View Filing Data

Document and Entity Information - shares	6 Months Ended
Jun. 30, 2015	Aug. 12, 2015
Document and Entity Information
Entity Registrant Name	Nxt-ID, Inc.
Entity Central Index Key	0001566826
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2015
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		27,541,974

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current Assets
Cash	$ 153,667	$ 2,201,287
Restricted cash	14,075	28,439
Inventory	1,119,253	359,544
Prepaid expenses and other current assets	647,003	918,204
Total Current Assets	1,933,998	3,507,474
Other assets	98,568
Property and equipment, net of accumulated depreciation of $90,946 and $13,157, respectively	343,549	156,223
Total Assets	2,376,115	3,663,697
Current Liabilities
Accounts payable	645,315	535,209
Accrued expenses	560,918	254,545
Convertible notes payable, net of discount of $1,281,575 and $0, respectively	293,425
Customer deposits	18,721	138,599
Total Current Liabilities	1,518,379	928,353
Commitment and Contingencies
Stockholders' Equity
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; 25,703,545 and 24,762,360 issued and outstanding, respectively	2,570	2,476
Additional paid-in capital	15,182,287	11,562,887
Accumulated deficit	(14,327,121)	(8,830,019)
Total Stockholders' Equity	857,736	2,735,344
Total Liabilities and Stockholders' Equity	$ 2,376,115	$ 3,663,697

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Balance Sheets [Abstract]
Accumulated depreciation	$ 90,946	$ 13,157
Net of discount of convertible notes payable	$ 1,281,575	$ 0
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued
Preferred stock, outstanding
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	100,000,000	100,000,000
Common stock, issued	25,703,545	25,703,545
Common stock, outstanding	24,762,360	24,762,360

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statements of Operations [Abstract]
Revenues	$ 113,131		$ 115,401
Cost of goods sold	133,857		135,847
Gross Profit (Loss)	(20,726)		(20,446)
Operating Expenses
General and administrative	857,662	462,151	1,674,105	758,077
Selling and marketing	655,232	317,419	1,313,266	377,603
Research and development	940,760	259,848	1,514,015	424,126
Total Operating Expenses	2,453,654	1,039,418	4,501,386	1,559,806
Operating Loss	(2,474,380)	(1,039,418)	(4,521,832)	(1,559,806)
Other Income and (Expense)
Interest income	131		530
Interest expense	(320,800)		(320,800)	(30,744)
Inducement expense	(655,000)	(1,051,128)	(655,000)	(1,051,128)
Unrealized gain on change in fair value of derivative liabilities				412,763
Total Other Expense, Net	(975,669)	(1,051,128)	(975,270)	(669,109)
Net Loss	$ (3,450,049)	$ (2,090,546)	$ (5,497,102)	$ (2,228,915)
Net Loss Per Share - Basic and Diluted	$ (0.14)	$ (0.09)	$ (0.22)	$ (0.10)
Weighted Average Number of Common Shares Outstanding - Basic and Diluted	25,487,505	22,054,704	25,184,315	22,011,401

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows from Operating Activities
Net Loss	$ (5,497,102)	$ (2,228,915)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	77,789	1,260
Stock based compensation	746,223	144,000
Amortization of debt discount	293,425	26,755
Unrealized gain on change in fair value of derivative liabilities		(412,763)
Amortization of deferred debt issuance costs	9,526
Inducement expense	655,000	1,051,128
Changes in operating assets and liabilities:
Inventory	(759,709)	(23,034)
Prepaid expenses and other current assets	367,642	(91,728)
Accounts payable	(13,161)	(151,290)
Accrued expenses	306,373	(60,042)
Customer deposits	(119,878)	80,075
Total Adjustments	1,563,230	564,361
Net Cash Used in Operating Activities	(3,933,872)	(1,664,554)
Cash Flows from Investing Activities
Restricted cash	14,364	(4,152)
Purchase of equipment	(239,265)	(16,735)
Net Cash Used in Investing Activities	(224,901)	(20,887)
Cash Flows from Financing Activities
Proceeds received in connection with issuance of common stock and warrants, net		799,994
Proceeds from convertible notes payable, net	1,481,500
Fees paid in connection with equity offerings	(20,347)
Proceeds from exercise of common stock warrants	650,000	1,170,000
Net Cash Provided by Financing Activities	2,111,153	1,969,994
Net (Decrease) Increase in Cash	(2,047,620)	284,553
Cash - Beginning of Period	2,201,287	303,626
Cash - End of Period	153,667	588,179
Cash paid during the periods for:
Interest
Taxes	1,000
Non-cash investing and financing activities:
Equipment purchases on payment terms	25,850
Fees incurred in connection with issuance of convertible notes	19,196
Fees incurred in connection with equity offerings	78,221
Recognition of liability in connection with warrant issuance		3,450,976
Reclassification of warrant liability to additional paid-in capital in connection with warrant modification		4,589,734
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

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2015

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 generally accepted accounting principles (“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.

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 in consolidation.

Inventory

Inventory at June 30, 2015 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, 2015 inventory was comprised of $996,234 in raw materials and $123,019 in finished goods on hand. Inventory of $359,544 at December 31, 2014 was comprised solely of raw materials. 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, 2015, $272,170 of prepayments made primarily for raw materials inventory is included in prepaid expenses and other current assets on the condensed consolidated balance sheet.

Revenue Recognition

During the six months ended June 30, 2015 all of the Company’s revenues relate to shipments of the wocket® smart wallet to customers who pre-ordered the product in 2014. The Company recognizes revenue 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’s wocket® smart wallet sales comprise multiple element arrangements including both the wocket® smart wallet device itself as well as unspecified future upgrades. The Company offers to all its customers a period of fourteen days post the actual receipt date in which to return their wocket® smart wallet. The Company was unable to reliably estimate returns at the time shipments were made during the six and three months ended June 30, 2015 due to the lack of return history. Accordingly, the Company has recognized revenue only on those shipments whose fourteen day return period had lapsed by June 30, 2015. As of June 30, 2015, the Company has $18,721 in customer deposits recorded that relate to remaining 2014 pre-orders of its wocket® smart wallet as well as orders received in 2015. The Company accrues for the estimated costs associated with the one year wocket® smart wallet warranty at the time revenue associated with the sale is recorded, and periodically updates its estimated warranty cost based on actual experience.

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 4.

Debt discount and amortization of debt discount

The intrinsic value of the beneficial conversion feature arising from the issuance of the convertible notes that are in-the-money at the commitment date is recorded as debt discount. The intrinsic value of a beneficial conversion feature is determined after initially allocating a portion of the proceeds received from the sale of the convertible notes to any detachable instruments, such as warrants, included in the sale of exchange based on relative fair values. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt. The amortization of debt discount is included as a component of interest expense included in other income and 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 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 has filed all of its tax returns for all prior periods through December 31, 2014. As a result, the Company’s net operating loss carryovers will now be available to offset any future taxable income.

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 generally amortizes the employee stock-based compensation over the vesting period. 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 conversion of convertible notes and related accrued interest and from the exercise of 4,242,274 warrants as of June 30, 2015, 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, 2014, potentially dilutive securities realizable from the exercise of 1,396,139 warrants 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, which will be useful in developing new products or processes. The Company expenses all research and development costs as incurred.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract(s); (3) determine the transaction price(s); (4) allocate the transaction price(s) to the performance obligations in the contract(s); and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The required effective date for adoption of ASU 2014-09 has been deferred to annual reporting periods beginning after December 15, 2017 with early adoption permitted for periods beginning after December 15, 2016. The new revenue standards may be applied retrospectively to each period presented or with the cumulative effect recognized as of the date of initial application. The Company is currently evaluating ASU 2014-09.

The FASB recently issued Accounting Standards Update No. ASU 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”), that changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. ASU 2015-11 is effective for inventory measurements for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating ASU 2015-11.

In April 2015, the FASB issued Accounting Standard Update ASU No. 2015-03 Interest - Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs (“ASU No. 2015-13”). ASU 2015-03 is effective for the fiscal years beginning after December 15, 2015. ASU 2015-03 simplifies financial reporting by eliminating the different presentation requirements for debt issuance costs and debt discounts or premiums. The adoption of this standard, which will be applied retrospectively, will not have a material impact on the Company’s results of operations.

Convertible Notes Payable

6 Months Ended

Jun. 30, 2015

Convertible Notes Payable [Abstract]

CONVERTIBLE NOTES PAYABLE

Note 4 - Convertible Notes Payable

April 2015 Private Placement

On April 24, 2015, the Company entered into a securities purchase agreement (the “April Purchase Agreement”) with a group of accredited investors (the “April Purchasers”) pursuant to which the Company sold to such purchasers an aggregate of $1,575,000 principal amount of secured convertible notes (the “Convertible Notes”), a Class A Common Stock Purchase Warrant (the “Class A Warrant”) to purchase up to 468,749 shares of the Company’s common stock and a Class B Common Stock Purchase Warrant (the “Class B Warrant,” and together with the Class A Warrant, the “April Warrants”) to purchase up to 468,749 shares of the Company’s common stock. The Convertible Notes bear interest at 6% per annum and are convertible at any time, in whole or in part, at the option of the holders into shares of common stock at a conversion price of $2.52 per share. The Class A Warrant and Class B Warrant are exercisable beginning six (6) months after issuance through the fifth (5^th) anniversary of such initial exercisability date. The Class A Warrant has an initial exercise price equal to $3.02 per share and the Class B Warrant has an initial exercise price equal to $5.00 per share.

The Company received cash proceeds of $1,481,500 from the issuance of the convertible notes after deducting debt issuance costs of $93,500.

The Company recorded a debt discount of $1,575,000 related to the sale of the Convertible Notes and the April Warrants. The debt discount reflects the underlying fair value of the April Warrants of approximately $860,000 on the date of the transaction and a beneficial conversion charge of approximately $715,000. The debt discount will be amortized to interest expense over the earlier of (i) term of the Convertible Notes or (ii) conversion of the debt. During the six months ended June 30, 2015, the Company amortized $293,425 of the debt discount as a component of interest expense in the accompanying statements of operations.

In connection with the sale of the Convertible Notes and April Warrants, the Company entered into a registration rights agreement, dated April 24, 2015 (the “April Registration Rights Agreement”), with the April Purchasers, pursuant to which the Company agreed to register the shares of common stock underlying the Convertible Notes and Warrants on a Form S-3 registration statement to be filed with the Securities and Exchange Commission within ten (10) business days after the date of the issuance of the Convertible Notes and April Warrants (the “April Filing Date”) and to cause the April Registration Statement to be declared effective under the Securities Act of 1933, as amended (the “Securities Act”) within ninety (90) days following the April Filing Date. If certain of its obligations under the April Registration Rights Agreement are not met, the Company is required to pay partial liquidated damages to each April Purchaser. On May 8, 2015, the Company filed a registration statement on Form S-3 with the SEC to register the shares issuable upon the conversion of the Convertible Notes, the related accrued interest and the exercise of the April Warrants. Such registration statement was declared effective with the SEC on May 14, 2015.

In connection with the sale of the Convertible Notes and the April Warrants, the Company entered into a security agreement, dated April 24, 2015 (the “April Security Agreement”), between the Company, 3D-ID and the collateral agent thereto. Pursuant to the Security Agreement, the April Purchasers were granted a security interest in certain personal property of the Company and 3D-ID to secure the payment and performance of all obligations of the Company and 3D-ID under the Convertible Notes, April Warrants, April Purchase Agreement, April Registration Rights Agreement and April Security Agreement. In addition, in connection with the Security Agreement, 3D-ID executed a subsidiary guaranty, pursuant to which it agreed to guarantee and act as surety for payment of the Convertible Notes and other obligations of the Company under the April Warrants, April Purchase Agreement, April Registration Rights Agreement and April Security Agreement.

Connecticut Innovations, Inc. Private Placement

On December 13, 2012, the Company received approval from Connecticut Innovations, Inc. (“CII”) for a Convertible Note (the “Note”) in the amount of $150,000. The Company received the first tranche of $75,000 on December 21, 2012, and the second tranche of $75,000 on January 31, 2013. The Note’s maturity date was December 21, 2014.

The Company received notice on February 11, 2014 from CII regarding converting the Note, 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. Since February 17, 2014 was a holiday the Company used its closing stock price on February 18, 2014 to determine the number of shares issued to CII resulting from the conversion. The Company issued 55,497 shares in full relief of its outstanding debt and accrued interest of $171,485.

Since the Note was converted on February 18, 2014, the Company re-measured the conversion feature liability associated with the convertible note payable on that date. The Company recorded an unrealized gain on the change in the fair value of the conversion feature liability of $20,218 for the six months ended June 30, 2014 (See Note 6) and reclassified the re-measured conversion feature of $98,722 to additional paid-in capital. Since the Note was converted the remaining unamortized portion of the debt discount of $26,755 was expensed during the six months ended June 30, 2014.

Derivative Liabilities

6 Months Ended

Jun. 30, 2015

Derivative Liabilities [Abstract]

DERIVATIVE LIABILITIES

Note 5 – Derivative liabilities

During 2014, 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
Embedded Conversion Feature and Warrant Liability:
Risk-free interest rate		1.52	%		0.10	%		1.60	%
Expected volatility		105.36	%		105.36	%		123.54	%
Expected life (in years)		4.88			0.75			5.00
Expected dividend yield		–			–			–
Number of shares		1,391,539			55,497			941,539
Fair value	$	4,589,734		$	98,722		$	3,450,976

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

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.

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
	June 30, 2014
Beginning liability balance	$	1,650,243
Recognition of derivative value in equity		3,450,976
Net unrealized gain on derivative liabilities in equity		(392,545	)
Net unrealized gain on conversion feature liabilities		(20,218	)
Adjustment to additional paid-in capital upon conversion and modification		(4,688,456	)
Ending balance	$	–

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624171-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=56946850&loc=d3e41620-113959

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624163-113959

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579240-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4D
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624177-113959

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=56946850&loc=d3e41641-113959

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579245-113959

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4H
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624258-113959

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80748-113994

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4K
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5708775-113959

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5708773-113959

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4A
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5618551-113959

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5580258-113959

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4E
-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624181-113959

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 25
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=56946850&loc=d3e41638-113959

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(n))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

+ Details

Stockholders' Equity

6 Months Ended

Jun. 30, 2015

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

Note 6 - Stockholders' Equity

January 2014 Private Placement

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 over-subscription 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 per share and (ii) warrants (the “Warrants”) to purchase 1,350,000 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 was $56,820 and $100,006, respectively. In January 2014, the placement agent received 41,539 Warrants to purchase 41,539 shares of the Company’s common stock as fees.

Pursuant to the Purchase Agreement, the Company’s founders who are members of management (the “Founders”) agreed to cancel a corresponding number of shares of common stock to those shares of common stock 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 (5) 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 $3,450,976 as derivative liability warrants on the consolidated balance sheet on January 13, 2014.

On February 21, 2014, the Company amended the terms of the 1,391,539 Warrants issued in the Offering as compensation to the placement agent 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 gain on derivative liabilities of $448,072 and reclassified the aggregate re-measured value of the Warrants of $4,514,772 to additional paid-in capital. See Note 5 above.

On various dates, during the twelve months ended December 31, 2014, the Company received gross proceeds of $1,500,000 in connection with the exercise of 500,000 warrants into 500,000 shares of common stock at an exercise price of $3.00 per share, net of fees paid upon the exercise of the warrants issued in the Offering per the terms of the underwriter agreement of $30,000. Upon exercise, pursuant to the Purchase Agreement, the Company’s Founders cancelled a certain number of shares of common stock in accordance with the Purchase Agreement.

Effective March 5, 2015, the Purchasers holding a majority of the securities offered in the January 2014 offering waived a provision that required certain stockholders of the Company to surrender shares of common stock proportional to the number of warrants exercised. To date, these stockholders have retired 697,054 shares of common stock which will remain in treasury.

On April 23, 2015, the Company entered into a waiver and termination of certain rights agreement (the “Waiver Agreement”) whereby the majority purchasers of shares of common stock and Warrants in the Offering agreed to terminate certain provisions in the Purchase Agreement for an aggregate of 250,000 shares of common stock. The fair value of the 250,000 shares of common stock issued on April 23, 2015 was $655,000 and was recorded as inducement expense by the Company.

June 2014 Private Placement

From June 12, 2014 to June 17, 2014, the Company conducted a private offering with a group of accredited investors (the “June Purchasers”) who had previously participated in the Offering that occurred between December 30, 2013 and January 13, 2014. Pursuant to a securities purchase agreement with the June Purchasers, the Company issued to the June Purchasers warrants (the “June Warrants”) to purchase an aggregate of 400,000 shares (the “June Shares”) of the Company’s common stock at an exercise price of $3.00 per share. The June Warrants are exercisable for a period of five (5) years from the original issue date. The exercise price for the June Warrants is subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change and dilutive issuances.

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

The Registration Statement was not filed by the June Filing Date or declared effective by the Required Effective Date of December 15, 2014. Under the original terms of the arrangement, the Company was required to pay partial liquidated damages to each June Purchaser in the amount equal to two percent (2%) for the purchase price paid for the June Warrants then owned by such June Purchaser for each 30-day period for which the Company is non-compliant. On January 30, 2015, the Company received signed documentation from all of the June Purchasers waiving their right to liquidated damages and terminating the registration rights agreement.

August 2014 Private Placement

On August 21, 2014, pursuant to a securities purchase agreement with two (2) Purchasers (the “August Purchasers”) who had previously participated in the Offering that occurred between December 30, 2013 and January 13, 2014, the Company issued to the August Purchasers warrants (the “August Warrants”) to purchase an aggregate of 100,000 shares (the “August Shares”) of the Company’s common stock at an exercise price of $3.00 per share. The August Warrants are exercisable for a period of five (5) years from the original issue date. The exercise price for the August Warrants is subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers, or other corporate changes and dilutive issuances.

In connection with the issuance of the August Warrants, the Company entered into a registration rights agreement with the August Purchasers pursuant to which the Company agreed to register the August Shares and all of the shares of common stock then issued to the August Purchasers on a Form S-1 registration statement (the “August Registration Statement”) to be filed with the SEC ninety (90) days following the Filing Date and to cause the August Registration Statement to be declared effective under the Securities Act by the Required Effective Date.

The August Registration Statement was not filed by the Filing Date or declared effective by the Required Effective Date. Under the original terms of the arrangement, the Company was required to pay partial liquidated damages to each August Purchaser in the amount equal to two percent (2%) for the purchase price paid for the August Warrants then owned by such August Purchaser for each 30-day period for which the Company is non-compliant. On January 30, 2015, the Company received signed documentation from all of the August Purchasers waiving their right to liquidated damages and terminating the registration rights agreement.

The Company determined that the effect of the issuance of the 500,000 warrants was to induce the June Purchasers and August Purchasers to exercise warrants previously issued to them in the Offering. As a result, the Company recorded inducement expense of $1,262,068 during the twelve months ended December 31, 2014.

September 2014 Public Offering

On September 15, 2014, the Company closed on an underwritten public offering of its common stock and warrants. The Company offered 2,127,273 shares of common stock and warrants to purchase 2,127,273 shares of common stock, at a combined price to the public of $2.75 per share and related warrant. The warrants are exercisable for a period of five (5) years beginning on September 15, 2014 at an exercise price of $3.288 per share. The Company received net proceeds of $4,954,042 from the public offering, after deducting the underwriting discount and other offering related expenses. The underwriters were Northland Securities, Inc., The Benchmark Company, LLC, and Newport Coast Securities Inc.

In connection with the underwritten public offering of the Company’s common stock and warrants on September 15, 2014, the Company was required to obtain a waiver and consent from the investors in the January 13, 2014 private offering in order to conduct the public offering at a price of $2.75 per share and warrant. As a result, on September 10, 2014, the Company issued the majority Purchasers in the January 13, 2014 private offering, 261,131 unregistered shares of common stock and reduced the exercise price on the outstanding Warrants, June Warrants, and August Warrants from $3.00 to $2.00 per share of common stock for all of the investors. During the twelve months ended December 31, 2014, the Company recorded additional inducement expense of $718,110 and $232,360 related to the issuance of unregistered shares of common stock to the majority Purchasers and the modification of the warrant exercise price, respectively.

2015 Warrant Exercises

Between January 28, 2015 and June 30, 2015, the Company received proceeds of $650,000 in connection with the exercise of 325,000 warrants into 325,000 shares of common stock at an exercise price of $2.00 per share.

$1,575,000 Securities Purchase Agreement

On April 24, 2015, the Company entered into the April Purchase Agreement with the April Purchasers pursuant to which the Company sold to such purchasers an aggregate of $1,575,000 principal amount of the Convertible Notes, a Class A Warrant (to purchase up to 468,749 shares of the Company’s common stock and a Class B to purchase up to 468,749 shares of the Company’s common stock. For more information regarding the Convertible Notes and the April Warrants, please refer to Note 4 - Convertible Notes Payable.

The following table summarizes the Company's warrants outstanding and exercisable at June 30, 2015:

						Weighted
				Weighted		Average
				Average		Remaining
	Number of			Exercise		Life		Intrinsic
	Warrants			Price		In Years		Value
Outstanding and Exercisable at January 1, 2015		3,629,776		$	2.80		4.51	$	283,828
Issued		937,498			4.01		-		-
Exercised		(325,000	)		2.00		-		-
Cancelled		-			-		-		-
Outstanding and Exercisable at June 30, 2015		4,242,274		$	3.13		4.34	$	385,552

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, stock issued to directors for serving on the Company’s board, 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 2,476,236 at January 1, 2015. During the six and three months ended June 30, 2015, the Company issued 34,242 and 18,987 shares, respectively of common stock under the plan to three non-executive directors for serving on the Company’s board. The aggregate fair value of the shares issued to the directors for the six and three months ended June 30, 2015 was $90,000 and $45,000, respectively. On November 18, 2014 the Company granted 215,000 restricted shares of common stock with an aggregate fair value of $451,500 to six non-executive employees and one consultant. The vesting period for these restricted shares of common stock is twelve months with the exception of one award that vests over a thirty-six month period. During the six and three months ended June 30, 2015, the Company expensed $120,750 and $60,375, respectively related to these restricted stock awards. During the three months ended June 30, 2015, the Company issued 50,000 restricted shares of common stock with an aggregate fair value of $147,500 to one non-executive employee. During the six and three months ended June 30, 2015, the Company expensed $147,500 related to this restricted stock award. During the six and three months ended June 30, 2014, the Company issued 5,084 and 2,558 restricted shares, respectively, of common stock under the plan to two non-executive directors with an aggregate fair value of $20,000 and $10,000, respectively. The Company did not issue any common stock to employees during the six months ended June 30, 2014. At June 30, 2015, a total of 376,972 shares of common stock have been issued from the Plan and 2,099,264 are available to be issued.

During the six and three months ended June 30, 2015, the Company issued 163,610 and 92,220, shares of common stock, respectively with a fair value of $442,810 and $243,430, respectively to non-employees for services rendered. The Company recorded expense of $387,973 and $229,995, in the six and three months ended June 30, 2015, respectively, in connection with the issuance of common stock to non-employees. For the six months ended June 30, 2014, the Company issued 29,883 shares of common stock with an aggregate fair value of $124,000 to consultants for services rendered to the Company.

During the six and three months ended June 30, 2015, the Company accrued $379,250 and $189,625, respectively, of discretionary management and employee bonus expense.

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

+ Details

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2015
Summary of Significant Accounting Policies [Abstract]
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS	*Use of Estimates in the Financial Statements* The preparation of financial statements in conformity with generally accepted accounting principles (“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.
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 in consolidation.
INVENTORY	*Inventory* Inventory at June 30, 2015 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, 2015 inventory was comprised of $996,234 in raw materials and $123,019 in finished goods on hand. Inventory of $359,544 at December 31, 2014 was comprised solely of raw materials. 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, 2015, $272,170 of prepayments made primarily for raw materials inventory is included in prepaid expenses and other current assets on the condensed consolidated balance sheet.
REVENUE RECOGNITION	*Revenue Recognition* During the six months ended June 30, 2015 all of the Company’s revenues relate to shipments of the wocket® smart wallet to customers who pre-ordered the product in 2014. The Company recognizes revenue 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’s wocket® smart wallet sales comprise multiple element arrangements including both the wocket® smart wallet device itself as well as unspecified future upgrades. The Company offers to all its customers a period of fourteen days post the actual receipt date in which to return their wocket® smart wallet. The Company was unable to reliably estimate returns at the time shipments were made during the six and three months ended June 30, 2015 due to the lack of return history. Accordingly, the Company has recognized revenue only on those shipments whose fourteen day return period had lapsed by June 30, 2015. As of June 30, 2015, the Company has $18,721 in customer deposits recorded that relate to remaining 2014 pre-orders of its wocket® smart wallet as well as orders received in 2015. The Company accrues for the estimated costs associated with the one year wocket® smart wallet warranty at the time revenue associated with the sale is recorded, and periodically updates its estimated warranty cost based on actual experience.
CONVERTIBLE INSTRUMENTS	*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 4.
DEBT DISCOUNT AND AMORTIZATION OF DEBT DISCOUNT	*Debt discount and amortization of debt discount* The intrinsic value of the beneficial conversion feature arising from the issuance of the convertible notes that are in-the-money at the commitment date is recorded as debt discount. The intrinsic value of a beneficial conversion feature is determined after initially allocating a portion of the proceeds received from the sale of the convertible notes to any detachable instruments, such as warrants, included in the sale of exchange based on relative fair values.. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt. The amortization of debt discount is included as a component of interest expense included in other income and expenses in the accompanying statements of operations.
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. The Company has filed all of its tax returns for all prior periods through December 31, 2014. As a result, the Company’s net operating loss carryovers will now be available to offset any future taxable income.
STOCK-BASED COMPENSATION	*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 generally amortizes the employee stock-based compensation over the vesting period. 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	*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 conversion of convertible notes and related accrued interest and from the exercise of 4,242,274 warrants as of June 30, 2015, 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, 2014, potentially dilutive securities realizable from the exercise of 1,396,139 warrants 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* 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	*Recent Accounting Pronouncements* In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract(s); (3) determine the transaction price(s); (4) allocate the transaction price(s) to the performance obligations in the contract(s); and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The required effective date for adoption of ASU 2014-09 has been deferred to annual reporting periods beginning after December 15, 2017 with early adoption permitted for periods beginning after December 15, 2016. The new revenue standards may be applied retrospectively to each period presented or with the cumulative effect recognized as of the date of initial application. The Company is currently evaluating ASU 2014-09. The FASB recently issued Accounting Standards Update No., ASU 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”), that changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. ASU 2015-11 is effective for inventory measurements for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating ASU 2015-11. In April 2015, the FASB issued Accounting Standard Update ASU No. 2015-03 “Interest - Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs” (“ASU No. 2015-13”). ASU 2015-03, is effective for the fiscal years beginning after December 15, 2015. ASU 2015-03 simplifies financial reporting by eliminating the different presentation requirements for debt issuance costs and debt discounts or premiums. The adoption of this standard, which will be applied retrospectively, will not have a material impact on the Company’s results of operations.

Convertible Notes Payable (Details) - USD ($)				6 Months Ended
Convertible Notes Payable (Details) - USD ($)	Apr. 24, 2015	Feb. 11, 2014	Dec. 13, 2012	Jun. 30, 2015	Jun. 30, 2014	Jan. 31, 2013	Dec. 21, 2012
Short-term Debt [Line Items]
Convertible notes payable			$ 150,000
Convertible notes payable - accrued interest		$ 21,485		$ 171,485
Convertible notes payable, Maturity date			Dec. 21, 2014
Proceeds from convertible notes payable				1,481,500
Debt issuance costs				93,500
Debt conversion description		CII regarding converting the Note, 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.
Unrealized gain on change in fair value of conversion feature					20,218
Conversion feature in additional paid-in capital					98,722
Amortization of debt discount				$ 293,425	$ 26,755
Shares issued for debt relief				55,497
April Purchase Agreement [Member]
Short-term Debt [Line Items]
Fair value of Class A and B Warrants	$ 860,000
Beneficial conversion feature	715,000
Amortization of debt discount	1,575,000
Aggregate principal amount of secured convertible notes	$ 1,575,000
Convertible notes bear interest per annum	6.00%
Common stock conversion price	$ 2.52
April Purchase Agreement [Member] \| Class A Warrant [Member]
Short-term Debt [Line Items]
Common stock purchase warrant, shares	468,749
Exercise price	$ 3.02
April Purchase Agreement [Member] \| Class B Warrant [Member]
Short-term Debt [Line Items]
Common stock purchase warrant, shares	468,749
Exercise price	$ 5.00
First Tranche [Member]
Short-term Debt [Line Items]
Convertible notes payable							$ 75,000
Second Tranche [Member]
Short-term Debt [Line Items]
Convertible notes payable						$ 75,000

Stockholders' Equity (Details) - Warrants [Member]	6 Months Ended
Stockholders' Equity (Details) - Warrants [Member]	Jun. 30, 2015 USD ($) $ / shares shares
Number of Warrants
Number of Warrants Outstanding and Exercisable beginning \| shares	3,629,776
Number of Warrants Issued \| shares	937,498
Number of Warrants Exercised \| shares	(325,000)
Number of Warrants Cancelled \| shares
Number of Warrants Outstanding and Exercisable ending \| shares	4,242,274
Weighted Average Exercise Price
Weighted Average Exercise Price Outstanding and Exercisable, beginning \| $ / shares	$ 2.80
Weighted Average Exercise Price Issued \| $ / shares	4.01
Weighted Average Exercise Price Exercised \| $ / shares	2.00
Weighted Average Exercise Price Cancelled \| $ / shares
Weighted Average Exercise Price Outstanding and Exercisable ending \| $ / shares	$ 3.13
Weighted Average Remaining Life In Years
Weighted Average Remaining Life In Years Outstanding, beginning	4 years 6 months 4 days
Weighted Average Remaining Life In Years Exercisable	4 years 4 months 2 days
Intrinsic Value
Intrinsic Value Outstanding and Exercisable, beginning \| $	$ 283,828
Intrinsic Value Outstanding and Exercisable, ending \| $	$ 385,552

Stockholders' Equity (Details Textual)							1 Months Ended				3 Months Ended		5 Months Ended	6 Months Ended		12 Months Ended
Stockholders' Equity (Details Textual)	Apr. 24, 2015 USD ($) $ / shares shares	Apr. 23, 2015 USD ($) shares	Mar. 05, 2015 shares	Aug. 21, 2014 USD ($) Purchaser $ / shares shares	Jun. 17, 2014 $ / shares shares	Jan. 13, 2014 USD ($) $ / shares shares	Nov. 18, 2014 USD ($) employees Consultants shares	Sep. 15, 2014 USD ($) $ / shares shares	Feb. 21, 2014 USD ($) $ / shares shares	Jan. 31, 2014 shares	Jun. 30, 2015 USD ($) $ / shares shares	Jun. 30, 2014 USD ($) shares	Jun. 29, 2015 USD ($) shares	Jun. 30, 2015 USD ($) directors $ / shares shares	Jun. 30, 2014 USD ($) directors shares	Dec. 31, 2014 USD ($) $ / shares shares
Common stock issued											25,703,545			25,703,545		25,703,545
Common stock, par value \| $ / shares											$ 0.0001			$ 0.0001		$ 0.0001
Proceeds from Warrant Exercises \| $														$ 650,000	$ 1,170,000
Stock issued under LTIP - shares														2,476,236
Inducement expense \| $											$ 655,000	$ 1,051,128		$ 655,000	$ 1,051,128
Restricted shares issued							215,000					2,558			5,084
Restricted shares issued, fair value \| $							$ 451,500				147,500	$ 10,000		$ 147,500	$ 20,000
Number of non executive under plan							6								2
Number of Executive \| Consultants							1
Long-term stock incentive plan description														<div><font size="2" style="font-family: times new roman;">The maximum aggregate number of shares of common stock that may be issued under the LTIP, including stock awards, stock issued to directors for serving on the Company’s board, 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 2,476,236 at January 1, 2015.</font></div>
Additional paid-in capital \| $											15,182,287			$ 15,182,287		$ 11,562,887
Stock issued during the plan, shares														55,497
Shares issued to executive and non-executive \| $											$ 147,500
Shares issued to executive and non-executive, Shares											50,000
Shares available to be issued														2,099,264
Shares, Issued											376,972			376,972
Expense on restricted stock awards \| $											$ 60,375			$ 120,750
Discretionary management and employee bonus expense \| $											$ 379,250			$ 189,625
Stock issued for services rendered, shares											92,220			163,610	29,883
Stock issued for services rendered \| $											$ 243,430			$ 442,810	$ 124,000
Expense related to issuance of common stock to non-employees \| $											229,995			$ 387,973
Director [Member]
Number of non executive under plan \| directors														3
Stock issued during the plan \| $											$ 45,000			$ 90,000
Stock issued during the plan, shares											18,987			34,242
Securities Purchase Agreement [Member]
Debt instrument principal amount \| $	$ 1,575,000
Securities Purchase Agreement [Member] \| Class A Warrant [Member]
Warrant exercise price \| $ / shares	$ 3.02
Shares purchased	468,749
Securities Purchase Agreement [Member] \| Class B Warrant [Member]
Warrant exercise price \| $ / shares	$ 5
Shares purchased	468,749
2015 Warrant Exercises [Member]
Proceeds from Warrant Exercises \| $													$ 650,000
Number of warrants exercised													325,000
Waiver And Termination Of Certain Rights Agreement [Member]
Common stock issued		250,000
Number of common stock called by warrants		250,000
Inducement expense \| $		$ 655,000
Common Stock [Member]
Common stock issued																500,000
Number of warrants exercised													325,000
Warrants [Member]
Warrant exercise price \| $ / shares						$ 3.25										$ 2.80
Warrants [Member] \| Maximum [Member]
Warrant exercise price \| $ / shares									$ 3.25
Warrants [Member] \| Minimum [Member]
Warrant exercise price \| $ / shares									$ 3.00
January 2014 Private Placement [Member]
Retirement of common stock by officers, shares			697,054
Warrant received by private placement agent										41,539
January 2014 Private Placement [Member] \| January 13, 2014 offering [Member]
Closing balance of private offering \| $														$ 1,000,000
Exercised oversubscription amount in offering \| $														350,000
Proceeds from issuance of stock, value \| $														$ 1,350,000
Common stock issued											415,387			415,387
Common stock, par value \| $ / shares											$ 0.0001			$ 0.0001
January 2014 Private Placement [Member] \| Securities Purchase Agreement [Member]
Stock sold in private offering, warrant shares														1,350,000
Common stock exercise price \| $ / shares														$ 3.25
January 2014 Private Placement [Member] \| December 2013 Offering [Member]
Stock sold in private offering, warrant shares														138,463
Common stock exercise price \| $ / shares														$ 3.25
Common stock unit under public offering											138,463			138,463
Gross proceeds from Issuance of common stock \| $														$ 450,000
Offering costs \| $														$ 56,820
Retirement of common stock by officers, shares														138,463
January 2014 Private Placement [Member] \| January 2014 Offering [Member]
Stock sold in private offering, warrant shares														276,924
Common stock exercise price \| $ / shares														$ 3.25
Common stock unit under public offering											276,924			276,924
Gross proceeds from Issuance of common stock \| $														$ 900,000
Offering costs \| $														$ 100,006
Retirement of common stock by officers, shares														276,924
January 2014 Private Placement [Member] \| Common Stock [Member]
Common stock issued																500,000
Common stock, par value \| $ / shares																$ 3.00
Offering costs \| $																$ 30,000
Proceeds from Warrant Exercises \| $																$ 1,500,000
Number of warrants exercised																500,000
January 2014 Private Placement [Member] \| Warrants [Member]
Unrealized gain on derivative liabilities \| $									$ 448,072
Derivative liability \| $						$ 3,450,976
Warrant exercise price \| $ / shares						$ 3.25
Warrant term						5 years
Number of warrants exercised									1,391,539
Additional paid-in capital \| $									$ 4,514,772
June 2014 Private Placement [Member] \| Common Stock [Member]
Common stock exercise price \| $ / shares					$ 3.00
Warrant term					5 years
Number of warrants exercised					400,000
August 2014 Private Placement [Member]
Inducement costs \| $				$ 1,262,068
Number of warrants exercised				500,000
August 2014 Private Placement [Member] \| Securities Purchase Agreement [Member]
Common stock exercise price \| $ / shares				$ 3.00
Warrant term				5 years
Number of warrants exercised				100,000
Percentage of liquidated damage				2.00%
Number of purchasers \| Purchaser				2
September 2014 Public Offering [Member]
Stock sold in private offering, warrant shares								2,127,273
Common stock exercise price \| $ / shares								$ 2.75
Proceeds from public offering \| $								$ 4,954,042
Warrants issued to purchase common stock								2,127,273
Warrant exercise price \| $ / shares								$ 3.288
Warrant term								5 years
Restricted shares issued						261,131
Additional inducement expense \| $																$ 718,110
Stock issued during the plan \| $																$ 232,360
September 2014 Public Offering [Member] \| Maximum [Member]
Common stock exercise price \| $ / shares						$ 3.00
September 2014 Public Offering [Member] \| Minimum [Member]
Common stock exercise price \| $ / shares						2.00
September 2014 Public Offering [Member] \| Common Stock [Member]
Public offering price per share \| $ / shares						2.75
September 2014 Public Offering [Member] \| Warrants [Member]
Public offering price per share \| $ / shares						$ 2.75

Subsequent Events (Details) - USD ($)			1 Months Ended				3 Months Ended	6 Months Ended
Subsequent Events (Details) - USD ($)	Aug. 04, 2015	Dec. 13, 2012	Jul. 29, 2015	Jul. 27, 2015	Apr. 30, 2015	Sep. 15, 2014	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2014	Apr. 24, 2015	Apr. 23, 2015	Apr. 07, 2015	Jan. 28, 2015
Subsequent Event [Line Items]
Convertible notes maturity date		Dec. 21, 2014
Issuance of common stock for services, shares							92,220	163,610	29,883
IPO [Member]
Subsequent Event [Line Items]
Exercise price						$ 3.288
Warrants issued to purchase common stock						2,127,273
Proceeds from public offering						$ 4,954,042
Subsequent Event [Member]
Subsequent Event [Line Items]
Conversion price										$ 2.52
Issuance of common stock for services, shares			100,000		30,000
Share price per share	$ 0.0000001
Exercise price	$ 2.35										$ 2.00	$ 2.00	$ 2.00
Number of common stock called by warrants	860,716
Warrant exercisable period and exercise right description	Each warrant is initially exercisable on the six (6) month anniversary of the issuance date at an initial exercise price equal to $2.35 per share and has a term of exercise equal to five (5) years from the date on which first exercisable. Subject to limited exceptions, a holder of warrants will not have the right to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of our common stock outstanding immediately after giving effect to such exercise..
Proceeds from public offering	$ 2,700,000
Subsequent Event [Member] \| IPO [Member]
Subsequent Event [Line Items]
Issuance of common stock for services, shares	1,721,429
Share price per share	$ 1.75
Subsequent Event [Member] \| July 2015 Private Placement [Member]
Subsequent Event [Line Items]
Deferred costs							$ 98,568	$ 98,568
Subsequent Event [Member] \| 8% Convertible Notes [Member]
Subsequent Event [Line Items]
Debt instrument principal amount				$ 222,222
Convertible notes bear interest				8.00%
Net proceeds from sale of convertible notes				$ 200,000
Convertible notes maturity date				Sep. 11, 2015
Debt default description				The 8% Convertible Notes bear interest at a rate of 8% per annum, subject to increase to the lesser of 24% per annum or the maximum rate permitted under applicable law upon the occurrence of certain events of default.
Conversion price				$ 3.50
Debt instrument, description				The Company shall pay an amount in cash equal to 109% of the sum of the then outstanding principal amount of the note and interest; thereafter, if such prepayment is made, the Company shall pay an amount in cash equal to 114% of the sum of the then outstanding principal amount of the note and interest.

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

Going Concern and Management Plans (Details) - USD ($)	3 Months Ended		6 Months Ended
Going Concern and Management Plans (Details) - USD ($)	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Going Concern and Management Plans [Abstract]
Operating loss	$ (2,474,380)	$ (1,039,418)	$ (4,521,832)	$ (1,559,806)
Net loss	(3,450,049)	$ (2,090,546)	(5,497,102)	$ (2,228,915)
Working capital	415,619		415,619
Stockholders' equity	$ 857,736		$ 857,736		$ 2,735,344

Derivative Liabilities (Details)	6 Months Ended
Derivative Liabilities (Details)	Jun. 30, 2015 USD ($) shares
February 21, 2014 [Member]
Embedded Conversion Feature and Warrant Liability:
Risk-free interest rate	1.52%
Expected volatility	105.36%
Expected life (in years)	4 years 10 months 17 days
Expected dividend yield
Number of shares \| shares	1,391,539
Fair value \| $	$ 4,589,734
February 18, 2014 [Member]
Embedded Conversion Feature and Warrant Liability:
Risk-free interest rate	0.10%
Expected volatility	105.36%
Expected life (in years)	9 months
Expected dividend yield
Number of shares \| shares	55,497
Fair value \| $	$ 98,722
January 13, 2014 [Member]
Embedded Conversion Feature and Warrant Liability:
Risk-free interest rate	1.60%
Expected volatility	123.54%
Expected life (in years)	5 years
Expected dividend yield
Number of shares \| shares	941,539
Fair value \| $	$ 3,450,976

Commitments and Contingencies (Details)	Jun. 30, 2015 USD ($)
Commitments and Contingencies [Abstract]
2015 (remaining)	$ 62,904
2016	121,575
2017	87,459
Total future lease obligation	$ 271,938

Commitments and Contingencies (Details Textual) - USD ($)		6 Months Ended
	Sep. 12, 2014	Jun. 30, 2015	Jun. 30, 2014
Lease Agreement [Member]
Commitments and Contingencies [Line Items]
Rent expenses		$ 63,982	$ 10,023
Term of the lease		3 years
Monthly rent amount		$ 6,395
Lease Agreement One [Member]
Commitments and Contingencies [Line Items]
Lease and rental expense current year	$ 2,300
Lease and rental expense next year	$ 2,450
Term of the lease	2 years

Derivative Liabilities (Details 1) - Fair Value, Inputs, Level 3 [Member]	6 Months Ended
	Jun. 30, 2015 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Beginning liability balance	$ 1,650,243
Recognition of derivative value in equity	3,450,976
Net unrealized gain on derivative liabilities in equity	(392,545)
Net unrealized gain on conversion feature liabilities	(20,218)
Adjustment to additional paid-in capital upon conversion and modification	(4,688,456)
Ending balance