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Future Lease Obligation

2014 (remaining)

Total future lease obligation

Document and Entity Information	6 Months Ended
Jun. 30, 2014
Document And Entity Information
Entity Registrant Name	Nxt-ID, Inc.
Entity Central Index Key	0001566826
Document Type	S-1
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Entity Filer Category	Smaller Reporting Company

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Current Assets
Cash	$ 588,179	$ 303,626	$ 135,820
Restricted cash	4,152
Inventory	30,167	6,533
Prepaid expenses	94,441	3,313
Total Current Assets	716,939	313,472	135,820
Property and equipment, net of accumulated depreciation of $1,944 and $684	23,209	7,734	1,883
Total Assets	740,148	321,206	137,703
Current Liabilities
Accounts payable	92,804	244,094
Accrued expenses	53,547	135,017	69,279
Customer deposits	80,018
Convertible notes payable, net of discount of $0 and 26,755, respectively		123,245	75,000
Derivative liability - warrants		1,531,303
Conversion feature liability		118,940
Total Current Liabilities	226,369	2,152,599	144,279
Commitments and Contingencies
Stockholders' Equity (Deficiency)
Preferred stock, $0.0001 par value: 10,000,000 shares authorized; none issued and outstanding
Common stock, $0.0001 par value: 100,000,000 shares authorized; 22,028,285 and 21,937,822 issued and outstanding, respectively	2,203	2,194	2,076
Additional paid-in capital	6,087,873	(80,177)	200,224
Accumulated deficit	(5,576,297)	(1,753,410)	(208,876)
Total Stockholders' Equity (Deficiency)	513,779	(1,831,393)	(6,576)
Total Liabilities and Stockholders' Equity (Deficiency)	$ 740,148	$ 321,206	$ 137,703

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
Revenues						$ 251,375
Costs of goods sold						48,455
Gross Profit						202,920
Operating Expenses
General and administrative	470,755	67,535	758,077	326,004	835,162	220,119
Selling	319,073	489	377,603	5,489	81,323	62,500
Research and development	259,847	84,225	424,126	262,007	518,614	114,269
Total Operating Expenses	1,049,675	152,249	1,559,806	593,500	1,435,099	396,888
Operating Loss	(1,049,675)	(152,249)	(1,559,806)	(593,500)	(1,435,099)	(193,968)
Other Expense
Interest and other expenses, net		(4,500)	(30,744)	(8,250)	(35,461)	(247)
Inducement expense in connection with warrant exercise	(1,177,760)		(1,177,760)
Unrealized loss on change in fair value of derivative liabilities			(1,054,577)		(73,974)
Total Other Expense	(1,177,760)	(4,500)	(2,263,081)	(8,250)	(109,435)	(247)
Net Loss	$ (2,227,435)	$ (156,749)	$ (3,822,887)	$ (601,750)	$ (1,544,534)	$ (194,215)
Net Loss Per Common Share - Basic and Diluted	$ (0.11)	$ (0.01)	$ (0.18)	$ (0.03)	$ (0.07)	$ (0.01)
Weighted Average Number of Common Shares Outstanding - Basic and Diluted	22,007,979	21,242,244	21,987,558	21,109,011	21,409,369	20,197,478

Consolidated Statements of Changes In Stockholders' Equity (Deficiency) (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2011	20,000,000
Beginning balance, value at Dec. 31, 2011	$ 2,000	$ 8,000	$ (14,661)	$ (4,661)
Capital contributions - founders		4,300		4,300
Issuance of common stock for cash, shares	632,000
Issuance of common stock for cash, value	$ 64	157,936		158,000
Issuance of common stock for services, shares	120,000
Issuance of common stock for services, value	$ 12	29,988		30,000
Issuance of warrants in connection with offering
Net loss			(194,215)	(194,215)
Ending balance, shares at Dec. 31, 2012	20,752,000
Ending balance, value at Dec. 31, 2012	$ 2,076	200,224	(208,876)	(6,576)
Exercise of common stock purchase warrants, shares	300,000
Exercise of common stock purchase warrants, value	$ 30	299,970		300,000
Issuance of common stock and warrants for cash, net of fees, shares	443,063
Issuance of common stock and warrants for cash, net of fees, value	$ 44	588,736		$ 588,780
Issuance of common stock for cash, shares	204,000			204,000
Issuance of common stock for cash, value	$ 20	50,980		$ 51,000
Issuance of common stock for services, shares	377,222			24,000
Issuance of common stock for services, value	$ 38	311,202		$ 311,240
Retirement of common stock by officers, shares	(138,463)
Retirement of common stock by officers, value	$ (14)	14
Issuance of warrants in connection with offering		(1,531,303)		(1,531,303)
Net loss			(1,544,534)	(1,544,534)
Ending balance, shares at Dec. 31, 2013	21,937,822
Ending balance, value at Dec. 31, 2013	$ 2,194	$ (80,177)	$ (1,753,410)	(1,831,393)
Ending balance, value at Jun. 30, 2014				$ 513,779

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Cash Flows from Operating Activities
Net loss	$ (3,822,887)	$ (601,750)	$ (1,544,534)	$ (194,215)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation	1,260	198	585	99
Stock- based compensation	144,000	80,000	311,240	30,000
Amortization of debt discount	26,755		18,211
Unrealized loss on change in fair value of derivative liabilities	1,054,577		73,974
Inducement fee in connection with warrant exercise	1,177,760
Changes in operating assets and liabilities:
Inventory	(23,634)	(2,790)	(6,533)
Prepaids	(91,128)		(3,313)
Accounts payable	(151,290)	219,907	244,094	64,279
Accrued expenses	(59,985)		65,738
Customer deposits	80,018
Total Adjustments	2,158,333	297,315	703,996	94,378
Net Cash Used in Operating Activities	(1,664,554)	(304,435)	(840,538)	(99,837)
Cash flows from Investing Activities
Restricted Cash	(4,152)
Purchase of equipment	(16,735)		(6,436)	(1,982)
Net Cash Used in Investing Activities	(20,887)		(6,436)	(1,982)
Cash flows from Financing Activities
Proceeds received in connection with issuance of common stock and warrants, net	799,994		588,780
Proceeds received in connection with issuance of common stock, net		246,435	51,000	158,000
Proceeds received in connection with exercise of warrants	1,170,000		300,000
Proceeds from convertible notes payable		75,000	75,000	75,000
Proceeds from advances made by officer		64,000	64,000
Repayments of advances made by officer		(60,000)	(64,000)
Capital contributions-founders				4,300
Net Cash Provided by Financing Activities	1,969,994	325,435	1,014,780	237,300
Net Increase in Cash	284,553	21,000	167,806	135,481
Cash - Beginning of Period	303,626	135,820	135,820	339
Cash - End of Period	588,179	156,820	303,626	135,820
Supplemental Disclosures of Cash Flow Information:
Interest
Taxes
Non-cash financing activities:
Recognition of liability in connection with warrant issuance	3,431,541
Reclassification of warrant liability to additional paid in capital in connection with warrant modification	6,037,639
Issuance of common stock in connection with conversion of note payable and accrued interest	171,485
Reclassification of conversion feature liability in connection with note conversion	98,722
Retirement of common stock by officers	68		14
Accrual of common shares to be issued for services		$ 35,000
Conversion feature in connection with note payable issuance			44,966
Issuance of warrants in connection with offering (Note 8)			$ 1,531,303

Summary of Significant Accounting Policies

6 Months Ended

12 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 3 - Summary Of Significant Accounting Policies

Use of Estimates in the Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates and assumptions include the valuation allowance relating to the Company’s deferred tax assets, the fair value of the Company’s equity and derivative financial instruments and stock-based compensation.

Principles of Consolidation

The consolidated financial statements include the accounts of Nxt-ID and its wholly-owned subsidiary, 3D-ID. Intercompany balances and transactions have been eliminated upon consolidation.

Restricted Cash

Restricted cash is comprised of amounts held by credit card processors until the Company establishes a history of activity and the processor is able to estimate potential charge back risk. The balances are rolling and held by the processor for a period of less than a year and therefore reported as a current asset on the accompanying condensed consolidated balance sheets.

Inventory

Inventory consists principally of raw materials and is valued at the lower of cost or market with cost determined using the first-in, first-out method and with market defined as the lower of replacement cost or realizable value. As of June 30, 2014 inventory is comprised of $30,167 in raw materials on hand. In addition, as an early stage entity, the Company is required to prepay for raw materials with certain vendors until credit terms can be established. As of June 30, 2014, approximately $86,000 of prepaid inventory is included in prepaid expenses on the condensed consolidated balance sheet.

Revenue Recognition

The Company’s 3D facial recognition and identification products are currently available for sale and the Company has begun accepting pre-orders on its Mobile Bio Wocket. The Company recognizes revenue in connection with the sale of these products when persuasive evidence of an arrangement exists, the service has been rendered or product delivery has occurred, the price is fixed or readily determinable and collectability of the sale is reasonably assured. As of June 30, 2014, the Company has received $80,018 in customer deposits in connection with pre-orders of its MobileBio Wocket.

The Company requires all of its product sales to be supported by evidence of a sale transaction that clearly indicates the selling price to the customer, shipping terms and payment terms. Evidence of an arrangement generally consists of a contract or purchase order approved by the customer. The Company recognizes revenue at the time in which it receives a confirmation that the goods were either tendered at their destination, when shipped “FOB destination,” or transferred to a shipping agent, when shipped “FOB shipping point.” Delivery to the customer is deemed to have occurred when the customer takes title to the product. Generally, title passes to the customer upon shipment, but could occur when the customer receives the product based on the terms of the agreement with the customer. The prices of all goods that the Company sells are fixed and agreed to with the customer prior to shipment.

In the event a sale is made to a customer under circumstances in which collectability is not reasonably assured, the Company either requires the customer to remit payment prior to shipment or defers recognition of the revenue until payment is received. The Company maintains a reserve for amounts that may not be collectible due to risk of credit losses.

The Company’s sales typically do not include multiple deliverable arrangements.

Convertible Instruments

The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The accounting standards require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (i) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in the results of operations.

Conversion options that contain variable settlement features, such as provisions to adjust the conversion price upon subsequent issuances of equity or equity linked securities at exercise prices more favorable than that featured in the hybrid contract, generally result in their bifurcation from the host instrument.

The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20 “Debt with Conversion and Other Options.” The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt. See Note 5 below.

Debt discount and amortization of debt discount

Debt discount represents the fair value of embedded conversion options of various convertible debt instruments and attached convertible equity instruments issued in connection with debt instruments. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the straight-line method which approximates the interest method. The amortization of debt discount is included as a component of other expenses in the accompanying statements of operations.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if, based on the weight of the available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company will classify as income tax expense any interest and penalties. The Company has no material uncertain tax positions for any of the reporting periods presented. Generally, the tax authorities may examine the partnership/corporate tax returns for three years from the date of filing. The Company is in the process of filing its tax returns for the year ended December 31, 2013. Therefore, the Company’s net operating loss carryovers will not be available to offset future taxable income, if any, until the returns are filed.

Stock-Based Compensation

The Company accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. The Company estimates the fair value of employee stock options using the Black-Scholes option pricing model. The Company amortizes the fair value of employee stock options on a straight-line basis over the requisite service period of the awards. Compensation expense includes the impact of an estimate for forfeitures for all stock options.

The Company accounts for equity instruments issued to non-employees at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests or becomes non-forfeitable. Non-employee stock-based compensation charges are amortized over the vesting period or as earned.

Net Loss per Share

Basic loss per share was computed using the weighted average number of common shares outstanding. Diluted loss per share includes the effect of diluted common stock equivalents. Potentially dilutive securities realizable from the exercise of 1,396,139 warrants as of June 30, 2014 were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. As of June 30, 2013, potentially dilutive securities realizable from the conversion of the Company’s then outstanding note payable into 120,000 shares of common stock and the exercise of warrants for the purchase of 304,600 common shares were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

Research and Development

Research and development costs consist of expenditures incurred during the course of planned research and investigation aimed at the discovery of new knowledge that would be useful in developing new products or processes. The Company expenses all research and development costs as incurred.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates and assumptions include the valuation allowance relating to the Company’s deferred tax asset, the fair value of the Company’s stock, derivative financial instruments and stock-based compensation.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Nxt-ID and its wholly-owned subsidiary, 3D-ID. Intercompany balances and transactions have been eliminated upon consolidation.

CASH

The Company considers all highly liquid securities with an original maturity date of three months or less when purchased to be cash equivalents. At December 31, 2013 and 2012, the Company had no cash equivalents. Due to their short-term nature, cash equivalents are carried at cost, which approximates fair value.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash.

The Company maintains its cash balances in financial institutions located in the United States. At times, the Company’s cash balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

REVENUE RECOGNITION

The Company’s 3D facial recognition and identification products are currently available for sale. The Company recognizes revenue in connection with the sale of these products when persuasive evidence of an arrangement exists, the service has been rendered or product delivery has occurred, the price is fixed or readily determinable and collectability of the sale is reasonably assured.

The Company requires all of its product sales to be supported by evidence of a sale transaction that clearly indicates the selling price to the customer, shipping terms and payment terms. Evidence of an arrangement generally consists of a contract or purchase order approved by the customer. The Company recognizes revenue at the time in which it receives a confirmation that the goods were either tendered at their destination, when shipped “FOB destination,” or transferred to a shipping agent, when shipped “FOB shipping point.” Delivery to the customer is deemed to have occurred when the customer takes title to the product. Generally, title passes to the customer upon shipment, but could occur when the customer receives the product based on the terms of the agreement with the customer. The selling prices of all goods that the Company sells are fixed, and agreed to with the customer, prior to shipment.

In the event a sale is made to a customer under circumstances in which collectability is not reasonably assured, the Company either requires the customer to remit payment prior to shipment or defers recognition of the revenue until payment is received. The Company maintains a reserve for amounts which may not be collectible due to risk of credit losses. The Company’s sales typically do not include multiple deliverable arrangements.

LONG-LIVED ASSETS

Long-lived assets, such as property and equipment, are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with ASC 360-10-35-17 through 35-35 "Measurement of an Impairment Loss." The Company assesses the impairment of the assets based on the undiscounted future cash flow the assets are expected to generate compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management's estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes to the Company's business operations.

PROPERTY AND EQUIPMENT

Property and equipment consisting of furniture and fixtures is stated at cost. The costs of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful life of the respective asset as follows:

	Equipment	5 years
	Furniture and fixtures	3 to 5 years

Depreciation expense for the year ended December 31, 2013 and 2012 was $585 and $99, respectively.

INVENTORY

Inventory is valued at the lower of cost or market with cost determined using the first-in, first-out method and with market defined as the lower of replacement cost or realizable value. Inventory is comprised principally of raw materials.

CONVERTIBLE INSTRUMENTS

The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The accounting standards require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (i) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in the results of operations.

Conversion options that contain variable settlement features such as provisions to adjust the conversion price upon subsequent issuances of equity or equity linked securities at exercise prices more favorable than that featured in the hybrid contract generally result in their bifurcation from the host instrument.

The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt. See Note 5.

DERIVATIVE FINANCIALS INSTRUMENTS

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes option valuation model to value the derivative instruments at inception and on subsequent valuation dates. The conversion feature embedded within Company’s convertible note payable does not have fixed settlement provisions as the conversion price varies based on the trading price of the Company’s common stock and the potential number of common shares to be issued upon conversion is indeterminable up to a maximum of 120,000 shares of common stock. In addition, the warrants issued in connection with the Offering (as defined in Note 8) do not have fixed settlement provisions as their exercise prices may be lowered if the Company conducts an offering in the future at a price per share below the exercise price of the warrants. Accordingly, the conversion feature and warrants have been recognized as derivative instruments. Although the Company determined the conversion feature and warrants both include a implied downside protection feature, it performed a Monte-Carlo simulation and concluded that the difference in value between the Monte-Carlo simulation and the Black-Scholes valuation model is de minimis and the use of the Black-Scholes valuation model is considered to be a reasonable method to value each instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. (See Note 6.)

DEBT DISCOUNT AND AMORTIZATION OF DEBT DISCOUNT

INCOME TAXES

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company will classify as income tax expense any interest and penalties. The Company has no material uncertain tax positions for any of the reporting periods presented. Generally, the tax authorities may examine the partnership/corporate tax returns for three years from the date of filing. All periods are open for examination since the Company is still in the process of filing its tax returns for all periods. Therefore, the Company’s net operating loss carryovers will not be available to offset future taxable income, if any, until the returns are filed.

STOCK-BASED COMPENSATION

NET LOSS PER SHARE

Basic loss per share was computed using the weighted average number of common shares outstanding. Diluted loss per share includes the effect of diluted common stock equivalents. Potentially dilutive securities realizable from the exercise of 454,600 warrants and from the conversion of the Company’s notes payable into 50,000 shares of common stock as of December 31, 2013, respectively, were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. As of December 31, 2012 there were no potentially dilutive securities.

RESEARCH AND DEVELOPMENT

Research and development costs consist of expenditures incurred during the course of planned research and investigation aimed at the discovery of new knowledge, which will be useful in developing new products or processes. The Company expenses all research and development costs as incurred.

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“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 (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

Stockholders' Equity

6 Months Ended

12 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

Note 6 - Stockholders' Equity

On January 13, 2014, the Company closed a “best efforts” private offering of $1,000,000 (the “Offering”) with a group of accredited investors (the “Purchasers”) and the Company exercised the oversubscription amount allowed in the Offering of $350,000, for total gross proceeds to the Company of $1,350,000 before deducting placement agent fees and other expenses. Pursuant to a securities purchase agreement with the Purchasers (the “Purchase Agreement”), the Company issued to the Purchasers (i) 415,387 shares of the Company’s common stock, par value $0.0001 and (ii) 1,350,000 warrants (the “Warrants”) to purchase shares (the “Warrant Shares”) of the Company’s common stock at an exercise price of $3.25 per share. In connection with the Offering, 138,463 units were sold at the end of December 2013 and 276,924 units were sold in January 2014, all at $3.25 per unit. As a result, the Company received aggregate gross proceeds of $450,000 in December 2013 from the issuance of 138,463 shares of common stock and 450,000 Warrants, and the Company received $900,000 in January 2014 from the issuance of 276,924 shares of common stock and 900,000 Warrants. Costs incurred associated with the Offering in December 2013 and January 2014 were $56,820 and $100,006, respectively. In January 2014, the placement agent received 41,539 Warrants from the Offering.

Pursuant to the Purchase Agreement, the Company’s founders who are members of management (the “Founders”) agreed to cancel a corresponding number of shares to those shares issued in the Offering and place in escrow a corresponding number of shares to be cancelled for each Warrant Share issued. As a result, the Founders retired 138,463 and 276,924 shares of common stock in December 2013 and January 2014, respectively.

The Warrants are exercisable for a period of five years from the original issue date. The initial exercise price with respect to the Warrants was $3.25 per share. On the date of issuance, the Warrants were recognized as derivative liabilities as they did not have fixed settlement provisions because their exercise prices could be lowered if the Company was to issue securities at a lower price in the future. As a result, the Company recorded $3,431,541 as derivative liability warrants on the condensed consolidated balance sheet on January 13, 2014.

On February 21, 2014, the Company amended the terms of the 1,359,539 Warrants issued in the Offering to eliminate the anti-dilution provision and to lower the exercise price of the Warrants from $3.25 to $3.00. As a result of the Warrant modifications, the Company re-measured the Warrant liability on the modification date and recorded an unrealized loss on derivative liabilities of $1,074,795 and reclassified the aggregate re-measured value of the Warrants of $6,037,639 to additional paid in capital. See Note 7 below.

On various dates, during the six months ended June 30, 2014, the Company received gross proceeds of $1,200,000 in connection with the exercise of 400,000 warrants into 400,000 shares of common stock at an exercise price of $3.00 per share, net of fees to be paid upon the exercise of the warrants issued in the Offering per the term of the underwriter agreement of $30,000. Upon exercise, pursuant to the Purchase Agreement, the Company’s Founders agreed to cancel a corresponding number of shares to be cancelled for each Warrant Share issued. As a result, the Founders retired 400,000 shares of common stock.

Between June 12, 2014 and June 17, 2014, the Company completed a private offering with a group of accredited investors (the “Purchasers”) who had previously participated in the Offering that occurred between December 30, 2013 and January 13, 2014 (as discussed in this Note 6) for total net proceeds to the Company of $4,000. Pursuant to a securities purchase agreement with the Purchasers, the Company issued to the Purchasers warrants (the “Warrants”) to purchase an aggregate of 400,000 shares (the “Shares”) of the Company’s common stock at an exercise price of $3.00 per share. The Warrants are exercisable for a period of five years from the original issue date. The exercise price for the Warrants is subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change and dilutive issuances. The Company determined that the effect of the issuance of the warrants was to induce the Purchasers to exercise warrants previously issued to them in the Offering. As a result, the Company recorded an inducement expense of $1,177,760 for the six and three months ended June 30, 2014.

In connection with the sale of the Warrants, the Company entered into a registration rights agreement with the Purchasers pursuant to which the Company agreed to register the Shares and the shares of the common stock underlying the Warrants (the “Registrable Securities”) on a Form S-1 registration statement (the “Registration Statement”) to be filed with the SEC 90 days following the completion of an underwritten public offering (the “Filing Date”) and to cause the Registration Statement to be declared effective under the Securities Act within 90 days following the Filing Date (the “Required Effective Date”).

If the Registration Statement is not filed by the Filing Date or declared effective by the Required Effective Date, the Company is required to pay partial liquidated damages to each Purchaser in the amount equal to 2% for the purchase price paid for the Warrants then owned by such Purchaser for each 30-day period for which the Company is non-compliant.

The following table summarizes the Company's warrants outstanding at June 30, 2014:

Warrants outstanding and exercisable

						Weighted
				Weighted		Average
				Average		Remaining
	Number of			Exercise		Life		Intrinsic
	Warrants			Price		In Years		Value
Outstanding at December 31, 2013		454,600		$	3.25		-		-
Issued		1,341,539			3.00		-		-
Exercised		(400,000	)		3.00		-		-
Cancelled		-			-		-		-
Outstanding at June 30, 2014		1,396,139		$	3.00		4.65	$	1,270,486
Exercisable at June 30, 2014		1,396,139		$	3.00		4.65	$	1,270,486

On January 4, 2013, a majority of the Company’s stockholders approved by written consent the Company’s 2013 Long-Term Stock Incentive Plan (“LTIP”). The maximum aggregate number of shares of common stock that may be issued under the LTIP, including stock awards and stock appreciation rights, is limited to 10% of the shares of common stock outstanding on the first business or trading day of any fiscal year, which is 2,193,782 at January 1, 2014. During the six and three months ended June 30, 2014, the Company issued 6,347 and 2,558 restricted shares, respectively, under the plan to three non-executive directors with an aggregate fair value of $25,000 and $10,000, respectively.

For the six months ended June 30, 2014, the Company issued 18,282 shares of common stock with an aggregate fair value of $75,000 to consultants for services rendered to the Company.

NOTE 8 - STOCKHOLDERS’ DEFICIENCY

Common Stock Issuances

During the first quarter of 2013, the Company issued 204,000 shares of common stock at $0.25 per share in a private placement and received net proceeds of $51,000.

On May 10, 2013, a registration statement under the Securities Act of 1933 with respect to a public offering of 1,000,000 Units at $1.00 per unit consisting of one share of common stock and one warrant to purchase one share of common stock was declared effective by the U.S. Securities and Exchange Commission. The warrants have an exercise price of $1.00 per share and a term of three years and contain customary anti-dilution provisions. During the year ended December 31, 2013, the Company sold 304,600 Units and has received proceeds of $304,600, less offering costs of approximately $109,000.

On January 13, 2014, the Company closed a “best efforts” private offering of $1,000,000 (the “Offering”) with a group of accredited investors (the “Purchasers”) and the Company exercised the oversubscription amount allowed in the Offering of $350,000, for total gross proceeds to the Company of $1,350,000 before deducting placement agent fees and other expenses. Pursuant to a securities purchase agreement with the Purchasers (the “Purchase Agreement”), the Company issued to the Purchasers (i) 415,387 shares (the “Shares”) of the Company’s common stock, par value, $0.0001 (the “Common Stock”) and (ii) 1,350,000 warrants (the “Warrants”) to purchase shares (the “Warrant Shares” and together with the Shares and the Warrants, the “Securities”) of the Company’s Common Stock at an exercise price of $3.25 per share. In connection with the Offering, 138,463 units were sold at the end of December of 2013 and 276,924 units were sold in January 2014, all at $3.25 per unit. As a result, the Company received aggregate gross proceeds of $450,000 in December 2013 from the issuance of 138,463 shares of common stock and 450,000 warrants, and the Company received $900,000 in January 2014 from the issuance of 276,924 shares of common stock and 900,000 warrants. Costs incurred associated with the Offering in December 2013 were $56,820. In January 2014, the placement agent received 41,539 warrants from the Offering.

The Warrants are exercisable for a period of five years from the original issue date. The exercise price with respect to the Warrants is $3.25 per share. The exercise price for the Warrants is subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change and dilutive issuances. See Note 6.

Pursuant to the Purchase Agreement, the Company’s founders who are members of management (the “Founders”) agreed to cancel a corresponding number of shares to those Shares issued in the Offering and place in escrow a corresponding number of shares to be cancelled for each Warrant Share issued. As a result, the Founders retired 138,463 and 276,924 shares of common stock in December 2013 and January 2014, respectively.

In connection with the sale of the Shares and Warrants, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Purchasers, pursuant to which the Company agreed to register the Shares and the shares of our Common Stock underlying the Warrants (the “Registrable Securities”) on a Form S-1 registration statement (the “Registration Statement”) to be filed with the SEC on the earlier of February 25, 2014 or within 3 business days following the filing of our Annual Report on Form 10-K for the year ended December 31, 2013 (the “Filing Date”) and to cause the Registration Statement to be declared effective under the Securities Act within 90 days following the Filing Date (the “Required Filing Date”). If the Registration Statement is not filed by the Filing Date or declared effective by the Required Effective Date, the Company is required to pay partial liquidated damages to each Purchaser in the amount equal to 2% for the purchase price paid for the Shares and Warrants then owned by such Purchaser for each 30-day period for which the Company is non-compliant.

During the year ended December 31, 2012, the Company issued 632,000 shares of common stock at $0.25 per share and received proceeds of $158,000.

During the year ended December 31, 2012, the founders of 3D-ID contributed $4,300 to fund the Company’s activities.

Common Stock Purchase Warrants

During the year ended December 31, 2013, the Company received $300,000 in net proceeds from the exercise of 300,000 warrants from holders of the units.

The following table summarizes the Company's warrants outstanding at December 31, 2013:

	Number of Warrants			Weighted Average Exercise Price	Weighted Average Remaining Life In Years		Intrinsic Value
Outstanding at December 31, 2012	-		$	-
Issued	754,600			2.34	-		-
Exercised	(300,000	)		1.00	-		-
Cancelled	-			-	-		-
Outstanding at December 31, 2013	454,600		$	3.23	4.97	$	351,300

Exercisable at December 31, 2013	454,600		$	3.23	4.97	$	351,300

Long-Term Stock Incentive Plan

On January 4, 2013, a majority the Company’s stockholders approved by written consent the Company’s 2013 Long-Term Stock Incentive Plan (“LTIP”). The maximum aggregate number of shares of common stock that may be issued under the LTIP, including stock awards and stock appreciation rights, is limited to 10% of the shares of common stock outstanding on the first business or trading day of any fiscal year, which is 2,193,782 at December 31, 2013. During the year ended December 31, 2013, the Company issued 48,833 restricted shares under the plan to two non-executive directors with an aggregate fair value of $30,000. During the year ended December 31, 2013, the Company issued 100,000 shares with an aggregate value of $100,000 to four non-executive employees. At December 31, 2013, a total of 148,833 shares have been issued from the Plan and 2,044,949 are available to be issued

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Derivative Liabilities

6 Months Ended

12 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE LIABILITIES

Note 7 – Derivative liabilities

Fair value of financial instruments is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. The Company has categorized its financial assets and liabilities measured at fair value into a three-level hierarchy.

The conversion feature embedded within the Company’s convertible notes payable and the warrants issued in connection with the Offering (as defined in Note 6 above) did not have fixed settlement provisions on the dates they were initially issued because the conversion and exercises prices could have been lowered if the Company would have issued securities at lower prices before conversion.

The derivative liabilities were valued using the Black-Scholes option valuation model and the following weighted average assumptions on the following dates:

	February 21, 2014			February 18, 2014			January 13, 2014			December 31, 2013
Embedded Conversion Feature and Warrant Liability:
Risk-free interest rate		0.30	%		0.30	%		0.30	%		0.30	%
Expected volatility		124	%		123	%		123	%		123.54	%
Expected life (in years)		4.9			0.75			5.00			4.59
Expected dividend yield		-			-			-			-
Number of shares		1,391,539			55,497			941,539			500,000
Fair value	$	6,037,639		$	98,722		$	3,431,541		$	1,650,243

The risk-free interest rate was based on rates established by the Federal Reserve. Since the Company’s common stock has not been publicly traded for a sufficiently long period of time, the Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The expected life of the conversion feature was determined by the maturity date of the Note (as defined in Note 5) and the expected life of the Warrants was determined by their expiration dates. The expected dividend yield was based upon the fact that the Company has not historically paid dividends on its common stock and does not expect to pay dividends on its common stock in the future.

Fair Value Measurement

Valuation Hierarchy

ASC 820, “Fair Value Measurements and Disclosures,” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides the liabilities carried at fair value measured on a recurring basis as of June 30, 2014:

Fair Value Measurements at June 30, 2014

Total Carrying Value at June 30, 2014

Quoted Prices in active

markets (Level 1)

Significant

other

observable inputs (Level 2)

Significant Unobservable inputs

(Level 3)

Derivative liabilities

The carrying amounts of cash, inventory, prepaid expenses, accounts payable and accrued liabilities approximate their fair value due to their short maturities. The Company’s other financial instruments included its convertible notes payable obligations. The carrying value of these instruments approximated fair value, as they bear terms and conditions comparable to market for obligations with similar terms and maturities. The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the derivative liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting department, who reports to the Principal Financial Officer, determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting department and are approved by the Principal Financial Officer.

Level 3 Valuation Techniques

Level 3 financial liabilities consisted of the conversion feature liability and common stock purchase warrants for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. A significant decrease in the volatility or a significant decrease in the Company’s stock price, in isolation, would result in a significantly lower fair value measurement.

As of June 30, 2014, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy.

The following table sets forth a summary of the changes in the fair value of our Level 3 financial liabilities that are measured at fair value on a recurring basis:

	For the six months ended			For the three and six months ended
	June 30, 2014			June 30, 2013
Beginning balance	$	1,650,243		$	-
Recognition of derivative liability		3,431,541			44,966
Net unrealized loss on derivative liabilities		1,074,795			-
Net unrealized gain on conversion feature liabilities		(20,218	)		(1,642	)
Adjustment to additional paid in capital upon conversion and modification		(6,136,361	)		-
Ending balance	$	-		$	43,324

NOTE 6 - DERIVATIVE LIABILITIES

The conversion feature embedded within the Company’s convertible notes payable and the warrants issued in connection with the Offering (as defined in Note 8) do not have fixed settlement provisions because the conversion and exercises prices may be lowered if the Company issues securities at lower prices in the future.

The derivative liabilities were valued using the Black-Scholes option valuation model and the following weighted average assumptions on the following dates:

	May 25, 2013			December 31, 2013
Embedded Conversion Feature and Warrant Liability:
Risk-free interest rate		0.30	%		0.30	%
Expected volatility		91.17	%		123.54	%
Expected life (in years)		1.60			4.59
Expected dividend yield		-			-
Number of shares		120,000			500,000
Fair value	$	44,966		$	1,650,243

The risk-free interest rate was based on rates established by the Federal Reserve. Since the Company’s stock has not been publicly traded for a sufficiently long period of time, the Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The expected life of the conversion feature was determined by the maturity date of the Note and the expected life of the warrants was determined by their expiration dates. The expected dividend yield was based upon the fact that the Company has not historically paid dividends on its common stock, and does not expect to pay dividends on its common stock in the future.

Fair Value Measurement

Valuation Hierarchy

The following table provides the liabilities carried at fair value measured on a recurring basis as of December 31, 2013:

			Fair Value Measurements at December 31, 2013
	Total Carrying Value at December 31, 2013		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liabilities	$	1,650,243	$	-	$	-	$	1,650,243

The carrying amounts of cash, inventory, prepaid expenses, accounts payable and accrued liabilities approximate their fair value due to their short maturities. The Company’s other financial instruments include its convertible notes payable obligations. The carrying value of these instruments approximate fair value, as they bear terms and conditions comparable to market, for obligations with similar terms and maturities. The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

Level 3 Valuation Techniques

Level 3 financial liabilities consist of the conversion feature liability and common stock purchase warrants for which there are no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. A significant decrease in the volatility or a significant decrease in the Company’s stock price, in isolation, would result in a significantly lower fair value measurement.

As of December 31, 2013, there were no transfers in or out of level 3 from other levels in the fair value hierarchy.

The following table sets forth a summary of the changes in the fair value of our Level 3 financial liabilities that are measured at fair value on a recurring basis:

	For the year ended
	December 31, 2013
Beginning balance	$	-
Recognition of conversion feature liability		44,966
Recognition of derivative liability - warrants		1,531,303
Net unrealized loss on derivative liabilities		73,974
Ending balance	$	1,650,243

Commitments and Contingencies

6 Months Ended

12 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 8 - Commitments and Contingencies

Legal Matters

From time to time, the Company is subject to legal proceedings arising in the ordinary course of business. Such matters are subject to uncertainties and outcomes are not predictable with assurance. Management believes at this time that there are no ongoing matters that will have a material adverse effect on the Company's business, financial position, results of operations, or cash flows.

Subsequent to the acquisition of 3D-ID, the Company licensed sixteen (16) U.S. patents. The Company does not generally conduct exhaustive patent searches to determine whether the technology used in our products infringes patents held by third parties. The Company may face claims by third parties that its products or technology infringe their patents or other intellectual property rights in the future. Any claim of infringement could cause the Company to incur substantial costs defending against the claim, even if the claim is invalid, and could distract the attention of the Company’s management. If any of the Company’s products are found to violate third-party proprietary rights, it may be required to pay substantial damages.

Commitments

On August 19, 2011, the Company signed a licensing agreement with Technest Holdings, Inc. (“Technest”) and Genex Technologies, Inc., which granted 3D-ID a perpetual sub-licensable, exclusive, worldwide license to use their intellectual property in U.S. federal and state markets and a non-exclusive license in all other markets. The Company’s Chief Executive Officer (“CEO”) is a stockholder of and was the former CEO of Technest. In consideration of the license of rights affected by this agreement, 3D-ID is obligated to pay Technest a royalty equal to 5% of net sales. To date, no royalties have been paid. As the Technest patents do not constitute part of the Company’s core intellectual property in its present or anticipated future product offerings, it has decided to forgo the exclusive rights to the Technest patents. As a result, the Company reversed an accrual of $35,000 which represented a minimum royalty to maintain certain exclusive rights. The Company retains a perpetual non-exclusive worldwide license to these patents.

In October 2012, the Company entered into an agreement with a consultant to provide public relations and marketing services to the Company for a period of three months. Pursuant to the agreement, the Company agreed to pay the consultant a monthly cash retainer of $5,000 to be paid in cash and to issue the consultant shares of common stock per month with a fair value of $10,000 as compensation for services provided. The Company entered into a new agreement with this consultant on November 1, 2013 for a period of six months and agreed to pay the consultant a monthly cash retainer of $5,000 to be paid in cash. On June 1, 2014, the Company and the consultant agreed to extend the contract for a period of one year from that date. In connection with the amended agreement, the Company agreed to pay the consultant a monthly retainer of $15,000, of which $5,000 shall be in cash and $10,000 in unregistered shares of the Company’s common stock. In addition to the monthly retainer the consultant is to be reimbursed for other expenses incurred in connection with certain marketing events. During the six and three months ended June 30, 2014, the Company paid the consultant $162,767 and $112,640, respectively pursuant to this agreement. Also during the six and three months ended June 30, 2014, 2,445 and 2,445 shares of common stock, respectively, with a fair value of $10,000 and $10,000, respectively, were paid to the consultant as compensation for services provided. During the six and three months ended June 30, 2013, 150,000 and 30,000 shares of common stock, respectively, with a fair value of $60,000 and $30,000, respectively, were paid to the consultant as compensation for services provided.

In January 2013, the Company entered into an agreement with a development and manufacturing company to provide samples of the Company’s smart card design for an aggregate of $150,000. Unless terminated early, the agreement will continue in full force and effect until the samples have been delivered to the Company. During the six months ended June 30, 2014 and 2013 the Company paid $0 and $125,000, respectively, in consulting fees pursuant to this agreement. During the three months ended June 30, 2014 and 2013 the Company paid $0 and $125,000, respectively, in consulting fees pursuant to this agreement.

In July 2013, the Company entered into an agreement with a consultant to provide public relations and marketing services to the Company for a period of six months. Pursuant to the agreement, the Company agreed to pay the consultant a monthly cash fee of $4,000 and to issue the consultant 4,000 shares of common stock per month as compensation for services provided. Commencing September 16, 2013, the agreement was amended to a monthly cash fee of $4,000 and to issue the consultant $4,000 in shares of common stock per month. In January 2014 the agreement was amended whereby the Company agreed to pay the consultant a monthly payment of $4,000 in cash only. During the six and three months ended June 30, 2014, the consultant was issued 833 and 0 shares, respectively with an aggregate grant date fair value of $4,000 and $0. During the six and three months ended June 30, 2014, the Company paid the consultant $19,000 and $10,000 respectively pursuant to this agreement.

On October 16, 2013, the Company entered into a lease agreement for office space in Palm Bay, Florida. The term of the lease is for three years with a monthly rent of $1,250 per month in the first year, increasing 3% annually thereafter. The Company incurred $7,500 and $3,750 of rent expense for the six and three months ended June 30, 2014, respectively. Minimum lease payments for non-cancelable operating leases are as follows:

On November 7, 2013, the Company entered into a three-year distribution and supply agreement with Voice of Big Data Solutions, Pvt. Ltd. (“VOBD”) for the distribution of the Company’s 3D facial recognition products in India and Sri Lanka on an exclusive basis and the Middle East and Singapore on a non-exclusive basis. The agreement is subject to termination at any time after the initial three-year term by either the Company or VOBD upon sixty (60) days written notice.

On January 6, 2014, the Company entered into an agreement with a business consulting firm to provide consulting services to the Company for a period of a year. Pursuant to the agreement, the Company agreed to pay the consultant a monthly cash fee of $5,000 and to issue the consultant $5,000 worth of restricted shares of common stock per month as compensation for services provided. During the six and three months ended June 30, 2014, the consultant was issued 7,060 and 3,656 shares, respectively, with an aggregate grant date fair value of $30,000 and $15,000, respectively, and $30,000 and $15,000 in cash for a total aggregate consulting fee of $60,000 and $30,000.

Employment Agreement

Effective October 1, 2012, Nxt-ID entered into an employment agreement with its Chief Executive Officer. The employment agreement provides for:

An initial term of 3 years beginning on October 1, 2012.

An initial base salary of $150,000 per year. In January 2014, upon the successful completion of the MobileWocket prototype, the salary was increased to $300,000 in accordance with the agreement.

Payment of all necessary and reasonable out-of-pocket expenses incurred by the executive in the performance of his duties under the agreement.

Eligibility to participate in bonus or incentive compensation plans that may be established by the board of directors from time to time applicable to the executive's services.

Eligibility to receive equity awards as determined by the board of directors, or a committee of the board of directors, composed in compliance with the corporate governance standards of any applicable listing exchange.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

From time to time, the Company is subject to legal proceedings arising in the ordinary course of business. Such matters are subject to uncertainties and outcomes are not predictable with assurance. Management believes at this time, there are no ongoing matters that will have a material adverse effect on the Company's business, financial position, results of operations, or cash flows.

COMMITMENTS

Around the date of the Acquisition the Company signed a licensing agreement with Aellipsys Holdings, Inc., an unrelated party, which granted 3D-ID a perpetual sub-licensable, non-exclusive, worldwide license to use their intellectual property, including, but not limited to, those of GeoMetrix, Inc., which has 18 patents in the field of 3D facial recognition and Active ID systems for access control and identification of individuals. 3D-ID is required to pay Aellipsys Holdings a royalty for each product manufactured, sold and installed at a customer by 3D-ID equal to two thousand dollars ($2,000). An additional royalty of ten percent (10%) is payable on recurring revenues from the same installation. The term of the initial agreement is five years. During the years ended December 31, 2013 and 2012 the Company paid $0 and $10,000, respectively, in royalty payments to GeoMetrix, Inc.

On August 19, 2011, the Company signed a licensing agreement with Technest Holdings, Inc. and Genex Technologies, Inc., which granted 3D-ID a perpetual sub-licensable, exclusive, worldwide license to use their intellectual property in U.S. Federal and State markets, and a non-exclusive license in all other markets. The Company’s Chief Executive Officer (“CEO”) is a stockholder of and was the former CEO of Technest Holdings, Inc. In consideration of the license of rights affected by this Agreement, 3D-ID is obligated to pay Technest a royalty equal to 5% of net sales with a minimum royalty of $15,000 during the first two years and $20,000 for each contract year thereafter. For the years ended December 31, 2013 and 2012, the Company incurred $15,000 each year, in connection with the agreement. As of December 31, 2013, $35,000 of minimum royalties are included in accrued expenses in the consolidated balance sheet in connection with the agreement.

Company and the consultant verbally extended the agreement until October 30, 2013, with the same terms and conditions. The Company entered into a new agreement on November 1, 2013 for a period of six months and agreed to pay the consultant a monthly cash fee of $5,000.

During the year ended December 31, 2013, the Company issued 165,744 shares of common stock with an aggregate fair value of $90,000 and paid $60,000 in cash as compensation for services provided from January 1, 2013 to December 31, 2013. In addition the consultant was paid $41,875 for additional marketing services.

In November 2012, the Company entered into an agreement with a technology consulting firm to provide strategic marketing and sales services to the Company with respect to developing business opportunities with the Federal Government through March 2013. Pursuant to the agreement, the Company agreed to pay the consultant a monthly cash fee of $5,500 and a sales commission of 5% on executed contracts. The agreement ended in May, 2013. For the years ended December 31, 2013 and 2012, the Company incurred expenses in connection with this agreement of $11,000 and $5,500, respectively.

In January 2013, the Company entered into an agreement with a consultant to provide business development services to the Company for a period of three months. Pursuant to the agreement, the Company issued the consultant 20,000 shares of common stock with an aggregate fair value of $5,000. The company also entered into an agreement with the same consultant for additional services ending December 31, 2013 in the amount of $65,000 in cash and 4,878 shares of common stock with a fair value of $20,000.

In January 2013, the Company entered into an agreement with a development and manufacturing company to provide samples of the Company’s smart card design for an aggregate of $150,000. Unless terminated early, the agreement will continue in full force and effect until the samples have been delivered to the Company. During the year ended December 31, 2013 the Company paid $125,000 and samples are currently in the process of being built.

In August 2013, the Company entered into an agreement with a consultant to provide public relations and marketing services to the Company for a period of three months. Pursuant to the agreement, the Company issued the consultant 24,000 shares of common stock with an aggregate fair value of $24,000 as compensation for services provided.

On October 16, 2013, the Company entered into a lease agreement for office space in Palm Bay, Florida. The term of the lease is for three years with a monthly rent of $1,250 per month in the first year, increasing 3% annually thereafter. The Company’s rent expense in 2013 was not material, however, it is obligated to pay $15,000 in 2014, 15,450 in 2015 and 15,914 in 2016, for a total remaining lease commitment as of December 31, 2013 of $46,364.

On November 7, 2013, the Company entered into a three-year distribution and supply agreement with Voice of Big Data Solutions, Pvt. Ltd. (“VOBD”) for the distribution of the Company’s 3D facial recognition products in India and Sri Lanka on an exclusive basis and The Middle East and Singapore on a non-exclusive basis. The agreement is subject to termination at any time after the initial three-year term by either the Company or VOBD upon sixty (60) days written notice.

EMPLOYMENT AGREEMENT

Effective October 1, 2012, Nxt-ID entered into an employment agreement with its Chief Executive Officer. The employment agreement provides for:

●

An initial term of 3 years beginning on October 1, 2012.

●

A base salary of $150,000 per year, increasing to $300,000 per year

●

Payment of all necessary and reasonable out-of-pocket expenses incurred by the executive in the performance of his duties under the agreement.

●

Eligibility to participate in bonus or incentive compensation plans that may be established by the board of directors from time to time applicable to the executive's services.

●

Summary of Significant Accounting Policies (Policies)

6 Months Ended

12 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Use of Estimates in the Financial Statements

Use of Estimates in the Financial Statements

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Nxt-ID and its wholly-owned subsidiary, 3D-ID. Intercompany balances and transactions have been eliminated upon consolidation.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Nxt-ID and its wholly-owned subsidiary, 3D-ID. Intercompany balances and transactions have been eliminated upon consolidation.

Restricted Cash

Restricted Cash

CASH

Concentrations of Credit Risk

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash.

Inventory

Inventory

INVENTORY

Revenue Recognition

Revenue Recognition

The Company’s sales typically do not include multiple deliverable arrangements.

REVENUE RECOGNITION

The Company requires all of its product sales to be supported by evidence of a sale transaction that clearly indicates the selling price to the customer, shipping terms and payment terms. Evidence of an arrangement generally consists of a contract or purchase order approved by the customer. The Company recognizes revenue at the time in which it receives a confirmation that the goods were either tendered at their destination, when shipped “FOB destination,” or transferred to a shipping agent, when shipped “FOB shipping point.” Delivery to the customer is deemed to have occurred when the customer takes title to the product. Generally, title passes to the customer upon shipment, but could occur when the customer receives the product based on the terms of the agreement with the customer. The selling prices of all goods that the Company sells are fixed, and agreed to with the customer, prior to shipment.

In the event a sale is made to a customer under circumstances in which collectability is not reasonably assured, the Company either requires the customer to remit payment prior to shipment or defers recognition of the revenue until payment is received. The Company maintains a reserve for amounts which may not be collectible due to risk of credit losses. The Company’s sales typically do not include multiple deliverable arrangements.

Long-Lived Assets

LONG-LIVED ASSETS

Property and Equipment

PROPERTY AND EQUIPMENT

	Equipment	5 years
	Furniture and fixtures	3 to 5 years

Depreciation expense for the year ended December 31, 2013 and 2012 was $585 and $99, respectively.

Convertible Instruments

Convertible Instruments

The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in the results of operations.

CONVERTIBLE INSTRUMENTS

The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The accounting standards require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (i) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in the results of operations.

The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt. See Note 5.

Derivative Financial Intruments

DERIVATIVE FINANCIALS INSTRUMENTS

Debt Discount And Amortization Of Debt Discount

Debt discount and amortization of debt discount

DEBT DISCOUNT AND AMORTIZATION OF DEBT DISCOUNT

Income Taxes

Income Taxes

INCOME TAXES

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company will classify as income tax expense any interest and penalties. The Company has no material uncertain tax positions for any of the reporting periods presented. Generally, the tax authorities may examine the partnership/corporate tax returns for three years from the date of filing. All periods are open for examination since the Company is still in the process of filing its tax returns for all periods. Therefore, the Company’s net operating loss carryovers will not be available to offset future taxable income, if any, until the returns are filed.

Stock-Based Compensation

Stock-Based Compensation

STOCK-BASED COMPENSATION

Net Loss per Share

Net Loss per Share

NET LOSS PER SHARE

Basic loss per share was computed using the weighted average number of common shares outstanding. Diluted loss per share includes the effect of diluted common stock equivalents. Potentially dilutive securities realizable from the exercise of 454,600 warrants and from the conversion of the Company’s notes payable into 50,000 shares of common stock as of December 31, 2013, respectively, were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. As of December 31, 2012 there were no potentially dilutive securities.

Research and Development

Research and Development

RESEARCH AND DEVELOPMENT

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“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 (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction doesnot require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

Convertible Notes Payable (Details) - USD ($)		6 Months Ended		12 Months Ended
Convertible Notes Payable (Details) - USD ($)	Feb. 11, 2014	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Jan. 31, 2013	Dec. 13, 2012
Convertible notes payable						$ 75,000	$ 75,000
Convertible notes payable, Maturity date	Dec. 21, 2014
Unamortized debt discount expensed		$ 26,755		$ 18,211
Outstanding convertible note converted amount	$ 150,000
Conversion of accrued interest into common stock	$ 21,485
Percentage of discount on closing price	25.00%
Shares issued for debt relief	55,497
Shares issued for debt relief, amount	$ 171,485
Unrealized gain on change in fair value of conversion feature		20,218
Conversion feature in additional paid in capital		98,722
Accrued interest on Notes Payable				17,497	$ 247
Debt conversion description	<div>CII regarding converting its outstanding convertible note of $150,000, along with accrued interest of $21,485, into common stock at a 25% discount to the Company’s closing stock price on February 17, 2014.</div>
Convertible Notes Payable [Member]
Unamortized debt discount expensed				18,211
Unrealized gain on change in fair value of conversion feature				73,974
Accrued interest on Notes Payable				17,497
Debt discount				$ 44,966

Stockholders' Equity (Details) - Warrant [Member] - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Number of Warrants
Number of Warrants Outstanding, beginning	454,600	0
Number of Warrants Granted	1,341,539	754,600
Number of Warrants Exercised	(400,000)	(300,000)
Number of Warrants Cancelled		0
Number of Warrants Outstanding, ending	1,396,139	454,600
Number of Warrants Exercisable	1,396,139	454,600
Weighted Average Exercise Price
Weighted Average Exercise Price Outstanding, beginning	$ 3.25
Weighted Average Exercise Price Issued	3.00	2.34
Weighted Average Exercise Price Exercised	3.00	1.00
Weighted Average Exercise Price Cancelled		0
Weighted Average Exercise Price Outstanding, ending		3.25
Weighted Average Exercise Price Exercisable	$ 3.00	$ 3.23
Weighted Average Remaining Life In Years
Weighted Average Remaining Life In Years Outstanding	4 years 7 months 24 days	4 years 11 months 19 days
Weighted Average Remaining Life In Years Exercisable	4 years 7 months 24 days	4 years 11 months 19 days
Intrinsic Value
Intrinsic Value Outstanding	$ 1,270,486	$ 351,300
Intrinsic Value Exercisable	$ 1,270,486	$ 351,300

Stockholders' Equity (Details Textual)	1 Months Ended		3 Months Ended	6 Months Ended		12 Months Ended
Stockholders' Equity (Details Textual)	Feb. 21, 2014 shares	Jan. 31, 2014 USD ($) shares	Jun. 30, 2014 USD ($) directors $ / shares shares	Jun. 30, 2014 USD ($) directors $ / shares shares	Jun. 30, 2013 USD ($)	Dec. 31, 2013 USD ($) $ / shares shares	Dec. 31, 2012 USD ($) $ / shares shares
Stock issued in private placement - shares \| shares						204,000
Proceeds from private placement						$ 51,000
Offering costs		$ 100,006				56,820
Proceeds from issuance of stock, value						$ 51,000	$ 158,000
Stock issued under LTIP - shares \| shares						148,833
Stock available to be issued under LTIP \| shares						2,044,949
Common stock issued \| shares			22,028,285	22,028,285		21,937,822	20,752,000
Common stock, par value \| $ / shares			$ 0.0001	$ 0.0001		$ 0.0001	$ 0.0001
Warrant received by private placement agent		41,539
Re-measured value of the warrants				$ (6,136,361)
Derivative liability - warrants				3,431,541
Proceeds from warrants exercised		$ 4,000
Warrant term				$ 5
Inducement costs			$ 1,177,760
Restricted shares issued \| shares			2,558	6,347
Restricted shares issued, fair value			$ 10,000	$ 25,000
Number of non executive directors under plan \| directors			3	3
Shares issued to consultants for services \| shares						24,000
Shares issued to consultants for services, fair value						$ 311,240	$ 30,000
Long-term stock incentive plan description				The maximum aggregate number of shares of common stock that may be issued under the LTIP, including stock awards and stock appreciation rights, is limited to 10% of the shares of common stock outstanding on the first business or trading day of any fiscal year, which is 2,193,782 at January 1, 2014.
Reclassification of warrant liability to additional paid in capital in connection with warrant modification				$ 6,037,639
Common Stock [Member]
Proceeds from public offering						$ 450,000
Offering costs				$ 30,000
Retirement of stock by founders, shares \| shares		276,924		400,000		138,463
Proceeds from issuance of stock, value						$ 20	$ 64
Common stock issued \| shares			400,000	400,000
Common stock exercise price \| $ / shares				$ 3.00
Common stock unit under public offering \| shares		276,924				138,463
Common unit par value						$ 3,250
Unrealized loss on derivative liabilities				$ 1,074,795
Shares issued to consultants for services \| shares						377,222	120,000
Shares issued to consultants for services, fair value						$ 38	$ 12
Warrant [Member]
Proceeds from public offering						$ 900,000
Proceeds from issuance of stock, value				1,200,000
Number of Warrants Exercised \| shares	1,359,539
May 10, 2013 Offering
Stock sold in public offering, warrant shares \| shares						304,600
Proceeds from public offering						$ 304,600
Offering costs						109,000
Jan. 13, 2014 Offering
Offering costs						$ 56,820
Stock sold in private offering, warrant shares \| shares						138,463
Proceeds from private offering				450,000		$ 450,000
Proceeds from issuance of stock, value				1,350,000
Closing balance of private offering				1,000,000
Exercised oversubscription amount in offering				$ 350,000
Common stock issued \| shares			415,387	415,387
Common stock, par value \| $ / shares			$ 0.0001	$ 0.0001
Securities Purchase Agreement [Member]
Stock sold in public offering, warrant shares \| shares				1,350,000
Consulting Services [Member]
Shares issued to consultants for services \| shares				18,282
Shares issued to consultants for services, fair value				$ 75,000

Commitments and Contingencies (Details Textual) - USD ($)		1 Months Ended							3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 06, 2014	Nov. 30, 2013	Oct. 16, 2013	Sep. 16, 2013	Jul. 31, 2013	Jan. 31, 2013	Nov. 30, 2012	Oct. 31, 2012	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Aug. 19, 2011
Commitments And Contingencies [Line Items]
Payments of royalty													$ 0	$ 10,000
Royalties accrued													35,000	20,000
Operating lease current									7,748		7,748		15,000
Operating lease due in year 2									15,496		15,496		15,450
Operating lease due in year 3									15,496		15,496		15,914
Operating Leases, Future Minimum Payments Due									38,740		38,740		46,364
Professional fees		$ 5,000						$ 5,000		$ 112,640
Shares issued as share based compensation				$ 4,000
Percentage on sales commission							5.00%								5.00%
Payments for additional marketing services								10,000	10,000	60,000	10,000	$ 30,000	41,875
Payments for additional marketing services													$ 90,000
Consultant fees paid	$ 5,000	$ 5,500		4,000					2,445	15,000	2,445	30,000
Development and manufacturing expense						$ 150,000
Shares issued to consultants for services													24,000
Shares issued to consultants for services, fair value													$ 311,240	30,000
Rent expenses			$ 1,250						$ 3,750		$ 7,500
Lease Description			First year, increasing 3% annually thereafter
Restricted shares issued									2,558		6,347
Aggregate consulting fee									$ 30,000		$ 60,000
Incurred Expenses									1,049,675	152,249	1,559,806	593,500	$ 1,435,099	396,888
Percentage of royalty													5.00%
Minimum royalty payment next twelve months													$ 15,000
Minimum royalty payment two years													15,000
Minimum royalty payment there after													20,000
Royalty revenue													$ 15,000	15,000,000
Common stock fair value compensation shares for services													165,744
Common stock fair value compensation for services													$ 90,000
Compensation for services paid in cash													60,000
Agreement maturity date							May, 2013
Base salary													150,000
Increasing base salary													$ 300,000
Agreement term description													An initial term of 3 years beginning on October 1, 2012.
Minimum [Member]
Commitments And Contingencies [Line Items]
Incurred Expenses											150,000
Maximum [Member]
Commitments And Contingencies [Line Items]
Incurred Expenses											300,000
Consultant Agreement [Member]
Commitments And Contingencies [Line Items]
Professional fees								5,000		162,767	15,000
Shares issued as share based compensation								$ 10,000
Payments for additional marketing services									0		4,000
Consultant fees paid									$ 10,000		$ 19,000
Shares issued to consultants for services									0		833		24,000
Shares issued to consultants for services, fair value													$ 24,000
Restricted shares issued									3,656		7,060
Incurred Expenses													5,500	11,000
Licensing Agreement [Member]
Commitments And Contingencies [Line Items]
Payments of royalty													0	$ 10,000,000
Royalty for product manufactured, sold and installed													$ 2,000
Percentage of additional royalty													10.00%
Term of agreement													5 years
July, 2013 [Member]
Commitments And Contingencies [Line Items]
Shares issued as share based compensation					$ 4,000
Consultant fees paid					$ 4,000
Employee benefits and share-based compensation				$ 4,000
January, 2013 [Member]
Commitments And Contingencies [Line Items]
Consultant fees paid									$ 125,000	$ 0	$ 0	$ 125,000

Income Taxes (Details) - USD ($)	12 Months Ended
Income Taxes (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Current
Federal
State
Total Current Income Tax Provision
Deferred
Federal	(491,900)	(66,000)
State	(71,500)	(9,700)
Total Deferred Income Tax Provision	(563,400)	(75,700)
Change in valuation allowance	563,400	75,700
Total income tax provision

Organization and Basis of Presentation(Details)	1 Months Ended
Organization and Basis of Presentation(Details)	Jun. 25, 2012 USD ($)
Organization and Basis of Presentation [Abstract]
Business acquisition, membership interests percentage	100.00%
Common stock acquired in exchange	$ 20,000,000

Accrued Expenses (Details) - USD ($)	Jun. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Accrued Expenses [Abstract]
Salaries	$ 20,861	$ 18,750	$ 16,000
Reimbursable expenses	2,686	196	27,334
Consulting fees	30,000	18,574	5,698
Royalty fees		35,000	20,000
Investment banking fees		45,000	0
Interest expense - convertible note		17,497	247
Total accrued expenses	$ 53,547	$ 135,017	$ 69,279

Advances from Officer (Details) - USD ($)	6 Months Ended		12 Months Ended
Advances from Officer (Details) - USD ($)	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Related Party Transactions [Abstract]
Aggregate cash advances		$ 64,000	$ 64,000
Aggregate repayments		$ 60,000	$ 64,000

Income Taxes (Details 1)	12 Months Ended
Income Taxes (Details 1)	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
U.S. federal statutory rate	(0.34%)	(0.34%)
State income tax rate, net of federal benefit	(0.0495%)	(0.05%)
Other permanent differences	0.0247%	0.00%
Less: valuation allowance	0.3648%	0.39%
Provision for income taxes	0.00%	0.00%

Income Taxes (Details 2) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Deferred tax assets:
Net operating loss carryforward	$ 639,100	$ 75,700
Derivative liability	10,421	0
Total deferred tax assets before valuation allowance:	649,521	75,700
Valuation allowance	(639,100)	(75,700)
Deferred tax assets, net of valuation allowance	10,421	0
Deferred tax liabilities:
Convertible debt	(10,421)	0
Total deferred tax liabilities	(10,421)	0
Net deferred tax asset (liability)	$ 0	$ 0

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Jun. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Accumulated Depreciation	$ 1,944	$ 684	$ 99
Net of discount of convertible notes payable	$ 0	$ 26,755	$ 0
Preferred Stock, Par Value	$ 0.0001	$ 0.0001	$ 0.0001
Preferred Stock, Authorized	10,000,000	10,000,000	10,000,000
Preferred Stock, Issued
Preferred Stock, Outstanding
Common Stock, Par Value	$ 0.0001	$ 0.0001	$ 0.0001
Common Stock, Authorized	100,000,000	100,000,000	100,000,000
Common Stock, Issued	22,028,285	21,937,822	20,752,000
Common Stock, Outstanding	22,028,285	21,937,822	20,752,000

Going Concern and Management Plans (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
Going Concern and Management Plans (Details) - USD ($)	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Going Concern and Management Plans [Abstract]
Net Losses	$ (2,227,435)	$ (156,749)	$ (3,822,887)	$ (601,750)	$ (1,544,534)	$ (194,215)
Cash	588,179	$ 588,179,000	588,179	$ 588,179,000	303,626	135,820
Stockholders' equity	513,779		513,779		(1,831,393)	$ (6,576)	$ (4,661)
Working capital	$ 490,570		490,570		$ (1,839,127)
Proceeds from issuance of common stock and exercise of warrants			$ 1,970,000

Derivative Liabilities (Details) - USD ($)	1 Months Ended	6 Months Ended	12 Months Ended
Derivative Liabilities (Details) - USD ($)	May 25, 2013	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
Embedded Conversion Feature:
Risk-free interest rate	0.003%		0.003%
Expected volatility	0.9117%		1.2354%
Expected life (in years)	1 year 7 months 6 days		4 years 7 months 2 days
Expected dividend yield	0.00%		0.00%
Number of shares	120,000		500,000
Fair value	$ 44,966	$ 4,324	$ 1,650,243	$ 4,324	$ 0
February 21, 2014
Embedded Conversion Feature:
Risk-free interest rate		0.30%
Expected volatility		124.00%
Expected life (in years)		4 years 10 months 24 days
Expected dividend yield		0.00%
Number of shares		1,391,539
Fair value		$ 6,037,639
February 18, 2014
Embedded Conversion Feature:
Risk-free interest rate		0.30%
Expected volatility		123.00%
Expected life (in years)		9 months
Expected dividend yield		0.00%
Number of shares		55,497
Fair value		$ 98,722
January 13, 2014
Embedded Conversion Feature:
Risk-free interest rate		0.30%
Expected volatility		123.00%
Expected life (in years)		5 years
Expected dividend yield		0.00%
Number of shares		941,539
Fair value		$ 3,431,541
December 31, 2013
Embedded Conversion Feature:
Risk-free interest rate		0.30%
Expected volatility		123.54%
Expected life (in years)		4 years 7 months 2 days
Expected dividend yield		0.00%
Number of shares		500,000
Fair value		$ 1,650,243

Derivative Liabilities (Details 2) - USD ($)	3 Months Ended		6 Months Ended	12 Months Ended
Derivative Liabilities (Details 2) - USD ($)	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Dec. 31, 2013
Financial liabilities, Beginning balance			$ 1,650,243	$ 0
Recognition of derivative liability	$ 44,966	$ 44,966	3,431,541	44,966
Net unrealized loss on derivative liabilities			1,074,795
Net unrealized gain on conversion feature liabilities	(1,642)	(1,642)	(20,218)
Adjustment to additional paid in capital upon conversion and modification			(6,136,361)
Financial liabilities, Ending balance	4,324	$ 4,324	4,324	1,650,243
Level 3 (Member)
Financial liabilities, Beginning balance			1,650,243	0
Recognition of derivative liability				44,966
Net unrealized loss on derivative liabilities				73,974
Financial liabilities, Ending balance				$ 1,650,243

Commitments and Contingencies (Details) - USD ($)	Jun. 30, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
2014 (remaining)	$ 7,748	$ 15,000
2015	15,496	15,450
2016	15,496	15,914
Total future lease obligation	$ 38,740	$ 46,364

Income Taxes (Details Textual) - USD ($)	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Net operating loss carryovers	$ 1,641,000	$ 194,000

Subsequent Events (Details) - USD ($)			1 Months Ended
Subsequent Events (Details) - USD ($)	Jul. 01, 2014	Feb. 11, 2014	Jan. 31, 2014	Jul. 15, 2014
Subsequent Event [Line Items]
Officers' Compensation			$ 150,000
Increased officer's salary			$ 300,000
Outstanding convertible note converted amount		$ 150,000
Conversion of accrued interest into common stock		$ 21,485
Shares issued for debt relief		55,497
Shares issued for debt relief, amount		$ 171,485
Subsequent Event [Member]
Subsequent Event [Line Items]
Common stock issued for grand option	2,558
Common stock issued, grand, value	$ 10,000
Purchase Commitments	$ 54,923			$ 360,006

Label	Element	Value
Income (Loss) Attributable to Noncontrolling Interest	us-gaap_IncomeLossAttributableToNoncontrollingInterest	$ (156,749)
Income (Loss) Attributable to Noncontrolling Interest	us-gaap_IncomeLossAttributableToNoncontrollingInterest	(601,750)
Income (Loss) Attributable to Noncontrolling Interest	us-gaap_IncomeLossAttributableToNoncontrollingInterest	$ (2,227,435)