0001448431 2013-01-01 2013-12-31 0001448431 2013-12-31 0001448431 2012-12-31 0001448431 OPRX:SeparationAgreementMember 2013-09-20 0001448431 OPRX:TwoNonEmployeeStockOptionsMember 2013-11-08 0001448431 2012-01-01 2012-12-31 0001448431 us-gaap:PreferredStockMember 2012-01-01 2012-12-31 0001448431 us-gaap:PreferredStockMember 2013-01-01 2013-12-31 0001448431 us-gaap:ScenarioPreviouslyReportedMember 2012-01-01 2013-12-31 0001448431 2011-12-31 0001448431 OPRX:ThreeEmployeesStockOptionsMember 2011-01-01 2011-12-31 0001448431 OPRX:ThreeEmployeesStockOptionsMember 2012-01-01 2012-05-30 0001448431 OPRX:TwoEmployeesStockOptionsMember 2011-01-01 2011-12-31 0001448431 OPRX:IndividualStockOptionsMember 2011-01-01 2011-12-31 0001448431 OPRX:FourNonEmployeesStockOptionsMember 2012-01-01 2012-06-30 0001448431 OPRX:NonEmployeeStockOptionsMember 2012-01-01 2012-12-31 0001448431 OPRX:TwoEmployeesStockOptionsMember 2012-01-01 2012-12-31 0001448431 OPRX:IndividualStockOptionsMember 2012-01-01 2012-12-31 0001448431 OPRX:NonEmployeeStockOptionsMember 2013-01-01 2013-12-31 0001448431 OPRX:SixEmployeesStockOptionsMember 2013-01-01 2013-12-31 0001448431 OPRX:TwoNonEmployeeStockOptionsMember 2013-10-01 2013-12-31 0001448431 2008-04-18 0001448431 2010-04-26 0001448431 2010-12-31 0001448431 OPRX:NorthCoastAdvisorsMember 2013-06-01 0001448431 OPRX:NorthCoastAdvisorsMember 2012-07-12 0001448431 OPRX:SeparationAgreementMember 2014-01-02 0001448431 OPRX:NorthCoastAdvisorsMember 2013-12-01 0001448431 us-gaap:PreferredStockMember 2011-12-31 0001448431 us-gaap:PreferredStockMember 2012-12-31 0001448431 us-gaap:PreferredStockMember 2013-12-31 0001448431 us-gaap:CommonStockMember 2011-12-31 0001448431 us-gaap:CommonStockMember 2012-12-31 0001448431 us-gaap:CommonStockMember 2013-12-31 0001448431 OPRX:SecuritiesSoldUnderAgreementsMember 2014-03-17 0001448431 OPRX:NorthCoastAdvisorsMember 2012-06-01 0001448431 OPRX:VicisCapitalAgreementAmdtMember 2014-01-02 0001448431 OPRX:VicisCapitalAgreementMember 2013-12-31 0001448431 2008-01-01 2008-12-31 0001448431 2010-01-01 2010-12-31 0001448431 2011-07-01 2011-09-30 0001448431 OPRX:SecuritiesSoldUnderAgreementsMember 2014-03-16 2014-03-18 0001448431 2011-03-25 0001448431 2011-09-21 0001448431 2010-05-12 0001448431 2010-11-16 0001448431 us-gaap:SeriesAMember 2012-02-29 0001448431 us-gaap:SeriesAMember 2012-12-31 0001448431 us-gaap:SeriesAMember 2013-12-31 0001448431 us-gaap:SeriesBMember 2012-02-29 0001448431 us-gaap:SeriesBMember 2012-12-31 0001448431 us-gaap:SeriesBMember 2013-12-31 0001448431 2014-03-31 0001448431 2013-01-14 0001448431 us-gaap:ScenarioPreviouslyReportedMember 2012-12-31 0001448431 us-gaap:WarrantMember 2011-12-31 0001448431 us-gaap:WarrantMember 2012-12-31 0001448431 us-gaap:WarrantMember 2013-12-31 0001448431 us-gaap:RetainedEarningsMember 2011-12-31 0001448431 us-gaap:RetainedEarningsMember 2012-12-31 0001448431 us-gaap:RetainedEarningsMember 2013-12-31 0001448431 us-gaap:RetainedEarningsMember 2012-01-01 2012-12-31 0001448431 us-gaap:CommonStockMember 2012-01-01 2012-12-31 0001448431 us-gaap:CommonStockMember 2013-01-01 2013-12-31 0001448431 us-gaap:WarrantMember 2013-01-01 2013-12-31 0001448431 OPRX:ThreeEmployeesStockOptionsMember 2011-05-31 0001448431 OPRX:TwoEmployeesStockOptionsMember 2011-12-31 0001448431 OPRX:IndividualStockOptionsMember 2011-11-21 0001448431 OPRX:FourNonEmployeesStockOptionsMember 2012-03-31 0001448431 OPRX:NonEmployeeStockOptionsMember 2012-12-31 0001448431 OPRX:SixEmployeesStockOptionsMember 2013-10-30 0001448431 OPRX:LDMSettlementAgreementMember 2014-02-28 2014-03-18 0001448431 2013-01-01 2013-03-31 0001448431 2014-01-01 2014-03-31 0001448431 2013-03-31 0001448431 OPRX:NorthCoastAdvisorsMember 2014-02-27 0001448431 OPRX:SeparationAgreementMember 2014-01-01 2014-03-31 0001448431 OPRX:VicisCapitalAgreementMember 2013-12-31 0001448431 OPRX:VicisCapitalAgreementAmdtMember 2014-01-02 0001448431 OPRX:SecuritiesSoldUnderAgreementsMember 2014-03-16 2014-03-18 0001448431 OPRX:ThreeOfficerMember 2014-03-16 2014-03-18 0001448431 OPRX:VicisCapitalAgreementAmdtMember 2014-03-31 0001448431 OPRX:EmployeeBonusMember 2014-03-31 0001448431 OPRX:CashlessExerciseFeatureMember 2014-01-28 2014-01-29 0001448431 OPRX:CashlessExerciseFeatureMember 2014-01-29 0001448431 us-gaap:SeriesAMember 2012-09-30 0001448431 us-gaap:SeriesAMember 2013-02-28 0001448431 us-gaap:SeriesAMember 2013-09-30 0001448431 us-gaap:SeriesBMember 2012-09-30 0001448431 us-gaap:SeriesBMember 2013-02-28 0001448431 us-gaap:SeriesBMember 2013-09-30 0001448431 us-gaap:SeriesAMember 2014-03-17 0001448431 us-gaap:SeriesBMember 2014-03-17 0001448431 OPRX:NonEmployeeStockOptionsMember 2014-01-01 2014-03-31 0001448431 OPRX:SixEmployeesStockOptionsMember 2014-01-01 2014-03-31 0001448431 OPRX:TwoNonEmployeeStockOptionsMember 2014-01-01 2014-03-31 0001448431 OPRX:FiveEmployeesStockOptionsMember 2014-03-31 0001448431 OPRX:FiveEmployeesStockOptionsMember 2014-01-01 2014-03-31 0001448431 OPRX:NonEmployeeStockOptions2Member 2014-03-31 0001448431 OPRX:NonEmployeeStockOptions2Member 2014-01-01 2014-03-31 0001448431 OPRX:TwoCompaniesWarrantsMember 2014-03-17 0001448431 OPRX:TwoCompaniesWarrantsMember 2014-01-01 2014-03-31 0001448431 us-gaap:RestatementAdjustmentMember 2014-01-01 2014-03-31 0001448431 us-gaap:ScenarioPreviouslyReportedMember 2014-01-01 2014-03-31 0001448431 OPRX:CFOEmploymentAgreementMember 2014-01-01 2014-03-31 0001448431 OPRX:CFOEmploymentAgreementMember 2014-03-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure OptimizeRx Corp 0001448431 S-1 2013-12-31 false No No Yes Smaller Reporting Company FY 2013 1118243 284263 4030730 1566964 616798 1111379 11771 68158 11805 11771 2696978 969219 5153914 15057 20685 13688 15057 885950 793236 903617 404986 387215 439054 404986 5049 5049 5049 1295985 1185500 1347720 4008020 2175404 6515322 188739 54693 230178 570000 570000 570000 12000 6000 146042 1968652 770522 1912659 14773 14232 505000 23168 18500 570375 18148049 20058051 3147709 8726708 6164666 27155730 -24616220 -24832067 -25269535 4008020 2175404 6515322 233942 0 174808 -59134 454409 -285188 215847 -454553 -454553 215847 -363976 -224438 -653315 -224438 -104826 193971 187104 48111 58906 -950166 -151851 -43871 455585 56387 50874 35822 -34 134046 -282019 1993 41439 6000 -66000 -6000 134042 -45000 -281353 31520 164462 1132628 -624033 6499 226727 0 2230 -298684 -50870 -30368 -109272 833980 -674903 -23869 2912487 0 0 0 0 0 0 0 0 -148060 -48640 0 -75975 -150588 0 -30368 -33297 233942 0 1118243 284263 959166 4030730 260394 0.001 0.001 0.001 500000000 500000000 500000000 14773496 14232496 23168337 411412 285605 187005 133580 2480 8346 35091 8335 16790 91811 31672 7720 11827 0 421577 58270 10002 11581 17740 24654 5645 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Optimizer Systems, LLC was formed in the State of Michigan on January 31, 2006. It then became a corporation in the State of Michigan on October 22, 2007 and changed its name to OptimizeRx Corporation. On April 14, 2008, RFID, Ltd., a Colorado corporation, consummated a reverse merger by entering into a share exchange agreement with the stockholders of OptimizeRx Corporation, pursuant to which the stockholders of OptimizeRx Corporation exchanged all of the issued and outstanding capital stock of OptimizeRx Corporation for 1,256,958 shares of common stock of RFID, Ltd., representing 100% of the outstanding capital stock of RFID, Ltd. As of April&#160;30, 2008, RFID&#146;s officers and directors resigned their positions and RFID changed its business to OptimizeRx&#146;s business. On April&#160;15, 2008, RFID, Ltd.&#146;s corporate name was changed to OptimizeRx Corporation. On September&#160;4, 2008, a migratory merger was completed, thereby changing the state of incorporation from Colorado to Nevada, resulting in the current corporate structure, in which OptimizeRx Corporation, a Nevada corporation, is the parent corporation, and OptimizeRx Corporation, a Michigan corporation, is a wholly-owned subsidiary (together, "OptimizeRx" and "the Company").</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The wholly-owned subsidiary, OptimizeRx Corporation, is a technology solutions company targeting the health care industry. Their objective is to bring better access to better care through connecting patients, physicians and pharmaceutical manufacturers through technology. Once defined as a marketing and advertising company through its consumer website, OptimizeRx is maturing as a technology solutions provider as it launched its direct to physician solution, SampleMD. SampleMD allows physicians to search, print and send available sample trial vouchers and/or co-pay coupons on behalf of their patients. The SampleMD solution can either sit on the doctor&#146;s desktop or can be integrated into the ePrescribing or Electronic Medical Records applications. OptimizeRx solutions provide pharmaceutical manufacturers either a direct to consumer and/or direct to physician channels for communicating and promoting their products. It provides health care providers a means to provide sampling and coupons without having to physically store samples on site, and it provides better access and affordability to the patients.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Optimizer Systems, LLC was formed in the State of Michigan on January 31, 2006. It then became a corporation in the State of Michigan on October 22, 2007 and changed its name to OptimizeRx Corporation. On April 14, 2008, RFID, Ltd., a Colorado corporation, consummated a reverse merger by entering into a share exchange agreement with the stockholders of OptimizeRx Corporation, pursuant to which the stockholders of OptimizeRx Corporation exchanged all of the issued and outstanding capital stock of OptimizeRx Corporation for 1,256,958 shares of common stock of RFID, Ltd., representing 100% of the outstanding capital stock of RFID, Ltd. As of April&#160;30, 2008, RFID&#146;s officers and directors resigned their positions and RFID changed its business to OptimizeRx&#146;s business. On April&#160;15, 2008, RFID, Ltd.&#146;s corporate name was changed to OptimizeRx Corporation. On September&#160;4, 2008, a migratory merger was completed, thereby changing the state of incorporation from Colorado to Nevada, resulting in the current corporate structure, in which OptimizeRx Corporation, a Nevada corporation, is the parent corporation, and OptimizeRx Corporation, a Michigan corporation, is a wholly-owned subsidiary (together, "OptimizeRx" and "the Company").</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The wholly-owned subsidiary, OptimizeRx Corporation, is a technology solutions company targeting the health care industry. Their objective is to bring better access to better care through connecting patients, physicians and pharmaceutical manufacturers through technology. Once defined as a marketing and advertising company through its consumer website, OptimizeRx is maturing as a technology solutions provider as it launched its direct to physician solution, SampleMD. SampleMD allows physicians to search, print and send available sample trial vouchers and/or co-pay coupons on behalf of their patients. The SampleMD solution can either sit on the doctor&#146;s desktop or can be integrated into the ePrescribing or Electronic Medical Records applications. OptimizeRx solutions provide pharmaceutical manufacturers either a direct to consumer and/or direct to physician channels for communicating and promoting their products. It provides health care providers a means to provide sampling and coupons without having to physically store samples on site, and it provides better access and affordability to the patients.</font></p> 1256958 1.00 2006-01-31 2006-01-31 2007-10-22 2007-10-22 <p style="text-align: justify; font: 11pt Times New Roman, Times, Serif; margin: 0px"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Basis of Presentation</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Accounting Basis</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (&#147;GAAP&#148; accounting). The Company has adopted a December 31 fiscal year end.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: center">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><u>Principles of Consolidation</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The financial statements reflect the consolidated results of OptimizeRx Corporation (a Nevada corporation) and its wholly owned subsidiary OptimizeRx Corporation (a Michigan corporation). All material inter-company transactions have been eliminated in the consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: center">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><u>Cash and Cash Equivalents</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">For purposes of the accompanying financial statements, the Company considers all highly liquid instruments with an initial maturity of three months or less to be cash equivalents.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: center"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The fair value of cash, accounts receivable, prepaid expenses, patent rights, web development costs, accounts payable, accounts payable &#150; related party, accrued expenses and deferred revenue approximates the carrying amount of these financial instruments due to their short-term nature. The fair value of long-term debt, which approximates its carrying value, is based on current rates at which the Company could borrow funds with similar remaining maturities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition to defining fair value, the disclosure requirements around fair value establish a fair value hierarchy for valuation inputs which is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1 &#150; inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2 &#150; inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3 &#150; inputs are generally unobservable and typically reflect management&#146;s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The Company&#146;s stock options and warrants are valued using level 3 inputs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying value of the Company&#146;s financial assets and liabilities which consist of cash, accounts receivable, prepaid expenses, patent rights, web development costs, accounts payable, accounts payable &#150; related party, accrued expenses and deferred revenue are valued using level 1 inputs. The Company believes that the recorded values approximate their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management&#146;s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Accounts Receivable and Allowance for Doubtful Accounts</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Bad debt expense was $0 and $6,923 for the years ended December&#160;31, 2013 and 2012, respectively. The allowance for doubtful accounts was $0 as of December&#160;31, 2013 and 2012.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Property and Equipment</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The capital assets are being depreciated over their estimated useful lives, three to seven years using the straight-line method of depreciation for book purposes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Revenue Recognition and Revenue Share Expense</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All revenue is recognized when it is earned. Revenues are generated either through the Company&#146;s web-based activities, in which we earn revenue from advertising and lead generation activities, from our SampleMD activities by which we deliver eCoupons and eVouchers through a distribution network of ePrescribers and Electronic Health Record technology providers (channel partners), or from reselling services for other of our partners products that complement our business.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For our SampleMD business the company recognizes setup fees that are required for integrating client offerings and campaigns into the SampleMD content delivery system and network. Setup fees are recognized upon completion of the setup and launch of the client&#146;s campaign within the SampleMD system. As the eCoupons and or eVouchers are distributed through the SampleMD platform and network of channel partners (a transaction), these transactions are recorded and revenue is recognized. Revenue for transactions can be realized as cost per distribution or cost per redemption depending on the client contract. Additionally, the company also recognizes revenue for providing program performance reporting and maintenance, either by the company directly delivering reports or by providing access to its online reporting portal that the client can utilize. These fees are administered monthly and recognized as recurring monthly revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The company on occasion has also resold products and or services that are available through our channel partners, and that is complementary to our core businesses and client base. In these events net revenue is recognized as this is a commission based revenue split that the company recognizes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Based on the volume of transactions that are delivered through our channel partner network, we provide a revenue share to compensate the partner for their promotion of the campaign. Revenue shares are a negotiated percentage of the transaction fee depending upon if the revenue is generated through distributions and or redemptions and can also be specific to special considerations and campaigns. Traditionally, revenue share has been recognized between 25% and 50% of the transaction value. See Note 18.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Income Taxes</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Use of Estimates</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions have been made in determining the depreciable lives of such assets and the allowance for doubtful accounts receivable. Actual results could differ from these estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Concentration of Credit Risks</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts; however, amounts in excess of the federally insured limit may be at risk if the bank experiences financial difficulties.</p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Research and Development</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The Company&#146;s key members are part of a continual research development team and monitor new technologies, trends, services and partnerships that can provide the Company with additional services, value to healthcare and pharmaceutical industries and to the patients it serves.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.25in 0 0; letter-spacing: -0.1pt; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The Company seeks to educate team members through understanding of all market dynamics that have the potential to affect the business both short term and longer term. The primary goal is to help patients better afford and access the medicines their doctor prescribes, as well as other healthcare products and services they need. Based on this, the Company continually seeks better ways to meet this mission through technology, better user experiences and new ways to engage industries to provide new support for patients needing their products. The Company is always seeking new services and solutions to offer. At this time, the three current platforms provide robust opportunities and growth during the next five years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Earnings Per Common and Common Equivalent Share</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The computation of basic earnings per common share is computed using the weighted average number of common shares outstanding during the year. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus common stock equivalents which would arise from the exercise of warrants outstanding using the treasury stock method and the average market price per share during the year. Options, warrants and convertible preferred stock which are common stock equivalents are included in the diluted earnings per share calculation for the year ended December&#160;31, 2013. They have not been included in the diluted earnings per share calculation for the year ended December&#160;31, 2012 since their effect is anti-dilutive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Impairment of Long-Lived Assets</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><u>Recently Issued Accounting Guidance</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company&#146;s results of operations, financial position or cash flow.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Basis of Presentation</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif; letter-spacing: 0pt">The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (&#147;SEC&#148;), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company&#146;s Form 10-K filed with the SEC as of and for the year ended December 31, 2013. In the opinion of management, all adjustments necessary for the financial statements to be not misleading for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Accounting Basis</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (&#147;GAAP&#148; accounting). The Company has adopted a December 31 fiscal year end.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: normal 10pt Times New Roman, Times, Serif"><u>Principles of Consolidation</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The financial statements reflect the consolidated results of OptimizeRx Corporation (a Nevada corporation) and its wholly owned subsidiary OptimizeRx Corporation (a Michigan corporation). All material inter-company transactions have been eliminated in the consolidation.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: normal 10pt Times New Roman, Times, Serif"><u>Cash and Cash Equivalents</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">For purposes of the accompanying financial statements, the Company considers all highly liquid instruments with an initial maturity of three months or less to be cash equivalents.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Fair Value of Financial Instruments</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The fair value of cash, accounts receivable, prepaid expenses, patent rights, web development costs, accounts payable, accounts payable &#150; related party, accrued expenses and deferred revenue approximates the carrying amount of these financial instruments due to their short-term nature. The fair value of long-term debt, which approximates its carrying value, is based on current rates at which the Company could borrow funds with similar remaining maturities.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In addition to defining fair value, the disclosure requirements around fair value establish a fair value hierarchy for valuation inputs which is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Level 1 &#150; inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Level 2 &#150; inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Level 3 &#150; inputs are generally unobservable and typically reflect management&#146;s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The Company&#146;s stock options and warrants are valued using level 3 inputs.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The carrying value of the Company&#146;s financial assets and liabilities which consist of cash and cash equivalents, accounts receivable, prepaid expenses, patent rights, web development costs, security deposit, accounts payable, accounts payable &#150; related party, accrued expenses, revenue share payable and deferred revenue are valued using level 1 inputs. The Company believes that the recorded values approximate their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management&#146;s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Accounts Receivable and Allowance for Doubtful Accounts</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Bad debt expense was $0 for the three months ended March 31, 2014 and 2013. The allowance for doubtful accounts was $0 as of March 31, 2014 and December&#160;31, 2013.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Property and Equipment</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The capital assets are being depreciated over their estimated useful lives, three to seven years using the straight-line method of depreciation for book purposes.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Revenue Recognition and Revenue Share Expense</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">All revenue is recognized when it is earned. Revenues are generated either through the Company&#146;s web-based activities, in which we earn revenue from advertising and lead generation activities, from our SampleMD activities by which we deliver eCoupons and eVouchers through a distribution network of ePrescribers and Electronic Health Record technology providers (channel partners), or from reselling services for other of our partners products that complement our business.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">For our SampleMD business the company recognizes setup fees that are required for integrating client offerings and campaigns into the SampleMD content delivery system and network. Setup fees are recognized upon completion of the setup and launch of the client&#146;s campaign within the SampleMD system. As the eCoupons and or eVouchers are distributed through the SampleMD platform and network of channel partners (a transaction), these transactions are recorded and revenue is recognized. Revenue for transactions can be realized as cost per distribution or cost per redemption depending on the client contract. Additionally, the company also recognizes revenue for providing program performance reporting and maintenance, either by the company directly delivering reports or by providing access to its online reporting portal that the client can utilize. These fees are administered monthly and recognized as recurring monthly revenue.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The company on occasion has also resold products and or services that are available through our channel partners, and that is complementary to our core businesses and client base. In these events net revenue is recognized as this is a commission based revenue split that the company recognizes.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Based on the volume of transactions that are delivered through our channel partner network, we provide a revenue share to compensate the partner for their promotion of the campaign through their network. Revenue shares are a negotiated percentage of the transaction fee depending upon if the revenue is generated through distributions and or redemptions and can also be specific to special considerations and campaigns. Traditionally, revenue share has been recognized between 25% and 50% of the transaction value.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Income Taxes</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Use of Estimates</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions have been made in determining the depreciable lives of such assets and the allowance for doubtful accounts receivable. Actual results could differ from these estimates.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Concentration of Credit Risks</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts; however, amounts in excess of the federally insured limit may be at risk if the bank experiences financial difficulties.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; letter-spacing: -0.1pt; text-align: center; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><u>Research and Development</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company&#146;s key members are part of a continual research development team and monitor new technologies, trends, services and partnerships that can provide the Company with additional services, value to healthcare and pharmaceutical industries and to the patients it serves.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.25in 0 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company seeks to educate team members through understanding of all market dynamics that have the potential to affect the business both short term and longer term. The primary goal is to help patients better afford and access the medicines their doctor prescribes, as well as other healthcare products and services they need. Based on this, the Company continually seeks better ways to meet this mission through technology, better user experiences and new ways to engage industries to provide new support for patients needing their products. The Company is always seeking new services and solutions to offer. At this time, the three current platforms provide robust opportunities and growth during the next five years.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Earnings Per Common and Common Equivalent Share</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The computation of basic earnings per common share is computed using the weighted average number of common shares outstanding during the year. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus common stock equivalents which would arise from the exercise of warrants outstanding using the treasury stock method and the average market price per share during the year. Options, warrants and convertible preferred stock which are common stock equivalents are included in the per share calculation for the three months ended March&#160;31, 2014. They have not been included in the diluted earnings per share calculation for the year ended December&#160;31, 2013 since their effect is anti-dilutive.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Impairment of Long-Lived Assets</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Recently Issued Accounting Guidance</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company&#146;s results of operations, financial position or cash flow.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.</p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif; letter-spacing: 0pt">The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (&#147;SEC&#148;), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company&#146;s Form 10-K filed with the SEC as of and for the year ended December 31, 2013. In the opinion of management, all adjustments necessary for the financial statements to be not misleading for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (&#147;GAAP&#148; accounting). The Company has adopted a December 31 fiscal year end.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u></u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (&#147;GAAP&#148; accounting). The Company has adopted a December 31 fiscal year end.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The financial statements reflect the consolidated results of OptimizeRx Corporation (a Nevada corporation) and its wholly owned subsidiary OptimizeRx Corporation (a Michigan corporation). All material inter-company transactions have been eliminated in the consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: center">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The financial statements reflect the consolidated results of OptimizeRx Corporation (a Nevada corporation) and its wholly owned subsidiary OptimizeRx Corporation (a Michigan corporation). All material inter-company transactions have been eliminated in the consolidation.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">For purposes of the accompanying financial statements, the Company considers all highly liquid instruments with an initial maturity of three months or less to be cash equivalents.</p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">For purposes of the accompanying financial statements, the Company considers all highly liquid instruments with an initial maturity of three months or less to be cash equivalents.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The fair value of cash, accounts receivable, prepaid expenses, patent rights, web development costs, accounts payable, accounts payable &#150; related party, accrued expenses and deferred revenue approximates the carrying amount of these financial instruments due to their short-term nature. The fair value of long-term debt, which approximates its carrying value, is based on current rates at which the Company could borrow funds with similar remaining maturities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition to defining fair value, the disclosure requirements around fair value establish a fair value hierarchy for valuation inputs which is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1 &#150; inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2 &#150; inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3 &#150; inputs are generally unobservable and typically reflect management&#146;s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The Company&#146;s stock options and warrants are valued using level 3 inputs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying value of the Company&#146;s financial assets and liabilities which consist of cash, accounts receivable, prepaid expenses, patent rights, web development costs, accounts payable, accounts payable &#150; related party, accrued expenses and deferred revenue are valued using level 1 inputs. The Company believes that the recorded values approximate their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management&#146;s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The fair value of cash, accounts receivable, prepaid expenses, patent rights, web development costs, accounts payable, accounts payable &#150; related party, accrued expenses and deferred revenue approximates the carrying amount of these financial instruments due to their short-term nature. The fair value of long-term debt, which approximates its carrying value, is based on current rates at which the Company could borrow funds with similar remaining maturities.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In addition to defining fair value, the disclosure requirements around fair value establish a fair value hierarchy for valuation inputs which is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Level 1 &#150; inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Level 2 &#150; inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Level 3 &#150; inputs are generally unobservable and typically reflect management&#146;s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The Company&#146;s stock options and warrants are valued using level 3 inputs.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The carrying value of the Company&#146;s financial assets and liabilities which consist of cash and cash equivalents, accounts receivable, prepaid expenses, patent rights, web development costs, security deposit, accounts payable, accounts payable &#150; related party, accrued expenses, revenue share payable and deferred revenue are valued using level 1 inputs. The Company believes that the recorded values approximate their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management&#146;s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Bad debt expense was $0 and $6,923 for the years ended December&#160;31, 2013 and 2012, respectively. The allowance for doubtful accounts was $0 as of December&#160;31, 2013 and 2012.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u></u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Bad debt expense was $0 for the three months ended March 31, 2014 and 2013. The allowance for doubtful accounts was $0 as of March 31, 2014 and December&#160;31, 2013.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The capital assets are being depreciated over their estimated useful lives, three to seven years using the straight-line method of depreciation for book purposes.</p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The capital assets are being depreciated over their estimated useful lives, three to seven years using the straight-line method of depreciation for book purposes.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All revenue is recognized when it is earned. Revenues are generated either through the Company&#146;s web-based activities, in which we earn revenue from advertising and lead generation activities, from our SampleMD activities by which we deliver eCoupons and eVouchers through a distribution network of ePrescribers and Electronic Health Record technology providers (channel partners), or from reselling services for other of our partners products that complement our business.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For our SampleMD business the company recognizes setup fees that are required for integrating client offerings and campaigns into the SampleMD content delivery system and network. Setup fees are recognized upon completion of the setup and launch of the client&#146;s campaign within the SampleMD system. As the eCoupons and or eVouchers are distributed through the SampleMD platform and network of channel partners (a transaction), these transactions are recorded and revenue is recognized. Revenue for transactions can be realized as cost per distribution or cost per redemption depending on the client contract. Additionally, the company also recognizes revenue for providing program performance reporting and maintenance, either by the company directly delivering reports or by providing access to its online reporting portal that the client can utilize. These fees are administered monthly and recognized as recurring monthly revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The company on occasion has also resold products and or services that are available through our channel partners, and that is complementary to our core businesses and client base. In these events net revenue is recognized as this is a commission based revenue split that the company recognizes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Based on the volume of transactions that are delivered through our channel partner network, we provide a revenue share to compensate the partner for their promotion of the campaign. Revenue shares are a negotiated percentage of the transaction fee depending upon if the revenue is generated through distributions and or redemptions and can also be specific to special considerations and campaigns. Traditionally, revenue share has been recognized between 25% and 50% of the transaction value. See Note 18.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">All revenue is recognized when it is earned. Revenues are generated either through the Company&#146;s web-based activities, in which we earn revenue from advertising and lead generation activities, from our SampleMD activities by which we deliver eCoupons and eVouchers through a distribution network of ePrescribers and Electronic Health Record technology providers (channel partners), or from reselling services for other of our partners products that complement our business.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">For our SampleMD business the company recognizes setup fees that are required for integrating client offerings and campaigns into the SampleMD content delivery system and network. Setup fees are recognized upon completion of the setup and launch of the client&#146;s campaign within the SampleMD system. As the eCoupons and or eVouchers are distributed through the SampleMD platform and network of channel partners (a transaction), these transactions are recorded and revenue is recognized. Revenue for transactions can be realized as cost per distribution or cost per redemption depending on the client contract. Additionally, the company also recognizes revenue for providing program performance reporting and maintenance, either by the company directly delivering reports or by providing access to its online reporting portal that the client can utilize. These fees are administered monthly and recognized as recurring monthly revenue.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The company on occasion has also resold products and or services that are available through our channel partners, and that is complementary to our core businesses and client base. In these events net revenue is recognized as this is a commission based revenue split that the company recognizes.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Based on the volume of transactions that are delivered through our channel partner network, we provide a revenue share to compensate the partner for their promotion of the campaign through their network. Revenue shares are a negotiated percentage of the transaction fee depending upon if the revenue is generated through distributions and or redemptions and can also be specific to special considerations and campaigns. Traditionally, revenue share has been recognized between 25% and 50% of the transaction value.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.</p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts; however, amounts in excess of the federally insured limit may be at risk if the bank experiences financial difficulties.</p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts; however, amounts in excess of the federally insured limit may be at risk if the bank experiences financial difficulties.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The computation of basic earnings per common share is computed using the weighted average number of common shares outstanding during the year. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus common stock equivalents which would arise from the exercise of warrants outstanding using the treasury stock method and the average market price per share during the year. Options, warrants and convertible preferred stock which are common stock equivalents are included in the diluted earnings per share calculation for the year ended December&#160;31, 2013. They have not been included in the diluted earnings per share calculation for the year ended December&#160;31, 2012 since their effect is anti-dilutive.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u></u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The computation of basic earnings per common share is computed using the weighted average number of common shares outstanding during the year. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus common stock equivalents which would arise from the exercise of warrants outstanding using the treasury stock method and the average market price per share during the year. Options, warrants and convertible preferred stock which are common stock equivalents are included in the per share calculation for the three months ended March&#160;31, 2014. They have not been included in the diluted earnings per share calculation for the year ended December&#160;31, 2013 since their effect is anti-dilutive.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif; letter-spacing: 0px">The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u></u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company&#146;s results of operations, financial position or cash flow.</p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u></u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company&#146;s results of operations, financial position or cash flow.</font></p> 0 0 --12-31 --12-31 P3Y P3Y P7Y P7Y <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">Prepaid expenses consisted of the following as of December&#160;31, 2013 and 2012:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; padding-left: 5.4pt">Insurance</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">6,722</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">6,437</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 5.4pt">Rent</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">5,049</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">5,049</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">Consulting</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">31,672</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; padding-left: 5.4pt">Legal</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">0</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">25,000</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">Total prepaid expenses</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">11,771</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">68,158</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Prepaid expenses consisted of the following as of March&#160;31, 2014 and December&#160;31, 2013:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Insurance</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,756</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,722</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Rent</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5,049</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5,049</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Total prepaid expenses</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,805</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,771</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; padding-left: 5.4pt">Insurance</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">6,722</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">6,437</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 5.4pt">Rent</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">5,049</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">5,049</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">Consulting</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">31,672</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; padding-left: 5.4pt">Legal</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">0</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">25,000</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">Total prepaid expenses</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">11,771</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">68,158</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"><tr style="vertical-align: bottom"><td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Insurance</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,756</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,722</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Rent</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5,049</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5,049</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Total prepaid expenses</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,805</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,771</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr></table> 6722 6437 6756 6722 5049 5049 5049 5049 0 31672 0 25000 <p style="text-align: justify; font: 11pt Times New Roman, Times, Serif; margin: 0px; letter-spacing: -0.1pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company owned equipment recorded at cost which consisted of the following as of December&#160;31, 2013 and 2012:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: center">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left; padding-left: 5.4pt">Computer equipment</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">22,360</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">22,360</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Furniture and fixtures</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">11,088</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">11,088</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">&#160;&#160;&#160;&#160;&#160;Subtotal</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">33,448</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">33,448</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Accumulated depreciation</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(18,391</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(12,763</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">&#160;&#160;&#160;&#160;Property and equipment, net</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">15,057</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">20,685</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Depreciation expense was $5,628 and $5,476 for the years ended December&#160;31, 2013 and 2012, respectively.</p> <p style="text-align: justify; font: 11pt Times New Roman, Times, Serif; margin: 0px; letter-spacing: -0.1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company owned equipment recorded at cost which consisted of the following as of March&#160;31, 2014 and December&#160;31, 2013:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Computer equipment</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22,360</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22,360</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,088</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,088</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;Subtotal</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">33,448</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">33,448</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated depreciation</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(19,760</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(18,391</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Property and equipment, net</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,688</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,057</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Depreciation expense was $1,369 and $1,407 for the three months ended March&#160;31, 2014 and 2013, respectively.</font></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left; padding-left: 5.4pt">Computer equipment</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">22,360</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">22,360</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Furniture and fixtures</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">11,088</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">11,088</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">&#160;&#160;&#160;&#160;&#160;Subtotal</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">33,448</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">33,448</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Accumulated depreciation</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(18,391</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(12,763</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">&#160;&#160;&#160;&#160;Property and equipment, net</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">15,057</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">20,685</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"><tr style="vertical-align: bottom"><td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Computer equipment</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22,360</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22,360</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,088</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,088</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;Subtotal</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">33,448</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">33,448</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated depreciation</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(19,760</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(18,391</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Property and equipment, net</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,688</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,057</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr></table> 22360 22360 22360 22360 11088 11088 11088 11088 33448 33448 33448 33448 18391 12763 19760 18391 5628 5476 1407 1369 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has capitalized costs in developing their web-based technology, which consisted of the following as of December&#160;31, 2013 and 2012:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left; padding-left: 5.4pt">OptimizeRx web-based technology</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">154,133</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">154,133</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">SampleMD web-based technology</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">602,517</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">602,517</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">SampleMD 2.0 web-based technology</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">148,060</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">0</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">&#160;&#160;&#160;&#160;Subtotal, web-based technology</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">904,710</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">756,650</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">Accumulated amortization</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">(440,641</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">(310,352</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; padding-left: 5.4pt">Impairment</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(59,083</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(59,083</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">&#160;&#160;&#160;&#160;Web-based technology, net</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">404,986</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">387,215</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Amortization is recorded using the straight-line method over a period of five years. The Company is currently developing enhanced SampleMD web-based technology and has capitalized $148,060. The development is currently in process. It was not completed at December&#160;31, 2013. Accordingly, no amortization has been recorded. The development is expected to be completed in 2014. Amortization expense for the web-based technology costs was $130,289 and $126,923 for the years ended December&#160;31, 2013 and 2012, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company has capitalized costs in developing their web-based technology, which consisted of the following as of March&#160;31, 2014 and December&#160;31, 2013:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">OptimizeRx web-based technology</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">154,133</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">154,133</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">SampleMD web-based technology</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">602,517</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">602,517</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">SampleMD 2.0 web-based technology</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">224,035</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">148,060</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Subtotal, web-based technology</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">980,685</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">904,710</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated amortization</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(482,548</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(440,641</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Impairment</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(59,083</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(59,083</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Web-based technology, net</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">439,054</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">404,986</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Amortization is recorded using the straight-line method over a period of five years. The Company is currently developing enhanced SampleMD web-based technology and has capitalized $224,035, which was completed in March 2014. Accordingly, amortization has been recorded. Amortization expense for the web-based technology costs was $41,907 and $32,572 for the three months ended March&#160;31, 2014 and 2013, respectively.</font></p> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left; padding-left: 5.4pt">OptimizeRx web-based technology</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">154,133</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">154,133</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">SampleMD web-based technology</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">602,517</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">602,517</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">SampleMD 2.0 web-based technology</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">148,060</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">0</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">&#160;&#160;&#160;&#160;Subtotal, web-based technology</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">904,710</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">756,650</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">Accumulated amortization</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">(440,641</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">(310,352</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; padding-left: 5.4pt">Impairment</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(59,083</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(59,083</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">&#160;&#160;&#160;&#160;Web-based technology, net</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">404,986</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">387,215</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"><tr style="vertical-align: bottom"><td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">OptimizeRx web-based technology</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">154,133</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">154,133</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">SampleMD web-based technology</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">602,517</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">602,517</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">SampleMD 2.0 web-based technology</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">224,035</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">148,060</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Subtotal, web-based technology</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">980,685</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">904,710</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated amortization</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(482,548</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(440,641</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Impairment</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(59,083</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(59,083</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Web-based technology, net</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">439,054</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">404,986</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr></table> 154133 154133 154133 154133 602517 602517 602517 602517 904710 756650 980685 904710 440641 310352 482548 440641 -59083 -59083 -59083 -59083 148060 0 224035 148060 P5Y P5Y 130289 126923 32572 41907 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April&#160;26, 2010, the Company acquired from an officer and shareholder the technical contributions and assignment of all exclusive rights to and for the SampleMD patent in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition to 200,000 stock options valued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to the related party.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has capitalized costs in purchasing and defending the SampleMD patent, which consisted of the following as of December&#160;31, 2013 and 2012:</p> <p style="font: 10pt/6pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left; padding-left: 5.4pt">Patent rights and intangible assets</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">930,000</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">930,000</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Patent defense costs</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">87,993</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">New patents and trademarks</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">62,595</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Accumulated amortization</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(194,638</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(136,764</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">&#160;&#160;&#160;&#160;Patent rights and intangible assets, net</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">885,950</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">793,236</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company began amortizing the patent, using the straight-line method over the estimated useful life of 17 years, once it was put into service in July 2010. In 2013, the Company began incurring costs related to defense of the patent. These costs have been capitalized and will be amortized using the straight-line method over the remaining useful life of the original patent. Amortization expense was $57,874 and $54,705 for the years ended December&#160;31, 2013 and 2012, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On April&#160;26, 2010, the Company acquired from an officer and shareholder the technical contributions and assignment of all exclusive rights to and for the SampleMD patent in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition to 200,000 stock options valued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to the related party.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company has capitalized costs in purchasing and defending the SampleMD patent, which consisted of the following as of March&#160;31, 2014 and December&#160;31, 2013:</font></p> <p style="font: 10pt/6pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Patent rights and intangible assets</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">930,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">930,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Patent defense costs</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">111,707</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">87,993</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">New patents and trademarks</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">72,178</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">62,595</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated amortization</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(210,268</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(194,638</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Patent rights and intangible assets, net</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">903,617</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">885,950</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: left"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company began amortizing the patent, using the straight-line method over the estimated useful life of 17 years, once it was put into service in July 2010. In 2013, the Company began incurring costs related to defense of the patent. These costs have been capitalized and will be amortized using the straight-line method over the remaining useful life of the original patent. Amortization expense was $15,630 and $14,132 for the three months ended March&#160;31, 2014 and 2013, respectively.</font></p> <p style="font: 11pt/6pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left; padding-left: 5.4pt">Patent rights and intangible assets</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">930,000</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">930,000</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Patent defense costs</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">87,993</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">New patents and trademarks</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">62,595</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Accumulated amortization</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(194,638</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(136,764</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">&#160;&#160;&#160;&#160;Patent rights and intangible assets, net</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">885,950</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">793,236</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"><tr style="vertical-align: bottom"><td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Patent rights and intangible assets</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">930,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">930,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Patent defense costs</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">111,707</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">87,993</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">New patents and trademarks</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">72,178</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">62,595</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated amortization</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(210,268</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(194,638</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Patent rights and intangible assets, net</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">903,617</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">885,950</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr></table> 194638 136764 210268 87993 0 111707 930000 930000 930000 300000 300000 200000 200000 360000 360000 570000 570000 P17Y P17Y 57874 54705 14132 15630 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Accrued expenses at December 31, 2013 and 2012 consisted of amounts owed to the Company&#146;s outside independent auditors for services rendered for periods reported on in these financial statements.</font></p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Accrued expenses consisted of the following at March 31, 2014 and December 31, 2013:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">March 31, 2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">December 31, 2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Audit fees</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Payroll taxes</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">146,042</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="font-family: Arial, Helvetica, Sans-Serif; padding-bottom: 2.5pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">146,042</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,000</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">The Company has signed several contracts with customers for either the distribution or redemption of coupons. The payments are not taken into revenue until either the coupon is distributed to a patient or the coupon has been redeemed depending on the specific contract. The distributions and redemptions are tracked by the Company&#146;s administrative tool. Additionally, customer setup contracts that have been paid in full are deferred until the Company has completed the obligations of the contacts. Deferred revenue was $4,252 and $49,252 as of December&#160;31, 2013 and 2012, respectively.</font></p> <p></p> <p><font style="font: 10pt Times New Roman, Times, Serif">The Company has signed several contracts with customers for either the distribution or redemption of coupons. The payments are not taken into revenue until either the coupon is distributed to a patient or the coupon has been redeemed depending on the specific contract. The distributions and redemptions are tracked by the Company&#146;s administrative tool. Additionally, customer setup contracts that have been paid in full are deferred until the Company has completed the obligations of the contacts. Deferred revenue was $168,714 and $4,252 as of March&#160;31, 2014 and December&#160;31, 2013, respectively.</font></p> <p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">During the year ended December&#160;31, 2010, the Company acquired from an officer and shareholder the technical contributions and assignment of all exclusive rights to and for the SampleMD patent currently in process in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition to 200,000 stock options valued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to the related party.</font></p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the year ended December&#160;31, 2010, the Company acquired from an officer and shareholder the technical contributions and assignment of all exclusive rights to and for the SampleMD patent currently in process in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition to 200,000 stock options valued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to the related party.</font></p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">OptimizeRx Corporation has 500,000,000 shares of $.001 par value common stock authorized as of December 31, 2013. There were 14,773,496 and 14,232,496 common shares issued and outstanding at December&#160;31, 2013 and 2012, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June&#160;1, 2012, the Company entered into a consulting agreement with North Coast Advisors, Inc. for various services. The Company agreed to issue 40,000 shares of common stock as of the date of the contract. However, these shares were not issued until July&#160;12, 2012. The Company also agreed to issue an additional 40,000 shares every six months in alignment with the agreement renewal up to the two years of the agreement. The first 40,000 shares were valued at the Company&#146;s common stock price as of the date of the contract, which was $1.12/share and has been expensed. No additional shares were issued and the agreement was voided and replaced by a new agreement as noted below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June&#160;1, 2013, the Company entered into a consulting agreement with North Coast Advisors, Inc. for various services. The Company agreed to issue 20,000 shares of common stock as of the date of the contract. The Company also agreed to issue an additional 20,000 shares every six months in alignment with the agreement renewal up to the two years of the agreement. The first 20,000 shares were valued at the Company&#146;s common stock closing price as of the date of the contract, which was $1.945/share; and the second 20,000 shares were valued at the Company&#146;s common stock closing price of $1.50/share on the date of issuance, and have been expensed.</p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September&#160;20, 2013, the Company entered into a separation agreement that includes post-employment consulting services with a former officer. The Company agreed to issue 500,000 shares of common stock, 250,000 shares immediately and 250,000 by January&#160;1, 2014. The first 250,000 shares have been issued and the Company has recognized the entire issuance in the December 31, 2013 shares outstanding. The shares were valued at $505,000 and $174,808 of that amount remains as deferred stock compensation as of December&#160;31, 2013.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">OptimizeRx Corporation has 500,000,000 shares of $.001 par value common stock authorized as of March&#160;31, 2014. There were 23,168,337 and 14,773,496 common shares issued and outstanding at March&#160;31, 2014 and December&#160;31, 2013, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On June&#160;1, 2013, the Company entered into an amended consulting agreement with North Coast Advisors, Inc. for various services. The Company agreed to issue 20,000 shares of common stock as of the date of the contract. The Company also agreed to issue an additional 20,000 shares every six months in alignment with the agreement renewal up to the two years of the agreement. The first 40,000 shares were valued at the Company&#146;s common stock price as of the date of the contract, which was $1.945/share and $1.50/share, respectively, and have been expensed. The Company has also issued an additional 10,000 shares for work beyond the original scope of the contract in February 2014 valued at $18,500.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">On September&#160;20, 2013, the Company entered into a separation agreement that includes post-employment consulting services with a former officer. The Company agreed to issue 500,000 shares of common stock, 250,000 shares immediately and 250,000 by January&#160;1, 2014. The first 250,000 shares have been issued and the Company has recognized the entire issuance in the December 31, 2013 shares outstanding. The shares were valued at $505,000 and $116,538 of that amount remains as deferred stock compensation as of March&#160;31, 2014. Stock-based compensation of $58,270 was recorded in connection with this agreement during the three months ended March 31, 2014.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On January&#160;2, 2014 the Company executed an amendment to their securities redemption option agreement with Vicis Capital Master Fund that provides an option to purchase all of the outstanding shares and derivative securities held by Vicis for a total of $6,000,000. The term of the option is through March&#160;31, 2014. The original agreement payment was for $9,000,000 and term was through December 30, 2013.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On&#160;March 17, 2014,&#160;the Company&#160;entered into a securities purchase agreement, pursuant to which&#160;the Company&#160;sold an aggregate of 8,333,333 shares of&#160;the Company&#146;s common stock for $1.20 per share, or gross proceeds of $10,000,000.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Placement agents in the offering received commissions equal to approximately 9.7% of gross proceeds, for an aggregate commission of approximately $970,000, including reimbursements for their reasonable out of pocket expenses. Placement agents also received warrants to purchase up to 804,139 shares of&#160;the Company's common stock with an exercise price of $1.20 per share and a term of 5 years. The agent warrants also provide for piggy-back registration rights. The warrants were valued at $1,110,211 and have been recorded as equity issuance costs.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In addition to the warrants, the Company also issued 200,000 shares to three officers in connection with the equity raise. The stock was valued based on the fair market value on the grant date which was $378,000. The amount has been recorded as equity issuance costs.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company&#160;used the net proceeds of the offering to exercise the securities redemption option agreement, as amended, with Vicis Capital Master Fund that provides&#160;the Company&#160;with an option to purchase all of the outstanding shares and derivative securities held by Vicis for total payment of $6,000,000. The shares and derivative securities include the Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, Common Stock, and warrants to purchase shares of common stock held by Vicis in the Company. The balance of the net proceeds will be used for working capital purposes.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the three months ended March 31, 2014, the Company granted 337,500 shares of common stock to two employees as bonuses valued at $570,375. As of March 31, 2014, only 50% of the shares had vested. The company recorded the remaining 50% as deferred stock-based compensation. Stock-based compensation related to these bonuses was $285,188 for the three months ended March 31, 2014. The remainder will be expensed once the other 50% of the shares have vested in August 2014.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On January 29, 2014, an officer exercised 500,000 stock warrants using the cashless exercise feature. In exchange for the 500,000 warrants, 410,348 shares of common stock were issued.</font></p> 250000 20000 40000 250000 20000 65 65 65 14192496 14232496 14773496 8333333 10000 337500 410348 1.945 1.12 1.50 1.20 P2Y P2Y 3/31/14 12/30/13 12/30/13 3/31/14 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Series A Preferred</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December&#160;31, 2008, 35 preferred shares were issued for $3,500,000. Issuance costs totaled $515,000 resulting in net proceeds of $2,985,000. The 35 shares are convertible to 3,500,000 shares of common stock and bear a 10% cumulative dividend. In addition, there was a warrant issued to purchase 6,000,000 shares of common stock at an exercise price of $2 for a period of seven years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The holders of the preferred stock are entitled to semi-annual dividends payable on the stated value of the Series A preferred stock at a rate of 10% per annum, which shall be cumulative, and accrue daily from the issuance date. The dividends may be paid in cash or shares of the Company's common stock at management&#146;s discretion. If after the conversion eligibility date, the market price for the common stock for any ten consecutive trading days in which the stock trades for over $2 per share and trading exceeds 100,000 shares per day, the preferred shareholders can be required to convert their shares to common stock. Each share of Series A preferred stock shall also be convertible at the option of the holder into that number of shares of common stock of the Company at the stated value of such share at a $1 conversion price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The holder may cause this conversion at the time the shares are eligible for resale by the holder. The conversion price is subject to adjustment as hereinafter provided, at any time, or from time to time upon the terms and in the manner hereinafter set forth in the shareholder agreement. There is no conversion expiration date, however, the holder must provide 30 days notice for the registration of the conversion.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May&#160;12, 2010, the Company&#146;s Board declared and issued 236,598 common shares as payment for all cumulative and current semi-annual dividends. On November&#160;16, 2010, the Company&#146;s Board declared and issued 173,922 common shares for its semi-annual dividend payment. On March&#160;25, 2011, the Company&#146;s Board declared and issued 176,768 common shares for its semi-annual dividend payment. On September&#160;21, 2011, the Company's Board declared and issued 156,306 common shares for its semi-annual dividend payment. The Company has undeclared dividends that were due in February and September 2012 totaling $350,000 and undeclared dividends of $350,000 that were due in February and September 2013 for a total undeclared amount of $700,000 as of December&#160;31, 2013.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Series B Preferred</u></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December&#160;31, 2010, 15 preferred shares were issued for $1,500,000. The 15 shares are convertible to 1,000,000 shares of common stock and bear a 10% cumulative dividend. In addition, there was a warrant issued to purchase 3,000,000 shares of common stock at an exercise price of $3 for a period of seven years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preferred stock was issued for $1,500,000 less associated issuance costs of $350,000 for net proceeds of $1,150,000. Additionally, 3,000,000 common stock warrants were issued with the preferred stock. Based on the fair values of the preferred stock and common stock warrants on the issue date, $341,100 was allocated to preferred stock and $1,158,900 was allocated to the common stock warrants. Equity issuance costs of $350,000 were allocated to the preferred stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended September&#160;30, 2011, 15 preferred shares were issued to an investor for $1,500,000. The 15 shares are convertible to 1,000,000 shares of common stock and bear a 10% cumulative dividend. In addition, there was a warrant issued to purchase 1,000,000 shares of common stock at an exercise price of $3 for a period of seven years. Based on the fair values of the preferred stock and common stock warrants on the issue date, $855,460 was allocated to preferred stock and $644,540 was allocated to the common stock warrants. See Note 12.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The holders of the preferred stock are entitled to semi-annual dividends payable on the stated value of the Series B preferred stock at a rate of 10% per annum, which shall be cumulative, and accrue daily from the issuance date. The dividends may be paid in cash or shares of the Company's common stock at management&#146;s discretion. If after the conversion eligibility date, the market price for the common stock for any ten consecutive trading days in which the stock trades for over $2 per share and trading exceeds 100,000 shares per day, the preferred shareholders can be required to convert their shares to common stock. Each share of Series B preferred stock shall also be convertible at the option of the holder into that number of shares of common stock of the Company at the stated value of such share at a $1.50 conversion price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The holder may cause this conversion at the time the shares are eligible for resale by the holder. The conversion price is subject to adjustment as hereinafter provided, at any time, or from time to time upon the terms and in the manner hereinafter set forth in the shareholder agreement.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March&#160;25, 2011, the Company&#146;s Board declared and issued 75,758 common shares for its semi-annual dividend payment. On September&#160;21, 2011, the Company's Board declared and issued 66,988 common shares for its semi-annual dividend payment. The Company has undeclared dividends that were due in February and September 2012 totaling $150,000 and undeclared dividends of $150,000 that were due in February and September 2013 for a total undeclared amount of $300,000 as of December&#160;31, 2013.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Series A Preferred</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the year ended December&#160;31, 2008, 35 preferred shares were issued for $3,500,000. Issuance costs totaled $515,000 resulting in net proceeds of $2,985,000. The 35 shares were convertible to 3,500,000 shares of common stock and bore a 10% cumulative dividend. In addition, there was a warrant issued to purchase 6,000,000 shares of common stock at an exercise price of $2 for a period of seven years.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company had undeclared dividends that were due in February and September 2012 totaling $350,000 and undeclared dividends of $350,000 that were due in February and September 2013 for a total undeclared amount of $700,000 as of December&#160;31, 2013.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">All Series A preferred stock was repurchased as part of the securities buyout by the Company on March&#160;17, 2014 and all undeclared dividends were cancelled. The related warrants were also purchased as part of the buyout.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Series B Preferred</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the year ended December&#160;31, 2010, 15 preferred shares were issued for $1,500,000. The 15 shares were convertible to 1,000,000 shares of common stock and bore a 10% cumulative dividend. In addition, there was a warrant issued to purchase 3,000,000 shares of common stock at an exercise price of $3 for a period of seven years.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the quarter ended September&#160;30, 2011, 15 preferred shares were issued to an investor for $1,500,000. The 15 shares are convertible to 1,000,000 shares of common stock and bear a 10% cumulative dividend. In addition, there was a warrant issued to purchase 1,000,000 shares of common stock at an exercise price of $3 for a period of seven years.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company had undeclared dividends that were due in February and September 2012 totaling $150,000 and undeclared dividends of $150,000 that were due in February and September 2013 for a total undeclared amount of $300,000 as of December&#160;31, 2013.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">All Series B preferred stock was repurchased as part of the Vicis securities buyout by the Company on March&#160;17, 2014 and all undeclared dividends were cancelled. The related warrants were also purchased as part of the buyout.</font></p> 35 3500000 515000 2985000 3500000 0.10 6000000 3000000 1000000 2.00 3.00 3.00 1.20 1.20 P7Y P7Y P7Y P5Y P5Y 176768 156306 236598 173922 15 15 1500000 1500000 1000000 1000000 .10 0.10 350000 1150000 3000000 804139 804139 200000 341100 855460 1158900 644540 75758 66988 350000 350000 700000 150000 150000 300000 350000 350000 350000 150000 150000 150000 0 0 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for employee stock-based compensation in accordance with the guidance of ASC Topic 718: Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows ASC Topic 505-50, formerly EITF 96-18, &#147;Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,&#148; for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May&#160;31, 2011, the Company issued 285,000 stock options to 3 employees at an exercise price of $1.00. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 218%, risk-free interest rate of 1.68% and expected life of 60 months. The total value of the options was $320,585. The options vest over one year. The Company recognized share-based compensation expense of $187,005 during the year ended December 31, 2011. The remaining balance of $133,580 was recognized over the first five months of 2012.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended December&#160;31, 2011, the Company issued 20,000 stock options to 2 employees at an exercise price of $1.00. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 204-205%, risk-free interest rate of 0.88-0.93% and expected life of 60 months. The total value of the options was $19,270. The options vest over one year. <font style="background-color: white">&#160;The Company&#160;recognized share-based compensation expense of $2,480 and $16,790 during the years ended&#160;December 31,&#160;2012 and 2011</font>, respectively.<font style="background-color: white">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November&#160;21, 2011, the Company issued 100,000 stock options to an individual at an exercise price of $0.73. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 205%, risk-free interest rate of 0.92% and expected life of 60 months. <font style="background-color: white">The Company&#160;recognized expenses of $91,811 and $8,346 during the years ended&#160;December&#160;31, 2012 and 2011</font>, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended March&#160;31, 2012, the Company issued 50,000 stock options to 4 non-employees at an exercise price of $0.89. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 198%, risk-free interest rate of 0.65% and expected life of 48 months. The total value of the options was $35,091. The options vest over 4 months. The Company recognized share-based compensation expense of $35,091 during the six months ended June 30, 2012.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended December&#160;31, 2012, the Company issued 25,000 stock options to a non-employee at an exercise price of $1.58. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 200%, risk-free interest rate of 0.67% and expected life of 60 months. The total value of the options was $40,007. The options vest over 1 year. The Company recognized share-based compensation expense of $31,672 and $8,335 during the years ended December&#160;31, 2013 and 2012, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 30, 2013, the Company issued 50,000 stock options to 6 employees at an exercise price of $1.00. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 171%, risk-free interest rate of 1.30% and expected life of 60 months. The total value of the options was $46,322. The options vest over one year. <font style="background-color: white">&#160;The Company&#160;recognized share-based compensation expense of $7,720 during the year ended&#160;December 31,&#160;201</font>3<font style="background-color: white">. The remaining balance will be recognized during 2014.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 8, 2013, the Company issued 75,000 stock options to 2 non-employees at an exercise price of $1.00. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 171%, risk-free interest rate of 1.42% and expected life of 60 months. The total value of the options was $70,961. The options vest over 1 year. The Company recognized share-based compensation expense of $11,827 during the three months ended December&#160;31, 2013. The remaining balance of $59,134 has been recorded as deferred stock compensation and will be recognized during 2014.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company had the following options outstanding as of December&#160;31, 2013:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 50%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3" style="text-align: left">&#160;</td> <td style="padding-bottom: 1pt; text-align: center">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Number of Options</td> <td style="padding-bottom: 1pt; text-align: center">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Weighted average exercise price</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 31%; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding, January 1, 2012</font></td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 31%; text-align: right">405,000</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 30%; text-align: right">1.01</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted - 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">75,000</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1.17</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised - 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired &#150; 2012</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(455,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(.98</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December 31, 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">25,000</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1.58</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted &#150; 2013</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">125,000</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1.00</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised &#150; 2013</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired &#150; 2013</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(25,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(1.58</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="border-bottom: black 2.5pt double; text-align: left">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December&#160;31, 2013</font></td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: right">125,000</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">1.00</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company had the following warrants outstanding as of December&#160;31, 2013:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 50%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3" style="text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Number of Warrants</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Weighted average exercise price</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 31%; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding, January 1, 2012</font></td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 31%; text-align: right">14,344,434</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 30%; text-align: right">2.41</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted - 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised - 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired - 2012</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">0</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">0</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December 31, 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">14,344,434</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">2.41</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted - 2013</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised - 2013</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired - 2013</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(686,100</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(2.71</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="border-bottom: black 2.5pt double; text-align: left">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December&#160;31, 2013</font></td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: right">13,658,334</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">2.44</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company accounts for employee stock-based compensation in accordance with the guidance of ASC Topic 718: Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company follows ASC Topic 505-50, formerly EITF 96-18, &#147;Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,&#148; for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the quarter ended December&#160;31, 2012, the Company issued 25,000 stock options to a non-employee at an exercise price of $1.58. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 200%, risk-free interest rate of 0.67% and expected life of 60 months. The total value of the options was $40,007. The options vested over 1 year. The Company recognized share-based compensation expense of $10,002 during the three months ended March 31, 2013. The remainder was expensed during the rest of 2013.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On October 30, 2013, the Company issued 50,000 stock options to six employees at an exercise price of $1.00. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 171%, risk-free interest rate of 1.30% and expected life of 60 months. The total value of the options was $46,322. The options vest over one year. <font style="background-color: white">&#160;The Company&#160;recognized share-based compensation expense of $7,720 during the year ended&#160;December 31,&#160;201</font>3 and $11,581 during the three months ended March 31, 2014<font style="background-color: white">. The remaining balance will be recognized during the rest of 2014.</font></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On November 8, 2013, the Company issued 75,000 stock options to two non-employees at an exercise price of $1.00. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 171%, risk-free interest rate of 1.42% and expected life of 60 months. The total value of the options was $70,961. The options vest over 1 year. The Company recognized share-based compensation expense of $11,827 and $17,740 during the three months ended December&#160;31, 2013 and March 31, 2014, respectively. The remaining balance of $41,394 has been recorded as deferred stock compensation and will be recognized during the rest of 2014.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the quarter ended March&#160;31, 2014, the Company issued 267,500 stock options to five employees at exercise prices of $1.54 and $1.82. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 172%, risk-free interest rates of 1.58% and 1.46% and expected life of 60 months. The total value of the options was $423,712. The options vest over one year. The Company recognized share-based compensation expense of $24,654 during the three months ended March&#160;31, 2014. The remaining balance will be recognized during 2014 and 2015.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the quarter ended March&#160;31, 2014, the Company issued 10,000 stock options to a non-employee at exercise price of $1.85. The options were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 171%, risk-free interest rates of 1.64% and expected life of 60 months. The total value of the options was $16,935. The options vest over six months. The Company recognized share-based compensation expense of $5,645 during the three months ended March&#160;31, 2014. The remaining balance will be recognized during 2014.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On March&#160;17, 2014, the Company issued 804,139 warrants to two companies at an exercise price of $1.20. The warrants were valued on the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 172%, risk-free interest rate of 1.58% and expected life of 60 months. <font style="background-color: white">The Company&#160;recognized $1,110,211 during the three months ended March&#160;31, 2014 as equity issuance costs related to these warrants.</font></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company had the following options outstanding as of March&#160;31, 2014:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 50%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Number of Options</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 32%; text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding, January 1, 2013</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 30%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,276,100</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 30%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.97</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted &#150; 2013</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,125,000</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.00</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised &#150; 2013</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired &#150; 2013</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(2,271,100</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(1.00</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December 31, 2013</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,130,000</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.97</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted &#150; 2014</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">277,500</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.75</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised &#150; 2014</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired &#150; 2014</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, March&#160;31, 2014</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,407,500</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.12</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company had the following warrants outstanding as of March&#160;31, 2014:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 50%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Number of Warrants</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 32%; text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding, January 1, 2013</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 30%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,277,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 30%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2.25</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted &#150; 2013</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised &#150; 2013</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired &#150; 2013</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(527,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(1.73</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December 31, 2013</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,750,000</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2.27</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted &#150; 2014</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">804,139</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.20</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised &#150; 2014</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(500,000</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(0.35</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Cancelled &#150; 2014</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(10,000,000</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(2.40</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired &#150; 2014</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: right; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, March&#160;31, 2014</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,054,139</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.70</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"></p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 50%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3" style="text-align: left">&#160;</td> <td style="padding-bottom: 1pt; text-align: center">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Number of Options</td> <td style="padding-bottom: 1pt; text-align: center">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Weighted average exercise price</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 31%; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding, January 1, 2012</font></td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 31%; text-align: right">405,000</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 30%; text-align: right">1.01</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted - 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">75,000</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1.17</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised - 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired &#150; 2012</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(455,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(.98</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December 31, 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">25,000</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1.58</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted &#150; 2013</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">125,000</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1.00</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised &#150; 2013</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired &#150; 2013</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(25,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(1.58</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="border-bottom: black 2.5pt double; text-align: left">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December&#160;31, 2013</font></td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: right">125,000</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">1.00</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 50%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3" style="text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Number of Warrants</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Weighted average exercise price</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 31%; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding, January 1, 2012</font></td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 31%; text-align: right">14,344,434</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 30%; text-align: right">2.41</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted - 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised - 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired - 2012</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">0</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">0</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December 31, 2012</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">14,344,434</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">2.41</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted - 2013</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left">&#160;</td> <td style="text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised - 2013</font></td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Expired - 2013</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(686,100</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(2.71</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="border-bottom: black 2.5pt double; text-align: left">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;Balance, December&#160;31, 2013</font></td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: right">13,658,334</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">2.44</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="margin: 0pt"></p> 1130000 25000 405000 1407500 0.97 1.58 1.01 1.12 125000 75000 277500 1.00 1.17 1.75 0 0 0 0 0 0 -25000 -455000 0 -1.58 -0.98 0 12277000 14344434 14344434 2054139 804139 2.25 2.41 2.41 1.70 0 0 0 0 0 0 0 0 0 -500000 0 0 0 -686100 0 -527000 -2.71 0 -1.73 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company signed a lease for new office space on December 1, 2011 at an approximate rent of $5,000 per month. The new offices are in Rochester, Michigan. The lease is for three years with an option to renew for an additional two years at approximately $5,200 per month with six months advance notice to exercise the option. Minimum annual rent is as follows for the initial term of the lease:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 35%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 77%; padding-bottom: 1pt; text-align: right; padding-left: 5.4pt">&#160;Year ended December 31, 2014</td> <td style="width: 1%; padding-bottom: 1pt">&#160;</td> <td style="width: 1%; border-bottom: black 1pt solid; text-align: left">$</td> <td style="width: 20%; border-bottom: black 1pt solid; text-align: right">55,542</td> <td style="width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: right; padding-left: 5.4pt">Total lease commitment</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">55,542</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company signed a lease for new office space on December 1, 2011 at an approximate rent of $5,000 per month. The new offices are in Rochester, Michigan. The lease is for three years with an option to renew for an additional two years at approximately $5,200 per month with six months advance notice to exercise the option. Minimum annual rent is as follows for the initial term of the lease:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 71%; padding-bottom: 1pt; text-align: right; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;Year ended December 31, 2014</font></td> <td style="width: 10%; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 17%; border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">55,542</font></td> <td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: right; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Total lease commitment</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">55,542</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 35%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 77%; padding-bottom: 1pt; text-align: right; padding-left: 5.4pt">&#160;Year ended December 31, 2014</td> <td style="width: 1%; padding-bottom: 1pt">&#160;</td> <td style="width: 1%; border-bottom: black 1pt solid; text-align: left">$</td> <td style="width: 20%; border-bottom: black 1pt solid; text-align: right">55,542</td> <td style="width: 1%; padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: right; padding-left: 5.4pt">Total lease commitment</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">55,542</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 71%; padding-bottom: 1pt; text-align: right; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;Year ended December 31, 2014</font></td> <td style="width: 10%; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 17%; border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">55,542</font></td> <td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: right; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Total lease commitment</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">55,542</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"></p> P3Y P3Y 5000 5000 5200 5200 <p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">The Company had two major customers that accounted for 58% and two major customers that accounted for 52% of the Company&#146;s revenues for the years ended December&#160;31, 2013 and 2012, respectively. The Company expects to continue to maintain these relationships with the customers.</font></p> <p></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company had three major customers that accounted for 44% and three major customers that accounted for 72% of the Company&#146;s revenues for the three months ended March&#160;31, 2014 and 2013, respectively. The Company expects to continue to maintain these relationships with the customers.</font></p> .58 .52 0.72 0.44 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the year ended December&#160;31, 2013, the Company incurred net income of approximately $216,000 but has no tax liability. The Company began operations in 2007 and has previous net operating loss carry-forwards of approximately $13,934,000 through December&#160;31, 2012. The cumulative loss of approximately $13,718,000 will be carried forward and can be used through the year 2033 to offset future taxable income. In the future, the cumulative net operating loss carry-forward for income tax purposes may differ from the cumulative financial statement loss due to timing differences between book and tax reporting.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The provision for Federal income tax consists of the following for the years ended December&#160;31, 2013 and 2012:</p> <p style="font: 10pt/6pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">Federal income tax (expense) benefit attributable to:</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">&#160;</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">&#160;</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left">&#160;&#160;Current operations</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">(73,000</td> <td style="width: 1%; text-align: left">)</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">155,000</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left">&#160;&#160;Valuation allowance</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">73,000</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(155,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left">&#160;&#160;&#160;&#160;&#160;&#160;Net provision for federal income tax</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">0</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">0</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of December&#160;31, 2013 and 2012:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">Deferred tax asset attributable to:</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">&#160;</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">&#160;</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left">&#160;&#160;Net operating loss carryover</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">4,665,000</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">4,738,000</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left">&#160;&#160;Valuation allowance</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(4,665,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(4,738,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left">&#160;&#160;&#160;&#160;&#160;&#160;Net deferred tax asset</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">0</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">0</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $13,718,000 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">For the three months ended March&#160;31, 2014, the Company incurred net loss of approximately $653,000 and therefore has no tax liability. The Company began operations in 2007 and has previous net operating loss carry-forwards of approximately $13,718,000 through December&#160;31, 2013. The cumulative loss of approximately $14,371,000 will be carried forward and can be used through the year 2033 to offset future taxable income. In the future, the cumulative net operating loss carry-forward for income tax purposes may differ from the cumulative financial statement loss due to timing differences between book and tax reporting.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The provision for Federal income tax consists of the following for the three months ended March&#160;31, 2014 and 2013:</font></p> <p style="font: 10pt/6pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Federal income tax benefit attributable to:</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 55%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;Current operations</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">222,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">36,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;Valuation allowance</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(222,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(36,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;Net provision for federal income tax</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of March&#160;31, 2014 and December&#160;31, 2013:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred tax asset attributable to:</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 55%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;Net operating loss carryover</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,996,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,774,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;Valuation allowance</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,996,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,774,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;Net deferred tax asset</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $14,371,000 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">Federal income tax (expense) benefit attributable to:</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">&#160;</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">&#160;</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left">&#160;&#160;Current operations</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">(73,000</td> <td style="width: 1%; text-align: left">)</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">155,000</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left">&#160;&#160;Valuation allowance</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">73,000</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(155,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left">&#160;&#160;&#160;&#160;&#160;&#160;Net provision for federal income tax</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">0</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">0</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="margin: 0pt">&#160;</p> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Federal income tax benefit attributable to:</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 55%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;Current operations</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">222,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">36,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;Valuation allowance</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(222,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(36,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;Net provision for federal income tax</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left">Deferred tax asset attributable to:</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">&#160;</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">&#160;</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; text-align: left">&#160;&#160;Net operating loss carryover</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">4,665,000</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">4,738,000</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left">&#160;&#160;Valuation allowance</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(4,665,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">(4,738,000</td> <td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left">&#160;&#160;&#160;&#160;&#160;&#160;Net deferred tax asset</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">0</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">0</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred tax asset attributable to:</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Arial, Helvetica, Sans-Serif; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 55%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;Net operating loss carryover</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,996,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,774,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;Valuation allowance</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,996,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,774,000</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;&#160;&#160;&#160;Net deferred tax asset</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"></p> -73000 155000 36000 222000 73000 -155000 -36000 -222000 0 0 0 0 216000 653000 2033-01-01 2033-01-01 0.34 0.34 13718000 13934000 14371000 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 14, 2013, the Company hired a new CEO. The employment agreement required annual compensation of $175,000 that was to be accrued and deferred until at least January 1, 2014. Additionally, the agreement required the issuance of 2,000,000 options with an exercise price of $1.00 for a term of five years. The options were not exercisable until at least January 1, 2014, and were only exercisable after reaching certain financial terms and conditions. Due to these restrictions, no accrual was made for the issuance of these options.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September&#160;20, 2013, the Company entered into a separation agreement with the CEO. As part of the terms of the separation agreement, the accrued compensation up to the date of separation was paid and the options were terminated.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Operating expenses consisted of the following for the years ended December&#160;31, 2013 and 2012, respectively:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2.5in; text-indent: 4.5pt">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#160;</td> <td style="padding-bottom: 1pt; text-align: center">&#160;</td> <td colspan="3" style="text-align: center">Years ended December&#160;31,</td> <td style="padding-bottom: 1pt; text-align: center">&#160;</td> <td colspan="3" style="text-align: center">Years ended December&#160;31,</td></tr> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; padding-left: 5.4pt">Advertising</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">47,105</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">57,218</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Professional fees</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">552,824</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">263,396</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">Consulting</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">100,077</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">19,148</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Salaries, wages and benefits</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1,319,712</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1,184,367</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">Rent</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">60,592</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">62,362</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Depreciation and amortization</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">193,971</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">187,104</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">Stock-based compensation</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">411,412</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">285,605</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">General and administrative</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">288,297</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">269,448</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">Total Operating Expenses</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">2,973,990</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">2,328,648</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Operating expenses consisted of the following for the three months ended March&#160;31, 2014 and 2013, respectively:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2.5in; text-indent: 4.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="7" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Three months ended March&#160;31,</font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Advertising</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">29,600</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,340</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Professional fees</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">92,553</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">53,098</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Consulting</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,814</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20,407</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Salaries, wages and benefits</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">349,096</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">375,071</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Rent</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,148</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,148</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Depreciation and amortization</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">58,906</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">48,111</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Settlement expense</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">400,000</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Stock-based compensation</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">421,577</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">General and administrative</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">89,264</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">218,794</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Total Operating Expenses</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,471,958</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">733,969</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#160;</td> <td style="padding-bottom: 1pt; text-align: center">&#160;</td> <td colspan="3" style="text-align: center">Years ended December&#160;31,</td> <td style="padding-bottom: 1pt; text-align: center">&#160;</td> <td colspan="3" style="text-align: center">Years ended December&#160;31,</td></tr> <tr style="vertical-align: bottom"> <td>&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2013</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 54%; padding-left: 5.4pt">Advertising</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">47,105</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 20%; text-align: right">57,218</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Professional fees</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">552,824</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">263,396</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">Consulting</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">100,077</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">19,148</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Salaries, wages and benefits</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1,319,712</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">1,184,367</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">Rent</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">60,592</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">62,362</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Depreciation and amortization</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">193,971</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">187,104</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt">Stock-based compensation</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">411,412</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">&#160;</td> <td style="text-align: right">285,605</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">General and administrative</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">288,297</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: right">269,448</td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt">Total Operating Expenses</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">2,973,990</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td> <td style="padding-bottom: 2.5pt">&#160;</td> <td style="border-bottom: black 2.5pt double; text-align: left">$</td> <td style="border-bottom: black 2.5pt double; text-align: right">2,328,648</td> <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr> </table> <p style="margin: 0pt"></p> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="7" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Three months ended March&#160;31,</font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Advertising</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">29,600</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,340</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Professional fees</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">92,553</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">53,098</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Consulting</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,814</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20,407</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Salaries, wages and benefits</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">349,096</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">375,071</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Rent</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,148</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,148</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Depreciation and amortization</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">58,906</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">48,111</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Settlement expense</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">400,000</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Stock-based compensation</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">421,577</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">General and administrative</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">89,264</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">218,794</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 2.5pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Total Operating Expenses</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,471,958</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">733,969</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"></p> 47105 57218 3340 29600 552824 263396 53098 92553 100077 19148 20407 15814 1319712 1184367 375071 349096 -60592 -62362 -15148 -15148 288297 269448 218794 89264 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">On January&#160;2, 2014 the Company executed an amendment to their securities redemption option agreement with Vicis Capital Master Fund that provides an option to purchase all of the outstanding shares and derivative securities held by Vicis for a total of $6,000,000. The term of the option is through March&#160;31, 2014. The original agreement payment was for $9,000,000 and term was through December 30, 2013.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On&#160;March 17, 2014,&#160;the Company&#160;entered into a securities purchase agreement, pursuant to which&#160;the Company&#160;sold an aggregate of 8,333,333 shares of&#160;the Company&#146;s common stock for $1.20 per share, or gross proceeds of $10,000,000.</p> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On May 12, 2014, the Company hired a new CFO. Per the terms of the employment agreement, the CFO will earn a salary of $125,000 per year and was granted 100,000 stock options as a signing bonus.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March&#160;31, 2014 through the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events described above.</font></p> 22809586 0 0 0 .001 .001 0.001 10000000 10000000 10000000 65 65 0 3189591 1873726 509475 818537 2973990 2328648 733969 1471958 215601 -454922 -364345 -224494 -653421 -224494 -104882 -246 -469 -56 -106 0 -100 246 369 56 106 215847 -454553 -363976 -224438 -653315 -224438 -104826 0 0 0 0 215847 -454553 -363976 -224438 -653315 -224438 -104826 14388017 14211455 14232196 16683894 0.02 -0.03 -0.02 -0.04 14713017 17211455 14232196 16683894 0.01 -0.03 -0.02 -0.04 0 49618 19547 40007 0 59620 4957016 1989086 669290 1317347 <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended December 31, 2013, the Company corrected an accounting error related to revenue share expenses. The Company will accrue the expense for amounts due, versus when they are paid, for proper matching. The revenue share expense was not properly accrued at the end of 2012 or at the end of each 2013 quarter</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The restated Consolidated Balance Sheet, Consolidated Statement of Operations and Consolidated Statement of Cash Flows for the year ended December 31, 2012 is as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <table cellspacing="0" cellpadding="0" align="center" style="width: 50%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Year ended December 31, 2012</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Financial Statement</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Line Item</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Corrected</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Previously Stated</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 30%; text-align: left; padding-left: 5.4pt">Balance sheet</td> <td style="width: 1%">&#160;</td> <td style="width: 29%; padding-left: 5.4pt">Revenue share payable</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 17%; text-align: right">90,577</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 17%; text-align: right">0</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Income statement</td> <td>&#160;</td> <td style="padding-left: 5.4pt">Revenue share expense</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">115,360</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">24,783</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">Income statement</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Loss from operations</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(454,922</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(364,345</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Income statement</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Loss before provision for income taxes</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(454,553</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(363,976</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">Income statement</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Net loss</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(454,553</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(363,976</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Statement of cash flows</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Net loss</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(454,553</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(363,976</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">Statement of cash flows</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Increase in revenue share payable</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">90,577</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> </table> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the quarter ended December 31, 2013, the Company corrected an accounting error related to revenue share expenses. The Company will accrue the expense for amounts due, versus when they are paid, for proper matching. The revenue share expense will now reflect the expense associated with the revenue from that particular quarter and year end. The Company will restate quarters 1 - 3 of 2013 as the 2014 quarterly statements are prepared. The full impact of the restatement is reflected in the December 31, 2013 balance sheet.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The restated Consolidated Balance Sheet, Consolidated Statement of Operations and Consolidated Statement of Cash Flows for the three months ended March&#160;31, 2013 is as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 60%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3" style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">Three months ended March&#160;31, 2013</font></td> <td style="font-family: Courier New, Courier, Monospace; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="font-family: Courier New, Courier, Monospace; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Courier New, Courier, Monospace; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="font-family: Courier New, Courier, Monospace; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Financial Statement</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Line Item</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Corrected</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Previously Stated</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 30%; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Income statement</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 23%; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Revenue share expense</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">159,815</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,203</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Income statement</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Loss from operations</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(224,494</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(104,882</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Income statement</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Loss before provision for income taxes</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(224,438</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(104,826</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Income statement</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Net loss</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(224,438</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(104,826</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Statement of cash flows</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Net loss</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(224,438</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(104,826</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Statement of cash flows</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Increase in revenue share payable</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">119,612</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <table cellspacing="0" cellpadding="0" align="center" style="width: 50%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center">Year ended December 31, 2012</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td colspan="3">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Financial Statement</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: left; padding-left: 5.4pt">Line Item</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Corrected</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td> <td style="padding-bottom: 1pt">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: left">&#160;</td> <td style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Previously Stated</font></td> <td style="padding-bottom: 1pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 30%; text-align: left; padding-left: 5.4pt">Balance sheet</td> <td style="width: 1%">&#160;</td> <td style="width: 29%; padding-left: 5.4pt">Revenue share payable</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 17%; text-align: right">90,577</td> <td style="width: 1%; text-align: left">&#160;</td> <td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td> <td style="width: 17%; text-align: right">0</td> <td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Income statement</td> <td>&#160;</td> <td style="padding-left: 5.4pt">Revenue share expense</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">115,360</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">24,783</td> <td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">Income statement</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Loss from operations</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(454,922</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(364,345</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Income statement</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Loss before provision for income taxes</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(454,553</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(363,976</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">Income statement</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Net loss</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(454,553</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(363,976</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt">Statement of cash flows</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Net loss</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(454,553</td> <td style="text-align: left">)</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">(363,976</td> <td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt">Statement of cash flows</td> <td>&#160;</td> <td style="text-align: left; padding-left: 5.4pt">Increase in revenue share payable</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">90,577</td> <td style="text-align: left">&#160;</td> <td>&#160;</td> <td style="text-align: left">$</td> <td style="text-align: right">0</td> <td style="text-align: left">&#160;</td></tr> </table> <p style="margin: 0pt"></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 60%; border-collapse: collapse; font-size: 10pt"> <tr style="vertical-align: bottom"> <td colspan="3" style="border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">Three months ended March&#160;31, 2013</font></td> <td style="font-family: Courier New, Courier, Monospace; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="font-family: Courier New, Courier, Monospace; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="font-family: Courier New, Courier, Monospace; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="font-family: Courier New, Courier, Monospace; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Financial Statement</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; padding-bottom: 1pt; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Line Item</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Corrected</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Previously Stated</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 30%; text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Income statement</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 23%; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Revenue share expense</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">159,815</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,203</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Income statement</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Loss from operations</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(224,494</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(104,882</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Income statement</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Loss before provision for income taxes</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(224,438</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(104,826</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Income statement</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Net loss</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(224,438</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(104,826</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Statement of cash flows</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Net loss</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(224,438</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(104,826</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Statement of cash flows</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left; padding-left: 5.4pt"><font style="font: 10pt Times New Roman, Times, Serif">Increase in revenue share payable</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">119,612</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> </table> <p style="margin: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions have been made in determining the depreciable lives of such assets and the allowance for doubtful accounts receivable. Actual results could differ from these estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions have been made in determining the depreciable lives of such assets and the allowance for doubtful accounts receivable. Actual results could differ from these estimates.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The Company&#146;s key members are part of a continual research development team and monitor new technologies, trends, services and partnerships that can provide the Company with additional services, value to healthcare and pharmaceutical industries and to the patients it serves.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.25in 0 0; letter-spacing: -0.1pt; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify">The Company seeks to educate team members through understanding of all market dynamics that have the potential to affect the business both short term and longer term. The primary goal is to help patients better afford and access the medicines their doctor prescribes, as well as other healthcare products and services they need. Based on this, the Company continually seeks better ways to meet this mission through technology, better user experiences and new ways to engage industries to provide new support for patients needing their products. The Company is always seeking new services and solutions to offer. At this time, the three current platforms provide robust opportunities and growth during the next five years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: left"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company&#146;s key members are part of a continual research development team and monitor new technologies, trends, services and partnerships that can provide the Company with additional services, value to healthcare and pharmaceutical industries and to the patients it serves.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.25in 0 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; letter-spacing: -0.1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company seeks to educate team members through understanding of all market dynamics that have the potential to affect the business both short term and longer term. The primary goal is to help patients better afford and access the medicines their doctor prescribes, as well as other healthcare products and services they need. Based on this, the Company continually seeks better ways to meet this mission through technology, better user experiences and new ways to engage industries to provide new support for patients needing their products. The Company is always seeking new services and solutions to offer. At this time, the three current platforms provide robust opportunities and growth during the next five years.</font></p> 0 6923 0 .25 0.25 .50 0.50 62595 0 72178 4252 49252 168714 55542 55542 P2Y P2Y 4665000 4738000 4996000 -4665000 -4738000 -4996000 0 0 0 175000 2000000 1.00 P5Y 2014-01-01 15276153 -1193661 -90577 -797725 0 2039368 1404882 1589170 0 0 14192 14232 14773 4602663 20826934 20058051 18148049 -24377514 -24832067 -24616220 150367 7720 150367 40000 40000 44760 68860 40 40 44800 68900 150367 7720 75098 70961 11827 75098 -59134 768883 1910002 -768883 -1910002 0 0 500000 504500 0 500 -505000 1000 -1 1 0 330192 330192 -454553 215847 1767425 115360 24783 159815 498810 159815 40203 1103084 90577 0 119612 -395935 119612 0 <p style="font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">The holders of the preferred stock are entitled to semi-annual dividends payable on the stated value of the Series A preferred stock at a rate of 10% per annum, which shall be cumulative, and accrue daily from the issuance date. The dividends may be paid in cash or shares of the Company's common stock at management&#146;s discretion. If after the conversion eligibility date, the market price for the common stock for any ten consecutive trading days in which the stock trades for over $2 per share and trading exceeds 100,000 shares per day, the preferred shareholders can be required to convert their shares to common stock. Each share of Series A preferred stock shall also be convertible at the option of the holder into that number of shares of common stock of the Company at the stated value of such share at a $1 conversion price.</font></p> <p style="font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">The holder may cause this conversion at the time the shares are eligible for resale by the holder. The conversion price is subject to adjustment as hereinafter provided, at any time, or from time to time upon the terms and in the manner hereinafter set forth in the shareholder agreement. There is no conversion expiration date, however, the holder must provide 30 days notice for the registration of the conversion.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The holders of the preferred stock are entitled to semi-annual dividends payable on the stated value of the Series B preferred stock at a rate of 10% per annum, which shall be cumulative, and accrue daily from the issuance date. The dividends may be paid in cash or shares of the Company's common stock at management&#146;s discretion. If after the conversion eligibility date, the market price for the common stock for any ten consecutive trading days in which the stock trades for over $2 per share and trading exceeds 100,000 shares per day, the preferred shareholders can be required to convert their shares to common stock. Each share of Series B preferred stock shall also be convertible at the option of the holder into that number of shares of common stock of the Company at the stated value of such share at a $1.50 conversion price.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The holder may cause this conversion at the time the shares are eligible for resale by the holder. The conversion price is subject to adjustment as hereinafter provided, at any time, or from time to time upon the terms and in the manner hereinafter set forth in the shareholder agreement.</p> 75000 285000 20000 100000 50000 25000 50000 267500 10000 100000 1.00 1.00 1.00 0.73 0.89 1.58 1.00 1.54 1.85 70961 19270 35091 40007 46322 423712 16935 P1Y P1Y P4M P1Y P1Y P1Y P6M 6000000 6000000 0 9000000 9000000 9000000 10000000 970000 400000 0 10000000 0 -1204968 0 -6000000 0 2795032 0 378000 378000 0 1110211 1110211 0 106405 0 285187 <p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">On November 5, 2012, LDM Group, LLC (&#147;LDM&#148;) commenced an action against the Company in the United States District Court for the Eastern District of Missouri, Eastern Division. The complaint alleged that OptimizeRx infringed on a patent issued on February 21, 2012 in favor of LDM. LDM alleged that its patent is an invention of a method for making available targeted content to a prescription medication patient while the patient is still in the physician&#146;s office. According to LDM, the Company&#146;s Integrated SampleMD uses systems and methods that perform the elements of the LDM patent and, therefore, infringes on its patent.&#160; On February 25, 2013, a Settlement and Patent License Agreement was reached with LDM, and LDM subsequently dismissed the lawsuit with prejudice.&#160; On April 23, 2013, however, LDM reinstituted the patent infringement action in the United States District Court for the Eastern District of Missouri, Eastern Division claiming that OptimizeRx breached the Settlement and Patent License Agreement. The Company continued to vigorously defend the OptimizeRx technology, preparing for litigation, depositions and patent protection while also positioning for legal actions against LDM. On February 28, 2014, a Settlement Agreement was reached with LDM, and the judge dismissed the case with prejudice on March 18, 2014. Per the terms of the settlement agreement, the Company paid a one-time fee of $400,000 and will pay LDM the greater of $0.37 per patient discount distributed by OptimizeRx or 10% of the total revenue earned by OptimizeRx for distribution and redemption of all patent discounts. This amount was included in operating expenses in the consolidated statement of operations for the three months ended March&#160;31, 2014.</font></p> <table cellspacing="0" cellpadding="0" align="center" style="width: 40%; border-collapse: collapse; font-size: 10pt"><tr style="vertical-align: bottom"><td style="font-family: Arial, Helvetica, Sans-Serif; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">March 31, 2014</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td colspan="3" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">December 31, 2013</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="width: 55%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Audit fees</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 20%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,000</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Payroll taxes</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">146,042</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,204)"> <td style="font-family: Arial, Helvetica, Sans-Serif; padding-bottom: 2.5pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">146,042</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,000</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></td></tr></table> 12000 0 0 146042 12000 146042 -10000000 -2.40 1.82 1.20 0 400000 2014-05-12 125000