2. BALANCE SHEET ACCOUNTS

9 Months Ended

Sep. 30, 2013

Notes to Financial Statements

2. BALANCE SHEET ACCOUNTS

Capitalized software consists of the following:

	September 30, 2013				December 31, 2012
Capitalized software		$	952,139			$	672,359
Less accumulated amortization			(133,752	)			(53,802	)
Capitalized software, net		$	818,387			$	618,557

Office furniture and equipment:

During the quarter ended September 30, 2013, the Company finalized its plans to move to a new office location.  During the nine month period then ended  the Company purchased $21,834 of new equipment and tradeshow furniture, in addition to purchasing $40,000 of new office furniture, which was financed.

As a result of the office move, the Company disposed of  $125,606 of certain  undepreciated assets which were not moved to the new location.

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 $1,917,500 and $2,065,000 at September 30, 2013 and December 31, 2012, respectively.

The Company recognized a gain of $147,500 and a loss of $442,500 in relation to the change in value of the financial liability during the nine-month periods ended September 30, 2013 and 2012, respectively.