5. CAPITALIZED PRODUCTION COSTS , OTHER CURRENT ASSETS	12 Months Ended
Dec. 31, 2013
Notes to Financial Statements
5. CAPITALIZED PRODUCTION COSTS , OTHER CURRENT ASSETS	Capitalized Production Costs Capitalized production costs include the unamortized costs of completed web series which have been produced by the Company and costs of scripts for projects that have not been developed or produced. These costs include direct production costs and production overhead and are amortized using the individual-film-forecast method, whereby these costs are amortized and participations and residuals costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the web series. During the year ended December 31, 2012, the Company completed production on two web series. It reported revenues from these web series of approximately of $800,000 and $3,900,000 for the years ended December 31, 2013 and 2012, respectively. The Company amortized capitalized production costs (included as direct costs) in the consolidated statement of operations and comprehensive loss using the individual film forecast computation method in the amount of approximately $500,000 and $3,000,000 for the years ended December 31, 2013 and 2012. During the year ended December 31, 2012, the Company analyzed the fair value of the capitalized production costs and determined that future expected revenues were below the capitalized production costs. As such, the Company impaired $0 and $228,541 of capitalized production cost for the years ended December 31, 2013 and 2012. In addition, the Company has entered into agreements to hire writers to develop scripts for other digital web series productions and has deferred approximately $630,000 and $341,000 in capitalized production costs as of December 31, 2013 and 2012 associated with these scripts. These projects are not yet in production. As of December 31, 2013 and 2012, respectively, the Company has total capitalized production costs of $781,391 and $1,003,658, net of accumulated amortization, tax incentives and write down to fair value, recorded on its consolidated balance sheet. At December 31, 2013 and 2012, the Company owed approximately $0 and $238,700 for these productions that is included in Other current liabilities on the consolidated balance sheet. The tax credits will be received by the production companies and used to pay the liabilities related to these productions. The Company estimates that it will receive approximately $62,000 once the liabilities are fully paid. The Company estimates that it will amortize 83% of the capitalized production costs over the next three years. The Company has assessed events and changes in circumstances that would indicate that the Company should assess whether the fair value of the productions are less than the unamortized costs capitalized and did not identify indicators of impairment, other than those noted above. Other Current Assets The Company recorded $79,389 and $239,259 in Other current assets on its Balance sheets as of December 31, 2013 and 2012, respectively. This is mainly comprised of receivables related to its productions. During 2013, the Company earned revenue from foreign sales in the amount of approximately $17,000, net of allowance for doubtful accounts, and tax credits over the amount of liabilities of approximately $62,000 related to the productions that had not been received as of year-end. During 2012, the Company earned production fees in the amount of $150,000 and revenues from foreign sales of its production that had not been received as of December 31, 2012.

5. CAPITALIZED PRODUCTION COSTS , OTHER CURRENT ASSETS

12 Months Ended

Dec. 31, 2013

5. CAPITALIZED PRODUCTION COSTS , OTHER CURRENT ASSETS

Capitalized Production Costs

Capitalized production costs include the unamortized costs of completed web series which have been produced by the Company and costs of scripts for projects that have not been developed or produced. These costs include direct production costs and production overhead and are amortized using the individual-film-forecast method, whereby these costs are amortized and participations and residuals costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the web series.

During the year ended December 31, 2012, the Company completed production on two web series. It reported revenues from these web series of approximately of $800,000 and $3,900,000 for the years ended December 31, 2013 and 2012, respectively. The Company amortized capitalized production costs (included as direct costs) in the consolidated statement of operations and comprehensive loss using the individual film forecast computation method in the amount of approximately $500,000 and $3,000,000 for the years ended December 31, 2013 and 2012. During the year ended December 31, 2012, the Company analyzed the fair value of the capitalized production costs and determined that future expected revenues were below the capitalized production costs. As such, the Company impaired $0 and $228,541 of capitalized production cost for the years ended December 31, 2013 and 2012.

In addition, the Company has entered into agreements to hire writers to develop scripts for other digital web series productions and has deferred approximately $630,000 and $341,000 in capitalized production costs as of December 31, 2013 and 2012 associated with these scripts. These projects are not yet in production.

As of December 31, 2013 and 2012, respectively, the Company has total capitalized production costs of $781,391 and $1,003,658, net of accumulated amortization, tax incentives and write down to fair value, recorded on its consolidated balance sheet. At December 31, 2013 and 2012, the Company owed approximately $0 and $238,700 for these productions that is included in Other current liabilities on the consolidated balance sheet. The tax credits will be received by the production companies and used to pay the liabilities related to these productions. The Company estimates that it will receive approximately $62,000 once the liabilities are fully paid. The Company estimates that it will amortize 83% of the capitalized production costs over the next three years.

The Company has assessed events and changes in circumstances that would indicate that the Company should assess whether the fair value of the productions are less than the unamortized costs capitalized and did not identify indicators of impairment, other than those noted above.

Other Current Assets

The Company recorded $79,389 and $239,259 in Other current assets on its Balance sheets as of December 31, 2013 and 2012, respectively. This is mainly comprised of receivables related to its productions. During 2013, the Company earned revenue from foreign sales in the amount of approximately $17,000, net of allowance for doubtful accounts, and tax credits over the amount of liabilities of approximately $62,000 related to the productions that had not been received as of year-end. During 2012, the Company earned production fees in the amount of $150,000 and revenues from foreign sales of its production that had not been received as of December 31, 2012.