COPI .0005-FORM-10-Q/A-WAY-TO-MUCH-INFO UNITED

[b]COPI [/b].0005-FORM-10-Q/A-WAY-TO-MUCH-INFO


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
Amendment No. 1

x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2012

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

Commission File Number: 000-54007

Compliance Systems Corporation
(Exact name of registrant as specified in its charter)

Nevada 20-4292198
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

780 New York Avenue, Suite A, Huntington, New York 11743
(Address of principal executive offices) (Zip Code)


(516)  656-4197
(Registrant’s telephone number, including area code)

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer ¨Accelerated filer ¨

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


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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 20, 2012, 1,441,770,097 shares of common stock of the issuer were outstanding.






Explanatory Note

The purpose of this Amendment No. 1 on Form 10-Q/A (this “Form 10-Q/A”) to the Quarterly Report on Form 10-Q of Compliance Systems Corporation for the quarterly period ended June 30, 2012, filed with the Securities and Exchange Commission on August 20, 2012 (“Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q, as required by Rule 405 of Regulation S-T.  No other changes have been made to the Form 10-Q. This Form 10-Q/A speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files comprising Exhibit 101 to this Form 10-Q/A are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.



PART II
OTHER INFORMATION


Item 6.     Exhibits.

The following exhibits are being filed as part of this Quarterly Report on Form 10-Q.

Exhibit
Number Description

10.1 Warrant Certificate of Compliance Systems Corp., dated January 1, 2012, evidencing 6,000,000 common stock purchase warrants registered in the name of Barry M. Brookstein. [Incorporated by reference to Exhibit 10.135 of the registrant’s Annual Report on Form 10-K (Date of Report: December 31, 2011), filed with the Securities and Exchange Commission on April 16, 2012].
10.2 Warrant Certificate of Compliance Systems Corp., dated January 1, 2012, evidencing 225,000 common stock purchase warrants registered in the name of Barry M. Brookstein. [Incorporated by reference to Exhibit 10.136 of the registrant’s Annual Report on Form 10-K (Date of Report: December 31, 2011), filed with the Securities and Exchange Commission on April 16, 2012].
10.3 Warrant Certificate of Compliance Systems Corp., dated January 1, 2012, evidencing 675,000 common stock purchase warrants registered in the name of Henry A. Ponzio. [Incorporated by reference to Exhibit 10.137 of the registrant’s Annual Report on Form 10-K (Date of Report: December 31, 2011), filed with the Securities and Exchange Commission on April 16, 2012].
10.4 Warrant Certificate of Compliance Systems Corp., dated January 1, 2012, evidencing 1,050,000 common stock purchase warrants registered in the name of Nascap Corp. [Incorporated by reference to Exhibit 10.138 of the registrant’s Annual Report on Form 10-K (Date of Report: December 31, 2011), filed with the Securities and Exchange Commission on April 16, 2012].
10.5 Warrant Certificate of Compliance Systems Corp., dated March 31, 2012 evidencing 1,500,000 common stock purchase warrants registered in the name of Barry M. Brookstein. [Incorporated by reference to Exhibit 10.5 of the registrant’s Quarterly Report on Form 10-Q (Date of Report: March 31, 2012), filed with the Securities and Exchange Commission on May 15, 2012].







10.6 Warrant Certificate of Compliance Systems Corp., dated March 31, 2012, evidencing 150,000 common stock purchase warrants registered in the name of Barry M. Brookstein. [Incorporated by reference to Exhibit 10.6 of the registrant’s Quarterly Report on Form 10-Q (Date of Report: March 31, 2012), filed with the Securities and Exchange Commission on May 15, 2012].
10.7 Warrant Certificate of Compliance Systems Corp., dated March 31, 2012, evidencing 2,250,000 common stock purchase warrants registered in the name of Spirits Management, Inc. [Incorporated by reference to Exhibit 10.7 of the registrant’s Quarterly Report on Form 10-Q (Date of Report: March 31, 2012), filed with the Securities and Exchange Commission on May 15, 2012].
10.8 Warrant Certificate of Compliance Systems Corp., dated April 1, 2012, evidencing 6,000,000 common stock purchase warrants registered in the name of Barry M. Brookstein. [Incorporated by reference to Exhibit 10.8 of the registrant’s Quarterly Report on Form 10-Q (Date of Report: March 31, 2012), filed with the Securities and Exchange Commission on May 15, 2012].
10.9 Warrant Certificate of Compliance Systems Corp., dated April 1, 2012, evidencing 225,000 common stock purchase warrants registered in the name of Barry M. Brookstein. [Incorporated by reference to Exhibit 10.9 of the registrant’s Quarterly Report on Form 10-Q (Date of Report: March 31, 2012), filed with the Securities and Exchange Commission on May 15, 2012].
10.10 Warrant Certificate of Compliance Systems Corp., dated April 1, 2012, evidencing 675,000 common stock purchase warrants registered in the name of Henry A. Ponzio. [Incorporated by reference to Exhibit 10.10 of the registrant’s Quarterly Report on Form 10-Q (Date of Report: March 31, 2012), filed with the Securities and Exchange Commission on May 15, 2012].
10.11 Warrant Certificate of Compliance Systems Corp., dated April 1, 2012, evidencing 1,050,000 common stock purchase warrants registered in the name of Nascap Corp. [Incorporated by reference to Exhibit 10.11 of the registrant’s Quarterly Report on Form 10-Q (Date of Report: March 31, 2012), filed with the Securities and Exchange Commission on May 15, 2012].
10.12 Financial Marketing Consulting Services Agreement with Equities Awareness Group, dated April 4, 2012. [Incorporated by reference to Exhibit 10.12 of the registrant’s Quarterly Report on Form 10-Q (Date of Report: March 31, 2012), filed with the Securities and Exchange Commission on May 15, 2012].
10.13 Warrant Certificate of Compliance Systems Corp., dated June 30, 2012 evidencing 1,500,000 common stock purchase warrants registered in the name of Barry M. Brookstein. †
10.14 Warrant Certificate of Compliance Systems Corp., dated June 30, 2012, evidencing 150,000 common stock purchase warrants registered in the name of Barry M. Brookstein. †
10.15 Warrant Certificate of Compliance Systems Corp., dated June 30, 2012, evidencing 2,250,000 common stock purchase warrants registered in the name of Spirits Management, Inc. †
10.16 Warrant Certificate of Compliance Systems Corp., dated July 1, 2012, evidencing 6,000,000 common stock purchase warrants registered in the name of Barry M. Brookstein. †
10.17 Warrant Certificate of Compliance Systems Corp., dated July 1, 2012, evidencing 225,000 common stock purchase warrants registered in the name of Barry M. Brookstein. †
10.18 Warrant Certificate of Compliance Systems Corp., dated July 1, 2012, evidencing 675,000 common stock purchase warrants registered in the name of Henry A. Ponzio. †
10.19 Warrant Certificate of Compliance Systems Corp., dated July 1, 2012, evidencing 1,050,000 common stock purchase warrants registered in the name of Nascap Corp. †
31.1 Rule 13a-14(a)/15d-14(a) Certification of Barry M. Brookstein. †
32.1 Section 1350 Certification of Barry M. Brookstein. †
101.INS** XBRL Instance
101.SCH** XBRL Taxonomy Extension Schema
101.CAL** XBRL Taxonomy Extension Calculation
101.DEF** XBRL Taxonomy Extension Definition
101.LAB** XBRL Taxonomy Extension Labels

**XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.


†Designated exhibits were filed with the Form 10-Q.







SIGNATURES

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

Date:  August 22, 2012Compliance Systems Corporation.

By: /s/ Barry M. Brookstein
Barry M. Brookstein, President
Principal Executive Officer, Principal Financial Officer
And Principal Accounting Officer





XBRL CONTENT
DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION
(USD $) 6 Months Ended
06/30/2012 08/20/2012
Entity Registrant NameCOMPLIANCE SYSTEMS CORP
Entity Central Index Key0001206133
Current Fiscal Year End Date--12-31
Entity Filer CategorySmaller Reporting Company
Trading Symbolcopi
Entity Common Stock, Shares Outstanding 1,441,770,097
Document Type10-Q
Amendment Flagfalse
Document Period End Date2012-06-30
Document Fiscal Period FocusQ2
Document Fiscal Year Focus2,012

CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
(USD $) 06/30/2012 12/31/2011
Series A Convertible Preferred Stock [Member]
Stockholders' Deficiency:
Convertible Preferred Stock, $0.001 par value:$ 2,294$ 2,294
Series B Convertible Preferred Stock [Member]
Stockholders' Deficiency:
Convertible Preferred Stock, $0.001 par value:1,2501,250
Series C Convertible Preferred Stock [Member]
Stockholders' Deficiency:
Convertible Preferred Stock, $0.001 par value:1,8291,829
Series D Convertible Preferred Stock [Member]
Stockholders' Deficiency:
Convertible Preferred Stock, $0.001 par value:5050
ASSETS
Cash279529
Total Current Assets279529
Total Assets279529
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Short-term and demand notes payable495,500474,500
Accounts payable and accrued expenses1,439,6461,287,054
Accrued officers' compensation1,130,0001,010,000
Notes and loans payable - related parties88,77282,958
Current maturities of long-term debt280,250210,750
Total Current Liabilities3,434,1683,065,262
Warrant liability167265
Total Liabilities3,434,3353,065,527
Stockholders' Deficiency:
Common stock, $0.001 par value; 2,000,000,000 shares authorized, 281,783,997 shares issued and outstanding281,783281,783
Additional paid-in capital5,882,3705,959,649
Accumulated deficit(9,603,632)(9,311,853)
Total Stockholders' Deficiency(3,434,056)(3,064,998)
Total Liabilities and Stockholders' Deficiency$ 279$ 529

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Parenthetical) (USD $) 06/30/2012 12/31/2011
Series A Convertible Preferred Stock [Member]
Preferred stock, shares authorized2,500,0002,500,000
Preferred stock, shares issued2,293,7502,293,750
Preferred stock, shares outstanding2,293,7502,293,750
Series B Convertible Preferred Stock [Member]
Preferred stock, shares authorized1,500,0001,500,000
Preferred stock, shares issued1,250,0001,250,000
Preferred stock, shares outstanding1,250,0001,250,000
Series C Convertible Preferred Stock [Member]
Preferred stock, shares authorized2,000,0002,000,000
Preferred stock, shares issued1,828,5691,828,569
Preferred stock, shares outstanding1,828,5691,828,569
Series D Convertible Preferred Stock [Member]
Preferred stock, shares authorized100,000100,000
Preferred stock, shares issued50,00050,000
Preferred stock, shares outstanding50,00050,000
Series D Preferred Stock [Member]
Preferred stock, shares outstanding50,000
Common stock, par value (in dollars per share)$ 0.001
Preferred stock, par value (in dollars per share)$ 0.001$ 0.001
Common stock, par value (in dollars per share)$ 0.001$ 0.001
Common stock, shares authorized2,000,000,0002,000,000,000
Common stock, shares, issued281,783,997281,783,997
Common stock, shares outstanding281,783,997281,783,997

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(USD $) 3 Months Ended
06/30/2012 3 Months Ended
06/30/2011 6 Months Ended
06/30/2012 6 Months Ended
06/30/2011
Brookstein Promissory Note Exchange Agreement [Member]
Operating Expenses:
Interest expense$ (2,250)$ (2,250)$ (4,500)$ (4,500)
Revenues0000
Cost of Revenues0000
Gross Margin0000
Operating Expenses:
Selling, general and administrative expenses124,993131,487252,156252,421
Operating Loss(124,993)(131,487)(252,156)(252,421)
Interest expense(19,966)(46,414)(39,721)(68,298)
Warrant fair value adjustment5,5095,371985,371
Net Loss(139,450)(172,530)(291,779)(315,348)
Preferred Dividends39,00038,78678,00076,286
Net Loss Attributable to Common Stockholders$ (178,450)$ (211,316)$ (369,779)$ (391,634)
Basic and Diluted Per Share Data:
Net loss (in dollars per share)$ 0$ 0$ 0$ 0
Weighted Average Shares Outstanding
Basic and Diluted (in shares)281,783,997281,783,997281,783,997281,783,997

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(USD $) 6 Months Ended
06/30/2012 6 Months Ended
06/30/2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$ (291,779)$ (315,348)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest/penalty accrued and not paid or imputed39,00043,201
Stock-based compensation72113,017
Warrant fair value adjustment(98)(5,371)
Warrant exchange011,797
Bad debt expense0288
Changes in assets and liabilities:
Accounts receivable028,234
Prepaid expenses and other current assets027,025
Accounts payable and accrued expenses74,59241,013
Accrued officers' compensation120,000120,000
Total adjustments234,215279,204
Net Cash Used in Operating Activities(57,564)(36,144)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans payable56,0000
Proceeds from loans payable-related party1,3140
Net repayments of short-term and demand loans0(15,291)
Proceeds from issuances of preferred stock050,000
Net Cash Provided By Financing Activities57,31434,709
NET DECREASE IN CASH(250)(1,435)
CASH - Beginning of Period52919,014
CASH - End of Period27917,579
SUPPLEMENTAL INFORMATION:
Interest0284
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Preferred dividends declared and accrued, but not paid78,00076,286
Insurance premium financed027,999
Reclassification of warrants to a liability$ 0$ 1,413

Basis of Presentation:
Basis of Presentation:
(USD $) 6 Months Ended
06/30/2012
Business Description and Basis of Presentation [Text Block]1.Basis of Presentation:


The accompanying unaudited interim condensed consolidated financial statements of Compliance Systems Corporation and Subsidiaries (the “Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”).  Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for annual financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012.  The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the SEC on April 16, 2012.

The Company’s current business plan is to attempt to identify and negotiate with business targets for mergers of those entities with and into the Company.   No assurance can be given that the Company will be successful in identifying or negotiating with any target company.

On June 7, 2012, the Company entered into a Securities Exchange Agreement with RDRD II Holding LLC, a Delaware limited liability company (“RDRD”). The Securities Exchange Agreement (the “Agreement”) contemplates a contribution to us by RDRD of an interest in an entity organized under the laws of Ireland currently owned by RDRD in exchange for the issuance to RDRD by us of shares of our common stock representing, immediately following the consummation of such exchange, 95% of all of our outstanding stock on a fully diluted basis. This will result in RDRD acquiring the Company through a reverse merger. The Agreement is expected to close during the fiscal third quarter.

On July 19, 2012, the Company’s Board of Directors adopted and the Company’s stockholders approved of a reverse stock split of its outstanding common stock at a ratio of 1-for-994.488567392 shares. The reverse stock split was not effective as of the date of filing this report.

Liquidity and Going Concern:
Liquidity and Going Concern:
(USD $) 6 Months Ended
06/30/2012
Liquidity and Going Concern Disclosure [Text Block]2.Liquidity and Going Concern:


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered continued losses from operations since its inception. At June 30, 2012, the Company had stockholders’ and working capital deficiencies of approximately $3.43 million and $3.43 million, respectively.

Management believes the Company will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional equity or debt financing to sustain its operations until it can achieve profitability and positive cash flows, if ever. Management plans to seek additional debt and/or equity financing for the Company, but cannot assure that such financing will be available on acceptable terms. The Company's continuation as a going concern is dependent upon its ability to ultimately attain profitable operations, generate sufficient cash flow to meet its obligations, and obtain additional financing as may be required. The outcome of this uncertainty cannot be assured.

The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Significant Accounting Policies Applicable to Interim Financial Statements:
Significant Accounting Policies Applicable to Interim Financial Statements:
(USD $) 6 Months Ended
06/30/2012
Significant Accounting Policies [Text Block]3.Significant Accounting Policies Applicable to Interim Financial Statements:


A.   Loss per Share

Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive.   The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive:

June 30, 2012  June 30, 2011
Preferred stock  587,231,900   587,231,900
Warrants  242,636,100   196,136,100
Stock options  10,000,000   40,000,000


B.   Fair Value of Financial Instruments

Substantially all of the Company’s financial instruments, consisting primarily of cash, accounts receivable, accounts payable and accrued expenses and all debt, are carried at, or approximate, fair value because of their short-term nature or because they carry market rates of interest.  The warrant liability was valued using the Black-Scholes option pricing model.  See Note 7E.

C.  Stock Based Compensation Arrangements

The Company accounts for stock-based compensation arrangements in accordance with guidance provided by the Financial Accounting Standards Board Accounting Standards Codification (“ASC”).  This guidance addresses all forms of share-based payment awards including shares issued under employee stock purchase plans, stock options, restricted stock and stock appreciation rights, as well as share grants and other awards issued to employees and non-employees under free-standing arrangements.  These awards are recorded at costs that are measured at fair value on the awards’ grant dates, based on the estimated number of awards that are expected to vest and will result in charges to operations.

The Company valued these issuances utilizing a Black-Scholes option pricing model using the following assumptions:  share price, exercise price, expected volatility, risk-free rate and term.

The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term.  The Company has not declared or paid any dividends and does not currently expect to do so in the future.  The expected term of options represents the period that its stock-based awards are expected to be outstanding and was determined based on projected holding periods for the remaining unexercised shares.  Consideration was given to the contractual terms of its stock-based awards, vesting schedules and expectations of future employee behavior.  The volatility rate used was based upon an average volatility rate for two entities providing telecommunications.  The Company did not use the volatility rate for Company Common Stock as the Company Common Stock had not been trading for the sufficient length of time to accurately compute its volatility when these warrants were issued.

From time to time, the Company’s shares of common stock and warrants have been issued as payment to employees and non-employees for services. These are non-cash transactions that require management to make judgments related to the fair value of the shares issued, which affects the amounts reported in the Company’s consolidated financial statements for certain of its assets and expenses.

Share based payments amounted to $466 and $13,017 for the three months ended June 30, 2012 and 2011, respectively, and $721 and $13,017 for the six months ended June 30, 2012 and 2011, respectively.

D.   Subsequent Events

Management has evaluated subsequent events through the date of this filing.

Short-Term and Demand Notes Payable
Short-Term and Demand Notes Payable
(USD $) 6 Months Ended
06/30/2012
Short Term and Demand Notes Payable [Text Block]4.Short-Term and Demand Notes Payable


Short-term and demand notes payable consist of the following:

June 30,  December 31,
2012  2011
(Unaudited)   

Nascap Corp. and accrued interest (A) $465,500  $444,500
John Koehler (B)  30,000   30,000

Total $495,500  $474,500


A.Secured Demand Note – Nascap Corp. (“Nascap”)


In September 2006, CCI executed a secured $150,000 promissory note and related security agreement with Nascap.  Interest at 12% per annum was payable monthly in arrears and the note principal was due on demand.  The note was collateralized by the accounts receivable of the principal subsidiary and was unconditionally guaranteed by the Company.

As of March 31, 2009, the Company entered into a Loan Modification Agreement with Nascap.  The original Nascap note was amended and restated as a revolving line of credit promissory note (“Nascap Restated Note”) in the principal amount not to exceed $750,000.  The Nascap Restated Note contains the same terms and conditions as the original note, except for the revolving line of credit nature of the debt.  As consideration for entering into the Loan Modification Agreement, the Company agreed to issue Nascap twenty Class A and twenty Class B warrants for each $1.00 of principal outstanding under the Nascap Restated Note on April 30, 2009.  Each Class A and Class B warrant entitles the holder to purchase one share of the Company’s common stock at $0.05 per share.  The Class B warrants require the holder to pay the exercise price in the form of cancellation of amounts outstanding under the Nascap Restated Note prior the payment of the exercise price in the form of cash.

On May 25, 2012, the Nascap note was assigned to five entities unrelated to the Company (the “Entities”). Accrued and unpaid interest on the note totaled $115,500 and $94,500 at June 30, 2012 and December 31, 2011 respectively. At both June 30, 2012 and December 31, 2011, $350,000 was outstanding on this note.

On July 1, 2012, the accrued interest on the note was waived. In consideration for the assignment of the note and the waiving of accrued interest owed to Nascap, the Company issued Nascap 250,000,000 shares of the Company’s Common Stock. See Note 7G.

On June 28, 2012, pursuant to a Final Declaratory Judgment, the Company was ordered to issue 7,000,000 post-split shares of its common stock to the Entities in satisfaction of the note. Such shares have not been issued as of the date of this report.

B.Promissory Note – John Koehler (“Koehler”)


On October 1, 2003, the predecessor to Execuserve issued a $150,000 non-interest bearing promissory note to Koehler, an investor in the predecessor.  The note was amended on October 25, 2004.  Upon the acquisition of Execuserve by the Company, Koehler was owed $37,000. The balance owed is being paid in monthly installments of $1,000.  The Company is in default as it has not made a payment since September 2010.  The balance due to Koehler at June 30, 2012 and December 31, 2011 totaled $30,000.

Long-term Debt
Long-term Debt
(USD $) 6 Months Ended
06/30/2012
Long-term Debt [Text Block]5.Long-term Debt


Long-term debt at June 30, 2012 and December 31, 2011 consists of the following:

June 30,  December 31,
2012  2011
(Unaudited)   
Notes payable and accrued interest to officer/stockholder (A) $74,750  $70,250
Loans payable to officer/stockholder (B)  14,022   12,708
Other secured debt and accrued interest (C)  224,250   210,750
Other loans payable (D)  56,000   —
Total long-term debt  369,022   293,708
Current maturities of long-term debt  369,022   293,708
Long-term debt less current maturities $—  $—


A.  Brookstein Promissory Note Exchange Agreement -

As of June 24, 2009, the Company entered in to a Promissory Note Exchange Agreement (the “Brookstein Exchange Agreement”) with Barry M. Brookstein (“Brookstein”) and simultaneously consummated the transactions contemplated by the Brookstein Exchange Agreement. Brookstein, a director and principal stockholder of the Company, is the Company’s chief executive officer and chief financial officer.  Under the Brookstein Exchange Agreement, Brookstein delivered and assigned a promissory note of Call Compliance, Inc., one of the Company’s wholly-owned subsidiaries (“CCI”), dated March 3, 2009, in the principal amount of $50,000 and payable to Brookstein (the “Brookstein Original Note”) in exchange for the Company issuing and delivering to Brookstein the Company’s 18% Senior Subordinated Secured Promissory Note, dated June 24, 2009, in the principal amount of $50,000 payable to Brookstein (the “Brookstein New Note”).  In connection with such exchange, the Company granted Brookstein a senior subordinated security interest (the “Brookstein Security Interest”) in all of the Company’s assets to secure the Company’s obligations under the Brookstein New Note, as evidenced and subject to the terms and conditions of a Security Agreement, dated June 24, 2009 (the “Brookstein Security Agreement”), between Brookstein and the Company.  As further consideration for entering into the Brookstein Exchange Agreement, Brookstein was granted 1 million Class “A” common stock purchase warrants of the Company (each, a “Brookstein Class A Warrant”) and 1 million class “B” common stock purchase warrants of the Company (each, a “Brookstein Class B Warrant”).  Each of these warrants entitles its holder to purchase one share of Company common stock at a purchase price of $0.05 per share. The Brookstein Class A Warrants and Brookstein Class B Warrants expire on June 23, 2014.  If any amount (principal or interest) is outstanding under the Brookstein New Note, the purchase price upon exercise of any of the Brookstein Class B Warrants must be paid by the reduction of the amount outstanding under the Brookstein New Note.

The Brookstein Original Note was due on demand and bore interest at the rate of 18% per annum, payable monthly in arrears.

The Brookstein New Note had a maturity date of January 1, 2011 and bears interest at the rate of 18% per annum (20%, in the case of a default under the Brookstein New Note), with interest payable monthly in arrears.  In March 2011, the maturity date of the Brookstein New Note was extended to July 1, 2011 and was further extended in August 2011 to January 1, 2012.  The principal and accrued interest were not paid on January 1, 2012 and are now due on demand. Interest incurred on the note totaled $2,250 for each of the three months ended June 31, 2012 and 2011 and $4,500 for each of the six months ended June 30, 2012 and 2011.  Accrued and unpaid interest totaled $24,750 and $20,250 at June 30, 2012 and December 31, 2011, respectively.   At both June 30, 2012 and December 31, 2011, $50,000 was outstanding on this note.

On July 1, 2012, Brookstein waived all accrued interest owed. In July 2012, the Company issued 50,000 shares of its Series D Senior Convertible Voting Redeemable Preferred Stock (“Series D Preferred Stock”) in satisfaction of the Brookstein New Note and the Loan Payable discussed below. See Note 7F.

B.   Loans Payable - Brookstein

At various times, Brookstein loaned the Company monies for working capital purposes. The loans do not bear interest and are due on demand. At June 30, 2012 and December 31, 2011, loans payable - Brookstein was $14,022 and $12,708, respectively.  In July 2012, the Company issued 50,000 shares of its Series D Preferred Stock in satisfaction of the Loan Payable and the Brookstein New Note discussed above. See Note 7F.

C.   Ponzio Promissory Note Exchange Agreement –

The Company had outstanding unsecured demand loans due Henry A. Ponzio (“Ponzio”) in the aggregate principal amount of $150,000 at December 31, 2008. This demand loan bore interest at the rate of 18% per annum, payable monthly in arrears.

As of June 24, 2009, the Company entered into a Promissory Note Exchange Agreement (the “Ponzio Exchange Agreement”) with Ponzio and simultaneously consummated the transactions contemplated by the Ponzio Exchange Agreement. Under the Ponzio Exchange Agreement, Ponzio delivered and assigned to the Company a promissory note of CCI, dated April 27, 2006, in the principal amount of $150,000 and payable to Ponzio (the “Ponzio Original Note”) in exchange for the Company’s issuing and delivering to Ponzio the Company’s 18% Senior Subordinated Secured Promissory Note, dated June 24, 2009, in the principal amount of $150,000 and payable to Ponzio (the “Ponzio New Note”). In connection with such exchange, the Company granted Ponzio a senior subordinated security interest (the “Ponzio Security Interest”) in all of the Company’s assets to secure the Company’s obligations under the Ponzio New Note, as evidenced and subject to the terms and conditions of a Security Agreement, dated June 24, 2009 (the “Ponzio Security Agreement”), between Ponzio and the Company. As further consideration for entering into the Ponzio Exchange Agreement, Ponzio was granted 3 million Class A warrants (each, a “Ponzio Class A Warrant”) and 3 million Class B warrants (each, a “Ponzio Class B Warrant”). Each of these warrants entitles its holder to purchase one share of common stock (each, a “Warrant Share”) at a purchase price of $0.05 per Warrant Share. The Ponzio Class A Warrants and Ponzio Class B Warrants expire on June 23, 2014. If any amount (principal or interest) is outstanding under the Ponzio New Note, the purchase price upon exercise of any of the Ponzio Class B Warrants must be paid by the reduction of such amounts outstanding under the Ponzio New Note.

The Ponzio Original Note was due on demand and bore interest at the rate of 18% per annum, payable monthly in arrears.

The Ponzio New Note had a maturity date of January 1, 2011 and bears interest at the rate of 18% per annum (20%, in the case of a default under the Ponzio New Note), with interest payable monthly in arrears.  In March 2011, the maturity date of the Ponzio New Note was extended to July 1, 2011 and was further extended in August 2011 to January 1, 2012.  The principal and accrued interest were not paid on January 1, 2012 and are now due on demand.

On May 25, 2012, the Ponzio note was assigned to Summit Trading Ltd., an unrelated entity. Accrued and unpaid interest as of June 30, 2012 and December 31, 2011 totaled $74,250 and $60,750, respectively.  At both June 30, 2012 and December 31, 2011, $150,000 was outstanding on this note.

On July 1, 2012, the accrued interest on the note was waived. In consideration for the assignment of the note and the waiving of accrued interest by Ponzio, the Company issued Ponzio 100,000,000 shares of the Company’s Common Stock. See Note 7G.

On June 28, 2012, pursuant to a Final Declaratory Judgment, the Company was ordered to issue 3,000,000 post-split shares of its common stock to Summit in satisfaction of the note. Such shares have not been issued as of the date of this report.

D.   Loans Payable – RDRD

During the six months ended June 30, 2012, RDRD loaned the Company monies for working capital purposes. The loans do not bear interest and are due on demand. At June 30, 2012, loans payable was $56,000.

Commitments:
Commitments:
(USD $) 6 Months Ended
06/30/2012
Commitments Disclosure [Text Block]6.Commitments:


A.  Employment Agreements

The Company had employment agreements with Brookstein and Dean Garfinkel through November 30, 2011. Garfinkel resigned in November 2010.  These officers deferred receiving the payments of their salaries in 2010 and Brookstein deferred receiving the payment of his salary in 2011 and 2012.  The payment of accrued salaries owing to Garfinkel in the amount of $380,000 was satisfied by the issuance of 100,000,000 shares of the Company’s Common Stock on July 1, 2012. See Note 7E.

The employment contract with Brookstein expired in November 2011 and the agreement was now on a month-to-month basis.  See Note 7.

On July 1, 2012, Brookstein waived all accrued salaries owed to him through June 30, 2012.

Capital Transactions:
Capital Transactions:
(USD $) 6 Months Ended
06/30/2012
Stockholders' Equity Note Disclosure [Text Block]7.Capital Transactions:


A.  Issuance of Deferred Salary Warrants –

Brookstein has been deferring all or a portion of his salary since January 1, 2009.

Effective January 1, 2012, Brookstein agreed to continue deferring his full salary.  The amount of such deferred salaries for the three and six months ending June 30, 2012 totaled $60,000 and $120,000, respectively. As compensation, the Company granted to Brookstein Deferred Salary Warrants to purchase 12,000,000 (each a “2012 Deferred Salary Warrant Share”) of Company Common Stock at $0.001 per 2012 Deferred Salary Warrant Share at the rate of 100 Deferred Salary Warrants for each $1 of deferred salary for a term of five years.  The Company valued these issuances utilizing a Black-Scholes option pricing model with the following assumptions:  share price: $0.0003 - $0.0006; exercise price: $0.001; expected volatility: 27%; risk-free rate: 1.03% - 2.01%; term: 5 years.

Effective July 1, 2012, Brookstein agreed to continue deferring his full salary.  The amount of such deferred salaries for the three months ending September 30, 2012 will total $60,000.  As compensation, the Company granted to Brookstein 2012 Deferred Salary Warrants to purchase 6,000,000 share of Company Common Stock at $0.001 per Deferred Salary Warrant Share at the rate of 100 Deferred Salary Warrants for each $1 of deferred salary for a term of five years.

On July 1, 2012, all of the issued and outstanding Deferred Salary Warrants were exchanged for shares of the Company’s common stock in contemplation of the Agreement. See Note 7G.

B.  Issuance of Dividend Accrual Warrants – Series B Senior Subordinated Convertible Voting Preferred Stock (the “Series B Preferred Stock”)

The Company has failed to pay dividends on the 1.25 million outstanding shares of its Series B Preferred Stock.  Dividends on the Series B Preferred Stock may only be paid out of funds legally available for such purpose.  Under Nevada law, generally, a corporation’s distribution to stockholders may only be made if, after giving effect to such distribution, (i) the corporation would be able to pay its debts as they become due in the usual course of action and (ii) the corporation’s total assets equal or exceed the sum of the corporation’s liabilities plus the amount that would be needed, if the corporation was to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of stockholders whose rights are superior to those receiving the distribution.

All of the outstanding shares of Series B Preferred Stock are held by Brookstein and Spirits Management, Inc. ("Spirits"), a company wholly-owned by Brookstein. Although the Company has been and currently is unable to pay the Series B Preferred Stock dividends when due, the dividends have been and are continuing to be accrued until such time as the monthly dividends can lawfully be paid under Nevada law.

The Company deferred dividends totaling $37,500 and $75,000 for the three and six months ended June 30, 2012, $30,000 due to Brookstein, and $45,000 due to Spirits.  To compensate Brookstein and Spirits for the failure to pay dividends when due, the Company agreed to grant five-year warrants (each, a “Dividend Accrual Warrant”) to purchase shares (each, a “Dividend Accrual Warrant Share”) of Company Common Stock to such holders at $0.001 per Dividend Accrual Warrant Share at a rate of 100 Dividend Accrual Warrants for every $1 of dividend accrued during the prior three and six month periods.  The Company issued Dividend Accrual Warrants totaling 1,500,000 and 3,000,000 to Brookstein and 2,250,000 and 4,500,000 to Spirits for the three and six months ended June 30, 2012, respectively.  The Company valued these issuances using the Black-Scholes option pricing model with the following assumptions: share price:  $0.0003 - $0.0006; strike price: $0.001; expected volatility: 27%; risk free interest rate: 0.720% - 1.04%; term: 5 years.

For each of the three months ended June 30, 2012 and 2011, dividends related to the Series B Preferred Stock totaled $37,500. For each of the six months ended June 30, 2012 and June 30, 2011, dividends totaled $75,000.  Accrued dividends totaled $525,000 and $450,000 at June 30, 2012 and December 31, 2011, respectively, and are included in accounts payable and accrued expenses on the consolidated balance sheet.

On July 1, 2012, the following transactions occurred:
1.Brookstein and Spirits waived all accrued dividends owed to them. In addition, no further dividends will be accrued.
2.All of the issued and outstanding Dividend Accrual Warrants were exchanged for shares of the Company’s common stock in contemplation of the Agreement.
3.Brookstein received 250,000,000 shares of the Company’s Common Stock in lieu of payment of accrued dividends.


See Note 7G.

C.  Issuance of Dividend Accrual Warrants - Series D Senior Convertible Voting Redeemable Preferred Stock (“Series D Preferred Stock”) –

The Company has failed to pay dividends on the 50,000 outstanding shares of its Series D Preferred Stock.  As with the Series B Preferred Stock Discussed above, dividends may only be paid out of funds legally available for such purpose.

The Company deferred dividends totaling $1,500 and $3,000 for the three and six months ended June 30, 2012, respectively.   To compensate Brookstein for the failure to pay dividends when due, the Company agreed to grant five-year warrants (each, a “Dividend Accrual Warrant”) to purchase shares (each, a “Dividend Accrual Warrant Share”) of Company Common Stock to such holders at $0.001 per Dividend Accrual Warrant Share at a rate of 100 Dividend Accrual Warrants for every $1 of dividend accrued during the prior three month period.  The Company issued Dividend Accrual Warrants totaling 150,000 and 300,000 for the three and six months ended June 30, 2012, respectively.  The Company valued these issuances using the Black-Scholes option pricing model with the following assumptions: share price:  $0.0003 - $0.0006; strike price: $0.001; expected volatility: 27%; risk free interest rate: 0.720% - 1.04%; term: 5 years

For the three months ended June 30, 2012 and 2011, dividends related to the Series D Preferred Stock totaled $1,500 and $1,286, respectively. For the six months ended June 30, 2012 and 2011, dividends related to the Series D Preferred Stock totaled $3,000 and $1,286, respectively.  Accrued dividends totaled $7,286 and $4,286 at June 30, 2012 and December 31, 2011, respectively, and are included in accounts payable and accrued expenses on the consolidated balance sheet.

On July 1, 2012, Brookstein waived all accrued dividends owed to him. On July 1, 2012, all of the issued and outstanding Dividend Accrual Warrants were exchanged for shares of the Company’s common stock in contemplation of the Agreement. See Note 7G.

D.  Issuance of Deferred Interest Payment Warrants –

The Company continued to fail to pay interest on the promissory notes that were previously issued to Brookstein, Ponzio and Nascap (the “Note Holders”).  To compensate the Note Holders for the failure to pay interest on their promissory notes for the three and six months ended June 30, 2012, the Company granted to such Note Holders warrants (each, a “Deferred Interest Payment Warrant”) to purchase shares of Common Stock at the rate of 100 Deferred Interest Payment Warrants for every $1 of interest not paid.  For the three and six months ended June 30, 2012, 1,950,000 and 3,900,000 Deferred Interest Payment Warrants were issued and have terms substantially identical to the Deferred Salary Warrants and Dividend Accrual Warrants. The Company valued these issuances using the Black-Scholes option pricing model with the following assumptions: share price:  $0.0003 - $0.0006; strike price: $0.001; expected volatility: 27%; risk free interest rate: 1.03% - 2.01%; term: 5 years

The Company will not pay interest to the Note Holders in the third quarter of 2012.  To compensate them, the Company granted Deferred Interest Payment Warrants to purchase shares of Common Stock at the rate of 1.00 Deferred Interest Payment Warrants for every $1 of interest not paid.  The Company issued a total of 1,950,000 Deferred Interest Payment Warrants on July 1, 2012.

As discussed above, on July 1, 2012, the Note Holders waived all accrued interest owed to them. On July 1, 2012, all of the issued and outstanding deferred Interest Payment Warrants were exchanged for shares of the Company’s Common Stock in contemplation of the Agreement. See Note 7G.

E .  Warrant Exchange Agreements –

The Company entered into separate warrant exchange agreements with Brookstein, Spirits, Garfinkel, Ponzio and Nascap to purchase an aggregate of 128.13 million shares of the Company’s Common Stock.  The warrant holders included the Company’s chairman of the board, chief executive officer and chief financial officer and a company in which such officer is the sole equity owner, as well as the Company’s former president and chief executive officer.  Each of the warrant exchange agreements were dated as of May 12, 2011 and provided for the exchange of the warrants then held by such warrant holders (the “Old Warrants”) for new warrants (the “New Warrants”).  The number of shares of Common Stock issuable upon exercise of the New Warrants is equal to the number of shares of Common Stock that were issuable upon exercise of the Old Warrants.  The Old Warrants had exercise prices ranging from $0.001 to $0.05 per share (a weighted average exercise price of $0.022 per share) and had exercise periods expiring from June 23, 2014 through March 31, 2016 (typically, five years after the date of issuance of the subject warrants).  However, the Old Warrants contained certain anti-dilution provisions which caused the effective exercise prices to be reduced to less than $0.001 per share.  The New Warrants all have an exercise price of $0.001 per share and expire on May 11, 2016.  The New Warrants contain cashless exercise provisions.  The anti-dilution provisions of the New Warrants are primarily limited to stock splits and corporate transactions involving mergers and consolidations while the Old Warrants contained anti-dilution provisions that caused the reduction in the exercise prices of the Old Warrants whenever the Company issued stock or derivative securities with an effective purchase price less than the then exercise price of the subject Old Warrants.  The Company had issued the Old Warrants in connection with the (x) accrual of dividends due on preferred stock of the Company owned by certain of the warrant holders, (y) deferral of the payment of interest due on promissory notes of the Company owned by certain of the warrant holders and (z) deferral of salary due certain of the warrant holders in their capacities as executive officers of the Company.

As a result of the exchanges, the Company recognized a charge of $11,797 for the three and six months ended June 30, 2011, respectively, which is classified as part of interest expense.

As the New Warrants contain “cashless exercise” provisions, the value of the New Warrants were recognized as liabilities and not as part of stockholders’ deficiency.  In addition, the Company is required to revalue the New Warrants at the end of each reporting period with the change in value reported on the statement of operations.  The Company valued these issuances using the Black-Scholes option pricing model with the following assumptions at June 30, 2012: share price:  $0.0003 - $0.0006; strike price: $0.001; expected volatility: 27%; risk free interest rate: 0.720% - 1.04%; term: 3.87 – 4.12 years.  The Company recognized a gain on the value of the New Warrants of $5,509 and $98 for the three and six months ended June 30, 2012, respectively. For both the three and six months ended June 30, 2011, the Company recognized a gain of $5,371.

In July 2012, the New Warrants were exchanged for shares of the Company’s Common Stock in contemplation of the Agreement. See Note 7G.

F.  Issuance of Series D Preferred Stock –

In July 2012, the Company issued 50,000 shares of Series D Preferred Stock to Brookstein in full satisfaction of the Brookstein New Note and Loans Payable. See Notes 5A and 5B.

G. Issuances in Q3 2012 -

On July 1, 2012, the Company issued 249,986,100 shares of the Company’s Common Stock in exchange for all outstanding warrants.

On July 1, 2012, the Company issued 10,000,000 shares of the Company’s Common Stock in exchange for all outstanding options.

On July 1, 2012, the Company issued Nascap 250,000,000 shares of the Company’s Common Stock in consideration for the assignment of the Nascap note and the waiving of accrued interest by Nascap. See Note 4A.

On July 1, 2012, the Company issued Ponzio 100,000,000 shares of the Company’s Common Stock in consideration for the assignment of the Ponzio note and the waiving of accrued interest by Ponzio. See Note 5C.

On July 1, 2012, the Company issued Garfinkel, 100,000,000 shares of the Company’s Common Stock in lieu of the payment of accrued salary totaling $380,000 as of June 30, 2012. See Note 6A.

On July 1, 2012, the Company issued Brookstein 250,000,000 shares of the Company’s Common Stock in lieu of payments of accrued dividends.

On July 1, 2012, the Company issued a total of 200,000,000 shares of the Company’s Common Stock to vendors in consideration for extending payment terms.

Recent Accounting Pronouncements:
Recent Accounting Pronouncements:
(USD $) 6 Months Ended
06/30/2012
Accounting Changes and Error Corrections [Text Block]8.Recent Accounting Pronouncements:


Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying consolidated financial statements.

Significant Accounting Policies Applicable to Interim Financial Statements (Policies)
Significant Accounting Policies Applicable to Interim Financial Statements
(Policies) (USD $) 6 Months Ended
06/30/2012
Earnings Per Share, Policy [Policy Text Block]A.   Loss per Share

Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive.   The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive:

June 30, 2012  June 30, 2011
Preferred stock  587,231,900   587,231,900
Warrants  242,636,100   196,136,100
Stock options  10,000,000   40,000,000

Fair Value of Financial Instruments, Policy [Policy Text Block]B.   Fair Value of Financial Instruments

Substantially all of the Company’s financial instruments, consisting primarily of cash, accounts receivable, accounts payable and accrued expenses and all debt, are carried at, or approximate, fair value because of their short-term nature or because they carry market rates of interest.  The warrant liability was valued using the Black-Scholes option pricing model.  See Note 7E.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]C.  Stock Based Compensation Arrangements

The Company accounts for stock-based compensation arrangements in accordance with guidance provided by the Financial Accounting Standards Board Accounting Standards Codification (“ASC”).  This guidance addresses all forms of share-based payment awards including shares issued under employee stock purchase plans, stock options, restricted stock and stock appreciation rights, as well as share grants and other awards issued to employees and non-employees under free-standing arrangements.  These awards are recorded at costs that are measured at fair value on the awards’ grant dates, based on the estimated number of awards that are expected to vest and will result in charges to operations.

The Company valued these issuances utilizing a Black-Scholes option pricing model using the following assumptions:  share price, exercise price, expected volatility, risk-free rate and term.

The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term.  The Company has not declared or paid any dividends and does not currently expect to do so in the future.  The expected term of options represents the period that its stock-based awards are expected to be outstanding and was determined based on projected holding periods for the remaining unexercised shares.  Consideration was given to the contractual terms of its stock-based awards, vesting schedules and expectations of future employee behavior.  The volatility rate used was based upon an average volatility rate for two entities providing telecommunications.  The Company did not use the volatility rate for Company Common Stock as the Company Common Stock had not been trading for the sufficient length of time to accurately compute its volatility when these warrants were issued.

From time to time, the Company’s shares of common stock and warrants have been issued as payment to employees and non-employees for services. These are non-cash transactions that require management to make judgments related to the fair value of the shares issued, which affects the amounts reported in the Company’s consolidated financial statements for certain of its assets and expenses.

Share based payments amounted to $466 and $13,017 for the three months ended June 30, 2012 and 2011, respectively, and $721 and $13,017 for the six months ended June 30, 2012 and 2011, respectively.
Subsequent Events, Policy [Policy Text Block]D.   Subsequent Events

Management has evaluated subsequent events through the date of this filing.

Significant Accounting Policies Applicable to Interim Financial Statements (Tables)
Significant Accounting Policies Applicable to Interim Financial Statements
(Tables) (USD $) 6 Months Ended
06/30/2012
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive:

June 30, 2012  June 30, 2011
Preferred stock  587,231,900   587,231,900
Warrants  242,636,100   196,136,100
Stock options  10,000,000   40,000,000


Short-Term and Demand Notes Payable (Tables)
Short-Term and Demand Notes Payable
(Tables) (USD $) 6 Months Ended
06/30/2012
Schedule of Short-term Debt [Table Text Block]Short-term and demand notes payable consist of the following:

June 30,  December 31,
2012  2011
(Unaudited)   

Nascap Corp. and accrued interest (A) $465,500  $444,500
John Koehler (B)  30,000   30,000

Total $495,500  $474,500



Long-term Debt (Tables)
Long-term Debt
(Tables) (USD $) 6 Months Ended
06/30/2012
Schedule of Long-term Debt Instruments [Table Text Block]Long-term debt at June 30, 2012 and December 31, 2011 consists of the following:

June 30,  December 31,
2012  2011
(Unaudited)   
Notes payable and accrued interest to officer/stockholder (A) $74,750  $70,250
Loans payable to officer/stockholder (B)  14,022   12,708
Other secured debt and accrued interest (C)  224,250   210,750
Other loans payable (D)  56,000   —
Total long-term debt  369,022   293,708
Current maturities of long-term debt  369,022   293,708
Long-term debt less current maturities $—  $—



Basis of Presentation (Details Textual)
Basis of Presentation
(Details Textual) (USD $) 1 Months Ended
07/31/2012 6 Months Ended
06/30/2012
Stockholders' Equity, Reverse Stock Split1-for-994.488567392 shares
Weighted Average Number Of Shares Outstanding Diluted Percentage 0.95

Liquidity and Going Concern (Details Textual)
Liquidity and Going Concern
(Details Textual) (USD $) (in Millions) 06/30/2012
Common Stockholders' Equity$ 3.43
Working Capital Deficiency$ 3.43

Significant Accounting Policies Applicable to Interim Financial Statements (Details)
Significant Accounting Policies Applicable to Interim Financial Statements
(Details) (USD $) 6 Months Ended
06/30/2012 6 Months Ended
06/30/2011
Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount587,231,900587,231,900
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount10,000,00040,000,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount242,636,100196,136,100

Significant Accounting Policies Applicable to Interim Financial Statements (Details Textual)
Significant Accounting Policies Applicable to Interim Financial Statements
(Details Textual) (USD $) 3 Months Ended
06/30/2012 3 Months Ended
06/30/2011 6 Months Ended
06/30/2012 6 Months Ended
06/30/2011
Stock-based compensation$ 466$ 13,017$ 721$ 13,017

Short-Term and Demand Notes Payable (Details)
Short-Term and Demand Notes Payable
(Details) (USD $) 06/30/2012 12/31/2011
John Koehler [Member]
Total$ 30,000$ 30,000
Nascap Corp [Member]
Total465,500444,500
Total$ 495,500$ 474,500

Short-Term and Demand Notes Payable (Details Textual)
Short-Term and Demand Notes Payable
(Details Textual) (USD $) 6 Months Ended
06/30/2012
Brookstein [Member]
Due to Related Parties$ 30,000
Brookstein Promissory Note Exchange Agreement [Member]
Total long-term debt
Interest Payable24,750
Due to Related Parties74,750
Stock Issued During Period, Shares, Stock Splits3,000,000
John Koehler [Member]
Total long-term debt
Business Acquisition, Cost of Acquired Entity, Cash Paid
Due to Related Parties30,000
Loans Payable Brookstein [Member]
Due to Related Parties14,022
Loans Payable Rdrd Holdings Llc [Member]
Due to Related Parties56,000
Nascap Corp [Member]
Total long-term debt350,000
Short-term Debt, Percentage Bearing Fixed Interest Rate
Line of Credit Facility, Maximum Borrowing Capacity
Warrants Issued Description
Interest Payable, Current115,500
Stock Issued On Accrued Interest Waived, Shares250,000,000
Stock Issued During Period, Shares, Stock Splits7,000,000
Ponzio Promissory Note Exchange Agreement [Member]
Total long-term debt
Interest Payable74,250
Due to Related Parties224,250
Stock Issued On Accrued Interest Waived, Shares250,000,000
Spirits [Member]
Due to Related Parties45,000
Interest Payable$ 14,022

Long-term Debt (Details)
Long-term Debt
(Details) (USD $) 06/30/2012 12/31/2011
Brookstein [Member]
Due to Related Parties$ 30,000
Brookstein Promissory Note Exchange Agreement [Member]
Due to Related Parties74,75070,250
John Koehler [Member]
Due to Related Parties30,00030,000
Loans Payable Brookstein [Member]
Due to Related Parties14,02212,708
Loans Payable Rdrd Holdings Llc [Member]
Due to Related Parties56,0000
Ponzio Promissory Note Exchange Agreement [Member]
Due to Related Parties224,250210,750
Spirits [Member]
Due to Related Parties45,000
Total long-term debt369,022293,708
Current maturities of long-term debt369,022293,708
Long-term debt less current maturities$ 0$ 0

Long-term Debt (Details Textual)
Long-term Debt
(Details Textual) (USD $) 3 Months Ended
06/30/2012 6 Months Ended
06/30/2012 12 Months Ended
12/31/2011
Brookstein [Member]
Due to Related Parties$ 30,000$ 30,000
Warrant Issued1,500,0003,000,000
Preferred Stock Issued Upon Settlement Of Notes Payable, Shares 50,000
Brookstein Promissory Note Exchange Agreement [Member]
Total long-term debt  
Debt Instrument, Interest Rate, Stated Percentage  
Stock Issued During Period, Shares, New Issues  
Common Stock Exercise Price  
Debt Instrument, Maturity Date  2011-01-01
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum  0.2
Interest expense2,2504,500
Interest Payable24,75024,75020,250
Secured Demand Notes50,00050,00050,000
Due to Related Parties74,75074,75070,250
Preferred Stock Issued Upon Settlement Of Notes Payable, Shares 50,000
Stock Issued During Period, Shares, Stock Splits 3,000,000
John Koehler [Member]
Total long-term debt  
Due to Related Parties30,00030,00030,000
Loans Payable Brookstein [Member]
Due to Related Parties14,02214,02212,708
Loans Payable Rdrd Holdings Llc [Member]
Due to Related Parties56,00056,0000
Nascap Corp [Member]
Total long-term debt350,000350,000350,000
Stock Issued During Period, Shares, Stock Splits 7,000,000
Ponzio Promissory Note Exchange Agreement [Member]
Total long-term debt  
Debt Instrument, Interest Rate, Stated Percentage  
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum  0.2
Interest Payable74,25074,25060,750
Secured Demand Notes150,000150,000150,000
Due to Related Parties224,250224,250210,750
Warrant Issued  
Investment Warrants, Exercise Price  
Warrant Maturity Date  
Common Stock Issued Upon Settlement Of Notes Payable, Shares 100,000,000
Spirits [Member]
Due to Related Parties45,00045,000
Warrant Issued2,250,0004,500,000
Warrant Exchange Agreements [Member]
Investment Warrants, Exercise Price $ 0.022
Series D Preferred Stock [Member]
Warrant Issued150,000300,000
Interest expense19,96639,721
Interes