10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year ended December 31, 2014

000-53705

(Commission File Number)

COPSYNC, INC.

(Exact name of registrant as specified in its charter)

Delaware	98-0513637
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

16415 Addison Road, Suite 300

 Addison, Texas 75001

 (Address of principal executive offices)

 (972) 865-6192

 (Registrant’s telephone number, including area code)

 Securities registered pursuant to Section 12(b) of the Act:  None

 Securities registered pursuant to Section 12(g) of the Act:

 Common Stock, $0.0001 par value

 (Title of Class)

Indicate by check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  ¨ Yes  x No

Indicate by check whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  ¨ Yes  x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or shorter period that the registrant was required to submit and post such files).   xYes  o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  ¨ Yes  x No

The aggregate market value of the registrant’s common equity held by non-affiliates of the registrant at June 30, 2014, based on the $0.17 per share closing price for the registrant’s common stock on the Markets Group Inc.’s OTCQB Link, was $18,320,449.

The number of shares of the registrant’s common stock outstanding as of March 25, 2015 was 202,572,444.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information from the definitive Information Statement for the registrant, filed with the Securities and Exchange Commission pursuant to Regulation 14C on March 2, 2015, is incorporated by reference into Part III of this Form 10-K.

Table of Contents
			Page
PART I			3
	ITEM 1.	BUSINESS	3
	ITEM 1A.	RISK FACTORS	7
	ITEM 1B.	UNRESOLVED STAFF COMMENTS	13
	ITEM 2.	PROPERTIES	13
	ITEM 3.	LEGAL PROCEEDINGS	13
	ITEM 4.	MINE SAFETY DISCLOSURES	13
PART II			14
	ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	14
	ITEM 6.	SELECTED FINANCIAL DATA	15
	ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
	ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
	ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	23
	ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	23
	ITEM 9A.	CONTROLS AND PROCEDURES	23
	ITEM 9B.	OTHER INFORMATION	24
PART III			25
	ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	25
	ITEM 11.	EXECUTIVE COMPENSATION	25
	ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	25
	ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	25
	ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	25
PART IV			26
	ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	26
		SIGNATURES	27
		INDEX TO EXHIBITS	28
	INDEX TO FINANCIAL STATEMENTS		F-1
	REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-2
	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		F-3

PART I 

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS AND RISK FACTORS

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including:  any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.  Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan” or “anticipate” and other similar words.  Such forward-looking statements may be contained in the sections “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” among other places in this report.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed.  Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this report.  We do not intend, and undertake no obligation, to update any forward-looking statement.

ITEM 1.  BUSINESS

Overview

COPsync, Inc. operates what we believe to be the largest real-time, law enforcement mobile data information system in the United States.  We refer to this real-time, in-car information sharing, communication and data interoperability network as the “COPsync Network.” The COPsync Network, delivered via software as a service, is designed for the purpose of:

·   Allowing law enforcement officers to compile and share information, in real-time, via a common database accessible by all such officers on the COPsync Network, regardless of agency jurisdiction;

·   Allowing officers to query, in real time, various local, state and federal law enforcement databases, including (i) the FBI Criminal Justice Information Service (CJIS) database, (ii) the law enforcement telecommunications system databases for the States of Texas, Mississippi and Massachusetts, (iii) the historical databases of our agency subscribers who have provided us with such access, (iv) the Department of Homeland Security’s El Paso Intelligence Center (EPIC) database, which collects information relating to persons crossing the United States – Mexico border, and (v) our COPsync Network database, and, as we expand the scope of our operations to states others than noted above, we anticipate that we will provide access to the law enforcement telecommunications databases in those states as well, subject to approvals from the applicable governing state agencies;

·   Allowing dispatchers and officers to send, in real-time, BOLO (be on the lookout) and other alerts of child kidnappings, robberies, car thefts, police pursuits, and other crimes in progress to all officers on the COPsync Network, regardless of agency jurisdiction;

·   Allowing officers to write tickets, offense reports, crash reports and other reports and electronically and seamlessly send, in real-time or near real-time, the information in those reports to the COPsync database and local court and agency databases;

·   Informing officers of outstanding Texas Class C misdemeanor warrants, in real-time, at the point of a traffic stop and allowing the officers to collect payment for those warrants using a credit card, through a specific feature enhancement to the COPsync Network that we sometimes referred to as the WARRANTsync system.

In the Homeland Security Act of 2002, Congress mandated that all U.S. law enforcement agencies, federal, state and local, implement information sharing solutions, referred to as “interoperability.”  Our COPsync Network provides this interoperability.  Prior to the introduction of the COPsync Network, significant information sharing among law enforcement agencies, regardless of agency jurisdiction, did not exist in the United States.  We believe that this lack of interoperability existed because law enforcement software vendors maintain proprietary systems that are not intended to interface with systems of other vendors.  Our business model is to bring real-time information sharing, communication and data interoperability to as many law enforcement agencies as possible.

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We also offer the COPsync911 threat alert service for use in schools, hospitals, day care facilities, government office buildings, energy infrastructure and other facilities with a high level of concern about security. When used in schools, the COPsync911 service enables school personnel to instantly and silently send emergency alerts directly to the closest law enforcement officers in their patrol vehicles, and to the local 911 dispatch center, with the mere click of an icon, from any computer within the facility and from any cell phones and other mobile devices associated with the facility.  The alert is also sent to the cell phones of all law enforcement officers in the area and to all teachers, administrators, and other staff at the school, alerting them of imminent danger.  We expect our COPsync911 service to reduce emergency law enforcement response times in those circumstances when seconds and minutes count.

Once the alert is sent, a “crisis communication portal” is established among the person(s) sending the alert, the responding patrol vehicles and the local law enforcement 911 dispatch center.  This allows the person(s) initiating the alert to silently communicate with responding officers and the 911 dispatch center about the nature of the threat, whether it is an active gunman, fire, suspicious person or other emergency.  The crisis communication portal also provides a link to a diagram of the school or other facility and a map to its location. 

We also augment our other services with our own law enforcement in-car video system, named VidTac, described below.

Number of Users and Corporate History

As of December 31, 2014, 629 law enforcement agencies, courts and school districts, primarily in the State of Texas, had contractually subscribed to use our COPsync Network real-time data collection, data sharing, and warrant collection service, and 127 subscribers to COPsync911.  We currently have at least one subscriber using the COPsync Network in 79% of the 254 Texas counties.  

To date, our COPsync Network service has successfully submitted, processed and relayed over 11,069,000 officer initiated information requests.  On average, our service is returning responses to our customers in less than five seconds, well within the 32 second average NCIC 2000 standard for mobile clients. 

We were incorporated in Delaware in October 2006, and operated with nominal or no assets or operations until 2008.  We acquired the predecessor-in-interest to our business, PostInk Technology, LP, a Texas limited partnership, in April 2008 and began realizing revenues from operations in the fourth quarter of 2008.

Business Model

We offer the COPsync Network and the COPsync911 threat alert service via a “software as a service” (SaaS) business model, under which our customers subscribe to use the COPsync Network and the COPsync911 service for a specified term.  The subscription fees are typically paid annually at the inception of each year of service.  Our business model is to obtain subscribers to use our service, achieve a high subscription renewal rate from those subscribers and then grow our revenue through a combination of acquiring new subscribers and obtaining renewals from existing subscribers.  Pertinent attributes of our business model include the following:

 ● We have incurred and will continue to incur material research and development costs to continue to build out our infrastructure and add new features and functionality to our offerings.

● We incurred start-up cost to establish our services and continue to incur recurring fixed costs to maintain our services.

● We acquire subscribers and bring them onto our services, which requires variable acquisition costs related to sales, installation and deployment.

● We recruit subscribers with the goal of reaching a level of aggregate subscriber payments that exceeds our fixed (and variable) recurring service costs.

● We seek to maintain a high renewal rate among existing subscribers.

● We augment these recurring revenues with product revenues from sales of our VidTac law enforcement in-car video system.

Assuming that we are successful in obtaining new users of our services, as well as retaining high renewal rates of existing subscribers, we anticipate that the recurring nature of our subscription model will result in annually recurring, sustainable and predictable cash flow and revenue growth, year-over-year.  However, there is no assurance that we will be successful in implementing our business model and achieving our operational and financial objectives.

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Our Products

COPsync Network

As described above, the COPsync Network is a real-time mobile data information system.

Information Sharing Replaces Agency “Information Silos”

State and local law enforcement agencies traditionally operate in information “silos.”  Information about criminals and criminal activity known to one law enforcement agency is typically contained only in the database of that agency and is not shared or made known to other agencies, even those that are geographically proximate.  The only exceptions to these information silos are the FBI National Crime Information Center (NCIC) and each state’s law enforcement telecommunications system (LETS).  However, we believe that these available databases have limited value because they only provide adjudicated information, such as certain warrant issuances, convictions or prison sentences.  These databases do not provide non-adjudicated information, such as whether the person has made a threat against law enforcement, is a known gang member, has been questioned for suspicious activity, or is known to carry a weapon.  Moreover, the NCIC and the LETS information is typically provided only by radio from the local dispatch office for those agencies that do not have in-vehicle computers.

With our COPsync Network, patrol officers have in-car, real-time, access to the adjudicated NCIC and LETS data, the EPIC data, and also have access to non-adjudicated data from other agencies and officers using the COPsync Network, regardless of the type of computer infrastructure used by the other agencies.  We believe that we are the only provider in the United States whose primary business objective is to connect law enforcement agencies for this purpose.

Real-Time Communication Replacing Virtually No Communication Between Agencies

Today, patrol officers typically cannot communicate in real-time with officers from other agencies because their radios are not interoperable.  Thus, officers have no ability to advise other agencies in real-time of “officer needs assistance” situations, “be on the lookout” notifications (BOLOs), child abductions, robberies or other crimes in progress.

Using our COPsync Network, agencies and officers can communicate with each other in real time through instant messaging (computer to computer) or SMS (computer to cell phone).  This ability enables virtually instantaneous communication of information to an individual officer, an agency, a county, a state or even the entire country – assuming the recipient is using the COPsync Network.

Electronic Tools Replacing Pen and Paper

Much of the work (e.g., traffic citations, arrests, suspicious activity reports, crash reports and DUIs) of a typical patrol officer has historically been done with pen and paper.  Our COPsync Network provides 21st century electronic tools designed to replace pen and paper.  These electronic tools are designed to enable patrol officers to be more efficient.  For example, the average DUI arrest in the State of Texas takes between 3.5 and 4.0 hours to process, in part because of the many required handwritten forms involved.  Using the COPsync Network, an officer can complete the paperwork for a DUI arrest in a fraction of the time.  Routine traffic stops can also be completed much quicker, and the tickets can be seamlessly and electronically sent to the court records management system for processing using the COPsync Network.

COPsync911 Threat Alert Service

As described above, the COPsync911 threat alert service enables persons to instantly and silently send emergency alerts directly to the closest law enforcement officers in their patrol vehicles and the local 911 dispatch center with the mere click of an icon.  Features of the COPsync911 threat alert service include:

·   Persons can send emergency alerts directly to the closest law enforcement officers’ computers and cell phones while simultaneously alerting the 911 law enforcement dispatch center.  

·   Text alerts are simultaneously sent to others within the targeted location and all officers in the area that subscribe to the COPsync Network.  

·   Once triggered, a crisis communication portal is established among the person sending the alert, the local 911 dispatch center and the responding officers – all in about two seconds.  

·   This crisis communication portal enables all parties to communicate directly, in real-time, as the officers are in route to the scene.  

·   Subsequent alerts sent from the scene by others are automatically added to the initial crisis communication portal, thus providing law enforcement responders real-time situational awareness information.  

·   Responding officers are able to view a diagram of the school or other facility and a map of its physical location through the crisis communication portal.

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VidTac In-Vehicle Video System

Software Driven, Digital In-car Video System

We believe that our VidTac in-vehicle video system is the world’s only 100% digital, high performance, software-driven video system designed for law enforcement.  Typical in-vehicle video systems are “hardware centric” DVR-based systems.  The video capture, compression and encryption of the video stream is all performed by the DVR.  High-end digital DVR-based systems are expensive, with an estimated price in excess of $5,000 per system.  These DVR-based video systems are typically replaced, at the same expensive price point every three to four years as new patrol vehicles are placed into service.

We believe that our VidTac system is price advantageous vis-a-vis other high-end video systems, since we are offering the VidTac system at a much lower price than the average price of the DVR-based video systems.   Moreover, since our system is software based, most maintenance fixes and updates can be automatically and seamlessly “pushed” to the users, thus avoiding the need for an on-site maintenance visit in many cases.

Sales and Marketing

We sell our products and services through direct sales efforts and indirectly through distributors and resellers.  Virtually all of our sales to-date have been derived from our direct sales efforts.  However, we continue our efforts to establish a network of indirect sales channels.  We have several distributors and resellers for the COPsync Network and COPsync911 threat alert service and a number of resellers for the VidTac system.  We are working with these indirect sales channels to establish processes and systems and otherwise enable them to become a more effective sales channel for our product offerings.

Research and Development

We have devoted a substantial amount of our resources to software and hardware development activities in recent years.  Total research and development expenses for the years ended December 31, 2014 and 2013 were $1,952,786 and $2,157,597, respectively.  The expenses incurred in 2014 were principally devoted to the continued development and refinement of our COPsync911 threat alert service and our VidTac system, and development efforts to enhance the scalability of our COPsync Network and COPsync911 service offerings.  The expenses incurred in 2013 were principally driven by the development of our COPsync911 threat alert service, which was launched in the second quarter of 2013.

Our cumulative gross capitalized software development costs at December 31, 2014 were $2,724,082.  The cumulative capitalized software development costs, net of amortization costs, at December 31, 2014 and December 31, 2013 were zero and $436,471, respectively.  We incurred no capitalized software development costs in the years ended December 31, 2014 and 2013.

Competition

We believe that there is no direct competition to our COPsync Network.  We believe that we provide the only law enforcement network that provides real-time access to both adjudicated and non-adjudicated law enforcement databases, plus real-time data sharing and communication across agency jurisdictional boundaries, directly to the patrol car and to all subscribing agencies at the point of incident.  We have designed our system to be “vendor neutral,” meaning it is designed to be used in conjunction with systems of other law enforcement technology vendors.  

We estimate that there are 2,100 vendors providing records management, jail management, court management, and computer aided dispatch technology systems to law enforcement agencies.  We do not view these vendors as our competitors, since our objective is not to interfere with their relationship with their customers or replace them.  Our objective and business model is to provide their customers with the connectivity to connect to other law enforcement agencies.  We aspire to be the one vendor connecting all law enforcement agencies, regardless of vendor.

There are a number of competitors to our COPsync911 threat alert service, including merely calling “911,” panic buttons, and alarm monitoring services.  We do not believe any of these competitors offer the features and functionality provided by the COPsync911 service.

There are many in-vehicle law enforcement video system vendors, including Coban, Digital Ally, MobileVision, Motorola, and Watchguard Video, whose products compete with our VidTac product offering.  We believe that we will be able to capture a reasonable share of the law enforcement in-vehicle video market with our VidTac product due to the following attributes, among others:

·   Our VidTac system possesses features and functionality that other existing video systems do not possess.  

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·   We are offering our VidTac system at a much lower price than the average price of the competing DVR-based video systems.    

·   Since our system is software based, most maintenance fixes and updates can be automatically and seamlessly “pushed” to the users, thus avoiding the need for the delay and inconvenience of on-site maintenance or the return of the system for repair.

Intellectual Property

We rely, and intend to continue to rely, on a combination of trademark, trade secret, copyright law and contractual restrictions to protect the proprietary aspects of our services and products.  We have filed applications for certain trademarks relating to our business.  We have filed several patent applications covering certain aspects of our COPsync Network service, our VidTac product, and the COPsync911 threat alert service.

Employees

We had 34 full-time employees as of March 15, 2015, a substantial majority of whom are non-management personnel.  None of our employees are represented by a labor union.  We have not experienced any work stoppages and believe that we have satisfactory employee relations. 

Government Regulation

Our business is subject to regulation by various federal and state governmental agencies.  Such regulation includes the anti-trust regulatory activities of the Federal Trade Commission, the Department of Justice (CJIS Division), the consumer protection laws of the Federal Trade Commission, the product safety regulatory activities of the U.S. Consumer Products Safety Commission and environmental regulation by a variety of regulatory authorities in each of the areas in which we conduct business.  With regards to the compliance of environmental regulations, our cost of such compliance is minimal.  In addition, our customers and potential customers are all governmental entities.  As a result, their ability to purchase our product could be subject to governmental regulation at the federal, state and local levels. 

ITEM 1A.  RISK FACTORS

There are numerous risks affecting our business, some of which are beyond our control.  An investment in our common stock involves a high degree of risk and may not be appropriate for investors who cannot afford to lose their entire investment.  If any of the following risks actually occur, our business, financial condition or operating results could be materially harmed.  This could cause the trading price of our common stock to decline, and you may lose all or part of your investment.  In addition to the risks outlined below, risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations.  Potential risks and uncertainties that could affect our operating results and financial condition include, without limitation, the following:

RISK FACTORS RELATING TO OUR OPERATIONS

We cannot predict our future results because we have a limited operating history.

Our predecessor, which began our business, was formed in January 2005.  We began realizing revenues from operations in the fourth quarter of 2008.  Given our limited operating history, it may be difficult for you to evaluate our performance or prospects.  You should consider the uncertainties that we may encounter as a company that should still be considered an early stage company.  These uncertainties include:

● our ability to market and sell our COPsync Network and other products for a profit;

● our ability to recruit and retain skilled personnel; and

● our evolving business model

If we are not able to address successfully some or all of these uncertainties, we may not be able to expand our business, compete effectively or achieve profitability.

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If we are unable to develop and generate additional demand for our services or products, we will likely suffer serious harm to our business.

We have invested significant resources in developing and marketing our services and products.  The demand for, and market acceptance of, our services and products is subject to a high level of uncertainty.  Adoption of new software and hardware solutions, particularly by law enforcement agencies, which have historically relied upon more traditional means of communication, requires a broad acceptance of substantially different methods of conducting business and collecting and sharing information.  Our services and products are often considered complex and often involve a new approach to the conduct of business by our customers.  As a result, intensive marketing and sales efforts may be necessary to educate prospective customers regarding the uses and benefits of our services and products in order to generate additional demand.  The market for our services and products may weaken, competitors may develop superior offerings or we may fail to develop acceptable solutions to address new market conditions.  Any one of these events could have a material adverse effect on our business, results of operations, cash flow and financial condition.

We rely predominantly on sales to governmental entities, and the loss of a significant number of our contracts would have a material adverse effect on our business, results of operations and cash flows.

Our sales are predominantly derived from contracts with agencies of local governments.  Our sales, and results of operations, may be adversely affected by the curtailment of these governmental agencies’ use of technology, including curtailment due to governmental budget reductions.  Governmental budgets available to purchase our software service and products could be negatively affected by several factors, including events we cannot foresee, local government budget shortfalls, federal and state government budget limitations resulting in the curtailment of grant programs that would otherwise cover the purchase of our services, current or future economic conditions, a change in spending priorities, and other related exigencies and contingencies.  A significant decline in or redirection of local law enforcement expenditures in the future could result in a decrease to our sales, earnings and cash flows.

Undetected errors or failures in our software could result in loss or delay in the market acceptance for our products or lost sales.

Because our software services and products, and the environments in which they operate, are complex, our software and products may contain errors that can be detected at any point in its lifecycle.  While we continually test our services and products for errors, errors may be found at any time in the future.  Detection of any significant errors may result in, among other things, loss of, or delay in, market acceptance and sales of our services and products, diversion of development resources, injury to our reputation, increased service and warranty costs, license terminations or renegotiations or costly litigation.  Additionally, because our services and products supports or relies on other systems and applications, any software or hardware errors or bugs in these systems or applications may result in errors in the performance of our service or products, and it may be difficult or impossible to determine where the error resides.

We may not be competitive, and increased competition could seriously harm our business.

Relative to us, some of our current competitors or potential competitors may have one or more of the following advantages:

● longer operating histories;

● greater financial, technical, marketing, sales and other resources;

● positive cash flows from operations;

● greater name recognition;

● a broader range of products to offer; and

● a larger installed base of customers

Current and potential competitors may establish cooperative relationships among themselves or with third parties to enhance their offerings that are competitive with our products and service, which may result in increased competition.  As a result of these and other factors, we may be unable to compete successfully with our existing or new competitors.

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Sales to most of our target customers involves long sales and implementation cycles, which may cause revenues and operating results to vary significantly.

We sell our services and products primarily to local government agencies and school districts.  A prospective customer’s decision to purchase our services or products may often involve lengthy evaluation and product qualification process.  Throughout the sales cycle, we anticipate often spending considerable time educating and providing information to prospective customers regarding the use and benefits of our services and products.  Budget constraints and the need for multiple approvals within these organizations may also delay the purchase decision.  Failure to obtain the timely required approval for a particular project or purchase decision may delay the purchase of our services or products.  As a result, we expect that the sales cycle for our services and products will typically exceed 180 days, depending on the availability of funding to the prospective customer.  These long cycles may cause delays in any potential sale, and we may spend a large amount of time and resources on prospective customers who decide not to purchase our services or products, which could materially and adversely affect our business.

Additionally, many of our services and products are designed for the law enforcement community, which requires us to maintain a sales force that understands the needs of this profession, engages in extensive negotiations and provides high level support to complete sales.  If we do not successfully market our services and products to these targeted customers, our operating results will be below our expectations and the expectations of investors and market analysts, which would likely cause the price of our common stock to decline.

We have experienced losses since our founding.  A failure to obtain profitability and achieve consistent positive cash flows would have a significant adverse effect on our business.

We have incurred operating losses since our inception, including a reported net loss of $4,223,467 for our fiscal year ended December 31, 2014.  In fiscal 2014 we used $2,900,870 of cash in our operating activities.  We expect to continue to incur operating losses through at least fiscal 2015.  As of December 31, 2014, we had an accumulated deficit of $22,908,272, cash and cash equivalents of $587,459, a working capital deficit of $3,484,825 and a stockholders’ deficit of $5,215,787.  To date, we have funded our operations principally through the sale of our capital stock and debt instruments, as well as contributions of capital to our predecessor, and cash generated from operations.  We will need to generate significant revenues to achieve profitability, and we cannot assure you that we will ever realize revenues at such levels.  If we do achieve profitability in any period, we may not be able to sustain or increase our profitability on a quarterly or annual basis.

We are likely to require additional financing to support our operations.  Such financing may only be available on disadvantageous terms, or may not be available at all.  Any new financing could have a substantial dilutive effect on our existing stockholders.

As of December 31, 2014, we had cash and cash equivalents of $587,459 and a working capital deficiency of $3,484,825.  Our cash position may decline in the future, and we may not be successful in maintaining an adequate level of cash resources.  Our key vendors have accommodated us by extending payment terms for our outstanding accounts payables, but we cannot assure you that these accommodations will continue.  If our key vendors begin demanding standard payment terms, we may not be able to pay our accounts payable in a timely fashion, and we may lose our relationships with our key vendors.

We are likely to be required to seek additional debt or equity financing in order to support our anticipated operations.  We may not be able to obtain additional financing on satisfactory terms, or at all, and any new equity financing could have a substantial dilutive effect on our existing stockholders.  If we cannot obtain additional financing, we will not be able to achieve the sales growth that we need to cover our costs, and our results of operations would be negatively affected.

Our products, offerings and website may be subject to intentional disruption that could adversely impact our reputation and future sales.

We collect and retain large volumes of criminal justice information, including law enforcement telemetry data, non-adjudicated criminal justice information and other personally identifiable information that our various products and systems collect, process, summarize and report.  The integrity and protection of our data is critical to our business and our customers have the expectation that we will adequately protect this information.  The federal Criminal Justice Information Security (CJIS) Policy and additional requirements imposed on us by the law enforcement industry pertaining to information security and privacy are increasingly demanding and continue to evolve.  Maintaining compliance with these may increase our operating costs and adversely impact our ability to release new products and services to our customers.  Furthermore, a penetrated or compromised data system or the intentional, inadvertent or negligent release or disclosure of data could result in theft, loss, fraudulent or unlawful use of our data, which could harm our reputation or result in remedial and other costs, fines or lawsuits.   Our business could be subject to significant disruption, and we could suffer monetary and other losses and reputational harm, in the event of such incidents and claims.

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We will not be able to develop or continue our business if we fail to attract and retain key personnel.

Our future success depends on our ability to attract, hire, train and retain a number of highly skilled employees and on the service and performance of our senior management and other key personnel.  The loss of the services of our executive officers or other key employees could adversely affect our business.  Competition for qualified personnel possessing the skills necessary to implement our strategy is intense, and we may fail to attract or retain the employees necessary to execute our business model successfully.  Because our common stock is not traded on a recognized national market, we may have a more difficult time in using equity incentives to attract and retain the employees we need.  We do not have “key person” life insurance policies covering any of our employees.

Our success will depend to a significant degree upon the continued contributions of our key management, engineering and other personnel, many of whom would be difficult to replace.  In particular, we believe that our future success is highly dependent on Ronald A. Woessner, our chief executive officer, Russell Chaney, our founder and chairman of the board, and Shane Rapp, our founder and president.  If Messrs. Woessner, Chaney or Rapp, or any other key members of our management team, leave our employment, our business could suffer and the share price of our common stock would likely decline.  Although we have entered into an employment agreement with each of Messrs. Chaney and Rapp, either of them may voluntarily terminate his services at any time.  We do not currently have an employment agreement with Mr. Woessner.

Furthermore, our sales success is dependent on our sales leadership and our sales representatives.  We continue to experience turnover in our sales organization, including at the executive level.  Our current senior sales executive is relatively new to the company.  In 2014, we hired new sales personnel to fill various vacancies and increased the size of our sales team.  Our current sales team is less experienced in the law enforcement space than our previous sales team.  Consequently, our sales volumes could suffer until our new sales personnel become fully integrated.

If we do not protect our proprietary information and prevent third parties from making unauthorized use of our products and technology, our financial results could be harmed.

Most of our software and underlying technology is proprietary.  We seek to protect our proprietary rights through a combination of confidentiality agreements and procedures and through copyright, patent, trademark, and trade secret laws.  However, all of these measures afford only limited protection and may be challenged, invalidated, or circumvented by third parties.  Third parties may copy all or portions of our software and products or otherwise obtain, use, distribute, and sell our proprietary information without authorization.

Third parties claiming that we infringe their proprietary rights could cause us to incur significant legal expenses and prevent us from selling our products and services.

From time to time, we might receive claims that we have infringed the intellectual property rights of others, including claims regarding patents, copyrights, and trademarks.  Because of constant technological change in the segments in which we compete, the extensive patent coverage of existing technologies, and the rapid rate of issuance of new patents, it is possible that the number of these claims may grow.  In addition, former employers of our former, current, or future employees may assert claims that such employees have improperly disclosed to us the confidential or proprietary information of these former employers.  Any such claim, with or without merit, could result in costly litigation and distract management from day-to-day operations.  If we are not successful in defending such claims, we could be required to stop selling, delay shipments of, or redesign our products, pay monetary amounts as damages, enter into royalty or licensing arrangements, or satisfy indemnification obligations that we have with some of our customers.  We cannot assure you that any royalty or licensing arrangements that we may seek in such circumstances will be available to us on commercially reasonable terms or at all.  We may incur making significant expenditures to investigate, defend and settle claims related to the use of technology and intellectual property rights as part of our strategy to manage this risk.

In addition, we license and use software from third parties in our business.  These third party software licenses may not continue to be available to us on acceptable terms, or at all, and may expose us to additional liability.  This liability, or our inability to use any of this third party software, could result in shipment delays or other disruptions in our business that could materially and adversely affect our operating results.

Periods of sustained economic adversity and uncertainty could negatively affect our business, results of operations and financial condition.

Demand for our services and products depend in large part upon the level of capital and maintenance expenditures by many of our customers.  Economic downturns result in lower tax receipts for municipalities, counties and school districts, hence, lower budgets for our customers and potential customers.  Lower budgets could have a material adverse effect on the demand for our services and products, and our business, results of operations, cash flow and overall financial condition would suffer.

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Disruptions in the financial markets, such as what occurred in 2008, may adversely impact the availability and cost of credit for our potential customers, which could result in the delay or cancellation of customer purchases.  In addition, the disruptions in the financial markets may have an adverse impact on regional and world economies and credit markets, which could negatively impact the availability and cost of capital for us and our customers.  These conditions may reduce the willingness or ability of our customers and prospective customers to commit funds to purchase our services or products, or their ability to pay for our services after purchase.  These conditions could result in bankruptcy or insolvency for some customers, which would impact our revenue and cash collections.  These conditions could also result in pricing pressure and less favorable financial terms in our contracts and our ability to access capital to fund our operations.

Because we do not have an audit or compensation committee, stockholders must rely on the entire board of directors, only three members of which are independent, to perform these functions.

We do not have an audit or compensation committee comprised of independent directors.  All of the functions of the audit committee and the compensation committee are currently performed by the board of directors as a whole.  Only three of our six directors are considered independent.  Thus, there is a potential conflict in that board members who are part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.

We will incur increased costs and may have difficulty attracting and retaining qualified directors and executive officers as a result of being a public company.

As a public company, we will incur significant legal, accounting, reporting and other expenses that a similarly situated private company would not incur.  We also anticipate that we could incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as related rules implemented by the Securities and Exchange Commission.  These rules and regulations could increase legal and financial compliance costs and make some activities more time-consuming and costly.  These rules and regulations could make it more difficult and more expensive for us to retain our director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs than desired to retain that coverage.  Consequently, we may experience difficulty attracting and retaining qualified individuals to serve on our board of directors or as our executive officers.  We cannot predict or estimate the amount of additional costs that we may incur as a result of these requirements or the timing of such costs.

RISK FACTORS RELATING TO OUR COMMON STOCK

We have a substantial number of authorized common and preferred shares available for future issuance that could cause dilution of our stockholders’ interest and adversely impact the rights of holders of our common stock.

We have a total of 500,000,000 shares of common stock and 1,375,000 shares of preferred stock authorized for issuance.  As of December 31, 2014, we had 230,214,091 shares of common stock and 900,000 shares of preferred stock available for issuance.  We have reserved 32,096,794 shares of our common stock for issuance upon the exercise of outstanding options and warrants, 15,100,000 shares of our common stock for issuance upon conversion of outstanding shares of our preferred stock, 6,145,374 shares of our common stock upon the conversion of accrued dividends on our outstanding shares of preferred stock, 4,106,296 shares of our common stock upon conversion of outstanding convertible notes, 300,000 shares of our common stock to be issued for investment monies received in 2014 and 10,185,001 additional shares available for future grants under our stock incentive plan.  We may seek financing that could result in the issuance of additional shares of our capital stock and/or rights to acquire additional shares of our capital stock.  We may also make acquisitions that result in issuances of additional shares of our capital stock.  Those additional issuances of capital stock would result in a significant reduction of your percentage interest in us.  Furthermore, the book value per share of our common stock may be reduced.  This reduction would occur if the exercise price of any issued warrants, the conversion price of any convertible notes or the conversion ratio of any issued preferred stock is lower than the book value per share of our common stock at the time of such exercise or conversion.  In addition, to the extent we issue shares of our common stock, or the exercise price or conversion price of warrants or securities convertible into shares of our common stock, at a price below $0.10 per share, the conversion price of our Series B Preferred Stock would be adjusted downward, based upon a weighted average formula, which would result in addition shares of our common stock being issuable upon exercise of our Series B Preferred Stock.

The addition of a substantial number of shares of our common stock into the market or by the registration of any of our other securities under the Securities Act may significantly and negatively affect the prevailing market price for our common stock.  The future sales of shares of our common stock issuable upon the exercise of outstanding warrants and options may have a depressive effect on the market price of our common stock, as such warrants and options would be more likely to be exercised at a time when the price of our common stock is greater than the exercise price.

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We are controlled by our management and other related parties, which effectively inhibits a non-negotiated merger or business combination.

As of December 31, 2014, co-founders Russell Chaney, our chairman of the board, and Shane Rapp, our president, and their affiliates, and other members of management beneficially owned a controlling percentage of the voting power of our outstanding shares of common stock.  This could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders.  As a result, our management will effectively control the outcome of matters on which our stockholders are entitled to vote, including the election of directors and other significant corporate actions.  Because of their stock ownership and other relationships with us, our management will be in a position to greatly influence the election of our board of directors, and thus control our affairs.  This concentration of voting power in the hands of our management will also effectively inhibit a non-negotiated merger or other business combination.

There may not be an active market for shares of our common stock, which may cause our shares to trade at a discount and may make it difficult for you to sell your shares.

Our common stock is quoted on the OTC Markets Group Inc.’s OTC Link quotation platform, which is viewed by most investors as a less desirable, and less liquid, marketplace than the NASDAQ, NYSE and NYSE-AMEX stock exchanges.  Trading in our common stock has been limited.  There can be no assurance that an active trading market for our common stock will develop and continue.  As a result, you may find it more difficult to purchase, dispose of and obtain accurate quotations as to the value of our common stock.

In addition, since the trading price of our common stock is less than $5.00 per share, trading in our common stock is also subject to the requirements of Rule 15g-9 of the Exchange Act.   Under Rule 15g-9, brokers who recommend our common stock to persons who are not established customers and accredited investors, as defined in the Exchange Act, must satisfy special sales practice requirements, including requirements that they:

·   make an individualized written suitability determination for the purchaser; and

·   receive the purchaser’s written consent prior to the transaction.

These requirements may severely limit the market liquidity of our common stock and the ability of purchasers of our equity securities to sell their securities in the secondary market.  For all of these reasons, an investment in our equity securities may not be attractive to potential investors.

Our stock could be subject to volatility.

The market price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control, including:

● actual or anticipated fluctuations in our quarterly and annual results;

● changes in market valuations of companies in our industry;

● announcements by us or our competitors of new strategies, significant contracts, acquisitions, strategic relationships, joint ventures, capital commitments or other material developments that may affect our prospects;

● shortfalls in our operating results from levels forecasted by securities analysts or company management;

● additions or departures of our key personnel;

● sales of our capital stock in the future;

● liquidity or cash flow constraints; and

● fluctuations in stock market prices and volume, which are particularly common for the securities of start-up and emerging technology companies, such as us

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We may not pay dividends on our common stock in the foreseeable future.

We have not paid any dividends on our common stock.  We might pay dividends in the future at the discretion of our board of directors.  Under the terms of our amended and restated certificate of incorporation, as amended, we are prohibited from paying dividends on our common stock unless and until all accrued and unpaid dividends are paid on our Series B Preferred Stock.  We are also restricted from paying dividends on our common stock unless a dividend is paid on our Series A Preferred Stock in an amount equal to the amount of the dividends for all shares of our common stock into which each such share of Series A Preferred Stock could then be converted.  We are unlikely to pay dividends at any time in the foreseeable future; rather, we are likely to retain earnings, if any, to fund our operations and to develop and expand our business.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2.  PROPERTIES

At December 31, 2014, our principal properties consisted of a leased facility in the Dallas area (approximately 7,000 square feet), where our research and development, sales and marketing, finance and administrative functions are located and a leased facility in New Braunfels, Texas (approximately 2,500 square feet), where our customer support and operational activities are located.  The Dallas area location is subject to a thirty-month sublease expiring on August 31, 2015.  The New Braunfels facility is subject to a fifty-one month lease expiring on August 31, 2018.  We terminated our previous month-to-month lease for office space located in Canyon Lake, Texas, in June 2014, and moved that office to New Braunfels.  We believe our present facilities are adequate for our foreseeable needs, and are currently reviewing lease renewal options for the Dallas facility.

ITEM 3.  LEGAL PROCEEDINGS

We are not currently involved in any material legal proceedings.  From time-to-time we anticipate we will be involved in legal proceedings, claims, and litigation arising in the ordinary course of our business and otherwise.  The ultimate costs to resolve any such matters could have a material adverse effect on our financial statements.  We could be forced to incur material expenses with respect to these legal proceedings, and in the event there is an outcome in any that is adverse to us, our financial position and prospects could be harmed.

ITEM 4.  MINE SAFETY DISCLOSURES

Not Applicable. 

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PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES 

Our common stock is quoted on the OTC Market Group Inc.’s OTC Link quotation platform under the trading symbol “COYN”.  We have one class of common stock and two classes of preferred stock.

The following table shows the high and low sales price of our common stock on the OTCQB Link for each quarterly period during our fiscal years ended December 31, 2014 and 2013.

	Price Range
Quarter Ending	High		Low
March 31, 2013		0.10		0.07
June 30, 2013		0.12		0.07
September 30, 2013		0.12		0.09
December 31, 2013		0.11		0.09
March 31, 2014		0.10		0.08
June 30, 2014		0.20		0.09
September 30, 2014		0.48		0.16
December 31, 2014		0.45		0.35

As of March 25, 2014, there were 202 holders of record of our common stock, and the closing price of our common stock on the OTCQB Link was $0.26 per share.

Dividend Policy

We have never declared or paid any dividends on our capital stock.  Our outstanding Series A Preferred Stock does not accrue dividends.  Our outstanding shares of Series B Preferred Stock accrue cumulative dividends at a rate of 7% of the original issue price of those shares per annum.  The dividends for the Series B Preferred Stock are accrued and added to the liquidation preference of the Series B Preferred Stock annually.

The payment of dividends on our common stock in the future will depend on our earnings, capital requirements, operating and financial condition and such other factors as our board of directors may consider appropriate.  Under the terms of our amended and restated certificate of incorporation, as amended, we are prohibited from paying dividends on our Series A Preferred Stock or our common stock unless and until all accrued and unpaid dividends are paid on our Series B Preferred Stock.  We are also restricted from paying dividends on our common stock unless a dividend is paid on our Series A Preferred Stock in an amount equal to the amount of the dividends for all shares of our common stock into which each such share of Series A Preferred Stock could then be converted.  We currently expect to use all available funds to finance the future development and expansion of our business and do not anticipate paying dividends on our common stock in the foreseeable future.

Recent Sales of Unregistered Securities

During the three months ended December 31, 2014, we issued 6,690,000 shares of our common stock, consisting of:  1) an aggregate of 2,500,000 shares issued to two third party service providers for advisory services, with a fair value of $1,050,000; 2) 200,000 shares issued for cash at $0.10 per share, or $20,000 in the aggregate, from warrant exercises; 3) an aggregate of 750,000 shares issued upon the conversion of three convertible promissory notes at a conversion price of $0.10 per share; 4) 2,050,000 shares issued in exchange for $205,000 in cash at a price of $0.10 per share received in a prior reporting period; and 5) 1,190,000 shares issued at a price of $0.10 per share and associated warrants to purchase 158,000 shares of common stock (with exercise prices ranging from $0.39 to $0.45 per share) in exchange for an aggregate $119,000 in cash.

Additionally, we issued warrants to purchase 400,000 shares of common stock at a price of $0.10 per share to two third party service providers for advisory services, with a fair value of $167,346.

The offer and sale was made without registration under the Securities Act, or the securities laws of certain states, in reliance on the exemptions provided by Section 4(2) of the Securities Act and Regulation D under the Securities Act and in reliance on similar exemptions under applicable state laws.  The offer and sale of the shares of common stock upon the conversion of convertible notes or the exercise of warrants without registration under the Securities Act, or the securities laws of certain states, was in reliance on the exemptions provided by Section 3(a)(9) of the Securities Act and in reliance on similar exemptions under applicable state laws.  No general solicitation or general advertising was used in connection with the offering of the common stock and warrants.  We disclosed to the investors that the shares of common stock and the warrants, and the common stock underlying the warrants, could not be sold unless they are registered under the Securities Act or unless an exemption from registration is available and the certificates representing the shares and the warrants included, and the certificates representing the common stock to be issued upon exercise of the warrants (if applicable) will include a legend to that effect. 

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ITEM 6.  SELECTED FINANCIAL DATA

Not Applicable

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the financial statements and related notes included elsewhere in this report.

The information contained below may be subject to risk factors.  We urge you to review carefully the section “Risk Factors” above under Item 1A for a more complete discussion of the risks associated with an investment in our securities.  See “Special Note on Forward-Looking Statements and Risk Factors” above under Item 1.

We sell the services and products discussed above under “ITEM 1.  BUSINESS.” As noted above, most of our services are sold on a subscription basis to our customers who subscribe to use the service for a specified term. Our customers renew at a high-renewal rate, which produces recurring cash and recurring revenue, year-after-year.

Pertinent attributes of our subscription-based business model include the following:

 ● We have incurred and will continue to incur material research and development costs to continue to build out our infrastructure and add new features and functionality to our offerings.

● We have incurred start-up costs to establish our services and continue to incur recurring fixed costs to maintain our services.

● As we acquire subscribers and bring them onto our services, we experience variable acquisition costs related to sales, installation and deployment.

● We recruit subscribers with the goal of reaching a level of aggregate subscriber payments that exceeds our fixed (and variable) recurring service costs.

  ● We seek to maintain a high renewal rate among existing subscribers.

● The two important key performance metrics of the subscription-based aspect of our business are (1) the subscription related new, first-year orders we obtain from customers in any given year and (2) the dollar volume of renewing orders we receive from renewing customers in any given year. We use the acronym “SNFYOs” to refer to these Subscription-related New-First Year Orders and the acronym “SROs” to refer to these Subscription-related Renewing Orders.  Hence, SNFYOs in “year 1,” assuming renewal, become SROs in “years 2 – N.”  The dollar volume of SNFYOs and SROs in any given year affects the pace of our future revenue and cash growth and slope of the anticipated future revenue and cash growth.   Since we are selling into the innovator and early adopter customer spectrum of a particular market segment comprised of millions of potential subscribers (law enforcement officers, schools, day-cares, energy facilities, etc.), we anticipate that the dollar volume of SNFYOs may fluctuate up or down in any given year, although over time as we move into the early majority customer spectrum of a particular market segment, we expect the dollar volume of SNFYOs to steadily increase year-over-year. For example, we signed SNFYOs of approximately $1,212,000 for the twelve month period ended December 31, 2014, compared to approximately $1,583,000 in new orders for the comparable period in 2013, a decrease of approximately 23%.  We expect this will negatively impact our reported revenues in the short-term. In contrast to the potential variability in the order intake of the SNFYOs, since we have solid and predictable renewal rates we expect the SROs to steadily increase year-after-year. We realized a 17% increase in SROs of $1,531,000 in 2014 up from $1,303,000 in 2013.  This partially offset the decrease in SNFYOs.

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Assuming we are successful in obtaining new users of our services, as well as retaining high renewal rates of existing subscribers, we anticipate that the recurring nature of our subscription model will result in annually recurring, sustainable and predictable cash flow and revenue growth, year-over-year.  However, there is no assurance that we will be successful in implementing our business model and achieving our operational and financial objectives.

We also augment our SNFOs and NFOs with product revenues from sales of party hardware (computer in-vehicle laptops, portable printers, GPS devices, etc.) and sales of our proprietary in-vehicle video system (“VidTac”).

At December 31, 2014, we had cash and cash equivalents of $587,459, a working capital deficit of $3,484,825 and an accumulated deficit of $22,908,272.  We took the following steps in fiscal year 2014 and in the first quarter of 2015 to manage our liquidity, to avoid default on any material third-party obligations and to continue progressing our business towards cash-flow break-even, and ultimately profitability: 

1)  We continue to employ “just in time” principles in our procurement processes for third party hardware, meaning that we attempt to schedule delivery to the customer of the third party hardware that we sell immediately after we receive the hardware.  We also continue our attempts to collect customer prepayments for the third party hardware we sell at or about the time we order the hardware, which has helped us manage our working capital needs.

2)   Our key vendors are currently offering us extended payment terms for our outstanding payables balances, which has also helped us manage our working capital needs.

3)   In October 2014, our Board of Directors approved a funding initiative for $750,000 to fund a software development effort for feature and function enhancements to enable the COPsync Network and COPsync911 threat alert system more readily to scale nationwide.  As of the date of this report, $450,000 has been raised, all in the first quarter of 2015.  The investment security is a three-year convertible promissory note, which bears interest at the rate of two percent simple interest per year, paid in cash.  The principal amount of the note is convertible into shares of our common stock at the rate of $0.22 per share.  The promissory note may be prepaid by us under certain conditions.

4)  As of December 31, 2014, we had outstanding warrants to purchase an aggregate of 3,155,582 shares of our common stock at a price of $0.20 per share, an aggregate exercise price of $631,116, that expire in 2015.  We believe that the bulk of these warrants will be exercised in calendar year 2015.  As of the date of this report date, warrants to purchase 360,000 shares of our common stock have been exercised, for a total exercise price of $64,000, all in the first quarter of 2015.

5)  Our balance sheet as of December 31, 2014 reflects a notes payable-current portion balance of $669,789, which is due in 2015.  Of that total, notes representing $570,977 in principal amount are held by three note-holders who have previously extended the original due date of their respective notes.  We believe these note holders will agree to extend the due dates of these notes again, if required. 

6)  We are attempting to secure up to $2.0 million in additional funding pursuant to an EB-5 program, which we originally expected to close in 2014.  We remain optimistic that we can successfully close this funding in 2015.  The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs.  Following the job creation, the foreign lenders receive U.S. “green cards.”  We will use a portion of any proceeds from this EB-5 program to repay a bridge loan from the City of Pharr, Texas, if required.  Any remaining funds will be used for general working capital purposes, including our anticipated hiring of a number of employees in the City of Pharr.

7)  We believe that we have the capability to further reduce operating expenses, should circumstances warrant.

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There are no assurances that these steps will generate sufficient cash flow from operations or that we will be able to obtain sufficient financing necessary to support our working capital requirements.  We can also give no assurance that additional capital financing will be available, or if available, will be on terms acceptable to us.  If adequate working capital is not available, we may not be able to continue our operations or execute our business plan.

Critical Accounting Policies and Estimates

In preparing our financial statements, we make estimates, assumptions and judgments that can have a significant impact on revenue, income (loss) from operations and net income (loss), as well as the value of certain assets and liabilities on our balance sheet. The application of our critical accounting policies requires an evaluation of a number of complex criteria and significant accounting judgments by us.  Our management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.  We evaluate our estimates on a regular basis and make changes accordingly.  Senior management has discussed the development, selection and disclosure of these estimates.  Actual results may materially differ from these estimates under different assumptions or conditions.  If actual results were to materially differ from these estimates, the resulting changes could have a material adverse effect on our financial condition.

Our critical accounting polices include the following:

a.   Revenue Recognition

Our business focus is to sell subscriptions to the COPsync software as a service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies.  We refer to this service as The COPsync Network.  The agencies subscribe to the service for a specified period of time (usually for twelve to forty-eight months), for a specified number of officers per agency, and at a fixed subscription fee per officer.

In the process of selling the subscription service, we also sell computers and computer-related hardware (“hardware”) used to provide the in-vehicle service should the customer not already have the hardware, or wants to upgrade their existing hardware, as well as hardware installation services, the initial agency and officer set-up and training services and, sometimes, software integration services for enhanced service offerings.

Our most common sales are:

1) for new customers – a multiple-element arrangement involving (a) the subscription fee, (b) integration of the COPsync software and a hardware appliance (where the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training and (c) if applicable, software integration services for enhanced service offerings; and

2) for existing customers – the subscription fees for the annual renewal of an agency’s COPsync subscription service, upon the completion of the agency’s previous subscription period.

We recognize revenue when all of the following have occurred: (1) we have entered into a legally binding arrangement with a customer resulting in the existence of persuasive evidence of an arrangement; (2) delivery has occurred, evidenced when product title transfers to the customer; (3) customer payment is deemed fixed or determinable and free of contingencies and significant uncertainties; and (4) collection is probable.

The sale of the hardware and related services for hardware installation and agency and officer set-up and training are reported as “Hardware, installation and other revenues” in our Statement of Operations.  The sale of the VidTac product offering is considered a hardware sale and is reported in this revenue classification.  

The subscription fees and software integration services are reported as “software license/subscriptions revenues” in our Statement of Operations.  The subscription fees include termed licenses for the contracted officers to have access to the service and the right to receive telephonic customer and technical support, as well as software updates, during the subscription period.  Support for the hardware is normally provided by the hardware manufacturer.

The sale of our WARRANTsync and COPsync911 product offerings are reported in “software license/subscriptions revenues.”  The service for each of these products consist of two elements:  (1) an integration element, and (2) a subscription element, both of which are recognized ratably over the service period upon customer acceptance.  WARRANTsync represents a very small portion of our revenues and could be viewed as an enhancement feature to our COPsync Network.

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The receipt and acceptance of an executed customer’s service agreement, which outlines all of the particulars of the sale event, is the primary method of determining that persuasive evidence of an arrangement exists.

Delivery generally occurs for the different elements of revenue as follows:

(1) For multiple-element arrangements involving new customers – contractually the lesser period of time of sixty days from contract date or the date officer training services are completed.  We request the agency to complete a written customer acceptance at the time training is completed, which will override the contracted criteria discussed immediately above.

(2) The subscription fee – the date the officer training is completed and written customer acceptance is received.

(3) Software integration services for enhanced service offerings – upon the completion of the integration efforts and verification that the enhanced service offering is available for use by the agency.

Fees are typically considered to be fixed or determinable at the inception of an arrangement, generally based on specific services and products to be delivered pursuant to the executed service agreement.  Substantially all of our service agreements do not include rights of return or acceptance provisions.  To the extent that agreements contain such terms, we recognize revenue once the acceptance provisions or right of return lapses.  Payment terms to customers generally range from net “upon receipt of invoice” to “net 30 days from invoice date”.  Beginning in 2013, we adopted a policy of requesting customers purchasing a significant amount of hardware to prepay for the hardware at the time the equipment was ordered from our suppliers.  These prepayments are recorded on our Balance Sheet as Current Deferred Revenues.

We assess the ability to collect from our customers based on a number of factors, including credit worthiness of the customer and the past transaction history with the customer.  If the customer is not deemed credit worthy, we defer all revenue from the arrangement until payment is received and all other revenue recognition criteria have been met. With the exception of sales to resellers, all of our customers are local or state governmental agencies.

As indicated above, some customer orders contain multiple elements.  We allocate revenue to each element in an arrangement based on relative selling price.  The selling price for a deliverable is based on its vendor specific objective evidence, or VSOE, if available, third party evidence, or TPE, if VSOE is not available, or our best estimate of selling price, or ESP, if neither VSOE nor TPE is available.  The maximum revenue we recognize on a delivered element is limited to the amount that is not contingent upon the delivery of additional items.  Many of our service agreements contain grants (or discounts) provided to the contracting agency.  These grants or discounts have been allocated across all of the different elements based upon the respective, relative selling price.

We determine VSOE for subscription fees for the initial contract period based upon the rate charged to customers on a stand-alone subscription service.  VSOE for renewal pricing is based upon the stated rate for the renewed subscription service, which is stated in the service agreement or contract entered into.  The renewal rate can be equal to or slightly higher than the stated rate in the original contract and is administered on a customer-by customer-basis.  Subscription fee revenue is recognized ratably over the life of the service agreement.   

We have determined that the selling price of hardware products include the related services for hardware installation and agency and officer set-up and training, as well as integration services for enhanced service offerings, which are sold separately and, as a result, we have VSOE for these products.

For almost all of our new service agreements, as well as renewal agreements, billing and payment terms are agreed to up front or in advance of performance milestones.  These payments are initially recorded as deferred revenue and subsequently recognized as revenue as follows:

(1) Integration of the COPsync software and a hardware appliance (where the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training – immediately upon delivery.

(2) The subscription fee – ratably over the contracted subscription period, commencing on the delivery date.

(3) Software integration services for enhanced service offerings – immediately upon our completion of the integration and verification that the enhanced service is available for the agency’s use.

(4) Renewals – ratably over the renewed subscription or service period commencing on the completion of the previous subscription or service period.

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b.   Software Development Costs

Certain software development costs incurred subsequent to the establishment of technological feasibility may be capitalized and amortized over the estimated lives of the related products.  Through mid-year 2010, we capitalized certain software development costs accordingly.

We determined technological feasibility to be established upon completion of (1) product design, (2) detail program design, (3) consistency between product and program design and (4) review of detail program design to ensure that high risk development issues have been resolved.  Upon the general release of the COPsync service offering to customers, development costs for that product were amortized over fifteen years based on management’s then estimated economic life of the product.  

We have not capitalized any of the software development efforts associated with our new product offerings, WARRANTsync, VidTac and COPsync911, because the time period between achieving technological feasibility and product release for these product offerings was very short.  As a result, the incurred costs have been recorded as research and development costs in years 2014 and 2013.

Results of Continuing Operations for the Years Ended December 31, 2014 and 2013

Revenues.

Total revenues for the years ended December 31, 2014 and 2013 were $5,910,328 and $4,725,617, respectively.  Total revenues are comprised of software license/subscription revenue and hardware, installation and other revenue.  Software license/subscriptions revenue is a key indicator of revenue performance in future years, since this revenue represents that portion of our revenue that is anticipated to recur as our service contracts renew from year-to-year.  Hardware, installation and other revenue is a one-time revenue event, and is not a key indicator of future performance.  Software license/subscriptions revenue totaled $2,662,237 and $1,780,790 for the years ended December 31, 2014 and 2013, respectively.  The increase in software license/subscriptions revenue was due to an increase in the number of law enforcement agency contracts executed between periods, revenues from our COPsync911 service which was introduced in the second quarter of 2013 and increased revenue attributable to contract renewals.  Hardware, installation and other revenue totaled $3,248,091 and $2,944,827 for the years ended December 31, 2014 and 2013, respectively.  These revenues involved a certain number of large, hardware intensive contracts involving both new customers and existing customers electing to replace or update their computer equipment, plus sales of our VidTac product offering.  A portion of these revenues stemmed from the 2013 year-end backlog of uncompleted service agreements.  VidTac revenues were approximately $652,000 and $1,195,000 for the years ended December 31, 2014 and 2013, respectively.  We believe the year-over-year decrease in sales of VidTac units resulted principally from our relatively new and inexperienced sales team.  We believe that in fiscal year 2015 we will experience increased customer orders for our VidTac product as the sales team matures and as certain feature sets and enhancements are incorporated into the product later in the year.

Many of our new contracts are multiple-year contracts that typically include hardware, installation and training (and integration in some cases) and one year of software license/subscriptions revenue during the first year of the contract, followed by software license/subscriptions revenue during the remaining years of the contract.  Normally, we receive full payment up front upon inception of the contract.  This up-front payment is initially recorded as deferred revenues and subsequently recognized as revenue during the service period.  As of December 31, 2014, we had $3,669,427 in deferred revenues, compared to $3,931,013 for 2013.  We do not believe our deferred revenues will have a material effect on our future working capital for the later years of the contract service periods because a large portion of our continuing customer support costs are incrementally fixed in nature.

We executed approximately 347 new service agreements (or contracts) in 2014, compared to approximately 285 new service agreements in 2013.  We expect to sign more new service agreements in 2015 than we did in 2014, primarily due to anticipated improvements in our sales staff.

19

Cost of Revenues and Gross Profit

The following is a summary of the cost of revenues and gross profit performances for the respective revenue types for the twelve month periods ended December 31, 2014 and 2013:

	For the twelve months ended December 31,
	2014					2013
	$		%			$		%
Hardware, installation and other revenues
Revenues	$	3,248,091		100	%	$	2,944,827		100	%
Cost of Revenues-hardware & other external costs		2,332,922		72	%		2,345,691		80	%
Cost of Revenues-internal costs		238,437		7	%		163,381		6	%
Total Gross Profit	$	676,732		21	%	$	435,755		15	%
Software license/subscription revenues
Revenues	$	2,662,237		100	%	$	1,780,790		100	%
Cost of Revenues-internal costs		636,665		24	%		523,303		29	%
Amortization of capitalized software development costs		436,471		16	%		436,465		25	%
Total Gross Profit	$	1,589,101		60	%	$	821,022		46	%
Total Company
Revenues	$	5,910,328		100	%	$	4,725,617		100	%
Cost of Revenues		3,644,495		62	%		3,468,840		73	%
Total Gross Profit	$	2,265,833		38	%	$	1,256,777		27	%

For the years ended December 31, 2014 and 2013, our total cost of revenues was $3,644,495 and $3,468,840, respectively.  As a result, we realized gross profits of $2,340,833 and $1,256,777, respectively, for the years ended December 31, 2014 and 2013.

Cost of revenues for hardware, installation and other revenues for the years ended December 31, 2014 and 2013 totaled $2,571,359 and $2,509,072, respectively.  Included in these cost of revenues are internal costs, which totaled $238,437 and $163,381 for the years ended December 31, 2014 and 2013, respectively.  The increase in internal costs between periods was due principally to a reallocation of certain costs from general and administrative expenses.  These reallocated expenses included salary for a senior executive, partially offset by a decrease in hosting and support services performed by outside service providers, which was reallocated to our customer support costs.  The total gross profit from hardware, installation and other revenue totaled $676,732 for the year ended December 31, 2014, compared to a gross profit of $435,755 for the comparable period in 2013.  This improvement in gross profit performance was due in part to increased equipment sales and more aggressive pricing on selected hardware items, as well as installation and integration related services.  

Cost of revenues for software license/subscription revenues for the years ended December 31, 2014 and 2013 were $1,073,136 and $959,768, respectively.  The increase of approximately $113,000 was due to increased internal costs representing our customer support team and web-hosting facilities.  The increased costs were driven by increased headcount and the cost of outside service providers needed to address the increased number of customers and services offered to our customers.  The resulting gross profit from software license/subscription revenues for years ended December 31, 2014 and 2013 was $1,589,101 and $821,022, respectively.

Our total cost of revenues has the potential to fluctuate with revenues because of the variable cost nature of hardware, installation and other revenues contained in future contracts.  Conversely, our internal costs associated with installation, training, customer support and web-site hosting are relatively flat.  In both 2014 and 2013, these internal costs increased because we added headcount and increased services to be provided by outside service providers to support the increased number of customers and new products.

Operating Expenses.

Research and Development

Total research and development expenses for years ended December 31, 2014 and 2013, were $1,952,786 and $2,157,597, respectively.  The $204,811 decrease in these expenses between years is due principally to a decrease in the development costs for new products, more specifically decreased contract labor for IT/software development services and decreased expendable supplies, partially offset by increases in payroll expenses and share-based compensation expense.  The expenses incurred in 2014 were principally driven by the continued development and refinement of our COPsync911 threat alert service and our VidTac system and development efforts to enhance the scalability of our COPsync Network and COPsync911 service offerings.  The expenses incurred in 2013 were principally driven by the development of our COPsync911 threat alert service, which was launched in the second quarter of 2013.  We believe our research and development expense will increase in 2015, assuming it is not necessary to reduce expense to maintain adequate liquidity.

20

Sales and Marketing

Total sales and marketing expenses for the years ended December 31, 2014 and 2013 were $1,408,659 and $1,289,892, respectively.  The $118,767 increase in these expenses consists principally of increases in personnel, travel expenses resulting from headcount additions and increased insurance and trade show expenses, partially offset by a decrease in share-based compensation expense.  

We expect our sales and marketing expenses will increase in 2015, as we will be increasing our current staffing levels.

 General and Administrative

Total general and administrative expenses for the years ended December 31, 2014 and 2013 were $2,960,262 and $1,395,118, respectively.  The approximate $1,565,000 increase in expenses was due principally to an aggregate of $1,050,000 for stock issued to two third party service providers for general financial advisory and investment banker services, $209,576 for performance-based warrants issued to two third party service providers for business and corporate advisory services, $180,000 in professional services for new corporate, business, promotion, general financial advisory-related, and investment banker services, as well as various legal services, $156,000 for bad-debts expenses, $31,000 for business insurance premiums resulting from expanded coverages, $16,000 for certain personnel costs in the areas of benefits and contract labor, and $29,000 for travel expense, partially offset by a $115,000 reduction in share-based compensation expense.  Share-based compensation expense decreased in 2014 because certain stock option grants awarded to members of executive management became fully vested in 2013.

We believe our general and administrative expenses for 2015 will remain relatively consistent with expense levels of 2014.

Other Income and Expense.

For the year ended December 31, 2014, other expense totaled $167,593, consisting of $177,293 in interest expense, partially offset by $9,700 in interest income.  For the year ended December 31, 2013, other expense totaled $29,026, consisting principally of interest expense.  The increase in interest expense relates to the various new debt instruments we executed in late 2013 and during 2014.

Liquidity and Capital Resources

We have funded our operations since inception through the sale of equity and debt securities and from cash generated by operating activities.  As of December 31, 2014, we had $587,459 in cash and cash equivalents, compared to $414,051 as of December 31, 2013.  The increase was due primarily to $3,123,011 net cash provided by financing activities, partially offset by $2,900,870 in net cash used in operating activities and $48,733 in net cash used in investing activities.  The net cash increase attributable to financing activities represents proceeds of $2,124,615 from the sale of common stock in 2014, $405,000 from the issuance of long-term notes payable, $285,000 from the issuance of short-term notes payable, $44,000 from the exercise of warrants for shares of our common stock, $40,500 in deposits for shares of common stock to be issued in 2015, and a $475,000 note advance from the City of Pharr, partially offset by payments on notes payable of $210,604.  

We had a working capital deficit of $3,484,825 on December 31, 2014, compared to a deficit of $3,739,475 on December 31, 2013.  Included in the working capital deficit on December 31, 2014 are current liabilities of $2,526,990 in net deferred revenues attributable to future performance obligations under prepaid customer contracts, the future costs of which we believe will not represent a majority of these current liabilities.

Plan of Operation for the Next Twelve Months

At December 31, 2014, we had cash and cash equivalents of $587,459, a working capital deficit of $3,484,825 and an accumulated deficit of $22,908,272.  We took the following steps in fiscal year 2014 and in the first quarter of 2015 to manage our liquidity, to avoid default on any material third-party obligations and to continue progressing our business towards cash-flow break-even, and ultimately profitability: 

21

1)  We signed service agreements for approximately $4,500,000 in new orders for the twelve month period ended December 31, 2014, compared to approximately $5,852,000 in new orders for the comparable period in 2013, a decrease of approximately 23%.  We expect this will negatively impact our liquidity in the short-term.  We believe this decrease resulted from experiencing high turnover within our sales organization. We are continually evaluating the performance of our sales team and replacing those who are not meeting our expectations.  As we continue to add to the number and quality of our sales team, we expect our new orders to begin growing again.  This decrease in our new orders was partially offset by an increase in customer subscription renewals in 2014 of $1,531,000, up from $1,303,000 in 2013 for an increase of 17%.

2)  We continue to employ “just in time” principles in our procurement processes for third party hardware, meaning that we attempt to schedule delivery to the customer of the third party hardware that we sell immediately after we receive the hardware.  We also continue our attempts to collect customer prepayments for the third party hardware we sell at or about the time we order the hardware, which has helped us manage our working capital needs.

3)   Our key vendors are currently offering us extended payment terms for our outstanding payables balances, which has also helped us manage our working capital needs.

4)   In October 2014, our Board of Directors approved a funding initiative for $750,000 to fund a software development effort for feature and function enhancements to enable the COPsync Network and COPsync911 threat alert system more readily to scale nationwide.  As of the date of this report, $450,000 has been raised, all in the first quarter of 2015.  The investment security is a three-year convertible promissory note, which bears interest at the rate of two percent simple interest per year, paid in cash.  The principal amount of the note is convertible into shares of our common stock at the rate of $0.22 per share.  The promissory note may be prepaid by us under certain conditions.

5)  As of December 31, 2014, we had outstanding warrants to purchase an aggregate of 3,155,582 shares of our common stock at a price of $0.20 per share, an aggregate exercise price of $631,116, that expire in 2015.  We believe that the bulk of these warrants will be exercised in calendar year 2015.  As of the date of this report, warrants to purchase 360,000 shares of our common stock have been exercised, for a total exercise price of $64,000, all in the first quarter of 2015.

6)  Our balance sheet as of December 31, 2014, shows a notes payable-current portion balance of $669,789, which is due in 2015.  Of that total, notes representing $570,977 in principal amount are held by three note-holders who have previously extended the original due date of their respective notes. We believe these note holders will agree to extend the due dates of these notes again, if required. 

7)  We are attempting to secure up to $2.0 million in additional funding pursuant to an EB-5 program, which we originally expected to close in 2014.  We remain optimistic that we can successfully close this funding in 2015.  The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs.  Following the job creation, the foreign lenders receive U.S. “green cards”.  We will use a portion of any proceeds from this EB-5 program to repay a loan from the City of Pharr, Texas, if required.  Any remaining funds will be used for general working capital purposes, including our anticipated hiring of a number of employees in the City of Pharr.

8)  We believe that we have the capability to further reduce operating expenses, should circumstances warrant.

Based upon the above-listed factors, we believe we will have adequate cash resources for the next twelve months.

Off-Balance Sheet Arrangements

As of December 31, 2014, we had no off-balance sheet arrangements.

Contractual Obligations

The following table summarizes our obligations to make future payments pursuant to certain contracts or arrangements as of December 31, 2014, as well as an estimate of the timing in which these obligations are expected to be satisfied:

	Payments Due by Period
Contractual Obligations	Total		2015			2016-2017		2018-2019	After 2019
Long-Term Debt Obligations	$	1,537,831	$	800,896	$	732,246	$	4,689	$	-
Capital Lease Obligations	$	35,098	$	7,632	$	17,479	$	9,987	$	-
Operating Lease Obligations	$	192,868	$	95,927	$	79,297	$	17,644	$	-
Purchase Obligations	$	545,738	$	545,738	$	-	$	-	$	-
Other Long-Term Liabilities	$	475,000	$	-	$	475,000	$	-	$	-
Total Contractual Obligations	$	2,786,535	$	1,450,193	$	1,304,022	$	32,320	$	-

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Recently Issued Accounting Standards

For information regarding the impact of recently issued accounting standards, see Note 2 to our financial statements included in this report.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data required by this item are set forth in Item 15 of Part IV, beginning at page F-1 of this report, which are incorporated by reference to this Item 8 by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Our management, under the supervision and with the participation of our chief executive officer and chief financial (and principal accounting) officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2014.  Based upon that evaluation our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2014 based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2014, our internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Limitations on Effectiveness of Controls and Procedures

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors or fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.  These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

23

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.  OTHER INFORMATION

None.

24

PART III

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Incorporated herein by reference to our Information Statement on Schedule 14C, filed with the Securities and Exchange Commission on March 2, 2015, under “ITEM 1 – ELECTION OF DIRECTORS” and “ITEM 2 – APPROVAL OF AMENDMENTS TO 2009 LONG-TERM INCENTIVE PLAN”.

ITEM 11.EXECUTIVE COMPENSATION

Incorporated herein by reference to our Information Statement on Schedule 14C, filed with the Securities and Exchange Commission on March 2, 2015, under “ITEM 1 – ELECTION OF DIRECTORS” and “ITEM 2 – APPROVAL OF AMENDMENTS TO 2009 LONG-TERM INCENTIVE PLAN”.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Incorporated herein by reference to our Information Statement on Schedule 14C, filed with the Securities and Exchange Commission on March 2, 2015, under “ITEM 1 – ELECTION OF DIRECTORS” and “ITEM 2 – APPROVAL OF AMENDMENTS TO 2009 LONG-TERM INCENTIVE PLAN”.

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Incorporated herein by reference to our Information Statement on Schedule 14C, filed with the Securities and Exchange Commission on March 2, 2015, under “ITEM 1 – ELECTION OF DIRECTORS” and “ITEM 2 – APPROVAL OF AMENDMENTS TO 2009 LONG-TERM INCENTIVE PLAN”.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

We engaged PMB Helin Donovan LLP, Certified Public Accountants, as our independent registered public accounting firm, and requested that they perform an audit of our financial statements beginning with the year ended December 31, 2011.  

Audit Fees

Fees for respective audit services total approximately $40,000 for the year ended December 31, 2014, and $37,440 paid for the year ended December 31, 2013.  There were other fees paid to our principal accountants for reviews of our quarterly reports on Form 10-Q totaling $23,400 and $21,840 for the years ended December 31, 2014 and 2013, respectively.  There were other fees paid to our principal accountants for tax-related fees totaling $2,355 and $1,460 for the years ended December 31, 2014 and 2013, respectively.  All fees and services provided by our independent registered public accounting firm have been approved by our board of directors.

25

PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)           The following documents are filed as part of this Report:

(1)           Financial Statements:

	Page
Report of Independent Registered Public Accounting Firm	F–2
Balance Sheets	F-3
Statements of Operations	F-5
Statements of Stockholders’ Equity (Deficit)	F-6
Statements of Cash Flows	F-8
Notes to the Financial Statements	F-10

 (2)          Management Contract or Compensatory Plan:

See Index to Exhibits.  Each of the following Exhibits described on the Index to Exhibits is a management contract or compensatory plan: Exhibits 10.7 through 10.12.

(b)           Exhibits:

See Index to Exhibits.

(c)           Schedules:

See financial statements and the accompanying notes.

26

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	COPSYNC, INC.
Date: March 31, 2015	By:	/s/ Ronald A. Woessner
		Ronald A. Woessner
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ RONALD A. WOESSNER	Chief Executive Officer and Director	March 31, 2015
Ronald A. Woessner	(Principal Executive Officer)
/s/ BARRY W. WILSON	Chief Financial Officer	March 31, 2015
Barry W. Wilson	(Principal Financial Officer)
/s/ RUSSELL CHANEY	Chairman and Director	March 31, 2015
Russell Chaney
/s/ SHANE RAPP	President and Director	March 31, 2015
Shane Rapp
	Director	March 31, 2015
Joel Hochberg
/s/ JOSEPH R. ALOSA	Director	March 31, 2015
Joseph R. Alosa
	Director	March 31, 2015
Robert Harris

27

INDEX TO EXHIBITS

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation filed on September 2, 2009 (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 20, 2009).
3.2	Certificate of Designations of Series B Convertible Preferred Stock filed on October 14, 2009 (Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on October 20, 2009).
3.3	Bylaws (Incorporated by reference to Registrants Registration Statement on Form SB-2 (Registration No. 333-140320)).
4.1	Form of Common Stock Certificate (Incorporated by reference to Registrant’s Registration Statement on Form SB-2 (Registration No. 333-140320)).
10.1	Form of Three-Year COPsync, Inc. Promissory Note, originally issued in 2014 (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed with Commission on November 11, 2014).
10.2	Form of Warrant to Purchase Common Stock (Cash Payment Exercise) (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed with Commission on November 11, 2014).
10.3	Form of Warrant to Purchase Common Stock (Cashless Exercise) (Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed with Commission on November 11, 2014).
10.4*	Form of Three-Year COPsync, Inc. Promissory Note, originally issued in 2015.
10.5	Form of Warrant, dated as of October 14, 2009, issued by registrant to the investors in its Series B Preferred Stock (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on October 20, 2009).
10.6	Investors’ Rights Agreement, dated as of October 14, 2009, by and among registrant and the investors in its Series B Preferred Stock (excluding exhibits) (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on October 20, 2009).
10.7	Amended and Restated Executive Employment Agreement, dated April 29, 2009, by and between Russell D. Chaney and registrant (Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 20, 2009)
10.8	Amended and Restated Executive Employment Agreement, dated April 29, 2009, by and between J. Shane Rapp and registrant (Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 20, 2009)
10.9	Stock Restriction Agreement, dated as of August 27, 2010, by and between Ronald A. Woessner and registrant.  (Incorporated by reference to the registrant’s Annual Report on Form 10-K filed with the Commission on April 15, 2011).
10.10	Form of Indemnification Agreement, dated as of October 14, 2009, by and between registrant and its officers and directors (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on October 20, 2009).
10.11	Registrant’s 2009 Long-Term Incentive Plan (Incorporated by reference to registrant’s Registration Statement on Form S-8 (Registration No. 333-161882)).
10.12	Amendment No. 1 to Registrant’s 2009 Long-Term Incentive Plan (Incorporated by reference to Registrant’s Information Statement in Schedule 14C, filed on March 2, 2015).
10.13	Form of Warrant, issued by the registrant to certain investors (Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Commission on April 6, 2011).
10.14	Form of Convertible Note, issued by the registrant to certain investors (Incorporated by reference to the registrant’s Current Report on Form 8-K filed with the Commission on April 6, 2011).
10.15*	Commercial Sublease Agreement with Addison Tower Investment Company LLC (entered into as of January 28, 2013).
10.16*	Commercial Lease Agreement with 1000 Walnut Limited, as amended on June 17, 2014 (originally executed on March 28, 2014).
10.17*	Advisory Agreement with Maxim Group LLC (entered into as of October 6, 2014).

28

23.1*	Consent of Independent Registered Public Accounting Firm.
31.1*	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2*	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32*	Section 1350 Certifications.
101.1	101.INS (XBRL Instance Document)
101	101.SCH (XBRL Taxonomy Extension Schema Document)
101	101.CAL (XBRL Calculation Linkbase Documents)
101	101.DEF (XBRL Taxonomy Linkbase Document)
101	101.LAB XBRL Taxonomy Label Linkbase Document)
101	101.PRE (XBRL Taxonomy  Presentation Linkbase Document)

* Filed herewith.

29

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F–2
Balance Sheets	F-3
Statements of Operations	F-5
Statements of Stockholders’ Equity (Deficit)	F-6
Statements of Cash Flows	F-8
Notes to the Financial Statements	F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Stockholders of

COPsync, Inc.:

We have audited the accompanying balance sheets of COPsync, Inc. (the “Company”) as of December 31, 2014 and 2013, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of COPsync, Inc. as of December 31, 2014 and 2013, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

PMB Helin Donovan, LLP

/s/ PMB Helin Donovan, LLP

March 31, 2015

Dallas, Texas

F-2

COPSYNC, INC.

Balance Sheets

ASSETS

	December 31, 2014			December 31, 2013
CURRENT ASSETS
Cash and cash equivalents	$	587,459		$	414,051
Accounts receivable, net		223,622			101,807
Inventories		246,077			357,933
Prepaid expenses and other current assets		270,148			116,573
Deferred loan costs		50,000			-
Total Current Assets		1,377,306			990,364
PROPERTY AND EQUIPMENT
Leased property under capital lease		35,098			-
Computer hardware		72,070			68,847
Computer software		36,936			36,936
Fleet vehicles		174,094			134,987
Furniture and fixtures		10,467			7,872
Total Property and Equipment		328,665			248,642
Less: Accumulated Depreciation		(152,789	)		(113,489	)
Net Property and Equipment		175,876			135,153
OTHER ASSETS
Software development costs, net		-			436,471
Total Other Assets		-			436,471
TOTAL ASSETS	$	1,553,182		$	1,561,988

The accompanying notes are an integral part of these financial statements.

F-3

COPSYNC, INC.

Balance Sheets (Continued)

LIABILITIES AND STOCKHOLDERS' DEFICIT

	December 31, 2014			December 31, 2013
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,526,612		$	1,419,170
Deferred revenues		2,526,990			2,878,264
Obligation under capital lease		7,632			-
Convertible notes payable, current portion		9,608			20,000
Three Year, 50% notes payable, net of $0 discount, current portion		121,500			-
Notes payable, current portion		669,789			412,405
Total Current Liabilities		4,862,131			4,729,839
LONG-TERM LIABILITIES
Deferred revenues		1,142,437			1,052,749
Obligation under capital lease		27,466			-
Convertible notes payable		389,178			594,163
Three Year, 50% notes payable, net of $181,385 discount, non-current portion		291,118			-
Notes payable, non-current portion		56,639			107,329
Total Long-Term Liabilities		1,906,838			1,754,241
Total Liabilities		6,768,969			6,484,080
COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS' DEFICIT
Series A Preferred stock, par value $0.0001 per share, 1,000,000 shares authorized; 100,000 shares issued and outstanding, respectively		10			10
Series B Preferred stock, par value $0.0001 per share, 375,000 shares authorized; issued; and outstanding, respectively		37			37
Common stock, par value $0.0001 per share, 500,000,000 shares authorized; 201,852,444 and 175,014,501 issued and outstanding, respectively		20,184			17,501
Common stock to be issued, 300,000 and 15,000 shares, respectively		42,000			1,500
Additional paid-in-capital		17,630,254			13,709,972
Accumulated deficit		(22,908,272	)		(18,651,112	)
Total Stockholders' Deficit		(5,215,787	)		(4,922,092	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,553,182		$	1,561,988

The accompanying notes are an integral part of these financial statements.

F-4

 COPSYNC, INC.

Statements of Operations

	For the Twelve Months Ended
	December 31,
	2014			2013
REVENUES
Hardware, installation and other revenues	$	3,248,091		$	2,944,827
Software license/subscription revenues		2,662,237			1,780,790
Total Revenues		5,910,328			4,725,617
COST OF REVENUES
Hardware and other costs		2,571,359			2,509,072
Software license/subscriptions		1,073,136			959,768
Total Cost of Revenues		3,644,495			3,468,840
GROSS PROFIT		2,265,833			1,256,777
OPERATING EXPENSES
Research and development		1,952,786			2,157,597
Sales and marketing		1,408,659			1,289,892
General and administrative		2,960,262			1,395,118
Total Operating Expenses		6,321,707			4,842,607
LOSS FROM OPERATIONS		(4,055,874	)		(3,585,830	)
OTHER INCOME (EXPENSE)
Interest income		9,700			7
Interest expense		(177,293	)		(29,033	)
Total Other Income (Expense)		(167,593	)		(29,026	)
NET LOSS BEFORE INCOME TAXES		(4,223,467	)		(3,614,856	)
INCOME TAXES		-			-
NET LOSS	$	(4,223,467	)	$	(3,614,856	)
Series B preferred stock dividend		(33,693	)		(105,000	)
Accretion of beneficial conversion feature on preferred shares dividends issued in kind		(71,307	)		-
Cost of Series B warrants extension		-			(120,000	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(4,328,467	)	$	(3,839,856	)
LOSS PER COMMON SHARE - BASIC & DILUTED	$	(0.02	)	$	(0.02	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED		182,986,709			173,799,481

The accompanying notes are an integral part of these financial statements. 

F-5

COPSYNC, INC

Statements of Stockholders' Equity (Deficit)

For the year ended December 31, 2014 and 2013

																Common
													Common			Stock									Total
													Stock			Warrants				Additional					Shareholder
	Preferred Stock A				Preferred Stock B				Common Stock				To Be			To Be		Treasury		Paid-in		Accumulated			Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Issued			Issued		Stock		Capital		Deficit			(Deficit)
Balance, January 1, 2013		100,000	$	10		375,000	$	37		171,284,201	$	17,129	$	7,000		$	-	$	-	$	12,803,341	$	(14,811,256	)	$	(1,983,739	)
Valuation of the vested portion of employee and non-employee stock options		-		-		-		-		-		-		-			-		-		184,973		-		$	184,973
Common stock issued for previous deposits at $0.10 per share		-		-		-		-		70,000		7		(7,000	)		-		-		6,993		-		$	-
Capital contributed/co-founders' forfeiture of contractual compensation		-		-		-		-		-		-		-			-		-		79,000		-		$	79,000
Amortization of restricted stock grant		-		-		-		-		-		-		-			-		-		45,000		-		$	45,000
Common stock issued for cash at $0.10 per share		-		-		-		-		3,469,300		347		-			-		-		346,583		-		$	346,930
Common stock issued in conversion of notes payable and accrued interest at $0.10 per share		-		-		-		-		191,000		18		-			-		-		19,082		-		$	19,100
Common stock to be issued for cash at $0.10 per share		-		-		-		-		-		-		1,500			-		-		-		-		$	1,500
Cost of Series B warrant extension		-		-		-		-		-		-		-			-		-		120,000		(120,000	)	$	-
Series B Preferred stock- cumulative dividends		-		-		-		-		-		-		-			-		-		105,000		(105,000	)	$	-
Net loss for the year ended December 31, 2013		-		-		-		-		-		-		-			-		-		-		(3,614,856	)	$	(3,614,856	)
Balance, December 31, 2013		100,000	$	10		375,000	$	37		175,014,501	$	17,501	$	1,500		$	-	$	-	$	13,709,972	$	(18,651,112	)	$	(4,922,092	)

The accompanying notes are an integral part of these financial statements.

F-6

COPSYNC, INC

Statements of Stockholders' Equity (Deficit) (Continued)

For the year ended December 31, 2014 and 2013

															Common
													Common		Stock										Total
													Stock		Warrants				Additional						Shareholder
	Preferred Stock A				Preferred Stock B				Common Stock				To Be		To Be		Treasury		Paid-in			Accumulated			Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Issued		Issued		Stock		Capital			Deficit			(Deficit)
Balance, January 1, 2014		100,000	$	10		375,000	$	37		175,014,501	$	17,501	$	1,500	$	-	$	-	$	13,709,972		$	(18,651,112	)	$	(4,922,092	)
Valuation of the vested portion of employee and non-employee stock options		-		-		-		-		-		-		-		-		-		147,096			-		$	147,096
Valuation of the vested portion of non-employee warrants		-		-		-		-		-		-		-		-		-		209,576			-		$	209,576
Valuation of the vested portion of non-employee stock grants		-		-		-		-		2,500,000		250		-		-		-		1,049,750			-		$	1,050,000
Common stock to be issued for cash at $0.10 per share from warrant exercises		-		-		-		-		-		-		-		24,000		-		-			-		$	24,000
Capital contributed/co-founders' forfeiture of contractual compensation		-		-		-		-		-		-		-		-		-		79,000			-		$	79,000
Common stock issued for services at $0.10   per share		-		-		-		-		600,000		60		-		-		-		59,940			-		$	60,000
Common stock issued for cash at $0.10 per share		-		-		-		-		21,243,100		2,124		-		-		-		2,081,991			-		$	2,084,115
Common stock issued for cash at $0.10   per share from warrant exercises		-		-		-		-		240,000		24		-		-		-		23,976			-		$	24,000
Common stock issued for cash at $0.20   per share from warrant exercises		-		-		-		-		100,000		10		-		-		-		19,990			-		$	20,000
Common stock issued in conversion of notes   payable and accrued interest at $0.10 per share		-		-		-		-		2,154,843		215		-		-		-		215,270			-		$	215,485
Common stock to be issued for cash at $0.10   per share		-		-		-		-		-		-		16,500		-		-		-			-		$	16,500
Series B Preferred stock- cumulative dividends		-		-		-		-		-		-		-		-		-		105,000			(105,000	)	$	-
Accretion of Beneficial Conversion Feature on Preferred Shares dividends issued in kind		-		-		-		-		-		-		-		-		-		(71,307	)		71,307		$	-
Net loss for the year ended December 31, 2014		-		-		-		-		-		-		-		-		-		-			(4,223,467	)	$	(4,223,467	)
Balance, December 31, 2014		100,000	$	10		375,000	$	37		201,852,444	$	20,184	$	18,000	$	24,000	$	-	$	17,630,254		$	(22,908,272	)	$	(5,215,787	)

The accompanying notes are an integral part of these financial statements.

F-7

COPSYNC, INC.

Statements of Cash Flows

	For the Twelve Months Ended
	December 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,223,467	)	$	(3,614,856	)
Adjustments to reconcile net loss to net cash used  in operating activities:
Depreciation and amortization		483,864			472,400
Employee stock compensation		147,097			184,973
Cost of performance-based warrants issued for outside services rendered		209,576			-
Cost of stock grant issued for outside services rendered		1,050,000
Amortization of restricted stock grants		-			45,000
Capital contributed/co-founders' forfeiture of contractual compensation		79,000			79,000
Discount on three-year, 50% notes payable		37,993			-
Bad debt Expense		185,864			30,000
Loss/(Gain) on asset disposals		(1,516	)		(1,791	)
Change in operating assets and liabilities:
Accounts receivable		(276,789	)		(21,738	)
Inventories		111,856			(20,513	)
Prepaid expenses and other current assets		(57,146	)		(67,737	)
Deferred loan costs		(50,000	)		-
Deferred revenues		(261,586	)		2,094,365
Accounts payable and accrued expenses		(335,616	)		193,852
Net Cash Used in Operating Activities	$	(2,900,870	)	$	(627,045	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from asset disposals		2,500			107,800
Purchases of property and equipment		(51,233	)		(119,744	)
Net Cash Used in Investing Activities	$	(48,733	)	$	(11,944	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		285,000			570,621
Proceeds from three-year, 50% notes payable		405,000			-
Proceeds from issuance of common stock for cash		2,084,115			346,930
Proceeds from convertible notes		-			260,000
Proceeds from a note-related advance		475,000			-
Proceeds from the issuance of stock for warrant exercises		44,000			-
Proceeds from stock deposit for common stock to be issued		40,500			1,500
Payments on notes payable		(180,229	)		(300,455	)
Payments on three-year, 50% notes payable		(30,375	)		-
Net Cash Provided by Financing Activities	$	3,123,011		$	878,596
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		173,408			239,607
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		414,051			174,444
CASH AND CASH EQUIVALENTS, END OF YEAR	$	587,459		$	414,051

The accompanying notes are an integral part of these financial statements.

F-8

COPSYNC, INC.

Statements of Cash Flows (Continued) 

	For the Twelve Months Ended
	December 31,
	2014		2013
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	62,683	$	17,860
Cash paid for income tax	$	9,649	$	7,449
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Partial financing associated with the purchase of two fleet vehicles	$	49,503	$	-
Non-cash issuance of 600,000 shares of common stock to third party for services performed and to be performed	$	60,000	$	-
Conversion of convertible notes, plus accrued interest into 2,154,843 and 191,000 shares of common stock, respectively	$	215,485	$	19,100
Issuance of common stock for prior year stock subscriptions	$	-	$	7,000
Insurance proceeds applied to outstanding bank loan	$	15,854	$	-
Capitalized Lease involving two fleet vehicles	$	35,098	$	-
Financing of prepaid insurance policy	$	40,300	$	34,069
Series B Preferred stock dividends	$	27,020	$	105,000
Cost of Series B warrants extension	$	-	$	120,000
Accretion of beneficial conversion feature on preferred shares dividends issued in kind	$	71,307	$	-

The accompanying notes are an integral part of these financial statements.

F-9

 COPSYNC, INC.

Notes to Financial Statements

NOTE 1 -       NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS

The Company sells the COPsync Network service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies.  The COPsync Network service enables patrol officers to collect, report and share critical data in real-time at the point of incident and obtain instant access to various local, state and federal law enforcement databases.  The COPsync Network service also eliminates manual processes and increases officer productivity by enabling officers to electronically write tickets, process DUI and other arrests and document accidents and other incidents.  The Company believes that the COPsync Network service saves lives, reduces unsolved crimes and assists in apprehending criminals through such features as a nationwide officer safety alert system, GPS/auto vehicle location and distance-based alerts for crimes in progress, such as child abductions, bank robberies and police pursuits.  The Company has designed the COPsync Network to be “vendor neutral”, meaning it can be used with products and services offered by other law enforcement technology vendors.  Additionally, the COPsync Network system architecture is designed to scale nationwide.

In addition to the Company’s core COPsync Network service, the Company offers three complementary service/product offerings.  These offerings are: COPsync911, an emergency threat notification service; VidTac, an in-vehicle software-driven video camera system for law enforcement and fire departments; and WARRANTsync, a statewide misdemeanor warrant clearing database.

The Company offers the COPsync911 threat alert, first introduced in the second quarter of 2013, for use in schools, hospitals, day care facilities, governmental office buildings, energy infrastructure and other facilities with a high level of concern about security.  When used in schools, for example, the COPsync911 service enables school personnel to instantly and silently send emergency alerts directly to the closest law enforcement officers in their patrol vehicles, and to the local 911 dispatch center, with the mere click of a screen icon located on every Windows-based computer or any handheld device within the facility.  The alert is also sent to the cell phones of all law enforcement officers in the area and to all teachers, administrators, and other staff at the school, alerting them of imminent danger.  The Company expects its COPsync911 service to reduce emergency law enforcement response times by five to seven minutes.

VidTac is a software-driven video system for law enforcement.  Traditional in-vehicle video systems are “hardware centric” DVR-based systems. The video capture, compression and encryption of the video stream is performed by the DVR.  The estimated price of these high-end, digital DVR-based systems is in excess of $5,000 per system.  These DVR-based systems are typically replaced, at the same expensive price point, every three to four years as new patrol vehicles are placed into service.

The VidTac system is price advantageous vis-a-vis other high-end video systems, since the Company is offering it for sale at a much lower price than the average price of DVR-based video systems.  Furthermore, for those agencies that have in-vehicle computers, the VidTac system eliminates the need for the agency to purchase a second computer, i.e., the DVR, and eliminates the need to replace this second (DVR) computer every three to four years as new patrol vehicles are placed into service.

The WARRANTsync system is designed to be a Texas statewide misdemeanor warrant clearing database. It enables law enforcement officers in the field to receive notice of outstanding warrants in real-time at the point of a traffic stop.  The WARRANTsync system enables the offender to pay the outstanding warrant fees and costs using a credit card.  Following payment, the offender is given a receipt and the transaction is complete.  This product could be viewed as an enhancement feature to the core COPsync Network service since all COPsync Network users receive the outstanding Warrant notice.

At December 31, 2014, the Company had cash and cash equivalents of $587,459, a working capital deficit of $3,484,825 and an accumulated deficit of $22,908,272.  The Company took the following steps in fiscal year 2014 and in the first quarter of 2015 to manage its liquidity, to avoid default on any material third-party obligations and to continue progressing its business towards cash-flow break-even, and ultimately profitability: 

1)  The Company signed service agreements for approximately $4,500,000 in new orders for the twelve month period ended December 31, 2014, compared to approximately $5,852,000 in new orders for the comparable period in 2013, a decrease of approximately 23%.  The Company expects this will negatively impact its reported revenue and liquidity in the short-term.  The Company believes this decrease resulted from experiencing high turnover within its sales organization.  The Company is continually evaluating the performance of its sales team and replacing those who are not meeting the Company’s expectations.  As the Company continues to add to the number and quality of its sales team, the Company expects its orders to begin growing again.  This decrease in the Company’s new orders was partially offset by an increase in customer subscription renewals in 2014 of $1,531,000, up from $1,303,000 in 2013 for an increase of 17%.

F-10

 COPSYNC, INC.

Notes to Financial Statements

2)  The Company continues to employ “just in time” principles in our procurement processes for third party hardware, meaning that it attempts to schedule delivery to the customer of the third party hardware that the Company sells immediately after it receives the hardware.  The Company also continues its attempts to collect customer prepayments for the third party hardware it sells at or about the time it orders the hardware, which has helped the Company manage its working capital needs.

3)  The Company’s key vendors are currently offering us extended payment terms for our outstanding payables balances, which has also helped us manage our working capital needs.

4)  In October 2014, the Company’s Board of Directors approved a funding initiative for $750,000 to fund a software development effort for feature and function enhancements to enable the COPsync Network and COPsync911 threat alert system more readily to scale nationwide.  As of the date of this report, $450,000 has been raised, all in the first quarter of 2015.  The investment security is a three-year convertible promissory note, which bears interest at the rate of two percent simple interest per year, paid in cash.  The principal amount of the note is convertible into shares of the Company’s common stock at the rate of $0.22 per share.  The promissory note may be prepaid by the Company under certain conditions.

5)  At December 31, 2014, the Company had outstanding warrants to purchase an aggregate of 3,155,582 shares of its common stock at a price of $0.20 per share, an aggregate exercise price of $631,116, that expire in 2015.  The Company believes that the bulk of these warrants will be exercised in calendar year 2015.  As of the date of this report date, warrants to purchase 360,000 shares of the Company’s common stock have been exercised for a total exercise price of $64,000, all in the first quarter of 2015.

6)  The Company’s Balance Sheet as of December 31, 2014, indicates a notes payable-current portion balance of $669,789, which is due in 2015.  Of that total, notes representing $570,977 in principal amount are held by three note-holders who have previously extended the original due date of their respective notes. The Company believes these note holders will agree to extend the due dates of these notes again, if required. 

7)  The Company is attempting to secure up to $2.0 million in additional funding pursuant to an EB-5 program, which the Company originally expected to close in 2014.  The Company remains optimistic that it can successfully close this funding in 2015.  The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs.  Following the job creation, the foreign lenders receive U.S. “green cards”.  The Company will use a portion of any proceeds from this EB-5 program to repay a loan from the City of Pharr, Texas, if required.  Any remaining funds will be used for general working capital purposes, including the Company’s anticipated hiring of a number of employees in the City of Pharr.

8)  The Company believes that it has the capability to further reduce operating expenses, should circumstances warrant.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has accumulated significant losses as it has been developing its current and recently added offerings. The Company has had recurring losses and expects to report losses for fiscal 2015. The Company believes that cash flow from operations, together with the potential sources of debt, equity and revenue-based financing outlined above will be sufficient to fund the Company’s anticipated operations for fiscal 2015.

NOTE 2 -       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.             Basis of Presentation

The accompanying financial statements include the accounts of the Company, and are prepared on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.

b.             Reclassifications

Certain prior year items have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s net loss.

c.             Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities at the date of purchase of three months or less to be cash equivalents.

F-11

 COPSYNC, INC.

Notes to Financial Statements

The Company's cash and cash equivalents, at December 31, consisted of the following:

	2014		2013
Cash in bank	$	586,469	$	414,001
Money market funds		990		50
Cash and cash equivalents	$	587,459	$	414,051

d.             Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Cash and cash equivalents are deposited in demand and money market accounts in two financial institutions in the United States. Accounts at financial institutions in the United States are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. At times, the Company’s deposits or investments may exceed federally insured limits.  At December 31, 2014, the Company had approximately $328,000 at two financial institutions in excess of FDIC insured limits. The Company has not experienced any losses in such accounts.

e.             Use of Estimates

The preparation of accompanying financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. The Company’s significant estimates include primarily those required in the valuation or impairment analysis of capitalization of labor under software development costs, property and equipment, revenue recognition, allowances for doubtful accounts, stock-based compensation, warrants, litigation accruals and valuation allowances for deferred tax assets. Although the Company believes that adequate accruals have been made for unsettled issues, additional gains or losses could occur in future years from resolutions of outstanding matters. Actual results could differ materially from original estimates.

f.              Inventory

Inventory is stated at the lower of cost (determined using the first-in, first-out method) or market. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence or impaired balances.  No such adjustments have been made in years 2014 or 2013.

g.             Deferred Loan Costs

The Company is attempting to secure up to $2.0 million in funding pursuant to an EB-5 program, which originally had been expected to close in 2014.  The Company remains optimistic that it can successfully close this funding in 2015.  The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs.  Following the job creation, the foreign lenders receive U.S. “green cards”.  

On December 30, 2013, the Company executed an agreement with a third-party service provider to provide business, promotional, financial and EB-5 Regional Center consulting relating to the Company’s attempts to secure the $2.0 million in funding as part of the EB-5 program.  For those services, the Company prepaid $50,000.  This prepayment will be matched or netted against the expected funding from the completed EB-5 program.   This prepayment will be charged to general and administrative expense upon closing the funding.

h.             Property and Equipment

Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, ranging as follows:

Computer hardware/software	3 years
Fleet vehicles	5 years
Furniture and fixtures	5 to 7 years

Depreciation expense on property and equipment was $47,393 and $35,935 for the years ended December 31, 2014 and 2013, respectively.

F-12

COPSYNC, INC.

Notes to Financial Statements

i.              Leased Property & Obligation under Capital Lease

On December 22, 2014, the Company executed a forty-eight month lease agreement with a third-party service provider for the lease of two vehicles.  The agreement requires monthly payments totaling $35,098 over the life of the lease and has a minimal buy-out option at the end of the lease.  The lease meets the definition of a capitalized lease in accordance with “Leases - ASC 840-10-15”.  Accordingly, both a lease property asset and obligation in the amount of $35,098 is being reported as of December 31, 2014.  No monthly payments were made in fiscal year 2014.

j.              Long-lived Assets

The Company reviews its long-lived assets including property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset, a significant decrease in the benefits realized from an acquired business, difficulties or delays in integrating the business or a significant change in the operations of an acquired business.

An impairment test involves a comparison of undiscounted cash flows from the use of the asset to the carrying value of the asset.  Measurement of an impairment loss is based on the amount that the carrying value of the asset exceeds its fair value.  No impairment losses were incurred in the periods presented.

k.              Software Development Costs

Certain software development costs incurred subsequent to the establishment of technological feasibility may be capitalized and amortized over the estimated lives of the related products.  Through mid-year 2010, the Company capitalized certain software development costs accordingly.

The Company determined technological feasibility to be established upon completion of (1) product design, (2) detail program design, (3) consistency between product and program design and (4) review of detail program design to ensure that high risk development issues have been resolved.  Upon the general release of the COPsync service offering to customers, development costs for that product were amortized over fifteen years based on management’s then estimated economic life of the product.  

The Company has not capitalized any of the software development efforts associated with its new product offerings, WARRANTsync, VidTac and COPsync911, because the time period between achieving technological feasibility and product release for both of these product offerings was very short.  As a result, the incurred costs have been recorded as research and development costs in years 2014 and 2013.

l.              Research and Development

Research and development costs are charged to expense as incurred.

m.             Fair Value of Financial Instruments

The carrying amounts of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value due to their relatively short maturities. The carrying amounts of notes payable approximate fair value based on market interest rates currently available to the Company.

The fair value framework requires a categorization of assets and liabilities, which are required at fair value, into three levels based upon the assumptions (inputs) used to price the assets and liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

F-13

 COPSYNC, INC.

Notes to Financial Statements

n.             Revenue Recognition

The Company’s business focus is to sell subscriptions to the COPsync software as a service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies.  The Company refers to this service as The COPsync Network.  The agencies subscribe to the service for a specified period of time (usually for twelve to forty-eight months), for a specified number of officers per agency, and at a fixed subscription fee per officer.

In the process of selling the subscription service, the Company also sells computers and computer-related hardware (“hardware”) used to provide the in-vehicle service should the customer not already have the hardware, or wants to upgrade their existing hardware, as well as hardware installation services, the initial agency and officer set-up and training services and, sometimes, software integration services for enhanced service offerings.

The Company’s most common sales are:

1) for new customers – a multiple-element arrangement involving (a) the subscription fee, (b) integration of the COPsync software and a hardware appliance (where the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training and (c) if applicable, software integration services for enhanced service offerings; and

2) for existing customers – the subscription fees for the annual renewal of an agency’s COPsync subscription service, upon the completion of the agency’s previous subscription period.

The Company recognizes revenue when all of the following have occurred: (1) the Company has entered into a legally binding arrangement with a customer resulting in the existence of persuasive evidence of an arrangement; (2) delivery has occurred, evidenced when product title transfers to the customer; (3) customer payment is deemed fixed or determinable and free of contingencies and significant uncertainties; and (4) collection is probable.

The sale of the hardware and related services for hardware installation and agency and officer set-up and training are reported as “Hardware, installation and other revenues” in the Company’s Statement of Operations.  The sale of the VidTac product offering is considered a hardware sale and is reported in this revenue classification.  

The subscription fees and software integration services are reported as “software license/subscriptions revenues” in the Company’s Statement of Operations.  The subscription fees include termed licenses for the contracted officers to have access to the service and the right to receive telephonic customer and technical support, as well as software updates, during the subscription period.  Support for the hardware is normally provided by the hardware manufacturer.

The sale of the WARRANTsync and COPsync911 product offerings are reported in “software license/subscriptions revenues”.  The service for each of these products consist of two elements:  (1) an integration element, and (2) a subscription element, both of which are recognized ratably over the service period upon customer acceptance.  WARRANTsync represents a very small portion of our revenues and could be viewed as an enhancement feature to our COPsync Network.

The receipt and acceptance of an executed customer’s service agreement, which outlines all of the particulars of the sale event, is the primary method of determining that persuasive evidence of an arrangement exists.

Delivery generally occurs for the different elements of revenue as follows:

(1) For multiple-element arrangements involving new customers – contractually the lesser period of time of sixty days from contract date or the date officer training services are completed.  The Company requests the agency to complete a written customer acceptance at the time training is completed, which will override the contracted criteria discussed immediately above.

(2) The subscription fee – the date the officer training is completed and written customer acceptance is received.

(3) Software integration services for enhanced service offerings – upon the completion of the integration efforts and verification that the enhanced service offering is available for use by the agency.

F-14

 COPSYNC, INC.

Notes to Financial Statements

Fees are typically considered to be fixed or determinable at the inception of an arrangement, generally based on specific services and products to be delivered pursuant to the executed service agreement. Substantially all of the Company’s service agreements do not include rights of return or acceptance provisions.  To the extent that agreements contain such terms, the Company recognizes revenue once the acceptance provisions or right of return lapses.  Payment terms to customers generally range from net “upon receipt of invoice” to “net 30 days from invoice date.”  Beginning in 2013, the Company adopted a policy of requesting customers purchasing a significant amount of hardware to prepay for the hardware at the time the equipment was ordered from the Company’s suppliers.  These prepayments are recorded on the Company’s Balance Sheet as Current Deferred Revenues.

The Company assesses the ability to collect from its customers based on a number of factors, including credit worthiness of the customer and the past transaction history with the customer.  If the customer is not deemed credit worthy, the Company defers all revenue from the arrangement until payment is received and all other revenue recognition criteria have been met. With the exception of sales to resellers, all of the Company’s customers are local or state governmental agencies.

As indicated above, some customer orders contain multiple elements.  The Company allocates revenue to each element in an arrangement based on relative selling price.  The selling price for a deliverable is based on its vendor specific objective evidence (“VSOE”), if available, third party evidence ("TPE"), if VSOE is not available, or the Company’s best estimate of selling price ("ESP"), if neither VSOE nor TPE is available.  The maximum revenue the Company recognizes on a delivered element is limited to the amount that is not contingent upon the delivery of additional items.  Many of the Company’s service agreements contain grants (or discounts) provided to the contracting agency.  These grants or discounts have been allocated across all of the different elements based upon the respective, relative selling price.

The Company determines VSOE for subscription fees for the initial contract period based upon the rate charged to customers on a stand-alone subscription service.  VSOE for renewal pricing is based upon the stated rate for the renewed subscription service, which is stated in the service agreement or contract entered into.  The renewal rate can be equal to or slightly higher than the stated rate in the original contract and is administered on a customer-by-customer basis.  Subscription fee revenue is recognized ratably over the life of the service agreement.   

The Company has determined that the selling price of hardware products include the related services for hardware installation and agency and officer set-up and training, as well as integration services for enhanced service offerings, which are sold separately and, as a result, it has VSOE for these products.

For almost all of the Company’s new service agreements, as well as renewal agreements, billing and payment terms are agreed to up front or in advance of performance milestones.  These payments are initially recorded as deferred revenue and subsequently recognized as revenue as follows:

(1) Integration of the COPsync software and a hardware appliance (where the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training – immediately upon delivery.

(2) The subscription fee – ratably over the contracted subscription period, commencing on the delivery date.

(3) Software integration services for enhanced service offerings – immediately upon the Company’s completion of the integration and verification that the enhanced service is available for the agency’s use.

(4) Renewals – ratably over the renewed subscription or service period commencing on the completion of the previous subscription or service period.

o.             Income Taxes

The Company periodically assesses uncertain tax positions that the Company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction).  The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority.  An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.  The Company evaluated its tax positions and determined that there were no uncertain tax positions for the years ended December 31, 2014 and 2013. 

F-15

 COPSYNC, INC.

Notes to Financial Statements

p.             Share Based Compensation

The Company accounts for all share-based payment transactions using a fair-value based measurement method.  The Company calculates stock option-based compensation by estimating the fair value of each option as of its date of grant using the Black-Scholes option pricing model.  These amounts are expensed over the respective vesting periods of each award using the straight-line attribution method.  The Company has historically issued stock options and vested and non-vested stock grants to employees.  Beginning in 2012, the Company also began granting stock options to outside directors.  The condition for vesting of the options has been continued employment or service during the related vesting or restriction period.

q.             Newly Adopted Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its audited financial statements. 

Revenue Recognition

ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”, was issued in May 2014.  ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  To achieve this core principle, the guidance provides that an entity should apply the following steps:  (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation.  The Company expects to adopt ASU 2014-09 for the fiscal year ending December 31, 2016 and the Company will continue to assess the impact on its financial statements.

Unrecognized Tax Benefit

In July 2013, the FASB issued guidance that requires entities to present unrecognized tax benefits (UTB) in the financial statements as a reduction to a deferred tax asset (DTA) for a net operating loss (NOL) carryforward when NOL’s exist. Entities whose NOL carryforwards are not available to settle taxes that would result from the disallowance of the tax position, or who do not intend to use their DTA for that purpose, should present their UTB as a liability and should not net the UTB with the DTA.  The guidance became effective for us at the beginning of 2014. This new guidance did not have a material impact on the Company’s consolidated financial statements.

Going Concern

On August 27, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern and to provide related footnote disclosures. This standard will be effective for the Company for the year ending on December 31, 2016. Early application is permitted. The Company is currently evaluating the impact of ASU No. 2014-15.

r.             Preferred Stock Issuances with Beneficial Conversion Features

The Company uses the effective conversion price of preferred shares issued based on the proceeds received to compute the intrinsic value of the embedded conversion feature on preferred stock issuances with detachable warrants.  The Company calculates an effective conversion price and uses that price to measure the intrinsic value of the embedded conversion option.  

F-16

COPSYNC, INC.

Notes to Financial Statements

NOTE 3 -       ACCOUNTS RECEIVABLE

The Company's accounts receivable, net, at December 31, consisted of the following:

	December 31,
Category	2014			2013
Trade receivables	$	1,101,279		$	649,837
Other receivables		53,227			7,908
Elimination of unpaid deferred revenue		(716,495	)		(525,938	)
Allowance for doubtful accounts		(214,389	)		(30,000	)
Total Accounts Receivable	$	223,622		$	101,807

To date, accounts receivable have been derived principally from revenue earned from end users, which are local and state governmental agencies.  The Company performs periodic credit evaluations of its customers, and does not require collateral.

The Company’s other receivables as of December 31, 2014 consisted principally of $30,890 for the sale of two vehicles to a third party leasing company and $9,700 for interest charged against a specific customer’s outstanding receivables balance.

The elimination of the unpaid deferred revenue December 31, 2014, represents those invoices issued for products and/or services not yet paid by the customer or services completed by the Company.  The elimination is made to prevent the “gross-up” effect on the Company’s Balance Sheet between Accounts Receivable and Deferred Revenues.

The Company’s allowance for doubtful accounts is based upon a review of outstanding receivables.  Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. 

NOTE 4 -       INVENTORY

Inventory consisted of the following as of December 31:

	December 31,
Category	2014		2013
Raw materials	$	-	$	-
Work-in-process		-		-
Finished goods		246,077		357,933
Total Inventory	$	246,077	$	357,933

The approximately $112,000 decrease in inventory between 2013 and 2014 is due principally to a sharp increase in 2013 customer bookings for new hardware associated with the Company’s COPsync service.  The timing of the receipt of the new orders, the associated procurement cycle and installation timetables all culminated in the Company possessing a large amount of inventory at December 31, 2013.  Those inventories were reduced as a result of the hardware being delivered to the customer and installed in fiscal year 2014.

Total inventory at December 31, 2014 included hardware consisting of computer laptops, printers and ancillary parts, such as electronic components, connectors, adapters and cables, as well as the Company’s propriety VidTac product and its related components.  Generally, the Company procures hardware as a result of receiving a customer order.  The hardware is procured, delivered to the Company, prepared for installation and then transported by the Company to the customer site for installation.  The Company does not procure and inventory third party hardware for speculative selling.

The various components of hardware are all considered finished goods because the individual items may be, and are, sold in a package, or on an individual basis, normally at the same pricing structure.

F-17

 COPSYNC, INC.

Notes to Financial Statements

With regards to the Company’s VidTac product, a manufacturing agreement was executed in 2012 with a single contract manufacturer and calls for the Company to periodically place a demand purchase order for a fixed number of finished units to be manufactured and delivered as finished goods.  The Company’s purchase orders placed with the contract manufacturer are non-cancellable; however, there are some relief provisions: (1) the Company may change the original requested delivery dates if the Company gives sufficient advance notice to the contract manufacturer; and (2) should the Company elect to cancel a purchase order in total or in part, it would be financially responsible for any materials that could not be returned by the contract manufacturer to its source suppliers.

When the VidTac product is recorded into Finished Goods, it consists of a kit consisting of four basic components.  It is inventoried as a single unit of inventory.  Should a single component fail or need to be replaced, the Company will take a kit and then inventory the components, still considered finished goods.  Should a component need to be repaired, it is returned to the contracted manufacturer for analysis and repair.  The repaired component is then shipped to the Company and inventoried as a finished goods component.

In July 2014, the Company placed a demand purchase order valued at $433,000 with the contract manufacturer for finished units to be delivered ratably throughout the year and into early fiscal year 2015.  The order was to cover a then backlog of orders for VidTac, as well as forecasted demand for the product during the delivery period.  The payment terms for this purchase order required a 10% down-payment at the time of order placement, followed by Net 30 days from invoice date once the units are delivered to finished goods inventory.

In December 2014, the Company placed another demand purchase order valued at $433,000 with the contract manufacturer for finished units to be delivered ratably in fiscal year 2015, beginning in May 2015.  This order was to cover forecasted demand for the product during the delivery period, as well as to accommodate the long-lead times required for procuring certain components from off-shore manufacturers.  The payment terms for this purchase order required a10% down-payment at the time of order placement, followed by Net 30 days from invoice date once the units are delivered to finished goods inventory.

NOTE 5 -      PREPAID EXPENSES AND OTHER ASSETS

The Company's prepaid expenses and other assets at December 31, consisted of the following:

	December 31,
Category	2014		2013
Prepaid Insurance	$	44,101	$	37,910
Subscriptions		24,050		14,859
Vendor Prepayments		103,044		63,804
Deferred Charges		98,953		-
Total Prepaid Expenses and Other Assets	$	270,148	$	116,573

Prepaid insurance pertains to various business insurance policies, the fees of which have been financed by a third-party service provider and are being paid over an eleven-month period.  This prepayment is amortized ratably over the twelve-month insurance coverage period.

Subscriptions principally pertain to prepaid software support and web-hosting services provided by third-party service providers.  These prepayments are amortized into expense over the life of the specific service period.

Vendor prepayments principally involve two vendors: one, consisting of down-payments made to the Company’s contract manufacturer for new orders of the VidTac product, which are then applied on a unitized basis as credits on the vendor’s invoices when the finished product goes into finished goods inventory; and two, a software engineering firm that provides ongoing services to the Company.  As of the date of this report, those services have subsequently been provided and the prepayments charged to operating expenses in fiscal year 2015.

F-18

 COPSYNC, INC.

Notes to Financial Statements

Deferred charges pertain to off-the-shelf computer aided dispatch systems (“CAD”) purchased from two outside software services companies and delivered to six contracted customers as part of their respective, executed service agreement (or contract).  The contracts involved license fees for the CAD service over a four-year period commencing with the acceptance of the service, as well as one-time implementation fees specific to each agency.  The contracts were executed in early in 2013 and the customers made prepayments totaling $285,555, the latter of which is reported in Current Deferred Revenues.  At December 31, 2014, there remains some services yet to be performed and delivered to the customers; therefore, revenue recognition is not appropriate at this time.  The Company expects to complete and deliver those services in fiscal year 2015, at which time these deferred charges will be matched against the applicable revenues.

 NOTE 6-      SOFTWARE DEVELOPMENT COSTS

Software development costs as of December 31, were as follows:

	December 31,
	2014			2013
Capitalized software development costs	$	2,724,082		$	2,724,082
Accumulated amortization		(1,847,274	)		(1,410,803	)
Sub-total		876,808		$	1,313,279
Cumulative Impairment charge		(876,808	)		(876,808	)
Total	$	-		$	436,471

Amortization expense related to these costs was $436,471 and $436,465 for the years ended December 31, 2014 and 2013, respectively.  

NOTE 7 -       INCOME TAXES

As of December 31, 2014, the Company had federal net operating loss carry-forwards available to reduce taxable income of approximately $15,573,000.  The net operating loss carry-forwards expire between 2028 and 2034.

Deferred tax assets and liabilities at December 31, consist of the following:

	2014			2013
Deferred tax assets:
Net operating loss carry-forwards	$	5,294,800		$	4,372,400
Total deferred tax assets		5,294,800			4,372,400
Valuation allowance		(5,294,800	)		(4,372,400	)
Net deferred tax assets	$	-		$	-

Income tax benefit differs from the expected statutory rate as follows:

	2014			2013
Expected federal income tax benefit	$	(1,471,700	)	$	(1,529,500	)
Stock expense		357,000			15,300
Stock option and warrant expense		121,300			123,100
Other		70,700			224,900
Change in valuation allowance		922,700			1,166,200
Income tax benefit	$	–		$	–

A full valuation allowance has been established for the Company's net deferred tax assets since the realization of such assets through the generation of future taxable income is uncertain.

Under the Tax Reform Act of 1986, the amounts of, and the benefit from, net operating losses and tax credit carry-forwards may be impaired or limited in certain circumstances.  These circumstances include, but are not limited to, a cumulative stock ownership change of greater than 50%, as defined, over a three-year period.

F-19

 COPSYNC, INC.

Notes to Financial Statements

NOTE 8 -       NOTES PAYABLE

Notes payable as of December 31 consisted of the following:

	Collateral		Interest			Monthly			December 31,
Type	(If any)		Rate			Payments		Maturity	2014			2013
Bank	Autos	(8)		6.00	%	$	468	Jan. 2017		10,949			15,749
Bank	Autos	(7) (8)		6.50	%	$	1,017	Jun. 2018		21,818			47,401
Bank	Autos	(8)		6.50	%	$	220	Jul. 2018		8,387			10,392
Bank	Autos	(1) (8)		4.00	%	$	312	Mar. 2019		14,569			-
Bank	Autos	(1) (8)		4.00	%	$	254	Mar. 2019		11,893			-
Bank	Autos	(1) (8)		4.00	%	$	346	May. 2019		16,790			-
Insurance		(2) (8)		7.50	%	$	3,093	Nov. 2014		40,300			34,069
Demand Note	Inventory	(11)		16.00	%	$	-	Jun. 2015		313,477			313,477
Demand Note		(6)		15.00	%	$	7,500	Apr. 2015		30,745			-
Demand Note		(3)		-	%	$	-	Apr. 2015		7,500			-
Demand Note		(4)		12.9	%	$	-	Jul. 2015		250,000			-
Demand Note		(4) (9)		9.90	%	$	-	Mar. 2014		-			98,646
Demand Note		(5) (10)		16.70	%	$	-	Jun. 2015		412,618			-
Total notes payable									$	1,139,046		$	519,734
Less: Current portion									$	(791,289	)	$	(412,405	)
Long-term portion									$	347,757		$	107,329

Future principal payments on long-term debt are as follows:

2015	$	791,289
2016		233,682
2017		109,386
2018		4,689
2019 & thereafter		-
Total	$	1,139,046

For the twelve months period ended December 31 2014, the Company incurred the following increases in notes payable:

1)             The Company executed three five-year bank notes, with total principal of $49,503 and an interest rate of 4.0% per annum, for the purchase of three automobiles to be used in sales and operations.

2)             The Company executed two eleven-month notes payable pertaining to the Company’s business insurance coverages: one in the amount of $27,963 in February and for inland marine, general and product liability risk exposures; and a second one in the amount of $40,300 in December and for directors and officers insurance.  Both notes call for monthly payments of principal and have an interest rate of 7.5% per annum.

3)             On February 28, 2014, the Company executed a sixty-day promissory note in the principal amount of $25,000, payable to its Chief Executive Officer, for a loan in the same amount.  Interest at 3.0% per annum is due upon maturity of the promissory note.  In the fourth quarter of fiscal 2014, the Company repaid $17,500 of the principal amount of the note, leaving an outstanding balance of $7,500.  The Company’s chief executive officer elected to extend the maturity date of this note to April 1, 2015.

4)             In September 2013, an individual loaned the Company $50,000 to procure third-party hardware for a new contract.  The related note matured on March 31, 2014, bore simple interest at a rate of 9.9% per annum, and was payable upon maturity.  Prior to the maturity date, the note holder elected to loan the Company an additional $200,000.  As a result, the $50,000 note was cancelled and replaced with a new $250,000 unsecured note, which matures on July 15, 2015 and accrues interest at a rate of 12.9% per annum.  Payment of the accrued interest is due upon the note’s maturity.  Accrued interest on the cancelled note totaled $2,807 and was paid in the second quarter of fiscal 2014.

F-20

 COPSYNC, INC.

Notes to Financial Statements

5)             In May 2014, eight individuals loaned the Company an aggregate of $405,000 in cash.  The resulting promissory notes included the following terms: each note is due thirty-six months from issuance date, contemplates a 50% return by the end of the note term, and requires a specific repayment amount be made by the Company every six months, commencing six months after the note is issued.  The aggregate repayment amount of the notes payable is $607,500.  The repayment amounts increase on an annual basis throughout the life of the note.  The Company is required to repay 10%, 30% and 60% of the aggregate repayment amount in years one, two and three of the notes’ term, respectively.  The aggregate discount on the notes, totaling $202,500, was recorded on the Company’s Balance Sheet at issuance as a contra-notes payable, located in long-term liabilities.  The discount is amortized ratably over the life of the respective promissory notes and is recorded as interest expense in the Company’s Statement of Operations.  The Company had recorded $37,933 in cumulative discount on the notes as of December 31, 2014.

6)             On July 11, 2014, the Company executed a $60,000 short-term promissory note payable to a third-party financier.  The purpose of the note was to assist in the Company’s procurement of its VidTac products.  The note matures on April 11, 2015, accrues interest at 15% per annum, and required an initial monthly payment of interest only in August 2014 of $750, followed by eight monthly principal and interest payments in the amount of $7,027.99, commencing in September 2014.

For the twelve months period ended December 31 2014, the Company recognized the following decreases in notes payable:

7)             In the third quarter of 2014, one of the Company’s financed automobiles was involved in an accident, and sustained sufficient damage whereby the insurance company determined the vehicle to be a total loss.  The insurance company subsequently issued a payment to the Company in the amount of $15,844 for its loss.  The payment was applied in full to the related bank loan

8)             In 2014, the Company made principal payments of $131,582, primarily through scheduled monthly payments on notes payable that financed the Company’s business insurance policies and bank notes for automobile loans.

9)             In 2014, the Company paid a maturing loan in the amount of $48,646.  The original loan to the Company was made in September 2013 by an individual for the purpose of procuring third-party hardware for a new contract, and consisted of $50,000 in principal, an interest rate of 9.9% per annum, a maturity date in March 2014, and required the Company make monthly principal and interest payments during the life of the loan to the individual note holder.

10)           In the fourth quarter of 2014, the Company made the first six-month principal repayment in the aggregate of $30,375 to the eight investors who made loans to the Company as discussed above.

Other activities involving the Company’s notes payable occurring during the twelve months period ended December 31, 2014 are as follows:

11)           In November 2013, the Company executed two short-term notes payable in the aggregate amount of $313,477 with an equipment financing company owned by one of the Company’s outside directors to finance the purchase of certain third-party equipment to be sold by the Company to its contracted customers.  Both notes were scheduled to mature in May 2014, bear interest at 16% per annum, payable upon maturity, and are collateralized by the third-party equipment being procured.  During the second quarter of 2014, the equipment financing company extended the maturity dates of the notes by six months, making the notes due in November 2014.  The equipment financing company required the Company to pay the accumulated interest for the original six-month period as a condition to the extension of the maturity date.  The Company paid total interest of $23,646 on these notes in the second quarter of 2014.  In December 2014, the equipment financing company again extended the maturity date of the notes to June 2015.  The Company paid total accrued interest of $26,526 on these notes in the fourth quarter of 2014.

12)           On February 3, 2014, the Company received a $475,000 loan from the City of Pharr, Texas.  The loan documents related to this loan have not been finalized at the date of this report, but the note is expected to bear interest at 8.0% per annum.  The loan principal amount is expected to be due in full on the earlier to occur of the 18 month anniversary of the loan or the receipt by the Company of $2.0 million in proceeds from an EB-5 visa funding arrangement the Company is pursuing.  The loan is expected to be secured by a first priority security interest in the Company’s accounts receivable.  The city is expected to also receive a modest percentage of the Company’s revenue, payable quarterly, with respect to contracts for the Company’s products and services with customers located in a specified territory in the southern portion of Texas, for a specified period of time.  Because the formal loan documents have not been executed as of the date of this report, the loan advance has been classified as an accrued expense on the Company’s Balance Sheet.

F-21

 COPSYNC, INC.

Notes to Financial Statements

During 2013, the Company made total payments of $300,455 on its notes payable, consisting of total monthly payments of $51,161 on existing notes payable involving the short-term financing of the Company’s business insurance policies and automobile loans, repayment of the $120,000 demand note issued to the Company’s chief executive officer described below, repayment of the $60,000 demand note issued to the spouse of the Company’s chief executive officer described below, and $69,294 involving the payoff of automobile loans in connection with the Company’s efforts to replace the vehicles used by its sales force with more fuel efficient vehicles.  Accordingly, the Company sold six vehicles for $107,800, which were being financed with bank notes.  Proceeds from the sales of $69,294 were used to pay-off the balances of the related bank notes, and the balance of the proceeds was to purchase new vehicles.  The Company financed the remaining acquisition costs of the new automobiles by executing a new bank note for $51,880, with terms of ratable, monthly payments, a five year life and a 6.5% annual interest rate.  Also during the third quarter of 2013, the Company financed the acquisition of a single vehicle by executing a new bank note for $11,195, with terms of ratable, monthly payments, a five year life and a 6.5% annual interest rate. 

In December 2012, the Company’s chief executive officer loaned the Company $120,000, which was evidenced by a demand promissory note, bearing 3% interest.  The principal amount of the note was repaid in the first quarter of fiscal 2013.  The accrued interest was included in the principal amount of a new convertible promissory note described Note 9.

In November 2013, the spouse of the Company’s chief executive officer loaned the Company $60,000, which was evidenced by a demand promissory note.  The note was replaced shortly thereafter with a new $60,000 convertible promissory note described below. 

 NOTE 9 -       CONVERTIBLE NOTES PAYABLE

For the twelve months ended December 31 2014, holders of nine convertible notes elected to convert their notes into shares of the Company’s common stock.  The total principal amount of the converted notes was $215,378.  Accrued and unpaid interest for one convertible note in the amount of $107 was also converted into shares of the Company’s common stock.  Accrued and unpaid interest for the other eight convertible notes was paid in cash to the note holders.  As a result of these conversions, the Company issued a total of 2,154,843 shares of its common stock, at a conversion price of $0.10 per share, pursuant to the terms of the notes.

During the first quarter of 2013, the Company issued a $120,532 convertible note to its chief executive officer following the receipt of $120,000 in cash, which the Company used for the repayment of the principal amount of a $120,000 demand note, representing a loan made to the Company by its chief executive officer in December 2012.  The demand note had accrued $532 of interest, which was included in the principal amount of the convertible note.  The convertible note bore 3% interest per annum, was originally due on March 31, 2014, but the maturity date was extended to March 31, 2016.  The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share.

During the first quarter of 2013, the holder of one convertible note elected to convert the note into shares of the Company’s common stock.  The principal amount of the converted note on the date of conversion was $19,100.  The Company issued a total of 191,000 shares of its common stock, at the conversion price of $0.10 per share, pursuant to the terms of the note.

During the second quarter of 2013, the Company issued two convertible notes to individual investors in exchange for an aggregate investment of $40,000.  The convertible notes bore interest at 3% per annum, with one $20,000 convertible note maturing in May 2015 and the other $20,000 note maturing in June 2016.  The convertible notes may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share.

During the third quarter of 2013, the Company issued a $40,000 convertible note to its chief executive officer in exchange for an investment of $40,000.  The convertible note bore interest at 3% per annum and originally matured in the first quarter of 2014, but the maturity date was extended to March 31, 2016.  The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share.

During the fourth quarter of 2013, the spouse of the Company’s chief executive officer loaned the Company $60,000, which was evidenced by a demand promissory note.  The demand note was replaced shortly thereafter with a new $60,000 convertible promissory note, also bearing interest at 3% per annum, and originally due March 31, 2014, but the maturity date was extended to March 31, 2016.  The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. 

F-22

 COPSYNC, INC.

Notes to Financial Statements

At December 31, 2013, the Company had outstanding convertible notes totaling $574,163 scheduled to mature on March 31, 2014.  During the first quarter of 2014, all but one of the holders of these convertible promissory notes, representing $554,163 in principal aggregate amount, elected to execute either a one-year or two-year extension of the maturity dates of the original notes.  The other holder elected to convert his $20,000 convertible promissory note into shares of the Company’s common stock at a conversion price of $0.10 per share.  The principal amount of the note was converted in fiscal 2014.

As a result of the extension of the maturity of these notes and consistent with applicable accounting guidelines, the Company reclassified the aggregate principal value of $554,163 for the converted notes from Current Liabilities to Long-Term Liabilities on the Company’s Balance Sheet for the year ended December 31, 2013.

The Company accrued interest on outstanding convertible notes in the amount of $16,341 and $13,989 for the years ended December 31, 2014 and 2013, respectively.

Convertible notes payable at December 31 are summarized as follows:

	December 31,		December 31,
	2014		2013
Total convertible notes payable	$	873,263	$	873,263
Less:  note conversions	$	474,477	$	259,100
Convertible notes payable, net	$	398,786	$	614,163
Less: current portion	$	9,608	$	20,000
Convertible notes payable, net, long-term portion	$	389,178	$	594,163

NOTE 10 -       PREFERRED STOCK

Series A Preferred Stock

The Company issued a total of 100,000 shares of its Series A Preferred Stock in April 2008 as partial consideration for its acquisition of a 100% ownership interest in PostInk Technology, LP (“PostInk”).  Each share of Series A Preferred Stock is convertible into one share of common stock, but has voting rights of 750 votes per share.  These shares are held by the former general partner of PostInk, which is owned by the co-founders of the Company.

Upon the occurrence of certain events, each share of the Company’s Series A Preferred Stock shall automatically be converted into fully-paid non-assessable shares of common stock at the then effective conversion rate for such share.  The events that may trigger this automatic conversion event are as follows:  1) immediately prior to the closing of firm commitment initial public offering, or 2) upon the receipt of the Company of a written request for such conversion from the holders of at least a majority of the Series A Preferred stock then outstanding, or if later, the effective date for conversion specified in such requests.

Series B Preferred Stock

During 2009, the Company completed a private placement of its Series B Convertible Preferred Stock and warrants to purchase its common stock in which the Company raised $1,450,000 in gross proceeds.  During 2010, an additional $50,000 was raised in the private placement.

The Series B Preferred Stock and the warrants were sold as a unit, with each investor receiving eight warrants to purchase one share of common stock for every share of Series B Preferred Stock purchased.  The purchase price for each unit was $4.00 per share of Series B Preferred Stock purchased.

As a result of this private placement, the Company issued 375,000 shares of the Company’s newly designated Series B Preferred Stock.  The Series B Preferred Stock is convertible into a total of 15,000,000 shares of the Company’s common stock.  In addition, as part of the private placement, the Company granted warrants to purchase an aggregate of 3,000,000 shares of its common stock.

F-23

 COPSYNC, INC.

Notes to Financial Statements

The Company used the effective conversion price of preferred shares issued based on the proceeds received to compute the intrinsic value of the embedded conversion feature on preferred stock issuances with detachable warrants.  The Company allocated the proceeds received from the Series B Preferred Stock issuance and the detachable warrants included in the exchange on a relative fair value basis.  The Company then calculated an effective conversion price and used that price to measure the intrinsic value of the embedded conversion option.

The warrants to purchase a total of 3,000,000 shares of the Company’s common stock granted in the private placement have an exercise price of $0.20 per share and were scheduled to expire on October 14, 2013.  During 2013, the Company extended the term of these warrants for an additional four years.  The fair value expense for this extension totaled $120,000, was determined using Black Scholes valuation techniques, and was reported in the Company’s Statement of Operations for fiscal 2013.  The exercise price and the number of shares of common stock purchasable upon exercise of the warrants are subject to adjustment upon the occurrence of certain events, including, but not limited to: (i) stock dividends, stock splits or reverse stock splits; (ii) the payment of dividends on the common stock payable in shares of common stock or securities convertible into common stock; (iii) a recapitalization, reorganization or reclassification involving the common stock, or a consolidation or merger of the Company; or (iv) a liquidation or dissolution of the Company.

Also in connection with this private placement, the Company agreed to use its best efforts to effect a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock issuable upon conversion of the Series B Preferred Stock and upon exercise of the warrants, upon the request of the holders of a majority of those shares after the second anniversary of the date of the private placement closing.  It also provides for the investors to have “piggyback” registration rights to include their shares in future registrations with the Securities and Exchange Commission by the Company of the issuance or sale of its securities.  The investor’s right to request a registration or inclusion of shares in a registration terminates on the date that such investor may immediately sell all of the shares of common stock issuable upon conversion of the Series B Preferred Stock and upon exercise of the warrants under Rule 144 or Rule 145 promulgated under the Securities Act.  The agreement also grants to the investors a right of first refusal to purchase all, but not less than all, of certain new securities the Company may, from time to time, propose to sell after the date of the private placement agreement, and also contains certain covenants relating to the Company’s Board of Directors and requiring the Company to retain patent counsel.  As of year ended December 31, 2014, the Company has not received a request of the holders of a majority of those shares to effect a registration statement with the Securities and Exchange Commission.

The Series B Preferred Stock (i) accrues dividends at a rate of 7.0% per annum, payable in preference to the common stock or any other capital stock of the Company, (ii) has a preference in liquidation, or deemed liquidation, to receive the initial investment in the Series B Preferred Stock, plus accrued and unpaid dividends, (iii) is convertible into 40 shares of the Company’s common stock, subject to adjustments for issuances by the Company of common stock at less than $0.10 per share, and (iv) has the right to elect one member of the Company’s Board of Directors. 

For the year ended December 31, 2014, gross dividends on the Series B Preferred Stock were $105,000, consisting of $77,980 for accretion of the beneficial conversion feature on the preferred shares dividends issued in kind and $27,070 for net dividends.  For the year ended December 31, 2013, dividends on the Series B Preferred Stock were $105,000.  The Company has recorded accrued accumulated dividends as of December 31, 2014 and 2013 of $546,863 and $441,863, respectively, on the Series B Preferred Stock.

Each share of Series B Preferred Stock automatically converts into fully-paid, non-assessable shares of the Company’s common stock at the then effective conversion rate on the first to occur of the following events:

(i) ninety (90) days after the Company has reported net income, in accordance with generally accepted accounting principles, for two (2) consecutive quarters, as reported in its quarterly reports on Form 10-Q (or annual report on Form 10-K, if applicable) filed under the Securities Exchange Act of 1934, as amended,

(ii) on the date that the Company closes on the sale of securities to purchasers other than holders of the Series B Preferred Stock that was subject to the right of first refusal set forth in the Investors’ Rights Agreement, and the purchasers of such securities require that the Series B Preferred Stock be converted into Common Stock as a condition to such closing, or

 (iii) upon the receipt by the Company of a written request for such conversion from the holders of all of the Series B Preferred Stock then outstanding, or, if later, the effective date for conversion specified in such requests.

F-24

 COPSYNC, INC.

Notes to Financial Statements

NOTE 11 -       COMMON STOCK

For the twelve months period ended December 31 2014, the Company issued a total of 21,243,100 shares of common stock, along with warrants to purchase 4,378,620 shares of common stock, to investors for an aggregate cash purchase price of $2,124,310, or $0.10 per share purchased, net of $40,195 in related costs.    Most of the warrants issued with the common stock provide for a twenty percent coverage, a four-year term and a specified exercise price ranging from $0.10 to $0.45 per share.  There were two exceptions to the preceding statement: one, an individual investment for $500,000 was made in exchange for 5,000,000 shares of common stock and warrants to purchase 1,250,000 shares of common stock (or twenty-five percent warrant coverage), with an exercise price of $0.20 per share and an optional, cashless exercise feature; and two, an individual investment for $120,000 in which no warrants were issued.

In 2014, the Company also issued 600,000 shares of its common stock, and warrants to purchase 120,000 shares of its common stock (with an exercise price of $0.10 per share), in exchange for $60,000 of services, $31,835 of which services had been performed at the date of issuance and $28,165 of which had yet to be performed.  Those services were subsequently performed.

On October 6, 2014, the Company executed a six-month consulting agreement with a third party service provider for general financial advisory and investment banker services.  As a part of the agreement, the Company issued 2,375,000 shares of its common stock to the third party provider.  The recipient of the stock is required to hold the stock for a specified period of time.  The fair value of the stock grant was $997,500, determined by multiplying 2,375,000 shares times that day’s closing price of $0.42 per share.  This non-cash expense was recorded as general and administrative expense in the Company’s Statement of Operations.

Also on October 6, 2014, the Company executed a six-month consulting agreement with a third party service provider for advisory services.  Compensation for the agreement called for the Company to issue a 125,000 stock grant for vested shares of the Company’s common stock.  The recipient of the stock grant is required to hold the stock for a specified period of time.  The fair value of the stock grant was $52,500, determined by multiplying 125,000 shares times that day’s closing price of $0.42 per share.  This non-cash expense was recorded as general and administrative expense in the Company’s Statement of Operations.

The Company also issued 2,154,843 shares of its common stock upon the conversion of $215,485 in principal and accrued interest of outstanding convertible notes during the period (See Note 9).

The Company also issued 340,000 shares of its common stock upon the exercise of outstanding warrants, for an aggregate purchase price of $44,000, during the period (See Note 14).

During 2013, the Company received gross proceeds totaling $346,930 from sixteen individual investors in a private placement.  The private placement was completed pursuant to a series of subscription agreements between the Company and the investors.  Pursuant to the terms of the subscription agreements, the Company agreed to sell to the investors an aggregate of 3,469,300 shares of the Company’s common stock and detachable four-year warrants to purchase an aggregate of 693,860 shares of common stock. 

Also during 2013, the Company issued 70,000 shares of common stock and associated warrants following the receipt of a $7,000 deposit in 2012 from a single investor.

In connection with the 2013 private placement, the Company received a series of small deposits from a single investor totaling $1,500 in 2013 for shares of common stock and associated warrants, which the Company expects to issue in 2015.

For the 2013 private placement, the common stock and the warrants were sold as an equity unit, with each investor who purchased shares of the Company’s common stock receiving a warrant to purchase one share of common stock (with an exercise price of $0.10 per share) for every five shares of common stock purchased by such investor.  The purchase price for each equity unit was $0.10 per share of common stock purchased.

During 2013, the Company recorded amortization of a restricted stock grant of $45,000 involving a stock grant of 2,000,000 restricted shares of common stock valued at $180,000, or $0.09 per share, and issued in the second quarter of 2011.  The restricted shares vested pro-rata and quarterly over three years and became fully vested in 2013.

The Company also recorded contributed capital of $79,000 during each of the years ended December 31, 2014 and 2013, related to the forfeiture of contractual compensation involving the Company’s two co-founders.

F-25

 COPSYNC, INC.

Notes to Financial Statements

NOTE 12 -     COMMON STOCK TO BE ISSUED

During fiscal year 2014, the Company received a deposit from an investor totaling $15,000 for the purchase of 150,000 shares of common stock and associated warrants.  The Company anticipates these shares will be issued in fiscal 2015 pursuant to an agreement between the investor and the Company.  The term of the warrants is four years, and the exercise price is $0.38 per share.  The warrants will have no value assigned to them because the warrants are being issued as a unit with the shares of common stock.  This is consistent with the provisions of ASC 718 (See Note 14).

In September 2014, the Company received deposits totaling $24,000 from warrant holders for the purchase of 120,000 shares of common stock.  The exercise price of the warrants was $0.20 per share.  At the warrant holders’ request, the shares of common stock will not be issued for a period of six months from the date of exercise.

During fiscal years 2014 and 2013, the Company has received a series of small deposits from a single investor totaling $3,000 for the purchase of shares of common stock and warrants to purchase 30,000 shares of common stock.  The Company anticipates that these shares will be issued in fiscal 2015.  The term of the warrants is four years, and the exercise price is $0.10 per share.  The warrants will have no value assigned to them because the warrants will be issued as a unit with common stock shares.  This is consistent with the provisions of ASC 718.

The following table provides a reconciliation of the transactions, number of shares and associated common stock values for the common stock to be issued at December 31, 2014 and December 31, 2013.

	At December 31, 2014				At December 31, 2013
Common stock to be issued per:	# of Shares		$ Value		# of Shares		$ Value
A stock deposit received for common stock to be issued at $0.10 per share		180,000		18,000		15,000		1,500
A stock deposit received for common stock to be issued at $0.20 per share		120,000		24,000		-		-
Total number of shares and value		300,000	$	42,000		15,000	$	1,500

NOTE 13-      BASIC AND FULLY DILUTED LOSS PER SHARE

The computations of basic loss per share of common stock are based on the weighted average number of common shares outstanding during the period of the financial statements.  Common stock equivalents which would arise from the exercise of stock options and warrants outstanding during the period, the conversion of convertible preferred stock and dividends or the conversion of convertible notes were excluded from the loss per share attributable to common stock holders as their value is anti-dilutive.

The Company's common stock equivalents, at December 31, consisted of the following and have not been included in the calculation because they are anti-dilutive:

	2014		2013
Convertible Notes Outstanding		4,106,296		6,212,191
Warrants Outstanding		22,371,795		11,049,842
Stock Options Outstanding		9,814,999		8,375,000
Common Stock to be Issued		300,000		-
Preferred Stock Outstanding		15,100,000		15,100,000
Dividends on Preferred Stock Outstanding		6,145,374		5,095,374
Total Common Stock Equivalents		57,838,464		45,832,407

F-26

 COPSYNC, INC.

Notes to Financial Statements

 NOTE 14 -    OUTSTANDING WARRANTS

For the twelve months period ended December 31 2014, warrant activity consisted of the following:

1)    The Company issued warrants to purchase 4,378,620 shares of common stock in connection with the issuance of 21,243,100 shares of the Company’s common stock pursuant to new investments, for cash totaling $2,084,115, which is net of $40,195 in finder fees and related miscellaneous costs.  The term of the warrants is four years from the date of issuance, with a range of exercise prices between $0.10 and $0.45 per share of common stock. Normally, the warrant coverage is twenty percent of the number of shares of stock issued.  This is true for all of the above warrants issued except for two warrants: one, involving an individual investment for $500,000 made in exchange for 5,000,000 shares of common stock and warrants to purchase 1,250,000 shares of common stock (or twenty-five percent warrant coverage), with an exercise price of $0.20 per share and an optional, cashless exercise feature; and two, an individual investment in shares of the Company’s common stock for $120,000 where no warrants were issued.

  2)     The Company received deposits from two investors totaling $16,500 for the purchase of 165,000 shares of common stock and warrants to purchase 33,000 shares of common stock.  Most of these warrants will be issued in fiscal 2015 (See Note 12).

3) The Company issued four-year warrants to purchase 120,000 shares of the Company’s common stock (with an exercise price of $0.10 per share) in connection with the issuance of 600,000 shares of its common stock in exchange for $60,000 of services, $31,835 of which services had been performed and $28,165 of which had yet to be performed.  This non-cash transaction was recorded on the Company’s balance sheet as a debit to accounts payable and accrued expense for $31,835, representing outstanding vendor invoices to be paid, and prepaid expenses for $28,165, representing the value of services to be performed by the vendor.  Those services were subsequently performed in fiscal year 2014.  The term of the warrants is four years from date of issuance.  Under the provisions of ASC 718, no value was assigned to the warrants granted during the nine month period, thus no additional expense was recorded under the Black-Scholes option pricing model because the warrants were issued as a unit with common stock shares.

4)   The Company issued warrants to purchase an aggregate of 7,258,333 shares of the Company’s common stock, at a price of $0.10 per share, to two outside consultants following their meeting specific performance metrics associated with growing the Company’s book of new business and/or securing additional capital or debt funding.  Each warrant specifies the individual tranches related to the specific metrics that must be achieved in order for the underlying shares to become exercisable.  The term of the two warrants is five years.  No valuation is determined for the respective tranches until the associated performance metric is achieved.  Warrants to purchase a total of 503,333 shares of common stock associated with these two agreements became exercisable during fiscal year 2014 as a result of one warrant holder achieving two specified metrics.  The fair value of the exercisable warrants totaled $42,231 and was determined by using the Black Scholes valuation method.  This non-cash expense was recorded as other expense in the Company’s Statement of Operations.

5) On October 1, 2014, the Company executed a six-month consulting agreement with a third party service provider for corporate advisory services.  As a part of the agreement, the Company issued 200,000 warrants to purchase shares of the Company’s common stock at price of $0.10 per share.  The term of warrant is five years from the date of issuance.  The fair value of the exercisable warrants totaled $83,673, determined by using the Black Scholes valuation method.  This non-cash expense was recorded as general and administrative expense in the Company’s Statement of Operations.

6) Also on October 1, 2014, the Company executed another six-month consulting agreement with a third party service provider for general financial advisory and investment banker services.  As a part of the agreement, the Company issued 200,000 warrants to purchase shares of the Company’s common stock at price of $0.10 per share.  The term of warrant is five years from the date of issuance.  The fair value of the exercisable warrants totaled $83,673, determined by using the Black Scholes valuation method.  This non-cash expense was recorded as general and administrative expense in the Company’s Statement of Operations.

F-27

 COPSYNC, INC.

Notes to Financial Statements

  7)     A number of warrant holders elected to exercise warrants to purchase a total of 460,000 shares of the Company’s common stock at a weighted average exercise price of $0.15 per share of stock, or for a total value of $68,000.  The Company issued 340,000 of those shares for an aggregate purchase price of $44,000, during the period (See Note 11).  The remaining 120,000 shares of common stock will not be issued for a period of six months from the date of exercise at the request of the two warrant holders.  These shares are being reported as an element of common stock to be issued (See Note 12).  

8)   Warrants to purchase a total of 475,000 shares of common stock, held by two warrant holders, expired during the fiscal year 2014.

For the twelve months period ended December 31 2013, warrant activity consisted of the following:

1)     The 707,860 warrants issued in the 2013 private placement, as well as the 3,490,000 warrants issued in the 2012 private   placement, all have an exercise price of $0.10 per share of common stock, and expire four years following the date of issuance.  The exercise price and the number of shares of common stock purchasable upon exercise of the warrants are subject to adjustment (under a formula set forth in the warrants) upon the occurrence of certain events, including, but not limited to: (i) stock dividends, stock splits or reverse stock splits; (ii) the payment of dividends on the common stock payable in shares of common stock or securities convertible into common stock; (iii) a recapitalization, reorganization or reclassification involving the common stock, or a consolidation or merger of the Company; or (iv) a liquidation or dissolution of the Company. 

2)     During 2013, the Company’s Board of Directors approved a four year extension to the life of the warrants to purchase 3,000,000 shares of common stock issued in the 2009 private placement of its Series B Preferred Stock (See Note 10).  These warrants were scheduled to expire in October 2013.  The Company determined the fair market value of this extension to be $120,000 using the Black-Scholes valuation method.  This determined cost is reported in the Company’s Statement of Operations for 2013.

A summary of the status of the Company’s outstanding warrants and the changes during 2013 and 2014 is as follows:

				Weighted Average
	Shares			Exercise Price
Outstanding, January 1, 2013		10,341,982		$	0.17
Granted		707,860		$	0.10
Cancelled		-		$	-
Expired		-		$	-
Outstanding, December 31, 2013		11,049,842		$	0.16
Exercisable, December 31, 2013		11,049,842		$	0.16
Granted		12,256,953		$	0.15
Cancelled		(475,000	)	$	0.19
Expired		(460,000	)	$	0.15
Outstanding, December 31, 2014		22,371,795		$	0.16
Exercisable, December 31, 2014		15,616,795		$	0.18

F-28

 COPSYNC, INC.

Notes to Financial Statements

The following is a summary of outstanding and exercisable warrants at December 31, 2014:

		Outstanding						Exercisable
Exercise Prices		Weighted Average Number Outstanding at 12/31/14		Remaining Life (in yrs.)		Weighted Average Exercise Price		Number Exercisable at 12/31/14		Weighted Average Exercise Price
$	0.10		11,997,593		3.28	$	0.10		5,242,593	$	0.10
$	0.11 - 0.19		414,000		3.47	$	0.15		414,000	$	0.15
	0.20 - 0.45		9,960,202		2.46		0.22		9,960,202		0.22
$	0.10 - 0.45		22,371,795		2.92	$	0.15		15,616,795	$	0.18

NOTE 15 -     EMPLOYEE OPTIONS 

At December 31, 2014, the Company has a stock-based compensation plan, the 2009 Long Term Incentive Plan.

The 2009 Long Term Incentive Plan was adopted by the Board of Directors on September 2, 2009.  Under the 2009 Long Term Incentive Plan, the Company can grant nonqualified options to employees, officers, outside directors and consultants of the Company or incentive stock options to employees of the Company. There are 10,000,000 shares of common stock authorized for issuance under the 2009 Long Term Incentive Plan. In April 2014, the Board of Directors authorized an additional 10,000,000 shares under the 2009 Long Term Incentive Plan, which the Company plans to submit for approval of the Company’s shareholders.  The outstanding options have a term of ten years and vest primarily over periods ranging from three to five years. As of December 31, 2014, options to purchase 9,814,999 shares of the Company’s common stock were outstanding under the plan, of which options to purchase 7,523,323 shares were exercisable, with a weighted average exercise price of $0.09 per share.

For the twelve months period ended December 31, 2014, the Company granted options to purchase 2,475,000 shares of its common stock with a weighted average exercise price of $0.13 per share.  Of the total options granted, options to purchase 75,000 shares were granted to three outside directors, each of whom received a set number of options as part of their annual compensation for serving on the Company’s Board of Directors, and options to purchase 2,400,000 shares were granted four members of executive management.  The total value of these stock options, utilizing the Black Scholes valuation method, was $311,490.  The term of the stock options is ten years, with three year vesting, with 33% vesting on the one-year anniversary of the grant date, and the remainder vesting ratably over the next eight quarters. 

Share-based compensation expense is based on the estimated grant date fair value of the portion of share-based payment awards that are ultimately expected to vest during the period.  The grant date fair value of stock-based awards to employees and directors is calculated using the Black-Scholes option pricing model.  Historically and through the third quarter of 2013, forfeitures of share-based payment awards were reported when actual forfeitures occur.  On a prospective basis, beginning in the fourth quarter of 2013, the Company applied an estimated forfeiture rate of twenty-three percent to new stock option grants.  Beginning with the fourth quarter of 2014, the estimated forfeiture rate was changed to twenty-six percent..

As of December 31, 2014 and 2013, the Company recorded $147,097 and $184,973 in share-based compensation expenses, respectively.

The cash flows from tax benefits for deductions in excess of the compensation costs recognized for share-based payment awards would be classified as financing cash flows.  Due to the Company’s loss position, there was no such tax benefits during the year ended December 31, 2014.

F-29

 COPSYNC, INC.

Notes to Financial Statements

The summary activity under the Company’s 2009 Long Term Incentive Plan is as follows:

	December 31, 2014									December 31, 2013
	Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life		Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life
Outstanding at beginning of period		8,375,000		$	0.09						8,815,000		$	0.09
Granted		2,475,000		$	0.13						450,000		$	0.10
Exercised		–		$	0.00					─			$	0.00
Forfeited/ Cancelled		(1,035,001	)	$	0.07						(890,000	)	$	0.08
Outstanding at period end		9,814,999		$	0.11	$	3,268,799		1.50		8,375,000		$	0.09	$	83,750		1.50
Options vested and exercisable at period end		7,523,323		$	0.09	$	2,708,396	─			6,057,494		$	0.09	$	60,575	─
Weighted average grant-date fair value of options granted during the period	$	0.27								$	0.10

The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2014:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Options Outstanding		Weighted Average Remaining Contractual  Life (in years)		Weighted Average Exercise Price		Number Outstanding		Weighted Average Exercise Price
$	0.00 – $ 0.08		2,500,000		5.84	$	0.08		2,312,500	$	0.08
$	0.09 – $ 0.39		7,314,999		6.68	$	0.09		5,210,823	$	0.10
			9,814,999						7,523,323

A summary of the status of the Company’s non-vested shares as of December 31, 2014 is as follows:

Non-vested Shares	Shares			Weighted Average Grant-Date Fair Value
Non-vested at January 1, 2014		2,317,506		$	0.09
Granted		2,475,000		$	0.27
Forfeited		(1,035,001	)	$	0.07
Vested		(1,465,829	)	$	0.13
Non-vested		2,291,676		$	0.20

F-30

 COPSYNC, INC.

Notes to Financial Statements

As of December 31, 2014, there was approximately $448,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements.  The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.76 years.  The intrinsic value of options vesting in year 2014 was approximately $475,000.

During 2014, the Company estimated the fair value of the stock options based on the following weighted average assumptions:

Risk-free interest rate		2.07%	-	3.00	%
Expected life	10 years
Expected volatility		120%	-	123	%
Dividend yield		0.0			%

During 2013, the Company estimated the fair value of the stock options based on the following weighted average assumptions:

Risk-free interest rate		1.73%	-	2.53	%
Expected life	10 years
Expected volatility		126%	-	131	%
Dividend yield		0.0			%

NOTE 16 -     COMMITMENTS AND CONTINGENCIES

Consulting Agreements

On July 21, 2014, the Company executed a six-month consulting agreement with a third party service provider for corporate advisory services.  After the six month period is over, the agreement may be extended for an additional six-month period, provided either party may cancel the agreement upon the submission of a ten day written notice.  One element of compensation to the consultant is a $7,500 monthly payment.  Another element is the Company’s issuance of warrants to purchase 300,000 shares of the Company’s common stock (see Note 14).  Additionally, the agreement contains elements involving the Company’s indemnification of the consultant and future rights belonging to the consultant should the Company conduct future business with a party originally introduced to the Company by the consultant.

On October 6, 2014, the Company executed a six-month consulting agreement with a third party service provider for general financial advisory and investment banker services.  After the six month period is over, either party may cancel the agreement upon the submission of a thirty day written notice.  One element of compensation to the consultant is a $5,000 non-refundable monthly payment.  The Company has also agreed to reimburse the consultant for reasonable travel and other out-of-pocket expenses.  Another element is the Company’s issuance of 2,375,000 stock grant (see Note 11).  Additionally, the agreement contains elements involving the Company’s indemnification of the consultant and future rights belonging to the consultant should the company become involved in a public offering.

Also on October 6, 2014, the Company executed a six-month consulting agreement with a third party service provider for advisory services.  The agreement called for compensation consisting of the Company issuing 125,000 shares of its common stock to the provider.  The agreement may be extended upon mutual agreement between the two parties.

On November 1, 2014, the Company executed a six-month consulting agreement with a third party service provider for promotion and sales of the Company’s COPsync911 and VidTac products in certain markets.  The agreement may be extended upon mutual agreement between the two parties.  One element of compensation to the consultant is a $10,000 monthly fee, with $5,000 being paid each month and the balance being deferred until the end of the initial six month period, at which time the cumulative deferral will be paid.  The Company has also agreed to reimburse the consult for reasonable travel and other out-of-pocket expenses.

Significant Purchase Orders

In July 2014, the Company placed a demand purchase order valued at $433,000 with the contract manufacturer for finished units to be delivered ratably throughout the year and into early fiscal year 2015 (see Note 4).  The remaining commitment value for this purchase order at December 31 2014, $155,925.

F-31

 COPSYNC, INC.

Notes to Financial Statements

In December 2014, the Company placed a demand purchase order for $433,000 with its contract manufacturer for VidTac finished units to be delivered ratably in fiscal year 2015, beginning in May 2015 (see Note 4).  This order is to cover forecasted demand for the product during the delivery period, as well as to accommodate the long-lead times required for procuring certain components from off-shore manufacturers.  The payment terms for this purchase order required a 10% down-payment at the time of order placement, followed by payment terms of Net 30 days from invoice date once the units are delivered to finished goods inventory.

Office Leases

At December 31, 2014, our principal properties consisted of a leased facility in the Dallas area (approximately 7,000 square feet), where our research and development, sales and marketing, finance and administrative functions are located and a leased facility in New Braunfels, Texas (approximately 2,500 square feet), where our customer support and operational activities are located.  The Dallas area location is subject to a thirty-month sublease expiring on August 31, 2015.  We terminated our previous month-to-month lease for office space located in Canyon Lake, Texas in June 2014, and moved that office to New Braunfels.  We believe our present facilities are adequate for our foreseeable needs, and are currently reviewing lease renewal options for the Dallas facility.

The sublease for the Dallas area facility is for 30 months, effective March 1, 2013, and calls for monthly lease payments of $7,502, with the first month’s rent being waived. 

The lease for the New Braunfels facility is for fifty-one months, effective June 6, 2014, and calls for initial monthly lease payments of $2,906 with the first month’s rent being waived. At each yearly anniversary, the monthly payment increases approximately 7%.

Future annual lease payments as of December 31, 2013 are as follows:

	Total		2015			2016-2017		2018-2019	After 2019
Operating Lease Obligations	$	192,868	$	95,927	$	79,297	$	17,644	$	-

Litigation

The Company is not currently involved in any material legal proceedings.  From time-to-time the Company anticipates that it will be involved in legal proceedings, claims, and litigation arising in the ordinary course of its business and otherwise.  The ultimate costs to resolve any such matters could have a material adverse effect on the Company’s financial statements.  The Company could be forced to incur material expenses with respect to these legal proceedings and, in the event there is an outcome in any that is adverse to the Company, its financial position and prospects could be harmed.

NOTE 17 -     RELATED PARTY TRANSACTIONS

On February 28, 2014, the Company executed a $25,000, sixty-day promissory note payable to its chief executive officer for a loan in the same amount.  The note bears interest at 3.0% per annum, which is due upon maturity of the promissory note.  In the fourth quarter of 2014, the Company repaid $17,500 of the principal amount of the note, leaving an outstanding balance of $7,500.  The Company’s chief executive officer has elected to extend the maturity date of this note to April 1, 2015.

In August 2013, the Company’s chief executive officer loaned the Company $40,000, which was evidenced by a convertible promissory note bearing interest at 3% annually.  The note was originally due March 31, 2014; however, the due date has been extended to March 31, 2016.  The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. 

In November 2013, the spouse of the Company’s chief executive officer loaned the Company $60,000, which was evidenced by a demand promissory note bearing interest at 3% annually.  The demand note was replaced shortly thereafter with a convertible promissory note totaling $60,000, also bearing 3% annual interest and originally due March 31, 2014; however, the due date has been extended to March 31, 2016. The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. 

F-32

 COPSYNC, INC.

Notes to Financial Statements

In November 2013, the Company executed two short-term notes payable in the aggregate of $313,477 with an equipment financing company owned by one of the Company’s outside directors for the specific purpose of financing the purchase of certain third-party equipment to be sold to contracted customers.  Both notes were to mature in May 2014, bear interest at 16% annually, are payable upon maturity, and are collateralized by the third-party equipment being procured.  The maturity dates for both notes have been extended until June 25, 2015.

In December 2012, the Company’s chief executive officer loaned the Company $120,000, which was evidenced by a demand promissory note bearing interest at 3% annually. The demand note, including accrued interest, was replaced with a convertible promissory note totaling $120,534, also bearing 3% annual interest and due one year from its issuance. The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share.  During 2013, the Company’s chief executive officer agreed to extend the due date for this convertible promissory note to March 14, 2014.  The Company’s chief executive officer subsequently extended the due date to March 31, 2016.

NOTE 18 -     SUBSEQUENT EVENTS

In October 2014, our Board of Directors approved a funding initiative for an additional $750,000 to fund a software development effort for feature and function enhancements to enable the COPsync Network and COPsync911 threat alert system more readily to scale nationwide.  As of the date of this report, $450,000 has been raised, all in the first quarter of 2015.  The investment security is a three-year convertible promissory note, which bears interest at the rate of two percent simple interest per year, paid in cash.  The principal of the note converts into shares of the Company’s common stock at the rate of $0.22 per share.  The promissory note may be prepaid by the Company under certain conditions.

The Company has outstanding warrants to purchase an aggregate of 3,155,582 shares of its common stock at a price of $0.20 per share, having an aggregate exercise price of $631,116, that expire in 2015.  As of the date of this report, 360,000 of those warrants have been exercised for a total exercised price of $64,000, all in the first quarter of 2015.

F-33

EX-10.4

Exhibit 10.4

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (“1933 ACT”) AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THIS NOTE AND APPLICABLE STATE SECURITIES LAWS OR THE DELIVERY OF AN OPINION OF COUNSEL ACCEPTABLE TO COPSYNC, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

ANY SHARES OF STOCK ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS.  THE SHARES OF STOCK ISSUABLE UPON THE CONVERSION HEREOF MAY NOT BE SOLD OR OFFERED FOR SALE, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL THE SIX MONTH ANNIVERSARY OF THE DATE HEREOF (OR 12 MONTHS IN THE CASE OF AFFILIATES) AND THEN ONLY IF THE COMPANY IS CURRENT IN ITS REPORTING REQUIREMENTS UNDER THE SECURITIES EXCHANGE ACT OF 1934 ACT (THE “34 ACT”).

COPSYNC, INC. CONVERTIBLE PROMISSORY NOTE

__________ ___, 2015

Note No. 2015 – 00__    $_________

This Convertible Promissory Note (this Note") has been issued pursuant to that certain Subscription Agreement (the "Subscription Agreement") accepted by the Company in  ___________ 2015, by and between COPsync, Inc., a Delaware corporation ("COPsync"), and the registered holder hereof,  _______________________ (or such holder's successor-in-interest) (the “Payee”).

FOR VALUE RECEIVED, COPsync hereby unconditionally promises to pay to the Payee, at the Payee’s address as set forth in the Subscription Agreement or such other address given to COPsync by the Payee, the principal sum of _______________________($__________), in lawful money of the United States of America, together with interest on the unpaid principal balance from day-to-day remaining, computed from the date hereof until payment in full of the principal sum at the rate per annum of two percent (2%) simple interest (based on a 365-day year or a 366-day year, as the case may be, and charged on the basis of actual days elapsed) in accordance with the following provisions.

1.Interest; Payment. Accrued interest shall be due and payable on each succeeding ____, _____, _____, and ______ while this Note is outstanding. The principal of and accrued and unpaid interest upon this Note shall be due and payable on the three year anniversary of the date hereof, unless earlier converted pursuant to section 3.

2.Application of Payment.  Payments made to Payee hereunder shall be applied first to accrued and unpaid interest on the principal amount of this Note and then to the outstanding principal amount of this Note.

3.Conversion.  All or any portion of the principal amount then owing under this Note may be converted at the option of Payee into shares of Common Stock by providing a conversion notice to COPsync at the address stated below. The number of shares of  Common Stock issuable upon conversion

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of this Note shall be the number derived by dividing the amount of the unpaid principal under this Note proposed to be converted into shares of Common Stock by $0.22 (TWENTY-TWO CENTS) (the “Conversion Price”). The shares of Common Stock issuable to Payee pursuant to this Paragraph 3 shall be referred to as the "Shares." No fractional share shall be issued upon such conversion. In lieu of any such fractional share that would otherwise be issuable upon such conversion, COPsync shall pay to Payee a cash adjustment in respect thereof in an amount equal to the same price attributable to the fractional share.  Accrued interest shall also be paid in cash.   COPsync shall promptly issue to Payee the Shares to which Payee is entitled as a result of the conversion.  The Shares issuable upon conversion of this Note may be publicly sold by non-affiliates as long as more than six months has elapsed since the issue date of the Note and COPsync is current in its reporting requirements under the 1934 Act.  Upon the conversion or payment of the entire amount of principal and interest owing under this Note, Payee shall surrender this Note to COPsync marked "PAID IN FULL."

The Conversion Price shall be equitably adjusted in the event the Shares shall be subdivided (via a stock split, stock dividend or otherwise) or in the event the Shares shall be combined (via a reverse stock split, reclassification or otherwise).

Example:  Assume the amount of the principal under this Note proposed to be converted to Common Stock shares is TWENTY FIVE THOUSAND DOLLARS ($25,000.00). The number of Common Stock shares issuable to Payee upon conversion of this Note shall be 113,636 shares ($25,000.00 ÷ $0.22).

4.Waivers.  COPsync waives demand for payment, presentment, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate, and agrees that its liability under this Note shall not be affected by any renewal or extension in the time of payment hereof or any other indulgences and hereby consents to any and all renewals, extensions, indulgences, releases or changes.

No waiver by Payee of any of its rights or remedies hereunder shall be considered a waiver of any other or subsequent right or remedy of Payee; no delay or omission in the exercise or enforcement by Payee of any such rights or remedies shall be construed as a waiver thereof; and no exercise or enforcement of any such rights or remedies shall be held to exhaust any such right or remedy.

5. Events of Default.  An “Event of Default” shall exist hereunder if any one or more of the following events shall occur and be continuing:

(a) COPsync shall fail or refuse to pay when due any principal of, or interest upon, this Note when due and payable and such failure or refusal continues more than 5 business days after the due date;

(b) COPsync shall (i) apply for or consent to the appointment of a receiver, trustee, custodian, intervenor or liquidator of COPsync or of all or a substantial part of its assets, (ii) file a voluntary petition in bankruptcy, admit in writing that it is unable to pay its debts as they become due or generally not pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) file a petition or answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy or insolvency laws, (v) file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding, or (vi) take corporate action for the purpose of effecting any of the foregoing;

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(c) an involuntary petition or complaint shall be filed against COPsync seeking bankruptcy or reorganization or the appointment of a receiver, custodian, trustee, intervenor or liquidator of COPsync, or of all or substantially all of its assets, and such petition or complaint shall not have been dismissed within thirty (30) days of the filing thereof; or an order, order for relief, judgment or decree shall be entered by any court of competent jurisdiction or other competent authority approving a petition or complaint seeking reorganization of COPsync or appointing a receiver, custodian, trustee, intervenor or liquidator of COPsync, or of all or substantially all of its assets; or

(d) the failure to have discharged within a period of ten (10) days after the commencement thereof any attachment, sequestration or similar proceedings against any of COPsync’s assets.

6.Remedies.  Upon the occurrence and continuance of any Event of Default, Payee may, at its option, declare the entire unpaid balance of principal and accrued interest on this Note to be immediately due and payable and exercise any and all remedies permitted by applicable law, provided, however, upon the occurrence of any of the Events of Default described in items 5(b) or 5(c) above, the entire unpaid balance of principal and accrued interest upon this Note shall, without any action by Payee, immediately become due and payable without demand for payment, presentment, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate or any other notice, all of which are expressly waived by COPsync.

7.Prepayments.  If the Prepayment Condition (defined below) is satisfied, COPsync may prepay this Note, without penalty, in whole or in part, at any time, by giving Payee a written prepayment notice of the amount to be prepaid and the proposed prepayment date at least ten business days prior to the prepayment date. Payee shall have the right to convert this Note following receipt of the prepayment notice by giving the conversion notice (see Paragraph 3 above) prior to the prepayment date. “Prepayment Condition” shall mean that the average of the closing prices of the COPsync common stock, as reported by the trading market where the COPsync common stock is then listed, for the 20 trading days prior to the prepayment date exceeds the Conversion Price.

8.Usury Savings Clause.  Any provision herein, in any other document securing the payment of this Note, or in any other agreement or commitment between COPsync and Payee, whether written or oral, expressed or implied, to the contrary notwithstanding, Payee shall never be entitled to charge, receive, or collect, nor shall amounts received hereunder be credited as interest so that Payee shall be paid, a sum greater than interest at the maximum non-usurious interest rate, if any, that at any time may be contracted for, charged, received, or collected on the indebtedness evidenced by this Note under applicable law (the “Maximum Rate”).  It is the intention of the parties that this Note, and all other instruments securing the payment of this Note or executed or delivered in connection herewith, shall comply with applicable law.  If Payee ever contracts for, charges, receives, or collects, anything of value which is deemed to be interest under applicable law, and if the occurrence of any circumstance or contingency, whether acceleration of maturity of this Note, delay in advancing proceeds of this Note; or other event, should cause such interest to exceed interest at the Maximum Rate, any such excess amount shall be applied to the reduction of the unpaid principal balance of this Note or any other indebtedness owed to Payee by COPsync, and if this Note and such other indebtedness is paid in full, any remaining excess shall be paid to COPsync.  In determining whether or not the interest hereon exceeds interest at the Maximum Rate, the total amount of interest shall be spread throughout the entire term of this Note until its payment in full in a manner which will cause the interest rate on this Note not to exceed the Maximum Rate.

9.Notice.  All notices to be given hereunder shall be in writing and shall be deemed given at

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the earlier of when actually received or five days after being deposited in the United States mails, return receipt requested, (a) to Payee at the address of Payee set forth in the Subscription Agreement executed by Payee in connection with this Note or (b) to COPsync at P.O. Box 802108, Dallas, Texas 75380-2108.  Either party may change that party’s above listed notice information by giving written notice of the changed information to the other party at least ten days prior to such change.

10.Governing law.  This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Texas excluding (except for matters governed by the Uniform Commercial Code as in effect in the State of Texas from time to time) choice of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

11.Collection. If this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceedings at law or in equity or in bankruptcy, receivership or other court proceedings, COPsync promises to pay all costs and expenses of collection including, but not limited to, court costs and the reasonable attorneys’ fees of the holder hereof.

12.Series of Notes.  This note is one of a series of convertible promissory notes of COPsync (the “Offering Notes”) evidencing indebtedness incurred by COPsync in an offering of the Offering Notes. This Note and the other Offering Notes shall rank pari passu as to the holders of this Note and the other Offering Notes, and payments, whether principal, interest or otherwise with respect hereto and thereto, shall be made pro-rata among the holder(s) of this Note and the holders of other Offering Notes based upon the aggregate unpaid principal amount of this Note and the other Offering Notes. By accepting this Note, each holder of this note agrees that if any holder of this Note or of any other Offering Note obtains any payments (whether voluntary, involuntary, by prepayment, set-off or otherwise) of the principal or interest on this Note or any other Offering Note in excess of such holder’s pro rata share of payments received by all holders of the Offering Notes, such holder shall purchase from the other holders of this Note and the other Offering Notes such participation in such notes held by them as is necessary to cause all such holders to share the excess payment ratably among each of them as provided in this Paragraph .

COPSYNC, INC.

Barry W. Wilson

Chief Financial Officer

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Page 4

EX-10.15

Exhibit 10.15

SUBLEASE AGREEMENT

THIS SUBLEASE AGREEMENT (the “Sublease”) is entered into as of the 28 day of January, 2013, by and between AIR METHODS CORPORATION, a Delaware corporation (“Sublandlord”), successor by merger to OMNIFLIGHT HELICOPTERS, INC., a Texas corporation and COPSYNC, INC., a Delaware corporation (“Subtenant").

W I T N E S S E T H :

WHEREAS, Addison Tower Investment Company LLC, as landlord/lessor (11Landlord"), as successor in interest to Urdang/Griffin-Addison, L.P., as the original landlord, and Sublandlord, as tenant/lessee, are parties to an Office Lease dated May-20, 2005 (the "Original Lease''), as amended by Amendment No. 1 dated August _, 2008 (the "First Amendment"), Amendment No. 2 dated October, 2008 (the "Second Amendment") and Amendment No. 3 dated October 3, 2009 (the "Third Amendment') a copy of which lease and amendments is set forth on Exhibit “A" attached hereto and incorporated herein by reference for all purposes (as amended, the "Lease”), pursuant to which Landlord leases to Sublandlord certain improved premises known and designated as Suite 250, 400, 425 and a portion of the third floor (the "Premises"), 16415 Addison Road, Addison, Texas 75001, as more fully set forth in the Lease; and

WHEREAS, Sublandlord desires to sublet to Subtenant a portion of the Premises (the

“Subleased Premises"), comprising approximately 7,053 net rentable square feet of the space contained in the Premises, as such Subleased Premises are further described and outlined on Exhibit “B”, attached hereto and incorporated herein by reference for all purposes;

NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in further consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

1.           Sublease.  Sublandlord hereby rents and sublets the Subleased Premises to Subtenant, to have and to hold the same unto Subtenant, its successors and assigns from the date hereof for the term of this Sublease, subject to the terms and provisions hereof. Subtenant shall hold the Subleased Premises pursuant and subject to the terms, conditions, covenants and agreements contained in the Lease. Subtenant hereby expressly assumes and agrees to keep, observe, perform and be bound by all of the conditions, covenants, and agreements on the part of Sublandlord to be kept, observed and performed pursuant to the Lease. Except as otherwise provided herein, all of the terms and provisions of the Lease which are applicable to or binding upon Sublandlord, as tenant/lessee thereunder, shall also be applicable to or binding upon Subtenant in the same manner as if such terms and provisions had been set forth in full herein. All provisions of the Lease which inure to the benefit of the Landlord therein, shall inure to the benefit of and be enforceable by Sublandlord herein as against Subtenant. Sublandlord shall not be required to perform any obligations of Landlord under the Lease. Sublandlord shall not be in default hereunder and shall have no liability to Subtenant in connection with any default by Landlord under the Lease. Subtenant hereby acknowledges and agrees that the only services or other rights that Subtenant is entitled to under this Sublease are those to which Sublandlord is

SUBLEASE AGREEMENT - Page 1

entitled under the Lease. All terms having their initial letters capitalized and not defined herein shall have the meanings set forth in the Lease. If any conflict exists between this Sublease and the Lease, the Lease shall govern and control. Notwithstanding any provision contained in the Lease to the contrary, the following shall apply with respect to the Subleased Premises:

(a)           Term: The term (the "Term") of this Sublease shall commence on the later to occur of the date on which the Landlord Consent (hereinafter defined) is executed and delivered by Landlord to Sublandlord or February 28, 2013 (the ,Commencement Date") and shall expire August 31, 2015, unless earlier terminated by operation of law, the terms of the Lease or this Sublease. The Term of this Sublease shall not be extended by, nor shall Subtenant be entitled to the benefit of, any extension or renewal of the Lease pursuant to the terms thereof.

(b)           Rent: Subtenant shall pay to Sublandlord as base rent under this Sublease the sum of $7,208.00 per month from 4/1/2013-3/30/2014. The rent from 4/1/2014 through the balance of the term shall be $7501.87. Subtenant shall pay to SubJandlord on the date of execution hereof a payment of base rent in the amount of $7173.00, representing the base rent for April, 2013. Subtenant shall pay all such amounts to Sublandlord on a monthly basis in advance of the first day of each month, which amounts shall be prorated in the event of a partial month. Notwithstanding, rent for 3/1/13 - 3/30/13 shall be abated.

(c)           Security Deposit: $7,208.00

(e)           Parking: Subtenant shall be entitled to use twenty eight (28) of the unreserved parking spaces in the Building's structured garage at no charge that Sublandlord is entitled to use pursuant to the terms of the Lease. Sublandlord shall be entitled to designate the location of any such parking spaces.

(f)           Signage: Subject to receipt of approval from Landlord, Subtenant, at Subtenant's sole cost and expense, shall be entitled to install non exclusive building standard signage at suite entry.

(g)           Provisions Excluded: The following provisions of the Lease shall not apply to and are hereby specifically excluded from the operation of this Sublease:

Original Lease:            Section 3.A., the first sentence of Section 3.B., Sections 4.B., 4.C., 4.D., 4.E., 4.F., 4.G., 4.H, Exhibit D, Exhibit F and Exhibit G

First Amendment:       Sections 6, 7, 8, 9 and Exhibit C

Second Amendment:  Sections 4, 5, 6, 7and Exhibit C

Third Amendment:     Sections 5, 6, 8, 9, 10, 11 and Exhibit B

2.           Possession of Subleased Premises.  SUBTENANT ACKNOWLEDGES AND AGREES THAT SUBTENANT HAS INSPECTED THE SUBLEASED PREMISES, THAT

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SUBLANDLORD MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE SUBLEASED PREMISES OR ANY INFORMATION DELIVERED BY SUBLANDLORD TO SUBTENANT IN CONNECTION WITH THE SUBLEASED PREMISES AND THAT SUBLANDLORD SHALLNOT BE REQUIRED TO MAKE ANY REPAIRS, ALTERATIONS, ADDITIONS OR IMPROVEMENTS IN OR TO THE SUBLEASED PREMISES, EVEN IF THE SUBLEASED PREMISES DO NOT CURRENTLY COMPLY WITH THE PROVISIONS OF THE LEASE.  SUBTENANT IS LEASING AND ACCEPTS THE SUBLEASED PREMISES "AS IS” WITH ALL FAULTS AND DEFECTS, KNOWN OR UNKNOWN, LATENTOR PATENT, WITHOUTANY REPRESENTATION OR WARRANTY, ORAL OR WRITTEN, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, HABITABILITY, MERCHANTABILITY, SUITABILITY OR QUALITY, AND IN SOLE RELIANCE ON SUBTENANT'S OWN INDEPENDENT INSPECTION, INQUIRY AND/OR INVESTIGATION. SPECIFICALLY, SUBLANDLORD IS NOT MAKING AND SPECIFICALLY DISCLAIMS ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED WITH RESPECT TO THE SUBLEASED PREMISES.   Notwithstanding, SUBLANDLORD will be obligated to perform the construction "Work" described in Exhibit B at SUBLANDLORD’s sole expense prior to the Commencement Date.

3.           Rent.  Subtenant agrees to pay during the Sublease Term to Sublandlord, without any demand, setoff or deduction whatsoever, the Base Rental, additional rental and all such other sums of money as shall become due under this Sublease or any exhibits or addenda to this Sublease, all of which are sometimes herein collectively called "rent", for the nonpayment of which  Sublandlord shall be entitled to exercise all such rights and remedies as are herein provided in the case of the nonpayment of Base Rental. The obligation of Subtenant to pay rent is an independent covenant and no act or circumstance whatsoever, whether such act or circumstance constitutes a breach of covenant by Sublandlord or not, shall release Subtenant from the obligation to pay rent hereunder. Subtenant shall pay the monthly installment of Base Rental and any additional rent attributable to the first month of the Term to Sublandlord simultaneously with Subtenant’s execution of this Sublease, prorated based on the number of days in the first calendar month.

4.           Security Deposit.  Subtenant shall deposit the Security Deposit with Sublandlord upon execution of this Sublease.  The Security Deposit shall be held by Sublandlord without liability for interest and as security for the performance by Subtenant of Subtenant’s covenants and obligations under this Sublease. The Security Deposit shall not be considered an advance payment of rental or a measure of Sublandlord's damages in case of default by Subtenant. Sublandlord may commingle the Security Deposit with Sublandlord's other funds.  Sublandlord may, from time to time, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any arrearages of rent or to satisfy any other covenant or obligation of Subtenant hereunder, or to compensate Sublandlord for any other loss or damage which Sublandlord may suffer by reason of any default by Subtenant. Following any such application of the Security Deposit, Subtenant shall pay to Sublandlord on demand the amount so applied in order to restore the Security Deposit to its original amount.  If Subtenant is not in default beyond any applicable cure period at the termination of the Sublease, and has complied with all of the provisions of this Sublease to be performed by Subtenant, including surrender of the Subleased Premises in accordance with the provisions hereof, the balance of the Security

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Deposit remaining after such termination shall be returned by Sublandlord to Subtenant within thirty (30) days from the Lease Expiration date on August 31, 2015. Subtenant will not assign or encumber Subtenant's interest in the Security Deposit, and neither Sublandlord nor Sublandlord's  successors  or assigns  will  be  bound  by  any  such attempted  assignment  or encumbrance of the Security Deposit.  In the event of a sale of the Subleased Premises, or a leasing of the Building of which the Subleased Premises form a part, or a transfer by Sublandlord of its interests under this Sublease, Sublandlord shall have the right to transfer the Security Deposit to the purchaser or owner of this Sublease, in which event, Sublandlord shall thereupon be released from all liability for the return of the Security Deposit to Subtenant and Subtenant agrees to look solely to the new purchaser or owner for the return of the Security Deposit so long as the aforementioned purchaser or owner accepts this obligation in writing. As security for the performance of its obligations under this Sublease, Subtenant hereby grants a security interest to Sublandlord in the Security Deposit in accordance with the provisions of the Uniform Commercial Code as in effect in the State of Texas, and agrees that Sublandlord shall be entitled to exercise all remedies available to a secured party thereunder with respect to the Security Deposit.

5.           Use.  Subtenant shall use the Subleased Premises only for the uses and purposes permitted under the Lease and for no other use or purpose.  Subtenant shall not do or suffer anything to be done upon the Subleased Premises which shall cause an injury to the Subleased Premises, or violate any zoning, building, health, safety or other  code or ordinance  of  any federal, state or local unit of government which has jurisdiction  over the Subleased Premises and Subtenant, at  its  sole expense, shall comply with, and shall use and occupy the Subleased Premises in compliance with, (i) all laws applicable  to the Subleased Premises, including, without limitation, the Americans With Disabilities Act, and all orders, judgments, ordinances, regulations, codes, directives, permits and licenses, now or hereafter applicable to the Subleased Premises (collectively, "Legal Requirements"); (ii) all easements, covenants and restrictions now or hereafter applicable to  the Subleased Premises; and  (iii)  the terms of the Lease (with subparagraphs  (i), (ii) and (iii) collectively called "Applicable Laws"). The Subleased Premises shall not be used as a place of public accommodation under the Americans with Disabilities Act or similar state statutes or local ordinances or any regulations promulgated thereunder, all as may be amended from time to time.  Subtenant shall, at its expense, make any alterations  or modifications, within the Subleased Premises that are required by Legal Requirements, subject to the  requirement of obtaining Sublandlord's  prior written approval and consent to same.  Subtenant shall hold Sublandlord harmless against any and all costs, expenses, losses or damages incurred, suffered, or imposed on Sublandlord as a result of any use of the Subleased Premises by Subtenant in violation of any such laws or the terms of the Lease. Notwithstanding, Sublandlord represents that the installation of the new entrance to the  Premises pursuant  to Exhibit B shall comply with Texas Accessibility  Standards  and the ADA as it pertains to the width of the entrance but will not include automatic openers or electronic locking mechanisms. Sublandlord warrants that all improvements or alterations to the Premises performed by Sublandlord comply with all applicable Texas Accessibility Standards and the ADA.

6.           Maintenance.  Subtenant shall maintain and keep the Subleased Premises in good repair and in a clean and orderly condition and shall perform all obligations of Sublandlord under the Lease related to the maintenance, repair and replacement of the Subleased Premises.

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7.           Taxes.  Subtenant shall pay to the applicable taxing authorities prior to delinquencies all taxes of any kind whatsoever becoming due with respect to the following (the "Sublease Taxes"): (a) Subtenant's personal property located in or about the Subleased Premises,

(b) any Rent payable by Subtenant to Sublandlord with respect to the Subleased Premises, or (c) Subtenant's use or occupancy of the Subleased Premises.  If any such Sublease Taxes are levied or assessed against Sublandlord or Sublandlord's property, and if Sublandlord elects to pay

same, or if the assessed value of the Sublandlord's property is increased by inclusion of any Sublease Taxes, and Sublandlord elects to pay the Sublease Taxes based upon such increase,

Subtenant shall pay such Sublease Taxes to Sublandlord within thirty (30) days. At Sublandlord's option, Subtenant shall pay the amount of Sublease Taxes to Sublandlord in lump sums within thirty (30) days after demand from Sublandlord or in monthly installments of the annual amount estimated by Sublandlord at the same time that monthly Rent is payable. If the total of Subtenant's monthly installments is less than the annual amount actually paid to Sublandlord, Subtenant shall pay the difference to Sublandlord within thirty (30) days after demand. If the total of Subtenant's monthly payments is greater than the annual amount actually paid to Sublandlord, then Sublandlord may apply such excess to the Rent next becoming due; provided, however, that any such excess at the end of the Term shall be paid to Subtenant after all amounts due Sublandlord have been paid in full.

8.           Utilities.

(a)    Sublandlord is not required to install meters or sub meters for same.

(b)    Subtenant will pay for all telephone and data charges incurred by Subtenant. All charges for heat, gas, electricity, water, sewer, and other utilities or assessments (collectively, "Utilities''), whether or not they are separately metered, shall be paid by Sublandlord. It is the intent of the Parties that all Utilities (other than telephone and data charges) will be included in the Base Rent paid by Subtenant to Sublandlord.

9.           Insurance. Subtenant will insure the Subleased Premises to the same extent that, and will procure and maintain such other insurance in connection therewith as, Sublandlord is required to maintain under the Lease, and will comply with the insurance requirements set forth in the Lease which are applicable to Sublandlord. It is agreed that any and all insurance required to be maintained by Subtenant pursuant to the terms of the Lease (as incorporated herein and assumed by Subtenant hereunder) must: (i) name Landlord and Sublandlord, and each leasehold mortgagee holding a leasehold mortgage on this Sublease or the Subleased Premises or any part thereof: as additional loss payees with respect to all insurance; (ii) contain waivers of subrogation applicable to each Sublandlord, each aforesaid mortgagee and Landlord; (iii) include a standard mortgage clause in favor of each aforesaid mortgagee; (iv) name Sublandlord, each aforesaid mortgagee, and Landlord as additional insureds with respect to with respect to liability insurance; and (v) require at least thirty (30) days' advance written notice to Sublandlord, Landlord, and any applicable mortgagee prior to the cancellation or modification of any such insurance. All insurance policies required to be maintained by Subtenant hereunder must be written by insurance companies reasonably satisfactory to Sublandlord and Landlord. True, correct and complete copies of all such insurance policies (or certificates thereof in form and content reasonable satisfactory to Sublandlord and Landlord hereunder have been obtained and paid form, must be provided to Sublandlord, Landlord and any applicable mortgagees concurrently with the execution of this Sublease and thereafter at least thirty (30) days prior to

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the expiration date of any then-existing policies.   Any proceeds received under such insurance shall be applied as provided in the Lease.

10.          Assignment and Subletting.  Subtenant shall not assign or sublease all or a portion of the Subleased Premises to any other party without obtaining the prior written consent of Sublandlord which consent .shall not be unreasonably withheld, conditioned or delayed. In the event that Subtenant attempts or purports to assign or sublease all or a part of the Subleased Premises to, or allow occupancy of any portion of the Subleased Premises by, any other party in violation of the terms of this section, such action shall constitute a default under the terms of this Sublease, entitling Sublandlord to exercise all remedies provided at law, in equity or under the Lease. Notwithstanding any assignment or subletting, Subtenant shall not be relieved of its obligations hereunder and a consent to one assignment or subletting shall not constitute a further waiver of the provisions of this Section.

11.          Waiver of Subrogation.  Notwithstanding anything in this Sublease to the contrary, Sublandlord and Subtenant each waive any and all rights to recover against the other, or against the officers, directors, shareholders, partners, joint venturers, employees, agents, customers, invitees or business visitors of such other party for any loss or damage to  such waiving party arising from any cause covered by any insurance required to be carried by the waiving party pursuant to the terms of this Sublease or any other insurance actually carried by such party,  EVEN  IF DUE  TO THE NEGLIGENCE  OF THE OTHER PARTY.  Sublandlord and Subtenant, from time to time, will cause the respective insurers to issue appropriate waiver of subrogation rights endorsements to all policies of insurance carried in connection with the Premises or the Subleased Premises or the contents of the Premises or the Subleased Premises. Subtenant agrees to cause all other occupants of the Subleased Premises claiming by, under or thorough Subtenant to execute and deliver to Sublandlord such a waiver of claims and to obtain such waiver of subrogation rights endorsements.

12.          Exculpation.  Subtenant hereby acknowledges and agrees that Sublandlord is not responsible for any repairs to the Subleased Premises, nor will Sublandlord, nor any of Sublandlord's partners, officers, directors, shareholders, agents, employees or representatives, be liable for any of the following: (a) any of the Landlord's obligations under the Lease; (b) any interruption in utilities or services to the Subleased Premises; (c) any loss of or damage to any property of Subtenant or of Subtenant's employees, agents, customers, guests or invitees (whether by theft or otherwise); (d) the failure of Landlord to perform any obligation of Landlord under the Lease; or (e) any damage or disturbance caused by others, EVEN IF DUE TO THE NEGLIGENCE OF SUBLANDLORD. Neither Sublandlord nor any of Sublandlord's partner's, officers, directors, shareholders, employees, agents or representatives has any personal liability under this Sublease.  The liability of Sublandlord for any default by Sublandlord under the terms of this Sublease will be  limited to Subtenant's actual direct, but not consequential, damages therefor and shall be recoverable solely from the equity interest of Sublandlord  in and to the Subleased Premises in, to and under the Lease.

13.          Indemnity.  Notwithstanding any provision of the Sublease to the contrary, Landlord and Sublandlord shall not be liable to Subtenant, or any of its agents, employees, servants, or invitees for any damage to persons or property due to the condition, design, or any defect in the building or its mechanical systems that may exist or subsequently occur. Subtenant, with respect to itself or its agents, employees, servants, and invitees, expressly assumes all risk

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and damages to persons and property, either proximate or remote, by reason of the present or further condition of the Subleased Premises or the Leased Premises.  Subtenant agrees that it will indemnify, defend and hold Landlord and Sublandlord harmless from and against: (a) all suits, claims and actions of every kind by reason of any breach, violation, or non-performance of any term or condition on the part of the Subtenant under  this  Sublease;  (b) all claims, actions, damages, liabilities and expenses asserted against the Landlord and/or Sublandlord by any person or entity in connection with any services provided or work performed by Subtenant from the Subleased Premises; and (c) any and all losses, claims, demands, actions, suits,  damages (including, without limitation,  punitive  damages), expenses, and costs (including, without limitation, actual attorneys' fees, consultant fees or expert fees) asserted against the Landlord and Sublandlord on account of injuries to person or damage to property to the extent that any such damage or injury may be caused, either approximately  or remotely, by any act or omission, whether  negligent  or not,  of Subtenant or any of its agents, servants, employees,  contractors, patrons, or invitees (while such invitees are on the Leased Premises  or Subleased Premises)  or any other person entering upon the Leased  Premises or Subleased  Premises under  or with the expressed  or implied invitation  of Subtenant, or if any such  injury or damage made any other way arise from or out of the occupancy or use of Subtenant, its agents, employees and invitees or the Subleased Premises, EVEN IF DUE TO THE NEGLIGENCE OF THE INDEMNIFIED PARTY.

14.          Alterations.  Subtenant shall not make any alterations, additions or improvements to the Subleased Premises without the prior written consent of Sublandlord and Landlord. All alterations now or hereafter proposed to be made by Subtenant shall be made in accordance with and shall be subject to the provisions of the Lease.

15.          Environmental  Requirements.

(a)    Except for Hazardous Materials contained in products used by Subtenant in de minimis quantities for ordinary cleaning and office purposes in compliance with Environmental Requirements ("Permitted Materials", Subtenant shall not permit or cause any party to bring any Hazardous Materials upon the Subleased Premises or the Leased Premises or transport, store, use, generate, manufacture or release any Hazardous Material in or about the Subleased Premises or the Leased Premises without Sublandlord's prior written consent. Subtenant, at its sole cost and expense, shall operate its business in the Subleased Premises and the Leased Premises in strict compliance with all Environmental Requirements, and shall remediate in a manner satisfactory to Sublandlord any Hazardous Materials released on, under, to or from the Subleased Premises or the Leased Premises by Subtenant, its agents, employees, contractors, subtenants or invitees. Subtenant shall complete, certify to and return to Landlord within twenty (20) days following receipt thereof such disclosure statements as may requested by Sublandlord from time to time relating to Subtenant's transportation, storage, use, generation, manufacture, or release of Hazardous Materials on the Subleased Premises and/or the Leased Premises. Subtenant has no right to use any Hazardous Materials other than the Permitted Materials .The term "EnvironmentalRequirements" means all applicable present and future statutes, regulations, ordinances, rules, codes, judgments, orders or other similar enactments of any governmental authority or agency regulating or relating to health, safety or environmental conditions on, under, or about the Subleased Premises and the 'Leased Premises or the environment, including without limitation, the following:  the Comprehensive

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Environmental Response, Compensation and Liability Act; the Resource and Conservation Recovery Act; and all state and local counterparts thereto, and any regulations or policies promulgated or issued thereunder. The term "Hazardous Material(s)" means and includes [a] any substance, material, waste, pollutant or contaminant listed or defined as hazardous or toxic under any Environmental  Requirements; [b] asbestos; [c] petroleum, including crude oil or any fraction thereof; and [d] natural gas or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas). As defined  in Environmental Requirements, Subtenant is and shall be deemed to be the "operator" of Subtenant's "facility" and the •owner" of all Hazardous Materials brought on the Subleased Premises and/or the Leased Premises by Subtenant, its agents, employees, contractors or invitees, and the wastes, by-products, or residues generated, resulting or produced therefrom.

(b)    Subtenant shall indemnify, defend, and hold  Sublandlord  and  Landlord harmless from and against any and all losses (including, without limitation, diminution in value of the Subleased Premises and/or the Leased Premises  and  loss of rental  income from the Subleased Premises and/or the Leased Premises), claims, demands, actions, suits, damages (including, without limitation, punitive damages), expenses (including, without limitation, remediation, removal, repair, corrective action or cleanup expenses), and costs (including, without limitation, actual attorneys' fees, consultant fees or expert fees and including, without limitation removal or management of any asbestos brought into the Subleased Premises and /or the Leased Premises or disturbed in breach of the requirements of this Paragraph, regardless of whether such removal or management is required by law) which are brought or recoverable against, or suffered or incurred by Sublandlord or Landlord as a result  of any release of Hazardous Materials in, on or about the Subleased Premises and/or the Leased Premises or any breach of the requirements under  this Paragraph by Subtenant, its agents, employees,  contractors,  subtenants,  assignees  or invitees, regardless of whether Subtenant had knowledge of such noncompliance . The obligations of Subtenant under this Paragraph shall survive any termination of this Sublease. Notwithstanding, Subtenant will not be responsible for any Hazardous Material that is present in the Premises on the Commencement Date.

(c)    Sublandlord shall have access to, and a right to perform inspections and tests o:t: the Subleased Premises and/or the Leased Premises to determine Subtenant's compliance with Environmental Requirements, its obligations under this Paragraph, or the environmental condition of the Subleased Premises and/or the Leased Premises. Such inspections and tests shall be conducted at Sublandlord's expense, unless such inspections or tests reveal that Subtenant bas not complied with any Environmental Requirement, in which case Subtenant shall immediately reimburse Sublandlord for the reasonable cost of such inspection and tests. Sublandlord's receipt of or satisfaction with any environmental assessment in no way waives any rights that Sublandlord holds against Subtenant.

16.          Default.  The occurrence of any of the following events as a result of Subtenant's acts or omissions shall constitute an event of default by Subtenant:

(a)    failure to pay any installment of rent or any other payments due hereunder as and when the same shall become due and payable;

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(b)    breach of any term, condition or covenant of this Sublease;

(c)    breach of any term, condition or covenant of the Lease imposed therein on Sublandlord and imposed under this Sublease on Subtenant;

(d)    the occurrence of any event of default specified in the Lease.

17.          Remedies.

(a)    Upon the occurrence of any event of default by Subtenant, Sublandlord shall have the right, without any notice or demand whatsoever, to (i) terminate this Sublease by giving Subtenant notice of Sublandlord's election to do so, in which event, the term of this Sublease shall end and all of Subtenant"s rights and interests shall expire on the date stated in such notice; (ii) terminate Subtenant's right of possession of the Subleased Premises without terminating this Sublease by giving notice to Subtenant that Subtenant's right of possession shall end on the date specified in such notice; (iii) pursue any other remedy available to Sublandlord at law, in equity, or otherwise; or (iv) pursue any remedies available to Landlord upon a default by "Tenant" under the Lease. All Sublandlord remedies shall be cumulative and not exclusive.

(b)    In the event that Sublandlord terminates the Lease, Sublandlord shall be entitled to recover (i) the sum of all Rents and other indebtedness accrued to the date of such termination, plus (ii) the cost of recovering possession of the Subleased Premises, (iii) the cost of reletting the Subleased Premises, or portions thereof (including, without limitation, legal fees  and brokerage commissions), and (iv) the cost of any repairs required to return the Premises to the condition it was in at the point of time the Subtenant originally took possession, accounting for reasonable wear and tear while occupied by Subtenant. [Items (ii) through (iv) in this paragraph are defined as the "Recovery Costs"]. In addition, Sublandlord shall be entitled to recover a sum equal to the remaining unpaid Base Rent for the months remaining in the applicable Term offset by any rents received by the Sublandlord by any new Subtenant taking possession of the Premises during the applicable Term and disregarding any remaining Sublease term extension option(s) in this Sublease.

(c)    In the event Sublandlord proceeds pursuant to subparagraph (a)(ii) above, Sublandlord shall be entitled to recover (i) the sum of all Rents and other indebtedness accrued to the date of such termination of Subtenant's possession, plus (ii) the Recovery Costs.  Sublandlord may, but shall not be obligated to (except as may be required by law) relet the Subleased Premises, or any part thereof for the accoWlt of Subtenant, for such rent and term and upon such terms and conditions as are reasonably acceptable to Sublandlord.  For  purposes  of such reletting, Sublandlord is authorized to incur reasonable costs to repair or alter the Premises to return it to the condition it was in at the point of time the Subtenant originally took possession, accounting for reasonable wear and tear while occupied by Subtenant.  If the Subleased Premises are relet and the consideration realized therefrom after payment of all Sublandlord's reletting expenses is insufficient to satisfy the payment when due of Rent reserved under this Lease for any monthly period, then Subtenant shall pay Sublandlord upon demand any such deficiency monthly  (''Rental  Deficiency"). If such consideration is greater than the amount

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necessary to pay the full amount of the Rent, the full amount of such excess shall be retained by Sublandlord and shall in no event be payable to Subtenant. Subtenant agrees that Sublandlord may file suit to recover any sums due to Sublandlord hereunder from time to time and that such suit or recovery of any amount due Sublandlord hereunder shall not be any defense to any subsequent action brought for any amount not therefore reduced to judgment  in favor of Sublandlord . Notwithstanding any such reletting without termination, Sublandlord may at any time thereafter elect to terminate this Sublease for such previous event of default by Subtenant. In the alternative, Sublandlord may at any time thereafter elect to terminate Subtenant’s right to occupy the Subleased Premises and to immediately recover as damages, in lieu of the Rental Deficiency, a sum equal to the remaining unpaid Base Rent for the applicable Term, disregarding any remaining Sublease term extension option(s), plus any Recovery Costs.

(d)    In the event Subtenant fails to pay any installment of rent or any other monetary obligation contained herein or in the Lease as and when such installment is due, Subtenant shall pay to Sublandlord on demand a late charge in an amount equal to five percent (5%) of such installment; and the failure to pay such late charge within five (5) days after written demand therefor shall be an event of default hereunder. The provision for such late charge shall be in addition to all of Sublandlord's other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limited Sublandlord's remedies in any manner.

(e)    Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such event of default. If, on account of any breach or default by Subtenant in its obligations under the terms and conditions of this Sublease, it shall become necessary or appropriate for the Sublandlord to employ or consult with an attorney concerning or to enforce or defend any of the Sublandlord's rights or remedies hereunder, Subtenant agrees to pay any reasonable attorney's fees incurred by the Sublandlord.

18.          Return of Subleased Premises.  At the end of the Term covered by this Sublease, or upon such earlier termination of this Sublease as provided herein, or upon termination of the Lease, in which event this Sublease shall automatically be terminated, Subtenant shall (i) surrender the Subleased Premises to Sublandlord in broom clean condition, in good repair and in the condition required by the Lease, (ii) deliver all keys to the Subleased  Premises to Sublandlord, (iii) remove all of Subtenane s trade fixtures and other personal property from the Subleased Premises and repair all damage caused by such  removal.  Any equipment, trade fixtures, or other property of Subtenant left in the Subleased Premises after the end of the Sublease shall be deemed abandoned, and may be retained or disposed of by Sublandlord, without notice to Subtenant, in any manner that Sublandlord deems appropriate, at Subtenant's sole cost and expense.

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19.          Holding Over.

a.            Should Subtenant, or any of its permitted successors in interest, hold over the Subleased Premises, or any part thereof, after the expiration of the Term of this Sublease, unless otherwise agreed in writing by Sublandlord, such holding over shall constitute and be construed as creating a tenancy at sufferance only, subject to all of the terms and provisions of this Sublease, except that the Rent payable monthly by Subtenant hereunder shall be an equal to the greater of: (a) the total Rent payable by Subtenant for the last month of the Term hereof, plus fifty percent (50%) of such amount; or (b) the total Rent payable monthly by Sublandlord to Landlord pursuant to the Lease as a result of Subtenant's failure to vacate  the  Subleased Premises prior to or on the date of termination of the this Sublease. Subtenant agrees to indemnify Sublandlord in the event that it's holding over causes any cost, expense, liability, or damage to Sublandlord. The inclusion of this paragraph shall not be construed as Sublandlord's permission for Subtenant to hold over.

20.          Subordination.  This Sublease shall be subject and subordinate to any mortgage of any type whatsoever on the Subleased Premises given to secure a loan made to Landlord, and to any renewals, replacements, extensions, or consolidations of such loan. Subtenant agrees, at the election of the holder of any such mortgage, to attorn to any such holder. Subtenant agrees upon demand to execute, acknowledge and deliver such instruments, confirming such subordination and such instruments of attornment as shall be requested by any such holder.  Subtenant hereby appoints Sublandlord attorney in fact for Subtenant irrevocably (such power of attorney being coupled with an interest) to execute, acknowledge and deliver any such instrument and instruments for and in the name of the Subtenant and to cause any such instrument to  be recorded.  Sublandlord shall not be required to execute or deliver any nondisturbance agreement in connection with this Sublease.

21.          Notices.  Each provision of this instrument or of any applicable governmental laws, ordinances, regulations and other requirements with reference to the sending, mailing, or delivery of any notice or the making of any payment by Sublandlord to Subtenant or with reference to the sending, mailing, or delivery of any notice or the making of any payment by Subtenant to Sublandlord shall be deemed to be complied with when and if the following steps are taken:

(a)    All Rent and other payments required to be made by Subtenant to Sublandlord hereunder shall be payable to Sublandlord at the address herein below set forth or at such other address as Sublandlord may specify from time to time by written notice delivered in accordance herewith.

(b)    All payments required to be made by Sublandlord to Subtenant hereunder shall be payable to Subtenant at the address herein below set forth, or at such other address as Subtenant may specify from time to time by written notice delivered in accordance herewith.

(c)    Any notice, demand, consent, approval or other communication or document to be provided hereunder to a party hereto, shall be in writing and shall be deemed to have been provided after being sent by certified or registered mail, return receipt requested, in the United States mail or by personal delivery or commercial

SUBLEASE AGREEMENT - Page 11

courier, against receipt.   Any and all notices or other communications to Sublandlord and Subtenant shall be given as follows:

If to Sublandlord:     Air Methods Corporation

Corporate Headquarters

7211 S. Peoria St.

Denver/Centennial Airport

Englewood, CO 80112

Attn:

If to Subtenant:        Copsync, Inc.

16415 Addison Road #350

Addison, TX 75001

Attention: Chief Financial Officer

Either party may change the address for notices by notice in writing given to the other party in the manner hereinabove described.

(b)    Each party hereto shall promptly give the other party a copy of each notice received from, or sent to, the Landlord and relating to the Subleased Premises.

22.           Real Estate Broker. Except for Jackson & Cooksey, Inc., a Texas corporation and Jones Lang LaSalle Brokerage Inc. ("Brokers"), whose commissions shall be paid pursuant to a separate agreement with Sublandlord, the parties represent and warrant to each other that no brokers or agents have been involved on behalf of such party in connection with the consummation of the transactions contemplated by this Sublease. Sublandlord agrees to pay the commissions to Brokers pursuant to such separate agreement.

23.           Miscellaneous.

(a)    The terms, provisions, covenants and conditions contained in this Sublease shall apply to, inure to the benefit of; and be binding upon, the parties hereto and upon their respective heirs, legal representatives, successors, and permitted assigns, except as otherwise herein expressly provided.

(b)    The captions are inserted in this Sublease for convenience only and in no way define, limit, or described the scope or intent of this Sublease, or any provision hereof, nor in any way affect the interpretation of this Sublease.

(c)    Subtenant agrees, within ten (10) days after request of Sublandlord, to deliver to Sublandlord, or Sublandlord's designee, an estoppel certificate stating that this Sublease is in full force and effect, the date to which rent has been paid, the unexpired term of this Sublease, and such other matters pertaining to this Sublease as may be reasonably requested by Sublandlord or Landlord.

SUBLEASE AGREEMENT - Page 12

(d)    This Sublease may not be altered, changed, or amended except by an instrument in writing signed by Sublandlord and Subtenant and consented to by Landlord.

(e)    Sublandlord reserves the right to amend the Lease. In the event Sublandlord amends the Lease after the execution of this Sublease, Subtenant will nevertheless be bound to Sublandlord by the terms and provisions of the Lease, as amended, unless the amendment alters the use or functionality of the Premises in the hands of the Subtenant in a material manner. If the amendment alters the use or functionality of the Premises in the hands of the Subtenant in a material manner, the Subtenant will not be bound by the amendment unless it has been approved by the Subtenant. Nothing contained herein shall amend or shall be construed or deemed to amend the Lease.

(f)    Notwithstanding any provision contained within this Sublease to the contrary, the liability of Sublandlord under this Sublease is expressly limited to Sublandlord’s interest in the Subleased Premises as it may be encumbered, and Subtenant agrees to look solely to Sublandlord’s interest in the Subleased Premises for recovery of any judgment against Sublandlord. Neither Sublandlord nor any party related to Sublandlord as officer, director, agent partner, lender or otherwise shall have any personal or corporate liability for any judgment or deficiency. Under no circumstances whatsoever shall Sublandlord or any such Sublandlord related party ever be liable hereunder for consequential damages or special damages. This section shall not limit any right of Subtenant to obtain specific performance of Sublandlord’s obligations hereunder.

(g)    Nothing contained in this Sublease will be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent, partnership, joint venture, or any association between Sublandlord and Subtenant, it being expressly understood and agreed that nothing contained in this Sublease will be deemed to create any relationship between Sublandlord and Subtenant other than the relationship of sublessor and sublessee.

(h)    Sub1andlord and its representatives will have the right, with reasonable notice, to enter upon the Subleased Premises for the purpose of examining and inspecting the same; provided, however this section will not be construed as imposing any obligation upon SublandJord to inspect the Subleased Premises.

24.           Consent of Landlord.  Sublandlord's obligations under this Sublease are conditioned upon Sublandlord obtaining the consent of Landlord to the subletting provided for hereunder (the "Landlord Consent"), and in the event that Sublandlord is unable to obtain such Landlord Consent within fifteen (15) days after execution of this Sublease by Sublandlord, Sublandlord shall be entitled to terminate this Sublease. Subtenant agrees to execute and deliver to Sublandlord within three (3) days of notice by Sublandlord such documents and information as are required to obtain the Landlord Consent.

25. Notices From Landlord. Sublandlord shall provide to Subtenant, in accordance with Section 21, all notices received from Landlord, including any notices of default.

SUBLEASE AGREEMENT - Page 13

EXECUTED as of the day and year first above written.

SUBLANDLORD:

AIR METHODS CORPORATION, a Delaware

corporation, successor by merger to OMNIFLIGHT

HELICOPTERS, INC., a Texas corporation

SUBTENANT:

Copsync,LLC.

SUBLEASE AGREEMENT - Page 14

CONSENT OF LANDLORD

Landlord consents to the subletting of the Subleased Premises in accordance with the terms and conditions of the Sublease.

LANDLORD:

ADDISON TOWER INVESTMENT COMPANY,

LLC, a Texas limited liability company

 

SUBLEASE AGREEMENT - Page 15

Exhibit A

Need copy of Master Lease

Need space plan of Premises

SUBLEASE AGREEMENT - Page 16

Exhibit B

Scope of Work:

Sublandlord will perform the following scope of work prior to the commencement of the sublease.

1)           Install new entrance door and frame in the exterior wall of the current "Publication" room that will open to the elevator lobby. Work opening to accept herculite door. Use building provided herculite door and add header with closer, lock and bottom pivot.

2)           Remove all screws, anchors and name plates and repair the wall surface and associated holes in all such places. Touch up I repaint walls as best as possible as there are a lot of walls that need to be painted from comer to corner and some entire rooms.

3)           Install Carpet and associated padding throughout the Records room. Carpet base on walls.

4)           Remove all furniture and trash from the Premises before the Commencement Date

5)           Professionally clean the entire Premises

SUBLEASE AGREEMENT - Page 17

EX-10.16

Exhibit 10.16

FIRST AMENDMENT TO LEASE AGREEMENT

 This First Amendment to the Lease Agreement (“First Amendment”) is made and entered into effective as of June 17, 2014, by and between 1000 Walnut Limited (“Landlord”) and Copsync, Inc. (“Tenant”).

WITNESSETH:

RECITALS:

 A.       Landlord and Tenant previously entered into that certain Lease Agreement dated June 6, 2014 (“Lease”) by and between 1000 Walnut Limited (“Landlord”) and Copsync, Inc. (“Tenant”) covering approximately 2,491 rentable square feet known as Suite 150 in an office building located at 1000 N. Walnut Ave., New Braunfels, TX 78130 (the “Building”), which Lease and Amendment, as amended, are incorporated herein by this reference for all purposes.

 B.       Landlord and Tenant now desire to amend portions of the Lease, (i) to amend the Expiration Date.

AGREEMENT:

 IN CONSIDERATION OF THE PREMISES and the mutual agreements herein set forth and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1.	Expiration Date: According to the Basic Terms in the Lease the Expiration Date is fifty (50) months and twenty six (26) days from the Rent Commencement Date of June, 6 2014. The new and correct Expiration Date is August 31, 2018.
2.	All other terms and conditions of the Lease Agreement dated June 6, 2014 and following amendments shall remain in full force and effect except as modified herein.
3.	Tenant hereby covenants, represents and warrants to Landlord that:

a.	Tenant is solvent; that no bankruptcy or insolvency proceedings are pending or contemplated by or against Tenant; and that this Amendment is the legal, valid and binding obligation of Tenant enforceable against Tenant in accordance with its terms, except as enforceability hereof may be limited by bankruptcy, insolvency, reorganization or moratorium or other similar laws relating to Landlord’s rights and by general principles which may limit the right to obtain equitable remedies.
b.	Except as expressly amended by this Amendment, the Lease is in all respects ratified and confirmed, and the terms, provisions, representations, warranties, covenants and conditions thereof shall be and remain in full force and effect.
c.	The covenants, representations and warranties contained in the Lease are true and correct in all material respects on and as of the date hereof as though made on and as of this date, and Tenant is not in default in any manner under the Lease or under any document, writing or instrument executed in connection therewith or herewith.
d.	All information, reports, statements and other data furnished by or on behalf of Tenant prior to, contemporaneously with, or subsequent to the execution of the Lease or this Amendment are and shall be true and correct and do not and shall not omit to state any fact or circumstance necessary to make the information contained therein or herewith not misleading.

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e. Tenant has no claims, demands, counterclaims, defenses, allowances, adjustments or offsets arising out of or in any way related to the Lease (as amended hereby) or arising out of any document, writing or instrument executed in connection therewith or herewith.

4. This Amendment shall be binding upon the Landlord and Tenant and their respective heirs, legal representatives, successors and permitted assigns; (ii) may be renewed, modified or amended only by a writing signed by each party hereto; (iii) shall be governed by and construed in accordance with the laws of the State of Texas and the United States of America; (iv) may be executed in several counterparts and each counterpart when so executed and delivered shall constitute an original agreement, and all such separate counterparts shall constitute one and the same agreement; and (v) embodies the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements, consents and understandings relating to such subject matter. All capitalized terms used herein and not otherwise defined therein shall have the meanings ascribed to them in the Lease. The term “Lease” as used in the Lease or in any other instrument, document or writing executed in connection therewith or herewith shall mean the Lease as amended by this Amendment.

AGREED AND ACCEPTED THIS 17th DAY OF JUNE 2014.

LANDLORD:	1000 Walnut, Limited
By:
Name:	Nick Tarantino, CCIM
Title:	Vice President Tarantino Properties, Inc. As Agent for Owner
TENANT:	Copsync, Inc.
By:
Name:	Jay Greene
Title:	V.P. of  Operations

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USE OF THIS FORM BY PERSONS WHO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REALTORS® IS NOT AUTHORIZED.

©Texas Association of REALTORS®, Inc. 2014

1. PARTIES: The parties to this lease are:

Landlord:	1000 Walnut Limited
		; and
Tenant:	Copsync, Inc.
		.

2. LEASED PREMISES:

A. Landlord leases to Tenant the following described real property, known as the “leased premises,” along with all its improvements (Check only one box):

x	(1)	Multiple-Tenant Property:  Suite or Unit Number 150                       containing approximately 2,491                                              square feet of rentable area in The Wells Fargo Building                                               (project name) at 1000 North Walnut Avenue                                                                                        (address) in New Braunfels                                              (city), Comal                                              (county), Texas, which is legally described on attached Exhibit  or as follows:
o	(2)	Single-Tenant Property:  The real property containing approximately _____________ square feet of rentable area at: _______________________________________ (address) in ______________________________________________ (city),________________(county), Texas, which is legally described on attached Exhibit ___________________ or as follows: _______________________________________________________________________________________________________________

B. If Paragraph 2A(1) applies:

(1)	“Property” means the building or complex in which the leased premises are located, inclusive of any common areas, drives, parking areas, and walks; and
(2)	the parties agree that the rentable area of the leased premises may not equal the actual or useable area within the leased premises and may include an allocation of common areas in the Property. The rentable area o will o will not   be adjusted if re-measured.

3. TERM:

A. Term: The term of this lease is 50                             months and 26                                       days, commencing on:

June 6, 2014                                                                                              (Commencement Date) and ending on

August 31, 2017                                                                                       (Expiration Date).

B. Delay of Occupancy:   If Tenant is unable to occupy the leased premises on the Commencement Date because of construction on the leased premises to be completed by Landlord that is not substantially complete or a prior tenant’s holding over of the leased premises, Landlord will not be liable to Tenant for such delay and this lease will remain enforceable. In the event of such a delay, the Commencement Date will automatically be extended to the date Tenant is able to occupy the Property and the Expiration Date will also be extended by a like number of days, so that the length of this lease remains unchanged. If Tenant is unable to occupy the leased premises after the 90th day after the Commencement Date because of construction on the leased premises to be completed by Landlord that is not substantially complete or a prior tenant’s holding over of the leased premises, Tenant may terminate this lease by giving written notice to Landlord before the leased premises become available to be occupied by Tenant and Landlord will refund to Tenant any amounts paid to Landlord by Tenant. This Paragraph 3B does not apply to any delay in occupancy caused by cleaning or repairs.

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Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

C. Certificate of Occupancy: Unless the parties agree otherwise, Tenant is responsible for obtaining a certificate of occupancy for the leased premises if required by a governmental body.

4. RENT AND EXPENSES:

A. Base Monthly Rent: On or before the first day of each month during this lease, Tenant will pay Landlord base monthly rent as described on attached Exhibit _________________ or as follows:

Dates		Rates per rentable square foot (optional)		Base Monthly
From	To	$ Monthly Rate	$ Annual Rate	Rent $
6/6/2014	8/5/2014	/ rsf / month	$0      / rsf / year	FREE
8/6/2014	8/31/2015	/ rsf / month	$14     / rsf / year	$2,906.17
9/1/2015	8/31/2016	/ rsf / month	$15     / rsf / year	$3,113.75
9/1/2016	8/31/2017	/ rsf / month	$16     / rsf / year	$3,321.33
9/1/2017	8/31/2018	/ rsf / month	$17     / rsf / year	$3,528.92

B. Additional Rent: In addition to the base monthly rent. Tenant will pay Landlord all other amounts, as provided by the attached (Check all that apply.):

x	(1)	Commercial Lease Addendum for Expense Reimbursement (TAR-2103)
o	(2)	Commercial Lease Addendum for Percentage Rent (TAR-2106)
o	(3)	Commercial Lease Addendum for Parking (TAR-2107)
o	(4)
All amounts payable under the applicable addenda are deemed to be “rent” for the purposes of this lease.

C.	First Full Month’s Rent: The first full monthly rent is due on or before	lease execution
D.	Prorated Rent: If the Commencement Date is on a day other than the first day of a month, Tenant will pay Landlord as prorated rent, an amount equal to the base monthly rent multiplied by the following fraction: the number of days from the Commencement Date to the first day of the following month divided by the number of days in the month in which this lease commences. The prorated rent is due on or before the Commencement Date.
E.	Place of Payment: Tenant will remit all amounts due to Landlord under this lease to the following person at the place stated or to such other person or place as Landlord may later designate in writing:

Name:	c/o Tarantino Properties, Inc.
Address:	502 E. 11th Street, Suite 400
	Austin, TX 78701

F. Method of Payment: Tenant must pay all rent timely without demand, deduction, or offset, except as permitted by law or this lease. If Tenant fails to timely pay any amounts due under this lease or if any check of Tenant is returned to Landlord by the institution on which it was drawn, Landlord after providing written notice to Tenant may require Tenant to pay subsequent amounts that become due under this lease in certified funds. This paragraph does not limit Landlord from seeking other remedies under this lease for Tenant’s failure to make timely payments with good funds.

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Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

G.

Late Charges: If Landlord does not actually receive a rent payment at the designated place of payment within 5 days after the date it is due, Tenant will pay Landlord a late charge equal to 10% of the amount due. In this paragraph, the mailbox is not the agent for receipt for Landlord. The late charge is a cost associated with the collection of rent and Landlord’s acceptance of a late charge does not waive Landlord’s right to exercise remedies under Paragraph 20.

H.

Returned Checks: Tenant will pay $                    25.00 for each check Tenant tenders to Landlord which is returned by the institution on which it is drawn for any reason, plus any late charges until Landlord receives payment.

5. SECURITY DEPOSIT:

A.	Upon execution of this lease, Tenant will pay $                                               3,528.92 to Landlord as a security deposit.
B.	Landlord may apply the security deposit to any amounts owed by Tenant under this lease. If Landlord applies any part of the security deposit during any time this lease is in effect to amounts owed by Tenant, Tenant must, within 10 days after receipt of notice from Landlord, restore the security deposit to the amount stated.
C.	Within 60 days after Tenant surrenders the leased premises and provides Landlord written notice of Tenant’s forwarding address, Landlord will refund the security deposit less any amounts applied toward amounts owed by Tenant or other charges authorized by this lease.

6.	TAXES: Unless otherwise agreed by the parties, Landlord will pay all real property ad valorem taxes assessed against the leased premises.
7.	UTILITIES:

A. The party designated below will pay for the following utility charges to the leased premises and any connection charges for the utilities. (Check all that apply.)

	N/A	Landlord	Tenant
(1) Water	o	x	o
(2) Sewer	o	x	o
(3) Electric	o	x	o
(4) Gas	x	o	o
(5) Telephone	o	o	x
(6) Internet	o	o	x
(7) Cable	o	o	x
(8) Trash	o	x	o
(9) __________________________________________________	x	o	o
(10) All other utilities	x	o	o

B. The party responsible for the charges under Paragraph 7A will pay the charges directly to the utility service provider. The responsible party may select the utility service provider, except that if Tenant selects the provider, any access or alterations to the Property or leased premises necessary for the utilities may be made only with Landlord’s prior consent, which Landlord will not unreasonably withhold. If Landlord incurs any liability for utility or connection charges for which Tenant is responsible to pay and Landlord pays such amount, Tenant will immediately upon written notice from Landlord reimburse Landlord such amount.

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Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

C.	Notice: Tenant should determine if all necessary utilities are available to the leased premises and are adequate for Tenant’s intended use.
D.	After-Hours HVAC Charges: “HVAC services” mean heating, ventilating, and air conditioning of the leased premises. (Check one box only.)

x	(1)	Landlord is obligated to provide the HVAC services to the leased premises only during the Property’s operating hours specified under Paragraph 9C.
o	(2)	Landlord will provide the HVAC services to the leased premises during the operating hours specified under Paragraph 9C for no additional charge and will, at Tenant’s request, provide HVAC services to the leased premises during other hours for an additional charge of $ _____________ per hour. Tenant will pay Landlord the charges under this paragraph immediately upon receipt of Landlord’s invoice. Hourly charges are charged on a half-hour basis. Any partial hour will be rounded up to the next half hour. Tenant will comply with Landlord’s procedures to make a request to provide the additional HVAC services under this paragraph.
o	(3)	Tenant will pay for the HVAC services under this lease.

8. INSURANCE:

A. During all times this lease is in effect, Tenant must, at Tenant’s expense, maintain in full force and effect from an insurer authorized to operate in Texas:

(1)	public liability insurance naming Landlord as an additional insured with policy limits on an occurrence basis in a minimum amount of: (check only (a) or (b) below)
x	(a) $1,000,000; or
o	(b) $2,000,000.
	If neither box is checked the minimum amount will be $1,000,000.
(2)	personal property damage insurance for the business operations being conducted in the leased premises and contents in the leased premises in an amount sufficient to replace such contents after a casualty loss; and

o (3) business interruption insurance sufficient to pay 12 months of rent payments;

B.	Before the Commencement Date, Tenant must provide Landlord with a copy of insurance certificates evidencing the required coverage. If the insurance coverage is renewed or changes in any manner or degree at any time this lease is in effect, Tenant must, not later than 10 days after the renewal or change, provide Landlord a copy of an insurance certificate evidencing the renewal or change.
C.	If Tenant fails to maintain the required insurance in full force and effect at all times this lease is in effect, Landlord may:

(1)	purchase insurance that will provide Landlord the same coverage as the required insurance and Tenant must immediately reimburse Landlord for such expense; or
(2)	exercise Landlord’s remedies under Paragraph 20.

D.

Unless the parties agree otherwise, Landlord will maintain in full force and effect insurance for: (1) fire and extended coverage in an amount to cover the reasonable replacement cost of the improvements of the Property; and (2) any public liability insurance in an amount that Landlord determines reasonable and appropriate.

E.

If there is an increase in Landlord’s insurance premiums for the leased premises or Property or its contents that is caused by Tenant, Tenant’s use of the leased premises, or any improvements made by or for Tenant, Tenant will, for each year this lease is in effect, pay Landlord the increase immediately after Landlord notifies Tenant of the increase. Any charge to Tenant under this Paragraph 8E will be equal to the actual amount of the increase in Landlord’s insurance premium.

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Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

9. USE AND HOURS:

A.	Tenant may use the leased premises for the following purpose and no other:	General Office
B.	Unless otherwise specified in this lease, Tenant will operate and conduct its business in the leased premises during business hours that are typical of the industry in which Tenant represents it operates.
C.	The Property maintains operating hours of (specify hours, days of week, and if inclusive or exclusive of weekends and holidays): Monday - Friday 7:30 am - 6:00 pm, Saturday 10:00 am - 3:00 pm. Tenant shall have twenty four (24) hour access to the Leased Premises. HVAC services are only provided during building hours as defined above

10. LEGAL COMPLIANCE:

A. Tenant may not use or permit any part of the leased premises or the Property to be used for:

(1)	any activity which is a nuisance or is offensive, noisy, or dangerous;
(2)	any activity that interferes with any other tenant’s normal business operations or Landlord’s management of the Property;
(3)	any activity that violates any applicable law, regulation, zoning ordinance, restrictive covenant, governmental order, owners’ association rules, tenants’ association rules, Landlord’s rules or regulations, or this lease;
(4)	any hazardous activity that would require any insurance premium on the Property or leased premises to increase or that would void any such insurance;
(5)	any activity that violates any applicable federal, state, or local law, including but not limited to those laws related to air quality, water quality, hazardous materials, wastewater, waste disposal, air emissions, or other environmental matters;
(6)	the permanent or temporary storage of any hazardous material; or
(7)

B.

“Hazardous material” means any pollutant, toxic substance, hazardous waste, hazardous material, hazardous substance, solvent, or oil as defined by any federal, state, or local environmental law, regulation, ordinance, or rule existing as of the date of this lease or later enacted.

C.

Landlord does not represent or warrant that the leased premises or Property conform to applicable restrictions, zoning ordinances, setback lines, parking requirements, impervious ground cover ratio requirements, and other matters that may relate to Tenant’s intended use. Tenant must satisfy itself that the leased premises may be used as Tenant intends by independently investigating all matters related to the use of the leased premises or Property. Tenant agrees that it is not relying on any warranty or representation made by Landlord, Landlord’s agent, or any broker concerning the use of the leased premises or Property.

11.  SIGNS:

A. Tenant may not post or paint any signs or place any decoration outside the leased premises or on the Property without Landlord’s written consent. Landlord may remove any unauthorized sign or decorations, and Tenant will promptly reimburse Landlord for its cost to remove any unauthorized sign or decorations.

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Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

B.

Any authorized sign must comply with all laws, restrictions, zoning ordinances, and any governmental order relating to signs on the leased premises or Property. Landlord may temporarily remove any authorized sign to complete repairs or alterations to the leased premises or the Property.

C.

By providing written notice to Tenant before this lease ends, Landlord may require Tenant, upon move-out and at Tenant’s expense, to remove, without damage to the Property or leased premises, any or all signs or decorations that were placed on the Property or leased premises by or at the request of Tenant. Any signs or decorations that Landlord does not require Tenant to remove and that are fixtures, become the property of the Landlord and must be surrendered to Landlord at the time this lease ends.

12. ACCESS BY LANDLORD:

A.

During Tenant’s normal business hours Landlord may enter the leased premises for any reasonable purpose, including but not limited to purposes for repairs, maintenance, alterations, and showing the leased premises to prospective tenants or purchasers. Landlord may access the leased premises after Tenant’s normal business hours if: (1) entry is made with Tenant’s permission; or (2) entry is necessary to complete emergency repairs. Landlord will not unreasonably interfere with Tenant’s business operations when accessing the leased premises.

B.

During the last 120           days of this lease, Landlord may place a “For Lease” or similarly worded sign on the leased premises.

13.	MOVE-IN CONDITION: Tenant has inspected the leased premises and accepts it in its present (as-is) condition unless expressly noted otherwise in this lease or in an addendum. Landlord and any agent have made no express or implied warranties as to the condition or permitted use of the leased premises or Property.
14.	MOVE-OUT CONDITION AND FORFEITURE OF TENANT’S PERSONAL PROPERTY:

A.	At the time this lease ends, Tenant will surrender the leased premises in the same condition as when received, except for normal wear and tear. Tenant will leave the leased premises in a clean condition free of all trash, debris, personal property, hazardous materials, and environmental contaminants.
B.	If Tenant leaves any personal property in the leased premises after Tenant surrenders possession of the leased premises, Landlord may: (1) require Tenant, at Tenant’s expense, to remove the personal property by providing written notice to Tenant; or (2) retain such personal property as forfeited property to Landlord.
C.	“Surrender” means vacating the leased premises and returning all keys and access devices to Landlord. “Normal wear and tear” means deterioration that occurs without negligence, carelessness, accident, or abuse.
D	By providing written notice to Tenant before this lease ends, Landlord may require Tenant, upon move-out and at Tenant’s expense, to remove, without damage to the Property or leased premises, any or all fixtures that were placed on the Property or leased premises by or at the request of Tenant. Any fixtures that Landlord does not require Tenant to remove become the property of the Landlord and must be surrendered to Landlord at the time this lease ends.

15. MAINTENANCE AND REPAIRS:

A. Cleaning: Tenant must keep the leased premises clean and sanitary and promptly dispose of all garbage in appropriate receptacles. x Landlord o Tenant will provide, at its expense, janitorial services to the leased premises that are customary and ordinary for the property type. Tenant will maintain any grease trap on the Property which Tenant uses, including but not limited to periodic emptying and cleaning, as well as making any modification to the grease trap that may be necessary to comply with any applicable law.

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Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

B.

Repairs of Conditions Caused by a Party: Each party must promptly repair a condition in need of repair that is caused, either intentionally or negligently, by that party or that party’s guests, patrons, invitees, contractors or permitted subtenants.

C.

Repair and Maintenance Responsibility: Except as otherwise provided by this Paragraph 15, the party designated below, at its expense, is responsible to maintain and repair the following specified items in the leased premises (if any). The specified items must be maintained in clean and good operable condition. If a governmental regulation or order requires a modification to any of the specified items, the party designated to maintain the item must complete and pay the expense of the modification. The specified items include and relate only to real property in the leased premises. Tenant is responsible for the repair and maintenance of its personal property. (Check all that apply.)

	N/A	Landlord	Tenant
(1)     Foundation, exterior walls, roof, and other structural components	o	x	o
(2)     Glass and windows	o	x	o
(3)     Fire protection equipment	o	x	o
(4)     Fire sprinkler systems	o	x	o
(5)     Exterior & overhead doors, including closure devices, molding, locks, and hardware	o	x	o
(6)     Grounds maintenance, including landscaping and irrigation systems	o	x	o
(7)     Interior doors, including closure devices, frames, molding, locks, and hardware	o	x	o
(8)     Parking areas and walks	o	x	o
(9)     Plumbing systems, drainage systems and sump pumps	o	x	o
(10)   Electrical systems, mechanical systems	o	x	o
(11)   Ballast and lamp replacement	x	o	o
(12)   Heating, Ventilation and Air Conditioning (HVAC) systems	o	x	o
(13)   HVAC system replacement	o	x	o
(14)   Signs and lighting:

(a)     Pylon	x	o	o
(b)     Facia	x	o	o
(c)     Monument	o	o	x
(d)     Door/Suite	o	x	o
(e)     Other:	x	o	o

(15)   Extermination and pest control, excluding wood-destroying insects	o	x	o
(16)   Fences and Gates	x	o	o
(17)   Storage yards and storage buildings	x	o	o
(18)   Wood-destroying insect treatment and repairs	o	x	o
(19)   Cranes and related systems	x	o	o
(20)		o	o
(21)		o	o
(22)   All other items and systems		o	o

D. Repair Persons: Repairs must be completed by trained, qualified, and insured repair persons.

(TAR-2101) 4-1-14 Initialed for Identification by Landlord:  ,___________ , and Tenant:  ,____________ Page 8 of 15

Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

E.	HVAC Service Contract: If Tenant maintains the HVAC system under Paragraph 15C( 12), Tenant o is x is not required to maintain, at its expense, a regularly scheduled maintenance and service contract for the HVAC system. The maintenance and service contract must be purchased from a HVAC maintenance company that regularly provides such contracts to similar properties. If Tenant fails to maintain a required HVAC maintenance and service contract in effect at all times during this lease, Landlord may do so and Tenant will reimburse Landlord for the expense of such maintenance and service contract or Landlord may exercise Landlord’s remedies under Paragraph 20.
F.	Common Areas: Landlord will maintain any common areas in the Property in a manner as Landlord determines to be in the best interest of the Property. Landlord will maintain any elevator and signs in the common area. Landlord may change the size, dimension, and location of any common areas, provided that such change does not materially impair Tenant’s use and access to the leased premises. Tenant has the non-exclusive license to use the common areas in compliance with Landlord’s rules and regulations. Tenant may not solicit any business in the common areas or interfere with any other person’s right to use the common areas. This paragraph does not apply if Paragraph 2A(2) applies.
G.	Notice of Repairs: Tenant must promptly notify Landlord of any item that is in need of repair and that is Landlord’s responsibility to repair. All requests for repairs to Landlord must be in writing.
H.	Failure to Repair: Landlord must make a repair for which Landlord is responsible within a reasonable period of time after Tenant provides Landlord written notice of the needed repair. If Tenant fails to repair or maintain an item for which Tenant is responsible within 10 days after Landlord provides Tenant written notice of the needed repair or maintenance, Landlord may: (1) repair or maintain the item, without liability for any damage or loss to Tenant, and Tenant must immediately reimburse Landlord for the cost to repair or maintain; or (2) exercise Landlord’s remedies under Paragraph 20.

16. ALTERATIONS:

A.	Tenant may not alter (including making any penetrations to the roof, exterior walls or foundation), improve, or add to the Property or the leased premises without Landlord’s written consent. Landlord will not unreasonably withhold consent for the Tenant to make reasonable non-structural alterations, modifications, or improvements to the leased premises.
B.	Tenant may not alter any locks or any security devices on the Property or the leased premises without Landlord’s consent. If Landlord authorizes the changing, addition, or rekeying of any locks or other security devices, Tenant must immediately deliver the new keys and access devices to Landlord.
C.	If a governmental order requires alteration or modification to the leased premises, the party obligated to maintain and repair the item to be modified or altered as designated in Paragraph 15 will, at its expense, modify or alter the item in compliance with the order and in compliance with Paragraphs 16A and 17.
D.	Any alterations, improvements, fixtures or additions to the Property or leased premises installed by either party during the term of this lease will become Landlord’s property and must be surrendered to Landlord at the time this lease ends, except for those fixtures Landlord requires Tenant to remove under Paragraph 11 or 14 or if the parties agree otherwise in writing.

17.

LIENS: Tenant may not do anything that will cause the title of the Property or leased premises to be encumbered in any way. If Tenant causes a lien to be filed against the Property or leased premises, Tenant will within 20 days after receipt of Landlord’s demand: (1) pay the lien and have the lien released of record; or (2) take action to discharge the lien. Tenant will provide Landlord a copy of any release Tenant obtains pursuant to this paragraph.

18.

LIABILITY: To the extent permitted by law. Landlord is NOT responsible to Tenant or Tenant’s employees, patrons, quests, or invitees for any damages, injuries or losses to person or property caused by:

(TAR-2101) 4-1-14 Initialed for Identification by Landlord:  ,___________ , and Tenant:  ,____________ Page 9 of 15

Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

A.	an act, omission, or neglect of: Tenant; Tenant’s agent; Tenant’s quest; Tenant’s employees; Tenant’s patrons; Tenant’s invitees; or any other tenant on the Property;
B.	fire, flood, water leaks, ice, snow, hail, winds, explosion, smoke, riot, strike, interruption of utilities. theft, burglary, robbery, assault, terrorism, vandalism, other persons, environmental contaminants, or other occurrences or casualty losses.

19.	INDEMNITY: Each party will indemnify, defend, and hold the other party harmless from any property damage, personal injury, suits, actions, liabilities, damages, cost of repairs or service to the leased premises or Property, or any other loss caused, negligently or otherwise, by that party or that party’s employees, patrons, guests, or invitees.
20.	DEFAULT:

A.	If Landlord fails to comply with this lease within 30 days after Tenant notifies Landlord of Landlord’s failure to comply, Landlord will be in default and Tenant may seek any remedy provided by law. If, however, Landlord’s non-compliance reasonably requires more than 30 days to cure, Landlord will not be in default if the cure is commenced within the 30-day period and is diligently pursued.
B.	If Landlord does not actually receive at the place designated for payment any rent due under this lease within 5 days after it is due, Tenant will be in default. If Tenant fails to comply with this lease for any other reason within 10 days after Landlord notifies Tenant of its failure to comply, Tenant will be in default.
C.	If Tenant is in default, Landlord may, with at least 3 days written notice to Tenant: (i) terminate this lease, or (ii) terminate Tenant’s right to occupy the leased premises without terminating this lease and may accelerate all rents which are payable during the remainder of this lease or any renewal period. Landlord will attempt to mitigate any damage or loss caused by Tenant’s breach by using commercially reasonable means. If Tenant is in default, Tenant will be liable for:

(1)	any lost rent;
(2)	Landlord’s cost of reletting the leased premises, including brokerage fees, advertising fees, and other fees necessary to relet the leased premises;
(3)	repairs to the leased premises for use beyond normal wear and tear;
(4)	all Landlord’s costs associated with eviction of Tenant, such as attorney’s fees, court costs, and prejudgment interest;
(5)	all Landlord’s costs associated with collection of rent such as collection fees, late charges, and returned check charges;
(6)	cost of removing any of Tenant’s equipment or fixtures left on the leased premises or Property;
(7)	cost to remove any trash, debris, personal property, hazardous materials, or environmental contaminants left by Tenant or Tenant’s employees, patrons, guests, or invitees in the leased premises or Property;
(8)	cost to replace any unreturned keys or access devices to the leased premises, parking areas, or Property; and
(9)	any other recovery to which Landlord may be entitled under this lease or under law.

21.

ABANDONMENT, INTERRUPTION OF UTILTIES, REMOVAL OF PROPERTY, AND LOCKOUT: Chapter 93 of the Texas Property Code governs the rights and obligations of the parties with regard to: (a) abandonment of the leased premises; (b) interruption of utilities; (c) removal of Tenant’s property; and (d) “lock-out” of Tenant.

22.

HOLDOVER: If Tenant fails to vacate the leased premises at the time this lease ends, Tenant will become a tenant-at-will and must vacate the leased premises immediately upon receipt of demand from Landlord. No holding over by Tenant, with or without the consent of Landlord, will extend this lease. Tenant will indemnify Landlord and any prospective tenants for any and all damages caused by the holdover. Rent for any holdover period will be 150% of the base monthly rent plus any additional rent calculated on a daily basis and will be immediately due and payable daily without notice or demand.

(TAR-2101) 4-1-14 Initialed for Identification by Landlord:  ,___________ , and Tenant:  ,____________ Page 10 of 15

Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

23.	LANDLORD’S LIEN AND SECURITY INTEREST: To secure Tenants performance under this lease, Tenant grants to Landlord a lien and security interest against all of Tenant’s nonexempt personal property that is in the leased premises or on the Property. This lease is a security agreement for the purposes of the Uniform Commercial Code. Landlord may file a financing statement to perfect Landlord’s security interest under the Uniform Commercial Code.
24.	ASSIGNMENT AND SUBLETTING: Landlord may assign this lease to any subsequent owner of the Property. Tenant may not assign this lease or sublet any part of the leased premises without Landlord’s written consent. An assignment of this lease or subletting of the leased premises without Landlord’s written consent is voidable by Landlord. If Tenant assigns this lease or sublets any part of the leased premises, Tenant will remain liable for all of Tenant’s obligations under this lease regardless if the assignment or sublease is made with or without the consent of Landlord.
25.	RELOCATION:

x	A.	By providing Tenant with no less than 90 days advanced written notice, Landlord may require Tenant to relocate to another location in the Property, provided that the other location is equal in size or larger than the leased premises then occupied by Tenant and contains similar leasehold improvements. Landlord will pay Tenant’s reasonable out-of-pocket moving expenses for moving to the other location. “Moving expenses” means reasonable expenses payable to professional movers, utility companies for connection and disconnection fees, wiring companies for connecting and disconnecting Tenant’s office equipment required by the relocation, and printing companies for reprinting Tenant’s stationary and business cards. A relocation of Tenant will not change or affect any other provision of this lease that is then in effect, including rent and reimbursement amounts, except that the description of the suite or unit number will automatically be amended.
o	B.	Landlord may not require Tenant to relocate to another location in the Property without Tenant’s prior consent.

26. SUBORDINATION:

A. This lease and Tenant’s leasehold interest are and will be subject, subordinate, and inferior to:

(1)	any lien, encumbrance, or ground lease now or hereafter placed on the leased premises or the Property that Landlord authorizes;
(2)	all advances made under any such lien, encumbrance, or ground lease;
(3)	the interest payable on any such lien or encumbrance;
(4)	any and all renewals and extensions of any such lien, encumbrance, or ground lease;
(5)	any restrictive covenant affecting the leased premises or the Property; and
(6)	the rights of any owners’ association affecting the leased premises or Property.

B. Tenant must, on demand, execute a subordination, attornment, and non-disturbance agreement that Landlord may request that Tenant execute, provided that such agreement is made on the condition that this lease and Tenant’s rights under this lease are recognized by the lien-holder.

27. ESTOPPEL CERTIFICATES & FINANCIAL INFORMATION:

A. Within 10 days after receipt of a written request from Landlord, Tenant will execute and deliver to Landlord an estoppel certificate that identifies the terms and conditions of this lease.

(TAR-2101) 4-1-14 Initialed for Identification by Landlord:  ,___________ , and Tenant:  ,____________ Page 11 of 15

Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

B. Within 30 days after receipt of a written request from Landlord, Tenant will provide to Landlord Tenant’s current financial information (balance sheet and income statement). Landlord may request the financial information no more frequently than once every 12 months.

28. CASUALTY LOSS:

A.	Tenant must immediately notify Landlord of any casualty loss in the leased premises. Within 20 days after receipt of Tenant’s notice of a casualty loss, Landlord will notify Tenant if the leased premises are less than or more than 50% unusable, on a per square foot basis, and if Landlord can substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty loss.
B.	If the leased premises are less than 50% unusable and Landlord can substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty, Landlord will restore the leased premises to substantially the same condition as before the casualty. If Landlord fails to substantially restore within the time required, Tenant may terminate this lease.
C.	If the leased premises are more than 50% unusable and Landlord can substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty, Landlord may: (1) terminate this lease: or (2) restore the leased premises to substantially the same condition as before the casualty. If Landlord chooses to restore and does not substantially restore the leased premises within the time required, Tenant may terminate this lease.
D.	If Landlord notifies Tenant that Landlord cannot substantially restore the leased premises within 120 days after Tenant notifies Landlord of the casualty loss, Landlord may: (1) choose not to restore and terminate this lease; or (2) choose to restore, notify Tenant of the estimated time to restore, and give Tenant the option to terminate this lease by notifying Landlord within 10 days.
E.	If this lease does not terminate because of a casualty loss, rent will be reduced from the date Tenant notifies Landlord of the casualty loss to the date the leased premises are substantially restored by an amount proportionate to the extent the leased premises are unusable.

29.	CONDEMNATION: If after a condemnation or purchase in lieu of condemnation the leased premises are totally unusable for the purposes stated in this lease, this lease will terminate. If after a condemnation or purchase in lieu of condemnation the leased premises or Property are partially unusable for the purposes of this lease, this lease will continue and rent will be reduced in an amount proportionate to the extent the leased premises are unusable. Any condemnation award or proceeds in lieu of condemnation are the property of Landlord and Tenant has no claim to such proceeds or award. Tenant may seek compensation from the condemning authority for its moving expenses and damages to Tenant’s personal property.
30.	ATTORNEY’S FEES: Any person who is a prevailing party in any legal proceeding brought under or related to the transaction described in this lease is entitled to recover prejudgment interest, reasonable attorney’s fees, and all other costs of litigation from the nonprevailing party.
31.	REPRESENTATIONS:

A.	Tenant’s statements in this lease and any application for rental are material representations relied upon by Landlord. Each party signing this lease represents that he or she is of legal age to enter into a binding contract and is authorized to sign this lease. If Tenant makes any misrepresentation in this lease or in any application for rental, Tenant is in default.
B.	Landlord is not aware of any material defect on the Property that would affect the health and safety of an ordinary person or any environmental hazard on or affecting the Property that would affect the health or safety of an ordinary person, except:

(TAR-2101) 4-1-14 Initialed for Identification by Landlord:  ,___________ , and Tenant:  ,____________ Page 12of 15

Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

C. Each party and each signatory to this lease represents that: (1) it is not a person named as a Specially Designated National and Blocked Person as defined in Presidential Executive Order 13224; (2) it is not acting, directly or indirectly, for or on behalf of a Specially Designated and Blocked Person; and (3) is not arranging or facilitating this lease or any transaction related to this lease for a Specially Designated and Blocked Person. Any party or any signatory to this lease who is a Specially Designated and Blocked person will indemnify and hold harmless any other person who relies on this representation and who suffers any claim, damage, loss, liability or expense as a result of this representation.

32. BROKERS:

A. The brokers to this lease are:

Principal Broker:	Tarantino Properties, Inc	Cooperating Broker:	Sperry Van Ness-Norris Commercial Group IIc
Agent:	Sean Gildea	Agent:	Scott Forester
Address:	502 E 11th Street, Suite400	Address:	373 S. Seguin Avenue
	Austin, TX 78701		New Braunfels, TX 78130
Phone & Fax:	512-302-4500	Phone & Fax:	830-358-7000
E-mail:	sgildea@tarantino.com	E-mail:	scott.forester@svn.com
License No.:	411489	License No.:
Principal Broker: (Check only one box)		Cooperating Broker represents Tenant.

x represents Landlord only.

o represents Tenant only.

o is an intermediary between Landlord and Tenant.

B. Fees:

x	(1)	Principal Broker’s fee will be paid according to: (Check only one box).
	o	(a)	a separate written commission agreement between Principal Broker and:
			o Landlord    o Tenant.
	x	(b)	the attached Commercial Lease Addendum for Broker’s Fee (TAR-2102).
x	(2)	Cooperating Broker’s fee will be paid according to: (Check only one box).
	o	(a)	a separate written commission agreement between Cooperating Broker and:
			o Principal Broker   o Landlord    o Tenant.
	x	(b)	the attached Commercial Lease Addendum for Broker’s Fee (TAR-2102).

33.	ADDENDA: Incorporated into this lease are the addenda, exhibits and other information marked in the Addenda and Exhibit section of the Table of Contents. If Landlord’s Rules and Regulations are made part of this lease, Tenant agrees to comply with the Rules and Regulations as Landlord may, at its discretion, amend from time to time.
34.	NOTICES: All notices under this lease must be in writing and are effective when hand-delivered, sent by mail, or sent by facsimile transmission to:

Landlord at:	c/o Tarantino Properties, Inc.
	Address:	502 E. 11th Street, Suite 400 Austin, TX 78701

(TAR-2101) 4-1-14 Initialed for Identification by Landlord:  ,___________ , and Tenant:  ,____________ Page 13 of 15

Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

	Phone:	512-302-4500	Fax:	512-302-4109
and a copy to:
	Address:
	Phone:		Fax:

o   Landlord also consents to receive notices by e-mail at:

Tenant at the leased premises,

and a copy to:
	Address:
	Phone:	Fax:

o   Tenant also consents to receive notices by e-mail at:

35. SPECIAL PROVISIONS:

A.	Landlord shall deliver the space to Tenant in “AS-IS”, “where is” condition and with all faults.
B.	Landlord at Landlord’s sole cost shall steam clean the carpets prior to Tenant’s Possession.
C.	Landlord at Landlord’s sole cost shall install building standard signage at the entrance to the Leased Premises and the lobby directory.
D.	Tenant shall have the right to periodically complete routine maintenance and installation of computer systems in law enforcement vehicles. Periodically shall be defined as no more than two (2) times per every calendar month. Tenant’s maintenance and installation activities shall not interfere with existing Tenants at the property and shall be done in the area outlined in Exhibit C. Vehicles shall not be stored overnight at the property and must be in good, working, and driveable condition. Landlord reserves the right to restrict or stop installation and/or maintenance by Tenant at the property at any time.

36. AGREEMENT OF PARTIES:

A.	Entire Agreement: This lease contains the entire agreement between Landlord and Tenant and may not be changed except by written agreement.
B.	Binding Effect: This lease is binding upon and inures to the benefit of the parties and their respective heirs, executors, administrators, successors, and permitted assigns.
C.	Joint and Several: All Tenants are jointly and severally liable for all provisions of this lease. Any act or notice to, or refund to, or signature of, any one or more of the Tenants regarding any term of this lease, its renewal, or its termination is binding on all Tenants.
D.	Controlling Law: The laws of the State of Texas govern the interpretation, performance, and enforcement of this lease.
E.	Severable Clauses: If any clause in this lease is found invalid or unenforceable by a court of law, the remainder of this lease will not be affected and all other provisions of this lease will remain valid and enforceable.
F.	Waiver: Landlord’s delay, waiver, or non-enforcement of acceleration, contractual or statutory lien, rental due date, or any other right will not be deemed a waiver of any other or subsequent breach by Tenant or any other term in this lease.

(TAR-2101) 4-1-14 Initialed for Identification by Landlord:  ,___________ , and Tenant:  ,____________ Page 14 of 15

Commercial Lease concerning: 1000 North Walnut Avenue #150                                                              New Braunfels                                                     TX                                          78130                                         

G.	Quiet Enjoyment: Provided that Tenant is not in default of this lease, Landlord covenants that Tenant will enjoy possession and use of the leased premises free from material interference.
H.	Force Majeure: If Landlord’s performance of a term in this lease is delayed by strike, lock-out, shortage of material, governmental restriction, riot, flood, or any cause outside Landlord’s control, the time for Landlord’s performance will be abated until after the delay.
I.	Time: Time is of the essence. The parties require strict compliance with the times for perfomance.

Brokers are not qualified to render legal advice, property inspections, surveys, engineering studies, environmental assessments, tax advice, or compliance inspections. The parties should seek experts to render such services. READ THIS LEASE CAREFULLY. If you do not understand the effect of this Lease, consult your attorney BEFORE signing.

Landlord: 1000 Walnut Limited Tenant: CoPSync, Inc.

By: By:

By (signature):		By (signature):
Printed Name:	John C. Lewis	Printed Name:	Jay Greene

Title: Date: Title: V.P. of Operations Date: 5/29/2014

By: By:

By (signature):	By (signature):
Printed Name:	Printed Name:

Title: Date: Title: Date:

(TAR-2101) 4-1-14 Page 15 of 15

EX-10.17

Exhibit 10.17

October 6, 2014

Mr.RonaldA.Woessner

ChiefExecutiveOfficer

COPsync,Inc.

P.O.  Box 802108

Dallas, Texas 75380
 

Dear Mr. Woessner,

We are pleased that COPsync, Inc., a U.S. corporation ("COPsync" or the "Company") has decided to retain Maxim Group LLC ("Maxim") to provide general financial advisory and investment banking services to the Company as set forth herein. This letter agreement ("Agreement") will confirm Maxim's acceptance of such retention and set forth the terms of our engagement.

1.  Retention. The Company hereby retains Maxim as its financial advisor and investment banker to provide general financial advisory and investment banking services, and Maxim accepts such retention on the terms and conditions set forth in this Agreement. In connection with this Agreement, Maxim may provide certain or all of the following services (collectively referred to as the ''Advisory Services"):

(a)           provide a valuation analysis of the Company including:

I. Comparable company analysis;

II. Precedent transaction analysis;

(b)           assist management of the Company and advise the Company with respect to its strategic planning process and business plans including an analysis of markets, positioning, financial models, organizational structure, potential strategic alliances and capital requirements;

(c)           advise the Company on matters relating to its capitalization including a potential reverse split and national listing application;

(d)           assist management  of the Company with the preparation of the Company's marketing materials and investor presentations;

(e)           assist the Company in broadening its shareholder base including non-deal road show activity;

(f)           assist the Company with strategic introductions;

(g)           work closely with the Company's management team to develop a set of long and short-term goals with special focus on enhancing corporate and shareholder value. This will include assisting the Company in determining key business actions, including assistance with strategic partnership discussions and review of financing requirements, intended to help enhance shareholder value and exposure to the investment community;

(h)           advise the Company on potential financing alternatives and merger and acquisition criteria and activity, including facilitation and negotiation of any financial or structural aspects of such alternatives; and

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

COPsync,Inc.

October 2014

(i) provide such other financial advisory and investment banking services upon which the parties may mutually agree.

It is expressly understood and agreed that Maxim shall be required to perform only such tasks as may be necessary or desirable in connection with the rendering of its services hereunder and therefore may not perform all of the tasks enumerated above during the term of this Agreement. Moreover , it is further understood that Maxim need not perform each of the above-referenced tasks in order to receive the fees described in Section 3. It is further understood that Maxim's tasks may not be limited to those enumerated in this paragraph.

2. Information. In connection with Maxim 's activities hereunder, the Company will cooperate with Maxim and furnish Maxim upon request with all information regarding the business , operations, properties, financial condition, management and prospects of the Company (all such information so furnished being the "Information") which Maxim deems appropriate and will provide Maxim with access to the Company's officers, directors, employees, independent accountants and legal counsel. The Company represents and warrants to Maxim that all information made available to Maxim hereunder will be complete and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements are or will be made. The Company further represents and warrants that any projections and other forward-looking information provided by it to Maxim will have been prepared in good faith and will be based upon assumptions which, in light of the circumstances under which they are made, are reasonable. The Company recognizes and confirms that Maxim: (i) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (ii) does not assume responsibility for the accuracy or completeness of the Information and such other information; and (iii) will not make an appraisal of any assets of the Company. Any advice rendered by Maxim pursuant to this Agreement may not be disclosed publicly without Maxim's prior written consent. Maxim hereby acknowledges that certain of the Information received by Maxim may be confidential and/or proprietary, including Information with respect to the Company's technologies, products, business plans, marketing, and other Information which must be maintained by Maxim as confidential. Maxim agrees that it will not disclose such confidential and/or proprietary information to any other companies in the industry in which the Company is involved .

3.Compensation. As consideration for Maxim's services pursuant to this Agreement, Maxim shall be entitled to receive, and the Company agrees to pay Maxim, the following compensation:

(a)           The Company shall pay to Maxim a non-refundable monthly fee of $5,000 (USD) for the term of this Agreement; however in no event shall the Company pay fewer than six (6) monthly fee payments to Maxim. The monthly fee payments are payable at the beginning of each month upon execution ·of this. Agreement until the termination of the Agreement (subject to the minimum six month time period detailed in the preceding sentence). The monthly fee payments shall be payable by wire or other immediately available funds.

(b) The Company will issue to Maxim or its designees 2,375,000 shares of the Company's Common Stock ("Common Stock") as of the execution date of this Agreement. The shares of Common Stock will have unlimited piggyback registration rights and the same rights afforded other holders of the Company's Common Stock. The certificate representing the shares shall bear the customary Rule 144 language. Maxim agrees to hold the shares (i.e., not pledge, transfer, gift or otherwise transfer the shares) until the earlier of (a) the one year anniversary from the date of

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

COPsync,Inc.

October 2014

issuance or (b) the effective date of the listing for trading of the Company's common stock on either the NYSE or the NASDAQ automated inter-dealer quotation system.

4.           Expenses. In addition to payment to Maxim of the compensation set forth in Section 3 hereof: the Company shall promptly upon request from time to time reimburse Maxim for all reasonable expenses (including, without limitation, fees and disbursements of counsel and all travel and other out-of-pocket expenses) incurred by Maxim in connection with its engagement hereunder. Maxim will provide the Company an invoice and copies of receipts pursuant to its expenses and such expenses shall not exceed $2,500 without prior authorization of the Company; provided that the foregoing limitation and consent shall not apply to legal fees.

5.           Indemnification. The Company agrees to indemnify Maxim in accordance with the indemnification and other provisions attached to this Agreement as Exhibit A {the "Indemnification Provisions"), which provisions are incorporated herein by reference and shall survive the termination or expiration of this Agreement.

6.           Future Rights. As additional consideration for its services hereunder and as an inducement to cause Maxim to enter into this Agreement, if at any time during the term of this Agreement or within twelve (12) months from the effective date of the termination of this Agreement, the Company proposes to effect a public offering of its securities on a US exchange, private placement of securities or other financing, the Company shall offer to retain Maxim as lead book running manager of such offering, or as its exclusive agent in connection with such financing or other matter, upon such terms as the parties may mutually agree, such terms to be set forth in a separate engagement letter or other agreement between the parties. Such offer shall be made in writing in order to be effective. The Company shall not offer to retain any other investment banking firm in connection with any such offering or financing, on terms more favorable than those discussed with Maxim without offering to retain Maxim on such more favorable terms. Maxim shall notify the Company within 10 days of its receipt of the written offer contemplated above as to whether or not it agrees to accept such retention. If Maxim should decline such retention, the Company shall have no further obligations to Maxim, except as specifically provided for herein. This Section shall supersede and replace Paragraph 4.e. of that certain Finder's Fee and Indemnity Agreement, dated. August 26, 2014 between the Company and Maxim .

7.           Other Activities. The Company acknowledges that Maxim has been, and may in the future be, engaged to provide services as an underwriter, placement agent, finder, advisor and investment banker to other companies in the industry in which the Company is involved. Subject to the confidentiality provisions of Maxim contained in Section 2 hereof, the Company acknowledges and agrees that nothing contained in this Agreement shall limit or restrict the right of Maxim or of any member, manager, officer, employee, agent or representative of Maxim, to be a member, manager, partner, officer, director, employee, agent or representative of, investor in, or to engage in, any other business, whether or not of a similar nature to the Company's business, nor to limit or restrict the right of Maxim to render services of any kind to any other corporation, firm, individual or association. Maxim may, but shall not be required to, present opportunities to the Company.

8.           Term and Termination; Survival of Provisions. Either Maxim or the Company may terminate this Agreement at any time upon 30 days' prior written notice to the other party after the six. (6) month anniversary of this Agreement. In the event of such termination, the Company shall pay and deliver to Maxim: (i) all compensation earned through the date of such termination (''Termination Date") pursuant to any provision of Section 3 hereof: and (ii) all compensation which may be earned by Maxim after the Termination Date pursuant to Section 3 hereof, and shall reimburse Maxim for all expenses incurred by Maxim in connection with its services hereunder pursuant to Section 4 hereof. All such fees

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

COPsync,Inc.

October 2014

and reimbursements due to Maxim pursuant to the immediately preceding sentence shall be paid to Maxim on or before the Termination Date (in the event such fees and reimbursements are earned or owed as of the Termination Date). Notwithstanding anything expressed or implied herein to the contrary: (i) any other agreement entered into between Maxim and the Company may only be terminated in accordance with the terms thereof, notwithstanding an actual or purported termination of this Agreement, and (ii) the terms and provisions of Sections 3, 4, 5 (including, but not limited to, the Indemnification Provisions attached to this Agreement and incorporated herein by reference), 6, 8, 9, 10, 11, 15 and 17 shall survive the termination of this Agreement.

9. Notices. All notices will be in writing and will be effective when delivered in person or sent via facsimile and confirmed by letter, to the party to whom it is addressed at the following addresses or such other address as such party may advise the other in writing:

To the Company : Mr. Ronald A. Woessner Chief Executive Officer COPsync, Inc. P.O. Box 802108 Dallas, TX 75380-2108 Telephone: (972) 865-6192 Fax : (972) 201-9646   16415 Addison Road Suite 300 Addison , Texas 75001

To Maxim James Siegel, Esq. Maxim Group LLC 405 Lexington Avenue NewYork,NY 10174 Attention: James Siegel Telephone:  (212) 895-3508 Facsimile:   (212) 895-3888

Mr. Clifford A. Teller

Maxim Group LLC

405 Lexington Avenue

NewYork.,NY 10174

Attention: Clifford A. Teller

10.Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be enforced, governed by and construed in accordance with the laws of New York without regard to principles of conflict of laws. Any controversy between the parties to this Agreement, or arising .under this Agreement, shall be resolved by arbitration before the Financial Industry Regulatory Authority ("F1NRA'') in New York City. The following arbitration agreement should be read in conjunction with these disclosures:

(a)	ARBITRATION IS FINAL AND BINDING ON THE PARTIES;
(b)	THE PARTIES  ARE WAIVING  THE1R  RIGHT TO SEEK REMEDIES IN  COURT, INCLUDING THE RIGHT TO JURY TRIAL;

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

COPsync,Inc.

October 2014

(c)	PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT PROCEEDING;
(d)	THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDING OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED; AND

ARBITRATION AGREEMENT ANY AND ALL CONTROVERSIES, DISPUTES OR CLAIMS BETWEEN THE .UNDERSIGNED AND YOU OR YOUR AGENTS, REPRESENTATIVES, EMPLOYEES, DIRECTORS, OFFICERS OR CONTROL PERSONS , ARISING OUT OF, IN CONNECTION WITH, FROM OR WITH RESPECT TO (a) ANY PROVISIONS OF OR THE VALIDITY OF THIS AGREEMENT OR ANY RELATED AGREEMENTS, (b) THE RELATIONSHIP OF THE PARTIES HERETO, OR (c) ANY CONTROVERSY ARISING OUT OF YOUR BUSINESS SHALL BE CONDUCTED PURSUANT TO THE CODE OF ARBITRATION PROCEDURE OF FINRA. ARBITRATION MUST BE COMMENCED BY SERVICE OF A WRITTEN DEMAND FOR ARBITRATION OR A WRITTEN NOTICE OF INTENTION TO ARBITRATE. IF YOU ARE A PARTY TO SUCH ARBITRATION, TO THE EXTENT PERMITTED BY THE RULES OF THE APPLICABLE ARBITRATION TRIBUNAL, THE ARBITRATION SHALL BE CONDUCTED IN NEW YORK, NEW YORK. THE DECISION AND AWARD OF THE ARBITRATORS(S) SHALL BE CONCLUSIVE AND BINDING UPON ALL PARTIES, AND ANY JUDGMENT UPON ANY AWARD RENDERED MAY BE ENTERED IN A COURT HAVING JURISDICTION THEREOF, AND NEITHER PARTY SHALL OPPOSE SUCH ENTRY.

11.           Amendments.This Agreement may not be modified or amended except in a writing duly executed by the parties hereto.

12.           Headings.  The section headings in this Agreement have been inserted as a matter of reference and are not part of this Agreement.

13.           Successors and Assigns. The benefits of this Agreement shall inure to the parties hereto, their respective successors and assigns and to the indemnified pat1ies hereunder and their respective successors and assigns, and the obligations and liabilities assumed in this Agreement shall be binding upon the parties hereto and their respective successors and assigns . Notwithstanding anything contained herein to the contrary, neither Maxim nor the Company shall assign any of its obligations hereunder without the prior written consent of the other party .

14.           No Third Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person or entity not a party hereto, except those entitled to the benefits of the Indemnification Provisions. Without limiting the foregoing, the Company acknowledges and agrees that Maxim is not being engaged as, and shall not be deemed to be, an agent or fiduciary of the Company's stockholders or creditors or any other person by virtue of this Agreement or the retention of Maxim hereunder, all of which are hereby expressly waived.

15.           Waiver.  Any waiver or any breach of any of the terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or of any other term or condition, nor shall any failure to insist upon strict performance or to enforce any provision hereof on any one occasion operate as a waiver of such provision or of any other provision hereof or a waiver of the right to insist upon strict performance or to enforce such provision or any other provision on any subsequent occasion. Any waiver must be in writing.

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

COPsync,Inc.

October 2014

16.           Counterparts. This Agreement may be executed in any number of counterparts and by facsimile transmission, each of which shall be deemed to be an original instrument, but all of which taken together shall constitute one and the same agreement. Facsimile signatures shall be deemed to be original signatures for all purposes.

17. Disclaimers. Maxim and the Company further agree that neither Maxim nor any of its affiliates or any of its/their respective officers, directors, controlling persons (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act. of 1934), employees or agents shall have any liability to the Company, its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract, tort, for an act of negligence or otherwise) for any. losses, fees, damages, liabilities , costs, expenses or equitable relief arising out of or relating to this Agreement or the Advisory Services rendered herein, except for losses, fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to act by Maxim and that are finally and fully judicially determined to have resulted solely from the gross negligence or willful misconduct of Maxim.

(Signature Page to Follow)

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

COPsync,Inc.

October 2014

If the terms of our engagement as set forth in this letter are satisfactory to you, please confirm by signing and returning one copy of this letter, together with a check or wire for. $5,000 representing the initial monthly payment, and in addition, the 2,375,000 shares of the Company's .Common Stock in connection with the Agreement.

Very truly yours,

MAXIM GROUP LLC

Agreed to and accepted this 6th day of October, 2014

Name:Ronald A. Woessner

Title: Chief Executive Officer

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

COPsync,Inc.

October 2014

Exhibit A

INDEMNIFICATION PROVISIONS

Capitalized tenns used in this Exhibit shall have the meanings ascribed to such terms in the Agreement to which this Exhibit is attached.

The Company agrees to indemnify and hold harmless Maxim and each of the other Indemnified Parties (as hereinafter defined) from and against any and all losses, claims, damages, obligations, penalties, . judgments, awards, liabilities, costs, expenses and disbursements, and any and all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation , the reasonable costs, expenses and disbursements,  as and when  incurred, of investigating, preparing,  pursing or defending any such  action, suit, proceeding  or investigation  (whether or not in connection with litigation in which any Indemnified Party is a party)) (collectively, "Losses''), caused by, ·relating to, based upon , arising out of, or in connection with, Maxim's acting for the Company, including, without limitation , any act or omission by Maxim in connection with its acceptance of or the performance or non-performance of its obligations under the Agreement between the Company and Maxim to which these indemnification provisions are attached and form a part (the "Agreement") , any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement; or the enforcement by Maxim of its rights under the Agreement or these indemnification provisions, except to the extent that any such Losses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily from the gross negligence, bad faith or willful misconduct of the Indemnified Party seeking indemnification ion hereunder. The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of Maxim by the Company, except to the extent that any such liability is found in a formal judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily from such Indemnified Party 's gross negligence, bad faith or willful misconduct.

These Indemnification  Provisions  shall extend to the following persons (collectively, the "Indemnified Parties"):  Maxim, its present and former affiliated entities, managers, members, officers, employees, legal counsel, agents and controlling persons (within the meaning of the federal securities laws), and the officers, directors, partners, stockholders, members, managers, employees, legal counsel, agents and controlling persons of any of them. These indemnification provisions shall be in addition to any liability which the Company may otherwise have to any Indemnified Party.

If any action, suit, proceeding or investigation is commenced , as to which an Indemnified Party proposes to demand indemnification, it shall notify the Company with reasonable promptness; provided , however, that any failure by an Indemnified Party to notify the Company shall not relieve the Company from its obligations hereunder, except to the extent that the Company shall have been prejudiced by such failure . An Indemnified Party shall have the right to retain counsel of its own choice to represent it, and the reasonable fees, expenses and disbursements of such counsel shall be borne by the Indemnified Party unless: (i) the Company has failed promptly to assume the defense and employ counsel or (ii) the named parties to any such action, suit, proceeding or investigation include such Indemnified Party and the Company, and such Indemnified Party shall have been advised in the reasonable opinion of counsel that there is an actual conflict of interest that prevents the counsel selected by the Company from representing both the Company (or another client of such counsel) and any such Indemnified Party; provided that the Company shall not in such event be responsible hereunder for the fees and expenses of more than one firm of separate counsel for all Indemnified Persons in connection with any action, suit, proceeding or investigation, in addition to any local counsel. The Indemnified Parties agree that they will permit the Company to assume the defense and control the settlement of such action, suit, proceeding or investigation, if they can reach an acceptable agreement as

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

COPsync,Inc.

October 2014

to the procedure and process. The Company shall be liable for any settlement of any claim against any Indemnified Party made with the Company's prior written consent. The Company shall not, without the prior written consent of Maxim, settle or compromise any claim, or consent to the entry of any judgment in respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the giving by the claimant to all of the Indemnified Parties of an unconditional release from all liability in respect of such claim, and (ii) does not contain any factual or legal admission by or with respect to an Indemnified Party or an adverse statement with respect to the character, professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.

In order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found  in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company shall contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by the Company and its stockholders, subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and (ii) if (and only if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to reflect not only the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the other hand, in connection with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable  considerations. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent misrepresentation. The relative benefits received (or anticipated to be received) by the Company and its stockholders, subsidiaries and affiliates shall be deemed to be equal to the aggregate consideration payable or receivable by such parties in connection with the transaction or transactions to which the Agreement relates relative to the amount of compensation actually received by Maxim in connection with such transaction or transactions. Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount of compensation received by Maxim pursuant to the Agreement.

Neither termination nor completion of the Agreement shall affect these Indemnification Provisions which shall remain operative and in full force and effect. The Indemnification Provisions shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnified Parties and their respective successors, assigns, heirs and personal representatives.

Members FINRA & SIPC 405 Lexington Ave.• New York, NY 10174 • tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 •www.maximgrp.com New York, NY • Woodbury, NY • Boca Raton, FL • San Francisco, CA • Red Bank, NJ  

EX-23.1

Exhibit 23.1

Consent of Independent Registered Accounting Firm

We hereby consent to the incorporation by reference in the previously filed Registration Statement on Form S-8 (File No. 333-161882) of our report dated March 31, 2015, relating to the financial statements of COPsync, Inc. as of and for the year ended December 31, 2014 (which report expressed an unqualified opinion on the financial statements) appearing in this annual report on Form 10-K of COPsync, Inc.

/s/  PMB Helin Donovan, LLP

Dallas, Texas

March 31, 2015

EX-31.1

Exhibit 31.1

I, Ronald A. Woessner, certify that:

1.           I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2014 of COPsync, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedure, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:           March 31, 2015	By:	/s/ RONALD A. WOESSNER
		Ronald A. Woessner
		Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Barry W. Wilson, certify that:

1.           I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2014 of COPsync, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedure, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:           March 31, 2015	By:	/s/ BARRY W. WILSON
		Barry W. Wilson
		Chief Financial Officer

EX-32

Exhibit 32

COPSYNC, INC.

CERTIFICATION OF CORPORATE OFFICERS

(Furnished Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of COPsync, Inc. (the "Company"), does hereby certify, to such officer’s knowledge, that:

The Company's Annual Report on Form 10-K for the year ended December 31, 2014 (the “Form 10-K”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-K.

Date: March 31, 2015	By:	/s/ RONALD A. WOESSNER
		Ronald A. Woessner
		Chief Executive Officer
	By:	/s/ BARRY W. WILSON
		Barry W. Wilson
		Chief Financial Officer

The forgoing certification is being furnished as an exhibit to the Form 10-K pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-K for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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NOTE 15 - EMPLOYEE OPTIONS (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The summary activity under the Company’s 2009 Long Term Incentive Plan is as follows:

	December 31, 2014									December 31, 2013
	Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life		Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life
Outstanding at beginning of period		8,375,000		$	0.09						8,815,000		$	0.09
Granted		2,475,000		$	0.13						450,000		$	0.10
Exercised		–		$	0.00					─			$	0.00
Forfeited/ Cancelled		(1,035,001	)	$	0.07						(890,000	)	$	0.08
Outstanding at period end		9,814,999		$	0.11	$	3,268,799		1.50		8,375,000		$	0.09	$	83,750		1.50
Options vested and exercisable at period end		7,523,323		$	0.09	$	2,708,396	─			6,057,494		$	0.09	$	60,575	─
Weighted average grant-date fair value of options granted during the period	$	0.27								$	0.10

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2014:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Options Outstanding		Weighted Average Remaining Contractual  Life (in years)		Weighted Average Exercise Price		Number Outstanding		Weighted Average Exercise Price
$	0.00 – $ 0.08		2,500,000		5.84	$	0.08		2,312,500	$	0.08
$	0.09 – $ 0.39		7,314,999		6.68	$	0.09		5,210,823	$	0.10
			9,814,999						7,523,323

Schedule of Nonvested Share Activity [Table Text Block]

A summary of the status of the Company’s non-vested shares as of December 31, 2014 is as follows:

Non-vested Shares	Shares			Weighted Average Grant-Date Fair Value
Non-vested at January 1, 2014		2,317,506		$	0.09
Granted		2,475,000		$	0.27
Forfeited		(1,035,001	)	$	0.07
Vested		(1,465,829	)	$	0.13
Non-vested		2,291,676		$	0.20

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The Company estimated the fair value of the stock options based on the following weighted average assumptions:

Risk-free interest rate		2.07%	-	3.00	%
Expected life	10 years
Expected volatility		120%	-	123	%
Dividend yield		0.0			%

Risk-free interest rate		1.73%	-	2.53	%
Expected life	10 years
Expected volatility		126%	-	131	%
Dividend yield		0.0			%

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NOTE 7 - INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities (USD $)	Dec. 31, 2014	Dec. 31, 2013
Deferred tax assets:
Net operating loss carry-forwards	$ 5,294,800	$ 4,372,400
Total deferred tax assets	5,294,800	4,372,400
Valuation allowance	(5,294,800)	(4,372,400)
Net deferred tax assets	$ 0	$ 0

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NOTE 4 - INVENTORY (Details) - Schedule of Inventory (USD $)	Dec. 31, 2014	Dec. 31, 2013
Schedule of Inventory [Abstract]
Raw materials	$ 0	$ 0
Work-in-process	0	0
Finished goods	246,077	357,933
Total Inventory	$ 246,077	$ 357,933

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NOTE 15 - EMPLOYEE OPTIONS (Details) (USD $)	3 Months Ended		12 Months Ended		0 Months Ended	1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Sep. 02, 2009	Apr. 30, 2014	Dec. 31, 2012
NOTE 15 - EMPLOYEE OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	9,814,999	8,375,000	9,814,999	8,375,000			8,815,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	7,523,323	6,057,494	7,523,323	6,057,494
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in Dollars per share)	$ 0.11	$ 0.09	$ 0.11	$ 0.09			$ 0.09
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			2,475,000	450,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.13	$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Forfeiture Rate	26.00%	23.00%
Share-based Compensation (in Dollars)			$ 147,097	$ 184,973
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested (in Dollars)			475,000
Director [Member]
NOTE 15 - EMPLOYEE OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			75,000
Number of Directors			3
Officer [Member]
NOTE 15 - EMPLOYEE OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			2,400,000
Number of Officers			4
Share-based Compensation Award, Tranche Three [Member] | 2009 Long Term Incentive Plan [Member]
NOTE 15 - EMPLOYEE OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					3 years
Share-based Compensation Award, Tranche One [Member] | 2009 Long Term Incentive Plan [Member]
NOTE 15 - EMPLOYEE OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					5 years
Share-based Compensation Award, Tranche Four [Member] | 2009 Long Term Incentive Plan [Member]
NOTE 15 - EMPLOYEE OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			24 months
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			33.00%
2009 Long Term Incentive Plan [Member]
NOTE 15 - EMPLOYEE OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					10,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized						10,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years		10 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	9,814,999		9,814,999
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	7,523,323		7,523,323
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in Dollars per share)	$ 0.09		$ 0.09
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			2,475,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.13
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount (in Dollars)			311,490
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars)	$ 448,000		$ 448,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 277 days

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NOTE 7 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Schedule of Effective Income Tax Rate Reconciliation [Abstract]
Expected federal income tax benefit	$ (1,471,700)	$ (1,529,500)
Stock expense	357,000	15,300
Stock option and warrant expense	121,300	123,100
Other	70,700	224,900
Change in valuation allowance	922,700	1,166,200
Income tax benefit	$ 0	$ 0

XML

NOTE 18 - SUBSEQUENT EVENTS (Details) (USD $)	1 Months Ended	12 Months Ended		3 Months Ended
	Oct. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2015	Dec. 31, 2012	Mar. 31, 2014	Jun. 30, 2013
NOTE 18 - SUBSEQUENT EVENTS (Details) [Line Items]
Funding Initiative to Fund Software Development	$ 750,000	$ 750,000
Proceeds from Convertible Debt		0	260,000
Class of Warrant or Right, Outstanding (in Shares)		22,371,795	11,049,842		10,341,982
Proceeds from Warrant Exercises		44,000	0
Warrant Exercise Price $0.20 [Member] | Subsequent Event [Member]
NOTE 18 - SUBSEQUENT EVENTS (Details) [Line Items]
Class of Warrant or Rights, Exercised (in Shares)				360,000
Proceeds from Warrant Exercises				64,000
Warrant Exercise Price $0.20 [Member]
NOTE 18 - SUBSEQUENT EVENTS (Details) [Line Items]
Class of Warrant or Right, Outstanding (in Shares)		3,155,582
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.20
Class of Warrant or Rights, Aggregate Exercise Proceeds		631,116
Subsequent Event [Member] | Convertible Debt [Member]
NOTE 18 - SUBSEQUENT EVENTS (Details) [Line Items]
Proceeds from Convertible Debt				$ 450,000
Debt Instrument, Term				3 years
Debt Instrument, Interest Rate, Stated Percentage				2.00%
Debt Instrument, Convertible, Conversion Price (in Dollars per share)				$ 0.22
Convertible Debt [Member]
NOTE 18 - SUBSEQUENT EVENTS (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage							3.00%
Debt Instrument, Convertible, Conversion Price (in Dollars per share)		$ 0.10				$ 0.10	$ 0.10

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NOTE 3 - ACCOUNTS RECEIVABLE (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable (USD $)	Dec. 31, 2014	Dec. 31, 2013
Schedule of Accounts, Notes, Loans and Financing Receivable [Abstract]
Trade receivables	$ 1,101,279	$ 649,837
Other receivables	53,227	7,908
Elimination of unpaid deferred revenue	(716,495)	(525,938)
Allowance for doubtful accounts	(214,389)	(30,000)
Total Accounts Receivable	$ 223,622	$ 101,807

XML

NOTE 7 - INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Deferred tax assets and liabilities at December 31, consist of the following:

	2014			2013
Deferred tax assets:
Net operating loss carry-forwards	$	5,294,800		$	4,372,400
Total deferred tax assets		5,294,800			4,372,400
Valuation allowance		(5,294,800	)		(4,372,400	)
Net deferred tax assets	$	-		$	-

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

Income tax benefit differs from the expected statutory rate as follows:

	2014			2013
Expected federal income tax benefit	$	(1,471,700	)	$	(1,529,500	)
Stock expense		357,000			15,300
Stock option and warrant expense		121,300			123,100
Other		70,700			224,900
Change in valuation allowance		922,700			1,166,200
Income tax benefit	$	–		$	–

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NOTE 15 - EMPLOYEE OPTIONS (Details) - Summary of Non-vested Shares (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Summary of Non-vested Shares [Abstract]
Non-vested at January 1, 2014	2,317,506
Non-vested at January 1, 2014	$ 0.09
Granted	2,475,000	450,000
Granted	$ 0.27	$ 0.10
Forfeited	(1,035,001)	(890,000)
Forfeited	$ 0.07
Vested	(1,465,829)
Vested	$ 0.13
Non-vested	2,291,676	2,317,506
Non-vested	$ 0.20	$ 0.09

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NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Total notes payable	$ 1,139,046	$ 519,734
Less: Current portion	(791,289)	(412,405)
Long-term portion	347,757	107,329
Note Payable #1 [Member] | Notes Payable to Banks [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Collateral	Autos
Note Payable, Interest Rate	6.00%
Note Payable, Monthly Payments	468
Note Payable, Maturity	Jan. 2017
Note Payable	10,949	15,749
Note Payable #1 [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Collateral	Inventory
Note Payable, Interest Rate	16.00%
Note Payable, Monthly Payments	0
Note Payable, Maturity	Jun. 2015
Note Payable	313,477	313,477
Note Payable #2 [Member] | Notes Payable to Banks [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Collateral	Autos
Note Payable, Interest Rate	6.50%
Note Payable, Monthly Payments	1,017
Note Payable, Maturity	Jun. 2018
Note Payable	21,818	47,401
Note Payable #2 [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Interest Rate	15.00%
Note Payable, Monthly Payments	7,500
Note Payable, Maturity	Apr. 2015
Note Payable	30,745	0
Note Payable #3 [Member] | Notes Payable to Banks [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Collateral	Autos
Note Payable, Interest Rate	6.50%
Note Payable, Monthly Payments	220
Note Payable, Maturity	Jul. 2018
Note Payable	8,387	10,392
Note Payable #3 [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Interest Rate	0.00%
Note Payable, Monthly Payments	0
Note Payable, Maturity	Apr. 2015
Note Payable	7,500	0
Note Payable #4 [Member] | Notes Payable to Banks [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Collateral	Autos
Note Payable, Interest Rate	4.00%
Note Payable, Monthly Payments	312
Note Payable, Maturity	Mar. 2019
Note Payable	14,569	0
Note Payable #4 [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Interest Rate	12.90%
Note Payable, Monthly Payments	0
Note Payable, Maturity	Jul. 2015
Note Payable	250,000	0
Note Payable #5 [Member] | Notes Payable to Banks [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Collateral	Autos
Note Payable, Interest Rate	4.00%
Note Payable, Monthly Payments	254
Note Payable, Maturity	Mar. 2019
Note Payable	11,893	0
Note Payable #5 [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Interest Rate	9.90%
Note Payable, Monthly Payments	0
Note Payable, Maturity	0
Note Payable	0	98,646
Note Payable #6 [Member] | Notes Payable to Banks [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Collateral	Autos
Note Payable, Interest Rate	4.00%
Note Payable, Monthly Payments	346
Note Payable, Maturity	May. 2019
Note Payable	16,790	0
Note Payable #6 [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Interest Rate	16.70%
Note Payable, Monthly Payments	0
Note Payable, Maturity	Jun. 2015
Note Payable	412,618	0
Insurance Coverage [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Note Payable, Interest Rate	7.50%
Note Payable, Monthly Payments	3,093
Note Payable, Maturity	Nov. 2014
Note Payable	$ 40,300	$ 34,069

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NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Future Minimum Payments for Contractual Obligations (USD $)	Dec. 31, 2014
Schedule of Future Minimum Payments for Contractual Obligations [Abstract]
Operating Lease Obligations	$ 192,868
Operating Lease Obligations	95,927
Operating Lease Obligations	79,297
Operating Lease Obligations	17,644
Operating Lease Obligations	$ 0

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NOTE 17 - RELATED PARTY TRANSACTIONS (Details) (USD $)	12 Months Ended		0 Months Ended	3 Months Ended	1 Months Ended	3 Months Ended	0 Months Ended	1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Feb. 28, 2014	Dec. 31, 2014	Nov. 30, 2013	Jun. 30, 2014	Jul. 11, 2014	May 31, 2014	Dec. 31, 2012	Aug. 31, 2013
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Repayments of Notes Payable	$ 180,229	$ 300,455
Chief Executive Officer [Member] | Notes Payable, Other Payables [Member]
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount		60,000	25,000						120,000
Debt Instrument, Interest Rate, Stated Percentage			3.00%						3.00%
Repayments of Notes Payable				17,500
Notes Payable, Related Parties	7,500			7,500
Debt Instrument, Maturity Date			Apr. 01, 2015
Chief Executive Officer [Member] | Convertible Notes Payable [Member]
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount		60,000							120,534	40,000
Debt Instrument, Interest Rate, Stated Percentage									3.00%	3.00%
Debt Instrument, Maturity Date		Mar. 14, 2014
Debt Instrument, Convertible, Conversion Price (in Dollars per share)									$ 0.10	$ 0.10
Chief Executive Officer [Member]
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Repayments of Notes Payable		120,000
Immediate Family Member of Management or Principal Owner [Member] | Notes Payable, Other Payables [Member]
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount					60,000
Debt Instrument, Interest Rate, Stated Percentage					3.00%
Repayments of Notes Payable		60,000
Immediate Family Member of Management or Principal Owner [Member] | Convertible Notes Payable [Member]
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount					60,000
Debt Instrument, Interest Rate, Stated Percentage					3.00%
Debt Instrument, Maturity Date					Mar. 31, 2014
Debt Instrument, Convertible, Conversion Price (in Dollars per share)					$ 0.10
Director [Member] | Notes Payable, Other Payables [Member]
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount					313,477
Debt Instrument, Interest Rate, Stated Percentage					16.00%
Number of Notes Payable					2
Debt Instrument, Maturity Date, Description					May 2014
Debt Instrument, Collateral					collateralized by the third-party equipment being procured
Equipment [Member] | Notes Payable, Other Payables [Member]
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount					313,477
Debt Instrument, Interest Rate, Stated Percentage					16.00%
Number of Notes Payable					2
Debt Instrument, Maturity Date, Description					May 2014	November 2014
Notes Payable, Other Payables [Member]
NOTE 17 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount								$ 607,500
Debt Instrument, Interest Rate, Stated Percentage							15.00%	50.00%
Debt Instrument, Maturity Date							Apr. 11, 2015
Number of Notes Payable								8

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NOTE 15 - EMPLOYEE OPTIONS (Details) - Summary of Stock Option Activity (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Summary of Stock Option Activity [Abstract]
Outstanding at beginning of period (in Shares)	8,375,000	8,815,000
Outstanding at beginning of period	$ 0.09	$ 0.09
Granted (in Shares)	2,475,000	450,000
Granted	$ 0.13	$ 0.10
Exercised	$ 0.00	$ 0.00
Exercised (in Shares)	0	0
Forfeited/ Cancelled (in Shares)	(1,035,001)	(890,000)
Forfeited/ Cancelled	$ 0.07	$ 0.08
Outstanding at period end (in Shares)	9,814,999	8,375,000
Outstanding at period end	$ 0.11	$ 0.09
Outstanding at period end (in Dollars)	$ 3,268,799	$ 83,750
Outstanding at period end	1 year 6 months	1 year 6 months
Options vested and exercisable at period end (in Shares)	7,523,323	6,057,494
Options vested and exercisable at period end	$ 0.09	$ 0.09
Options vested and exercisable at period end (in Dollars)	$ 2,708,396	$ 60,575
Options vested and exercisable at period end	0 years	0 years
Weighted average grant-date fair value of options granted during the period	$ 0.27	$ 0.10

XML

NOTE 17 - RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 17 -     RELATED PARTY TRANSACTIONS

On February 28, 2014, the Company executed a $25,000, sixty-day promissory note payable to its chief executive officer for a loan in the same amount.  The note bears interest at 3.0% per annum, which is due upon maturity of the promissory note.  In the fourth quarter of 2014, the Company repaid $17,500 of the principal amount of the note, leaving an outstanding balance of $7,500.  The Company’s chief executive officer has elected to extend the maturity date of this note to April 1, 2015.

In August 2013, the Company’s chief executive officer loaned the Company $40,000, which was evidenced by a convertible promissory note bearing interest at 3% annually.  The note was originally due March 31, 2014; however, the due date has been extended to March 31, 2016.  The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. 

In November 2013, the spouse of the Company’s chief executive officer loaned the Company $60,000, which was evidenced by a demand promissory note bearing interest at 3% annually.  The demand note was replaced shortly thereafter with a convertible promissory note totaling $60,000, also bearing 3% annual interest and originally due March 31, 2014; however, the due date has been extended to March 31, 2016. The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. 

In November 2013, the Company executed two short-term notes payable in the aggregate of $313,477 with an equipment financing company owned by one of the Company’s outside directors for the specific purpose of financing the purchase of certain third-party equipment to be sold to contracted customers.  Both notes were to mature in May 2014, bear interest at 16% annually, are payable upon maturity, and are collateralized by the third-party equipment being procured.  The maturity dates for both notes have been extended until June 25, 2015.

In December 2012, the Company’s chief executive officer loaned the Company $120,000, which was evidenced by a demand promissory note bearing interest at 3% annually. The demand note, including accrued interest, was replaced with a convertible promissory note totaling $120,534, also bearing 3% annual interest and due one year from its issuance. The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share.  During 2013, the Company’s chief executive officer agreed to extend the due date for this convertible promissory note to March 14, 2014.  The Company’s chief executive officer subsequently extended the due date to March 31, 2016.

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NOTE 5 - PREPAID EXPENSES AND OTHER ASSETS (Details) - Schedule of Prepaid Expenses and Other Assets (USD $)	Dec. 31, 2014	Dec. 31, 2013
Schedule of Prepaid Expenses and Other Assets [Abstract]
Prepaid Insurance	$ 44,101	$ 37,910
Subscriptions	24,050	14,859
Vendor Prepayments	103,044	63,804
Deferred Charges	98,953	0
Total Prepaid Expenses and Other Assets	$ 270,148	$ 116,573

XML

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	12 Months Ended		0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 22, 2014
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Cash, Uninsured Amount	$ 328,000
Inventory Adjustments	0	0
Additional Funding Attempting to Secure	2,000,000	(2,000,000)
Payments of Financing Costs		50,000
Depreciation	47,393	35,935
Finite-Lived Intangible Asset, Useful Life	15 years
Vehicles [Member]
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Lease Agreement, Term			48 months
Number of Vehicles			2
Capital Lease Obligation, Monthly Payment			35,098
Capital Lease Obligations	35,098
Repayments of Long-term Capital Lease Obligations	$ 0

XML

NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) (USD $)	0 Months Ended	1 Months Ended		12 Months Ended		0 Months Ended
	Jul. 21, 2014	Dec. 31, 2014	Jul. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Nov. 01, 2014	Oct. 06, 2014
NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Class of Warrant or Rights, Granted (in Shares)	300,000			12,256,953	707,860
Purchase Commitment, Amount		$ 433,000	$ 433,000
Purchase Commitment, Remaining Minimum Amount Committed		155,925		155,925
Building [Member] | Dallas, Texas [Member]
NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Area of Real Estate Property (in Square Meters)		7,000		7,000
Lease Expiration Date				Aug. 31, 2015
Lessor Leasing Arrangements, Operating Leases, Term of Contract				30 months
Operating Leases, Rent Expense, Minimum Rentals				7,502
Building [Member] | New Braunfels, Texas [Member]
NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Area of Real Estate Property (in Square Meters)		2,500		2,500
Lessor Leasing Arrangements, Operating Leases, Term of Contract				51 months
Operating Leases, Rent Expense, Minimum Rentals				2,906
Lease, Rental Increase, Percentage				7.00%
Consulting Agreement with Advisory Services [Member] | Monthly Payment [Member]
NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Other Commitment	7,500
Consulting Agreement with Advisory Services [Member]
NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Other Commitments, Description	After the six month period is over, the agreement may be extended for an additional six-month period, provided either party may cancel the agreement upon the submission of a ten day written notice. One element of compensation to the consultant is a $7,500 monthly payment. Another element is the Company’s issuance of warrants to purchase 300,000 shares of the Company’s common stock (see Note 14). Additionally, the agreement contains elements involving the Company’s indemnification of the consultant and future rights belonging to the consultant should the Company conduct future business with a party originally introduced to the Company by the consultant.
Agreement, Term	6 months
Consulting Agreement with Financial Advisory and Investment Banker Services [member] | Monthly Payment [Member]
NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Other Commitment							5,000
Class of Warrant or Rights, Granted (in Shares)						10,000
Consulting Agreement with Financial Advisory and Investment Banker Services [member]
NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Other Commitments, Description							Company executed a six-month consulting agreement with a third party service provider for general financial advisory and investment banker services. After the six month period is over, either party may cancel the agreement upon the submission of a thirty day written notice. One element of compensation to the consultant is a $5,000 non-refundable monthly payment. The Company has also agreed to reimburse the consultant for reasonable travel and other out-of-pocket expenses. Another element is the Company’s issuance of 2,375,000 stock grant (see Note 11). Additionally, the agreement contains elements involving the Company’s indemnification of the consultant and future rights belonging to the consultant should the company become involved in a public offering.
Agreement, Term						6 months	6 months
Class of Warrant or Rights, Granted (in Shares)							2,375,000
Promotion and Sales Agreement [Member]
NOTE 16 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Other Commitments, Description						Company executed a six-month consulting agreement with a third party service provider for promotion and sales of the Company’s COPsync911 and VidTac products in certain markets. The agreement may be extended upon mutual agreement between the two parties. One element of compensation to the consultant is a $10,000 monthly fee, with $5,000 being paid each month and the balance being deferred until the end of the initial six month period, at which time the cumulative deferral will be paid. The Company has also agreed to reimburse the consult for reasonable travel and other out-of-pocket expenses.

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NOTE 13- BASIC AND FULLY DILUTED LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

The Company's common stock equivalents, at December 31, consisted of the following and have not been included in the calculation because they are anti-dilutive:

	2014		2013
Convertible Notes Outstanding		4,106,296		6,212,191
Warrants Outstanding		22,371,795		11,049,842
Stock Options Outstanding		9,814,999		8,375,000
Common Stock to be Issued		300,000		-
Preferred Stock Outstanding		15,100,000		15,100,000
Dividends on Preferred Stock Outstanding		6,145,374		5,095,374
Total Common Stock Equivalents		57,838,464		45,832,407

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NOTE 6- SOFTWARE DEVELOPMENT COSTS (Details) - Schedule of Finite-Lived Intangible Assets (USD $)	Dec. 31, 2014	Dec. 31, 2013
Schedule of Finite-Lived Intangible Assets [Abstract]
Capitalized software development costs	$ 2,724,082	$ 2,724,082
Accumulated amortization	(1,847,274)	(1,410,803)
Sub-total	876,808	1,313,279
Cumulative Impairment charge	(876,808)	(876,808)
Total	$ 0	$ 436,471

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NOTE 14 - OUTSTANDING WARRANTS (Details) (USD $)	0 Months Ended	12 Months Ended		24 Months Ended	12 Months Ended	1 Months Ended	0 Months Ended
	Jul. 21, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2010	Dec. 31, 2012	Sep. 30, 2014	Oct. 06, 2014	Oct. 01, 2014	Nov. 01, 2014
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted	300,000	12,256,953	707,860
Proceeds from Issuance or Sale of Equity (in Dollars)		$ 2,084,115
Common Stock to be Issued, Shares		300,000	15,000
Stock Issued During Period, Shares, Issued for Services		600,000	0
Stock Issued During Period, Value, Issued for Services (in Dollars)		60,000
Adjustments to Additional Paid in Capital, Warrant Issued (in Dollars)		209,576
Class of Warrant or Rights Exercisable		15,616,795	11,049,842
Class of Warrant or Rights, Warrants Exercisable, Fair Value (in Dollars)		42,231
Stock Issued During Period, Value, Conversion of Convertible Securities (in Dollars)			19,100
Proceeds from Warrant Exercises (in Dollars)		44,000	0
Class of Warrant or Rights, Expired		(460,000)	0
Series B Preferred Stock [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted			3,000,000	3,000,000
Stock Issued During Period, Shares, New Issues				375,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)				$ 0.20
Warrant, Renewal Term			4 years
Warrants, Fair Value of Warrants, Granted (in Dollars)			120,000
Private Placement [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted		707,860	693,860		3,490,000
Stock Issued During Period, Shares, New Issues			3,469,300
Warrants, Term of Warrants		4 years	4 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.10	$ 0.10
Equity Issued for Cash [Member] | Minimum [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.10
Equity Issued for Cash [Member] | Maximum [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.45
Equity Issued for Cash [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted		4,378,620
Stock Issued During Period, Shares, New Issues		21,243,100
Proceeds from Issuance or Sale of Equity (in Dollars)		2,124,310
Payments of Stock Issuance Costs (in Dollars)		40,195
Warrants, Term of Warrants		4 years
Stock to be issued [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted		30,000				120,000
Proceeds from Issuance or Sale of Equity (in Dollars)		16,500				24,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.10				$ 0.20
Common Stock to be Issued, Shares		165,000
Warrants to be Issued		33,000
Equity Issued for Services [Member] | Consulting Agreement with Advisory Services [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted								200,000
Warrants, Term of Warrants								5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)								$ 0.10
Stock Issued During Period, Shares, Issued for Services							125,000
Stock Issued During Period, Value, Issued for Services (in Dollars)							52,500
Equity Issued for Services [Member] | Consulting Agreement with Financial Advisory and Investment Banker Services [member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted								200,000
Warrants, Term of Warrants								5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)								$ 0.10
Stock Issued During Period, Shares, Issued for Services							2,375,000
Stock Issued During Period, Value, Issued for Services (in Dollars)							997,500
Class of Warrant or Rights, Warrants Exercisable, Fair Value (in Dollars)								83,673
Equity Issued for Services [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted		120,000
Warrants, Term of Warrants		4 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.10
Stock Issued During Period, Shares, Issued for Services		600,000
Stock Issued During Period, Value, Issued for Services (in Dollars)		60,000
Adjustments to Additional Paid in Capital, Warrant Issued (in Dollars)		31,835
Non-Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options (in Dollars)		28,165
Increase (Decrease) in Other Accounts Payable and Accrued Liabilities (in Dollars)		31,835
Increase (Decrease) in Prepaid Expenses, Other (in Dollars)		28,165
Shares Issued, Price Per Share (in Dollars per share)		$ 0.10
Equity Issued for Consulting Services [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted		7,258,333
Shares Issued, Price Per Share (in Dollars per share)		$ 0.10
Number of Consultants		2
Agreement, Term		5 years
Class of Warrant or Rights Exercisable		503,333
Stock Issued for Exercise of Warrants [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Warrants to be Issued		120,000
Class of Warrant or Rights, Exercised		460,000
Class of Warrant or Rights, Weighted Average Exercise Price of Warrants or Rights, Exercised (in Dollars per share)		$ 0.15
Stock Issued During Period, Value, Conversion of Convertible Securities (in Dollars)		68,000
Stock Issued During Period, Shares, Conversion of Convertible Securities		340,000
Proceeds from Warrant Exercises (in Dollars)		44,000
Class of Warrant or Rights, Expired		475,000
Consulting Agreement with Advisory Services [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Agreement, Term	6 months
Class of Warrant or Rights, Warrants Exercisable, Fair Value (in Dollars)								$ 83,673
Consulting Agreement with Financial Advisory and Investment Banker Services [member]
NOTE 14 - OUTSTANDING WARRANTS (Details) [Line Items]
Class of Warrant or Rights, Granted							2,375,000
Agreement, Term							6 months		6 months

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NOTE 10 - PREFERRED STOCK (Details) (USD $)	0 Months Ended	12 Months Ended		1 Months Ended	12 Months Ended		15 Months Ended	24 Months Ended
	Jul. 21, 2014	Dec. 31, 2014	Dec. 31, 2013	Apr. 30, 2008	Dec. 31, 2010	Dec. 31, 2009	Mar. 31, 2010	Dec. 31, 2010
NOTE 10 - PREFERRED STOCK (Details) [Line Items]
Class of Warrant or Rights, Granted (in Shares)	300,000	12,256,953	707,860
Preferred Stock, Accretion of Redemption Discount		$ 71,307	$ 0
Dividends, Preferred Stock, Paid-in-kind		27,020	105,000
Series A Preferred Stock [Member]
NOTE 10 - PREFERRED STOCK (Details) [Line Items]
Stock Issued During Period, Shares, Acquisitions (in Shares)				100,000
Noncash or Part Noncash Acquisition, Interest Acquired				100.00%
Convertible Preferred Stock, Shares Issued upon Conversion (in Shares)				1
Preferred Stock, Voting Rights				voting rights of 750 votes per share
Series B Preferred Stock [Member]
NOTE 10 - PREFERRED STOCK (Details) [Line Items]
Proceeds from Issuance of Private Placement					50,000	1,450,000
Preferred Stock, Unit Description								eight warrants to purchase one share of common stock for every share of Series B Preferred Stock purchased
Sale of Stock, Price Per Share (in Dollars per share)					$ 4.00			$ 4.00
Stock Issued During Period, Shares, New Issues (in Shares)								375,000
Convertible Preferred Stock, Terms of Conversion								convertible into a total of 15,000,000 shares of the Company’s common stock
Class of Warrant or Rights, Granted (in Shares)			3,000,000					3,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)					$ 0.20			$ 0.20
Warrants, Expiration Date								Oct. 14, 2013
Warrant, Renewal Term			4 years
Warrants, Fair Value of Warrants, Granted			120,000
Preferred Stock, Dividend Payment Terms							(i) accrues dividends at a rate of 7.0% per annum, payable in preference to the common stock or any other capital stock of the Company, (ii) has a preference in liquidation, or deemed liquidation, to receive the initial investment in the Series B Preferred Stock, plus accrued and unpaid dividends, (iii) is convertible into 40 shares of the Company’s common stock, subject to adjustments for issuances by the Company of common stock at less than $0.10 per share, and (iv) has the right to elect one member of the Company’s Board of Directors.
Dividends, Preferred Stock		105,000	105,000
Preferred Stock, Accretion of Redemption Discount		77,980
Dividends, Preferred Stock, Paid-in-kind		27,070
Dividends Payable		$ 546,863	$ 441,863

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NOTE 4 - INVENTORY (Details) (USD $)	1 Months Ended		12 Months Ended
	Dec. 31, 2014	Jul. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Increase (Decrease) in Inventories			$ (111,856)	$ 20,513
Inventory Purchase Order	$ 433,000	$ 433,000	$ 433,000
Inventory Related Text	The payment terms for this purchase order required a10% down-payment at the time of order placement, followed by Net 30 days from invoice date once the units are delivered to finished goods inventory.	The payment terms for this purchase order required a 10% down-payment at the time of order placement, followed by Net 30 days from invoice date once the units are delivered to finished goods inventory.

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NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS

12 Months Ended

Dec. 31, 2014

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 -       NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS

The Company sells the COPsync Network service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies.  The COPsync Network service enables patrol officers to collect, report and share critical data in real-time at the point of incident and obtain instant access to various local, state and federal law enforcement databases.  The COPsync Network service also eliminates manual processes and increases officer productivity by enabling officers to electronically write tickets, process DUI and other arrests and document accidents and other incidents.  The Company believes that the COPsync Network service saves lives, reduces unsolved crimes and assists in apprehending criminals through such features as a nationwide officer safety alert system, GPS/auto vehicle location and distance-based alerts for crimes in progress, such as child abductions, bank robberies and police pursuits.  The Company has designed the COPsync Network to be “vendor neutral”, meaning it can be used with products and services offered by other law enforcement technology vendors.  Additionally, the COPsync Network system architecture is designed to scale nationwide.

In addition to the Company’s core COPsync Network service, the Company offers three complementary service/product offerings.  These offerings are: COPsync911, an emergency threat notification service; VidTac, an in-vehicle software-driven video camera system for law enforcement and fire departments; and WARRANTsync, a statewide misdemeanor warrant clearing database.

The Company offers the COPsync911 threat alert, first introduced in the second quarter of 2013, for use in schools, hospitals, day care facilities, governmental office buildings, energy infrastructure and other facilities with a high level of concern about security.  When used in schools, for example, the COPsync911 service enables school personnel to instantly and silently send emergency alerts directly to the closest law enforcement officers in their patrol vehicles, and to the local 911 dispatch center, with the mere click of a screen icon located on every Windows-based computer or any handheld device within the facility.  The alert is also sent to the cell phones of all law enforcement officers in the area and to all teachers, administrators, and other staff at the school, alerting them of imminent danger.  The Company expects its COPsync911 service to reduce emergency law enforcement response times by five to seven minutes.

VidTac is a software-driven video system for law enforcement.  Traditional in-vehicle video systems are “hardware centric” DVR-based systems. The video capture, compression and encryption of the video stream is performed by the DVR.  The estimated price of these high-end, digital DVR-based systems is in excess of $5,000 per system.  These DVR-based systems are typically replaced, at the same expensive price point, every three to four years as new patrol vehicles are placed into service.

The VidTac system is price advantageous vis-a-vis other high-end video systems, since the Company is offering it for sale at a much lower price than the average price of DVR-based video systems.  Furthermore, for those agencies that have in-vehicle computers, the VidTac system eliminates the need for the agency to purchase a second computer, i.e., the DVR, and eliminates the need to replace this second (DVR) computer every three to four years as new patrol vehicles are placed into service.

The WARRANTsync system is designed to be a Texas statewide misdemeanor warrant clearing database. It enables law enforcement officers in the field to receive notice of outstanding warrants in real-time at the point of a traffic stop.  The WARRANTsync system enables the offender to pay the outstanding warrant fees and costs using a credit card.  Following payment, the offender is given a receipt and the transaction is complete.  This product could be viewed as an enhancement feature to the core COPsync Network service since all COPsync Network users receive the outstanding Warrant notice.

At December 31, 2014, the Company had cash and cash equivalents of $587,459, a working capital deficit of $3,484,825 and an accumulated deficit of $22,908,272.  The Company took the following steps in fiscal year 2014 and in the first quarter of 2015 to manage its liquidity, to avoid default on any material third-party obligations and to continue progressing its business towards cash-flow break-even, and ultimately profitability: 

1)  The Company signed service agreements for approximately $4,500,000 in new orders for the twelve month period ended December 31, 2014, compared to approximately $5,852,000 in new orders for the comparable period in 2013, a decrease of approximately 23%.  The Company expects this will negatively impact its reported revenue and liquidity in the short-term.  The Company believes this decrease resulted from experiencing high turnover within its sales organization.  The Company is continually evaluating the performance of its sales team and replacing those who are not meeting the Company’s expectations.  As the Company continues to add to the number and quality of its sales team, the Company expects its orders to begin growing again.  This decrease in the Company’s new orders was partially offset by an increase in customer subscription renewals in 2014 of $1,531,000, up from $1,303,000 in 2013 for an increase of 17%.

2)  The Company continues to employ “just in time” principles in our procurement processes for third party hardware, meaning that it attempts to schedule delivery to the customer of the third party hardware that the Company sells immediately after it receives the hardware.  The Company also continues its attempts to collect customer prepayments for the third party hardware it sells at or about the time it orders the hardware, which has helped the Company manage its working capital needs.

3)  The Company’s key vendors are currently offering us extended payment terms for our outstanding payables balances, which has also helped us manage our working capital needs.

4)  In October 2014, the Company’s Board of Directors approved a funding initiative for $750,000 to fund a software development effort for feature and function enhancements to enable the COPsync Network and COPsync911 threat alert system more readily to scale nationwide.  As of the date of this report, $450,000 has been raised, all in the first quarter of 2015.  The investment security is a three-year convertible promissory note, which bears interest at the rate of two percent simple interest per year, paid in cash.  The principal amount of the note is convertible into shares of the Company’s common stock at the rate of $0.22 per share.  The promissory note may be prepaid by the Company under certain conditions.

5)  At December 31, 2014, the Company had outstanding warrants to purchase an aggregate of 3,155,582 shares of its common stock at a price of $0.20 per share, an aggregate exercise price of $631,116, that expire in 2015.  The Company believes that the bulk of these warrants will be exercised in calendar year 2015.  As of the date of this report date, warrants to purchase 360,000 shares of the Company’s common stock have been exercised for a total exercise price of $64,000, all in the first quarter of 2015.

6)  The Company’s Balance Sheet as of December 31, 2014, indicates a notes payable-current portion balance of $669,789, which is due in 2015.  Of that total, notes representing $570,977 in principal amount are held by three note-holders who have previously extended the original due date of their respective notes. The Company believes these note holders will agree to extend the due dates of these notes again, if required. 

7)  The Company is attempting to secure up to $2.0 million in additional funding pursuant to an EB-5 program, which the Company originally expected to close in 2014.  The Company remains optimistic that it can successfully close this funding in 2015.  The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs.  Following the job creation, the foreign lenders receive U.S. “green cards”.  The Company will use a portion of any proceeds from this EB-5 program to repay a loan from the City of Pharr, Texas, if required.  Any remaining funds will be used for general working capital purposes, including the Company’s anticipated hiring of a number of employees in the City of Pharr.

8)  The Company believes that it has the capability to further reduce operating expenses, should circumstances warrant.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has accumulated significant losses as it has been developing its current and recently added offerings. The Company has had recurring losses and expects to report losses for fiscal 2015. The Company believes that cash flow from operations, together with the potential sources of debt, equity and revenue-based financing outlined above will be sufficient to fund the Company’s anticipated operations for fiscal 2015.

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NOTE 11 - COMMON STOCK (Details) (USD $)	0 Months Ended	12 Months Ended			0 Months Ended
	Jul. 21, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Oct. 06, 2014	Oct. 01, 2014
NOTE 11 - COMMON STOCK (Details) [Line Items]
Class of Warrant or Rights, Granted (in Shares)	300,000	12,256,953	707,860
Proceeds from Issuance or Sale of Equity		$ 2,084,115
Stock Issued During Period, Shares, Issued for Services (in Shares)		600,000	0
Stock Issued During Period, Value, Issued for Services		60,000
Proceeds from Warrant Exercises		44,000	0
Proceeds from Issuance of Common Stock		2,084,115	346,930
Stock Issued During Period, Value, New Issues		2,084,115	346,930
Allocated Share-based Compensation Expense		0	45,000
Capital contributed through forfeiture of conractual compensation		79,000	79,000
Private Placement [Member] | Equity Issued for Cash [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Sale of Stock, Price Per Share (in Dollars per share)			$ 0.10
Proceeds from Issuance of Private Placement			1,500
Preferred Stock, Unit Description			the common stock and the warrants were sold as an equity unit, with each investor who purchased shares of the Company’s common stock receiving a warrant to purchase one share of common stock (with an exercise price of $0.10 per share) for every five shares of common stock purchased by such investor.
Private Placement [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)			3,469,300
Class of Warrant or Rights, Granted (in Shares)		707,860	693,860	3,490,000
Warrants, Term of Warrants		4 years	4 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.10	$ 0.10
Equity Issued for Cash [Member] | Minimum [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.10
Equity Issued for Cash [Member] | Maximum [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.45
Equity Issued for Cash [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)		21,243,100
Class of Warrant or Rights, Granted (in Shares)		4,378,620
Proceeds from Issuance or Sale of Equity		2,124,310
Sale of Stock, Price Per Share (in Dollars per share)		$ 0.10
Payments of Stock Issuance Costs		40,195
Warrants, Coverage, Percentage		20.00%
Warrants, Term of Warrants		4 years
Warrant, Description		There were two exceptions to the preceding statement: one, an individual investment for $500,000 was made in exchange for 5,000,000 shares of common stock and warrants to purchase 1,250,000 shares of common stock (or twenty-five percent warrant coverage), with an exercise price of $0.20 per share and an optional, cashless exercise feature; and two, an individual investment for $120,000 in which no warrants were issued.
Equity Issued for Services [Member] | Consulting Agreement with Financial Advisory and Investment Banker Services [member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Class of Warrant or Rights, Granted (in Shares)						200,000
Warrants, Term of Warrants						5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)						$ 0.10
Stock Issued During Period, Shares, Issued for Services (in Shares)					2,375,000
Stock Issued During Period, Value, Issued for Services					997,500
Share Price (in Dollars per share)					$ 0.42
Equity Issued for Services [Member] | Consulting Agreement with Advisory Services [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Class of Warrant or Rights, Granted (in Shares)						200,000
Warrants, Term of Warrants						5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)						$ 0.10
Stock Issued During Period, Shares, Issued for Services (in Shares)					125,000
Stock Issued During Period, Value, Issued for Services					52,500
Share Price (in Dollars per share)					$ 0.42
Equity Issued for Services [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Class of Warrant or Rights, Granted (in Shares)		120,000
Warrants, Term of Warrants		4 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.10
Stock Issued During Period, Shares, Issued for Services (in Shares)		600,000
Shares Issued, Price Per Share (in Dollars per share)		$ 0.10
Stock Issued During Period, Value, Issued for Services		60,000
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition		31,835
Non-Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		28,165
Stock Issued for Exercise of Warrants [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities (in Shares)		340,000
Proceeds from Warrant Exercises		44,000
Stock Issued for Prior Subscriptions [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)			70,000
Stock Issued During Period, Value, New Issues			7,000
Restricted Stock [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Shares Issued, Price Per Share (in Dollars per share)			$ 0.09
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares)			2,000,000
Stock Issued During Period, Value, Restricted Stock Award, Gross			180,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Consulting Agreement with Financial Advisory and Investment Banker Services [member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Class of Warrant or Rights, Granted (in Shares)					2,375,000
Convertible Notes and Accrued Interest [Member]
NOTE 11 - COMMON STOCK (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)		2,154,843
Debt Conversion, Original Debt, Amount		$ 215,485

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Cash and Cash Equivalents (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Schedule of Cash and Cash Equivalents [Abstract]
Cash in bank	$ 586,469	$ 414,001
Money market funds	990	50
Cash and cash equivalents	$ 587,459	$ 414,051	$ 174,444

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NOTE 3 - ACCOUNTS RECEIVABLE (Tables)

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

The Company's accounts receivable, net, at December 31, consisted of the following:

	December 31,
Category	2014			2013
Trade receivables	$	1,101,279		$	649,837
Other receivables		53,227			7,908
Elimination of unpaid deferred revenue		(716,495	)		(525,938	)
Allowance for doubtful accounts		(214,389	)		(30,000	)
Total Accounts Receivable	$	223,622		$	101,807

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents [Table Text Block]

The Company's cash and cash equivalents, at December 31, consisted of the following:

	2014		2013
Cash in bank	$	586,469	$	414,001
Money market funds		990		50
Cash and cash equivalents	$	587,459	$	414,051

Property, Plant and Equipment [Table Text Block]

Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, ranging as follows:

Computer hardware/software	3 years
Fleet vehicles	5 years
Furniture and fixtures	5 to 7 years

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NOTE 8 - NOTES PAYABLE (Details) (USD $)	3 Months Ended	12 Months Ended		0 Months Ended	3 Months Ended	1 Months Ended			3 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended	0 Months Ended
	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013	Feb. 28, 2014	Dec. 31, 2014	Nov. 30, 2013	Sep. 30, 2013	Mar. 31, 2013	Jun. 30, 2014	Feb. 28, 2014	Jul. 11, 2014	May 31, 2014	Feb. 03, 2014	Dec. 31, 2012	Aug. 31, 2013	Mar. 31, 2014
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Repayments of Notes Payable		$ 180,229	$ 300,455
Interest Paid		62,683	17,860
Proceeds from Other Debt		475,000	0
Proceeds from Notes Payable		285,000	570,621
Proceeds from Insurance Settlement, Investing Activities	15,844
Proceeds from Sale of Property, Plant, and Equipment			107,800
Chief Executive Officer [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount			60,000	25,000						25,000				120,000
Debt Instrument, Interest Rate, Stated Percentage				3.00%						3.00%				3.00%
Repayments of Notes Payable					17,500
Notes Payable		7,500			7,500
Debt Instrument, Maturity Date				Apr. 01, 2015
Chief Executive Officer [Member] | Convertible Notes Payable [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount			60,000											120,534	40,000
Debt Instrument, Interest Rate, Stated Percentage														3.00%	3.00%
Debt Instrument, Maturity Date			Mar. 14, 2014
Chief Executive Officer [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Term				60 days
Repayments of Notes Payable			120,000
Immediate Family Member of Management or Principal Owner [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount						60,000
Debt Instrument, Interest Rate, Stated Percentage						3.00%
Repayments of Notes Payable			60,000
Immediate Family Member of Management or Principal Owner [Member] | Convertible Notes Payable [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount						60,000
Debt Instrument, Interest Rate, Stated Percentage						3.00%
Debt Instrument, Maturity Date						Mar. 31, 2014
Vehicles [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount			11,195
Debt Instrument, Interest Rate, Stated Percentage			6.50%
Debt Instrument, Payment Terms			five
Vehicles [Member] | Notes Payable to Banks [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Number of Automobiles Financed		3
Debt Instrument, Term		5 years
Debt Instrument, Face Amount		49,503			49,503
Debt Instrument, Interest Rate, Stated Percentage		4.00%			4.00%
Vehicles [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Repayments of Notes Payable			69,294
Technology Equipment [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount							50,000	250,000
Debt Instrument, Interest Rate, Stated Percentage							9.90%									12.90%
Repayments of Notes Payable		48,646
Debt Instrument, Maturity Date							Mar. 31, 2014	Jul. 15, 2015
Debt Instrument, Increase (Decrease), Other, Net								200,000
Extinguishment of Debt, Amount								50,000
Interest Paid									2,807
Equipment [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount						313,477
Debt Instrument, Interest Rate, Stated Percentage						16.00%
Number of Notes Payable						2
Interest Paid					26,526				23,646
Debt Instrument, Maturity Date, Description						May 2014			November 2014
Automobiles [Member] | Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount			51,880
Debt Instrument, Interest Rate, Stated Percentage			6.50%
Debt Instrument, Payment Terms			five
Notes Payable, Other Payables [Member] | Insurance Coverage [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Term										11 months
Debt Instrument, Face Amount		40,300		27,963	40,300					27,963
Debt Instrument, Interest Rate, Stated Percentage		7.50%		7.50%	7.50%					7.50%
Number of Notes Payable		2
Notes Payable, Other Payables [Member] | Insurance Policies and Automobile Loans [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Repayments of Notes Payable		131,582
Notes Payable, Other Payables [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Term												36 months
Debt Instrument, Face Amount												607,500
Debt Instrument, Interest Rate, Stated Percentage											15.00%	50.00%
Number of Notes Payable												8
Debt Instrument, Maturity Date											Apr. 11, 2015
Proceeds from Other Debt												405,000
Debt Instrument, Frequency of Periodic Payment											eight monthly principal and interest payments	requires a specific repayment amount be made by the Company every six months, commencing six months after the note is issued
Debt Instrument, Payment Terms												The Company is required to repay 10%, 30% and 60% of the aggregate repayment amount in years one, two and three of the notes’ term, respectively.
Debt Instrument, Unamortized Discount		37,933			37,933							202,500
Proceeds from Notes Payable											60,000
Debt Instrument, Periodic Payment, Interest											750
Debt Instrument, Periodic Payment											7,027.99
Repayments of Other Debt		30,375
Insurance Policies and Automobile Loans [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Repayments of Notes Payable			51,161
Loan from City of Pharr, Texas [Member]
NOTE 8 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount													$ 475,000
Debt Instrument, Interest Rate, Stated Percentage													8.00%
Debt Instrument, Description													The loan principal amount is expected to be due in full on the earlier to occur of the 18 month anniversary of the loan or the receipt by the Company of $2.0 million in proceeds from an EB-5 visa funding arrangement the Company is pursuing. The loan is expected to be secured by a first priority security interest in the Company’s accounts receivable. The city is expected to also receive a modest percentage of the Company’s revenue, payable quarterly, with respect to contracts for the Company’s products and services with customers located in a specified territory in the southern portion of Texas, for a specified period of time.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Property, Plant and Equipment, Estimated Usefule Lives	12 Months Ended
	Dec. 31, 2014
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful lives	3 years
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful lives	5 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful lives	5 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful lives	7 years

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NOTE 4 - INVENTORY (Tables)

12 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventory consisted of the following as of December 31:

	December 31,
Category	2014		2013
Raw materials	$	-	$	-
Work-in-process		-		-
Finished goods		246,077		357,933
Total Inventory	$	246,077	$	357,933

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NOTE 5 - PREPAID EXPENSES AND OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure Text Block Supplement [Abstract]

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]

The Company's prepaid expenses and other assets at December 31, consisted of the following:

	December 31,
Category	2014		2013
Prepaid Insurance	$	44,101	$	37,910
Subscriptions		24,050		14,859
Vendor Prepayments		103,044		63,804
Deferred Charges		98,953		-
Total Prepaid Expenses and Other Assets	$	270,148	$	116,573

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Statements of Cash Flows (Parentheticals)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Issuance of shares of common stock	600,000	0
Convertible Notes and Accrued Interest [Member]
Conversion of convertible notes, shares	2,154,843	191,000

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NOTE 6- SOFTWARE DEVELOPMENT COSTS (Tables)

12 Months Ended

Dec. 31, 2014

Research and Development [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

Software development costs as of December 31, were as follows:

	December 31,
	2014			2013
Capitalized software development costs	$	2,724,082		$	2,724,082
Accumulated amortization		(1,847,274	)		(1,410,803	)
Sub-total		876,808		$	1,313,279
Cumulative Impairment charge		(876,808	)		(876,808	)
Total	$	-		$	436,471

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NOTE 16 - COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Payments for Contractual Obligations [Table Text Block]

Future annual lease payments as of December 31, 2013 are as follows:

	Total		2015			2016-2017		2018-2019	After 2019
Operating Lease Obligations	$	192,868	$	95,927	$	79,297	$	17,644	$	-

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NOTE 7 - INCOME TAXES (Details) (USD $)	12 Months Ended
	Dec. 31, 2014
NOTE 7 - INCOME TAXES (Details) [Line Items]
Operating Loss Carryforwards	$ 15,573,000
Tax Credit Carryforward, Limitations on Use	a cumulative stock ownership change of greater than 50%, as defined, over a three-year period
Minimum [Member]
NOTE 7 - INCOME TAXES (Details) [Line Items]
Operating Loss Carryforwards, Expiration Date 1	2028
Maximum [Member]
NOTE 7 - INCOME TAXES (Details) [Line Items]
Operating Loss Carryforwards, Expiration Date 1	2034

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NOTE 15 - EMPLOYEE OPTIONS (Details) - Summary of Outstanding and Exercisable Options (USD $)	12 Months Ended
	Dec. 31, 2014
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding (in Shares)	9,814,999
Options Exercisable (in Shares)	7,523,323
Options, Range of Exercise Prices $0.00-0.08 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Lower Limit	$ 0.00
Exercise Price, Upper Limit	$ 0.08
Options Outstanding (in Shares)	2,500,000
Options Outstanding, Weighted Average Remaining Life	5 years 306 days
Options Outstanding, Weighted Average Exercise Price	$ 0.08
Options Exercisable (in Shares)	2,312,500
Options Exercisable, Weighted Average Exercise Price	$ 0.08
Options, Range of Exercise Prices $0.09-$0.39 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price, Lower Limit	$ 0.09
Exercise Price, Upper Limit	$ 0.39
Options Outstanding (in Shares)	7,314,999
Options Outstanding, Weighted Average Remaining Life	6 years 248 days
Options Outstanding, Weighted Average Exercise Price	$ 0.09
Options Exercisable (in Shares)	5,210,823
Options Exercisable, Weighted Average Exercise Price	$ 0.10

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Balance Sheets (USD $)	Dec. 31, 2014	Dec. 31, 2013
CURRENT ASSETS
Cash and cash equivalents	$ 587,459	$ 414,051
Accounts receivable, net	223,622	101,807
Inventories	246,077	357,933
Prepaid expenses and other current assets	270,148	116,573
Deferred loan costs	50,000	0
Total Current Assets	1,377,306	990,364
PROPERTY AND EQUIPMENT
Leased property under capital lease	35,098	0
Computer hardware	72,070	68,847
Computer software	36,936	36,936
Fleet vehicles	174,094	134,987
Furniture and fixtures	10,467	7,872
Total Property and Equipment	328,665	248,642
Less: Accumulated Depreciation	(152,789)	(113,489)
Net Property and Equipment	175,876	135,153
OTHER ASSETS
Software development costs, net	0	436,471
Total Other Assets	0	436,471
TOTAL ASSETS	1,553,182	1,561,988
CURRENT LIABILITIES
Accounts payable and accrued expenses	1,526,612	1,419,170
Deferred revenues	2,526,990	2,878,264
Obligation under capital lease	7,632	0
Convertible notes payable, current portion	9,608	20,000
Three Year, 50% notes payable, net of $0 discount, current portion	121,500	0
Notes payable, current portion	669,789	412,405
Total Current Liabilities	4,862,131	4,729,839
LONG-TERM LIABILITIES
Deferred revenues	1,142,437	1,052,749
Obligation under capital lease	27,466	0
Convertible notes payable	389,178	594,163
Three Year, 50% notes payable, net of $181,385 discount, non-current portion	291,118	0
Notes payable, non-current portion	56,639	107,329
Total Long-Term Liabilities	1,906,838	1,754,241
Total Liabilities	6,768,969	6,484,080
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock, par value $0.0001 per share, 500,000,000 shares authorized; 201,852,444 and 175,014,501 issued and outstanding, respectively	20,184	17,501
Common stock to be issued, 300,000 and 15,000 shares, respectively	42,000	1,500
Additional paid-in-capital	17,630,254	13,709,972
Accumulated deficit	(22,908,272)	(18,651,112)
Total Stockholders' Deficit	(5,215,787)	(4,922,092)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	1,553,182	1,561,988
Series A Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock, value issued	10	10
Series B Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock, value issued	$ 37	$ 37

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NOTE 3 - ACCOUNTS RECEIVABLE (Details) (USD $)	Dec. 31, 2014
Receivables [Abstract]
Notes, Loans and Financing Receivable, Net, Current	$ 30,890
Interest Receivable, Current	$ 9,700

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Statements of Stockholders' Equity (Deficit) (Parentheticals) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Stock Issued for Previous Deposits [Member] | Common Stock [Member]
Common stock issued at		$ 0.10
Stock Issued for Cash [Member] | Common Stock [Member]
Common stock issued at		$ 0.10
Stock to be Issued for Cash [Member] | Common Stock [Member]
Common stock issued at	$ 0.10
Stock to be Issued for Cash [Member] | Common Stock To Be Issued [Member]
Common stock issued at	$ 0.10	$ 0.10
Stock to be Issued for Cash from Warrant Exercises [Member] | Common Stock Warrants To Be Issued [Member]
Common stock issued at	$ 0.10
Stock Issued for Services [Member] | Common Stock [Member]
Common stock issued at	$ 0.10
Stock Issued for Cash from Warrant Exercises at $0.10 [Member] | Common Stock [Member]
Common stock issued at	$ 0.10
Stock Issued for Cash from Warrant Exercises at $0.20 [Member] | Common Stock [Member]
Common stock issued at	$ 0.20
Stock Issued for Conversion of Note Payable and Accrued Interest [Member] | Common Stock [Member]
Conversion of notes payable at	$ 0.10
Common Stock [Member]
Conversion of notes payable at		$ 0.10

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NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) (USD $)	12 Months Ended		3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Mar. 31, 2013	Dec. 31, 2013	Jun. 30, 2013	Mar. 31, 2014
NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Interest Payable	$ 16,341	$ 13,989			$ 13,989
Proceeds from Convertible Debt	0	260,000
Convertible Debt		574,163			574,163
Chief Executive Officer [Member] | Convertible Debt [Member]
NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Convertible, Conversion Price (in Dollars per share)			$ 0.10	$ 0.10
Debt Instrument, Face Amount			40,000	120,532
Proceeds from Related Party Debt				120,000
Interest Payable				532
Debt Instrument, Interest Rate, Stated Percentage			3.00%	3.00%
Debt Instrument, Maturity Date			Mar. 31, 2016	Mar. 31, 2016
Proceeds from Convertible Debt			40,000
Immediate Family Member of Management or Principal Owner [Member] | Convertible Debt [Member]
NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Convertible, Conversion Price (in Dollars per share)		$ 0.10			$ 0.10
Debt Instrument, Face Amount		60,000			60,000
Debt Instrument, Interest Rate, Stated Percentage		3.00%			3.00%
Debt Instrument, Maturity Date					Mar. 31, 2016
Principal [Member] | Convertible Debt [Member]
NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Conversion, Original Debt, Amount	215,378
Interest [Member] | Convertible Debt [Member]
NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Conversion, Original Debt, Amount	107
Convertible Note #1 [Member] | Convertible Debt [Member]
NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount						20,000
Debt Instrument, Maturity Date, Description						May 2015
Convertible Note #2 [Member] | Convertible Debt [Member]
NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount						20,000
Debt Instrument, Maturity Date, Description						June 2016
Convertible Debt [Member]
NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) [Line Items]
Number of Notes Payable	9					2
Debt Conversion, Original Debt, Amount				19,100			20,000
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	2,154,843			191,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.10					$ 0.10	$ 0.10
Debt Instrument, Face Amount						40,000
Debt Instrument, Interest Rate, Stated Percentage						3.00%
Shares Issued, Price Per Share (in Dollars per share)				$ 0.10
Convertible Debt							$ 554,163
Debt Instrument, Description							elected to execute either a one-year or two-year extension of the maturity dates of the original notes

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NOTE 9 - CONVERTIBLE NOTES PAYABLE (Tables)

12 Months Ended

Dec. 31, 2014

Convertible Note Payable [Abstract]

Convertible Debt [Table Text Block]

Convertible notes payable at December 31 are summarized as follows:

	December 31,		December 31,
	2014		2013
Total convertible notes payable	$	873,263	$	873,263
Less:  note conversions	$	474,477	$	259,100
Convertible notes payable, net	$	398,786	$	614,163
Less: current portion	$	9,608	$	20,000
Convertible notes payable, net, long-term portion	$	389,178	$	594,163

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NOTE 12 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued (Parentheticals) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Stock to be Issued for Cash at $0.10 [Member]
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued (Parentheticals) [Line Items]
Per share	$ 0.10	$ 0.10
Stock to be Issued for Cash at $0.20 [Member]
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued (Parentheticals) [Line Items]
Per share	$ 0.20	$ 0.20

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NOTE 14 - OUTSTANDING WARRANTS

12 Months Ended

Dec. 31, 2014

Disclosure Text Block Supplement [Abstract]

Shareholders' Equity and Share-based Payments [Text Block]

 NOTE 14 -    OUTSTANDING WARRANTS

For the twelve months period ended December 31 2014, warrant activity consisted of the following:

1)    The Company issued warrants to purchase 4,378,620 shares of common stock in connection with the issuance of 21,243,100 shares of the Company’s common stock pursuant to new investments, for cash totaling $2,084,115, which is net of $40,195 in finder fees and related miscellaneous costs.  The term of the warrants is four years from the date of issuance, with a range of exercise prices between $0.10 and $0.45 per share of common stock. Normally, the warrant coverage is twenty percent of the number of shares of stock issued.  This is true for all of the above warrants issued except for two warrants: one, involving an individual investment for $500,000 made in exchange for 5,000,000 shares of common stock and warrants to purchase 1,250,000 shares of common stock (or twenty-five percent warrant coverage), with an exercise price of $0.20 per share and an optional, cashless exercise feature; and two, an individual investment in shares of the Company’s common stock for $120,000 where no warrants were issued.

  2)     The Company received deposits from two investors totaling $16,500 for the purchase of 165,000 shares of common stock and warrants to purchase 33,000 shares of common stock.  Most of these warrants will be issued in fiscal 2015 (See Note 12).

3) The Company issued four-year warrants to purchase 120,000 shares of the Company’s common stock (with an exercise price of $0.10 per share) in connection with the issuance of 600,000 shares of its common stock in exchange for $60,000 of services, $31,835 of which services had been performed and $28,165 of which had yet to be performed.  This non-cash transaction was recorded on the Company’s balance sheet as a debit to accounts payable and accrued expense for $31,835, representing outstanding vendor invoices to be paid, and prepaid expenses for $28,165, representing the value of services to be performed by the vendor.  Those services were subsequently performed in fiscal year 2014.  The term of the warrants is four years from date of issuance.  Under the provisions of ASC 718, no value was assigned to the warrants granted during the nine month period, thus no additional expense was recorded under the Black-Scholes option pricing model because the warrants were issued as a unit with common stock shares.

4)   The Company issued warrants to purchase an aggregate of 7,258,333 shares of the Company’s common stock, at a price of $0.10 per share, to two outside consultants following their meeting specific performance metrics associated with growing the Company’s book of new business and/or securing additional capital or debt funding.  Each warrant specifies the individual tranches related to the specific metrics that must be achieved in order for the underlying shares to become exercisable.  The term of the two warrants is five years.  No valuation is determined for the respective tranches until the associated performance metric is achieved.  Warrants to purchase a total of 503,333 shares of common stock associated with these two agreements became exercisable during fiscal year 2014 as a result of one warrant holder achieving two specified metrics.  The fair value of the exercisable warrants totaled $42,231 and was determined by using the Black Scholes valuation method.  This non-cash expense was recorded as other expense in the Company’s Statement of Operations.

5) On October 1, 2014, the Company executed a six-month consulting agreement with a third party service provider for corporate advisory services.  As a part of the agreement, the Company issued 200,000 warrants to purchase shares of the Company’s common stock at price of $0.10 per share.  The term of warrant is five years from the date of issuance.  The fair value of the exercisable warrants totaled $83,673, determined by using the Black Scholes valuation method.  This non-cash expense was recorded as general and administrative expense in the Company’s Statement of Operations.

6) Also on October 1, 2014, the Company executed another six-month consulting agreement with a third party service provider for general financial advisory and investment banker services.  As a part of the agreement, the Company issued 200,000 warrants to purchase shares of the Company’s common stock at price of $0.10 per share.  The term of warrant is five years from the date of issuance.  The fair value of the exercisable warrants totaled $83,673, determined by using the Black Scholes valuation method.  This non-cash expense was recorded as general and administrative expense in the Company’s Statement of Operations.

  7)     A number of warrant holders elected to exercise warrants to purchase a total of 460,000 shares of the Company’s common stock at a weighted average exercise price of $0.15 per share of stock, or for a total value of $68,000.  The Company issued 340,000 of those shares for an aggregate purchase price of $44,000, during the period (See Note 11).  The remaining 120,000 shares of common stock will not be issued for a period of six months from the date of exercise at the request of the two warrant holders.  These shares are being reported as an element of common stock to be issued (See Note 12).  

8)   Warrants to purchase a total of 475,000 shares of common stock, held by two warrant holders, expired during the fiscal year 2014.

For the twelve months period ended December 31 2013, warrant activity consisted of the following:

1)     The 707,860 warrants issued in the 2013 private placement, as well as the 3,490,000 warrants issued in the 2012 private   placement, all have an exercise price of $0.10 per share of common stock, and expire four years following the date of issuance.  The exercise price and the number of shares of common stock purchasable upon exercise of the warrants are subject to adjustment (under a formula set forth in the warrants) upon the occurrence of certain events, including, but not limited to: (i) stock dividends, stock splits or reverse stock splits; (ii) the payment of dividends on the common stock payable in shares of common stock or securities convertible into common stock; (iii) a recapitalization, reorganization or reclassification involving the common stock, or a consolidation or merger of the Company; or (iv) a liquidation or dissolution of the Company. 

2)     During 2013, the Company’s Board of Directors approved a four year extension to the life of the warrants to purchase 3,000,000 shares of common stock issued in the 2009 private placement of its Series B Preferred Stock (See Note 10).  These warrants were scheduled to expire in October 2013.  The Company determined the fair market value of this extension to be $120,000 using the Black-Scholes valuation method.  This determined cost is reported in the Company’s Statement of Operations for 2013.

A summary of the status of the Company’s outstanding warrants and the changes during 2013 and 2014 is as follows:

				Weighted Average
	Shares			Exercise Price
Outstanding, January 1, 2013		10,341,982		$	0.17
Granted		707,860		$	0.10
Cancelled		-		$	-
Expired		-		$	-
Outstanding, December 31, 2013		11,049,842		$	0.16
Exercisable, December 31, 2013		11,049,842		$	0.16
Granted		12,256,953		$	0.15
Cancelled		(475,000	)	$	0.19
Expired		(460,000	)	$	0.15
Outstanding, December 31, 2014		22,371,795		$	0.16
Exercisable, December 31, 2014		15,616,795		$	0.18

The following is a summary of outstanding and exercisable warrants at December 31, 2014:

		Outstanding						Exercisable
Exercise Prices		Weighted Average Number Outstanding at 12/31/14		Remaining Life (in yrs.)		Weighted Average Exercise Price		Number Exercisable at 12/31/14		Weighted Average Exercise Price
$	0.10		11,997,593		3.28	$	0.10		5,242,593	$	0.10
$	0.11 - 0.19		414,000		3.47	$	0.15		414,000	$	0.15
	0.20 - 0.45		9,960,202		2.46		0.22		9,960,202		0.22
$	0.10 - 0.45		22,371,795		2.92	$	0.15		15,616,795	$	0.18

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NOTE 12 - COMMON STOCK TO BE ISSUED (Tables)

12 Months Ended

Dec. 31, 2014

Common Stock To Be Isssued [Abstract]

Schedule of Common Stock to Be Issued [Table Text Block]

The following table provides a reconciliation of the transactions, number of shares and associated common stock values for the common stock to be issued at December 31, 2014 and December 31, 2013.

	At December 31, 2014				At December 31, 2013
Common stock to be issued per:	# of Shares		$ Value		# of Shares		$ Value
A stock deposit received for common stock to be issued at $0.10 per share		180,000		18,000		15,000		1,500
A stock deposit received for common stock to be issued at $0.20 per share		120,000		24,000		-		-
Total number of shares and value		300,000	$	42,000		15,000	$	1,500

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NOTE 16 - COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 16 -     COMMITMENTS AND CONTINGENCIES

Consulting Agreements

On July 21, 2014, the Company executed a six-month consulting agreement with a third party service provider for corporate advisory services.  After the six month period is over, the agreement may be extended for an additional six-month period, provided either party may cancel the agreement upon the submission of a ten day written notice.  One element of compensation to the consultant is a $7,500 monthly payment.  Another element is the Company’s issuance of warrants to purchase 300,000 shares of the Company’s common stock (see Note 14).  Additionally, the agreement contains elements involving the Company’s indemnification of the consultant and future rights belonging to the consultant should the Company conduct future business with a party originally introduced to the Company by the consultant.

On October 6, 2014, the Company executed a six-month consulting agreement with a third party service provider for general financial advisory and investment banker services.  After the six month period is over, either party may cancel the agreement upon the submission of a thirty day written notice.  One element of compensation to the consultant is a $5,000 non-refundable monthly payment.  The Company has also agreed to reimburse the consultant for reasonable travel and other out-of-pocket expenses.  Another element is the Company’s issuance of 2,375,000 stock grant (see Note 11).  Additionally, the agreement contains elements involving the Company’s indemnification of the consultant and future rights belonging to the consultant should the company become involved in a public offering.

Also on October 6, 2014, the Company executed a six-month consulting agreement with a third party service provider for advisory services.  The agreement called for compensation consisting of the Company issuing 125,000 shares of its common stock to the provider.  The agreement may be extended upon mutual agreement between the two parties.

On November 1, 2014, the Company executed a six-month consulting agreement with a third party service provider for promotion and sales of the Company’s COPsync911 and VidTac products in certain markets.  The agreement may be extended upon mutual agreement between the two parties.  One element of compensation to the consultant is a $10,000 monthly fee, with $5,000 being paid each month and the balance being deferred until the end of the initial six month period, at which time the cumulative deferral will be paid.  The Company has also agreed to reimburse the consult for reasonable travel and other out-of-pocket expenses.

Significant Purchase Orders

In July 2014, the Company placed a demand purchase order valued at $433,000 with the contract manufacturer for finished units to be delivered ratably throughout the year and into early fiscal year 2015 (see Note 4).  The remaining commitment value for this purchase order at December 31 2014, $155,925.

In December 2014, the Company placed a demand purchase order for $433,000 with its contract manufacturer for VidTac finished units to be delivered ratably in fiscal year 2015, beginning in May 2015 (see Note 4).  This order is to cover forecasted demand for the product during the delivery period, as well as to accommodate the long-lead times required for procuring certain components from off-shore manufacturers.  The payment terms for this purchase order required a 10% down-payment at the time of order placement, followed by payment terms of Net 30 days from invoice date once the units are delivered to finished goods inventory.

Office Leases

At December 31, 2014, our principal properties consisted of a leased facility in the Dallas area (approximately 7,000 square feet), where our research and development, sales and marketing, finance and administrative functions are located and a leased facility in New Braunfels, Texas (approximately 2,500 square feet), where our customer support and operational activities are located.  The Dallas area location is subject to a thirty-month sublease expiring on August 31, 2015.  We terminated our previous month-to-month lease for office space located in Canyon Lake, Texas in June 2014, and moved that office to New Braunfels.  We believe our present facilities are adequate for our foreseeable needs, and are currently reviewing lease renewal options for the Dallas facility.

The sublease for the Dallas area facility is for 30 months, effective March 1, 2013, and calls for monthly lease payments of $7,502, with the first month’s rent being waived. 

The lease for the New Braunfels facility is for fifty-one months, effective June 6, 2014, and calls for initial monthly lease payments of $2,906 with the first month’s rent being waived. At each yearly anniversary, the monthly payment increases approximately 7%.

Future annual lease payments as of December 31, 2013 are as follows:

	Total		2015			2016-2017		2018-2019	After 2019
Operating Lease Obligations	$	192,868	$	95,927	$	79,297	$	17,644	$	-

Litigation

The Company is not currently involved in any material legal proceedings.  From time-to-time the Company anticipates that it will be involved in legal proceedings, claims, and litigation arising in the ordinary course of its business and otherwise.  The ultimate costs to resolve any such matters could have a material adverse effect on the Company’s financial statements.  The Company could be forced to incur material expenses with respect to these legal proceedings and, in the event there is an outcome in any that is adverse to the Company, its financial position and prospects could be harmed.

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NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Changes in Warrants (USD $)	0 Months Ended	12 Months Ended
	Jul. 21, 2014	Dec. 31, 2014	Dec. 31, 2013
Schedule of Changes in Warrants [Abstract]
Warrants Outstanding		11,049,842	10,341,982
Weighted Average Exercise Price, Warrants Outstanding		$ 0.16	$ 0.17
Warrants Exercisable		15,616,795	11,049,842
Weighted Average Exercise Price, Warrants Exercisable		$ 0.18	$ 0.16
Warrants Granted	300,000	12,256,953	707,860
Weighted Average Exercise Price, Warrants Granted		$ 0.15	$ 0.10
Warrants Cancelled		(475,000)	0
Weighted Average Exercise Price, Cancelled		$ 0.19	$ 0
Warrants Expired		(460,000)	0
Weighted Average Exercise Price, Warrants Expired		$ 0.15	$ 0
Warrants Outstanding		22,371,795	11,049,842
Weighted Average Exercise Price, Warrants Outstanding		$ 0.16	$ 0.16

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Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (4,223,467)	$ (3,614,856)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	483,864	472,400
Employee stock compensation	147,097	184,973
Cost of performance-based warrants issued for outside services rendered	209,576	0
Cost of stock grant issued for outside services rendered	1,050,000
Amortization of restricted stock grants	0	45,000
Capital contributed/co-founders' forfeiture of contractual compensation	79,000	79,000
Discount on three-year, 50% notes payable	37,993	0
Bad debt Expense	185,864	30,000
Loss/(Gain) on asset disposals	(1,516)	(1,791)
Change in operating assets and liabilities:
Accounts receivable	(276,789)	(21,738)
Inventories	111,856	(20,513)
Prepaid expenses and other current assets	(57,146)	(67,737)
Deferred loan costs	(50,000)	0
Deferred revenues	(261,586)	2,094,365
Accounts payable and accrued expenses	(335,616)	193,852
Net Cash Used in Operating Activities	(2,900,870)	(627,045)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from asset disposals	2,500	107,800
Purchases of property and equipment	(51,233)	(119,744)
Net Cash Used in Investing Activities	(48,733)	(11,944)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable	285,000	570,621
Proceeds from three-year, 50% notes payable	405,000	0
Proceeds from issuance of common stock for cash	2,084,115	346,930
Proceeds from convertible notes	0	260,000
Proceeds from a note-related advance	475,000	0
Proceeds from the issuance of stock for warrant exercises	44,000	0
Proceeds from stock deposit for common stock to be issued	40,500	1,500
Payments on notes payable	(180,229)	(300,455)
Payments on three-year, 50% notes payable	(30,375)	0
Net Cash Provided by Financing Activities	3,123,011	878,596
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	173,408	239,607
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	414,051	174,444
CASH AND CASH EQUIVALENTS, END OF YEAR	587,459	414,051
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	62,683	17,860
Cash paid for income tax	9,649	7,449
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Partial financing associated with the purchase of two fleet vehicles	49,503	0
Insurance proceeds applied to outstanding bank loan	15,854	0
Capitalized Lease involving two fleet vehicles	35,098	0
Financing of prepaid insurance policy	40,300	34,069
Series B Preferred stock dividends	27,020	105,000
Cost of Series B warrants extension	0	120,000
Accretion of beneficial conversion feature on preferred shares dividends issued in kind	71,307	0
Convertible Notes and Accrued Interest [Member]
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of convertible notes, plus accrued interest into 2,154,843 and 191,000 shares of common stock, respectively	215,485	19,100
Stock Issued for Services [Member]
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued	60,000	0
Stock Issued for Prior Subscriptions [Member]
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued	$ 0	$ 7,000

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Balance Sheets (Parentheticals) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	201,852,444	175,014,501
Common stock, shares outstanding	201,852,444	175,014,501
Common stock to be issued	300,000	15,000
Series A Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	100,000	100,000
Preferred stock, shares outstanding	100,000	100,000
Series B Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	375,000	375,000
Preferred stock, shares issued	375,000	375,000
Preferred stock, shares outstanding	375,000	375,000
Other Current Liabilities [Member]
Notes payable	50.00%
Notes payable, year	3 years
Notes payable, discount (in Dollars)	$ 0
Other Noncurrent Liabilities [Member]
Notes payable	50.00%
Notes payable, year	3 years
Notes payable, discount (in Dollars)	$ 181,385

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NOTE 9 - CONVERTIBLE NOTES PAYABLE

12 Months Ended

Dec. 31, 2014

Convertible Note Payable [Abstract]

Convertible Note Payable [Text Block]

 NOTE 9 -       CONVERTIBLE NOTES PAYABLE

For the twelve months ended December 31 2014, holders of nine convertible notes elected to convert their notes into shares of the Company’s common stock.  The total principal amount of the converted notes was $215,378.  Accrued and unpaid interest for one convertible note in the amount of $107 was also converted into shares of the Company’s common stock.  Accrued and unpaid interest for the other eight convertible notes was paid in cash to the note holders.  As a result of these conversions, the Company issued a total of 2,154,843 shares of its common stock, at a conversion price of $0.10 per share, pursuant to the terms of the notes.

During the first quarter of 2013, the Company issued a $120,532 convertible note to its chief executive officer following the receipt of $120,000 in cash, which the Company used for the repayment of the principal amount of a $120,000 demand note, representing a loan made to the Company by its chief executive officer in December 2012.  The demand note had accrued $532 of interest, which was included in the principal amount of the convertible note.  The convertible note bore 3% interest per annum, was originally due on March 31, 2014, but the maturity date was extended to March 31, 2016.  The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share.

During the first quarter of 2013, the holder of one convertible note elected to convert the note into shares of the Company’s common stock.  The principal amount of the converted note on the date of conversion was $19,100.  The Company issued a total of 191,000 shares of its common stock, at the conversion price of $0.10 per share, pursuant to the terms of the note.

During the second quarter of 2013, the Company issued two convertible notes to individual investors in exchange for an aggregate investment of $40,000.  The convertible notes bore interest at 3% per annum, with one $20,000 convertible note maturing in May 2015 and the other $20,000 note maturing in June 2016.  The convertible notes may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share.

During the third quarter of 2013, the Company issued a $40,000 convertible note to its chief executive officer in exchange for an investment of $40,000.  The convertible note bore interest at 3% per annum and originally matured in the first quarter of 2014, but the maturity date was extended to March 31, 2016.  The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share.

During the fourth quarter of 2013, the spouse of the Company’s chief executive officer loaned the Company $60,000, which was evidenced by a demand promissory note.  The demand note was replaced shortly thereafter with a new $60,000 convertible promissory note, also bearing interest at 3% per annum, and originally due March 31, 2014, but the maturity date was extended to March 31, 2016.  The convertible note may be converted at the holder’s option into shares of the Company’s common stock at a conversion price of $0.10 per share. 

At December 31, 2013, the Company had outstanding convertible notes totaling $574,163 scheduled to mature on March 31, 2014.  During the first quarter of 2014, all but one of the holders of these convertible promissory notes, representing $554,163 in principal aggregate amount, elected to execute either a one-year or two-year extension of the maturity dates of the original notes.  The other holder elected to convert his $20,000 convertible promissory note into shares of the Company’s common stock at a conversion price of $0.10 per share.  The principal amount of the note was converted in fiscal 2014.

As a result of the extension of the maturity of these notes and consistent with applicable accounting guidelines, the Company reclassified the aggregate principal value of $554,163 for the converted notes from Current Liabilities to Long-Term Liabilities on the Company’s Balance Sheet for the year ended December 31, 2013.

The Company accrued interest on outstanding convertible notes in the amount of $16,341 and $13,989 for the years ended December 31, 2014 and 2013, respectively.

Convertible notes payable at December 31 are summarized as follows:

	December 31,		December 31,
	2014		2013
Total convertible notes payable	$	873,263	$	873,263
Less:  note conversions	$	474,477	$	259,100
Convertible notes payable, net	$	398,786	$	614,163
Less: current portion	$	9,608	$	20,000
Convertible notes payable, net, long-term portion	$	389,178	$	594,163

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 25, 2015	Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	COPsync, Inc.
Document Type	10-K
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		202,572,444
Entity Public Float			$ 18,320,449
Amendment Flag	false
Entity Central Index Key	0001383154
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

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NOTE 10 - PREFERRED STOCK

12 Months Ended

Dec. 31, 2014

Disclosure Text Block Supplement [Abstract]

Preferred Stock [Text Block]

NOTE 10 -       PREFERRED STOCK

Series A Preferred Stock

The Company issued a total of 100,000 shares of its Series A Preferred Stock in April 2008 as partial consideration for its acquisition of a 100% ownership interest in PostInk Technology, LP (“PostInk”).  Each share of Series A Preferred Stock is convertible into one share of common stock, but has voting rights of 750 votes per share.  These shares are held by the former general partner of PostInk, which is owned by the co-founders of the Company.

Upon the occurrence of certain events, each share of the Company’s Series A Preferred Stock shall automatically be converted into fully-paid non-assessable shares of common stock at the then effective conversion rate for such share.  The events that may trigger this automatic conversion event are as follows:  1) immediately prior to the closing of firm commitment initial public offering, or 2) upon the receipt of the Company of a written request for such conversion from the holders of at least a majority of the Series A Preferred stock then outstanding, or if later, the effective date for conversion specified in such requests.

Series B Preferred Stock

During 2009, the Company completed a private placement of its Series B Convertible Preferred Stock and warrants to purchase its common stock in which the Company raised $1,450,000 in gross proceeds.  During 2010, an additional $50,000 was raised in the private placement.

The Series B Preferred Stock and the warrants were sold as a unit, with each investor receiving eight warrants to purchase one share of common stock for every share of Series B Preferred Stock purchased.  The purchase price for each unit was $4.00 per share of Series B Preferred Stock purchased.

As a result of this private placement, the Company issued 375,000 shares of the Company’s newly designated Series B Preferred Stock.  The Series B Preferred Stock is convertible into a total of 15,000,000 shares of the Company’s common stock.  In addition, as part of the private placement, the Company granted warrants to purchase an aggregate of 3,000,000 shares of its common stock.

The Company used the effective conversion price of preferred shares issued based on the proceeds received to compute the intrinsic value of the embedded conversion feature on preferred stock issuances with detachable warrants.  The Company allocated the proceeds received from the Series B Preferred Stock issuance and the detachable warrants included in the exchange on a relative fair value basis.  The Company then calculated an effective conversion price and used that price to measure the intrinsic value of the embedded conversion option.

The warrants to purchase a total of 3,000,000 shares of the Company’s common stock granted in the private placement have an exercise price of $0.20 per share and were scheduled to expire on October 14, 2013.  During 2013, the Company extended the term of these warrants for an additional four years.  The fair value expense for this extension totaled $120,000, was determined using Black Scholes valuation techniques, and was reported in the Company’s Statement of Operations for fiscal 2013.  The exercise price and the number of shares of common stock purchasable upon exercise of the warrants are subject to adjustment upon the occurrence of certain events, including, but not limited to: (i) stock dividends, stock splits or reverse stock splits; (ii) the payment of dividends on the common stock payable in shares of common stock or securities convertible into common stock; (iii) a recapitalization, reorganization or reclassification involving the common stock, or a consolidation or merger of the Company; or (iv) a liquidation or dissolution of the Company.

Also in connection with this private placement, the Company agreed to use its best efforts to effect a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock issuable upon conversion of the Series B Preferred Stock and upon exercise of the warrants, upon the request of the holders of a majority of those shares after the second anniversary of the date of the private placement closing.  It also provides for the investors to have “piggyback” registration rights to include their shares in future registrations with the Securities and Exchange Commission by the Company of the issuance or sale of its securities.  The investor’s right to request a registration or inclusion of shares in a registration terminates on the date that such investor may immediately sell all of the shares of common stock issuable upon conversion of the Series B Preferred Stock and upon exercise of the warrants under Rule 144 or Rule 145 promulgated under the Securities Act.  The agreement also grants to the investors a right of first refusal to purchase all, but not less than all, of certain new securities the Company may, from time to time, propose to sell after the date of the private placement agreement, and also contains certain covenants relating to the Company’s Board of Directors and requiring the Company to retain patent counsel.  As of year ended December 31, 2014, the Company has not received a request of the holders of a majority of those shares to effect a registration statement with the Securities and Exchange Commission.

The Series B Preferred Stock (i) accrues dividends at a rate of 7.0% per annum, payable in preference to the common stock or any other capital stock of the Company, (ii) has a preference in liquidation, or deemed liquidation, to receive the initial investment in the Series B Preferred Stock, plus accrued and unpaid dividends, (iii) is convertible into 40 shares of the Company’s common stock, subject to adjustments for issuances by the Company of common stock at less than $0.10 per share, and (iv) has the right to elect one member of the Company’s Board of Directors. 

For the year ended December 31, 2014, gross dividends on the Series B Preferred Stock were $105,000, consisting of $77,980 for accretion of the beneficial conversion feature on the preferred shares dividends issued in kind and $27,070 for net dividends.  For the year ended December 31, 2013, dividends on the Series B Preferred Stock were $105,000.  The Company has recorded accrued accumulated dividends as of December 31, 2014 and 2013 of $546,863 and $441,863, respectively, on the Series B Preferred Stock.

Each share of Series B Preferred Stock automatically converts into fully-paid, non-assessable shares of the Company’s common stock at the then effective conversion rate on the first to occur of the following events:

(i) ninety (90) days after the Company has reported net income, in accordance with generally accepted accounting principles, for two (2) consecutive quarters, as reported in its quarterly reports on Form 10-Q (or annual report on Form 10-K, if applicable) filed under the Securities Exchange Act of 1934, as amended,

(ii) on the date that the Company closes on the sale of securities to purchasers other than holders of the Series B Preferred Stock that was subject to the right of first refusal set forth in the Investors’ Rights Agreement, and the purchasers of such securities require that the Series B Preferred Stock be converted into Common Stock as a condition to such closing, or

 (iii) upon the receipt by the Company of a written request for such conversion from the holders of all of the Series B Preferred Stock then outstanding, or, if later, the effective date for conversion specified in such requests.

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Statements of Operations (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
REVENUES
Hardware, installation and other revenues	$ 3,248,091	$ 2,944,827
Software license/subscription revenues	2,662,237	1,780,790
Total Revenues	5,910,328	4,725,617
COST OF REVENUES
Hardware and other costs	2,571,359	2,509,072
Software license/subscriptions	1,073,136	959,768
Total Cost of Revenues	3,644,495	3,468,840
GROSS PROFIT	2,265,833	1,256,777
OPERATING EXPENSES
Research and development	1,952,786	2,157,597
Sales and marketing	1,408,659	1,289,892
General and administrative	2,960,262	1,395,118
Total Operating Expenses	6,321,707	4,842,607
LOSS FROM OPERATIONS	(4,055,874)	(3,585,830)
OTHER INCOME (EXPENSE)
Interest income	9,700	7
Interest expense	(177,293)	(29,033)
Total Other Income (Expense)	(167,593)	(29,026)
NET LOSS BEFORE INCOME TAXES	(4,223,467)	(3,614,856)
INCOME TAXES	0	0
NET LOSS	(4,223,467)	(3,614,856)
Series B preferred stock dividend	(33,693)	(105,000)
Accretion of beneficial conversion feature on preferred shares dividends issued in kind	(71,307)	0
Cost of Series B warrants extension	0	(120,000)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$ (4,328,467)	$ (3,839,856)
LOSS PER COMMON SHARE - BASIC & DILUTED (in Dollars per share)	$ (0.02)	$ (0.02)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED (in Shares)	182,986,709	173,799,481

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NOTE 4 - INVENTORY

12 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

NOTE 4 -       INVENTORY

Inventory consisted of the following as of December 31:

	December 31,
Category	2014		2013
Raw materials	$	-	$	-
Work-in-process		-		-
Finished goods		246,077		357,933
Total Inventory	$	246,077	$	357,933

The approximately $112,000 decrease in inventory between 2013 and 2014 is due principally to a sharp increase in 2013 customer bookings for new hardware associated with the Company’s COPsync service.  The timing of the receipt of the new orders, the associated procurement cycle and installation timetables all culminated in the Company possessing a large amount of inventory at December 31, 2013.  Those inventories were reduced as a result of the hardware being delivered to the customer and installed in fiscal year 2014.

Total inventory at December 31, 2014 included hardware consisting of computer laptops, printers and ancillary parts, such as electronic components, connectors, adapters and cables, as well as the Company’s propriety VidTac product and its related components.  Generally, the Company procures hardware as a result of receiving a customer order.  The hardware is procured, delivered to the Company, prepared for installation and then transported by the Company to the customer site for installation.  The Company does not procure and inventory third party hardware for speculative selling.

The various components of hardware are all considered finished goods because the individual items may be, and are, sold in a package, or on an individual basis, normally at the same pricing structure.

With regards to the Company’s VidTac product, a manufacturing agreement was executed in 2012 with a single contract manufacturer and calls for the Company to periodically place a demand purchase order for a fixed number of finished units to be manufactured and delivered as finished goods.  The Company’s purchase orders placed with the contract manufacturer are non-cancellable; however, there are some relief provisions: (1) the Company may change the original requested delivery dates if the Company gives sufficient advance notice to the contract manufacturer; and (2) should the Company elect to cancel a purchase order in total or in part, it would be financially responsible for any materials that could not be returned by the contract manufacturer to its source suppliers.

When the VidTac product is recorded into Finished Goods, it consists of a kit consisting of four basic components.  It is inventoried as a single unit of inventory.  Should a single component fail or need to be replaced, the Company will take a kit and then inventory the components, still considered finished goods.  Should a component need to be repaired, it is returned to the contracted manufacturer for analysis and repair.  The repaired component is then shipped to the Company and inventoried as a finished goods component.

In July 2014, the Company placed a demand purchase order valued at $433,000 with the contract manufacturer for finished units to be delivered ratably throughout the year and into early fiscal year 2015.  The order was to cover a then backlog of orders for VidTac, as well as forecasted demand for the product during the delivery period.  The payment terms for this purchase order required a 10% down-payment at the time of order placement, followed by Net 30 days from invoice date once the units are delivered to finished goods inventory.

In December 2014, the Company placed another demand purchase order valued at $433,000 with the contract manufacturer for finished units to be delivered ratably in fiscal year 2015, beginning in May 2015.  This order was to cover forecasted demand for the product during the delivery period, as well as to accommodate the long-lead times required for procuring certain components from off-shore manufacturers.  The payment terms for this purchase order required a10% down-payment at the time of order placement, followed by Net 30 days from invoice date once the units are delivered to finished goods inventory.

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NOTE 3 - ACCOUNTS RECEIVABLE

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 3 -       ACCOUNTS RECEIVABLE

The Company's accounts receivable, net, at December 31, consisted of the following:

	December 31,
Category	2014			2013
Trade receivables	$	1,101,279		$	649,837
Other receivables		53,227			7,908
Elimination of unpaid deferred revenue		(716,495	)		(525,938	)
Allowance for doubtful accounts		(214,389	)		(30,000	)
Total Accounts Receivable	$	223,622		$	101,807

To date, accounts receivable have been derived principally from revenue earned from end users, which are local and state governmental agencies.  The Company performs periodic credit evaluations of its customers, and does not require collateral.

The Company’s other receivables as of December 31, 2014 consisted principally of $30,890 for the sale of two vehicles to a third party leasing company and $9,700 for interest charged against a specific customer’s outstanding receivables balance.

The elimination of the unpaid deferred revenue December 31, 2014, represents those invoices issued for products and/or services not yet paid by the customer or services completed by the Company.  The elimination is made to prevent the “gross-up” effect on the Company’s Balance Sheet between Accounts Receivable and Deferred Revenues.

The Company’s allowance for doubtful accounts is based upon a review of outstanding receivables.  Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. 

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NOTE 15 - EMPLOYEE OPTIONS

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 15 -     EMPLOYEE OPTIONS 

At December 31, 2014, the Company has a stock-based compensation plan, the 2009 Long Term Incentive Plan.

The 2009 Long Term Incentive Plan was adopted by the Board of Directors on September 2, 2009.  Under the 2009 Long Term Incentive Plan, the Company can grant nonqualified options to employees, officers, outside directors and consultants of the Company or incentive stock options to employees of the Company. There are 10,000,000 shares of common stock authorized for issuance under the 2009 Long Term Incentive Plan. In April 2014, the Board of Directors authorized an additional 10,000,000 shares under the 2009 Long Term Incentive Plan, which the Company plans to submit for approval of the Company’s shareholders.  The outstanding options have a term of ten years and vest primarily over periods ranging from three to five years. As of December 31, 2014, options to purchase 9,814,999 shares of the Company’s common stock were outstanding under the plan, of which options to purchase 7,523,323 shares were exercisable, with a weighted average exercise price of $0.09 per share.

For the twelve months period ended December 31, 2014, the Company granted options to purchase 2,475,000 shares of its common stock with a weighted average exercise price of $0.13 per share.  Of the total options granted, options to purchase 75,000 shares were granted to three outside directors, each of whom received a set number of options as part of their annual compensation for serving on the Company’s Board of Directors, and options to purchase 2,400,000 shares were granted four members of executive management.  The total value of these stock options, utilizing the Black Scholes valuation method, was $311,490.  The term of the stock options is ten years, with three year vesting, with 33% vesting on the one-year anniversary of the grant date, and the remainder vesting ratably over the next eight quarters. 

Share-based compensation expense is based on the estimated grant date fair value of the portion of share-based payment awards that are ultimately expected to vest during the period.  The grant date fair value of stock-based awards to employees and directors is calculated using the Black-Scholes option pricing model.  Historically and through the third quarter of 2013, forfeitures of share-based payment awards were reported when actual forfeitures occur.  On a prospective basis, beginning in the fourth quarter of 2013, the Company applied an estimated forfeiture rate of twenty-three percent to new stock option grants.  Beginning with the fourth quarter of 2014, the estimated forfeiture rate was changed to twenty-six percent..

As of December 31, 2014 and 2013, the Company recorded $147,097 and $184,973 in share-based compensation expenses, respectively.

The cash flows from tax benefits for deductions in excess of the compensation costs recognized for share-based payment awards would be classified as financing cash flows.  Due to the Company’s loss position, there was no such tax benefits during the year ended December 31, 2014.

The summary activity under the Company’s 2009 Long Term Incentive Plan is as follows:

	December 31, 2014									December 31, 2013
	Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life		Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life
Outstanding at beginning of period		8,375,000		$	0.09						8,815,000		$	0.09
Granted		2,475,000		$	0.13						450,000		$	0.10
Exercised		–		$	0.00					─			$	0.00
Forfeited/ Cancelled		(1,035,001	)	$	0.07						(890,000	)	$	0.08
Outstanding at period end		9,814,999		$	0.11	$	3,268,799		1.50		8,375,000		$	0.09	$	83,750		1.50
Options vested and exercisable at period end		7,523,323		$	0.09	$	2,708,396	─			6,057,494		$	0.09	$	60,575	─
Weighted average grant-date fair value of options granted during the period	$	0.27								$	0.10

The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2014:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Options Outstanding		Weighted Average Remaining Contractual  Life (in years)		Weighted Average Exercise Price		Number Outstanding		Weighted Average Exercise Price
$	0.00 – $ 0.08		2,500,000		5.84	$	0.08		2,312,500	$	0.08
$	0.09 – $ 0.39		7,314,999		6.68	$	0.09		5,210,823	$	0.10
			9,814,999						7,523,323

A summary of the status of the Company’s non-vested shares as of December 31, 2014 is as follows:

Non-vested Shares	Shares			Weighted Average Grant-Date Fair Value
Non-vested at January 1, 2014		2,317,506		$	0.09
Granted		2,475,000		$	0.27
Forfeited		(1,035,001	)	$	0.07
Vested		(1,465,829	)	$	0.13
Non-vested		2,291,676		$	0.20

As of December 31, 2014, there was approximately $448,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements.  The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.76 years.  The intrinsic value of options vesting in year 2014 was approximately $475,000.

During 2014, the Company estimated the fair value of the stock options based on the following weighted average assumptions:

Risk-free interest rate		2.07%	-	3.00	%
Expected life	10 years
Expected volatility		120%	-	123	%
Dividend yield		0.0			%

During 2013, the Company estimated the fair value of the stock options based on the following weighted average assumptions:

Risk-free interest rate		1.73%	-	2.53	%
Expected life	10 years
Expected volatility		126%	-	131	%
Dividend yield		0.0			%

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NOTE 11 - COMMON STOCK

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 11 -       COMMON STOCK

For the twelve months period ended December 31 2014, the Company issued a total of 21,243,100 shares of common stock, along with warrants to purchase 4,378,620 shares of common stock, to investors for an aggregate cash purchase price of $2,124,310, or $0.10 per share purchased, net of $40,195 in related costs.    Most of the warrants issued with the common stock provide for a twenty percent coverage, a four-year term and a specified exercise price ranging from $0.10 to $0.45 per share.  There were two exceptions to the preceding statement: one, an individual investment for $500,000 was made in exchange for 5,000,000 shares of common stock and warrants to purchase 1,250,000 shares of common stock (or twenty-five percent warrant coverage), with an exercise price of $0.20 per share and an optional, cashless exercise feature; and two, an individual investment for $120,000 in which no warrants were issued.

In 2014, the Company also issued 600,000 shares of its common stock, and warrants to purchase 120,000 shares of its common stock (with an exercise price of $0.10 per share), in exchange for $60,000 of services, $31,835 of which services had been performed at the date of issuance and $28,165 of which had yet to be performed.  Those services were subsequently performed.

On October 6, 2014, the Company executed a six-month consulting agreement with a third party service provider for general financial advisory and investment banker services.  As a part of the agreement, the Company issued 2,375,000 shares of its common stock to the third party provider.  The recipient of the stock is required to hold the stock for a specified period of time.  The fair value of the stock grant was $997,500, determined by multiplying 2,375,000 shares times that day’s closing price of $0.42 per share.  This non-cash expense was recorded as general and administrative expense in the Company’s Statement of Operations.

Also on October 6, 2014, the Company executed a six-month consulting agreement with a third party service provider for advisory services.  Compensation for the agreement called for the Company to issue a 125,000 stock grant for vested shares of the Company’s common stock.  The recipient of the stock grant is required to hold the stock for a specified period of time.  The fair value of the stock grant was $52,500, determined by multiplying 125,000 shares times that day’s closing price of $0.42 per share.  This non-cash expense was recorded as general and administrative expense in the Company’s Statement of Operations.

The Company also issued 2,154,843 shares of its common stock upon the conversion of $215,485 in principal and accrued interest of outstanding convertible notes during the period (See Note 9).

The Company also issued 340,000 shares of its common stock upon the exercise of outstanding warrants, for an aggregate purchase price of $44,000, during the period (See Note 14).

During 2013, the Company received gross proceeds totaling $346,930 from sixteen individual investors in a private placement.  The private placement was completed pursuant to a series of subscription agreements between the Company and the investors.  Pursuant to the terms of the subscription agreements, the Company agreed to sell to the investors an aggregate of 3,469,300 shares of the Company’s common stock and detachable four-year warrants to purchase an aggregate of 693,860 shares of common stock. 

Also during 2013, the Company issued 70,000 shares of common stock and associated warrants following the receipt of a $7,000 deposit in 2012 from a single investor.

In connection with the 2013 private placement, the Company received a series of small deposits from a single investor totaling $1,500 in 2013 for shares of common stock and associated warrants, which the Company expects to issue in 2015.

For the 2013 private placement, the common stock and the warrants were sold as an equity unit, with each investor who purchased shares of the Company’s common stock receiving a warrant to purchase one share of common stock (with an exercise price of $0.10 per share) for every five shares of common stock purchased by such investor.  The purchase price for each equity unit was $0.10 per share of common stock purchased.

During 2013, the Company recorded amortization of a restricted stock grant of $45,000 involving a stock grant of 2,000,000 restricted shares of common stock valued at $180,000, or $0.09 per share, and issued in the second quarter of 2011.  The restricted shares vested pro-rata and quarterly over three years and became fully vested in 2013.

The Company also recorded contributed capital of $79,000 during each of the years ended December 31, 2014 and 2013, related to the forfeiture of contractual compensation involving the Company’s two co-founders.

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NOTE 7 - INCOME TAXES

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 7 -       INCOME TAXES

As of December 31, 2014, the Company had federal net operating loss carry-forwards available to reduce taxable income of approximately $15,573,000.  The net operating loss carry-forwards expire between 2028 and 2034.

Deferred tax assets and liabilities at December 31, consist of the following:

	2014			2013
Deferred tax assets:
Net operating loss carry-forwards	$	5,294,800		$	4,372,400
Total deferred tax assets		5,294,800			4,372,400
Valuation allowance		(5,294,800	)		(4,372,400	)
Net deferred tax assets	$	-		$	-

Income tax benefit differs from the expected statutory rate as follows:

	2014			2013
Expected federal income tax benefit	$	(1,471,700	)	$	(1,529,500	)
Stock expense		357,000			15,300
Stock option and warrant expense		121,300			123,100
Other		70,700			224,900
Change in valuation allowance		922,700			1,166,200
Income tax benefit	$	–		$	–

A full valuation allowance has been established for the Company's net deferred tax assets since the realization of such assets through the generation of future taxable income is uncertain.

Under the Tax Reform Act of 1986, the amounts of, and the benefit from, net operating losses and tax credit carry-forwards may be impaired or limited in certain circumstances.  These circumstances include, but are not limited to, a cumulative stock ownership change of greater than 50%, as defined, over a three-year period.

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NOTE 9 - CONVERTIBLE NOTES PAYABLE (Details) - Schedule of Convertible Notes Payable (USD $)	Dec. 31, 2014	Dec. 31, 2013
Schedule of Convertible Notes Payable [Abstract]
Total convertible notes payable	$ 873,263	$ 873,263
Less: note conversions	474,477	259,100
Convertible notes payable, net	398,786	614,163
Less: current portion	9,608	20,000
Convertible notes payable, net, long-term portion	$ 389,178	$ 594,163

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NOTE 5 - PREPAID EXPENSES AND OTHER ASSETS

12 Months Ended

Dec. 31, 2014

Disclosure Text Block Supplement [Abstract]

Other Current Assets [Text Block]

NOTE 5 -      PREPAID EXPENSES AND OTHER ASSETS

The Company's prepaid expenses and other assets at December 31, consisted of the following:

	December 31,
Category	2014		2013
Prepaid Insurance	$	44,101	$	37,910
Subscriptions		24,050		14,859
Vendor Prepayments		103,044		63,804
Deferred Charges		98,953		-
Total Prepaid Expenses and Other Assets	$	270,148	$	116,573

Prepaid insurance pertains to various business insurance policies, the fees of which have been financed by a third-party service provider and are being paid over an eleven-month period.  This prepayment is amortized ratably over the twelve-month insurance coverage period.

Subscriptions principally pertain to prepaid software support and web-hosting services provided by third-party service providers.  These prepayments are amortized into expense over the life of the specific service period.

Vendor prepayments principally involve two vendors: one, consisting of down-payments made to the Company’s contract manufacturer for new orders of the VidTac product, which are then applied on a unitized basis as credits on the vendor’s invoices when the finished product goes into finished goods inventory; and two, a software engineering firm that provides ongoing services to the Company.  As of the date of this report, those services have subsequently been provided and the prepayments charged to operating expenses in fiscal year 2015.

Deferred charges pertain to off-the-shelf computer aided dispatch systems (“CAD”) purchased from two outside software services companies and delivered to six contracted customers as part of their respective, executed service agreement (or contract).  The contracts involved license fees for the CAD service over a four-year period commencing with the acceptance of the service, as well as one-time implementation fees specific to each agency.  The contracts were executed in early in 2013 and the customers made prepayments totaling $285,555, the latter of which is reported in Current Deferred Revenues.  At December 31, 2014, there remains some services yet to be performed and delivered to the customers; therefore, revenue recognition is not appropriate at this time.  The Company expects to complete and deliver those services in fiscal year 2015, at which time these deferred charges will be matched against the applicable revenues.

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NOTE 6- SOFTWARE DEVELOPMENT COSTS

12 Months Ended

Dec. 31, 2014

Research and Development [Abstract]

Research, Development, and Computer Software Disclosure [Text Block]

 NOTE 6-      SOFTWARE DEVELOPMENT COSTS

Software development costs as of December 31, were as follows:

	December 31,
	2014			2013
Capitalized software development costs	$	2,724,082		$	2,724,082
Accumulated amortization		(1,847,274	)		(1,410,803	)
Sub-total		876,808		$	1,313,279
Cumulative Impairment charge		(876,808	)		(876,808	)
Total	$	-		$	436,471

Amortization expense related to these costs was $436,471 and $436,465 for the years ended December 31, 2014 and 2013, respectively.  

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NOTE 8 - NOTES PAYABLE

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE 8 -       NOTES PAYABLE

Notes payable as of December 31 consisted of the following:

	Collateral		Interest			Monthly			December 31,
Type	(If any)		Rate			Payments		Maturity	2014			2013
Bank	Autos	(8)		6.00	%	$	468	Jan. 2017		10,949			15,749
Bank	Autos	(7) (8)		6.50	%	$	1,017	Jun. 2018		21,818			47,401
Bank	Autos	(8)		6.50	%	$	220	Jul. 2018		8,387			10,392
Bank	Autos	(1) (8)		4.00	%	$	312	Mar. 2019		14,569			-
Bank	Autos	(1) (8)		4.00	%	$	254	Mar. 2019		11,893			-
Bank	Autos	(1) (8)		4.00	%	$	346	May. 2019		16,790			-
Insurance		(2) (8)		7.50	%	$	3,093	Nov. 2014		40,300			34,069
Demand Note	Inventory	(11)		16.00	%	$	-	Jun. 2015		313,477			313,477
Demand Note		(6)		15.00	%	$	7,500	Apr. 2015		30,745			-
Demand Note		(3)		-	%	$	-	Apr. 2015		7,500			-
Demand Note		(4)		12.9	%	$	-	Jul. 2015		250,000			-
Demand Note		(4) (9)		9.90	%	$	-	Mar. 2014		-			98,646
Demand Note		(5) (10)		16.70	%	$	-	Jun. 2015		412,618			-
Total notes payable									$	1,139,046		$	519,734
Less: Current portion									$	(791,289	)	$	(412,405	)
Long-term portion									$	347,757		$	107,329

Future principal payments on long-term debt are as follows:

2015	$	791,289
2016		233,682
2017		109,386
2018		4,689
2019 & thereafter		-
Total	$	1,139,046

For the twelve months period ended December 31 2014, the Company incurred the following increases in notes payable:

1)             The Company executed three five-year bank notes, with total principal of $49,503 and an interest rate of 4.0% per annum, for the purchase of three automobiles to be used in sales and operations.

2)             The Company executed two eleven-month notes payable pertaining to the Company’s business insurance coverages: one in the amount of $27,963 in February and for inland marine, general and product liability risk exposures; and a second one in the amount of $40,300 in December and for directors and officers insurance.  Both notes call for monthly payments of principal and have an interest rate of 7.5% per annum.

3)             On February 28, 2014, the Company executed a sixty-day promissory note in the principal amount of $25,000, payable to its Chief Executive Officer, for a loan in the same amount.  Interest at 3.0% per annum is due upon maturity of the promissory note.  In the fourth quarter of fiscal 2014, the Company repaid $17,500 of the principal amount of the note, leaving an outstanding balance of $7,500.  The Company’s chief executive officer elected to extend the maturity date of this note to April 1, 2015.

4)             In September 2013, an individual loaned the Company $50,000 to procure third-party hardware for a new contract.  The related note matured on March 31, 2014, bore simple interest at a rate of 9.9% per annum, and was payable upon maturity.  Prior to the maturity date, the note holder elected to loan the Company an additional $200,000.  As a result, the $50,000 note was cancelled and replaced with a new $250,000 unsecured note, which matures on July 15, 2015 and accrues interest at a rate of 12.9% per annum.  Payment of the accrued interest is due upon the note’s maturity.  Accrued interest on the cancelled note totaled $2,807 and was paid in the second quarter of fiscal 2014.

5)             In May 2014, eight individuals loaned the Company an aggregate of $405,000 in cash.  The resulting promissory notes included the following terms: each note is due thirty-six months from issuance date, contemplates a 50% return by the end of the note term, and requires a specific repayment amount be made by the Company every six months, commencing six months after the note is issued.  The aggregate repayment amount of the notes payable is $607,500.  The repayment amounts increase on an annual basis throughout the life of the note.  The Company is required to repay 10%, 30% and 60% of the aggregate repayment amount in years one, two and three of the notes’ term, respectively.  The aggregate discount on the notes, totaling $202,500, was recorded on the Company’s Balance Sheet at issuance as a contra-notes payable, located in long-term liabilities.  The discount is amortized ratably over the life of the respective promissory notes and is recorded as interest expense in the Company’s Statement of Operations.  The Company had recorded $37,933 in cumulative discount on the notes as of December 31, 2014.

6)             On July 11, 2014, the Company executed a $60,000 short-term promissory note payable to a third-party financier.  The purpose of the note was to assist in the Company’s procurement of its VidTac products.  The note matures on April 11, 2015, accrues interest at 15% per annum, and required an initial monthly payment of interest only in August 2014 of $750, followed by eight monthly principal and interest payments in the amount of $7,027.99, commencing in September 2014.

For the twelve months period ended December 31 2014, the Company recognized the following decreases in notes payable:

7)             In the third quarter of 2014, one of the Company’s financed automobiles was involved in an accident, and sustained sufficient damage whereby the insurance company determined the vehicle to be a total loss.  The insurance company subsequently issued a payment to the Company in the amount of $15,844 for its loss.  The payment was applied in full to the related bank loan

8)             In 2014, the Company made principal payments of $131,582, primarily through scheduled monthly payments on notes payable that financed the Company’s business insurance policies and bank notes for automobile loans.

9)             In 2014, the Company paid a maturing loan in the amount of $48,646.  The original loan to the Company was made in September 2013 by an individual for the purpose of procuring third-party hardware for a new contract, and consisted of $50,000 in principal, an interest rate of 9.9% per annum, a maturity date in March 2014, and required the Company make monthly principal and interest payments during the life of the loan to the individual note holder.

10)           In the fourth quarter of 2014, the Company made the first six-month principal repayment in the aggregate of $30,375 to the eight investors who made loans to the Company as discussed above.

Other activities involving the Company’s notes payable occurring during the twelve months period ended December 31, 2014 are as follows:

11)           In November 2013, the Company executed two short-term notes payable in the aggregate amount of $313,477 with an equipment financing company owned by one of the Company’s outside directors to finance the purchase of certain third-party equipment to be sold by the Company to its contracted customers.  Both notes were scheduled to mature in May 2014, bear interest at 16% per annum, payable upon maturity, and are collateralized by the third-party equipment being procured.  During the second quarter of 2014, the equipment financing company extended the maturity dates of the notes by six months, making the notes due in November 2014.  The equipment financing company required the Company to pay the accumulated interest for the original six-month period as a condition to the extension of the maturity date.  The Company paid total interest of $23,646 on these notes in the second quarter of 2014.  In December 2014, the equipment financing company again extended the maturity date of the notes to June 2015.  The Company paid total accrued interest of $26,526 on these notes in the fourth quarter of 2014.

12)           On February 3, 2014, the Company received a $475,000 loan from the City of Pharr, Texas.  The loan documents related to this loan have not been finalized at the date of this report, but the note is expected to bear interest at 8.0% per annum.  The loan principal amount is expected to be due in full on the earlier to occur of the 18 month anniversary of the loan or the receipt by the Company of $2.0 million in proceeds from an EB-5 visa funding arrangement the Company is pursuing.  The loan is expected to be secured by a first priority security interest in the Company’s accounts receivable.  The city is expected to also receive a modest percentage of the Company’s revenue, payable quarterly, with respect to contracts for the Company’s products and services with customers located in a specified territory in the southern portion of Texas, for a specified period of time.  Because the formal loan documents have not been executed as of the date of this report, the loan advance has been classified as an accrued expense on the Company’s Balance Sheet.

During 2013, the Company made total payments of $300,455 on its notes payable, consisting of total monthly payments of $51,161 on existing notes payable involving the short-term financing of the Company’s business insurance policies and automobile loans, repayment of the $120,000 demand note issued to the Company’s chief executive officer described below, repayment of the $60,000 demand note issued to the spouse of the Company’s chief executive officer described below, and $69,294 involving the payoff of automobile loans in connection with the Company’s efforts to replace the vehicles used by its sales force with more fuel efficient vehicles.  Accordingly, the Company sold six vehicles for $107,800, which were being financed with bank notes.  Proceeds from the sales of $69,294 were used to pay-off the balances of the related bank notes, and the balance of the proceeds was to purchase new vehicles.  The Company financed the remaining acquisition costs of the new automobiles by executing a new bank note for $51,880, with terms of ratable, monthly payments, a five year life and a 6.5% annual interest rate.  Also during the third quarter of 2013, the Company financed the acquisition of a single vehicle by executing a new bank note for $11,195, with terms of ratable, monthly payments, a five year life and a 6.5% annual interest rate. 

In December 2012, the Company’s chief executive officer loaned the Company $120,000, which was evidenced by a demand promissory note, bearing 3% interest.  The principal amount of the note was repaid in the first quarter of fiscal 2013.  The accrued interest was included in the principal amount of a new convertible promissory note described Note 9.

In November 2013, the spouse of the Company’s chief executive officer loaned the Company $60,000, which was evidenced by a demand promissory note.  The note was replaced shortly thereafter with a new $60,000 convertible promissory note described below. 

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NOTE 12 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued (USD $)	Dec. 31, 2014	Dec. 31, 2013
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued [Line Items]
Number of shares to be issued	300,000	15,000
Value of shares to be issued	$ 42,000	$ 1,500
Stock to be Issued for Cash at $0.10 [Member]
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued [Line Items]
Number of shares to be issued	180,000	15,000
Value of shares to be issued	18,000	1,500
Stock to be Issued for Cash at $0.20 [Member]
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued [Line Items]
Number of shares to be issued	120,000	0
Value of shares to be issued	24,000	0
Common Stock To Be Issued [Member]
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) - Schedule of Common Stock to be Issued [Line Items]
Number of shares to be issued	300,000	15,000
Value of shares to be issued	$ 42,000	$ 1,500

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NOTE 13- BASIC AND FULLY DILUTED LOSS PER SHARE (Details) - Schedule of Anti-Dilutive Common Stock Equivalents	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock Equivalents Outstanding	57,838,464	45,832,407
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock Equivalents Outstanding	4,106,296	6,212,191
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock Equivalents Outstanding	22,371,795	11,049,842
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock Equivalents Outstanding	9,814,999	8,375,000
Stock to be issued [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock Equivalents Outstanding	300,000	0
Preferred Stock Outstanding [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock Equivalents Outstanding	15,100,000	15,100,000
Preferred Stock Dividends [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock Equivalents Outstanding	6,145,374	5,095,374

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NOTE 12 - COMMON STOCK TO BE ISSUED (Details) (USD $)	0 Months Ended	12 Months Ended		1 Months Ended
	Jul. 21, 2014	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2014
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) [Line Items]
Proceeds from Issuance or Sale of Equity		$ 2,084,115
Common Stock to be Issued, Shares		300,000	15,000
Class of Warrant or Rights, Granted	300,000	12,256,953	707,860
Stock to be issued [Member] | Warrants at $0.38 [Member] | Minimum [Member]
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.38
Stock to be issued [Member] | Warrants at $0.38 [Member]
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) [Line Items]
Proceeds from Issuance or Sale of Equity		15,000
Common Stock to be Issued, Shares		150,000
Warrants, Term of Warrants		4 years
Stock to be issued [Member]
NOTE 12 - COMMON STOCK TO BE ISSUED (Details) [Line Items]
Proceeds from Issuance or Sale of Equity		16,500		24,000
Common Stock to be Issued, Shares		165,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.10		$ 0.20
Class of Warrant or Rights, Granted		30,000		120,000
Proceeds from Issuance of Private Placement		$ 3,000

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NOTE 8 - NOTES PAYABLE (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

Notes payable as of December 31 consisted of the following:

	Collateral		Interest			Monthly			December 31,
Type	(If any)		Rate			Payments		Maturity	2014			2013
Bank	Autos	(8)		6.00	%	$	468	Jan. 2017		10,949			15,749
Bank	Autos	(7) (8)		6.50	%	$	1,017	Jun. 2018		21,818			47,401
Bank	Autos	(8)		6.50	%	$	220	Jul. 2018		8,387			10,392
Bank	Autos	(1) (8)		4.00	%	$	312	Mar. 2019		14,569			-
Bank	Autos	(1) (8)		4.00	%	$	254	Mar. 2019		11,893			-
Bank	Autos	(1) (8)		4.00	%	$	346	May. 2019		16,790			-
Insurance		(2) (8)		7.50	%	$	3,093	Nov. 2014		40,300			34,069
Demand Note	Inventory	(11)		16.00	%	$	-	Jun. 2015		313,477			313,477
Demand Note		(6)		15.00	%	$	7,500	Apr. 2015		30,745			-
Demand Note		(3)		-	%	$	-	Apr. 2015		7,500			-
Demand Note		(4)		12.9	%	$	-	Jul. 2015		250,000			-
Demand Note		(4) (9)		9.90	%	$	-	Mar. 2014		-			98,646
Demand Note		(5) (10)		16.70	%	$	-	Jun. 2015		412,618			-
Total notes payable									$	1,139,046		$	519,734
Less: Current portion									$	(791,289	)	$	(412,405	)
Long-term portion									$	347,757		$	107,329

Schedule of Maturities of Long-term Debt [Table Text Block]

Future principal payments on long-term debt are as follows:

2015	$	791,289
2016		233,682
2017		109,386
2018		4,689
2019 & thereafter		-
Total	$	1,139,046

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NOTE 6- SOFTWARE DEVELOPMENT COSTS (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Research and Development [Abstract]
Amortization of Intangible Assets	$ 436,471	$ 436,465

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NOTE 13- BASIC AND FULLY DILUTED LOSS PER SHARE

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE 13-      BASIC AND FULLY DILUTED LOSS PER SHARE

The computations of basic loss per share of common stock are based on the weighted average number of common shares outstanding during the period of the financial statements.  Common stock equivalents which would arise from the exercise of stock options and warrants outstanding during the period, the conversion of convertible preferred stock and dividends or the conversion of convertible notes were excluded from the loss per share attributable to common stock holders as their value is anti-dilutive.

The Company's common stock equivalents, at December 31, consisted of the following and have not been included in the calculation because they are anti-dilutive:

	2014		2013
Convertible Notes Outstanding		4,106,296		6,212,191
Warrants Outstanding		22,371,795		11,049,842
Stock Options Outstanding		9,814,999		8,375,000
Common Stock to be Issued		300,000		-
Preferred Stock Outstanding		15,100,000		15,100,000
Dividends on Preferred Stock Outstanding		6,145,374		5,095,374
Total Common Stock Equivalents		57,838,464		45,832,407

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NOTE 18 - SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 18 -     SUBSEQUENT EVENTS

In October 2014, our Board of Directors approved a funding initiative for an additional $750,000 to fund a software development effort for feature and function enhancements to enable the COPsync Network and COPsync911 threat alert system more readily to scale nationwide.  As of the date of this report, $450,000 has been raised, all in the first quarter of 2015.  The investment security is a three-year convertible promissory note, which bears interest at the rate of two percent simple interest per year, paid in cash.  The principal of the note converts into shares of the Company’s common stock at the rate of $0.22 per share.  The promissory note may be prepaid by the Company under certain conditions.

The Company has outstanding warrants to purchase an aggregate of 3,155,582 shares of its common stock at a price of $0.20 per share, having an aggregate exercise price of $631,116, that expire in 2015.  As of the date of this report, 360,000 of those warrants have been exercised for a total exercised price of $64,000, all in the first quarter of 2015.

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NOTE 5 - PREPAID EXPENSES AND OTHER ASSETS (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
Disclosure Text Block Supplement [Abstract]
Proceeds from Deposits from Customers	$ 285,555

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NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) (USD $)	1 Months Ended	12 Months Ended		3 Months Ended
	Oct. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2015	Dec. 31, 2012	Jul. 11, 2014	May 31, 2014	Mar. 31, 2014	Jun. 30, 2013
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Cash and Cash Equivalents, at Carrying Value		$ 587,459	$ 414,051		$ 174,444
Working Capital (Deficit)		(3,484,825)
Retained Earnings (Accumulated Deficit)		(22,908,272)	(18,651,112)
Sales Contract, Amount		4,500,000	5,852,000
Increase (Decrease) in Sales Contract, Percentage		(23.00%)
Customer Subscription Renewals		1,531,000	1,303,000
Increase in Customer Subscription Renewals, Percentage		17.00%
Funding Initiative to Fund Software Development	750,000	750,000
Proceeds from Convertible Debt		0	260,000
Class of Warrant or Right, Outstanding (in Shares)		22,371,795	11,049,842		10,341,982
Proceeds from Warrant Exercises		44,000	0
Notes Payable, Current		669,789	412,405
Additional Funding Attempting to Secure		2,000,000	(2,000,000)
Warrant Exercise Price $0.20 [Member] | Subsequent Event [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Class of Warrant or Rights, Exercised (in Shares)				360,000
Proceeds from Warrant Exercises				64,000
Warrant Exercise Price $0.20 [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Class of Warrant or Right, Outstanding (in Shares)		3,155,582
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)		$ 0.20
Class of Warrant or Rights, Aggregate Exercise Proceeds		631,116
Notes Payable, Other Payables [Member] | Three Note Holders [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Notes Payable, Current		570,977
Notes Payable, Other Payables [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage						15.00%	50.00%
Subsequent Event [Member] | Convertible Debt [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Proceeds from Convertible Debt				$ 450,000
Debt Instrument, Interest Rate, Stated Percentage				2.00%
Debt Instrument, Convertible, Conversion Price (in Dollars per share)				$ 0.22
COPSync911 [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Product Description		The Company offers the COPsync911 threat alert, first introduced in the second quarter of 2013, for use in schools, hospitals, day care facilities, governmental office buildings, energy infrastructure and other facilities with a high level of concern about security. When used in schools, for example, the COPsync911 service enables school personnel to instantly and silently send emergency alerts directly to the closest law enforcement officers in their patrol vehicles, and to the local 911 dispatch center, with the mere click of a screen icon located on every Windows-based computer or any handheld device within the facility. The alert is also sent to the cell phones of all law enforcement officers in the area and to all teachers, administrators, and other staff at the school, alerting them of imminent danger. The Company expects its COPsync911 service to reduce emergency law enforcement response times by five to seven minutes.
VidTac Systems and Components [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Product Description		VidTac is a software-driven video system for law enforcement. Traditional in-vehicle video systems are “hardware centric” DVR-based systems. The video capture, compression and encryption of the video stream is performed by the DVR. The estimated price of these high-end, digital DVR-based systems is in excess of $5,000 per system. These DVR-based systems are typically replaced, at the same expensive price point, every three to four years as new patrol vehicles are placed into service.The VidTac system is price advantageous vis-a-vis other high-end video systems, since the Company is offering it for sale at a much lower price than the average price of DVR-based video systems. Furthermore, for those agencies that have in-vehicle computers, the VidTac system eliminates the need for the agency to purchase a second computer, i.e., the DVR, and eliminates the need to replace this second (DVR) computer every three to four years as new patrol vehicles are placed into service.
WARRANTsync System [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Product Description		The WARRANTsync system is designed to be a Texas statewide misdemeanor warrant clearing database. It enables law enforcement officers in the field to receive notice of outstanding warrants in real-time at the point of a traffic stop. The WARRANTsync system enables the offender to pay the outstanding warrant fees and costs using a credit card. Following payment, the offender is given a receipt and the transaction is complete. This product could be viewed as an enhancement feature to the core COPsync Network service since all COPsync Network users receive the outstanding Warrant notice.
Convertible Debt [Member]
NOTE 1 - NATURE OF ORGANIZATION AND LIQUIDITY AND MANAGEMENT PLANS (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage									3.00%
Debt Instrument, Convertible, Conversion Price (in Dollars per share)		$ 0.10						$ 0.10	$ 0.10

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Statements of Stockholders' Equity (Deficit) (USD $)	Stock to be Issued for Cash [Member] Common Stock To Be Issued [Member]	Stock to be Issued for Cash [Member]	Stock to be Issued for Cash from Warrant Exercises [Member] Common Stock Warrants To Be Issued [Member]	Stock to be Issued for Cash from Warrant Exercises [Member]	Stock Issued for Cash from Warrant Exercises at $0.10 [Member] Common Stock [Member]	Stock Issued for Cash from Warrant Exercises at $0.10 [Member] Additional Paid-in Capital [Member]	Stock Issued for Cash from Warrant Exercises at $0.10 [Member]	Stock Issued for Cash from Warrant Exercises at $0.20 [Member] Common Stock [Member]	Stock Issued for Cash from Warrant Exercises at $0.20 [Member] Additional Paid-in Capital [Member]	Stock Issued for Cash from Warrant Exercises at $0.20 [Member]	Stock Issued for Conversion of Note Payable and Accrued Interest [Member] Common Stock [Member]	Stock Issued for Conversion of Note Payable and Accrued Interest [Member] Additional Paid-in Capital [Member]	Stock Issued for Conversion of Note Payable and Accrued Interest [Member]	Series A Preferred Stock [Member]	Series B Preferred Stock [Member]	Common Stock [Member]	Common Stock To Be Issued [Member]	Common Stock Warrants To Be Issued [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2012														$ 10	$ 37	$ 17,129	$ 7,000	$ 0	$ 0	$ 12,803,341	$ (14,811,256)	$ (1,983,739)
Balance (in Shares) at Dec. 31, 2012														100,000	375,000	171,284,201
Valuation of the vested portion of employee and non-employee stock options																				184,973		184,973
Common stock issued for previous deposits at $0.10 per share																7	(7,000)			6,993
Common stock issued for previous deposits at $0.10 per share (in Shares)																70,000
Capital contributed/co-founders' forfeiture of contractual compensation																				79,000		79,000
Common stock issued for services at $0.10 per share (in Shares)																						0
Amortization of restricted stock grant																				45,000		45,000
Common stock issued for cash																347				346,583		346,930
Common stock issued for cash (in Shares)																3,469,300
Common stock issued in conversion of securities																18				19,082		19,100
Common stock issued in conversion of securities (in Shares)																191,000
Common stock to be issued for cash																	1,500					1,500
Warrants																				120,000	(120,000)
Series B Preferred stock - cumulative dividends																				105,000	(105,000)
Net loss																					(3,614,856)	(3,614,856)
Balance at Dec. 31, 2013														10	37	17,501	1,500	0	0	13,709,972	(18,651,112)	(4,922,092)
Balance (in Shares) at Dec. 31, 2013														100,000	375,000	175,014,501
Valuation of the vested portion of employee and non-employee stock options																				147,096		147,096
Capital contributed/co-founders' forfeiture of contractual compensation																				79,000		79,000
Common stock issued for services at $0.10 per share																60				59,940		60,000
Common stock issued for services at $0.10 per share (in Shares)																600,000						600,000
Common stock issued for cash																2,124				2,081,991		2,084,115
Common stock issued for cash (in Shares)																21,243,100
Common stock issued in conversion of securities					24	23,976	24,000	10	19,990	20,000	215	215,270	215,485
Common stock issued in conversion of securities (in Shares)					240,000			100,000			2,154,843
Common stock to be issued for cash	16,500	16,500	24,000	24,000
Warrants																				209,576		209,576
Valuation of the vested portion of non-employee stock grants																250				1,049,750		1,050,000
Valuation of the vested portion of non-employee stock grants (in Shares)																2,500,000
Series B Preferred stock - cumulative dividends																				105,000	(105,000)
Accretion of Beneficial Conversion Feature on Preferred Shares dividends issued in kind																				(71,307)	71,307
Net loss																					(4,223,467)	(4,223,467)
Balance at Dec. 31, 2014														$ 10	$ 37	$ 20,184	$ 18,000	$ 24,000	$ 0	$ 17,630,254	$ (22,908,272)	$ (5,215,787)
Balance (in Shares) at Dec. 31, 2014														100,000	375,000	201,852,444

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2 -       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.             Basis of Presentation

The accompanying financial statements include the accounts of the Company, and are prepared on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.

b.             Reclassifications

Certain prior year items have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s net loss.

c.             Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities at the date of purchase of three months or less to be cash equivalents.

The Company's cash and cash equivalents, at December 31, consisted of the following:

	2014		2013
Cash in bank	$	586,469	$	414,001
Money market funds		990		50
Cash and cash equivalents	$	587,459	$	414,051

d.             Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Cash and cash equivalents are deposited in demand and money market accounts in two financial institutions in the United States. Accounts at financial institutions in the United States are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. At times, the Company’s deposits or investments may exceed federally insured limits.  At December 31, 2014, the Company had approximately $328,000 at two financial institutions in excess of FDIC insured limits. The Company has not experienced any losses in such accounts.

e.             Use of Estimates

The preparation of accompanying financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. The Company’s significant estimates include primarily those required in the valuation or impairment analysis of capitalization of labor under software development costs, property and equipment, revenue recognition, allowances for doubtful accounts, stock-based compensation, warrants, litigation accruals and valuation allowances for deferred tax assets. Although the Company believes that adequate accruals have been made for unsettled issues, additional gains or losses could occur in future years from resolutions of outstanding matters. Actual results could differ materially from original estimates.

f.              Inventory

Inventory is stated at the lower of cost (determined using the first-in, first-out method) or market. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence or impaired balances.  No such adjustments have been made in years 2014 or 2013.

g.             Deferred Loan Costs

The Company is attempting to secure up to $2.0 million in funding pursuant to an EB-5 program, which originally had been expected to close in 2014.  The Company remains optimistic that it can successfully close this funding in 2015.  The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs.  Following the job creation, the foreign lenders receive U.S. “green cards”.  

On December 30, 2013, the Company executed an agreement with a third-party service provider to provide business, promotional, financial and EB-5 Regional Center consulting relating to the Company’s attempts to secure the $2.0 million in funding as part of the EB-5 program.  For those services, the Company prepaid $50,000.  This prepayment will be matched or netted against the expected funding from the completed EB-5 program.   This prepayment will be charged to general and administrative expense upon closing the funding.

h.             Property and Equipment

Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, ranging as follows:

Computer hardware/software	3 years
Fleet vehicles	5 years
Furniture and fixtures	5 to 7 years

Depreciation expense on property and equipment was $47,393 and $35,935 for the years ended December 31, 2014 and 2013, respectively.

i.              Leased Property & Obligation under Capital Lease

On December 22, 2014, the Company executed a forty-eight month lease agreement with a third-party service provider for the lease of two vehicles.  The agreement requires monthly payments totaling $35,098 over the life of the lease and has a minimal buy-out option at the end of the lease.  The lease meets the definition of a capitalized lease in accordance with “Leases - ASC 840-10-15”.  Accordingly, both a lease property asset and obligation in the amount of $35,098 is being reported as of December 31, 2014.  No monthly payments were made in fiscal year 2014.

j.              Long-lived Assets

The Company reviews its long-lived assets including property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset, a significant decrease in the benefits realized from an acquired business, difficulties or delays in integrating the business or a significant change in the operations of an acquired business.

An impairment test involves a comparison of undiscounted cash flows from the use of the asset to the carrying value of the asset.  Measurement of an impairment loss is based on the amount that the carrying value of the asset exceeds its fair value.  No impairment losses were incurred in the periods presented.

k.              Software Development Costs

Certain software development costs incurred subsequent to the establishment of technological feasibility may be capitalized and amortized over the estimated lives of the related products.  Through mid-year 2010, the Company capitalized certain software development costs accordingly.

The Company determined technological feasibility to be established upon completion of (1) product design, (2) detail program design, (3) consistency between product and program design and (4) review of detail program design to ensure that high risk development issues have been resolved.  Upon the general release of the COPsync service offering to customers, development costs for that product were amortized over fifteen years based on management’s then estimated economic life of the product.  

The Company has not capitalized any of the software development efforts associated with its new product offerings, WARRANTsync, VidTac and COPsync911, because the time period between achieving technological feasibility and product release for both of these product offerings was very short.  As a result, the incurred costs have been recorded as research and development costs in years 2014 and 2013.

l.              Research and Development

Research and development costs are charged to expense as incurred.

m.             Fair Value of Financial Instruments

The carrying amounts of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value due to their relatively short maturities. The carrying amounts of notes payable approximate fair value based on market interest rates currently available to the Company.

The fair value framework requires a categorization of assets and liabilities, which are required at fair value, into three levels based upon the assumptions (inputs) used to price the assets and liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

n.             Revenue Recognition

The Company’s business focus is to sell subscriptions to the COPsync software as a service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies.  The Company refers to this service as The COPsync Network.  The agencies subscribe to the service for a specified period of time (usually for twelve to forty-eight months), for a specified number of officers per agency, and at a fixed subscription fee per officer.

In the process of selling the subscription service, the Company also sells computers and computer-related hardware (“hardware”) used to provide the in-vehicle service should the customer not already have the hardware, or wants to upgrade their existing hardware, as well as hardware installation services, the initial agency and officer set-up and training services and, sometimes, software integration services for enhanced service offerings.

The Company’s most common sales are:

1) for new customers – a multiple-element arrangement involving (a) the subscription fee, (b) integration of the COPsync software and a hardware appliance (where the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training and (c) if applicable, software integration services for enhanced service offerings; and

2) for existing customers – the subscription fees for the annual renewal of an agency’s COPsync subscription service, upon the completion of the agency’s previous subscription period.

The Company recognizes revenue when all of the following have occurred: (1) the Company has entered into a legally binding arrangement with a customer resulting in the existence of persuasive evidence of an arrangement; (2) delivery has occurred, evidenced when product title transfers to the customer; (3) customer payment is deemed fixed or determinable and free of contingencies and significant uncertainties; and (4) collection is probable.

The sale of the hardware and related services for hardware installation and agency and officer set-up and training are reported as “Hardware, installation and other revenues” in the Company’s Statement of Operations.  The sale of the VidTac product offering is considered a hardware sale and is reported in this revenue classification.  

The subscription fees and software integration services are reported as “software license/subscriptions revenues” in the Company’s Statement of Operations.  The subscription fees include termed licenses for the contracted officers to have access to the service and the right to receive telephonic customer and technical support, as well as software updates, during the subscription period.  Support for the hardware is normally provided by the hardware manufacturer.

The sale of the WARRANTsync and COPsync911 product offerings are reported in “software license/subscriptions revenues”.  The service for each of these products consist of two elements:  (1) an integration element, and (2) a subscription element, both of which are recognized ratably over the service period upon customer acceptance.  WARRANTsync represents a very small portion of our revenues and could be viewed as an enhancement feature to our COPsync Network.

The receipt and acceptance of an executed customer’s service agreement, which outlines all of the particulars of the sale event, is the primary method of determining that persuasive evidence of an arrangement exists.

Delivery generally occurs for the different elements of revenue as follows:

(1) For multiple-element arrangements involving new customers – contractually the lesser period of time of sixty days from contract date or the date officer training services are completed.  The Company requests the agency to complete a written customer acceptance at the time training is completed, which will override the contracted criteria discussed immediately above.

(2) The subscription fee – the date the officer training is completed and written customer acceptance is received.

(3) Software integration services for enhanced service offerings – upon the completion of the integration efforts and verification that the enhanced service offering is available for use by the agency.

Fees are typically considered to be fixed or determinable at the inception of an arrangement, generally based on specific services and products to be delivered pursuant to the executed service agreement. Substantially all of the Company’s service agreements do not include rights of return or acceptance provisions.  To the extent that agreements contain such terms, the Company recognizes revenue once the acceptance provisions or right of return lapses.  Payment terms to customers generally range from net “upon receipt of invoice” to “net 30 days from invoice date.”  Beginning in 2013, the Company adopted a policy of requesting customers purchasing a significant amount of hardware to prepay for the hardware at the time the equipment was ordered from the Company’s suppliers.  These prepayments are recorded on the Company’s Balance Sheet as Current Deferred Revenues.

The Company assesses the ability to collect from its customers based on a number of factors, including credit worthiness of the customer and the past transaction history with the customer.  If the customer is not deemed credit worthy, the Company defers all revenue from the arrangement until payment is received and all other revenue recognition criteria have been met. With the exception of sales to resellers, all of the Company’s customers are local or state governmental agencies.

As indicated above, some customer orders contain multiple elements.  The Company allocates revenue to each element in an arrangement based on relative selling price.  The selling price for a deliverable is based on its vendor specific objective evidence (“VSOE”), if available, third party evidence ("TPE"), if VSOE is not available, or the Company’s best estimate of selling price ("ESP"), if neither VSOE nor TPE is available.  The maximum revenue the Company recognizes on a delivered element is limited to the amount that is not contingent upon the delivery of additional items.  Many of the Company’s service agreements contain grants (or discounts) provided to the contracting agency.  These grants or discounts have been allocated across all of the different elements based upon the respective, relative selling price.

The Company determines VSOE for subscription fees for the initial contract period based upon the rate charged to customers on a stand-alone subscription service.  VSOE for renewal pricing is based upon the stated rate for the renewed subscription service, which is stated in the service agreement or contract entered into.  The renewal rate can be equal to or slightly higher than the stated rate in the original contract and is administered on a customer-by-customer basis.  Subscription fee revenue is recognized ratably over the life of the service agreement.   

The Company has determined that the selling price of hardware products include the related services for hardware installation and agency and officer set-up and training, as well as integration services for enhanced service offerings, which are sold separately and, as a result, it has VSOE for these products.

For almost all of the Company’s new service agreements, as well as renewal agreements, billing and payment terms are agreed to up front or in advance of performance milestones.  These payments are initially recorded as deferred revenue and subsequently recognized as revenue as follows:

(1) Integration of the COPsync software and a hardware appliance (where the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training – immediately upon delivery.

(2) The subscription fee – ratably over the contracted subscription period, commencing on the delivery date.

(3) Software integration services for enhanced service offerings – immediately upon the Company’s completion of the integration and verification that the enhanced service is available for the agency’s use.

(4) Renewals – ratably over the renewed subscription or service period commencing on the completion of the previous subscription or service period.

o.             Income Taxes

The Company periodically assesses uncertain tax positions that the Company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction).  The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority.  An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.  The Company evaluated its tax positions and determined that there were no uncertain tax positions for the years ended December 31, 2014 and 2013. 

p.             Share Based Compensation

The Company accounts for all share-based payment transactions using a fair-value based measurement method.  The Company calculates stock option-based compensation by estimating the fair value of each option as of its date of grant using the Black-Scholes option pricing model.  These amounts are expensed over the respective vesting periods of each award using the straight-line attribution method.  The Company has historically issued stock options and vested and non-vested stock grants to employees.  Beginning in 2012, the Company also began granting stock options to outside directors.  The condition for vesting of the options has been continued employment or service during the related vesting or restriction period.

q.             Newly Adopted Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its audited financial statements. 

Revenue Recognition

ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”, was issued in May 2014.  ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  To achieve this core principle, the guidance provides that an entity should apply the following steps:  (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation.  The Company expects to adopt ASU 2014-09 for the fiscal year ending December 31, 2016 and the Company will continue to assess the impact on its financial statements.

Unrecognized Tax Benefit

In July 2013, the FASB issued guidance that requires entities to present unrecognized tax benefits (UTB) in the financial statements as a reduction to a deferred tax asset (DTA) for a net operating loss (NOL) carryforward when NOL’s exist. Entities whose NOL carryforwards are not available to settle taxes that would result from the disallowance of the tax position, or who do not intend to use their DTA for that purpose, should present their UTB as a liability and should not net the UTB with the DTA.  The guidance became effective for us at the beginning of 2014. This new guidance did not have a material impact on the Company’s consolidated financial statements.

Going Concern

On August 27, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern and to provide related footnote disclosures. This standard will be effective for the Company for the year ending on December 31, 2016. Early application is permitted. The Company is currently evaluating the impact of ASU No. 2014-15.

r.             Preferred Stock Issuances with Beneficial Conversion Features

The Company uses the effective conversion price of preferred shares issued based on the proceeds received to compute the intrinsic value of the embedded conversion feature on preferred stock issuances with detachable warrants.  The Company calculates an effective conversion price and uses that price to measure the intrinsic value of the embedded conversion option.  

XML

NOTE 8 - NOTES PAYABLE (Details) - Schedule of Maturities of Long-term Debt (USD $)	Dec. 31, 2014	Dec. 31, 2013
Schedule of Maturities of Long-term Debt [Abstract]
2015	$ 791,289
2016	233,682
2017	109,386
2018	4,689
2019 & thereafter	0
Total	$ 1,139,046	$ 519,734

XML

NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants Outstanding, Weighted Average Exercise Price	$ 0.16	$ 0.16	$ 0.17
Warrants Outstanding, Weighted Average Number (in Shares)	22,371,795	11,049,842	10,341,982
Warrants Exercisable (in Shares)	15,616,795	11,049,842
Warrants Exercisable, Weighted Average Exercise Price	$ 0.18	$ 0.16
Warrant exercise price 0.10 [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants, Exercise Prices	$ 0.10
Warrants Outstanding, Weighted Average Exercise Price	$ 0.10
Warrants Outstanding, Weighted Average Number (in Shares)	11,997,593
Warrants Outstanding, Remaining Life	3 years 102 days
Warrants Exercisable (in Shares)	5,242,593
Warrants Exercisable, Weighted Average Exercise Price	$ 0.10
Warrant Exercise Price $0.11 - $0.19 [Member] | Minimum [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants, Exercise Prices	$ 0.11
Warrant Exercise Price $0.11 - $0.19 [Member] | Maximum [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants, Exercise Prices	$ 0.19
Warrant Exercise Price $0.11 - $0.19 [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants Outstanding, Weighted Average Exercise Price	$ 0.15
Warrants Outstanding, Weighted Average Number (in Shares)	414,000
Warrants Outstanding, Remaining Life	3 years 171 days
Warrants Exercisable (in Shares)	414,000
Warrants Exercisable, Weighted Average Exercise Price	$ 0.15
Warrants Exercise Price $0.20-$0.45 [Member] | Minimum [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants, Exercise Prices	$ 0.20
Warrants Exercise Price $0.20-$0.45 [Member] | Maximum [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants, Exercise Prices	$ 0.45
Warrants Exercise Price $0.20-$0.45 [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants Outstanding, Weighted Average Exercise Price	$ 0.22
Warrants Outstanding, Weighted Average Number (in Shares)	9,960,202
Warrants Outstanding, Remaining Life	2 years 167 days
Warrants Exercisable (in Shares)	9,960,202
Warrants Exercisable, Weighted Average Exercise Price	$ 0.22
Warrants Exercise Price $0.10-$0.45 [Member] | Minimum [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants, Exercise Prices	$ 0.10
Warrants Exercise Price $0.10-$0.45 [Member] | Maximum [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants, Exercise Prices	$ 0.45
Warrants Exercise Price $0.10-$0.45 [Member]
NOTE 14 - OUTSTANDING WARRANTS (Details) - Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Line Items]
Warrants Outstanding, Weighted Average Exercise Price	$ 0.15
Warrants Outstanding, Weighted Average Number (in Shares)	22,371,795
Warrants Outstanding, Remaining Life	2 years 335 days
Warrants Exercisable (in Shares)	15,616,795
Warrants Exercisable, Weighted Average Exercise Price	$ 0.18

XML

Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of Accounting [Text Block]

a.             Basis of Presentation

The accompanying financial statements include the accounts of the Company, and are prepared on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.

Reclassification, Policy [Policy Text Block]

b.             Reclassifications

Certain prior year items have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s net loss.

Cash and Cash Equivalents, Policy [Policy Text Block]

c.             Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities at the date of purchase of three months or less to be cash equivalents.

The Company's cash and cash equivalents, at December 31, consisted of the following:

	2014		2013
Cash in bank	$	586,469	$	414,001
Money market funds		990		50
Cash and cash equivalents	$	587,459	$	414,051

Concentration Risk, Credit Risk, Policy [Policy Text Block]

d.             Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Cash and cash equivalents are deposited in demand and money market accounts in two financial institutions in the United States. Accounts at financial institutions in the United States are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. At times, the Company’s deposits or investments may exceed federally insured limits.  At December 31, 2014, the Company had approximately $328,000 at two financial institutions in excess of FDIC insured limits. The Company has not experienced any losses in such accounts.

Use of Estimates, Policy [Policy Text Block]

e.             Use of Estimates

The preparation of accompanying financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. The Company’s significant estimates include primarily those required in the valuation or impairment analysis of capitalization of labor under software development costs, property and equipment, revenue recognition, allowances for doubtful accounts, stock-based compensation, warrants, litigation accruals and valuation allowances for deferred tax assets. Although the Company believes that adequate accruals have been made for unsettled issues, additional gains or losses could occur in future years from resolutions of outstanding matters. Actual results could differ materially from original estimates.

Inventory, Policy [Policy Text Block]

f.              Inventory

Inventory is stated at the lower of cost (determined using the first-in, first-out method) or market. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolescence or impaired balances.  No such adjustments have been made in years 2014 or 2013.

Deferred Financing Costs, Policy [Policy Text Block]

g.             Deferred Loan Costs

The Company is attempting to secure up to $2.0 million in funding pursuant to an EB-5 program, which originally had been expected to close in 2014.  The Company remains optimistic that it can successfully close this funding in 2015.  The EB-5 program is a program under which foreign nationals loan money to U.S. companies who are creating U.S. jobs.  Following the job creation, the foreign lenders receive U.S. “green cards”.  

On December 30, 2013, the Company executed an agreement with a third-party service provider to provide business, promotional, financial and EB-5 Regional Center consulting relating to the Company’s attempts to secure the $2.0 million in funding as part of the EB-5 program.  For those services, the Company prepaid $50,000.  This prepayment will be matched or netted against the expected funding from the completed EB-5 program.   This prepayment will be charged to general and administrative expense upon closing the funding.

Property, Plant and Equipment, Policy [Policy Text Block]

h.             Property and Equipment

Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, ranging as follows:

Computer hardware/software	3 years
Fleet vehicles	5 years
Furniture and fixtures	5 to 7 years

Depreciation expense on property and equipment was $47,393 and $35,935 for the years ended December 31, 2014 and 2013, respectively.

Lease, Policy [Policy Text Block]

i.              Leased Property & Obligation under Capital Lease

On December 22, 2014, the Company executed a forty-eight month lease agreement with a third-party service provider for the lease of two vehicles.  The agreement requires monthly payments totaling $35,098 over the life of the lease and has a minimal buy-out option at the end of the lease.  The lease meets the definition of a capitalized lease in accordance with “Leases - ASC 840-10-15”.  Accordingly, both a lease property asset and obligation in the amount of $35,098 is being reported as of December 31, 2014.  No monthly payments were made in fiscal year 2014.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

j.              Long-lived Assets

The Company reviews its long-lived assets including property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset, a significant decrease in the benefits realized from an acquired business, difficulties or delays in integrating the business or a significant change in the operations of an acquired business.

An impairment test involves a comparison of undiscounted cash flows from the use of the asset to the carrying value of the asset.  Measurement of an impairment loss is based on the amount that the carrying value of the asset exceeds its fair value.  No impairment losses were incurred in the periods presented.

Research, Development, and Computer Software, Policy [Policy Text Block]

k.              Software Development Costs

Certain software development costs incurred subsequent to the establishment of technological feasibility may be capitalized and amortized over the estimated lives of the related products.  Through mid-year 2010, the Company capitalized certain software development costs accordingly.

The Company determined technological feasibility to be established upon completion of (1) product design, (2) detail program design, (3) consistency between product and program design and (4) review of detail program design to ensure that high risk development issues have been resolved.  Upon the general release of the COPsync service offering to customers, development costs for that product were amortized over fifteen years based on management’s then estimated economic life of the product.  

The Company has not capitalized any of the software development efforts associated with its new product offerings, WARRANTsync, VidTac and COPsync911, because the time period between achieving technological feasibility and product release for both of these product offerings was very short.  As a result, the incurred costs have been recorded as research and development costs in years 2014 and 2013.

Research and Development Expense, Policy [Policy Text Block]

l.              Research and Development

Research and development costs are charged to expense as incurred.

Fair Value of Financial Instruments, Policy [Policy Text Block]

m.             Fair Value of Financial Instruments

The carrying amounts of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value due to their relatively short maturities. The carrying amounts of notes payable approximate fair value based on market interest rates currently available to the Company.

The fair value framework requires a categorization of assets and liabilities, which are required at fair value, into three levels based upon the assumptions (inputs) used to price the assets and liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Revenue Recognition, Policy [Policy Text Block]

n.             Revenue Recognition

The Company’s business focus is to sell subscriptions to the COPsync software as a service, which is a real-time, in-car information sharing, communication and data interoperability network for law enforcement agencies.  The Company refers to this service as The COPsync Network.  The agencies subscribe to the service for a specified period of time (usually for twelve to forty-eight months), for a specified number of officers per agency, and at a fixed subscription fee per officer.

In the process of selling the subscription service, the Company also sells computers and computer-related hardware (“hardware”) used to provide the in-vehicle service should the customer not already have the hardware, or wants to upgrade their existing hardware, as well as hardware installation services, the initial agency and officer set-up and training services and, sometimes, software integration services for enhanced service offerings.

The Company’s most common sales are:

1) for new customers – a multiple-element arrangement involving (a) the subscription fee, (b) integration of the COPsync software and a hardware appliance (where the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training and (c) if applicable, software integration services for enhanced service offerings; and

2) for existing customers – the subscription fees for the annual renewal of an agency’s COPsync subscription service, upon the completion of the agency’s previous subscription period.

The Company recognizes revenue when all of the following have occurred: (1) the Company has entered into a legally binding arrangement with a customer resulting in the existence of persuasive evidence of an arrangement; (2) delivery has occurred, evidenced when product title transfers to the customer; (3) customer payment is deemed fixed or determinable and free of contingencies and significant uncertainties; and (4) collection is probable.

The sale of the hardware and related services for hardware installation and agency and officer set-up and training are reported as “Hardware, installation and other revenues” in the Company’s Statement of Operations.  The sale of the VidTac product offering is considered a hardware sale and is reported in this revenue classification.  

The subscription fees and software integration services are reported as “software license/subscriptions revenues” in the Company’s Statement of Operations.  The subscription fees include termed licenses for the contracted officers to have access to the service and the right to receive telephonic customer and technical support, as well as software updates, during the subscription period.  Support for the hardware is normally provided by the hardware manufacturer.

The sale of the WARRANTsync and COPsync911 product offerings are reported in “software license/subscriptions revenues”.  The service for each of these products consist of two elements:  (1) an integration element, and (2) a subscription element, both of which are recognized ratably over the service period upon customer acceptance.  WARRANTsync represents a very small portion of our revenues and could be viewed as an enhancement feature to our COPsync Network.

The receipt and acceptance of an executed customer’s service agreement, which outlines all of the particulars of the sale event, is the primary method of determining that persuasive evidence of an arrangement exists.

Delivery generally occurs for the different elements of revenue as follows:

(1) For multiple-element arrangements involving new customers – contractually the lesser period of time of sixty days from contract date or the date officer training services are completed.  The Company requests the agency to complete a written customer acceptance at the time training is completed, which will override the contracted criteria discussed immediately above.

(2) The subscription fee – the date the officer training is completed and written customer acceptance is received.

(3) Software integration services for enhanced service offerings – upon the completion of the integration efforts and verification that the enhanced service offering is available for use by the agency.

Fees are typically considered to be fixed or determinable at the inception of an arrangement, generally based on specific services and products to be delivered pursuant to the executed service agreement. Substantially all of the Company’s service agreements do not include rights of return or acceptance provisions.  To the extent that agreements contain such terms, the Company recognizes revenue once the acceptance provisions or right of return lapses.  Payment terms to customers generally range from net “upon receipt of invoice” to “net 30 days from invoice date.”  Beginning in 2013, the Company adopted a policy of requesting customers purchasing a significant amount of hardware to prepay for the hardware at the time the equipment was ordered from the Company’s suppliers.  These prepayments are recorded on the Company’s Balance Sheet as Current Deferred Revenues.

The Company assesses the ability to collect from its customers based on a number of factors, including credit worthiness of the customer and the past transaction history with the customer.  If the customer is not deemed credit worthy, the Company defers all revenue from the arrangement until payment is received and all other revenue recognition criteria have been met. With the exception of sales to resellers, all of the Company’s customers are local or state governmental agencies.

As indicated above, some customer orders contain multiple elements.  The Company allocates revenue to each element in an arrangement based on relative selling price.  The selling price for a deliverable is based on its vendor specific objective evidence (“VSOE”), if available, third party evidence ("TPE"), if VSOE is not available, or the Company’s best estimate of selling price ("ESP"), if neither VSOE nor TPE is available.  The maximum revenue the Company recognizes on a delivered element is limited to the amount that is not contingent upon the delivery of additional items.  Many of the Company’s service agreements contain grants (or discounts) provided to the contracting agency.  These grants or discounts have been allocated across all of the different elements based upon the respective, relative selling price.

The Company determines VSOE for subscription fees for the initial contract period based upon the rate charged to customers on a stand-alone subscription service.  VSOE for renewal pricing is based upon the stated rate for the renewed subscription service, which is stated in the service agreement or contract entered into.  The renewal rate can be equal to or slightly higher than the stated rate in the original contract and is administered on a customer-by-customer basis.  Subscription fee revenue is recognized ratably over the life of the service agreement.   

The Company has determined that the selling price of hardware products include the related services for hardware installation and agency and officer set-up and training, as well as integration services for enhanced service offerings, which are sold separately and, as a result, it has VSOE for these products.

For almost all of the Company’s new service agreements, as well as renewal agreements, billing and payment terms are agreed to up front or in advance of performance milestones.  These payments are initially recorded as deferred revenue and subsequently recognized as revenue as follows:

(1) Integration of the COPsync software and a hardware appliance (where the hardware and software work together to deliver the essential functionality of the service) to include related services for hardware installation and agency and officer set-up and training – immediately upon delivery.

(2) The subscription fee – ratably over the contracted subscription period, commencing on the delivery date.

(3) Software integration services for enhanced service offerings – immediately upon the Company’s completion of the integration and verification that the enhanced service is available for the agency’s use.

(4) Renewals – ratably over the renewed subscription or service period commencing on the completion of the previous subscription or service period.

Income Tax, Policy [Policy Text Block]

o.             Income Taxes

The Company periodically assesses uncertain tax positions that the Company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction).  The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority.  An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.  The Company evaluated its tax positions and determined that there were no uncertain tax positions for the years ended December 31, 2014 and 2013.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

p.             Share Based Compensation

The Company accounts for all share-based payment transactions using a fair-value based measurement method.  The Company calculates stock option-based compensation by estimating the fair value of each option as of its date of grant using the Black-Scholes option pricing model.  These amounts are expensed over the respective vesting periods of each award using the straight-line attribution method.  The Company has historically issued stock options and vested and non-vested stock grants to employees.  Beginning in 2012, the Company also began granting stock options to outside directors.  The condition for vesting of the options has been continued employment or service during the related vesting or restriction period.

New Accounting Pronouncements, Policy [Policy Text Block]

q.             Newly Adopted Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its audited financial statements. 

Revenue Recognition

ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”, was issued in May 2014.  ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  To achieve this core principle, the guidance provides that an entity should apply the following steps:  (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation.  The Company expects to adopt ASU 2014-09 for the fiscal year ending December 31, 2016 and the Company will continue to assess the impact on its financial statements.

Unrecognized Tax Benefit

In July 2013, the FASB issued guidance that requires entities to present unrecognized tax benefits (UTB) in the financial statements as a reduction to a deferred tax asset (DTA) for a net operating loss (NOL) carryforward when NOL’s exist. Entities whose NOL carryforwards are not available to settle taxes that would result from the disallowance of the tax position, or who do not intend to use their DTA for that purpose, should present their UTB as a liability and should not net the UTB with the DTA.  The guidance became effective for us at the beginning of 2014. This new guidance did not have a material impact on the Company’s consolidated financial statements.

Going Concern

On August 27, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern and to provide related footnote disclosures. This standard will be effective for the Company for the year ending on December 31, 2016. Early application is permitted. The Company is currently evaluating the impact of ASU No. 2014-15.

Stockholders' Equity, Policy [Policy Text Block]

r.             Preferred Stock Issuances with Beneficial Conversion Features

The Company uses the effective conversion price of preferred shares issued based on the proceeds received to compute the intrinsic value of the embedded conversion feature on preferred stock issuances with detachable warrants.  The Company calculates an effective conversion price and uses that price to measure the intrinsic value of the embedded conversion option.

XML

NOTE 15 - EMPLOYEE OPTIONS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
NOTE 15 - EMPLOYEE OPTIONS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items]
Expected life	10 years	10 years
Minimum [Member]
NOTE 15 - EMPLOYEE OPTIONS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items]
Risk-free interest rate	2.07%	1.73%
Expected volatility	120.00%	126.00%
Dividend yield	0.00%	0.00%
Maximum [Member]
NOTE 15 - EMPLOYEE OPTIONS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items]
Risk-free interest rate	3.00%	2.53%
Expected volatility	123.00%	131.00%

XML

NOTE 14 - OUTSTANDING WARRANTS (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure Text Block Supplement [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

A summary of the status of the Company’s outstanding warrants and the changes during 2013 and 2014 is as follows:

				Weighted Average
	Shares			Exercise Price
Outstanding, January 1, 2013		10,341,982		$	0.17
Granted		707,860		$	0.10
Cancelled		-		$	-
Expired		-		$	-
Outstanding, December 31, 2013		11,049,842		$	0.16
Exercisable, December 31, 2013		11,049,842		$	0.16
Granted		12,256,953		$	0.15
Cancelled		(475,000	)	$	0.19
Expired		(460,000	)	$	0.15
Outstanding, December 31, 2014		22,371,795		$	0.16
Exercisable, December 31, 2014		15,616,795		$	0.18

Schedule of Warrants or Rights, Shares Authorized, by Exercise Price Range [Table Text Block]

The following is a summary of outstanding and exercisable warrants at December 31, 2014:

		Outstanding						Exercisable
Exercise Prices		Weighted Average Number Outstanding at 12/31/14		Remaining Life (in yrs.)		Weighted Average Exercise Price		Number Exercisable at 12/31/14		Weighted Average Exercise Price
$	0.10		11,997,593		3.28	$	0.10		5,242,593	$	0.10
$	0.11 - 0.19		414,000		3.47	$	0.15		414,000	$	0.15
	0.20 - 0.45		9,960,202		2.46		0.22		9,960,202		0.22
$	0.10 - 0.45		22,371,795		2.92	$	0.15		15,616,795	$	0.18

XML

NOTE 12 - COMMON STOCK TO BE ISSUED

12 Months Ended

Dec. 31, 2014

Common Stock To Be Isssued [Abstract]

Common Stock To Be Isssued [Text Block]

NOTE 12 -     COMMON STOCK TO BE ISSUED

During fiscal year 2014, the Company received a deposit from an investor totaling $15,000 for the purchase of 150,000 shares of common stock and associated warrants.  The Company anticipates these shares will be issued in fiscal 2015 pursuant to an agreement between the investor and the Company.  The term of the warrants is four years, and the exercise price is $0.38 per share.  The warrants will have no value assigned to them because the warrants are being issued as a unit with the shares of common stock.  This is consistent with the provisions of ASC 718 (See Note 14).

In September 2014, the Company received deposits totaling $24,000 from warrant holders for the purchase of 120,000 shares of common stock.  The exercise price of the warrants was $0.20 per share.  At the warrant holders’ request, the shares of common stock will not be issued for a period of six months from the date of exercise.

During fiscal years 2014 and 2013, the Company has received a series of small deposits from a single investor totaling $3,000 for the purchase of shares of common stock and warrants to purchase 30,000 shares of common stock.  The Company anticipates that these shares will be issued in fiscal 2015.  The term of the warrants is four years, and the exercise price is $0.10 per share.  The warrants will have no value assigned to them because the warrants will be issued as a unit with common stock shares.  This is consistent with the provisions of ASC 718.

The following table provides a reconciliation of the transactions, number of shares and associated common stock values for the common stock to be issued at December 31, 2014 and December 31, 2013.

	At December 31, 2014				At December 31, 2013
Common stock to be issued per:	# of Shares		$ Value		# of Shares		$ Value
A stock deposit received for common stock to be issued at $0.10 per share		180,000		18,000		15,000		1,500
A stock deposit received for common stock to be issued at $0.20 per share		120,000		24,000		-		-
Total number of shares and value		300,000	$	42,000		15,000	$	1,500