AudioEye (AEYE) 10-Q/A 18 May 15 2014 Q1 Quarterly report (amended) Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	14-May-14
Document And Entity Information
Entity Registrant Name	AUDIOEYE INC
Entity Central Index Key	1362190
Document Type	10-Q/A
Document Period End Date	31-Mar-14
Amendment Flag	TRUE
Amendment Description	The Registrant is filing this Amendment No. 1 on Form 10-Q/A (this ?Amended Filing?) to its Quarterly Report on Form 10 Q for the three months ended March 31, 2014 as originally filed with the Securities and Exchange Commission on May 14, 2014 (?Original Filing?) to restate its consolidated balance sheet as of March 31, 2014, and its consolidated statement of operations and consolidated statement of cash flows for the three months ended March 31, 2014. In connection therewith, the Registrant hereby amends and replaces in their entirety Items 1, 2 and 4 in Part I, and Item 1A in Part II in the Original Filing. For the convenience of the reader, this Amended Filing sets forth the Original Filing, as modified where necessary to reflect the restatement and revisions. The reasons for the restatement and the effect thereof is discussed in Footnote 2 to our consolidated financial statements. As required by Rule 12b-15, the Registrant's principal executive officer and principal financial officer are providing new currently dated certifications. Accordingly, the Registrant hereby amends Item 6 in Part II in the Original Filing to reflect the filing of the new certifications. We are also separately amending our quarterly reports on Form 10 Q for the periods ending June 30, 2014 and September 30, 2014 in connection with the restatements of our interim financial statements for such periods. Except as described above, this Amended Filing does not amend, update or change any other items or disclosures in the Original Filing and does not purport to reflect any information or events subsequent to the filing thereof. As such, this Amended Filing speaks only as of the date the Original Filing was filed, and the Registrant has not undertaken herein to amend, supplement or update any information contained in the Original Filing to give effect to any subsequent events. Accordingly, this Amended Filing should be read in conjunction with the Registrant's filings made with the SEC subsequent to the filing of the Original Filing, including any amendment to those filings.
Current Fiscal Year End Date	-19
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		55,517,709
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Current Assets
Cash	$492,718	$1,847,004	$93,420	$11,710
Accounts receivable, net	1,219,138	569,297
Related party receivables	83,375	82,250
Prepaid assets & security deposits	49,643
Total Current Assets	1,844,874	2,498,551
Property and equipment, net	3,048	3,847
Intangible assets, net	3,156,447	3,073,945
Goodwill	700,528	700,528
Total Assets	5,704,897	6,276,871
Current Liabilities
Accounts payable and accrued expenses	1,275,184	416,531
Billings in excess of costs	11,321
Notes and loans payable-current, net of discount of $0 and $1,155, respectively	24,000	172,845
Related party payable	87,000	243,424
Related party loans	35,000	35,000
Total Current Liabilities	1,432,505	867,800
Long Term Liabilities
Notes and loans payable-long term	69,800	79,800
Total Long Term Liabilities	69,800	79,800
Total Liabilities	1,502,305	947,600
STOCKHOLDERS' EQUITY
Preferred stock, $0.00001 par value, 10,000,000 shares authorized, none issued and outstanding, as of March 31, 2014 and December 31, 2013, respectively
Common stock, $0.00001 par value, 250,000,000 shares authorized, 55,399,839 and 53,239,369 issued and outstanding, as of March 31, 2014 and December 31, 2013 respectively	554	532
Treasury stock	-623,000	-623,000
Additional paid in capital	14,274,875	13,231,212
Accumulated deficit	-9,449,837	-7,279,473
Total Stockholders' Deficit	4,202,592	5,329,271
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$5,704,897	$6,276,871

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
CONSOLIDATED BALANCE SHEETS
Notes and loans payable-current, discount amount	$0	$1,155
Preferred Stock, par value (in dollars per share)	$0.00	$0.00
Preferred Stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value (in dollars per share)	$0.00	$0.00
Common Stock, shares authorized	250,000,000	250,000,000
Common Stock, shares issued	55,399,839	53,239,369
Common Stock, shares outstanding	55,399,839	53,239,369

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$42,527	$223,172
Revenue from related party	3,125	1,125
Total revenues	45,652	224,297
Cost of revenues	41,153	45,023
Gross profit	4,499	179,274
Operating expenses:
Selling & marketing	270,383	7,750
Research & development	130,624
General and administrative expenses	1,667,600	444,050
Amortization & depreciation	99,273	89,593
Total operating expenses	2,167,880	541,393
Operating income (loss)	-2,163,381	-362,119
Other income (expense)
Unrealized gain (loss) on marketable securities		-9,000
Interest expense	-6,983	-24,967
Total other income (expense)	-6,983	-33,967
Net (loss)	($2,170,364)	($396,086)
Net (loss) per common share - basic and diluted (in dollars per share)	($0.04)	($0.01)
Weighted average common shares outstanding - basic and diluted (in shares)	54,215,367	36,965,057

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash Flows from Operating Activities:
Net (loss)	($2,170,364)	($396,086)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	99,273	89,593
Stock, option and warrant expense	849,148	169,756
Unrealized (gain) loss on investments		9,000
Amortization of debt discount	1,155
Changes in operating assets and liabilities:
Accounts receivable	-649,841	3,256
Related party receivable	-1,125
Prepaid & other assets	-49,643
Accounts payable and accruals	791,153	70,071
Billings in excess of costs	11,321
Deferred revenue		-10,380
Related party payables	-156,424
Net cash (used in) operating activities	-1,275,347	-64,790
Cash Flows from Investing Activities:
Cash paid for intangible assets	-113,476
Net cash (used in) by investing activities	-113,476
Cash Flows from Financing Activities:
Repayment of note payable	-160,000	-206,000
Issuance of common stock for cash	181,537
Issuance of equity for cash exercise of options and warrants	13,000
Proceeds from third party loans		352,500
Net cash provided by financing activities	34,537	146,500
Increase (decrease) in cash	-1,354,286	81,710
Cash - beginning of period	1,847,004	11,710
Cash - end of period	492,718	93,420
NON-CASH FINANCING ACTIVITIES
Common stock issued for conversion of debt		1,692,932
Warrants issued for related party loans		829,418
Common stock issued to CMGO for debt repayment		241,339
Patents capitalized in accounts payable		1,837
Accounts payable converted into debt		30,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$3,658	$24,967

ORGANIZATION_AND_BASIS_OF_PRES

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2014
ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION AND BASIS OF PRESENTATION	NOTE 1:                                             ORGANIZATION AND BASIS OF PRESENTATION
	The accompanying unaudited interim financial statements of AudioEye, Inc. and its wholly-owned subsidiary (collectively, the “Company”) 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, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014.
	In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended December 31, 2013 as reported in the Company’s Annual Report on Form 10-K have been omitted.
	Corporate Information and Background
	AudioEye, Inc. was formed as a Delaware corporation on May 20, 2005. The Company focuses on working to improve the mobility, usability and accessibility of all Internet-based content through the development, sale, licensing and use of its proprietary accessibility technologies. Audio Internet® is a technology that utilizes patented architecture to deliver a fully accessible audio equivalent of a visual website or mobile website in a compliant format that can be navigated, utilized, interacted with, and transacted from, without the use of a monitor or mouse, by individuals with visual impairments. For individuals with hearing impairments, Audio Internet® provides captioning for websites, and the challenges of reaching those with other impairments are also addressed by the technology platform.
	Complete with an ever-growing suite of utilities tailored to the needs of different disabled users, the AudioEye® Audio Internet® Accessibility Platform is a fully scalable cloud-based solution designed and developed to meet the needs and compliance mandates for an ever-growing demographic.
	Reclassification
	Certain prior year amounts have been reclassified to conform to the current year presentation.
	Revenue Recognition
	Revenue is recognized when all applicable recognition criteria have been met, which generally include: (a) persuasive evidence of an existing arrangement; (b) a fixed or determinable price; (c) delivery has occurred or service has been rendered; and (d) the collectability of the sales price is reasonably assured. For software and technology development contracts where applicable, the Company recognizes revenues on a percentage of completion method based upon several factors including but not limited to: (a) an estimate of total hours and milestones to complete; (b) the total hours completed; (c) the delivery of services rendered; (d) the change in estimates; and (e) the collectability of the contract.
	Licensing revenues for intangible assets, including intellectual property such as patents and trademarks, are recognized when all applicable criteria have been met: (a) persuasive evidence of an existing arrangement; (b) a fixed or determinable price; (c) the delivery has occurred or service has been rendered; and (d) the collectability of the sales price is reasonably assured. Licensing revenues are recognized over the term of the contract or, in the case of a perpetual license, revenues are recognized in the period the criteria have been met. In transactions where the Company engages in a non-cash exchange, the Company follows ASC 845 and any potential revenue is recorded as other income.

RESTATEMENT_OF_PREVIOUSLY_ISSU

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS	3 Months Ended
	Mar. 31, 2014
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS	NOTE 2:                                             RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
	The Company has restated its consolidated balance sheet as of March 31, 2014, and its consolidated statement of operations and consolidated statement of cash flow for the quarter ended March 31, 2014.
	At the time the Company issued the financial statements subject to this restatement, the Company believed that it was relying on generally accepted accounting principles and properly applying those principles.  It remains the case that the Company relied upon the correct accounting principles in the accounting in those statements.  However, in conjunction with certain changes in the management of the Company, as well as during the course of an internal review initiated by the Audit Committee of the Board of Directors during the first quarter and into the second quarter of 2015 (“Internal Review”), the Company identified errors in the application of the accounting principles for revenue recognition and costing of non-monetary transactions related to its intellectual property portfolio.  Specifically, the Company had no prior cash sales of licenses of its patents as of March 31, 2014. To recognize revenue on a non-monetary exchange of a license of its patents for services or licenses to be provided by a counterparty, the Company looked to establish fair value of either the licensed patents or the services or licenses to be received. Based on the nature of the transactions, and after consultation with the Company’s auditors and another outside accounting firm, the Company applied ASC 845-10-30-1, holding that fair value of the services or licenses it would receive in each transaction was more clearly evident than the fair value of the asset surrendered.  This methodology was approved by Company’s auditors and another outside accounting firm; this is the correct methodology, and it was the methodology used by the Company.
	Under ASC 845, fair value in a license-for-services or license-for-license contract in which the cost of the asset being surrendered is not determinable can rely on the fair value of the asset received if it is determinable. The subsequent licenses for services or licenses transactions, as such, might have in the alternative considered the fair value of the services or licenses being provided by the counterparties. However, the Company has now determined following its Internal Review that in applying this methodology it did not have sufficient support to establish the value of the services or licenses provided under the subsequent license-for-services or license-for-license transactions, did not adequately track the value provided by the various counterparties, and did not have sufficient support to establish such services were actually provided as per the terms of the contracts.
	The Company recorded these revenues as “non-monetary” transactions, and the actual cash position of the Company is unaffected by this restatement.
	The restatement also reflects that the Company discovered following its Internal Review errors associated with the timing of revenues recognized under certain contracts in terms of the percentage of completion methodology.  In such cases, the Company has now learned that it did not maintain sufficient documentation to measure the production activities necessary for such computation.
	Finally, the Company discovered, following its Internal Review, errors which impacted revenues recognized where collection of the sales price was not reasonably assured.
	None of the adjustments necessary to correct the errors impacted net cash used in operating activities or the Company’s cash balance.
	Following its Internal Review, the Company has determined that these errors resulted from material weakness in internal control over financial reporting as discussed under Part 1, Item 4.  In particular, the Company concluded that there was a misapplication of relevant accounting guidance and the absence of documentation to support transactions including the failure to trace the delivery of services. The following tables present the impact of the corrections on the previously reported unaudited quarterly financial information. The “As Reported” column in the tables below reflects balances previously reported by the Company in its quarterly report on Form 10-Q. The “Revisions” column shows the impact of adjustments made by the Company to reflect changes in presentation retrospectively as follows:
	AUDIOEYE, INC.
	CONSOLIDATED BALANCE SHEETS-RESTATED
	(UNAUDITED)
		As Reported			Revisions		Restated
		March 31, 2014					March 31, 2014
	Current Assets
	Cash	$	492,718				$	492,718
	Accounts receivable, net	1,295,051			(75,913	)   (a)	1,219,138
	Related party receivables	83,375					83,375
	Prepaid assets& security deposits	49,643					49,643
	Total Current Assets	1,920,787			(75,913	)	1,844,874
	Property and equipment, net	3,048					3,048
	Intangible assets, net	3,830,823			(674,376	)   (b)	3,156,447
	Goodwill	700,528					700,528
	Total Assets	$	6,455,186		(750,289	)	$	5,704,897
	LIABILITIES AND STOCKHOLDERS’ DEFICIT
	Current Liabilities
	Accounts payable and accrued expenses	$	1,275,184				$	1,275,184
	Billings in excess of costs	—			11,321	(c)	11,321
	Notes and loans payable-current	24,000					24,000
	Related party payable	87,000					87,000
	Related party loans	35,000					35,000
	Total Current Liabilities	1,421,184			11,321		1,432,505
	Long Term Liabilities
	Notes and loans payable-long term	69,800					69,800
	Total Long Term Liabilities	69,800					69,800
	Total Liabilities	1,490,984			11,321		1,502,305
	STOCKHOLDERS’ EQUITY
	Preferred stock	—					—
	Common stock	554					554
	Treasury stock	(623,000		)			(623,000		)
	Additional paid in capital	14,274,875					14,274,875
	Accumulated deficit	(8,688,227		)	(761,610	)	(9,449,837		)
	Total Stockholders’ Deficit	4,964,202			(761,610	)	4,202,592
	TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	6,455,186		(750,289	)	$	5,704,897
	(a)     Revenues associated with collectability not reasonably assured
	(b)     Revenues associated with non-cash transactions
	(c)     Revenues associated with the timing of recognition under certain percentage of completion contracts
	AUDIOEYE, INC.
	CONSOLIDATED STATEMENTS OF OPERATIONS-RESTATED
	(UNAUDITED)
		As Reported			Revisions			Restated
		Three Months						Three Months
		Ended						ended
		March 31, 2014						March 31, 2014
	Revenue	$	1,029,761		(987,234	)   (a),(b),(c)		$	42,527
	Revenue from related party	3,125						3,125
	Total revenues	1,032,886			(987,234	)		45,652
	Cost of revenues	41,153						41,153
	Gross profit	991,733			(987,234	)		4,499
	Operating expenses:
	Selling & marketing	495,383			(225,000	)   (b)		270,383
	Research & development	130,624						130,624
	General and administrative expenses	1,667,600						1,667,600
	Amortization & depreciation	99,897			(624	)   (b)		99,273
Total operating expenses	2,393,504			(225,624	)		2,167,880
Operating income (loss)	(1,401,771		)	(761,610	)		(2,163,381		)
Other income (expense)
Unrealized gain (loss) on marketable securities	—						—
Interest expense	(6,983		)				(6,983		)
Total other income (expense)	(6,983		)				(6,983		)
Net (loss)	$	(1,408,754	)	(761,610	)		$	(2,170,364	)
Net (loss) per common share - basic and diluted	$	(0.03	)	(0.01	)		$	(0.04	)
Weighted average common shares outstanding - basic and diluted	54,215,367						54,215,367
(a)     Revenues associated with collectability not reasonably assured
(b)     Revenues associated with non-cash transactions
(c)     Revenues associated with the timing of recognition under certain percentage of completion contracts
AUDIOEYE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS-RESTATED
(UNAUDITED)
	As Reported			Revisions			Restated
	Three Months						Three Months
	Ended						Ended
	March 31,						March 31, 2014
	2014
Cash Flows from Operating Activities:
Net (loss)	$	(1,408,754	)	(761,610	)   (a),(b),(c)		$	(2,170,364	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	99,897			(624	)   (b)		99,273
Stock, option and warrant expense	849,148						849,148
Unrealized (gain) loss on investments	—						—
Amortization of debt discount	1,155						1,155
Changes in operating assets and liabilities:
Accounts receivable	(725,754		)	75,913	(a)		(649,841		)
Related party receivable	(1,125		)				(1,125		)
Prepaid & other assets	(49,643		)				(49,643		)
Accounts payable and accruals	116,153			675,000	(b)		791,153
Billings in excess of costs	—			11,321	(c)		11,321
Deferred revenue	—						—
Related party payables	(156,424		)				(156,424		)
Net cash (used in) operating activities	(1,275,347		)				(1,275,347		)
Cash Flows from Investing Activities:
Cash paid for intangible assets	(113,476		)				(113,476		)
Net cash (used in) by investing activities	(113,476		)				(113,476		)
Cash Flows from Financing Activities:
Repayment of note payable	(160,000		)				(160,000		)
Issuance of common stock for cash	181,537						181,537
Issuance of equity for cash exercise of options and warrants	13,000						13,000
Proceeds from third party loans	—						—
Net cash provided by financing activities	34,537						34,537
Increase (decrease) in cash	(1,354,286		)				(1,354,286		)
Cash - beginning of period	1,847,004						1,847,004
Cash - end of period	$	492,718					$	492,718
NON-CASH FINANCING ACTIVITIES
Common stock issued for conversion of debt	$	—					$	—
Warrants issued for related party loans	—						—
Common stock issued to CMGO for debt repayment	—						—
Patents capitalized in accounts payable	—						—
Accounts payable converted into debt	—						—
Intangible assets purchased with accounts payable	742,500			(742,500	)   (b)		—
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	3,658					$	3,658
Income taxes paid	$	—					$	—
(a)     Revenues associated with collectability not reasonably assured
(b)     Revenues associated with non-cash transactions
(c)     Revenues associated with the timing of recognition under certain percentage of completion contracts

RELATED_PARTY_TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2014
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 3:                                             RELATED PARTY TRANSACTIONS
	As of March 31, 2014 and December 31, 2013, related party loans totaled $35,000 and $35,000, respectively.
	As of March 31, 2014 and December 31, 2013, there were related party payables of $87,000 and $243,424, respectively, for services performed by related parties. During the three months ended March 31, 2014, the Company repaid $156,424 to related parties for services, payroll and reimbursable expenses.
	As of March 31, 2014 and December 31, 2013, there were outstanding receivables of $83,375 and $82,250, respectively, for services performed for related parties.
	For the three months ended March 31, 2014 and 2013, there were revenues earned of $3,125 and $1,125, respectively, for services performed for related parties.

NOTES_PAYABLE

NOTES PAYABLE	3 Months Ended
	Mar. 31, 2014
NOTES PAYABLE
NOTES PAYABLE	NOTE 4:                                             NOTES PAYABLE
	As of March 31, 2014 and December 31, 2013, the Company had the current and long term notes payable of $24,000 and $172,845 and $69,800 and $79,800, respectively as shown in the table below.
	NOTES AND LOANS PAYABLE	March 31, 2014		December 31, 2013
	Short Term
	Maryland TEDCO Note	$	24,000	$	24,000
	Note Payable (net of $0 and $1,155 discount, respectively)	—		148,845
	Total	$	24,000	$	172,845
	Long Term
	Maryland TEDCO Note	$	69,800	$	79,800
	Total	$	69,800	$	79,800
	As of December 31, 2012, the Company had an outstanding loan to a third party in the amount of $74,900, which was originally issued during 2006 as part of an investment agreement.  The loan was unsecured and bore interest at 25% per year for four years. The Company had accrued interest of $74,900, which was included in accounts payable and accrued expenses on the balance sheet.  The note was in default until October 24, 2011, at which time the Company entered into a Termination and Release Agreement (“Release”) with the noteholder.  The terms of the Release, among other things, terminated the Investment Agreement between the parties, and required the Company to issue a Promissory Note to the noteholder in the combined amount of principal and accrued interest owed to date, for a total principal amount of $149,800 (the “Maryland TEDCO Note”).  The Maryland TEDCO Note is interest free, and is payable in monthly installments of $2,000 beginning November 1, 2011.  As of March 31, 2014 and December 31, 2013 the principal amount owing was $93,800 and $103,800, respectively, of which $24,000 and $24,000, respectively, has been recorded as the current portion of the note, and $69,800 and $79,800, respectively, as the long-term portion of the note, respectively.
	On August 3, 2013, the Company borrowed $150,000 with a coupon rate of 10%, due on September 10, 2013 with a warrant to purchase 20,000 common shares, that vested immediately with a strike price of $0.50. The warrant was valued at $6,930 on August 3, 2013 using a closing price that day of $0.47, a strike price of $0.50, term of 5 years, volatility of 100%, dividends of 0%, and a discount rate of 1.36%. The value of the warrant of $6,930 is reflected as a discount to the note for a net amount of $143,070. For the year ended December 31, 2013, interest was accrued in the amount of $2,384 and $5,755 was recognized as amortization expense. During the quarter ending March 31, 2014, the note principal of $150,000 and interest of $3,658 was paid in full and $1,155 was recognized as amortization expenses.

STOCKHOLDERS_EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2014
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE 5:                                             STOCKHOLDERS’ EQUITY
	As of March 31, 2014 and December 31, 2013, the Company had 55,399,839 and 53,239,369 shares of common stock issued and outstanding, respectively.
	On January 30, 2014, the Company sold an aggregate of 666,667 units to two accredited investors for gross proceeds of $200,000 in the second closing of a private placement (the “Second Private Placement”). Placement fees were paid and the company received net proceeds of $181,537. The units in the Second Private Placement consisted of 666,667 shares of the Company’s common stock and warrants to purchase an additional 666,667 shares of the Company’s common stock.  The warrants in the Second Private Placement have a term of five years and an exercise price of $0.40 per share.
	On February 3, 2014, the Company issued 44,307 shares of common stock valued at $13,292 and a five-year warrant to purchase 44,307 shares of common stock with a strike price of $0.40, volatility of 100% and a risk free rate of 1.44% and a fair value of $9,103, which was completely expensed in the current period. The warrant was issued to compensate for consulting services provided by a third-party. The shares were valued at the market price of the respective date of issuance.
	On March 27, 2014, the Company filed a Certificate of Amendment to the Certificate of Incorporation increasing the authorized number of shares of Company common stock to 250,000,000 from 100,000,000.
	On March 28, 2014, the Company issued 49,496 shares of common stock pursuant to the cashless exercise of 100,000 options.
	From January 1, 2014 through March 31, 2014, the Company also issued 100,000 shares of common stock for services for an expense of $28,500 with no future period amortization and 1,300,000 shares of common stock pursuant to exercise of warrants for total proceeds of $13,000. The shares were valued at the market price of the respective date of issuance.

OPTIONS

OPTIONS	3 Months Ended
	Mar. 31, 2014
OPTIONS.
OPTIONS	NOTE 6:                                             OPTIONS
	As of March 31, 2014 and December 31, 2013, the Company has 8,712,350 and 4,485,250 options issued and outstanding, respectively.
		Number of	Wtd Avg.		Wtd Avg.	Intrinsic
		Options	Exercise Price		Remaining	Value
					Term
	Outstanding at December 31, 2013	4,485,250	$	0.38	3.96	$	99,070
	Granted	4,327,100	0.43		5.17	—
	Less Exercised	100,000	0.25		—	—
	Outstanding at March 31, 2014	8,712,350	$	0.41	4.31	$	489,225
	The options were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 2.67 to 2.88 years, expected volatility of 100%, risk free interest rate of 1.54% to 1.76%, and expected dividend yield of 0%.
	On January 27, 2014, the Company awarded 1,500,000 options, one third of which vested immediately, one third upon the Company reporting a minimum of $10 million in annualized revenues by the 2nd anniversary and one third upon the Company reporting a minimum of $20 million in annualized revenues by the 3rd anniversary from the grant date, with an exercise price of $0.40 per share and an expiration date of January 27, 2019. The fair value on the grant date of the options was $274,463 and the option expense for three months ended March 31, 2014 was determined to be $91,488.
	On February 17, 2014, the Company awarded 55,000 options, which vest over three years, with an exercise price of $0.305 per share and an expiration date of February 17, 2019. The fair value on the grant date of the options was $9,752 and the option expense for three months ended March 31, 2014 was determined to be $582.
	On March 3, 2014, the Company awarded 250,000 options, of which 20% vested immediately and 20% vest every 90 days thereafter, with an exercise price of $0.40 per share and an expiration date of March 3, 2019. The fair value on the grant date of the options was $37,805 and the option expense for three months ended March 31, 2014 was determined to be $7,561.
	On March 24, 2014, the Company awarded 1,522,100 options, which vest over three years, with the exception of 200,000 options issued to one individual that vested immediately upon grant. The options have an exercise price of $0.45 per share and an expiration date of March 24, 2019. The value on the grant date of the options was $675,775 and the option expense for three months ended March 31, 2014 was determined to be $60,501.
	On March 28, 2014, 100,000 options were exercised in a cashless manner and 49,496 shares of common stock were issued.
	For the three months ended March 31, 2014 expense amortized for options issued prior to January 1, 2014 was $146,002.
	For the three months ended March 31, 2014 and 2013, stock compensation expense related to the options totaled $306,134 and $86,006, respectively. For the three months ended March 31, 2014 and 2013, stock compensation expense related to the options, warrants and performance stock units totaled $807,356 and $86,006, respectively. The total stock compensation expense related to the options, warrants and performance stock units to be amortized through March 2017 is $2,402,590 as of March 31, 2014.

WARRANTS

WARRANTS	3 Months Ended
	Mar. 31, 2014
WARRANTS
WARRANTS	NOTE 7:                                             WARRANTS
	Below is a table summarizing the Company’s outstanding warrants as of March 31, 2014 and December 31, 2013:
		Number of	Wtd Avg.		Wtd Avg.	Intrinsic
		Warrants	Exercise Price		Remaining	Value
					Term
	Outstanding at December 31, 2013	18,770,591	$	0.35	4.64	—
	Granted	2,014,308	0.4		4.16	—
	Less Exercised	1,300,000	0.01		—	—
	Outstanding at March 31, 2014	19,484,899	$	0.38	4.32	$	1,918,848
	The warrants were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 3.17 years, expected volatility of 100%, risk free interest rate of 1.55% to 1.76%, and expected dividend yield of 0%.
	On November 16, 2013, the Company issued warrants to purchase 1,300,000 of common stock which vested immediately and have an exercise price of $0.01 per share and expire on December 13, 2018. The fair value on the grant date of the options was $331,287 and the expense for year ended December 31, 2013 was determined to be $331,286. As of March 31, 2014, these warrants have been exercised in their entirety.
	On January 27, 2014, the Company issued five-year fully-vested warrants to purchase 250,000 shares of the Company’s common stock with an exercise price of $0.40 per share. The fair value on the grant date of the warrants was $49,469 and the expense for the three months ended March 31, 2014 was determined to be $49,469. As of March 31, 2014, these warrants have not been exercised.
	On January 30, 2014, the Company sold an aggregate of 666,667 units to two accredited investors for gross proceeds of $200,000 in the Second Private Placement.  The units in the Second Private Placement consisted of 666,667 shares of the Company’s common stock and warrants to purchase an additional 666,667 shares of the Company’s common stock, as well as 53,334 placement agent warrants.  The warrants in the Second Private Placement have a term of five years, an exercise price of $0.40 per share and a fair value determined to be $136,707. As of March 31, 2014, these warrants have not been exercised.
	On February 3, 2014, the Company issued 44,307 shares of common stock and five-year fully-vested warrants to purchase 44,307 shares of common stock with an exercise price of $0.40 per share for payment for services. The fair value on the grant date of the warrants was $9,103 and the expense for the three months ended March 31, 2014 was determined to be $9,103. As of March 31, 2014, these warrants have not been exercised.
	On March 24, 2014, the Company issued warrants to purchase 1,000,000 shares of common stock. The warrants vest as follows: one warrant share for every $10 of gross sales by the Company during the 12-month period immediately following the date of grant to customers introduced by an affiliate of the warrant holder. The warrants have an exercise price of $0.40 per share and an expiration date of March 24, 2019. The fair value on the grant date of the warrants was $346,997 and the warrant expense for March 31, 2014 was determined to be $346,997. As of March 31, 2014, these warrants have not been exercised.
	For the three months ended March 31, 2014 and 2013, the Company has incurred warrant-based expense of $405,569 and $0, respectively. For the three months ended March 31, 2014 and 2013, stock compensation expense related to the options, warrants and performance stock units totaled $807,356  and $86,006, respectively. The total stock compensation expense related to the options, warrants and performance stock units to be amortized through March 2017 is $2,402,590 as of March 31, 2014.

PERFORMANCE_SHARE_UNITS

PERFORMANCE SHARE UNITS	3 Months Ended
	Mar. 31, 2014
PERFORMANCE SHARE UNITS
PERFORMANCE SHARE UNITS	NOTE 8:                                             PERFORMANCE SHARE UNITS
	On January 27, 2014, the Company entered into a Performance Share Unit Agreement under the AudioEye, Inc. 2013 Incentive Compensation Plan with Paul Arena, the Company’s Executive Chairman. Mr. Arena was granted an award of up to an aggregate of 3,000,000 Performance Share Units (“PSUs”).  Each PSU represents the right to receive one share of the Company’s common stock.  The number of PSUs for a performance period will be determined by the level of achievement of performance goals in accordance with the terms and provisions of the Performance Share Unit Agreement.
	Below is a table summarizing the Company’s outstanding performance share units as of March 31, 2014 and December 31, 2013:
		Number of	Wtd Avg.		Weighted-Average
		PSUs	Grant Price		Remaining
					Term
	Outstanding at December 31, 2013	1,000,000	$	0.45	2
	Granted	3,000,000	0.33		2.67
	Outstanding at March 31, 2014	4,000,000	$	0.36	2.5
	For the three months ended March 31, 2014 and 2013, the Company has incurred performance share unit-based expense of $95,653 and $0, respectively. For the three months ended March 31, 2014 and 2013, stock compensation expense related to the options, warrants and performance stock units totaled $807,356 and $86,006, respectively. The total stock compensation expense related to the options, warrants and performance stock units to be amortized through March 2017 is $2,402,590  as of March 31, 2014.

INTANGIBLE_ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2014
INTANGIBLE ASSETS
INTANGIBLE ASSETS	NOTE 9:                                             INTANGIBLE ASSETS
	As of March 31, 2014, patents, technology and other intangibles with contractual terms were generally amortized over their estimated useful lives of five or ten years. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.
	Prior to any impairment adjustment, intangible assets consisted of the following:
		Restated			December 31,
		March 31,
		2014			2013
	Patents	$	3,564,319		$	3,563,343
	Software Development Costs	180,000			—
	Licensing	—			—
	Accumulated Amortization	(587,872		)	(489,398		)
	Intangible Assets, Net	$	3,156,447		$	3,073,945
	Software development costs and licensing intangible assets both have an estimated useful life of 3 years. Software development costs are incurred during the building of the Company’s Internet platform. Licensing costs are those costs incurred to use processes and technologies not developed by the Company. Both software development and licensing costs are subject to annual impairment testing. During the three months ended March 31, 2014, $180,000 was capitalized as software development cost.
	Amortization expense totaled $98,474 and $88,794 for the three months ended March 31, 2014 and 2013, respectively.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2014
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 10:                                      SUBSEQUENT EVENTS
	From April 1, 2014 through May 14, 2014, the Company has issued 100,000 shares of common stock for services for an expense of $49,500 with no future period amortization and 17,870 shares of common stock pursuant to cashless exercise of warrants.

ORGANIZATION_AND_BASIS_OF_PRES1

ORGANIZATION AND BASIS OF PRESENTATION (Policies)	3 Months Ended
	Mar. 31, 2014
ORGANIZATION AND BASIS OF PRESENTATION
Reclassification	Reclassification
	Certain prior year amounts have been reclassified to conform to the current year presentation.
Revenue Recognition	Revenue Recognition
	Revenue is recognized when all applicable recognition criteria have been met, which generally include: (a) persuasive evidence of an existing arrangement; (b) a fixed or determinable price; (c) delivery has occurred or service has been rendered; and (d) the collectability of the sales price is reasonably assured. For software and technology development contracts where applicable, the Company recognizes revenues on a percentage of completion method based upon several factors including but not limited to: (a) an estimate of total hours and milestones to complete; (b) the total hours completed; (c) the delivery of services rendered; (d) the change in estimates; and (e) the collectability of the contract.
	Licensing revenues for intangible assets, including intellectual property such as patents and trademarks, are recognized when all applicable criteria have been met: (a) persuasive evidence of an existing arrangement; (b) a fixed or determinable price; (c) the delivery has occurred or service has been rendered; and (d) the collectability of the sales price is reasonably assured. Licensing revenues are recognized over the term of the contract or, in the case of a perpetual license, revenues are recognized in the period the criteria have been met. In transactions where the Company engages in a non-cash exchange, the Company follows ASC 845 and any potential revenue is recorded as other income.

RESTATEMENT_OF_PREVIOUSLY_ISSU1

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables)	3 Months Ended
	Mar. 31, 2014
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
Schedule of error corrections and prior period adjustments
	AUDIOEYE, INC.
	CONSOLIDATED BALANCE SHEETS-RESTATED
	(UNAUDITED)
		As Reported			Revisions		Restated
		March 31, 2014					March 31, 2014
	Current Assets
	Cash	$	492,718				$	492,718
	Accounts receivable, net	1,295,051			(75,913	)   (a)	1,219,138
	Related party receivables	83,375					83,375
	Prepaid assets& security deposits	49,643					49,643
	Total Current Assets	1,920,787			(75,913	)	1,844,874
	Property and equipment, net	3,048					3,048
	Intangible assets, net	3,830,823			(674,376	)   (b)	3,156,447
	Goodwill	700,528					700,528
	Total Assets	$	6,455,186		(750,289	)	$	5,704,897
	LIABILITIES AND STOCKHOLDERS’ DEFICIT
	Current Liabilities
	Accounts payable and accrued expenses	$	1,275,184				$	1,275,184
	Billings in excess of costs	—			11,321	(c)	11,321
	Notes and loans payable-current	24,000					24,000
	Related party payable	87,000					87,000
	Related party loans	35,000					35,000
	Total Current Liabilities	1,421,184			11,321		1,432,505
	Long Term Liabilities
	Notes and loans payable-long term	69,800					69,800
	Total Long Term Liabilities	69,800					69,800
	Total Liabilities	1,490,984			11,321		1,502,305
	STOCKHOLDERS’ EQUITY
	Preferred stock	—					—
	Common stock	554					554
	Treasury stock	(623,000		)			(623,000		)
	Additional paid in capital	14,274,875					14,274,875
	Accumulated deficit	(8,688,227		)	(761,610	)	(9,449,837		)
	Total Stockholders’ Deficit	4,964,202			(761,610	)	4,202,592
	TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	6,455,186		(750,289	)	$	5,704,897
	(a)     Revenues associated with collectability not reasonably assured
	(b)     Revenues associated with non-cash transactions
	(c)     Revenues associated with the timing of recognition under certain percentage of completion contracts
	AUDIOEYE, INC.
	CONSOLIDATED STATEMENTS OF OPERATIONS-RESTATED
	(UNAUDITED)
		As Reported			Revisions			Restated
		Three Months						Three Months
		Ended						ended
		March 31, 2014						March 31, 2014
	Revenue	$	1,029,761		(987,234	)   (a),(b),(c)		$	42,527
	Revenue from related party	3,125						3,125
	Total revenues	1,032,886			(987,234	)		45,652
	Cost of revenues	41,153						41,153
	Gross profit	991,733			(987,234	)		4,499
	Operating expenses:
	Selling & marketing	495,383			(225,000	)   (b)		270,383
	Research & development	130,624						130,624
	General and administrative expenses	1,667,600						1,667,600
	Amortization & depreciation	99,897			(624	)   (b)		99,273
	Total operating expenses	2,393,504			(225,624	)		2,167,880
	Operating income (loss)	(1,401,771		)	(761,610	)		(2,163,381		)
	Other income (expense)
	Unrealized gain (loss) on marketable securities	—						—
	Interest expense	(6,983		)				(6,983		)
	Total other income (expense)	(6,983		)				(6,983		)
	Net (loss)	$	(1,408,754	)	(761,610	)		$	(2,170,364	)
	Net (loss) per common share - basic and diluted	$	(0.03	)	(0.01	)		$	(0.04	)
Weighted average common shares outstanding - basic and diluted	54,215,367						54,215,367
(a)     Revenues associated with collectability not reasonably assured
(b)     Revenues associated with non-cash transactions
(c)     Revenues associated with the timing of recognition under certain percentage of completion contracts
AUDIOEYE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS-RESTATED
(UNAUDITED)
	As Reported			Revisions			Restated
	Three Months						Three Months
	Ended						Ended
	March 31,						March 31, 2014
	2014
Cash Flows from Operating Activities:
Net (loss)	$	(1,408,754	)	(761,610	)   (a),(b),(c)		$	(2,170,364	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	99,897			(624	)   (b)		99,273
Stock, option and warrant expense	849,148						849,148
Unrealized (gain) loss on investments	—						—
Amortization of debt discount	1,155						1,155
Changes in operating assets and liabilities:
Accounts receivable	(725,754		)	75,913	(a)		(649,841		)
Related party receivable	(1,125		)				(1,125		)
Prepaid & other assets	(49,643		)				(49,643		)
Accounts payable and accruals	116,153			675,000	(b)		791,153
Billings in excess of costs	—			11,321	(c)		11,321
Deferred revenue	—						—
Related party payables	(156,424		)				(156,424		)
Net cash (used in) operating activities	(1,275,347		)				(1,275,347		)
Cash Flows from Investing Activities:
Cash paid for intangible assets	(113,476		)				(113,476		)
Net cash (used in) by investing activities	(113,476		)				(113,476		)
Cash Flows from Financing Activities:
Repayment of note payable	(160,000		)				(160,000		)
Issuance of common stock for cash	181,537						181,537
Issuance of equity for cash exercise of options and warrants	13,000						13,000
Proceeds from third party loans	—						—
Net cash provided by financing activities	34,537						34,537
Increase (decrease) in cash	(1,354,286		)				(1,354,286		)
Cash - beginning of period	1,847,004						1,847,004
Cash - end of period	$	492,718					$	492,718
NON-CASH FINANCING ACTIVITIES
Common stock issued for conversion of debt	$	—					$	—
Warrants issued for related party loans	—						—
Common stock issued to CMGO for debt repayment	—						—
Patents capitalized in accounts payable	—						—
Accounts payable converted into debt	—						—
Intangible assets purchased with accounts payable	742,500			(742,500	)   (b)		—
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	3,658					$	3,658
Income taxes paid	$	—					$	—
(a)     Revenues associated with collectability not reasonably assured
(b)     Revenues associated with non-cash transactions
(c)     Revenues associated with the timing of recognition under certain percentage of completion contracts

NOTES_PAYABLE_Tables

NOTES PAYABLE (Tables)	3 Months Ended
	Mar. 31, 2014
NOTES PAYABLE
Schedule of current and long term notes payable
	NOTES AND LOANS PAYABLE	March 31, 2014		December 31, 2013
	Short Term
	Maryland TEDCO Note	$	24,000	$	24,000
	Note Payable (net of $0 and $1,155 discount, respectively)	—		148,845
	Total	$	24,000	$	172,845
	Long Term
	Maryland TEDCO Note	$	69,800	$	79,800
	Total	$	69,800	$	79,800

OPTIONS_Tables

OPTIONS (Tables)	3 Months Ended
	Mar. 31, 2014
OPTIONS.
Summary of the Company's outstanding options
		Number of	Wtd Avg.		Wtd Avg.	Intrinsic
		Options	Exercise Price		Remaining	Value
					Term
	Outstanding at December 31, 2013	4,485,250	$	0.38	3.96	$	99,070
	Granted	4,327,100	0.43		5.17	—
	Less Exercised	100,000	0.25		—	—
	Outstanding at March 31, 2014	8,712,350	$	0.41	4.31	$	489,225

WARRANTS_Tables

WARRANTS (Tables)	3 Months Ended
	Mar. 31, 2014
WARRANTS
Summary of the Company's outstanding warrants
		Number of	Wtd Avg.		Wtd Avg.	Intrinsic
		Warrants	Exercise Price		Remaining	Value
					Term
	Outstanding at December 31, 2013	18,770,591	$	0.35	4.64	—
	Granted	2,014,308	0.4		4.16	—
	Less Exercised	1,300,000	0.01		—	—
	Outstanding at March 31, 2014	19,484,899	$	0.38	4.32	$	1,918,848

PERFORMANCE_SHARE_UNITS_Tables

PERFORMANCE SHARE UNITS (Tables)	3 Months Ended
	Mar. 31, 2014
PERFORMANCE SHARE UNITS
Summary of outstanding performance share units
		Number of	Wtd Avg.		Weighted-Average
		PSUs	Grant Price		Remaining
					Term
	Outstanding at December 31, 2013	1,000,000	$	0.45	2
	Granted	3,000,000	0.33		2.67
	Outstanding at March 31, 2014	4,000,000	$	0.36	2.5

INTANGIBLE_ASSETS_Tables

INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2014
INTANGIBLE ASSETS
Schedule of intangible assets
		Restated			December 31,
		March 31,
		2014			2013
	Patents	$	3,564,319		$	3,563,343
	Software Development Costs	180,000			—
	Licensing	—			—
	Accumulated Amortization	(587,872		)	(489,398		)
	Intangible Assets, Net	$	3,156,447		$	3,073,945

RESTATEMENT_OF_PREVIOUSLY_ISSU2

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Current Assets
Cash	$492,718	$1,847,004	$93,420	$11,710
Accounts receivable, net	1,219,138	569,297
Related party receivables	83,375	82,250
Prepaid assets and security deposits	49,643
Total Current Assets	1,844,874	2,498,551
Property and equipment, net	3,048	3,847
Intangible assets, net	3,156,447	3,073,945
Goodwill	700,528	700,528
Total Assets	5,704,897	6,276,871
Current Liabilities
Accounts payable and accrued expenses	1,275,184	416,531
Billings in excess of costs	11,321
Notes and loans payable-current	24,000	172,845
Related party payable	87,000	243,424
Related party loans	35,000	35,000
Total Current Liabilities	1,432,505	867,800
Long Term Liabilities
Notes and loans payable-long term	69,800	79,800
Total Long Term Liabilities	69,800	79,800
Total Liabilities	1,502,305	947,600
STOCKHOLDERS' EQUITY
Preferred stock
Common stock	554	532
Treasury stock	-623,000	-623,000
Additional paid in capital	14,274,875	13,231,212
Accumulated deficit	-9,449,837	-7,279,473
Total Stockholders' Deficit	4,202,592	5,329,271
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	5,704,897	6,276,871
As Reported
Current Assets
Cash	492,718	1,847,004
Accounts receivable, net	1,295,051
Related party receivables	83,375
Prepaid assets and security deposits	49,643
Total Current Assets	1,920,787
Property and equipment, net	3,048
Intangible assets, net	3,830,823
Goodwill	700,528
Total Assets	6,455,186
Current Liabilities
Accounts payable and accrued expenses	1,275,184
Notes and loans payable-current	24,000
Related party payable	87,000
Related party loans	35,000
Total Current Liabilities	1,421,184
Long Term Liabilities
Notes and loans payable-long term	69,800
Total Long Term Liabilities	69,800
Total Liabilities	1,490,984
STOCKHOLDERS' EQUITY
Common stock	554
Treasury stock	-623,000
Additional paid in capital	14,274,875
Accumulated deficit	-8,688,227
Total Stockholders' Deficit	4,964,202
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	6,455,186
Cumulative Revisions | Error in revenue recognition and non-monetary intellectual property portfolio
Current Assets
Accounts receivable, net	-75,913
Total Current Assets	-75,913
Intangible assets, net	-674,376
Total Assets	-750,289
Current Liabilities
Billings in excess of costs	11,321
Total Current Liabilities	11,321
Long Term Liabilities
Total Liabilities	11,321
STOCKHOLDERS' EQUITY
Accumulated deficit	-761,610
Total Stockholders' Deficit	-761,610
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	($750,289)

RESTATEMENT_OF_PREVIOUSLY_ISSU3

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenue	$42,527	$223,172
Revenue from related party	3,125	1,125
Total revenues	45,652	224,297
Cost of revenues	41,153	45,023
Gross profit	4,499	179,274
Operating expenses:
Selling and marketing	270,383	7,750
Research and development	130,624
General and administrative expenses	1,667,600	444,050
Amortization and depreciation	99,273	89,593
Total operating expenses	2,167,880	541,393
Operating income (loss)	-2,163,381	-362,119
Other income (expense)
Unrealized gain (loss) on marketable securities		-9,000
Interest expense	-6,983	-24,967
Total other income (expense)	-6,983	-33,967
Net (loss)	-2,170,364	-396,086
Net (loss) per common share - basic and diluted (in dollars per share)	($0.04)	($0.01)
Weighted average common shares outstanding - basic and diluted (in shares)	54,215,367	36,965,057
As Reported
Revenue	1,029,761
Revenue from related party	3,125
Total revenues	1,032,886
Cost of revenues	41,153
Gross profit	991,733
Operating expenses:
Selling and marketing	495,383
Research and development	130,624
General and administrative expenses	1,667,600
Amortization and depreciation	99,897
Total operating expenses	2,393,504
Operating income (loss)	-1,401,771
Other income (expense)
Interest expense	-6,983
Total other income (expense)	-6,983
Net (loss)	-1,408,754
Net (loss) per common share - basic and diluted (in dollars per share)	($0.03)
Weighted average common shares outstanding - basic and diluted (in shares)	54,215,367
Cumulative Revisions | Error in revenue recognition and non-monetary intellectual property portfolio
Revenue	-987,234
Total revenues	-987,234
Gross profit	-987,234
Operating expenses:
Selling and marketing	-225,000
Amortization and depreciation	-624
Total operating expenses	-225,624
Operating income (loss)	-761,610
Other income (expense)
Net (loss)	($761,610)
Net (loss) per common share - basic and diluted (in dollars per share)	($0.01)

RESTATEMENT_OF_PREVIOUSLY_ISSU4

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash Flows from Operating Activities:
Net (loss)	($2,170,364)	($396,086)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	99,273	89,593
Stock, option and warrant expense	849,148	169,756
Unrealized (gain) loss on investments		9,000
Amortization of debt discount	1,155
Changes in operating assets and liabilities:
Accounts receivable	-649,841	3,256
Related party receivable	-1,125
Prepaid & other assets	-49,643
Accounts payable and accruals	791,153	70,071
Billings in excess of costs	11,321
Deferred revenue		-10,380
Related party payables	-156,424
Net cash (used in) operating activities	-1,275,347	-64,790
Cash Flows from Investing Activities:
Cash paid for intangible assets	-113,476
Net cash (used in) by investing activities	-113,476
Cash Flows from Financing Activities:
Repayment of note payable	-160,000	-206,000
Issuance of common stock for cash	181,537
Issuance of equity for cash exercise of options and warrants	13,000
Proceeds from third party loans		352,500
Net cash provided by financing activities	34,537	146,500
Increase (decrease) in cash	-1,354,286	81,710
Cash - beginning of period	1,847,004	11,710
Cash - end of period	492,718	93,420
NON-CASH FINANCING ACTIVITIES
Common stock issued for conversion of debt		1,692,932
Warrants issued for related party loans		829,418
Common stock issued to CMGO for debt repayment		241,339
Patents capitalized in accounts payable		1,837
Accounts payable converted into debt		30,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	3,658	24,967
As Reported
Cash Flows from Operating Activities:
Net (loss)	-1,408,754
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	99,897
Stock, option and warrant expense	849,148
Amortization of debt discount	1,155
Changes in operating assets and liabilities:
Accounts receivable	-725,754
Related party receivable	-1,125
Prepaid & other assets	-49,643
Accounts payable and accruals	116,153
Related party payables	-156,424
Net cash (used in) operating activities	-1,275,347
Cash Flows from Investing Activities:
Cash paid for intangible assets	-113,476
Net cash (used in) by investing activities	-113,476
Cash Flows from Financing Activities:
Repayment of note payable	-160,000
Issuance of common stock for cash	181,537
Issuance of equity for cash exercise of options and warrants	13,000
Net cash provided by financing activities	34,537
Increase (decrease) in cash	-1,354,286
Cash - beginning of period	1,847,004
Cash - end of period	492,718
NON-CASH FINANCING ACTIVITIES
Intangible assets purchased with accounts payable	742,500
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	3,658
Cumulative Revisions | Error in revenue recognition and non-monetary intellectual property portfolio
Cash Flows from Operating Activities:
Net (loss)	-761,610
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	-624
Changes in operating assets and liabilities:
Accounts receivable	75,913
Accounts payable and accruals	675,000
Billings in excess of costs	11,321
NON-CASH FINANCING ACTIVITIES
Intangible assets purchased with accounts payable	($742,500)

RELATED_PARTY_TRANSACTIONS_Det

RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
RELATED PARTY TRANSACTIONS
Related party loans	$35,000		$35,000
Related party payable	87,000		243,424
Payment to related party	156,424
Related party receivables	83,375		82,250
Revenue from related party	$3,125	$1,125

NOTES_PAYABLE_Details

NOTES PAYABLE (Details) (USD $)	3 Months Ended		0 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Oct. 24, 2011	Aug. 03, 2013	Dec. 31, 2013	Dec. 31, 2012
Notes Payable
Short Term	$24,000				$172,845
Long Term	69,800				79,800
Discount	0				1,155
Amortization expense	99,098	88,794
Maryland TEDCO Note
Notes Payable
Short Term	24,000				24,000
Long Term	69,800				79,800
Carrying amount of debt	93,800				103,800
Face amount of debt			149,800
Monthly payments			2,000
Note Payable
Notes Payable
Short Term					148,845
Discount	0			6,930	1,155
Carrying amount of debt				143,070
Interest rate				10.00%
Accrued interest					2,384
Face amount of debt				150,000
Warrants to purchase shares				20,000
Strike price (in dollars per share)				$0.50
Share price (in dollars per share)				$0.47
Term				5 years
Volatility (as a percent)				100.00%
Dividends (as a percent)				0.00%
Discount rate (as a percent)				1.36%
Amortization expense	1,155				5,755
Payment of accrued interest	3,658
Repayment of Principal	150,000
Loans Payable
Notes Payable
Carrying amount of debt						74,900
Interest rate						25.00%
Due date from the date of issuance						4 years
Accrued interest						$74,900

STOCKHOLDERS_EQUITY_Details

STOCKHOLDERS' EQUITY (Details) (USD $)	0 Months Ended	3 Months Ended	0 Months Ended
	Mar. 28, 2014	Mar. 31, 2014	Feb. 03, 2014	Jan. 30, 2014	Mar. 27, 2014	Dec. 31, 2013
				item
STOCKHOLDERS' EQUITY
Common Stock, shares issued	49,496	55,399,839				53,239,369
Common Stock, shares outstanding		55,399,839				53,239,369
Common stock issued for services (in shares)		100,000
Expenses related to common stock issued for service		$28,500
Stockholders' Equity
Common Stock, shares authorized		250,000,000			250,000,000	250,000,000
Common Stock, shares authorized before amendment					100,000,000
Common Stock, shares issued	49,496	55,399,839				53,239,369
Common shares for the exercise of options	100,000
Common stock issued for services (in shares)		100,000
Expenses related to common stock issued for service		28,500
Common stock issued for exercise of warrants (in shares)		1,300,000
Proceeds from exercise of warrants		13,000
Warrants granted on February 3, 2014 | Warrants
STOCKHOLDERS' EQUITY
Common stock issued for services (in shares)			44,307
Stockholders' Equity
Common stock value			13,292
Warrants to purchase shares			44,307
Term of warrant			5 years
Strike price (in dollars per share)			$0.40
Value of warrants			9,103
Common stock issued for services (in shares)			44,307
Volatility (as a percent)			100.00%
Risk-free interest rate (as a percent)			1.44%
Accredited investors
Stockholders' Equity
Units sold to accredited investors (in shares)				666,667
Number of accredited investors				2
Proceeds from sale of units to accredited investors				200,000
Units sold to accredited investors, number of common shares				666,667
Units sold to accredited investors, number of warrants				666,667
Number of shares of warrants included with the units sold				5 years
Exercise price of units (in dollars per share)				$0.40
Net proceeds from sale of units to accredited investors				$181,537

OPTIONS_Details

OPTIONS (Details) (USD $)	0 Months Ended	3 Months Ended		12 Months Ended	0 Months Ended
	Mar. 28, 2014	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Jan. 27, 2014	Feb. 17, 2014	Mar. 03, 2014	Mar. 24, 2014
Number of options:
Less Exercised (in shares)	100,000
Significant assumptions used in the valuation
Share based compensation expense		$807,356	$86,006
Common shares for the exercise of options	100,000
Common Stock, shares issued	49,496	55,399,839		53,239,369
Unamortized Share based compensation expense		2,402,590
Options
Options
Options issued and outstanding		8,712,350		4,485,250
Number of options:
Outstanding at beginning of the period (in shares)		4,485,250
Granted (in shares)		4,327,100
Less Exercised (in shares)		100,000
Outstanding at the end of the period (in shares)		8,712,350		4,485,250
Wtd Avg. Exercise Price
Outstanding at beginning of the period (in dollars per share)		$0.38
Granted (in dollars per share)		$0.43
Less Exercised (in dollars per share)		$0.25
Outstanding at end of the period (in dollars per share)		$0.41		$0.38
Wtd Avg. Remaining Term
Outstanding at beginning of the period, wtd Avg. Remaining Term		4 years 3 months 22 days		3 years 11 months 16 days
Granted, Wtd Avg. Remaining Term		5 years 2 months 1 day
Outstanding at end of the period, wtd Avg. Remaining Term		4 years 3 months 22 days		3 years 11 months 16 days
Intrinsic Value
Outstanding at beginning of the period, Intrinsic Value (in dollars)		99,070
Outstanding at end of the period, Intrinsic Value (in dollars)		489,225		99,070
Significant assumptions used in the valuation
Expected volatility (as a percent)		100.00%
Expected dividend yield (as a percent)		0.00%
Share based compensation expense		306,134	86,006
Number of options awarded		4,327,100
Exercise Price (in dollars per share)		$0.43
Common shares for the exercise of options		100,000
Options | Minimum
Significant assumptions used in the valuation
Expected term		2 years 8 months 1 day
Risk-free interest rate (as a percent)		1.54%
Options | Maximum
Significant assumptions used in the valuation
Expected term		2 years 10 months 17 days
Risk-free interest rate (as a percent)		1.76%
Options | Options issued on January 27, 2014
Number of options:
Granted (in shares)					1,500,000
Significant assumptions used in the valuation
Grant date fair value of options					274,463
Share based compensation expense		91,488
Number of options awarded					1,500,000
Exercise Price (in dollars per share)					$0.40
Options | Options issued on January 27, 2014 | Immediate vesting
Significant assumptions used in the valuation
Vesting percentage					33.33%
Options | Options issued on January 27, 2014 | Vesting upon company reporting minimum $10 million in annualized revenue by 2nd anniversary
Significant assumptions used in the valuation
Vesting percentage					33.33%
Minimum annualized revenues reported by 2nd anniversary from the grant date					10,000,000
Options | Options issued on January 27, 2014 | Vesting upon company reporting minimum $20 million in annualized revenue by 3rd anniversary
Significant assumptions used in the valuation
Vesting percentage					33.33%
Minimum annualized revenues reported by 3nd anniversary from the grant date					20,000,000
Options | Options issued on February 17, 2014
Number of options:
Granted (in shares)						55,000
Significant assumptions used in the valuation
Grant date fair value of options						9,752
Share based compensation expense		582
Number of options awarded						55,000
Exercise Price (in dollars per share)						$0.31
Vesting period						3 years
Options | Options issued on March 3, 2014
Number of options:
Granted (in shares)							250,000
Significant assumptions used in the valuation
Grant date fair value of options							37,805
Share based compensation expense		7,561
Number of options awarded							250,000
Exercise Price (in dollars per share)							$0.40
Options | Options issued on March 3, 2014 | Immediate vesting
Significant assumptions used in the valuation
Vesting percentage							20.00%
Options | Options issued on March 3, 2014 | Vesting every 90 days
Significant assumptions used in the valuation
Vesting percentage							20.00%
Options | Options issued on March 24, 2014
Number of options:
Granted (in shares)								1,522,100
Significant assumptions used in the valuation
Grant date fair value of options								675,775
Share based compensation expense		60,501
Number of options awarded								1,522,100
Exercise Price (in dollars per share)								$0.45
Vesting period								3 years
Options | Options issued on March 24, 2014 | One individual
Number of options:
Granted (in shares)								200,000
Significant assumptions used in the valuation
Number of options awarded								200,000
Options | Options issued prior to January 1, 2014
Significant assumptions used in the valuation
Share based compensation expense		$146,002

WARRANTS_Details

WARRANTS (Details) (Warrant, USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Warrant
Number of warrants
Number of shares, beginning	18,770,591
Number of shares, granted	2,014,308
Number of shares, less exercised	1,300,000
Number of shares, ending	19,484,899	18,770,591
Weighted average exercise price
Weighted average exercise price, beginning (in dollars per share)	$0.35
Weighted average exercise price, granted (in dollars per share)	$0.40
Weighted average exercise price, less exercised (in dollars per share)	$0.01
Weighted average exercise price, ending (in dollars per share)	$0.38	$0.35
"Wtd Avg. Remaining Term "
Outstanding at beginning of the period	4 years 3 months 25 days	4 years 7 months 20 days
Granted	4 years 1 month 28 days
Outstanding at end of the period	4 years 3 months 25 days	4 years 7 months 20 days
Intrinsic Value
Outstanding at end of the period	$1,918,848

WARRANTS_Details_2

WARRANTS (Details 2) (USD $)	0 Months Ended	3 Months Ended		0 Months Ended		12 Months Ended	0 Months Ended
	Mar. 28, 2014	Mar. 31, 2014	Mar. 31, 2013	Jan. 30, 2014	Nov. 16, 2013	Dec. 31, 2013	Mar. 24, 2014	Jan. 27, 2014	Feb. 03, 2014
				item
Significant assumptions used in the valuation
Stock compensation expense related to the options and warrants		$807,356	$86,006
Common stock issued for services (in shares)		100,000
Number of options exercised	100,000
Total stock compensation expense to be amortized through March 2017		2,402,590
Accredited investors
Significant assumptions used in the valuation
Grant date fair value of options				136,707
Units sold to accredited investors (in shares)				666,667
Number of accredited investors to whom the entity sold units				2
Proceeds from sale of units to accredited investors				200,000
Number of shares of common stock included with the units sold				666,667
Additional number of shares of common stock included with the units sold				666,667
Number of shares of warrants included with the units sold				666,667
Additional number of shares of common stock included with the units sold to agents				53,334
Term of warrants issued to accredited investor				5 years
Exercise price of units (in dollars per share)				$0.40
Warrants
Significant assumptions used in the valuation
Expected term		3 years 2 months 1 day
Expected volatility (as a percent)		100.00%
Expected dividend yield (as a percent)		0.00%
Stock compensation expense related to the options and warrants		405,569	0
Warrants | Warrants granted on November 16, 2013
Significant assumptions used in the valuation
Issuance of warrants (in shares)					1,300,000
Strike price (in dollars per share)					$0.01
Grant date fair value of options					331,287
Stock compensation expense related to the options and warrants						331,286
Warrants | Warrants granted on March 24, 2014
Significant assumptions used in the valuation
Strike price (in dollars per share)							$0.40
Stock compensation expense related to the options and warrants		346,997
Grant date fair value of warrants							346,997
Warrants to purchase shares							1,000,000
Number of warrants, which will vest for every specified dollars of gross sales							1
Amount of gross sales for which one warrant share will vest							10
Period immediately following the issue date during which warrants will vest for every specified dollars of gross sales							12 months
Warrants | Warrants granted on January 27, 2014
Significant assumptions used in the valuation
Strike price (in dollars per share)								$0.40
Stock compensation expense related to the options and warrants		49,469
Grant date fair value of warrants								49,469
Warrants to purchase shares								250,000
Term of warrant								5 years
Warrants | Warrants granted on February 3, 2014
Significant assumptions used in the valuation
Strike price (in dollars per share)									$0.40
Stock compensation expense related to the options and warrants		9,103
Grant date fair value of warrants									$9,103
Common stock issued for services (in shares)									44,307
Warrants to purchase shares									44,307
Term of warrant									5 years
Warrants | Minimum
Significant assumptions used in the valuation
Risk-free interest rate (as a percent)		1.55%
Warrants | Maximum
Significant assumptions used in the valuation
Risk-free interest rate (as a percent)		1.76%

PERFORMANCE_SHARE_UNITS_Detail

PERFORMANCE SHARE UNITS (Details) (USD $)	3 Months Ended		12 Months Ended	0 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Jan. 27, 2014
Weighted-Average Remaining Term
Stock compensation expense related to the options and warrants	$807,356	$86,006
Total stock compensation expense to be amortized through March 2017	2,402,590
PSUs
PERFORMANCE SHARE UNITS
Performance share unit agreement granted (in shares)	3,000,000
Number of PSUs
Number of shares, beginning	1,000,000
Granted (in shares)	3,000,000
Number of shares, ending	4,000,000		1,000,000
Wtd Avg. Grant Price
Weighted average exercise price, beginning (in dollars per share)	$0.45
Granted (in dollars per share)	$0.33
Weighted average exercise price, ending (in dollars per share)	$0.36		$0.45
Weighted-Average Remaining Term
Outstanding at the beginning of the period	2 years 6 months		2 years
Granted	2 years 8 months 1 day
Outstanding at the end of the period	2 years 6 months		2 years
Stock compensation expense related to the options and warrants	$95,653	$0
Mr. Arena | PSUs
PERFORMANCE SHARE UNITS
Performance share unit agreement granted (in shares)				3,000,000
Number of shares issued for each performance share unit				1
Number of PSUs
Granted (in shares)				3,000,000

INTANGIBLE_ASSETS_Details

INTANGIBLE ASSETS (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Intangible Assets
Accumulated Amortization	($587,872)		($489,398)
Intangible Assets, Net	3,156,447		3,073,945
Amortization expense	99,098	88,794
Minimum
Intangible Assets
Estimated useful lives of intangibles assets	5 years
Maximum
Intangible Assets
Estimated useful lives of intangibles assets	10 years
Patents
Intangible Assets
Intangible Assets, Gross	3,564,319		3,563,343
Software Development Costs
Intangible Assets
Estimated useful lives of intangibles assets	3 years
Intangible Assets, Gross	180,000
Capitalized cost	$180,000
Licensing
Intangible Assets
Estimated useful lives of intangibles assets	3 years

SUBSEQUENT_EVENTS_Details

SUBSEQUENT EVENTS (Details) (USD $)	3 Months Ended	1 Months Ended
	Mar. 31, 2014	14-May-14
Subsequent event
Common stock issued for services (in shares)	100,000
Expenses related to common stock issued for service	$28,500
Common stock issued for exercise of warrants (in shares)	1,300,000
Subsequent events
Subsequent event
Common stock issued for services (in shares)		100,000
Expenses related to common stock issued for service		$49,500
Amortization period		0 years
Common stock issued for exercise of warrants (in shares)		17,870