Change in Accounting Policy

6 Months Ended

Jun. 30, 2013

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

Note 8 – Change in Accounting Policy

In early 2013, the Company expanded its business strategy specifically related to the monetization of its intellectual property and has been pursuing brand licenses with major corporations. This expansion of strategy gave rise to a change in accounting principle by which we recognize revenue as detailed in Note 2, above, changing from the proportional performance methodology to the completed performance methodology. The Company’s contracts consider the delivery of a number of elements including but not limited to a prospective license to utilize methodologies covered by certain licensed patents, as defined specifically by the agreement in question, for a specified license term. Upon delivery of all contractual elements, the Company recognizes all revenue associated with the contract provided that all other recognition criteria have been met. We evaluated our accounting principles related to revenue recognition in Q2 2013 and determined that the completed performance methodology was preferable and such change represents , in the our circumstances, the adoption of a preferable accounting principle in conformity with ASC 250, Accounting Changes and Error Corrections.

The company conducted a quantitative analysis of the impact of the accounting policy change on our balance sheet and income statement for the fiscal year ended December 31, 2012 and the fiscal quarter ended March 31, 2013 which are presented below. The analysis shows that when considering the overall impact on the financial statements for the December 31, 2012 and March 31, 2013 prior periods, the impact is immaterial. For the year ended December 31, 2012 and the three months ended March 31, 2013, our net loss and total current liabilities are impacted by less than 1%. Our conclusion is that the change in accounting policy enacted in 2013 has no material effect on prior period financial statements.

As of and for the year ended December 31, 2012

	As reported		Effect of Accounting Change		As Adjusted
Consolidated Statement of Operations and Comprehensive Loss
Revenue	$	2,344	$	208	$	2,552
Net (loss) attributable to common shareholders	$	(19,386)	$	208	$	(19,178)
Consolidated Balance Sheet
Assets
Current Assets	$	948	$	-	$	948
Long-Term Assets		5,091		-		5,091
Total Assets	$	6,039	$	-	$	6,039
Liabilities and Shareholders Deficit
Current Liabilities, excluding Deferred revenue and customer pre-payments	$	71,840	$	-	$	71,840
Deferred revenue and customer prepayments		3,735		(208)		3,527
Total Current Liabilities		75,575		(208)		75,367
Series C & D Convertible Preferred Stock		5,188		-		5,188
Total Shareholders' Deficit		(74,724)		208		(74,516)
Total Liabilities and Shareholders Deficit	$	6,039	$	-	$	6,039

As of and for the three months ended March 31, 2013

	As reported		Effect of  Accounting  Change		As Adjusted
Condensed Consolidated Statement of Operations and Comprehensive Loss
Revenue	$	602	$	(21)	$	581
Net income (loss) attributable to common shareholders	$	9,036	$	(21)	$	9,015
Condensed Consolidated Balance Sheet
Assets
Current Assets	$	365	$	-	$	365
Long-Term Assets		4,870		-		4,870
Total Assets	$	5,235	$	-	$	5,235
Liabilities and Shareholders Deficit
Current Liabilities, excluding Deferred revenue and customer pre-payments	$	59,162	$	-	$	59,162
Deferred revenue and customer prepayments		3,348		21		3,369
Total Current Liabilities		62,510		21		62,531
Series C & D Convertible Preferred Stock		5,188		-		5,188
Total Shareholders' Deficit		(62,463)		(21)		(62,484)
Total Liabilities and Shareholders Deficit	$	5,235	$	-	$	5,235