Investment in Equity Securities

6 Months Ended

Jun. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 3. Investment in Equity Securities

On May 7, 2013, the Company purchased 100,000 shares of the authorized but unissued shares of Series A Convertible Preferred Stock (“Series A stock”), $.001 par value, of Sudo.me Corporation (Sudo) for an aggregate purchase price of  $100,000 pursuant to the terms and conditions of a preferred stock purchase agreement. Sudo is a customer of the Company. As a result, the Company owns approximately 3.8% of the total outstanding shares of Sudo. Sudo's web site is http://mysudo.me. The source of funds for the purchase consisted of accounts receivable of $84,167 due from Sudo and cash of $15,833. At June 30, 2013, the cash was not paid and was included in accrued expenses - other. Accordingly, this transaction is considered non-cash investing activity of $100,000. The investment is accounted for using the equity method since Company management exercises significant influence over the operating and financial policies of Sudo. During 2012 and 2013, certain officers and directors of the Company made loans to Sudo and converted loans to Series A stock. In addition, one Company employee is one of three members of the board of directors of Sudo and one Company employee is an officer of Sudo. As a result of the foregoing, the Company is deemed to have significant influence upon Sudo's policy and operating decisions. The investment was written down by $5,000 through June 30, 2013 to $95,000 based on the Company's interest in the net loss of Sudo from May 7, 2013 through June 30, 2013.

The Series A stock votes together with all other classes of stock as a single class on all actions to be taken by the stockholders. Series A stock dividends accrue at the rate of $.10 per year on each share from the date of issuance. Each share entitles the holder to such number of votes per share as shall equal the number of shares of common stock into which each share of Series A stock is then convertible. At the option of the holder, each share and accrued and unpaid dividends are convertible into shares of common stock at a rate of the quotient of (i) preferred shares plus unpaid dividends divided by (ii) the number of preferred shares. Shares of Series A stock are automatically converted to shares of common stock upon a firm commitment underwritten public offering of common stock yielding gross proceeds of at least $10 million at a minimum price of $3 per share.

Financial information for Sudo as of and for the six months ended June 30, 2013 includes total assets of $8,368, total liabilities of $206,662, and net loss of $455,860.