2. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8.03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation of the consolidated financial position of the Company as of June 30, 2014 and the consolidated results of its operations and cash flows for the three and six months ended June 30, 2014 and June 30, 2013, have been included. The Company has evaluated subsequent events through the issuance of this Form 10-Q. Operating results for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or any other interim or future period. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2013 included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 31, 2014.

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 includes the impact of the restatement on the applicable unaudited financial information for the three and six months ended June 30, 2013. In addition, our September 30, 2014 Quarterly Report on Form 10-Q 2014 will also include the impacts of the restatement on applicable 2013 comparable prior quarters. The restatement relates to the overstatement of revenue on one customer contract during the three months ended June 30, 2013 which was identified by the Company and corrected in the fourth quarter of 2013 and had no impact on the statement of operations and cash flows for the year ended December 31, 2013.

The effect of the restatement on previously issued quarterly financial information as of and for the three and six months ended June 30, 2013 is set forth as follows:

Condensed Consolidated Statements of Operations (unaudited)

	For the Three Months Ended June 30,2013						For the Six Months Ended June 30,2013
	As Previously Reported		Restatement Adjustments		As Restated in this Quarterly Report on Form 10-Q		As Previously Reported		Restatement Adjustments		As Restated in this Quarterly Report on Form 10-Q
Revenues:
Sale of software	$	250,352	$	(90,000)	$	160,352	$	259,012	$	(90,000)	$	169,012
Professional services		65,761		(19,990)		45,771		138,533		(19,990)		118,543
Total revenues		581,164		(109,990)		471,174		936,036		(109,990)		826,046
Gross profit		398,801		(109,990)		288,811		574,187		(109,990)		464,197
Loss from operations		(367,680)		(109,990)		(477,670)		(993,568)		(109,990)		(1,103,558)
Net loss	$	(408,907)	$	(109,990)	$	(518,897)	$	(1,080,704)	$	(109,990)	$	(1,190,694)

Basic and diluted net loss per share:	$	(0.01)			$	(0.01)	$	(0.03)			$	(0.03)

Condensed Consolidated Statements of Cash Flows (unaudited)

	For the Six Months Ended June 30,2013
	As Previously Reported		Restatement Adjustments		As Restated in this Quarterly Report on Form 10-Q

Cash flows from operating activities:
Net loss	$	(1,080,704)	$	(109,990)	$	(1,190,694)
Adjustments to reconcile net loss to net cash
Changes in operating assets and liabilities:
Accounts receivable		(427,220)		109,990		(317,230)
Total adjustments		(794,722)		109,990		(684,732)
Net cash used in operating activities	$	(1,875,426)	$	-	$	(1,875,426)

Previously filed Quarterly Reports on Form 10-Q for quarterly periods ended prior to December 31, 2013 have not been and will not be amended.