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Restatement
 12 Months Ended
Dec. 31, 2014
Restatement [Abstract]  
RESTATEMENT

NOTE 17 – RESTATEMENT

 

The Company discovered and recorded items requiring it to restate its 2013 financial results, as well as its 2014 quarterly results, to correct the accounting for certain transactions contained therein. The restatement relates to unrecorded stock compensation related to investor relations and consulting services, unrecorded revenue share payables, and changes in revenue recognition, all occurring during the year ended December 31, 2013. The revenue recognition relates to promotional programs started in 2013 that were expected to be completed in 2013, but actually carried over into 2014.

 

The following items were restated in the 2013 Annual Financial Statements

 

Balance Sheet     Previously stated       Adjustments       Restated  
Accounts receivable   $ 1,566,964     $ (55,255 )   $ 1,511,709  
Revenue share payable   $ 1,193,661     $ 93,891     $ 1,287,552  
Deferred revenue   $ 4,252     $ 222,020     $ 226,272  
Additional paid in capital   $ 8,726,708     $ 148,477     $ 8,875,155  
Deferred stock compensation   $ (233,942 )   $ (36,520 )   $ (270,462 )
Accumulated deficit   $ (24,616,220 )   $ (483,137 )   $ (25,099,357 )
                         
Statement of Operations                        
Revenue   $ 4,957,016     $ (277,275 )   $ 4,679,741  
Revenue share expense   $ 1,767,425     $ 93,891     $ 1,861,316  
Operating expenses   $ 2,973,990     $ 111,701     $ 3,085,691  
Net income (loss)   $ 215,847     $ (483,137 )   $ (267,290 )
                         
Statement of Cash Flows                        
Net income (loss)   $ 215,847     $ (483,137 )   $ (267,290 )
Stock options issued for services   $ 19,547     $ 75,451     $ 94,998  
Stock-based compensation   $ 399,092     $ 36,520     $ 435,612  
Changes in accounts receivable   $ (950,166 )   $ 55,255     $ (894,911 )
Changes in revenue share payable   $ 1,103,084     $ 93,891     $ 1,196,975  
Changes in deferred revenue   $ (45,000 )   $ 222,020     $ 177,020  


 

The following tables show the effect of the restatement on the unaudited quarterly information previously filed.

 

Period Ended September 30, 2013 (unaudited):

 

Balance Sheet   Previously stated     Adjustments     Restated  
                         
Revenue share payable   $ 782,902     $ 28,376     $ 811,278  
Deferred revenue   $ 13,272     $ 147,860     $ 161,132  
Additional paid in capital   $ 8,449,271     $ 148,477     $ 8,597,748  
Deferred stock compensation   $ (233,077 )   $ (54,780 )   $ (287,857 )
Accumulated deficit   $ (24,870,854 )   $ (270,207 )   $ (25,141,061 )
                         
Statement of Operations                        
Three Months ended September 30, 2013                        
Revenue   $ 1,373,029     $ (147,860 )   $ 1,225,169  
Revenue share expense   $ 529,134     $ 28,376     $ 557,510  
Operating expenses   $ 982,504     $ 93,971     $ 1,076,475  
Net income (loss)   $ (141,527 )   $ (270,207 )   $ (411,734 )
Nine Months ended September 30, 2013                        
Revenue   $ 3,146,406     $ (147,860 )   $ 2,998,546  
Revenue share expense   $ 1,264,059     $ 28,376     $ 1,292,435  
Operating expenses   $ 2,272,239     $ 93,971     $ 2,366,210  
Net income (loss)   $ (389,716 )   $ (270,207 )   $ (659,923 )
                         
Statement of Cash Flows                        
Net income (loss)   $ (389,716 )   $ (270,207 )   $ (659,923 )
Stock-based compensation   $ 310,823     $ 93,971     $ 404,794  
Changes in revenue share payable   $ 649,825     $ 28,376     $ 678,201  
Changes in deferred revenue   $ (35,980 )   $ 147,860     $ 111,880  

 

Period Ended March 31, 2014 (unaudited):

 

Balance Sheet   Previously stated     Adjustments     Restated  
                         
Revenue share payable   $ 797,725     $ 167,880     $ 965,605  
Deferred revenue   $ 168,714     $ 268,807     $ 437,521  
Additional paid in capital   $ 27,155,730     $ 148,477     $ 27,304,207  
Deferred stock compensation   $ (454,409 )   $ (18,260 )   $ (472,669 )
Accumulated deficit   $ (25,269,535 )   $ (591,917 )   $ (25,861,452 )
                         
Statement of Operations                        
Three Months ended March 31, 2014                        
Revenue   $ 1,317,347     $ (27,919)     $ 1,289,428  
Revenue share expense   $ 498,810     $ 62,601     $ 561,411  
Operating expenses   $ 1,471,598     $ 18,260     $ 1,489,858  
Net income (loss)   $ (653,315 )   $ (108,780 )   $ (762,095 )
                         
Statement of Cash Flows                        
Net income (loss)   $ (653,315 )   $ (108,780 )   $ (762,095 )
Stock-based compensation   $ 361,957     $ 18,260     $ 380,217  
Changes in revenue share payable   $ (395,935 )   $ 62,601     $ (333,334 )
Changes in deferred revenue   $ 164,462     $ 27,919     $ 192,381  

 

 

Period Ended June 30, 2014 (unaudited):

 

Balance Sheet   Previously stated     Adjustments     Restated  
                         
Revenue share payable   $ 506,901     $ 366,088     $ 872,989  
Deferred revenue   $ 42,908     $ 258,270     $ 301,178  
Additional paid in capital   $ 27,304,112     $ 84,677     $ 27,388,789  
Accumulated deficit   $ (25,322,216 )   $ (738,674 )   $ 26,060,890 )
                         
Statement of Operations                        
Three Months ended June 30, 2014                        
Revenue   $ 1,454,214     $ (27,206 )   $ 1,427,008  
Revenue share expense   $ 540,048     $ 190,092     $ 730,140  
Operating expenses   $ 967,070     $ (70,541 )   $ 896,529  
Net income (loss)   $ (52,681 )   $ (146,757 )   $ (199,438 )
                         
Six Months ended June 30, 2014                        
Revenue   $ 2,771,560     $ (55,124 )   $ 2,716,436  
Revenue share expense   $ 1,038,858     $ 252,693     $ 1,291,551  
Operating expenses   $ 2,439,028     $ (52,281 )   $ 2,386,747  
Net income (loss)   $ (705,996 )   $ (255,537 )   $ (961,533 )
                         
Statement of Cash Flows                        
Net income (loss)   $ (705,996 )   $ (255,537 )   $ (961,533 )
Stock-based compensation   $ 654,634     $ (52,281 )   $ 602,353  
Changes in revenue share payable   $ (686,760 )   $ 252,693     $ (434,067 )
Changes in deferred revenue   $ 38,656     $ 55,124     $ 93,780  

 

 

Period Ended September 30, 2014(unaudited):

 

Balance Sheet   Previously stated     Adjustments     Restated  
                         
Revenue share payable   $ 853,410     $ 421,019     $ 1,274,429  
Deferred revenue   $ -0-     $ 118,949     $ 118,949  
Additional paid in capital   $ 28,398,825     $ 84,677     $ 28,483,502  
Accumulated deficit   $ (25,716,530 )   $ (638,903 )   $ (26,355,433 )
                         
                         
Statement of Operations                        
Three Months ended September 30, 2014                        
Revenue   $ 1,620,215     $ 199,206     $ 1,819,421  
Revenue share expense   $ 858,898     $ 99,435     $ 958,,333  
Operating expenses   $ 1,155,933     $ -0-     $ 1,155,933  
Net income (loss)   $ (394,314 )   $ 99,771     $ (294,543 )
                         
Nine Months ended September 30, 2014                        
Revenue   $ 4,391,775     $ 144,082     $ 4,535,857  
Revenue share expense   $ 1,897,757     $ 352,127     $ 2,249,884  
Operating expenses   $ 3,594,961     $ (52,280 )   $ 3,542,681  
Net income (loss)   $ (1,100,310 )   $ (155,766 )   $ (1,256,076 )
                         
Statement of Cash Flows                        
Net income (loss)   $ (1,100,310 )   $ (155,766 )   $ (1,256,076 )
Stock-based compensation   $ 1,118,952     $ (52,280 )   $ (1,066,672 )
Changes in revenue share payable   $ (340,251 )   $ 352,127     $ 11,876  
Changes in deferred revenue   $ (4,252 )   $ (144,082 )   $ (148,334 )