2. BALANCE SHEET ACCOUNTS

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

2. BALANCE SHEET ACCOUNTS

2. BALANCE SHEET ACCOUNTS

Capitalized software consists of the following:

	June 30, 2013			December 31, 2012
Capitalized software	$	829,307		$	672,359
Less accumulated amortization		(103,627	)		(53,802	)
Capitalized software, net	$	725,680		$	618,557

Financial instruments:

The fair value of the financial liability related to issuance of 1,475,000 shares of our common stock, par value $0.001 per share (the "Common Stock"), resulting from the settlement of the Class Action lawsuit on July 1, 2011 was $2,065,000 at both June 30, 2013 and December 31, 2012.

The fair value of the financial instrument is calculated by multiplying 1,470,000 of shares by the fair value of the Common Stock of $1.40. The Company uses inputs that are observable in the market. Such determination of value falls within Level I measurement methods under Fair Value Hierarchy under ASC 820 "Fair Value Measurements"

The Company recognized a loss in relation to the change in value of the financial liability of zero and $162,250 during the six-month periods ended June 30, 2013 and 2012, respectively.