outstanding | $ 1.00 | $ 1.00 | |
| Number of Options Exercisable | 420,923 | 223,404 | |
| Weighted Average Exercise Price, Options Exercisable | $ 1.00 | $ 1.00 |
Stockholders' Equity - Schedule of Warrants Activity (Details)
|
Stockholders' Equity - Schedule of Warrants Activity (Details) (Warrant [Member], USD $)
|
9 Months Ended | 12 Months Ended |
|---|---|---|
|
Sep. 30, 2013
|
Dec. 31, 2012
|
|
|
Warrant [Member]
|
||
| Warrants Outstanding, Beginning balance | 505,400 | |
| Warrants, Granted | 277,134 | 505,400 |
| Warrants, Exercised | ||
| Warrants, Forfeited/Cancelled | ||
| Warrants Outstanding, Ending balance | 782,534 | 505,400 |
| Warrants Exercisable, Begining balance | 505,400 | |
| Warrants Exercisable, Ending balance | 782,534 | 505,400 |
| Warrants Outstanding, Weighted Average Exercise Price, Beginning balance | $ 1.00 | |
| Weighted Average Exercise Price, Granted | $ 1.50 | $ 1.00 |
| Weighted Average Exercise Price, Exercised | ||
| Weighted Average Exercise Price, Forfeited/Cancelled | ||
| Warrants Outstanding, Weighted Average Exercise Price, Ending balance | $ 1.18 | $ 1.00 |
| Warrants Exercisable, Weighted Average Exercise Price, Beginning balance | $ 1.00 | |
| Warrants Exercisable, Weighted Average Exercise Price, Ending balance | $ 1.18 | $ 1.00 |
Schedule of Warrants Outstanding and Exercisable (Details)
|
Schedule of Warrants Outstanding and Exercisable (Details) (Warrant [Member], USD $)
|
9 Months Ended | ||
|---|---|---|---|
|
Sep. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
|
Warrant [Member]
|
|||
| Range of exercise price, lower limit | $ 1.00 | ||
| Range of exercise price, higher limit | $ 1.50 | ||
| Number of Warrants Outstanding | 782,534 | ||
| Weighted Average Remaining Contractual Life (in Years) | 4 years 2 months 1 day | ||
| Number of Warrants Exercisable | 782,534 | 505,400 | |
| Weighted Average Exercise Price, Warrants Exercisable | $ 1.18 | $ 1.00 |
Commitments and Contingencies (Details Narrative)
|
Commitments and Contingencies (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Oct. 22, 2013
|
Oct. 16, 2013
|
May 02, 2013
|
May 02, 2013
|
Dec. 01, 2011
|
Sep. 30, 2013
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Oct. 22, 2013
Spartan Capital Securities, LLC [Member]
|
Sep. 30, 2013
Spartan Capital Securities, LLC [Member]
|
Dec. 31, 2012
Spartan Capital Securities, LLC [Member]
|
Sep. 30, 2013
Year 1 [Member]
|
Sep. 30, 2013
Year 2 [Member]
|
Sep. 30, 2013
Year 2 [Member]
Maximum [Member]
|
Sep. 30, 2013
Year 3 [Member]
|
Sep. 30, 2013
Year 3 [Member]
Maximum [Member]
|
Sep. 30, 2013
Year 4 [Member]
|
|
| Percentage of royalty rate on net sales | 6.00% | 4.00% | 2.00% | 1.00% | |||||||||||||
| Royalty net sales | $ 500,000 | $ 500,000 | $ 2,500,000 | $ 2,500,000 | $ 20,000,000 | $ 20,000,000 | |||||||||||
| Royalty expenses | 156,743 | 119,777 | |||||||||||||||
| Proceeds form private placements | 2,500,000 | 5,000,000 | 6,000,000 | 4,157,000 | |||||||||||||
| Percentage of fee equal to aggregate gross proceeds | 10.00% | 10.00% | 10.00% | 3.00% | 3.00% | ||||||||||||
| Percentage of common stock issuable | 10.00% | 10.00% | 10.00% | ||||||||||||||
| Payment of maximum amount paid for consideration of expenses incurred by Spartan | 10,000 | 40,000 | |||||||||||||||
| Spartan fee paid amount | 540,410 | 505,400 | |||||||||||||||
| Number of warrants issued | 56,200 | 277,133 | 505,400 | ||||||||||||||
| Warrants Remaining Contractual Life | 5 years | 5 years | |||||||||||||||
| Warrants exercise price | 1.50 | ||||||||||||||||
| Spartan advisory agreement description | The Company shall pay to Spartan a non-refundable monthly fee of $10,000 over a twelve to twenty four month period upon Spartan’s satisfaction of certain thresholds (raising of aggregate gross proceeds of $4.0 mil- $5.0 mil) outlined in the Spartan Advisory Agreement. |
||||||||||||||||
| Fees cancellation on agreement amendment | $ 10,000 | ||||||||||||||||
Commitments and Contingencies - Schedule of Royalty Minimum Payment by Preceding Agreement Year (Details)
|
Commitments and Contingencies - Schedule of Royalty Minimum Payment by Preceding Agreement Year (Details) (USD $)
|
9 Months Ended |
|---|---|
|
Sep. 30, 2013
|
|
|
Agreement Year 1st and 2nd [Member]
|
|
| Minimum Royalty to be Paid | |
|
Agreement Year 3rd and 4th [Member]
|
|
| Minimum Royalty to be Paid | 50,000 |
|
Agreement Year 5th, 6th and 7th [Member]
|
|
| Minimum Royalty to be Paid | 75,000 |
|
Agreement Year 8th and 9th [Member]
|
|
| Minimum Royalty to be Paid | 100,000 |
|
Agreement Year 10th and thereafter [Member]
|
|
| Minimum Royalty to be Paid | $ 125,000 |
Subsequent Event (Details Narrative)
|
Subsequent Event (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|---|---|
|
Oct. 22, 2013
|
Oct. 16, 2013
|
May 02, 2013
|
Dec. 01, 2011
|
Sep. 30, 2013
|
Sep. 30, 2013
|
Sep. 30, 2012
|
Dec. 31, 2012
|
|
| Common stock issued to investors, shares | 562,000 | |||||||
| Common stock issued to investors | $ 843,000 | $ 4,157,000 | $ 5,054,000 | |||||
| Warrants exercise price | 1.50 | |||||||
| Stock issuance cost | 109,590 | 1,123,498 | 1,088,964 | 1,088,964 | ||||
| Number of warrants issued to Spartan | 56,200 | |||||||
| Proceeds form private placements | 2,500,000 | 5,000,000 | 6,000,000 | 4,157,000 | ||||
| Percentage of fee equal to aggregate gross proceeds | 10.00% | 10.00% | 10.00% | |||||
| Percentage of common stock issuable | 10.00% | 10.00% | 10.00% | |||||
|
Spartan Capital Securities, LLC [Member]
|
||||||||
| Number of warrants issued to Spartan | 277,133 | 505,400 | ||||||
| Percentage of fee equal to aggregate gross proceeds | 3.00% | 3.00% | ||||||
| Non-refundable monthly fees due on agreement | $ 10,000 | |||||||